================================================================================
TRUST INDENTURE AND MORTGAGE N___TZ
dated as of __________, 200_
between
XXXXX FARGO BANK NORTHWEST, N.A.,
not in its individual capacity, except as expressly
provided herein, but solely as Owner Trustee,
Owner Trustee
and
WILMINGTON TRUST COMPANY,
not in its individual capacity, except as expressly
provided herein, but solely as Loan Trustee,
Loan Trustee
--------------------------------
Equipment Notes covering one Boeing 737-800 aircraft bearing manufacturer's
serial no. _____ and U.S. registration xxxx N___TZ leased by American Trans Air,
Inc.
================================================================================
2002 EETC - Mortgage (LL) (11) Mortgage N__TZ
TABLE OF CONTENTS
GRANTING CLAUSE ................................................................................1
1. DEFINITIONS AND CONSTRUCTION................................................................8
1.01. Definitions and Construction....................................................8
2. THE EQUIPMENT NOTES.........................................................................8
2.01. Form of Equipment Notes.........................................................8
2.02. Issuance and Terms of Equipment Notes...........................................8
2.03. Payments from Collateral Only...................................................9
2.04. Method of Payment..............................................................12
2.05. Application of Payments........................................................14
2.06. Termination of Interest in Collateral..........................................15
2.07. Registration, Transfer and Exchange of Equipment Notes.........................15
2.08. Mutilated, Destroyed, Lost, or Stolen Equipment Notes..........................17
2.09. Payment of Expenses on Transfer; Cancellation..................................18
2.10. Mandatory Redemptions of Equipment Notes.......................................18
2.11. Lessee's Assumption of Equipment Notes..........................................18
2.12. Voluntary Redemptions of Equipment Notes........................................19
2.13. Redemptions; Notice of Redemption..............................................19
2.14. Option to Purchase Equipment Notes.............................................20
2.15. Subordination..................................................................21
3. RECEIPT, DISTRIBUTION, AND APPLICATION OF INCOME...........................................22
3.01. Basic Rent Distribution........................................................22
3.02. Event of Loss; Replacement; Voluntary Termination; Refinancing.................23
3.03. Payments After Event of Default................................................24
3.04. Certain Payments...............................................................26
3.05. Other Payments.................................................................27
3.06. Payments to Owner Trustee......................................................27
3.07. Application of Payments Under Guarantee........................................28
4. COVENANTS OF OWNER TRUSTEE; MORTGAGE EVENTS OF DEFAULT; REMEDIES...........................28
4.01. Covenants of Owner Trustee.....................................................28
4.02. Mortgage Event of Default......................................................29
4.03. Certain Rights.................................................................31
4.04. Remedies ......................................................................33
4.05. Return of Aircraft, Etc........................................................36
4.06. Remedies Cumulative............................................................37
2002 EETC - Mortgage (LL) (11) i Mortgage N__TZ
4.07. Discontinuance of Proceedings..................................................38
4.08. Waiver of Past Defaults........................................................38
4.09. Appointment of Receiver........................................................38
4.10. Loan Trustee Authorized to Execute Bills of Sale, etc..........................39
4.11. Rights of Note Holders to Receive Payment......................................39
5. DUTIES OF LOAN TRUSTEE.....................................................................39
5.01. Notice of Event of Default.....................................................39
5.02. Action upon Instructions; Certain Rights and Limitations.......................40
5.03. Indemnification................................................................43
5.04. No Duties Except as Specified in Mortgage or Instructions......................43
5.05. No Action Except Under Lease, Mortgage, or Instructions........................44
5.06. Replacement Airframes and Replacement Engines..................................44
5.07. Mortgage Supplements for Replacements..........................................47
5.08. Effect of Replacement..........................................................47
5.09. Investment of Amounts Held by Loan Trustee.....................................48
6. OWNER TRUSTEE AND LOAN TRUSTEE.............................................................48
6.01. Acceptance of Trusts and Duties................................................48
6.02. Absence of Duties..............................................................49
6.03. No Representations or Warranties as to Aircraft or Documents....................49
6.04. No Segregation of Money; No Interest...........................................50
6.05. Reliance; Agreements; Advice of Counsel........................................50
6.06. Capacity in Which Acting.......................................................51
6.07. Compensation...................................................................51
6.08. Instructions from Note Holders.................................................51
7. INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE...........................................52
7.01. Scope of Indemnification.......................................................52
8. SUCCESSOR AND SEPARATE TRUSTEES............................................................53
8.01. Notice of Successor Owner Trustee..............................................53
8.02. Resignation of Loan Trustee; Appointment of Successor..........................53
8.03. Appointment of Additional and Separate Trustees................................54
9. SUPPLEMENT AND AMENDMENTS..................................................................56
9.01. Instructions of Majority; Limitations..........................................56
9.02. Trustees Protected.............................................................59
9.03. Documents Mailed to Note Holders...............................................59
9.04. No Request Necessary for Lease Supplement or Mortgage Supplement...............59
9.05. Notices to Liquidity Provider..................................................59
2002 EETC - Mortgage (LL) (11) ii Mortgage N__TZ
10. MISCELLANEOUS.............................................................................59
10.01. Termination of Mortgage.......................................................59
10.02. No Legal Title to Collateral in Note Holders..................................60
10.03. Sale of Aircraft by Loan Trustee Is Binding...................................60
10.04. Mortgage Benefits Specified Persons Only......................................60
10.05. Notices ......................................................................60
10.06. Severability..................................................................61
10.07. No Oral Modification or Continuing Waivers....................................61
10.08. Successors and Assigns........................................................61
10.09. Headings .....................................................................61
10.10. Normal Commercial Relations...................................................61
10.11. Governing Law; Counterpart Form...............................................62
10.12. Voting By Note Holders........................................................62
10.13. Bankruptcy....................................................................62
10.14. No Action Contrary to Lessee's Rights Under the Lease.........................62
10.15. Payments With Respect to Insured Obligations........ERROR! BOOKMARK NOT DEFINED.
SCHEDULE I Equipment Notes Original Amount, Interest Rate, and Amortization
EXHIBIT A Aircraft Description
EXHIBIT B Form of Equipment Note
ANNEX A Definitions
2002 EETC - Mortgage (LL) (11) iii Mortgage N__TZ
TRUST INDENTURE AND MORTGAGE N___TZ
This Trust Indenture and Mortgage (this "Mortgage") is entered into as
of __________, 200_ between Xxxxx Fargo Bank Northwest, N.A., a national banking
association organized under the laws of the United States, not in its individual
capacity, except when referred to as "WFB", but solely as Owner Trustee under
the Trust Agreement referred to below (together with its successors under the
Trust Agreement, the "Owner Trustee"), and Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity, except when referred to as
"WTC", but solely as Loan Trustee hereunder (together with its successors
hereunder, the "Loan Trustee").
W I T N E S S E T H
- - - - - - - - - -
Owner Trustee desires by this Mortgage, among other things, (i) to
provide for the issue by Owner Trustee to the Pass-Through Trustees of Equipment
Notes evidencing the loans made by each of the Loan Participants to finance a
portion of Owner Trustee's payment of Lessor's Cost for the Aircraft, as
provided in the Participation Agreement, and (ii) to provide for the assignment,
mortgage and pledge by Owner Trustee to Loan Trustee, as part of the Collateral
hereunder, among other things, of all of Owner Trustee's right, estate and
interest in and to the Aircraft, and, except as hereinafter expressly provided
as to Excluded Payments, all of Owner Trustee's right, title and interest in, to
and under the Lease and all payments and other amounts received hereunder or
thereunder in accordance with the terms hereof, as security for Owner Trustee's
and Lessee's obligations to the holders of the Equipment Notes and the Mortgage
Indemnitees and for the benefit and security of such Persons;
All things have been done to make the Equipment Notes, when executed by
Owner Trustee and authenticated and delivered by Loan Trustee hereunder, the
valid, binding and enforceable obligations of Owner Trustee; and
All things necessary to make this Mortgage the valid, binding and legal
obligation of Owner Trustee for the uses and purposes herein set forth, in
accordance with its terms, have been done and performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS MORTGAGE WITNESSETH, that, to secure the prompt
payment of the Original Amount of, interest on, Make-Whole Amount, if any,
2002 EETC - Mortgage (LL) (11) 1 Mortgage N__TZ
and all other amounts due with respect to, all Equipment Notes from time to time
outstanding hereunder and the performance and observance by Owner Trustee of all
the agreements, covenants, and provisions contained herein and in the other
Operative Agreements to which it is a party and the Equipment Notes, for the
benefit of the Note Holders and each of the Mortgage Indemnitees and the prompt
payment of all amounts from time to time owing hereunder and under the
Participation Agreement to the Note Holders or any Mortgage Indemnitee by Owner
Trustee or Lessee and for the uses and purposes and subject to the terms and
provisions hereof, and in consideration of the premises and of the covenants
herein contained, and of the acceptance of the Equipment Notes by the holders
thereof, and for other good and valuable consideration the receipt and adequacy
whereof are hereby acknowledged, Owner Trustee hereby grants to Loan Trustee,
its successors in trust and assigns, for the security and benefit of the Note
Holders and each of the Mortgage Indemnitees, a first-priority security interest
in and mortgage lien on all right, title, and interest of Owner Trustee in, to,
and under the following described property, rights, and privileges, whether now
existing or hereafter acquired, other than Excluded Payments (which,
collectively, excluding Excluded Payments but including all property hereafter
specifically subjected to the Lien of this Mortgage by the terms hereof or any
supplement hereto, are included within, and are referred to as, the
"Collateral"):
(1) the Aircraft (including the Airframe and the Engines, all
as more particularly described in the Aircraft Description Exhibit) and all
replacements thereof and substitutions therefor to which Owner Trustee shall
from time to time acquire title as provided herein and in the Lease), as the
same is now and will hereafter be constituted, whether now owned by Owner
Trustee or hereafter acquired, leased or intended to be leased under the Lease,
and in the case of such Engines, whether or not any such Engine shall be
installed in or attached to the Airframe or any other airframe, including all
Parts of whatever nature, which are from time to time included within the
definitions of "Airframe" or "Engines", whether now owned or hereafter acquired,
including all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to the Airframe and Engines (other
than additions, improvements, accessions and accumulations which constitute
appliances, parts, instruments, appurtenances, accessories, furnishings, or
other equipment excluded from the definition of Parts), and all Aircraft
Documents;
(2) all right, title, interest, claims and demands of Owner
Trustee, as Lessor, in, to and under the Lease and the Guarantee, together with
all rights, powers, privileges, options and other benefits of Owner Trustee
2002 EETC - Mortgage (LL) (11) 2 Mortgage N__TZ
as lessor under the Lease, including the immediate and continuing right to
receive and collect all amounts of Basic Rent, Supplemental Rent, income,
revenues, issues, profits, insurance proceeds, condemnation awards and other
payments, tenders and security now or hereafter payable to or receivable by
Lessor under the Lease pursuant thereto, and the right to make all waivers and
agreements, to give and receive copies of all notices and other instruments or
communications, to accept surrender or redelivery of the Aircraft or any part
thereof, as well as all the rights, powers and remedies on the part of Owner
Trustee as Lessor under the Lease, to take such action upon the occurrence of a
Lease Event of Default thereunder, including the commencement, conduct and
consummation of legal, administrative or other proceedings, as shall be
permitted by the Lease or by Law, and to do any and all other things whatsoever
which Owner Trustee or any lessor may be entitled to do under or in respect of
the Lease and any right to restitution from Lessee or any other Person in
respect of any determination of invalidity of the Lease;
[(3) each Permitted Sublease assignment and each assigned
Permitted Sublease (to the extent assigned under such Permitted Sublease
assignment), and all Rent thereunder (including all rents or other amounts of
Basic Rent, Supplemental Rent, and payments of any kind made under such assigned
Permitted Sublease (to the extent assigned under such Permitted Sublease
assignment]1;
[(3)/(4)] the Purchase Agreement (to the extent specified in
the Purchase Agreement Assignment), the Consent and Agreement, the Engine
Warranty Assignment, the Engine Consent and Agreement, and the Bills of Sale and
any and all other contracts, agreements, warranties and instruments relating to
the Airframe and Engines or any rights or interests therein to which Owner
Trustee is now or may hereafter be a party; together with all rights, powers,
privileges, licenses, easements, options and other benefits of Owner Trustee
under each contract, agreement and instrument referred to in this clause (3/4),
including the right to receive and collect all payments to Owner Trustee
thereunder now or hereafter payable to or receivable by Owner Trustee pursuant
thereto and the right to make all waivers and agreements, to give and receive
notices and other instruments or communications, or to take any other action
under or in respect of any thereof or 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 Owner Trustee is or may be
entitled to do thereunder and any right to restitution from
----------------------
(1) Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
2002 EETC - Mortgage (LL) (11) 3 Mortgage N__TZ
Lessee, Owner Participant or any other Person in respect of any determination of
invalidity of any thereof);
[(4)/(5)] all rents, issues, profits, revenues and other
income of the property subjected or required to be subjected to the Lien of this
Mortgage including such proceeds resulting from the sale, lease, or other
disposition thereof, and all estate, right, title and interest of every nature
whatsoever of Owner Trustee in and to the same;
[(5)/(6)] without limiting the generality of the foregoing,
all insurance and requisition proceeds with respect to the Aircraft or any part
thereof, including the insurance required under (ss.) 11 of the Lease;
[(6)/(7)] without limiting the generality of the foregoing,
rights of Owner Trustee to amounts paid or payable by Lessee to Owner Trustee
under the Participation Agreement and all rights of Owner Trustee to enforce
payments of any such amounts thereunder;
[(7)/(8)] without limiting the generality of the foregoing,
money and securities from time to time deposited or required to be deposited
with Loan Trustee pursuant to any terms of this Mortgage or the Lease or
required hereby or by the Lease to be held by Loan Trustee hereunder (other than
Excluded Payments); and
[(8)/(9)] all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Collateral all Excluded Payments,
and the right to enforce and collect the same, and SUBJECT TO all of the terms
and conditions of this Mortgage and the rights of Owner Trustee and Owner
Participant hereunder.
Concurrently with the delivery of this Mortgage, Owner Trustee is
delivering to Loan Trustee the original executed counterpart of the Lease (to
which a chattel paper receipt is attached), and executed copies of the
Participation Agreement, the Purchase Agreement (to the extent assigned by the
Purchase Agreement Assignment), the Purchase Agreement Assignment with the
Consent and Agreement and the Engine Warranty Assignment and Engine Consent and
Agreement.
TO HAVE AND TO HOLD all and singular the aforesaid property unto Loan
Trustee, and its successors and assigns, in trust for the benefit and security
of the Note Holders and the Mortgage Indemnitees, except as provided in
(ss.) 2.15 and (ss.) 3 without any preference, distinction or priority of any
one Equipment Note over any other by reason of priority of time of issue, sale,
negotiation, date
2002 EETC - Mortgage (LL) (11) 4 Mortgage N__TZ
of maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and in all cases and as to all property specified in paragraphs (1)
through [(9)] inclusive above, subject to the terms and provisions set forth in
this Mortgage.
Anything herein contained to the contrary notwithstanding, Owner
Trustee shall remain liable under each of the Mortgage Agreements to which it is
a party to perform all of the obligations assumed by it thereunder, except to
the extent prohibited or excluded from doing so pursuant to the terms and
provisions thereof, and Loan Trustee, the Note Holders and the Mortgage
Indemnitees shall have no obligation or liability under the Mortgage Agreements,
by reason of or arising out of the assignment hereunder, nor shall Loan Trustee,
the Note Holders or the Mortgage Indemnitees be required or obligated in any
manner to perform or fulfill any obligations of Owner Trustee under or pursuant
to any of the Mortgage Agreements to which it is a party, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or present or file any claim, or
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
Owner Trustee does hereby constitute Loan Trustee the true and lawful
attorney of Owner Trustee, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of Owner Trustee or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all money
and claims for money (in each case including insurance and requisition proceeds
but in all cases excluding Excluded Payments) due and to become due under or
arising out of the Mortgage Agreements, and all other property which now or
hereafter constitutes part of the Collateral, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or to take
any action or to institute any proceedings which Loan Trustee may deem to be
necessary or advisable in the premises. Without limiting the generality of the
foregoing, but subject to the rights of Owner Trustee and Owner Participant
hereunder, during the continuance of any Mortgage Event of Default, Loan Trustee
shall have the right under such power of attorney to accept any offer in
connection with the exercise of remedies as set forth herein of any purchaser to
purchase the Airframe and Engines and upon such purchase to execute and deliver
in the name of and on behalf of Owner Trustee an appropriate xxxx of sale and
other instruments of transfer relating to the Airframe and Engines when
purchased by such purchaser, and to perform all other necessary or appropriate
acts with respect to any such purchase, and in
2002 EETC - Mortgage (LL) (11) 5 Mortgage N__TZ
its discretion to file any claim or take any other action or proceedings, either
in its own name or in the name of Owner Trustee or otherwise, which Loan Trustee
may deem necessary or appropriate to protect and preserve the right, title and
interest of Loan Trustee in and to such Rents and other sums and the security
intended to be afforded hereby; provided, that no action of Loan Trustee
pursuant to this paragraph shall increase the obligations or liabilities of
Owner Trustee to any Person beyond those obligations and liabilities
specifically set forth in this Mortgage and in the other Operative Agreements.
Under the Lease, Lessee is directed, so long as this Mortgage shall not have
been fully discharged, to make all payments of Rent (other than Excluded
Payments) and all other amounts which are required to be paid to or deposited
with Owner Trustee pursuant to the Lease (other than Excluded Payments) directly
to, or as directed by, Loan Trustee at such address or addresses as Loan Trustee
shall specify, for application as provided in this Mortgage. Owner Trustee
agrees that promptly upon receipt thereof, it will transfer to Loan Trustee any
and all money from time to time received by it constituting part of the
Collateral, for distribution by Loan Trustee pursuant to this Mortgage, except
that Owner Trustee shall accept for distribution pursuant to the Trust Agreement
any amounts distributed to it by Loan Trustee under this Mortgage.
Owner Trustee agrees that at any time and from time to time, upon the
written request of Loan Trustee, Owner Trustee will promptly and duly execute
and deliver or cause to be duly executed and delivered any and all such further
instruments and documents as Loan Trustee may reasonably deem necessary or
desirable to perfect, preserve or protect the mortgage, security interests and
assignments created or intended to be created hereby or to obtain for Loan
Trustee the full benefits of the assignment hereunder and of the rights and
powers herein granted.
Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to (ss.) 10.01, any of its right,
title or interest hereby assigned, to anyone other than Loan Trustee, and that
it will not, except as otherwise provided in this Mortgage and except with
respect to Excluded Payments to which it is entitled, (i) accept any payment
from Lessee or any Permitted Sublessee under any Mortgage Agreement, (ii) enter
into any agreement amending or supplementing any Mortgage Agreement, (iii)
execute any waiver or modification of, or consent under, the terms of, or
exercise any rights, powers or privileges under, any Mortgage Agreement, (iv)
settle or compromise any claim (other than those relating to an Excluded
Payment) arising under any Mortgage Agreement or (v) submit or consent to the
2002 EETC - Mortgage (LL) (11) 6 Mortgage N__TZ
submission of any dispute, difference or other matter arising under or in
respect of any Mortgage Agreement to arbitration thereunder.
Owner Trustee will not without the written consent of Loan Trustee:
(a) receive or collect or agree to the receipt or
collection of any payment of Rent (other than Excluded Payments),
including Basic Rent, Stipulated Loss Value, Termination Value, EBO
Price, or any other payment to be made pursuant to (ss.) 9, 10, or 17
of the Lease prior to the date for the payment thereof provided for by
the Lease or assign, transfer or hypothecate (other than to Loan
Trustee hereunder) any payment of Rent (other than Excluded Payments),
including Basic Rent, Stipulated Loss Value, Termination Value, EBO
Price, or any other payment to be made pursuant to (ss.) 9, 10, or 17
of the Lease, then due or to accrue in the future under the Lease in
respect of the Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner trustee, sell,
mortgage, transfer, assign or hypothecate (other than to Loan Trustee
hereunder) its interest in the Airframe and Engines or any part thereof
or in any amount to be received by it from the use or disposition of
the Airframe and Engines, other than amounts distributed to it pursuant
to (ss.) 3.
Any and all property described or referred to in the granting clauses hereof
which is hereafter acquired by Owner Trustee shall ipso facto, and without any
further conveyance, assignment or act on the part of Owner Trustee or Loan
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained in
this paragraph shall be deemed to modify or change the obligations of Owner
Trustee contained in the foregoing paragraphs.
Owner Trustee does hereby ratify and confirm the Lease and does hereby
agree that it will not violate any covenant or agreement made by it therein,
herein or in any other Owner Trustee Agreement.
Notwithstanding the Granting Clause or any of the foregoing paragraphs,
there is hereby excluded from the foregoing security interest all Excluded
Payments.
Owner Trustee and Loan Trustee hereby covenant and agree as follows:
2002 EETC - Mortgage (LL) (11) 7 Mortgage N__TZ
1. DEFINITIONS AND CONSTRUCTION
1.01. DEFINITIONS AND CONSTRUCTION. The terms defined in Annex A,
when capitalized as in Annex A, have the same meanings when used in this
Mortgage. Annex A also contains rules of usage that control construction in this
Mortgage.
2. THE EQUIPMENT NOTES
2.01. FORM OF EQUIPMENT NOTES. The Equipment Notes shall be
substantially in the form of Exhibit B.
2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES. The Equipment Notes shall
be dated the date of issuance thereof, shall be issued in two separate series
consisting of Series A and Series B and in the maturities and principal amounts
and shall bear interest as specified in Schedule I hereto. On the Delivery Date,
each Series of Equipment Notes shall be issued to the Subordination Agent on
behalf of the related Pass-Through Trustee under the applicable Pass-Through
Trust Agreement. The Equipment Notes shall be issued in registered form only.
The Equipment Notes shall be issued in denominations of $1,000 and integral
multiples thereof, except that one Equipment Note of each Series may be in an
amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the applicable Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30 day months
and payable for the actual number of days elapsed (including the first day but
excluding the last day)) on the unpaid Original Amount thereof from time to time
outstanding, payable in arrears on __________, 200_, and on each [February 20],
[May 20], [August 20] and [November 20] thereafter until maturity. The Original
Amount of each Equipment Note shall be payable on the dates and in the
installments equal to the corresponding percentage of the Original Amount as set
forth in Schedule I hereto which shall be attached as Schedule I to the
Equipment Notes. Notwithstanding the foregoing, the final payment made under
each Equipment Note shall be in an amount sufficient to discharge in full the
unpaid Original Amount and all accrued and unpaid interest on, and any other
amounts due under, such Equipment Note. Each Equipment Note shall bear interest
at the Past Due Rate (calculated on the basis of a year of 360 days and payable
for the actual number of days elapsed (including the first day but excluding the
last day)) on any part of the Original Amount, Make-Whole Amount, if any, and to
the extent permitted by applicable Law, interest and any other amounts payable
thereunder not paid when due
2002 EETC - Mortgage (LL) (11) 8 Mortgage N__TZ
for any period during which the same shall be overdue, in each case for the
period the same is overdue. Amounts shall be overdue if not paid when due
(whether at stated maturity, by acceleration or otherwise). Notwithstanding
anything to the contrary contained herein, if any date on which a payment under
any Equipment Note becomes due and payable is not a Business Day then such
payment shall not be made on such scheduled date but shall be made on the next
succeeding Business Day, and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment during such
extension. The interest rate borne by the Equipment Notes shall be subject to
adjustments to the extent, and under the circumstances, specified by the
Registration Rights Agreement.
Without limiting the Lessee's obligations to pay Supplemental Rent,
Owner Trustee hereby agrees to pay all amounts described in clauses (2) through
(6) of the definition of Supplemental Rent.
The Equipment Notes shall be executed on behalf of Owner Trustee by its
President or one of its Vice Presidents, Assistant Vice Presidents or Assistant
Secretaries or other authorized officer. Equipment Notes bearing the signatures
of individuals who were at any time the proper officers of Owner Trustee shall
bind Owner Trustee, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Equipment Notes or did not hold such offices at the respective dates of such
Equipment Notes. Owner Trustee may from time to time execute and deliver
Equipment Notes with respect to the Aircraft to Loan Trustee for authentication
upon original issue and such Equipment Notes shall thereupon be authenticated
and delivered by Loan Trustee upon the written request of Owner Trustee signed
by a Vice President or Assistant Vice President or other authorized officer of
Owner Trustee; provided, that each such request shall specify the aggregate
Original Amount of all Equipment Notes to be authenticated hereunder on original
issue with respect to the Aircraft. Each Equipment Note shall be dated the date
of its authentication, which shall be the Delivery Date of the Aircraft in the
case of the original issuance of Equipment Notes. No Equipment Note shall be
secured by or entitled to any benefit under this Mortgage or be valid or
obligatory for any purposes, unless there appears on such Equipment Note a
certificate of authentication in the form provided for herein executed by Loan
Trustee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes shall be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and delivered
hereunder.
2.03. PAYMENTS FROM COLLATERAL ONLY.
2002 EETC - Mortgage (LL) (11) 9 Mortgage N__TZ
(a) Without impairing any of the other rights, powers, remedies,
privileges, or Liens of the Note Holders under this Mortgage, each Note Holder,
by its acceptance of a Equipment Note, agrees that, except as expressly provided
in this Mortgage, the Participation Agreement or any other Operative Agreement,
(i) the obligation to make all payments of the Original Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to the
Equipment Notes, and the performance by Owner Trustee of every obligation or
covenant contained in this Mortgage and in the Participation Agreement or any of
the other Operative Agreements, shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the Collateral and only
to the extent that Owner Trustee shall have sufficient income or proceeds from
the Trust Estate to the extent included in the Collateral to enable Loan Trustee
to make such payments in accordance with the terms of (ss.) 3, and all of the
statements, representations, covenants and agreements made by Owner Trustee
(when made in such capacity) contained in this Mortgage and any agreement
referred to herein other than the Trust Agreement, unless expressly otherwise
stated, are made and intended only for the purpose of binding the Trust Estate
and establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this
Mortgage or such other agreements to the contrary notwithstanding (except for
any express provisions or representations that WFB is responsible for, or is
making, in its individual capacity, for which there would be personal liability
of WFB), no recourse shall be had with respect to this Mortgage or such other
agreements against WFB or against any institution or person which becomes a
successor trustee or co-trustee or any officer, director, trustee, servant or
direct or indirect parent or controlling Person or Persons of any of them, and
(ii) none of WFB, Owner Participant, Loan Trustee and any officer, director,
trustee, servant, employee, agent or direct or indirect parent or controlling
Person or Persons of any of them (other than Owner Trustee in its trust
capacity) shall have any personal liability for any amounts payable or other
obligation owed hereunder, under the Participation Agreement or any of the other
Operative Agreements or under the Equipment Notes except as expressly provided
herein, in the Lease, or in the Participation Agreement; provided, that nothing
contained in this (ss.) 2.03(a) shall be construed to limit the exercise and
enforcement in accordance with the terms of this Mortgage or such other
agreements of rights and remedies against the Trust Estate. These provisions are
not intended as any release or discharge of the indebtedness represented by the
Equipment Notes and this Mortgage, but are intended only as a covenant not to
xxx Owner Participant, WFB, or WTC, except as expressly provided herein or in
the Participation Agreement, for a deficiency with respect to such indebtedness,
the indebtedness represented by this Mortgage and the Equipment Notes to remain
in full force and effect as
2002 EETC - Mortgage (LL) (11) 10 Mortgage N__TZ
fully as though these provisions were not contained in this Mortgage. Owner
Trustee hereby acknowledges that the Note Holders have expressly reserved all
their rights and remedies against the Collateral, including the right, in the
event of a default in the payment of all or part of the Original Amount of
interest on, Make-Whole Amount, if any, or any other amount due with respect to
any Equipment Note within the periods provided for in (ss.) 4.02(b), or upon
the existence of any other Mortgage Event of Default, to foreclose upon this
Mortgage, or to receive the proceeds from the Collateral and otherwise to
enforce any other right under this Mortgage. Nothing in this (ss.) 2.03(a) shall
(x) release Owner Participant from personal liability, or constitute a covenant
not to xxx Owner Participant, for any breach by it of any of its covenants,
representations or warranties contained in the Participation Agreement or for
any of the payments it has agreed to make pursuant to the Participation
Agreement or (y) release Owner Trustee or constitute a covenant not to xxx Owner
Trustee for any breach by it of any representations, warranties or covenants of
Owner Trustee contained in the Operative Agreements or (z) release WFB from
personal liability, or constitute a covenant not to xxx WFB for any breach by it
of any representations, warranties or covenants of WFB made in its individual
capacity in the Operative Agreements.
(b) If (i) all or any part of the Trust Estate becomes the property of,
or Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including (ss.) 1111(b) of the Bankruptcy Code, WFB
or Owner Participant is required, by reason of WFB or Owner Participant being
held to have recourse liability to any Note Holder or Loan Trustee, directly
or indirectly (other than the express recourse liability of WFB or Owner
Participant under the Participation Agreement, the Lease or this Mortgage or by
separate agreement), to make payment on account of any amount payable as
principal of, Make-Whole Amount, if any, interest or other amounts on the
Equipment Notes or under this Mortgage, and (iii) any Note Holder or Loan
Trustee actually receives any Excess Amount (as hereinafter defined) which
reflects any payment by WFB or Owner Participant on account of clause (ii)
above, then such Note Holder or Loan Trustee, as the case may be, shall promptly
refund to WFB or Owner Participant (whichever shall have made such payment) such
Excess Amount.
For purposes of this (ss.) 2.03(b), "Excess Amount" means the amount by
which such payment exceeds the amount that would have been received by a Note
Holder or Loan Trustee if WFB or Owner Participant had not become subject to the
recourse liability referred to in clause (ii) above. Nothing contained in this
(ss.) 2.03(b) shall prevent a Note Holder or Loan Trustee from
2002 EETC - Mortgage (LL) (11) 11 Mortgage N__TZ
enforcing any personal recourse obligation (and retaining the proceeds thereof)
of WFB or Owner Participant under the Participation Agreement or this Mortgage
(and any exhibits or annexes hereto or thereto) or by separate agreement or from
retaining any amount paid by Owner Participant under (ss.) 2.14 or (ss.) 4.03.
2.04. METHOD OF PAYMENT.
(a) The Original Amount of, interest on, Make-Whole Amount, if any, and
other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 11:00
a.m., New York City time, on the due date of payment to Loan Trustee at the
Corporate Trust Office for distribution among the Note Holders in the manner
provided herein. Owner Trustee shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, Loan Trustee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to Owner Trustee), all amounts paid by Owner Trustee
hereunder and under such holder's Equipment Note or Equipment Notes to such
holder or a nominee therefor (including all amounts distributed pursuant to
(ss.) 3 of this Mortgage) by transferring, or causing to be transferred, by wire
transfer of immediately available funds in Dollars, prior to 2:00 p.m., New York
City time, on the due date of payment, to an account maintained by such holder
with a bank located in the continental United States, the amount to be
distributed to such holder, for credit to the account of such holder maintained
at such bank. If Loan Trustee shall fail to make any such payment as provided in
the immediately preceding sentence after its receipt of funds at the place and
prior to the time specified above, WTC agrees to compensate such holders for
loss of use of funds at the Debt Rate until such payment is made and Loan
Trustee shall be entitled to any interest earned on such funds until such
payment is made. Any payment made hereunder shall be made without any
presentment or surrender of any Equipment Note, except that, in the case of the
final payment in respect of any Equipment Note, such Equipment Note shall be
surrendered to Loan Trustee for cancellation promptly after such payment.
Notwithstanding any other provision of this Mortgage to the contrary, Loan
Trustee shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for Loan
Trustee to do so in view of the time of day when the funds to be so transferred
were received by it if such funds were received after 12:30 p.m., New York City
time, at the place of payment. Prior to the due presentment for registration of
transfer of any Equipment Note, Owner Trustee and Loan Trustee shall deem and
treat the
2002 EETC - Mortgage (LL) (11) 12 Mortgage N__TZ
Person in whose name any Equipment Note is registered on the Equipment Note
Register as the absolute owner and holder of such Equipment Note for the purpose
of receiving payment of all amounts payable with respect to such Equipment Note
and for all other purposes, and none of Owner Trustee or Loan Trustee shall be
affected by any notice to the contrary. So long as any signatory to the
Participation Agreement or nominee thereof shall be a registered Note Holder,
all payments to it shall be made to the account of such Note Holder specified in
Schedule I thereto and otherwise in the manner provided in or pursuant to the
Participation Agreement unless it shall have specified some other account or
manner of payment by notice to Loan Trustee consistent with this (ss.) 2.04.
(b) Loan Trustee, as agent for Owner Trustee, shall exclude and
withhold at the appropriate rate from each payment of Original Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (and such exclusion and withholding shall constitute payment
in respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by Law. Loan Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
United States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts (and such withholding shall constitute payment in respect
of such Equipment Note) and timely pay the same to the appropriate authority in
the name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to Owner Trustee and Lessee) appropriate receipts showing
the payment thereof, together with such additional documentary evidence as any
such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to Loan
Trustee a properly completed and currently effective U.S. Internal Revenue
Service Form W-8BEN (or such successor form or forms as may be required by the
United States Treasury Department) during the calendar year in which the payment
hereunder or under the Equipment Note(s) held by such holder is made (but prior
to the making of such payment), or in either of the two preceding calendar
years, and has not notified Loan Trustee of the withdrawal or inaccuracy of such
form prior to the date of such payment (and Loan Trustee has no reason to know
that any information set forth in such form is inaccurate), Loan Trustee shall
withhold only the amount, if any, required by Law (after taking into account any
applicable exemptions properly claimed by
2002 EETC - Mortgage (LL) (11) 13 Mortgage N__TZ
the Note Holder) to be withheld from payments hereunder or under the Equipment
Notes held by such holder in respect of United States federal income tax (and
such withholding shall constitute payment in respect of such Equipment Note). If
a Note Holder (x) which is a Non-U.S. Person has furnished to Loan Trustee a
properly completed and currently effective U.S. Internal Revenue Service Form
W-8ECI in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to avoid
withholding of United States federal income tax), during the calendar year in
which the payment is made (but prior to the making of such payment), and has not
notified Loan Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and Loan Trustee has no reason to know
that any information set forth in such form is inaccurate) or (y) which is a
U.S. Person has furnished to Loan Trustee a properly completed and currently
effective U.S. Internal Revenue Service Form W-9, if applicable, prior to a
payment hereunder or under the Equipment Notes held by such holder, no amount
shall be withheld from payments in respect of United States federal income tax.
If any Note Holder has notified Loan Trustee that any of the foregoing forms or
certificates is withdrawn or inaccurate, or if such holder has not filed a form
claiming an exemption from United States withholding tax or if the Code or the
regulations thereunder or the administrative interpretation thereof are at any
time after the date hereof amended to require such withholding of United States
federal income taxes from payments under the Equipment Notes held by such
holder, Loan Trustee agrees to withhold from each payment due to the relevant
Note Holder withholding taxes at the appropriate rate under Law and will, on a
timely basis as more fully provided above, deposit such amounts with an
authorized depository and make such returns, statements, receipts and other
documentary evidence in connection therewith as required by applicable Law.
Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Loan Trustee to withhold taxes in the manner
provided for herein or for any false, inaccurate, or untrue evidence provided by
any Note Holder hereunder.
2.05. APPLICATION OF PAYMENTS. In the case of each Equipment Note (and,
subject to the provisions of (ss.) 3) each payment of Original Amount, Make-
Whole Amount, if any, and interest or other amounts due thereon shall be
applied:
First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Original Amount, any overdue
Make-
2002 EETC - Mortgage (LL) (11) 14 Mortgage N__TZ
Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such payment;
Second: to the payment of the Original Amount of such
Equipment Note (or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to any
payments of the portions of Original Amount of such Equipment Note remaining
unpaid (provided, that such Equipment Note shall not be subject to redemption
except as provided in (ss.) 2.10, (ss.) 2.12, and (ss.) 2.13).
The amounts paid pursuant to clause "Fourth" above shall be applied to
the payment of installments of Original Amount of such Equipment Note in the
inverse order of their normal maturity.
2.06. TERMINATION OF INTEREST IN COLLATERAL. No Note Holder or any
other Mortgage Indemnitee shall, as such, have any further interest in, or other
right with respect to, the Collateral when and if the Original Amount of,
Make-Whole Amount, if any, and interest on and other amounts due under all
Equipment Notes held by such Note Holder and all other sums then due and payable
to such Note Holder, such Mortgage Indemnitee or Loan Trustee hereunder
(including under the third paragraph of (ss.) 2.02) and under the other
Operative Agreements by Owner Trustee and Lessee (collectively, the "Secured
Obligations") shall have been paid in full.
2.07. REGISTRATION, TRANSFER AND EXCHANGE OF EQUIPMENT NOTES. Loan
Trustee shall keep a register (the "Equipment Note Register") in which Loan
Trustee shall provide for the registration of Equipment Notes and the
registration of transfers of Equipment Notes. No such transfer shall be given
effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of Loan
Trustee. Loan Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to Loan Trustee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, Owner
2002 EETC - Mortgage (LL) (11) 15 Mortgage N__TZ
Trustee shall execute, and Loan Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original Amount and of the same series. At the option
of the Note Holder, Equipment Notes may be exchanged for other Equipment Notes
of any authorized denominations of a like aggregate Original Amount, upon
surrender of the Equipment Notes to be exchanged to Loan Trustee at the
Corporate Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, Owner Trustee shall execute, and Loan Trustee shall authenticate and
deliver, the Equipment Notes which the Note Holder making the exchange is
entitled to receive. All Equipment Notes issued upon any registration of
transfer or exchange of Equipment Notes (whether under this (ss.) 2.07 or under
(ss.) 2.08 or otherwise under this Mortgage) shall be the valid obligations of
Owner Trustee evidencing the same respective obligations, and entitled to the
same security and benefits under this Mortgage, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every Equipment Note
presented or surrendered for registration of transfer, shall (if so required by
Loan Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to Loan Trustee duly executed by the Note Holder
or such holder's attorney duly authorized in writing, and Loan Trustee shall
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act, and the securities Laws of any applicable state. Loan
Trustee shall make a notation on each new Equipment Note of the amount of all
payments of Original Amount previously made on the old Equipment Note or
Equipment Notes with respect to which such new Equipment Note is issued and the
date to which interest on such old Equipment Note or Equipment Notes has been
paid. Interest shall be deemed to have been paid on such new Equipment Note to
the date on which interest shall have been paid on such old Equipment Note, and
all payments of the Original Amount marked on such new Equipment Note, as
provided above, shall be deemed to have been made thereon. Owner Trustee shall
not be required to exchange any surrendered Equipment Notes as provided above
during the ten-day period preceding the due date of any payment on such
Equipment Note. Owner Trustee shall in all cases deem the Person in whose name
any Equipment Note shall have been issued and registered as the absolute owner
and holder of such Equipment Note for the purpose of receiving payment of all
amounts payable by Owner Trustee with respect to such Equipment Note and for all
purposes until a notice stating otherwise is received from Loan Trustee and such
change is reflected on the Equipment Note Register. Loan Trustee will promptly
notify Owner Trustee, Owner Participant and Lessee of each registration of a
transfer of an Equipment Note. Any such transferee of an Equipment Note, by its
acceptance of an Equipment Note, agrees to the provisions of the Participation
Agreement applicable to Note
2002 EETC - Mortgage (LL) (11) 16 Mortgage N__TZ
Holders, including (xx.xx.) 6.5, 7.5, 7.6, and 10, and shall be deemed to have
represented and warranted (except as provided above), and covenanted, to the
parties to the Participation Agreement as to the matters represented, warranted
and covenanted as provided in the Participation Agreement. Subject to compliance
by the Note Holder and its transferee (if any) of the requirements set forth in
this (ss.) 2.07, Loan Trustee and Owner Trustee shall use all reasonable efforts
to issue new Equipment Notes upon transfer or exchange within 10 Business Days
of the date an Equipment Note is surrendered for transfer or exchange.
2.08. MUTILATED, DESTROYED, LOST, OR STOLEN EQUIPMENT NOTES. If any
Equipment Note shall become mutilated, destroyed, lost or stolen, Owner Trustee
shall, upon the written request of the holder of such Equipment Note, execute
and Loan Trustee shall authenticate and deliver in replacement thereof a new
Equipment Note of the same series, payable in the same Original Amount dated the
same date and captioned as issued in connection with the Aircraft. If the
Equipment Note being replaced has become mutilated, such Equipment Note shall be
surrendered to Loan Trustee and a photocopy thereof shall be furnished to Owner
Trustee. If the Equipment Note being replaced has been destroyed, lost or
stolen, the holder of such Equipment Note shall furnish to Owner Trustee, Owner
Participant and Loan Trustee such security or indemnity as may be required by
them to save Owner Trustee, Owner Participant and Loan Trustee harmless and
evidence satisfactory to Owner Trustee, Owner Participant and Loan Trustee of
the destruction, loss or theft of such Equipment Note and of the ownership
thereof.
If a "qualified institutional buyer" of the type referred to in
paragraph (a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a
"QIB") is the holder of any such destroyed, lost or stolen Equipment Note, then
the written indemnity of such QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Lessee, Owner
Participant, Owner Trustee and Loan Trustee shall be accepted as satisfactory
indemnity and security and no further indemnity or security shall be required as
a condition to the execution and delivery of such new Equipment Note. Subject to
compliance by the Note Holder of the requirements set forth in this (ss.) 2.08,
Loan Trustee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes within 10 Business Days of the date of the written request
therefor from the Note Holder.
2002 EETC - Mortgage (LL) (11) 17 Mortgage N__TZ
2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but Loan Trustee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
(b) Loan Trustee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation, shall
destroy the canceled Equipment Notes and shall deliver to Owner Trustee, upon
request, its certification to such effect.
2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES.
(a) On the date on which Lessee is required pursuant to (ss.) 10.1.2 of
the Lease to make payment for an Event of Loss with respect to the Aircraft, all
of the Equipment Notes shall be redeemed in whole at a redemption price equal to
100% of the unpaid Original Amount thereof, together with all accrued interest
thereon to the date of redemption and all other amounts payable hereunder or
under the Participation Agreement to the Note Holders but without Make-Whole
Amount.
(b) If the Lease is terminated with respect to the Aircraft by Lessee
pursuant to (ss.) 9 or (ss.) 17.3 thereof and Lessee shall not have assumed all
of the obligations of Owner Trustee hereunder pursuant to (ss.) 2.11 hereof and
(ss.) 11.6 of the Participation Agreement, on the date the Lease is so
terminated all the Equipment Notes shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement and all other Operative
Agreements to the Note Holders plus Make-Whole Amount, if any.
2.11. LESSEE'S ASSUMPTION OF EQUIPMENT NOTES. If, in accordance with
(ss.) 17.3.6 of the Lease and (ss.) 11.6 of the Participation Agreement, Lessee
elects to assume Owner Trustee's obligations hereunder, under the Equipment
Notes, and under the other Operative Agreements by a supplement to this Mortgage
reasonably satisfactory to Mortgagee (which shall contain (a) provisions
substantially similar to (xx.xx.) 6, 7, 8, 10, 11 and 12 of the Lease, and (b)
other provisions necessary or advisable to effectuate such assumption), then,
upon delivery of such supplement, Guarantor's delivery of a guarantee of the
Equipment Notes and other amounts owing to the Note Holders and the other
2002 EETC - Mortgage (LL) (11) 18 Mortgage N__TZ
Mortgage Indemnitees substantially in the form of the Guarantee, Lessee's
counsel's delivery of an opinion to the effect that such assumption has been
duly and validly effected, and compliance with all other requirements of
(ss.) 11.6 of the Participation Agreement and (ss.) 1(j) of the Note Purchase
Agreement, Owner Trustee shall be released and discharged from any further
obligations hereunder and under the Equipment Notes and all other Operative
Documents, and Owner Participant shall be released and discharged from any
further obligations under the Participation Agreement and any other Operative
Document to which it is a party, except with respect to any obligations that
accrued before the release date.
2.12. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES. All (but not less than
all) of the Equipment Notes may be redeemed at the option of Owner Trustee in
connection with a transaction described in, and subject to the terms and
conditions of, (ss.) 11 of the Participation Agreement, upon at least 30 days'
revocable written notice to Loan Trustee and the Note Holders. In these
circumstances, the Equipment Notes shall be redeemed in whole at a redemption
price equal to 100% of the unpaid Original Amount thereof, together with accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement and a Make-Whole Amount, if any.
2.13. REDEMPTIONS; NOTICE OF REDEMPTION.
(a) Neither any redemption of any Equipment Note nor any purchase by
Owner Trustee of any Equipment Note may be made except to the extent and in the
manner expressly permitted by this Mortgage. No purchase of any Equipment Note
may be made by Loan Trustee.
(b) Upon receipt of notice thereof, notice of redemption or purchase
with respect to the Equipment Notes shall be given by Loan Trustee by
first-class mail, postage prepaid, mailed not less than 25 nor more than 60 days
prior to the applicable redemption date, to each Note Holder of such Equipment
Notes to be redeemed or purchased, at such Note Holder's address appearing in
the Equipment Note Register; provided, that, in the case of a redemption to be
made pursuant to (ss.) 2.10(b) or (ss.) 2.12, such notice shall be revocable and
shall be deemed revoked if the Lease does not in fact terminate on the specified
termination date or if such refinancing does not occur on the date specified in
the notice thereof, as the case may be. All notices of redemption shall state:
(1) the redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become due and
payable upon each such Equipment Note, and that, if any such Equipment
2002 EETC - Mortgage (LL) (11) 19 Mortgage N__TZ
Notes are then outstanding, interest on such Equipment Notes shall cease to
accrue on and after such redemption date, and (4) the place or places where such
Equipment Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, Owner Trustee (or any person on
behalf of Owner Trustee) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed or purchased on the redemption date
shall not then be held in the Collateral, deposit or cause to be deposited with
Loan Trustee by 12:00 noon on the redemption date in immediately available funds
the redemption price of the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to (ss.) 2.13(b)), the
Equipment Notes to be redeemed or purchased shall, on the redemption date,
become due and payable at the Corporate Trust Office of Loan Trustee or at any
office or agency maintained for such purposes pursuant to (ss.) 2.07, and from
and after such redemption date (unless there shall be a default in the payment
of the redemption price) any such Equipment Notes then outstanding shall cease
to bear interest. Upon surrender of any such Equipment Note for redemption or
purchase in accordance with said notice, such Equipment Note shall be redeemed
at the redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
redemption date at the interest rate in effect for such Equipment Note as of
such redemption date.
2.14. OPTION TO PURCHASE EQUIPMENT NOTES. Either Owner Trustee or Owner
Participant may, upon the events and subject to the terms and conditions and for
the price set forth in this (ss.) 2.14, purchase all but not less than all of
the Equipment Notes outstanding hereunder, and each Note Holder agrees that it
will, upon such events and subject to such terms and conditions and upon receipt
of such price, sell, assign, transfer and convey to such purchaser or its
nominee (without recourse or warranty of any kind except as to its title to the
Equipment Notes and except against Liens on such Equipment Notes arising by,
through or under such holder), all of the right, title and interest of such Note
Holder in and to the Collateral, this Mortgage and the Equipment Notes held by
it, and such purchaser or its nominee shall assume all of such holder's
obligations under the Participation Agreement and hereunder.
2002 EETC - Mortgage (LL) (11) 20 Mortgage N__TZ
Such option to purchase the Equipment Notes may be exercised by Owner
Trustee or Owner Participant upon any of the following events, and, in any such
event, the purchase price thereof shall equal for each Equipment Note the
aggregate unpaid Original Amount thereof, plus accrued and unpaid interest
thereon to but not including the date of purchase and all other amounts (other
than the Make-Whole Amount, except as provided in the next sentence) then
payable hereunder or under the Participation Agreement to the holder thereof.
Such option to purchase the Equipment Notes may be exercised: (i) upon a
Mortgagee Event or (ii) if a Lease Event of Default exists or (iii) upon either
the Equipment Notes becoming due and payable pursuant to (ss.) 4.04(b) hereof or
the Loan Trustee taking action or notifying the Owner Trustee or the Owner
Participant that it intends to take action to foreclose the Lien of this
Mortgage or otherwise commence the exercise of remedies under this Mortgage or
the Lease, provided, that if such option is exercised pursuant to clause (ii) at
a time when a Lease Event of Default has existed for less than 120 days, the
purchase price thereof shall equal the price provided in the preceding sentence
plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by Owner
Trustee or Owner Participant giving written notice of its irrevocable election
of such option to Loan Trustee, which notice shall specify a date for such
purchase not more than 30 days or less than 15 days after the date of such
notice. Loan Trustee shall not exercise any of the remedies hereunder or,
without the consent of Owner Trustee or Owner Participant, under the Lease,
during the period from the time that a notice of exercise by Owner Participant
of such option is given until the date on which such purchase is required to
occur pursuant to the terms of the preceding sentence.
If Owner Trustee or Owner Participant on or before the date of such
purchase shall so request, the Note Holders will comply with all the provisions
of (ss.) 2.07 to enable new Equipment Notes to be issued to Owner Trustee or
Owner Participant or its nominee in such denominations as Owner Trustee or Owner
Participant shall request. All taxes, charges and expenses required pursuant to
(ss.) 2.09 in connection with the issuance of such new Equipment Note shall be
borne by Owner Participant.
2.15. SUBORDINATION.
(a) Owner Trustee and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed to
such Note Holder of such Series, including any payment or distribution of
2002 EETC - Mortgage (LL) (11) 21 Mortgage N__TZ
cash, property or securities after the commencement of a proceeding of the type
referred to in (ss.) 4.02(g), except as expressly provided in ss. 3.
(b) By the acceptance of its Equipment Notes of any Series (other than
Series A), each Note Holder of such Series agrees that if such Note Holder, in
its capacity as a Note Holder, shall receive any payment or distribution on any
Secured Obligations in respect of such Series which it is not entitled to
receive under this (ss.) 2.15 or (ss.) 3, it will hold any amount so received in
trust for the Senior Holder (as defined in (ss.) 2.15(c)) and will forthwith
turn over such payment to Loan Trustee in the form received to be applied as
provided in (ss.) 3.
(c) As used in this (ss.) 2.15, the term "Senior Holder" shall mean (i)
the Note Holders of Series A until the Secured Obligations in respect of Series
A Equipment Notes have been paid in full, and (ii) after the Secured Obligations
in respect of Series A Equipment Notes have been paid in full, the Note Holders
of Series B until the Secured Obligations in respect of Series B Equipment Notes
have been paid in full.
3. RECEIPT, DISTRIBUTION, AND APPLICATION OF
INCOME
3.01. BASIC RENT DISTRIBUTION. Except as otherwise provided in
(ss.) 3.03, each installment of Basic Rent, any payment of interest on overdue
installments of Basic Rent and any payment received by Loan Trustee pursuant to
(ss.) 4.03 shall be promptly distributed in the following order of priority:
First, (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments of
Original Amount and interest and other amounts (as well as any interest on any
overdue Original Amount and, to the extent permitted by applicable law, on any
overdue interest and any other overdue amounts) then due under all Series A
Equipment Notes shall be distributed to the Note Holders of Series A ratably,
without priority of one over the other, in the proportion that the amount of
such payment or payments then due under each Series A Equipment Note bears to
the aggregate amount of the payments then due under all Series A Equipment
Notes; and
(ii) after giving effect to paragraph (i) above, so much of
such installment or payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of Original Amount and interest and
other amounts (as well as any interest on any overdue Original Amount
2002 EETC - Mortgage (LL) (11) 22 Mortgage N__TZ
and, to the extent permitted by applicable law, on any overdue interest and any
other overdue amounts) then due under all Series B Equipment Notes shall be
distributed to the Note Holders of Series B ratably, without priority of one
over the other, in the proportion that the amount of such payment or payments
then due under each Series B Equipment Note bears to the aggregate amount of the
payments then due under all Series B Equipment Notes; and
Second, the balance, if any, of such installment remaining
thereafter shall be distributed to Owner Trustee; provided, that if a Mortgage
Event of Default exists, then such balance shall not be distributed as provided
in this clause "Second" but shall be held by Loan Trustee as part of the
Collateral and invested in accordance with (ss.) 5.09 until whichever of the
following shall first occur: (i) all Mortgage Events of Default shall have been
cured or waived, in which event such balance shall be distributed as provided in
this clause "Second" without reference to this proviso, (ii) (ss.) 3.03 shall be
applicable, in which event such balance shall be distributed in accordance with
the provisions of (ss.) 3.03, or (iii) the 120th day after the receipt of such
payment in which case such payment shall be distributed as provided in this
clause "Second" without reference to this proviso.
3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION; REFINANCING.
Except as otherwise provided in (ss.) 3.03, any payments received by Loan
Trustee (i) with respect to the Aircraft as the result of an Event of Loss,
(ii) pursuant to a voluntary termination of the Lease pursuant to (ss.) 9 or
(ss.) 17.3 thereof, or (iii) in connection with a refinancing of the Equipment
Notes pursuant to (ss.) 11 of the Participation Agreement shall be applied to
redemption of the Equipment Notes and to all other amounts payable to Loan
Trustee or any Note Holder hereunder or under the Participation Agreement by
applying such funds in the following order of priority:
First, (a) to reimburse Loan Trustee and the Note Holders for
any reasonable costs or expenses incurred in connection with such redemption for
which they are entitled to reimbursement, or indemnity by Lessee, under the
Operative Agreements and then (b) to pay any other amounts then due to Loan
Trustee, the Note Holders and the other Mortgage Indemnitees under this
Mortgage, the Participation Agreement or the Equipment Notes;
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of (ss.) 3.03 plus Make-Whole Amount, if any, then due and
payable in respect of the Series A Equipment Notes; and
2002 EETC - Mortgage (LL) (11) 23 Mortgage N__TZ
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "Third" of (ss.) 3.03 plus
Make-Whole Amount, if any, then due and payable in respect of the Series B
Equipment Notes; and
Third, as provided in clause "Fourth" of (ss.) 3.03,
provided, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in (ss.) 10 of the Lease and in accordance with (ss.) 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to Loan Trustee shall be held by Loan Trustee as permitted by
(ss.) 6.04 hereof (provided, that such moneys shall be invested as provided in
(ss.) 5.09 hereof) as additional security for the obligations of Lessee under
the Lessee Operative Agreements and, unless otherwise applied pursuant to the
Lease, such proceeds (and any related investment earnings) shall be released to
Lessee at Lessee's written request upon the release of such Airframe or Engine
subject to such Event of Loss and the replacement thereof as provided in the
Lease.
3.03. PAYMENTS AFTER EVENT OF DEFAULT. Except as otherwise provided in
(ss.) 3.04, all payments received and amounts held or realized by Loan Trustee
(including any amounts realized by Loan Trustee from the exercise of any
remedies pursuant to (ss.) 15 of the Lease or (ss.) 4 hereof) after both a
Mortgage Event of Default exists and the Equipment Notes shall have become due
and payable pursuant to (ss.) 4.04(b) hereof, as well as all payments or
amounts then held by Loan Trustee as part of the Collateral, shall be promptly
distributed by Loan Trustee in the following order of priority:
First, so much of such payments or amounts as shall be
required to (i) reimburse Loan Trustee for any compensation, tax (except to the
extent resulting from a failure of the Loan Trustee to withhold taxes pursuant
to (ss.) 2.04(b) hereof), expense or other loss (including all amounts to be
expended at the expense of, or charged upon the tolls, rents, revenues, issues,
products and profits of, the property included in the Collateral (all such
property being herein called the "Mortgaged Property") pursuant to
(ss.) 4.05(b)) incurred by Loan Trustee (to the extent not previously
reimbursed), the expenses of any sale, taking or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other expenditures incurred
or expenditures or advances made by Loan Trustee or the Note Holders in the
protection, exercise or enforcement of any right, power or remedy or any
damages sustained by Loan Trustee or any Note Holder, liquidated or otherwise,
upon such Mortgage Event of Default shall be applied by Loan Trustee as between
itself and the Note Holders in
2002 EETC - Mortgage (LL) (11) 24 Mortgage N__TZ
reimbursement of such expenses and any other expenses for which Loan Trustee or
the Note Holders are entitled to reimbursement under any Operative Agreement and
(ii) to pay all amounts payable to the other Mortgage Indemnitees hereunder and
under the Participation Agreement and the Lease; and in the case the aggregate
amount to be so distributed is insufficient to pay as aforesaid in clauses (i)
and (ii), then ratably, without priority of one over the other, in proportion to
the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall
be required to reimburse the then existing or prior Note Holders for payments
made pursuant to (ss.) 5.03 (to the extent not previously reimbursed) shall be
distributed to such then existing or prior Note Holders ratably, without
priority of one over the other, in accordance with the amount of the payment or
payments made by each such then existing or prior Note Holder pursuant to said
(ss.) 5.03;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Original Amount of all
Series A Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon (other than Make-Whole Amount, which shall not be payable) and all
other Secured Obligations in respect of the Series A Equipment Notes (other than
Make-Whole Amount, if any) to the date of distribution, shall be distributed to
the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that the aggregate
unpaid Original Amount of all Series A Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Amount, if any) to the date of distribution, bears to the
aggregate unpaid Original Amount of all Series A Equipment Notes held by all
such holders plus the accrued but unpaid interest and other amounts due thereon
(other than Make-Whole Amount, if any) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in full the
aggregate unpaid Original Amount of all Series B Equipment Notes, and the
accrued but unpaid interest and other amounts due thereon (other than Make-Whole
Amount, which shall not be payable) and all other Secured Obligations in respect
of the Series B Equipment Notes (other than Make-Whole Amount, if any) to the
date of distribution, shall be distributed to the Note Holders of Series B, and
in case the aggregate amount so to be distributed shall be insufficient to pay
in full as aforesaid, then ratably, without priority of one over the other, in
the proportion that the aggregate unpaid Original Amount of all
2002 EETC - Mortgage (LL) (11) 25 Mortgage N__TZ
Series B Equipment Notes held by each holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder (other than Make-Whole
Amount, if any) to the date of distribution, bears to the aggregate unpaid
Original Amount of all Series B Equipment Notes held by all such holders plus
the accrued but unpaid interest and other amounts due thereon (other than
Make-Whole Amount, if any) to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to Owner Trustee.
No Make-Whole Amount shall be due and payable on the Equipment Notes as
a consequence of the acceleration of the Equipment Notes as a result of a
Mortgage Event of Default.
3.04. CERTAIN PAYMENTS.
(a) Any payments received by Loan Trustee for which no provision as to
the application thereof is made in this Mortgage and for which such provision is
made in the Lease, the Participation Agreement or any other Operative Agreement
shall be applied forthwith to the purpose for which such payment was made in
accordance with the terms of the Lease, the Participation Agreement or such
other Operative Agreement, as the case may be.
(b) Notwithstanding anything to the contrary in this (ss.) 3, Loan
Trustee will distribute promptly upon receipt any indemnity payment received by
it from Owner Trustee or Lessee in respect of WTC, any Note Holder, or any
other Mortgage Indemnitee, in each case whether pursuant to (ss.) 9 of the
Participation Agreement or as Supplemental Rent (other than clauses (2), (3),
(4), and (5) of the definition thereof), directly to the Person entitled
thereto. Any payment received by Loan Trustee as Supplemental Rent pursuant to
clauses (2), (3), (4), or (5) of the definition thereof under the third
paragraph of (ss.) 2.02 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained in (ss.) 3, any
amounts received by Loan Trustee which constitute Excluded Payments shall be
distributed promptly upon receipt by Loan Trustee directly to the Person or
Persons entitled thereto.
(d) Notwithstanding any provision of this Mortgage to the contrary, any
amounts held by Loan Trustee pursuant to the terms of the Lease [or any
Permitted Sublease assignment] shall be held by Loan Trustee as security for
2002 EETC - Mortgage (LL) (11) 26 Mortgage N__TZ
the obligations of Lessee under the Lessee Operative Agreements and, if and when
required by the Lease, paid or applied in accordance with the applicable
provisions of the Lease.
3.05. OTHER PAYMENTS. Any payments received by Loan Trustee for which
no provision as to the application thereof is made in the Lease, the
Participation Agreement, elsewhere in this Mortgage or in any other Operative
Agreement shall be distributed by Loan Trustee to the extent received or
realized at any time (i) prior to the payment in full of all Secured
Obligations, in the order of priority specified in (ss.) 3.01 subject to the
proviso thereto, and (ii) after payment in full of all Secured Obligations, in
the following order of priority:
First, to the extent payments or amounts described in clause
"First" of (ss.) 3.03 are otherwise obligations of Lessee under the Operative
Agreements or for which Lessee is obligated to indemnify against thereunder, in
the manner provided in clause "First" of (ss.) 3.03, and
Second, in the manner provided in clause "Fourth" of
(ss.) 3.03.
Further, and except as otherwise provided in (xx.xx.) 3.02, 3.03, and
3.04, all payments received and amounts realized by Loan Trustee under the Lease
or otherwise with respect to the Aircraft (including all amounts realized upon
the sale or re-lease of the Aircraft after the termination of the Lease with
respect thereto), to the extent received or realized at any time after payment
in full of all Secured Obligations shall be distributed by Loan Trustee in the
order of priority specified in clause (ii) of the immediately preceding sentence
of this (ss.) 3.05.
3.06. PAYMENTS TO OWNER TRUSTEE. Any amounts distributed hereunder by
Loan Trustee to Owner Trustee shall be paid to Owner Trustee (within the time
limits contemplated by (ss.) 2.04(a)) by wire transfer of funds of the type
received by Loan Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner Trustee to Loan
Trustee from time to time. Owner Trustee hereby notifies Loan Trustee that
unless and until Loan Trustee receives notice to the contrary from Owner
Trustee, all amounts to be distributed to Owner Trustee pursuant to clause
"Second" of (ss.) 3.01 shall be distributed by wire transfer of funds of the
type received by Loan Trustee to Owner Participant's account (within the time
limits contemplated by (ss.) 2.04(a)) specified in Schedule I to the
Participation Agreement.
2002 EETC - Mortgage (LL) (11) 27 Mortgage N__TZ
3.07. APPLICATION OF PAYMENTS UNDER GUARANTEE. All payments received by
Loan Trustee pursuant to the Guarantee shall be distributed forthwith by Loan
Trustee in the same order of priority, and in the same manner, as it would have
distributed the payment in respect of which such payment under the Guarantee was
received.
4. COVENANTS OF OWNER TRUSTEE; MORTGAGE EVENTS OF
DEFAULT; REMEDIES
4.01. COVENANTS OF OWNER TRUSTEE. Owner Trustee hereby covenants and
agrees (the covenants and agreements in clause (b) below being made only by WFB)
as follows:
(a) Owner Trustee will duly and punctually pay the Original
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under the Equipment Notes and hereunder in accordance with the terms of the
Equipment Notes and this Mortgage and all amounts, if any, payable by it to the
Note Holders under the Participation Agreement or (ss.) 9 of the Lease;
(b) WFB will not, directly or indirectly, cause or permit to
exist a Lessor Lien attributable to it in its individual capacity with respect
to the Aircraft or any other portion of the Trust Estate; will promptly, at its
own expense, take such action as may be necessary to duly discharge such Lessor
Lien attributable to it in its individual capacity; and will make restitution to
the Trust Estate for any actual diminution of the assets of the Trust Estate
resulting from such Lessor Liens attributable to it in its individual capacity;
(c) if Owner Trustee shall have Actual Knowledge of a Mortgage
Default or an Event of Loss, Owner Trustee will give prompt written notice of
such Mortgage Default or Event of Loss to Loan Trustee, each Note Holder, Lessee
and Owner Participant;
(d) Owner Trustee will furnish to Loan Trustee, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates and other instruments furnished to Owner Trustee under the
Lease, including a copy of each report or notice received pursuant to (ss.) 9.1
and (ss.) E of Annex D of the Lease to the extent that the same shall not have
been furnished to Loan Trustee pursuant to the Lease;
(e) except pursuant to the Operative Agreements or with the
consent of Loan Trustee (acting pursuant to instructions given in accordance
2002 EETC - Mortgage (LL) (11) 28 Mortgage N__TZ
with (ss.) 9.01), Owner Trustee will not contract for, create, incur, assume or
suffer to exist any Debt, and will not guarantee (directly or indirectly or by
an instrument having the effect of assuring another's payment or performance of
any obligation or capability of so doing, or otherwise), endorse or otherwise be
or become contingently liable, directly or indirectly, in connection with the
Debt of any other person; and
(f) Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing thereof to
Lessee and the carrying out of the transactions contemplated hereby and by the
Lease, the Participation Agreement, the Trust Agreement and the other Operative
Agreements.
4.02. MORTGAGE EVENT OF DEFAULT. "Mortgage Event of Default" means any
of the following events (whatever the reason for such event and whether such
event shall be voluntary or involuntary or come about or be effected by
operation of Law or pursuant to or in compliance with any judgment, decree, or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) any Lease Event of Default (provided, that any such Lease
Event of Default caused solely by a failure of Lessee to pay to Owner Trustee or
Owner Participant when due any amount that is included in the definition of
Excluded Payments shall not constitute a Mortgage Event of Default unless notice
is given by Owner Participant to Loan Trustee that such failure shall constitute
a Mortgage Event of Default); or
(b) the failure of Owner Trustee to pay when due any payment
of Original Amount of, interest on, Make-Whole Amount, if any, or other amount
due and payable under any Equipment Note or hereunder (other than any such
failure arising by virtue of a tax withheld pursuant to (ss.) 2.04(b) or as a
result of a Lease Default) and such failure shall have continued unremedied for
five Business Days in the case of any payment of Original Amount or interest or
Make-Whole Amount, if any, thereon and, in the case of any other amount, for ten
Business Days after Owner Trustee and Owner Participant receive written demand
from Loan Trustee or any Note Holder; or
(c) any Lien required to be discharged by WFB pursuant to ss.
4.01(b) hereof or WFB or Owner Trustee pursuant to (ss.) 7.2.1 of the
Participation Agreement, or by Owner Participant pursuant to (ss.) 7.2.1 of the
Participation Agreement shall remain undischarged for a period of 30 days after
2002 EETC - Mortgage (LL) (11) 29 Mortgage N__TZ
Owner Trustee and Owner Participant shall have received written notice from Loan
Trustee or any Note Holder of such Lien; or
(d) any representation or warranty made by Owner Participant
or Owner Trustee herein, in the Participation Agreement or in any certificate
furnished by Owner Participant or Owner Trustee to Loan Trustee or any Note
Holder in connection with the transactions contemplated by the Operative
Agreements or by any Person guaranteeing or supporting the obligations of Owner
Participant under the Operative Agreements in any related guarantee or support
agreement (an "OP Guarantor") shall prove to have been false or incorrect when
made in any material respect and continues to be material and adverse to the
interests of Loan Trustee or the Note Holders, and if such misrepresentation is
capable of being corrected and if such correction is being sought diligently,
such misrepresentation shall not have been corrected within 60 days (or, without
affecting (ss.) 4.02(f) hereof, in the case of the representations made in (ss.)
6.2.6 of the Participation Agreement as to the citizenship of WFB or of Owner
Participant, respectively, as soon as is reasonably practicable but in any event
within 60 days) following notice thereof from Loan Trustee or any Note Holder to
Owner Trustee and Owner Participant or an OP Guarantor, as the case may be; or
(e) other than as provided in (c) above or (f) below, any
failure by Owner Trustee or Owner Participant to observe or perform any other
covenant or obligation of Owner Trustee or Owner Participant, as the case may
be, for the benefit of Loan Trustee or the Note Holders contained in the
Participation Agreement, (ss.) 4.2.1 of the Trust Agreement, the Equipment Notes
or this Mortgage or any failure of an OP Guarantor to observe or perform any
covenant or obligation of such Person contained in its guarantee or support
agreement which is not remedied within a period of 60 days after notice thereof
has been given to Owner Trustee, Owner Participant or an OP Guarantor, as the
case may be; or
(f) if at any time when the Aircraft is registered under the
laws of the United States, Owner Participant shall not be a Citizen of the
United States, and as the result thereof the registration of the Aircraft under
the Federal Aviation Act, and regulations then applicable thereunder, shall
cease to be effective; provided, that no Mortgage Event of Default shall be
deemed to have occurred under this paragraph (f) unless such circumstances
continue unremedied for more than 60 days after Owner Participant has Actual
Knowledge of the state of facts that resulted in such ineffectiveness and of
such loss of citizenship; or
2002 EETC - Mortgage (LL) (11) 30 Mortgage N__TZ
(g) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of Owner Participant, Owner Trustee or the
Trust Estate 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 seeking the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
Owner Participant, an OP Guarantor, Owner Trustee, the Trust or the Trust Estate
or for all or substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of 60 consecutive days; or (ii)
the commencement by Owner Participant, Owner Trustee, the Trust or the Trust
Estate of a voluntary case or proceeding 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 Owner Participant, an OP Guarantor, Owner Trustee, the Trustee or the Trust
Estate to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Owner
Participant, such OP Guarantor, Owner Trustee, the Trust, or the Trust Estate or
for all or substantially all of its property, or the making by Owner
Participant, an OP Guarantor, Owner Trustee, the Trust or the Trust Estate of
any assignment for the benefit of creditors or Owner Participant, an OP
Guarantor or Owner Trustee shall take any action to authorize any of the
foregoing; provided, that an event referred to in this (ss.) 4.02(g) with
respect to Owner Participant or an OP Guarantor shall not constitute a Mortgage
Event of Default if within 30 days of the commencement of the case or
proceeding a final non-appealable order, judgment or decree shall be entered in
such case or proceeding by a court or a trustee, custodian, receiver or
liquidator, to the effect that no part of the Trust Estate (except for Owner
Participant's beneficial interest therein) and no right, title or interest
under the Collateral shall be included in, or be subject to, any declaration or
adjudication of, or proceedings with respect to, the bankruptcy, insolvency or
liquidation of Owner Participant or such OP Guarantor referred to in this
(ss.) 4.02(g).
4.03. CERTAIN RIGHTS. Loan Trustee shall give the Note Holders, Owner
Trustee and Owner Participant prompt written notice of any Mortgage Event of
Default of which Loan Trustee has Actual Knowledge and shall give the Note
Holders, Owner Trustee and Owner Participant not less than ten Business Days'
prior written notice of the date (the "Enforcement Date") on or after which Loan
Trustee may commence and consummate the exercise of any remedy or remedies
described in (ss.) 4.04, 4.05, or 4.06 hereof, or the exercise of any
2002 EETC - Mortgage (LL) (11) 31 Mortgage N__TZ
remedy or remedies pursuant to the provisions of (ss.) 15 of the Lease. If a
Mortgage Event of Default exists, Owner Trustee shall have the following rights
hereunder, any of which may be exercised directly by Owner Participant.
If as a result of the occurrence of a Mortgage Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease, Loan
Trustee shall have insufficient funds so as to make any payment of the Original
Amount and interest on any Equipment Note on the day it becomes due and payable,
Owner Trustee or Owner Participant may, but shall not be obligated to, pay Loan
Trustee prior to the Enforcement Date, in the manner provided in (ss.) 2.05, for
application in accordance with (ss.) 3.01, an amount equal to the portion of the
Original Amount and interest (including interest, if any, on any overdue
payments of such portion of Original Amount and interest) then due and payable
on the Equipment Notes, and, unless Owner Trustee or Owner Participant has cured
Mortgage Events of Default in respect of payments of Basic Rent on each of the
six immediately preceding Basic Rent payment dates, or Owner Trustee has cured
12 previous Mortgage Events of Default in respect of payments of Basic Rent,
such payment by Owner Trustee or Owner Participant shall, solely for purposes of
this Mortgage be deemed to cure any Mortgage Event of Default which would
otherwise have arisen on account of the nonpayment by Lessee of such,
installment of Basic Rent (but not any other existing Mortgage Default).
If any Mortgage Event of Default (other than in respect of the
nonpayment of Basic Rent by Lessee) which can be cured has occurred, Owner
Trustee or Owner Participant may, but shall not be obligated to, cure such
Mortgage Event of Default prior to the Enforcement Date as is necessary to
accomplish the observance or performance of the defaulted covenant, condition or
agreement.
Except as hereinafter in this (ss.) 4.03 provided, Owner Trustee (or
Owner Participant, as the case may be) shall not, as a result of exercising the
right to cure any such Mortgage Event of Default, obtain any Lien on any of the
Mortgaged Property or any Rent payable under the Lease for or on account of
costs or expenses incurred in connection with the exercise of such right, nor
shall any claim of Owner Trustee (or Owner Participant, as the case may be)
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of Loan Trustee in and to the
Mortgaged Property. Upon any payment by Owner Trustee or Owner Participant
pursuant to the first or second preceding paragraphs of this (ss.) 4.03, Owner
Trustee or Owner Participant, as the case may be, shall be subrogated to the
rights of Loan Trustee and the Note Holders in respect of the Basic Rent
2002 EETC - Mortgage (LL) (11) 32 Mortgage N__TZ
which was overdue at the time of such payment and interest payable by Lessee on
account of its being overdue and any Supplemental Rent in respect of the
reimbursement of amounts paid by Owner Trustee or Owner Participant pursuant to
the immediately preceding paragraph (but in either case shall have no rights as
a secured party hereunder), and thereafter, Owner Trustee or Owner Participant,
as the case may be, shall be entitled to receive such overdue Basic Rent or
Supplemental Rent, as the case may be, and interest thereon (in each case as
long as the application thereof shall not give rise to a Mortgage Event of
Default hereunder) upon receipt thereof by Loan Trustee (and shall be entitled
to bring an action against Lessee to enforce such payment); provided, that (i)
if the Original Amount and interest on the Equipment Notes shall have become due
and payable pursuant to (ss.) 4.04(b), such subrogation shall, until the Secured
Obligations shall have been paid in full, be subordinate to the rights of Loan
Trustee, the Note Holders and the Mortgage Indemnitees in respect of such
payment of overdue Basic Rent, Supplemental Rent, and such interest and (ii)
Owner Trustee or Owner Participant, as the case may be, shall not otherwise
attempt or be entitled to seek to recover any such amount paid by it on behalf
of Lessee pursuant to this (ss.) 4.03 except by demanding of Lessee payment of
such amount, or by commencing an action at law against Lessee and obtaining and
enforcing a judgment against Lessee for the payment of such amount or taking
appropriate action in a pending action at law against Lessee (provided, that at
no time while a Mortgage Event of Default exists shall any such demand be made
or shall any such action be commenced (or continued) and any amounts
nevertheless received by Owner Trustee in respect thereof shall be held in trust
for the benefit of, and promptly paid to, Loan Trustee for distribution as
provided in (ss.) 3.03). Neither Owner Trustee nor Owner Participant shall have
the right to cure any Lease Default except as specified in this (ss.) 4.03.
4.04. REMEDIES.
(a) Subject to the provisions of (ss.) 2.14, if a Mortgage Event of
Default exists, then and in every such case Loan Trustee may, subject to the
following paragraph of this (ss.) 4.04(a), exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this (ss.) 4 and shall
have and may exercise all of the rights and remedies of a secured party under
the Uniform Commercial Code and, if such Mortgage Event of Default is also a
Lease Event of Default, any and all of the remedies pursuant to (ss.) 15 of the
Lease and may take possession of all or any part of the properties covered or
intended to be covered by the Lien created hereby or pursuant hereto and may
exclude Owner Participant, Owner Trustee and Lessee and all persons claiming
2002 EETC - Mortgage (LL) (11) 33 Mortgage N__TZ
under any of them wholly or partly therefrom, provided, that Loan Trustee shall
give Owner Trustee and Owner Participant 20 days' prior written notice of its
intention to sell the Aircraft. The Owner Participant may bid at the sale and
become the purchaser. Without limiting any of the foregoing, it is understood
and agreed that Loan Trustee may exercise any right of sale of the Aircraft
available to it, even though it shall not have taken possession of the Aircraft
and shall not have possession thereof at the time of such sale.
Anything in this Mortgage to the contrary notwithstanding, Loan Trustee
shall not be entitled to exercise any remedy hereunder as a result of a Mortgage
Event of Default which arises solely by reason of one or more events or
circumstances which constitute a Lease Event of Default unless Loan Trustee as
security assignee of Owner Trustee shall have declared the Lease in default and
exercised or concurrently be exercising one or more of the remedies provided for
in (ss.) 15 of the Lease to terminate the Lease or take possession or sell the
Aircraft; provided, that such requirement to exercise one or more of such
remedies under the Lease shall not apply in circumstances where Loan Trustee is,
and has been, for a continuous period in excess of 60 days or such other period
as may be specified in (ss.) 1110(a)(1)(A) of the Bankruptcy Code (such 60-day
or other period being the "Section 1110 Period"), involuntarily stayed or
prohibited by applicable law or court order from exercising such remedies under
the Lease (a "Continuous Stay Period"); provided, further, that the requirement
to exercise one or more of such remedies under the Lease shall nonetheless be
applicable during a Continuous Stay Period subsequent to the expiration of the
Section 1110 Period to the extent that the continuation of such Continuous Stay
Period subsequent to the expiration of the Section 1110 Period (A) results from
an agreement by the trustee or the debtor-in-possession in such proceeding
during the Section 1110 Period with the approval of the relevant court to
perform the Lease in accordance with (ss.) 1110(a)(1)(A) of the Bankruptcy Code
and such trustee or debtor-in-possession continues to perform as required by
(ss.) 1110(a)(1)(A-B) of the Bankruptcy Code or (B) is an extension of the
Section 1110 Period with the consent of Loan Trustee pursuant to (ss.) 1110(b)
of the Bankruptcy Code [or (C) results from Lessee's assumption during the
Section 1110 Period with the approval of the relevant court of the Lease
pursuant to (ss.) 365 of the Bankruptcy Code] or (D) is the consequence of Loan
Trustee's own failure to give any requisite notice to any Person. If the
applicability of Section 1110 to the Aircraft is being contested by Lessee in
judicial proceedings, the Owner Trustee shall have the right (without affecting
in any way any rights or remedy of Loan Trustee hereunder) to participate in
such proceedings.
2002 EETC - Mortgage (LL) (11) 34 Mortgage N__TZ
It is expressly understood and agreed that, subject only to the
immediately preceding paragraph, the inability, described in such paragraph, of
Loan Trustee to exercise any right or remedy under the Lease shall in no event
and under no circumstances prevent Loan Trustee from exercising any or all of
its rights, powers and remedies under this Mortgage, including this (ss.) 4.
(b) If a Mortgage Event of Default exists, then and in every such case
Loan Trustee may (and shall, upon receipt of a written demand therefor from a
Majority in Interest of Note Holders), subject to ((ss.)) 4.03, at any time, by
delivery of written notice or notices to Owner Trustee and Owner Participant,
declare all the Equipment Notes to be due and payable, whereupon the unpaid
Original Amount of all Equipment Notes then outstanding, together with accrued
but unpaid interest thereon (without Make-Whole Amount) and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived; provided, that if a
Mortgage Event of Default referred to in clause (g) of (ss.) 4.02 hereof shall
have occurred or a Lease Event of Default under (ss.) 14.5 of the Lease shall
have occurred, then and in every such case the unpaid Original Amount of all
Equipment Notes then outstanding, together with accrued but unpaid interest
thereon (without Make-Whole Amount) and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.
This (ss.) 4.04(b), however, is subject to the condition that, if at
any time after the Original Amount of the Equipment Notes shall have become so
due and payable, and before any judgment or decree for the payment of the money
so due, or any thereof, shall be entered, all overdue payments of interest upon
the Equipment Notes and all other amounts payable under the Equipment Notes
(except the Original Amount of the Equipment Notes which by such declaration
shall have become payable) shall have been duly paid, and every Mortgage Default
shall have been cured, then and in every such case a Majority in Interest of
Note Holders may (but shall not be obligated to), by written instrument filed
with Loan Trustee, rescind and annul Loan Trustee's declaration and its
consequences; but no such rescission or annulment shall extend to or affect any
subsequent Mortgage Default or impair any right consequent thereon. Any
acceleration pursuant to this (ss.) 4.04(b) shall be automatically rescinded and
any related declaration of an Event of Default annulled in the event that the
Owner Trustee shall have cured, in accordance with (ss.) 4.03 hereof, the
Mortgage Event of Default that resulted in such acceleration or declaration.
(c) Any Note Holder shall be entitled, at any sale pursuant to (ss.) 15
of the Lease or this (ss.) 4.04, to credit against any purchase price bid at
such sale
2002 EETC - Mortgage (LL) (11) 35 Mortgage N__TZ
by such holder all or any part of the unpaid obligations owing to such Note
Holder and secured by the Lien of this Mortgage (but only to the extent that
such purchase price would have been paid to such Note Holder pursuant to (ss.) 3
if such purchase price were paid in cash and the foregoing provisions of this
(ss.) 4.04(c) were not given effect).
(d) In the event of any sale of the Collateral, or any part thereof,
pursuant to any judgment or decree of any court or otherwise in connection with
the enforcement of any of the terms of this Mortgage, the unpaid Original Amount
of all Equipment Notes then outstanding, together with accrued interest thereon
(without the Make-Whole Amount), and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass-Through Trustee under any Pass-Through Trust Agreement or the Subordination
Agent on its behalf is a Note Holder, Loan Trustee will not be authorized or
empowered to acquire title to any Mortgaged Property or take any action with
respect to any Mortgaged Property so acquired by it if such acquisition or
action would cause any Trust to fail to qualify as a "grantor trust" for federal
income tax purposes.
4.05. RETURN OF AIRCRAFT, ETC.
(a) If a Mortgage Event of Default exists, subject to (ss.) 4.03 and
ss. 4.04, at the request of Loan Trustee, Owner Trustee shall promptly execute
and deliver to Loan Trustee such instruments of title and other documents as
Loan Trustee may deem necessary or advisable to enable Loan Trustee or an agent
or representative designated by Loan Trustee, at such time or times and place or
places as Loan Trustee may specify, to obtain possession of all or any part of
the Mortgaged Property included in the Collateral to which Loan Trustee shall at
the time be entitled hereunder. If Owner Trustee shall for any reason fail to
execute and deliver such instruments and documents after such request by Loan
Trustee, Loan Trustee may (i) obtain a judgment conferring on Loan Trustee the
right to immediate possession and requiring Owner Trustee to execute and deliver
such instruments and documents to Loan Trustee, to the entry of which judgment
Owner Trustee hereby specifically consents to the fullest extent permitted by
applicable law, and (ii) pursue all or part of such Mortgaged Property wherever
it may be found and, if a Lease Event of Default exists, may enter any of the
premises of Lessee wherever such Mortgaged Property may be or be supposed to be
and search for such Mortgaged Property and take possession of and remove such
Mortgaged Property. All expenses of
2002 EETC - Mortgage (LL) (11) 36 Mortgage N__TZ
obtaining such judgment or of pursuing, searching for and taking such property
shall, until paid, be secured by the Lien of this Mortgage.
(b) Upon every such taking of possession, Loan Trustee may, from time
to time, at the expense of the Mortgaged Property, make all such expenditures
for maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modifications or alterations to and of the Mortgaged
Property, as it may deem proper. In each such case, Loan Trustee shall have the
right to maintain, use, operate, store, insure, lease, control, manage, dispose
of, modify or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of Owner Trustee relating to the Mortgaged
Property, as Loan Trustee shall deem best, including the right to enter into any
and all such agreements with respect to the maintenance, use, operation,
storage, insurance, leasing, control, management, disposition, modification or
alteration of the Mortgaged Property or any part thereof as Loan Trustee may
determine, and Loan Trustee shall be entitled to collect and receive directly
all tolls, rents (including Rent), revenues, issues, income, products and
profits of the Mortgaged Property and every part thereof, except Excluded
Payments, without prejudice, however, to the right of Loan Trustee under any
provision of this Mortgage to collect and receive all cash held by, or required
to be deposited with, Loan Trustee hereunder. Such tolls, rents (including
Rent), revenues, issues, income, products and profits shall be applied to pay
the expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make all
payments which Loan Trustee may be required or may elect to make, if any, for
taxes, assessments, insurance or other proper charges upon the Mortgaged
Property or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of Owner Trustee), and all other payments which Loan Trustee may be
required or authorized to make under any provision of this Mortgage, as well as
just and reasonable compensation for the services of Loan Trustee, and of all
persons properly engaged and employed by Loan Trustee with respect hereto.
4.06. REMEDIES CUMULATIVE. Each and every right, power and remedy given
to Loan Trustee specifically or otherwise in this Mortgage 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
2002 EETC - Mortgage (LL) (11) 37 Mortgage N__TZ
often and in such order as may be deemed expedient by Loan Trustee, and the
exercise, or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy. No delay or omission by Loan Trustee in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Owner Trustee or Lessee or to be an acquiescence therein.
4.07. DISCONTINUANCE OF PROCEEDINGS. In case Loan Trustee shall have
instituted any proceeding to enforce any right, power or remedy under this
Mortgage by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to Loan Trustee, then and in every such case Owner Trustee, Loan
Trustee and Lessee shall, subject to any determination in such proceedings, be
restored to their former positions and rights hereunder with respect to the
Mortgaged Property, and all rights, remedies and powers of Owner Trustee, Loan
Trustee or Lessee shall continue as if no such proceedings had been instituted.
4.08. WAIVER OF PAST DEFAULTS. Upon written instruction from a Majority
in Interest of Note Holders, Loan Trustee shall waive any past Mortgage Default
hereunder and its consequences and upon any such waiver such Mortgage Default
shall cease to exist and any Mortgage Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Mortgage, but no such
waiver shall extend to any subsequent or other Mortgage Default or impair any
right consequent thereon; provided, that in the absence of written instructions
from all the Note Holders, Loan Trustee shall not waive any Mortgage Default (i)
in the payment of the Original Amount, Make-Whole Amount, if any, and interest
and other amounts due under any Equipment Note then outstanding, or (ii) in
respect of a covenant or provision hereof which, under (ss.) 9, cannot be
modified or amended without the consent of each Note Holder.
4.09. APPOINTMENT OF RECEIVER. Loan Trustee shall, as a matter of
right, be entitled to the appointment of a receiver (who may be Loan Trustee or
any successor or nominee thereof) for all or any part of the Mortgaged Property,
whether such receivership be incidental to a proposed sale of the Mortgaged
Property or the taking of possession thereof or otherwise, and Owner Trustee
hereby consents to the appointment of such a receiver and will not oppose any
such appointment. Any receiver appointed for all or any part of the Mortgaged
2002 EETC - Mortgage (LL) (11) 38 Mortgage N__TZ
Property shall be entitled to exercise all the rights and powers of Loan Trustee
with respect to the Mortgaged Property.
4.10. LOAN TRUSTEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC. Subject to
the provisions of this Mortgage, the Owner Trustee irrevocably appoints Loan
Trustee the true and lawful attorney-in-fact of Owner Trustee which appointment
is coupled with an interest in its name and stead and on its behalf, for the
purpose of effectuating any sale, assignment, transfer or delivery for the
enforcement of the Lien of this Mortgage, whether pursuant to foreclosure or
power of sale, assignments and other instruments as may be necessary or
appropriate, with full power of substitution, Owner Trustee hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue hereof in
accordance with applicable law. Nevertheless, if so requested by Loan Trustee or
any purchaser, Owner Trustee shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to Loan Trustee or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.
4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Mortgage, the right of any Note Holder to receive
payment of principal of, any Make-Whole Amount on, and interest on an Equipment
Note on or after the respective due dates expressed in such Equipment Note, or
to bring suit for the enforcement of any such payment on or after such
respective dates in accordance with the terms hereof, shall not be impaired or
affected without the consent of such Note Holder.
5. DUTIES OF LOAN TRUSTEE
5.01. NOTICE OF EVENT OF DEFAULT. If Loan Trustee shall have Actual
Knowledge of a Mortgage Default arising from a failure to pay Rent, Loan Trustee
shall give prompt written notice thereof to Owner Trustee, Owner Participant,
Lessee, and each Note Holder. Subject to the terms of (xx.xx.) 2.14, 4.03, 4.04,
4.08, 5.02, and 5.03, Loan Trustee shall take such action, or refrain from
taking such action, with respect to such Mortgage Default (including with
respect to the exercise of any rights or remedies hereunder) as Loan Trustee
shall be instructed in writing by a Majority in Interest of Note Holders.
Subject to the provisions of (ss.) 5.03, if Loan Trustee shall not have received
instructions as above provided within 20 days after mailing notice of such
Mortgage Default to the Note Holders, Loan Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this
2002 EETC - Mortgage (LL) (11) 39 Mortgage N__TZ
(ss.) 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Mortgage Default as it shall determine advisable in the best interests of the
Note Holders. If Loan Trustee shall at any time declare the Lease to be in
default pursuant to (ss.) 14 thereof or shall elect to foreclose or otherwise
enforce this Mortgage, Loan Trustee shall forthwith notify Owner Participant,
the Note Holders, Owner Trustee and Lessee. For all purposes of this Mortgage,
in the absence of Actual Knowledge on the part of Loan Trustee, Owner Trustee or
Owner Participant, Loan Trustee, Owner Trustee or Owner Participant, as the case
may be, shall not be deemed to have knowledge of a Mortgage Default (except, in
the case of Loan Trustee, the failure of Lessee to pay any installment of Basic
Rent within one Business Day after the same shall become due, if any portion of
such installment was then required to be paid to Loan Trustee, which failure
shall constitute knowledge of a Mortgage Default) unless notified in writing by
Lessee, Owner Trustee, Owner Participant or one or more Note Holders.
5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND LIMITATIONS.
(a) Subject to the terms of (xx.xx.) 2.14, 4.03, 4.04(a) and (b), 4.08,
5.01, and 5.03, upon the written instructions at any time and from time to time
of a Majority in Interest of Note Holders, Loan Trustee shall, subject to the
terms of this (ss.) 5.02, take such of the following actions as may be specified
in such instructions: (i) give such notice or direction or exercise such right,
remedy or power hereunder as shall be specified in such instructions; (ii) give
such notice or direction or exercise such right, remedy or power under the
Lease, the Participation Agreement, the Purchase Agreement, the Purchase
Agreement Assignment, the Engine Warranty Assignment or any other part of the
Collateral as shall be specified in such instructions; and (iii) approve as
satisfactory to Loan Trustee all matters required by the terms of the Lease to
be satisfactory to Owner Trustee, it being understood that without the written
instructions of a Majority in Interest of Note Holders, Loan Trustee shall not
approve any such matter as satisfactory to Loan Trustee; provided, that anything
contained in this Mortgage, the Lease or the other Operative Agreements to the
contrary notwithstanding, but subject to the next paragraph hereof:
(1) Owner Trustee or Owner Participant may, without the
consent of Loan Trustee, demand, collect, xxx for or otherwise obtain all
amounts included in Excluded Payments from Lessee or the Guarantor, exercise any
election or option or make any decision or determination or give or receive any
notice, consent, waiver or approval in respect of any Excluded
2002 EETC - Mortgage (LL) (11) 40 Mortgage N__TZ
Payment and seek legal or equitable remedies to require Lessee or the Guarantor
to maintain the insurance coverage referred to in (ss.) 11 of the Lease;
provided, that the rights referred to in this clause (1) shall not be deemed to
include the exercise of any remedies provided for in (ss.) 15 of the Lease other
than the right to proceed by appropriate court action, either at law or in
equity, to enforce payment by Lessee or the Guarantor of such amounts included
in Excluded Payments or performance by Lessee or the Guarantor of such insurance
covenant, or to recover damages for the breach thereof or for specific
performance of any covenant of Lessee or the Guarantor;
(2) unless a Mortgage Event of Default and a Mortgagee Event
exists and except as provided in clause (4) below, Loan Trustee shall not,
without the consent of Owner Trustee, which consent shall not be withheld or
delayed if no right or interest of Owner Trustee or Owner Participant shall be
diminished or impaired thereby, (i) enter into, execute or deliver amendments or
modifications in respect of any of the provisions of the Lease[, any assigned
Permitted Sublease or any Permitted Sublease assignment], or enter into, execute
or deliver waivers or consents in respect of any of the provisions of the Lease,
or (ii) approve any accountants, engineers, appraisers or counsel as
satisfactory to render services for or issue opinions to Owner Trustee pursuant
to the Operative Agreements; provided, that, whether or not a Mortgage Event of
Default exists, no amendment, modification, waiver or consent in respect of the
Lease shall affect the amount or timing of, or the right to enforce payment of,
any Excluded Payment;
(3) whether or not a Mortgage Default exists, Owner Trustee
and Owner Participant shall have the right, in addition to that of Loan Trustee,
(i) to receive from Lessee all notices, certificates, reports, filings, opinions
of counsel and other documents and all information which any thereof is
permitted or required to give or furnish to Owner Trustee or Lessor pursuant to
any Operative Agreement (including pursuant to (ss.) 9.3 of the Participation
Agreement), (ii) to exercise inspection rights pursuant to ss. 12 of the Lease,
(iii) to retain all rights with respect to insurance maintained for its own
account which (ss.) 11.2(b) of the Lease specifically confers on Lessor or Owner
Participant, (iv) to exercise, to the extent necessary to enable it to exercise
its rights under (ss.) 4.03 hereof, the rights of Lessor under (ss.) 15.3 of the
Lease, and (v) to give notices of default under (ss.) 15 of the Lease;
(4) whether or not a Mortgage Default exists, Owner Trustee
shall have the right to the exclusion of Loan Trustee to adjust Rent and
Stipulated Loss Values and other amounts as provided in (ss.) 3.2.1 of the Lease
and to select counsel with respect to any opinion relating to tax matters to be
delivered solely to Owner Participant;
2002 EETC - Mortgage (LL) (11) 41 Mortgage N__TZ
(5) whether or not a Mortgage Default exists, Owner Trustee
may, without the consent of Loan Trustee, solicit and make bids with respect to
the Aircraft under (ss.) 9 of the Lease in respect of a termination of the Lease
by Lessee pursuant to (ss.) 9 thereof; and
(6) so long as no Mortgage Event of Default exists, except as
provided in clauses (2) and (3) above, all rights of the "Lessor" under the
Lease shall be exercised by Owner Trustee to the exclusion of Loan Trustee
including the right to (i) exercise all rights with respect to Lessee's use and
operation, modification, or maintenance of the Aircraft and any Engine which the
Lease specifically confers on Lessor (including the right to seek legal or
equitable remedies to require Lessee or the Guarantor to perform the covenants
and agreements contained in (xx.xx.) 6, 7, 8, 10, and 12 of the Lease), and
(ii) consent to and approve any assignment pursuant to (ss.) 13 of the Lease;
provided, that the foregoing shall not (x) limit (A) any rights separately
granted to Loan Trustee under the Operative Agreements or (B) the right of Loan
Trustee to receive any funds to be delivered to the "Lessor" under the Lease
(except with respect to Excluded Payments) and under the Purchase Agreement or
(y) confer upon Owner Trustee the right to adversely affect the validity or
enforceability of the Lien of this Mortgage.
Notwithstanding anything to the contrary contained herein, Loan Trustee
shall have the right, to the exclusion of Owner Trustee and Owner Participant,
(A) to declare the Lease to be in default under (ss.) 15 thereof, and (B)
subject only to the provisions of (xx.xx.) 4.03, 4.04(a) and (b), and 2.14
hereof, to exercise the remedies set forth in such (ss.) 15 (other than in
connection with Excluded Payments) at any time that a Lease Event of Default
exists.
Lessee will file or cause to be filed such continuation statements with
respect to financing statements relating to the security interest created
hereunder in the Collateral as specified by Lessee pursuant to (ss.) 7.1.3 of
the Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Note Holders (which instructions may,
by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement so to be filed). Loan
Trustee will furnish to each Note Holder (and, during the continuation of a
Mortgagee Event, to Owner Trustee and Owner Participant), promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to Loan Trustee under the Lease or
hereunder, including a copy of any Termination Notice (as defined in the Lease)
and a copy of each report or notice received pursuant to (ss.) 9.1 and ss. E of
Annex D of the Lease, respectively, to the extent that the same shall not have
been furnished to such Note Holder pursuant hereto or to the Lease.
2002 EETC - Mortgage (LL) (11) 42 Mortgage N__TZ
(b) If any Lease Event of Default exists and Owner Trustee shall not
have cured fully such Lease Event of Default under and in accordance with
(ss.) 4.03, on request of a Majority in Interest of Note Holders, Loan Trustee
shall declare the Lease to be in default pursuant to (ss.) 15 thereof and
exercise those remedies specified by such Note Holders. Loan Trustee agrees to
provide to the Note Holders, Owner Trustee, Owner Participant and Lessee
concurrently with such declaration by Loan Trustee, notice of such declaration
by Loan Trustee.
5.03. INDEMNIFICATION. Loan Trustee shall not be under any obligation
to take any action under this Mortgage and nothing herein or therein shall
require Loan Trustee to expend or risk its own funds or otherwise incur the risk
of any financial liability in the performance of any of its rights or powers if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it (the written indemnity of any Note Holder who is a QIB (or a Note Holder who
has all of its obligations guaranteed by a QIB), signed by an authorized officer
thereof, in favor of, delivered to and in form reasonably satisfactory to Loan
Trustee shall be accepted as reasonable assurance of adequate indemnity). Loan
Trustee shall not be required to take any action under (ss.) 4, (ss.) 5.01
(other than the first sentence thereof), or (ss.) 5.02, nor shall any other
provision of this Mortgage or any other Operative Agreement be deemed to impose
a duty on Loan Trustee to take any action, if Loan Trustee shall have been
advised by counsel that such action is contrary to the terms hereof or of the
Lease or is otherwise contrary to Law.
5.04. NO DUTIES EXCEPT AS SPECIFIED IN MORTGAGE OR INSTRUCTIONS. Loan
Trustee shall not have any duty or obligation to use, operate, store, lease,
control, manage, sell, dispose of or otherwise deal with the Aircraft or any
other part of the Collateral, or to otherwise take or refrain from taking any
action under, or in connection with, this Mortgage or any part of the
Collateral, except as expressly provided by the terms of this Mortgage or as
expressly provided, in written instructions from Note Holders as provided in
this Mortgage; and no implied duties or obligations shall be read into this
Mortgage against Loan Trustee. WTC agrees that it will at its own cost and
expense (but without any right of indemnity in respect of any such cost or
expense under (ss.) 7.01), promptly take such action as may be necessary duly
to discharge all Liens on any part of the Collateral which result from claims
against it in its individual capacity not related to the ownership of the
Aircraft or the administration of the Collateral or any other transaction
pursuant to this Mortgage or any document included in the Collateral.
2002 EETC - Mortgage (LL) (11) 43 Mortgage N__TZ
5.05. NO ACTION EXCEPT UNDER LEASE, MORTGAGE, OR INSTRUCTIONS. Owner
Trustee and Loan Trustee agree that they will not use, operate, store, lease,
control, manage, sell, dispose of or otherwise deal with the Aircraft or any
other part of the Collateral except (i) as required or permitted by the terms of
the Lease or the Participation Agreement or (ii) in accordance with the powers
granted to, or the authority conferred upon, Owner Trustee and Loan Trustee
pursuant to this Mortgage and in accordance with the express terms hereof.
5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES. At any time an
Airframe or Engine is to be replaced under or pursuant to (ss.) 10 of the Lease
by a Replacement Airframe or Replacement Engine, if no Lease Event of Default
exists, Owner Trustee shall direct Loan Trustee to execute and deliver to Owner
Trustee an appropriate instrument releasing such Airframe or Engine as
appropriate from the Lien of this Mortgage and Loan Trustee shall execute and
deliver such instrument as aforesaid, but only upon compliance by Lessee with
the applicable provisions of (ss.) 10 of the Lease and upon receipt by or
deposit with Loan Trustee of the following:
(1) A written request from Owner Trustee, requesting such
release specifically describing the Airframe or Engine(s) so to be released.
(2) A certificate signed by a duly authorized officer of
Lessee stating the following:
A. With respect to the Replacement of any Airframe:
(i) a description of the Airframe which shall be
identified by manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe to be
received (including the manufacturer, model, FAA registration number
(or other applicable registration information) and manufacturer's
serial number) as consideration for the Airframe to be released;
(iii) that on the date of the Mortgage supplement
relating to the Replacement Airframe Owner Trustee will be the legal
owner of such Replacement Airframe free and clear of all Liens except
as are permitted by ss. 6 of the Lease, that such Replacement Airframe
will on such date be in good working order and condition, and that such
Replacement Airframe has been or, substantially concurrently with such
withdrawal, will be duly registered in the name of Owner Trustee under
2002 EETC - Mortgage (LL) (11) 44 Mortgage N__TZ
the Federal Aviation Act or under the law then applicable to the
registration of the Airframe and that an airworthiness certificate has
been duly issued under the Federal Aviation Act (or such other
applicable law) with respect to such Replacement Airframe, and that
such registration and certificate is in full force and effect, and that
Lessee will have the full right and authority to use such Replacement
Airframe;
(iv) the existence of the insurance required by
(ss.) 11 of the Lease with respect to such Replacement Airframe and the
payment of all premiums then due thereon;
(v) that the Replacement Airframe is of the same
or an improved model as the Airframe requested to be released from
this Mortgage and otherwise complies with the requirements of the
Lease and all other Operative Agreements;
(vi) the fair market value and utility (without
regard to hours and cycles until overhaul) of the Replacement Airframe
as of the date of such certificate (which shall be not less than the
then fair market value and utility (without regard to hours and cycles
until overhaul) of the Airframe requested to be released (assuming such
Airframe was in the condition and repair required to be maintained
under the Lease));
(vii) the fair market value of the Airframe
immediately prior to the date the Airframe suffered an Event of Loss
(assuming such Airframe was in the condition and repair required to be
maintained under the Lease),
(viii) that no Lease Default exists which has not
been waived, that each of the conditions specified in (ss.) 10.3.1 of
the Lease with respect to the Replacement Airframe shall have been
satisfied and that Lessee will not be in default, by the making and
granting of the request for release and the addition of a Replacement
Airframe, in the performance of any of the terms and covenants of the
Lease; and
(ix) that the release of the Airframe so to be
released will not be in contravention of any of the provisions of this
Mortgage; or
B. with respect to the replacement of any Engine:
(i) a description of the Engine which shall be
identified by manufacturer's serial number;
2002 EETC - Mortgage (LL) (11) 45 Mortgage N__TZ
(ii) a description of the Replacement Engine
(including the manufacturer's name and serial number) as consideration
for the Engine to be released;
(iii) that on the date of the Mortgage supplement
relating to the Replacement Engine Owner Trustee will be the legal
owner of such Replacement Engine free and clear of all Liens except as
are permitted by (ss.) 6 of the Lease, that such Replacement Engine
will on such date be in good working order and condition and that such
Replacement Engine is substantially the same as the Engine to be
released (or an improved model),
(iv) the fair market value, utility (without regard
to hours and cycles until overhaul) and modification and remaining
manufacturers warranty status of the Replacement Engine as of the date
of such certificate (which value shall not be less than the then fair
market value of the Engine to be released (assuming such Engine was in
the condition and repair required to be maintained under the Lease));
(v) the fair market value of the Engine to be
released (immediately prior to any Event of Loss suffered by such
Engine and assuming that such Engine was in the condition and repair
required to be maintained under the Lease);
(vi) that each of the conditions specified in (ss.)
10.3.1 of the Lease with respect to such Replacement Engine have been
satisfied and that Lessee will not be in default, by the making and
granting of the request for release and the addition of the Replacement
Engine, in the performance of any of the terms and covenants of the
Lease; and
(vii) that the release of the Engine so to be
released will not be in contravention of any of the provisions of this
Mortgage.
(3) (a) The appropriate instruments (i) transferring to Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning to
Owner Trustee the benefit of all manufacturer's and vendor's warranties
generally available with respect to such Replacement Airframe or Replacement
Engine, and a Mortgage supplement subjecting such Replacement Airframe or
Replacement Engine and any related warranty rights to the Lien of this Mortgage.
2002 EETC - Mortgage (LL) (11) 46 Mortgage N__TZ
(b) With respect to the replacement of any Engine, such
Uniform Commercial Code financing statements covering the Lien created by this
Mortgage as deemed necessary or desirable by counsel for Loan Trustee to protect
the Lien under the Mortgage in the Replacement Engine.
(4) A certificate from either an aircraft engineer (who may be
an employee of Lessee) or a firm of independent aircraft appraisers selected by
Lessee confirming the accuracy of the information set forth in clause (2)A(vi)
of this (ss.) 5.06.
(5) The opinion of counsel satisfactory to Loan Trustee,
stating that:
(i) the certificates, opinions, and other instruments
or property which have been or are therewith delivered to and deposited
with Loan Trustee conform to the requirements of this Mortgage and the
Lease and, upon the basis of such application, the property so sold or
disposed of may be lawfully released from the Lien of this Mortgage and
all conditions precedent herein provided for relating to such release
have been complied with; and
(ii) the Replacement Airframe or Replacement Engine
has been validly subjected to the Lien of this Mortgage and covered by
the Lease, the instruments subjecting such Replacement Airframe or
Replacement Engine to the Lease and to the Lien of this Mortgage, as
the case may be, have been duly filed for recordation pursuant to the
Federal Aviation Act or any other law then applicable to the
registration of the Aircraft, and no further action, filing or
recording of any document is necessary or advisable in order to
establish and perfect the right, title, estate and interest of Owner
Trustee to and the Lien of this Mortgage on such Replacement Aircraft
or Replacement Engine.
5.07. MORTGAGE SUPPLEMENTS FOR REPLACEMENTS. If a Replacement Airframe
or Replacement Engine is being substituted as contemplated by (ss.) 10 of the
Lease, Owner Trustee and Loan Trustee agree for the benefit of the Note Holders
and Lessee, subject to fulfillment of the conditions precedent and compliance by
Lessee with its obligations set forth in ss. 10 of the Lease and the
requirements of (ss.) 5.06 hereof with respect to such Replacement Airframe or
Replacement Engine, to execute and deliver a Lease supplement and a Mortgage
supplement, as applicable, as contemplated by (ss.) 10 of the Lease.
5.08. EFFECT OF REPLACEMENT. In the event of the substitution of an
Airframe or of a Replacement Engine pursuant to (ss.) 10 of the Lease, (a) all
2002 EETC - Mortgage (LL) (11) 47 Mortgage N__TZ
provisions of this Mortgage relating to the Airframe or Engine or Engines being
replaced shall be applicable to such Replacement Airframe or Replacement Engine
or Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or engines, as
the case may be, as the Airframe or Engine or Engines being replaced but for the
Event of Loss with respect to the Airframe or Engine or Engines being replaced,
and (b) the provisions of this Mortgage shall no longer be applicable to the
Airframe or Engine or Engines being replaced, which shall be released from the
Lien of this Mortgage.
5.09. INVESTMENT OF AMOUNTS HELD BY LOAN TRUSTEE. Any amounts held by
Loan Trustee as assignee of Owner Trustee's rights to hold money for security
pursuant to (ss.) 4.4.1 of the Lease shall be held in accordance with the terms
of such (ss.) 4.4.1 and Loan Trustee agrees, for the benefit of Lessee, to
perform the duties of Owner Trustee under such (ss.) 4.4.1. Any amounts held by
Loan Trustee pursuant to the proviso to the first sentence of (ss.) 3.01,
pursuant to (ss.) 3.02, or pursuant to any provision of any other Operative
Agreement providing for amounts to be held by Loan Trustee which are not
distributed pursuant to the other provisions of (ss.) 3 shall be invested by
Loan Trustee from time to time in Cash Equivalents as directed by Lessee (or,
if a Lease Event of Default exists, by Owner Trustee) so long as Loan Trustee
may acquire the same using its best efforts. All Cash Equivalents shall either
be (a) registered in the name of, payable to the order of, or specially
endorsed to, Loan Trustee or (b) credited to an Eligible Account. Unless
otherwise expressly provided in this Mortgage, any income realized as a result
of any such investment, net of Loan Trustee's reasonable fees and expenses in
making such investment, shall be held and applied by Loan Trustee in the same
manner as the principal amount of such investment is to be applied and any
losses, net of earnings and such reasonable fees and expenses, shall be charged
against the principal amount invested. Loan Trustee shall not be liable for any
loss resulting from any investment required to be made by it under this
Mortgage other than by reason of its willful misconduct or gross negligence or
negligence in the handling of funds, and any such investment may be sold
(without regard to its maturity) by Loan Trustee without instructions whenever
such sale is necessary to make a distribution required by this Mortgage.
6. OWNER TRUSTEE AND LOAN TRUSTEE
6.01. ACCEPTANCE OF TRUSTS AND DUTIES. Loan Trustee accepts the duties
hereby created and applicable to it and agrees to perform the same but only upon
the terms of this Mortgage and agrees to receive and disburse all
2002 EETC - Mortgage (LL) (11) 48 Mortgage N__TZ
money constituting part of the Collateral in accordance with the terms hereof.
WFB and WTC shall not be answerable or accountable under any circumstances,
except (i) for their own willful misconduct or gross negligence (other than for
the handling of funds, for which the standard of accountability shall be willful
misconduct or negligence), (ii) in the case of Loan Trustee, as provided in the
fourth sentence of (ss.) 2.04(a) and the last sentence of (ss.) 5.04, and
(iii) for liabilities that may result, in the case of Owner Trustee, from the
inaccuracy of any representation or warranty of WFB expressly made in its
individual capacity in the Participation Agreement or in (ss.) 4.01(b) or
(ss.) 6.03 (or in any certificate furnished to Loan Trustee or any Note Holder
in connection with the transactions contemplated by the Operative Agreements)
or, in the case of WTC, from the inaccuracy of any representation or warranty
of WTC in the Participation Agreement or expressly made hereunder. Neither
Owner Trustee nor Loan Trustee shall be liable for any action or inaction of
the other or of Owner Participant.
6.02. ABSENCE OF DUTIES. In the case of Loan Trustee, except in
accordance with written instructions furnished pursuant to (ss.) 5.01 or
(ss.) 5.02, and except as provided in, and without limiting the generality of,
(ss.) 5.03 and (ss.) 5.04, and, in the case of Owner Trustee, except as
provided in (ss.) 4.01(b) hereof or (ss.) 13 of the Participation Agreement,
Owner Trustee and Loan Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of
this Mortgage or any other document, or to see to the maintenance of any such
registration, recording or filing, (ii) to see to any insurance on the Aircraft
or to effect or maintain any such insurance, whether or not Lessee shall be in
default with respect thereto, (iii) to see to the payment or discharge of any
Lien of any kind against any part of the Trust Estate or the Collateral,
(iv) to confirm, verify or inquire into the failure to receive any financial
statements from Lessee, or (v) to inspect the Aircraft at any time or ascertain
or inquire as to the performance or observance of any of Lessee's covenants
under the Lease [or any of the Permitted Sublessee's covenants under any
assigned Permitted Sublease] with respect to the Aircraft. Owner Participant
shall not have any duty or responsibility hereunder, including any of the
duties mentioned in clauses (i) through (v) above; provided, that nothing
contained in this sentence shall limit any obligations of Owner Participant
under the Participation Agreement or relieve Owner Participant from any
restriction under (ss.) 4.03.
6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR DOCUMENTS.
NEITHER LOAN TRUSTEE NOR WTC NOR OWNER TRUSTEE NOR WFB NOR OWNER PARTICIPANT
MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS
2002 EETC - Mortgage (LL) (11) 49 Mortgage N__TZ
TO THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY. OR FITNESS FOR USE FOR
A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK, OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, except that WFB warrants that on the Delivery Date (i)
Owner Trustee shall have received whatever interest was conveyed to it by
Lessee, and (ii) the Aircraft shall be free and clear of Lessor Liens
attributable to WFB. Neither WFB nor Owner Trustee nor Loan Trustee nor WTC
makes or shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Mortgage, the Trust Agreement, the
Participation Agreement, the Equipment Notes, the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the Consent and Agreement, the Engine
Warranty Assignment, the Engine Consent and Agreement, or the Guarantee, or as
to the correctness of any statement contained in any thereof, except for the
representations and warranties of WFB and of Loan Trustee, in each case
expressly made in this Mortgage or in the Participation Agreement. The Note
Holders and Owner Participant make no representation or warranty hereunder
whatsoever.
6.04. NO SEGREGATION OF MONEY; NO INTEREST. Any money paid to or
retained by Loan Trustee pursuant to any provision hereof and not then required
to be distributed to the Note Holders, Lessee or Owner Trustee as provided in
(ss.) 3 need not be segregated in any manner except to the extent required by
law or (ss.) 10.9 and (ss.) 11.5 of the Lease and (ss.) 5.09 hereof, and may be
deposited under such general conditions as may be prescribed by law, and Loan
Trustee shall not be liable for any interest thereon (except that Loan Trustee
shall invest all money held as directed by Lessee so long as no Lease Default
exists (or in the absence of such direction, by the Majority In Interest of Note
Holders) in Cash Equivalents either registered in the name of Loan Trustee or
credited to an Eligible Account of the type described in clause (1) of the
definition thereof; provided, that any payments received, or applied hereunder,
by Loan Trustee shall be accounted for by Loan Trustee so that any portion
thereof paid or applied pursuant hereto shall be identifiable as to the source
thereof.
6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL. Neither Owner Trustee
nor Loan Trustee shall incur any liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. Owner Trustee
2002 EETC - Mortgage (LL) (11) 50 Mortgage N__TZ
and Loan Trustee may accept a copy of a resolution of the Board of Directors of
any party to the Participation Agreement, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to the aggregate unpaid Original Amount of
Equipment Notes outstanding as of any date, Owner Trustee may for all purposes
hereof rely on a certificate signed by any Vice President or other authorized
corporate trust officer of Loan Trustee. As to any fact or matter relating to
Lessee the manner of ascertainment of which is not specifically described
herein, Owner Trustee and Loan Trustee may for all purposes hereof rely on a
certificate, signed by a duly authorized officer of Lessee, as to such fact or
matter, and such certificate shall constitute full protection to Owner Trustee
and Loan Trustee for any action taken or omitted to be taken by them in good
faith in reliance thereon. Loan Trustee shall assume, and shall be fully
protected in assuming that Owner Trustee is authorized by the Trust Agreement to
enter into this Mortgage and to take all action to be taken by it pursuant to
the provisions hereof, and shall not inquire into the authorization of Owner
Trustee with respect thereto. In the administration of the trusts hereunder,
Owner Trustee and Loan Trustee each may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through agents or
attorneys and may at the expense of the Collateral, consult with counsel,
accountants and other skilled persons to be selected and retained by it, and
Owner Trustee and Loan Trustee shall not be liable for anything done, suffered
or omitted in good faith by them in accordance with the written advice or
written opinion of any such counsel, accountants or other skilled persons.
6.06. CAPACITY IN WHICH ACTING. Owner Trustee acts hereunder solely
as trustee as herein and in the Trust Agreement provided, and not in its
individual capacity, except as otherwise expressly provided herein, in the Trust
Agreement and in the Participation Agreement.
6.07. COMPENSATION. Loan Trustee shall be entitled to certain
indemnities and compensation, including expenses and disbursements (including
the reasonable fees and expenses of counsel), for all services rendered
hereunder (which indemnities and compensation shall be set forth on a separate
fee agreement between Loan Trustee and Lessee). Loan Trustee agrees that it
shall have no right against the Note Holders, Owner Trustee or Owner Participant
for any fee as compensation for its services as trustee under this Mortgage.
2002 EETC - Mortgage (LL) (11) 51 Mortgage N__TZ
6.08. INSTRUCTIONS FROM NOTE HOLDERS. In the administration of the
trusts created hereunder, Loan Trustee shall have the right to seek instructions
from a Majority in Interest of Note Holders should any provision of this
Mortgage appear to conflict with any other provision herein or should Loan
Trustee's duties or obligations hereunder be unclear, and Loan Trustee shall
incur no liability in refraining from acting until it receives such
instructions. Loan Trustee shall be fully protected for acting in accordance
with any instructions received under this (ss.) 6.08.
7. INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE
7.01. SCOPE OF INDEMNIFICATION. Owner Trustee hereby agrees, whether or
not any of the transactions contemplated hereby shall be consummated, except as
otherwise provided in (ss.) 2.03 or (ss.) 2.04(b), to assume liability for, and
does hereby indemnify, protect, save and keep harmless Loan Trustee and WTC, and
their successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any taxes
payable by WTC on or measured by any compensation received by WTC for its
services under this Mortgage), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever, which may be imposed on, incurred by or asserted against Loan
Trustee or WTC (whether or not also indemnified against by any other Person
under any other document) in any way relating to or arising out of this Mortgage
or any other Operative Agreement to which it is a party or the enforcement of
any of the terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, non-acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including latent or other defects,
whether or not discoverable, and any claim for patent, trademark, or copyright
infringement), or in any way relating to or arising out of the administration of
the Collateral or the action or inaction of Loan Trustee or WTC hereunder, to
the extent not reimbursed by Lessee. Notwithstanding the foregoing, neither Loan
Trustee nor WTC shall be entitled to any indemnification for any Expenses to the
extent relating to or arising from its willful misconduct or gross negligence
(or negligence in the case of handling funds) in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or warranty of
WTC referred to in (ss.) 6.03, or as provided in (ss.) 6.01 or in the last
sentence of (ss.) 5.04, or as otherwise excluded by the terms of (ss.) 9.1 and
(ss.) 9.3 of the Participation Agreement from Lessee's indemnities under such
sections. In addition, if necessary, Loan Trustee and WTC shall be entitled to
indemnification from the Collateral for
2002 EETC - Mortgage (LL) (11) 52 Mortgage N__TZ
any liability, obligation, loss, damage, penalty, claim, action, suit, cost,
expense or disbursement indemnified against pursuant to this (ss.) 7.01 to the
extent not reimbursed by Lessee or others, but without releasing any of them
from their respective agreements of reimbursement; and to secure the same Loan
Trustee and WTC shall have a prior Lien on the Collateral. Without limiting the
foregoing, Loan Trustee agrees that, prior to seeking indemnification from the
Collateral, it will demand, and diligently pursue in good faith (but with no
duty to exhaust all legal remedies therefor), indemnification available to Loan
Trustee from Lessee under the Lease or the Participation Agreement.
8. SUCCESSOR AND SEPARATE TRUSTEES
8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE. In the case of any appointment
of a successor to the institution acting as Owner Trustee pursuant to the Trust
Agreement (including upon any merger, conversion, consolidation, or sale of
substantially all of the corporate trust business of the institution acting as
Owner Trustee pursuant to the Trust Agreement), the successor institution shall
give prompt written notice thereof to Loan Trustee, Lessee, and the Note
Holders.
8.02. RESIGNATION OF LOAN TRUSTEE; APPOINTMENT OF SUCCESSOR.
(a) The institution acting as Loan Trustee or any successor thereto may
resign at any time without cause by giving at least 30 days' prior written
notice to Lessee, Owner Trustee, Owner Participant and each Note Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Loan Trustee. In addition, a Majority in Interest of Note Holders may
at any time (but only with the consent of Lessee, which consent shall not be
unreasonably withheld, except that such consent shall not be necessary if a
Lease Event of Default exists) remove the institution acting as Loan Trustee
without cause by an instrument in writing delivered to Owner Trustee, Lessee,
Owner Participant and Loan Trustee, and Loan Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the acceptance
of the trusteeship by a successor institution. In the case of the resignation or
removal of the institution acting as Loan Trustee, a Majority in Interest of
Note Holders may appoint a successor by an instrument signed by such holders,
which successor, so long as no Lease Event of Default exists, shall be subject
to Lessee's reasonable approval. If a successor shall not have been appointed
within 30 days after such notice of resignation or removal, Loan Trustee, Owner
Trustee, Owner Participant or any Note Holder may apply to any court of
competent jurisdiction to appoint a successor to act until such
2002 EETC - Mortgage (LL) (11) 53 Mortgage N__TZ
time, if any, as a successor shall have been appointed as above provided. The
successor Loan Trustee so appointed by such court shall immediately and without
further act be superseded by any successor appointed as above provided.
(b) Any successor institution acting as Loan Trustee, however
appointed, shall execute and deliver to Owner Trustee, the predecessor the
institution acting as Loan Trustee and Lessee an instrument accepting such
appointment and assuming the obligations of Loan Trustee under the Participation
Agreement arising from and after the time of such appointment, and thereupon,
without further act, such successor shall become vested with all the estates,
properties, rights, powers, and duties of the predecessor hereunder in the trust
hereunder applicable to it with like effect as if originally named Loan Trustee
herein; but nevertheless upon the written request of such successor, such
predecessor shall execute and deliver an instrument transferring to such
successor, upon the trusts herein expressed applicable to it, all the estates,
properties, rights, and powers of such predecessor as Loan Trustee, and such
predecessor shall duly assign, transfer, deliver, and pay over to such successor
all money or other property then held by such predecessor as Loan Trustee
hereunder.
(c) Any successor institution acting as Loan Trustee, however
appointed, shall be a bank or trust company having its principal place of
business in the Borough of Manhattan, City and State of New York; Wilmington,
Delaware; Salt Lake City, Utah; Chicago, Illinois or Hartford, Connecticut and
having (or whose obligations under the Operative Agreements are guaranteed by an
affiliated entity having) a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of Loan Trustee hereunder upon reasonable or
customary terms.
(d) Any corporation into which the institution acting as Loan 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
institution acting as Loan Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the institution acting as Loan
Trustee may be transferred, shall, subject to the terms of paragraph (c) of this
(ss.) 8.02, be a successor Loan Trustee and Loan Trustee under this Mortgage
without further act.
2002 EETC - Mortgage (LL) (11) 54 Mortgage N__TZ
8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.
(a) Whenever (i) Loan Trustee shall deem it necessary or desirable in
order to conform to any law of any jurisdiction in which all or any part of the
Collateral shall be situated or to make any claim or bring any suit with respect
to or in connection with the Collateral, this Mortgage, any other Mortgage
Agreement, the Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) Loan Trustee shall be advised by counsel
satisfactory to it that it is so necessary or prudent in the interests of the
Note Holders (and Loan Trustee shall so advise Owner Trustee and Lessee), or
(iii) Loan Trustee shall have been requested to do so by a Majority in Interest
of Note Holders, then in any such case, Loan Trustee and, upon the written
request of Loan Trustee, Owner Trustee, shall execute and deliver a supplement
to this Mortgage and such other instruments as may from time to time be
necessary or advisable either (1) to constitute one or more bank or trust
companies or one or more persons approved by Loan Trustee, either to act jointly
with Loan Trustee as additional trustee or trustees of all or any part of the
Collateral, or to act as separate trustee or trustees of all or any part of the
Collateral, in each case with such rights, powers, duties and obligations
consistent with this Mortgage as may be provided in such supplement or other
instruments as Loan Trustee or a Majority in Interest of Note Holders may deem
necessary or advisable, or (2) to clarify, add to or subtract from the rights,
powers, duties, and obligations theretofore granted any such additional and
separate trustee, subject in each case to the remaining provisions of this (ss.)
8.03. If Owner Trustee shall not have taken any action requested of it under
this (ss.) 8.03(a) that is permitted or required by its terms within 15 days
after the receipt of a written request from Loan Trustee so to do, or if a
Mortgage Event of Default exists, Loan Trustee may act under the foregoing
provisions of this (ss.) 8.03(a) without the concurrence of Owner Trustee; and
Owner Trustee hereby irrevocably appoints (which appointment is coupled with an
interest) Loan Trustee, its agent and attorney-in-fact to act for it under the
foregoing provisions of this (ss.) 8.03(a) in either of such contingencies.
Loan Trustee may, in such capacity, execute, deliver, and perform any such
supplement, or any such instrument, as may be required for the appointment of
any such additional or separate trustee or for the clarification of, addition
to or subtraction from the rights, powers, duties or obligations theretofore
granted to any such additional or separate trustee. In case any additional or
separate trustee appointed under this (ss.) 8.03(a) shall die, become incapable
of acting, resign or be removed, all the assets, property, rights, powers,
trusts, duties and obligations of such additional or separate trustee shall
revert to Loan Trustee until a successor additional or separate trustee is
appointed as provided in this (ss.) 8.03(a).
2002 EETC - Mortgage (LL) (11) 55 Mortgage N__TZ
(b) No additional or separate trustee shall be entitled to exercise any
of the rights, powers, duties and obligations conferred upon Loan Trustee in
respect of the custody, investment and payment of money and all money received
by any such additional or separate trustee from or constituting part of the
Collateral or otherwise payable under any Operative Agreement to Loan Trustee
shall be promptly paid over by it to Loan Trustee. All other rights, powers,
duties and obligations conferred or imposed upon any additional or separate
trustee shall be exercised or performed by Loan Trustee and such additional or
separate trustee jointly except to the extent that applicable Law of any
jurisdiction in which any particular act is to be performed renders Loan Trustee
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations (including the holding of title to all or part of
the Collateral in any such jurisdiction) shall be exercised and performed by
such additional or separate trustee. No additional or separate trustee shall
take any discretionary action except on the instructions of Loan Trustee or a
Majority in Interest of Note Holders. No trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee hereunder, except
that Loan Trustee shall be liable for the consequences of its lack of reasonable
care in selecting, and Loan Trustee's own actions in acting with, any additional
or separate trustee. Each additional or separate trustee appointed pursuant to
this (ss.) 8.03 shall be subject to, and shall have the benefit of (xx.xx.) 4
through 8 and (ss.) 10 insofar as they apply to Loan Trustee. The powers of any
additional or separate trustee appointed pursuant to this (ss.) 8.03 shall not
in any case exceed those of Loan Trustee hereunder.
(c) If at any time Loan Trustee shall deem it no longer necessary or
desirable in order to conform to any such law or take any such action or shall
be advised by such counsel that it is no longer so necessary or desirable in the
interest of the Note Holders, or if Loan Trustee shall have been requested to do
so in writing by a Majority in Interest of Note Holders, Loan Trustee and, upon
the written request of Loan Trustee, Owner Trustee, shall execute and deliver a
supplement hereto and all other instruments and agreements necessary or proper
to remove any additional or separate trustee. Loan Trustee may act on behalf of
Owner Trustee under this (ss.) 8.03(c) when and to the extent it could so act
under (ss.) 8.03(a).
9. SUPPLEMENT AND AMENDMENTS
9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS.
2002 EETC - Mortgage (LL) (11) 56 Mortgage N__TZ
(a) Except as provided in ss. 5.02, and except with respect to Excluded
Payments, Owner Trustee agrees it shall not enter into any amendment of or
supplement to the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Warranty Assignment, or the
Guarantee, or execute and deliver any written waiver or modification of, or
consent under, the terms of the Lease, the Purchase Agreement, the Purchase
Agreement Assignment, the Consent and Agreement, the Engine Warranty Assignment,
or the Guarantee, unless such supplement, amendment, waiver, modification, or
consent is consented to in writing by Loan Trustee and a Majority in Interest of
Note Holders. Anything to the contrary contained herein notwithstanding, without
the necessity of the consent of any of the Note Holders or Loan Trustee, (i) any
Excluded Payments payable to Owner Participant may be modified, amended, changed
or waived in such manner as shall be agreed to by Owner Participant and Lessee
and (ii) Owner Trustee and Lessee may enter into amendments of or additions to
the Lease to modify (ss.) 5 (except to the extent that such amendment would
affect the rights or exercise of remedies under (ss.) 15 of the Lease), (ss.) 9,
or (ss.) 17 of the Lease so long as such amendments, modifications and changes
do not and would not affect the time of, or reduce the amount of, Rent payments
until after the payment in full of all Secured Obligations or otherwise
adversely affect the Note Holders.
(b) Without limiting the provisions of (ss.) 9.01(a) and subject to
(ss.) 5.02(a)(2)(i), Loan Trustee agrees with the Note Holders that it shall
not enter into any amendment, waiver, or modification of, or supplement or
consent to, this Mortgage, the Lease, the Purchase Agreement, the Purchase
Agreement Assignment, the Consent and Agreement, the Engine Warranty Assignment,
the Guarantee, or the Participation Agreement, or any other agreement included
in the Collateral, unless such supplement, amendment, waiver, modification, or
consent is consented to in writing by a Majority in Interest of Note Holders,
but upon the written request of a Majority in Interest of Note Holders, Loan
Trustee shall from time to time enter into any such supplement or amendment, or
execute and deliver any such waiver, modification, or consent, as may be
specified in such request and as may be (in the case of any such amendment,
supplement, or modification), to the extent such agreement is required, agreed
to by Owner Trustee and Lessee or, as may be appropriate, the Airframe
Manufacturer or the Engine Manufacturer; provided, that, without the consent of
each holder of an affected Equipment Note then outstanding and of each Liquidity
Provider, no such amendment of or supplement to this Mortgage, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Engine Warranty Assignment, the Guarantee, or the Participation
Agreement or waiver or modification of the terms of, or consent under, any
thereof, shall (i) modify any of the provisions of
2002 EETC - Mortgage (LL) (11) 57 Mortgage N__TZ
this (ss.) 9.01, of (ss.) 2, 3, 4.02, 4.03, 4.04, 5.02, or 5.06 hereof, of
(ss.) 13.3, 14 (except to add a Lease Event of Default), or 16 of the Lease,
ss. 15.1 of the Participation Agreement, the definitions of "Event of Default",
"Default", "Lease Event of Default", "Lease Default", "Majority in Interest of
Note Holders", "Make-Whole Amount" or "Note Holder", or the percentage of Note
Holders required to take or approve any action hereunder, (ii) reduce the
amount, or change the time of payment or method of calculation of any amount, of
Original Amount, Make-Whole Amount, if any, or interest with respect to any
Equipment Note, or alter or modify the provisions of (ss.) 3 with respect to the
order of priorities in which distribution thereunder shall be made as among the
Note Holders, Owner Trustee and Lessee, (iii) reduce, modify or amend any
indemnities in favor of Loan Trustee, the Mortgage Indemnitees or the Note
Holders, (iv) consent to any change in this Mortgage or the Lease which would
permit redemption of Equipment Notes earlier than permitted under (ss.) 2.10 or
2.12 hereof or the purchase of the Equipment Notes other than as permitted by
(ss.) 2.14 hereof, (v) modify any of the provisions of (ss.) 3.2.1(e) of the
Lease, or modify, amend, or supplement the Lease or consent to any assignment
of the Lease, in either case releasing Lessee from its obligations in respect
of the of Basic Rent, Stipulated Loss Value, Termination Value, or any purchase
price (including the EBO Price) for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set forth in
(ss.) 3 and (ss.) 16 of the Lease or (vi) permit the creation of any Lien on the
Collateral or any part thereof other than Permitted Liens or deprive any Note
Holder of the benefit of the Lien of this Mortgage on the Collateral, except as
provided in connection with the exercise of remedies under (ss.) 4. So long as
no Lease Event of Default exists, without the consent of Lessee no amendment or
supplement to this Mortgage or waiver or modification of the terms hereof shall
adversely affect Lessee.
(c) At any time after the Delivery Date, Owner Trustee and Loan Trustee
may enter into one or more agreements supplemental hereto without the consent of
any Note Holder for any of the following purposes: (i) (a) to cure any defect or
inconsistency herein or in the Equipment Notes, or to make any change not
inconsistent with the provisions hereof (provided that such change does not
adversely affect the interests of any Note Holder in its capacity solely as Note
Holder) or (b) to cure any ambiguity or correct any mistake; (ii) to evidence
the succession of another party as Owner Trustee in accordance with the terms of
the Trust Agreement or to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of any
co-trustee or co-trustees or any separate or additional trustee or trustees;
(iii) to convey, transfer, assign, mortgage or pledge any property to or with
Loan Trustee or to make any other provisions with respect to matters or
questions arising hereunder so long as such action shall not
2002 EETC - Mortgage (LL) (11) 58 Mortgage N__TZ
adversely affect the interests of the Note Holders in its capacity solely as
Note Holder; (iv) to correct or amplify the description of any property at any
time subject to the Lien of this Mortgage or better to assure, convey and
confirm unto Loan Trustee any property subject or required to be subject to the
Lien of this Mortgage, the Airframe or Engines or any Replacement Airframe or
Replacement Engine: (v) to add to the covenants of Owner Trustee for the benefit
of the Note Holders, or to surrender any rights or power herein conferred upon
Owner Trustee, Owner Participant or Lessee; (vi) to add to the rights of the
Note Holders; and (vii) to include on the Equipment Notes any legend as may be
required by law.
9.02. TRUSTEES PROTECTED. If, in the opinion of the institution acting
as Owner Trustee under the Trust Agreement or the institution acting as Loan
Trustee hereunder, any document required to be executed by it pursuant to the
terms of (ss.) 9.01 adversely affects any right, duty, immunity or indemnity
with respect to such institution under this Mortgage or the Lease, such
institution may in its discretion decline to execute such document.
9.03. DOCUMENTS MAILED TO NOTE HOLDERS. Promptly after the execution
by Owner Trustee or Loan Trustee of any document entered into pursuant to
(ss.) 9.01, Loan Trustee shall mail, by first class mail, postage prepaid, a
copy thereof to Lessee and to each Note Holder at its address last set forth in
the Equipment Note Register, but the failure of Loan Trustee to mail such
copies shall not impair or affect the validity of such document.
9.04. NO REQUEST NECESSARY FOR LEASE SUPPLEMENT OR MORTGAGE SUPPLEMENT.
No written request or consent of Loan Trustee, the Note Holders or Owner
Participant pursuant to (ss.) 9.01 shall be required to enable Owner Trustee to
enter into any Lease supplement specifically required by the terms of the Lease
or to execute and deliver a Mortgage supplement specifically required by the
terms hereof.
9.05. NOTICES TO LIQUIDITY PROVIDER . Any request made to any Note
Holder for consent to any amendment or supplement to this Agreement or the
Equipment Notes pursuant to this (ss.) 9 shall be promptly furnished by Loan
Trustee to each Liquidity Provider.
10. MISCELLANEOUS
2002 EETC - Mortgage (LL) (11) 59 Mortgage N__TZ
10.01. TERMINATION OF MORTGAGE. Upon (or at any time after) payment in
full of the Original Amount of, Make-Whole Amount, if any, and interest on and
all other amounts due under all Equipment Notes and provided that there shall
then be no other Secured Obligations due to the Mortgage Indemnitees, the Note
Holders and Loan Trustee hereunder or under the Participation Agreement, Owner
Trustee shall direct Loan Trustee to execute and deliver to or as directed in
writing by Owner Trustee an appropriate instrument releasing the Aircraft and
the Engines from the Lien of this Mortgage and releasing the Lease, the
Guarantee, the Purchase Agreement, the Purchase Agreement Assignment with the
Consent and Agreement attached thereto, and the Engine Warranty Assignment with
the Engine Consent and Agreement attached thereto from the assignment and pledge
thereof hereunder and Loan Trustee shall execute and deliver such instrument as
aforesaid and give written notice thereof to Lessee; provided, that this
Mortgage and the trusts created hereby shall earlier terminate and this Mortgage
shall be of no further force or effect upon any sale or other final disposition
by Loan Trustee of all property constituting part of the Collateral and the
final distribution by Loan Trustee of all money or other property or proceeds
constituting part of the Collateral in accordance with the terms hereof. Except
as aforesaid otherwise provided, this Mortgage and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
10.02. NO LEGAL TITLE TO COLLATERAL IN NOTE HOLDERS. No holder of a
Equipment Note shall have legal title to any part of the Collateral. No
transfer, by operation of law or otherwise, of any Equipment Note or other
right, title and interest of any Note Holder in and to the Collateral or
hereunder shall operate to terminate this Mortgage or entitle such holder or any
successor or transferee of such holder to an accounting or to the transfer to it
of any legal title to any part of the Collateral.
10.03. SALE OF AIRCRAFT BY LOAN TRUSTEE IS BINDING. Any sale or other
conveyance of the Collateral, or any part thereof (including any part thereof or
interest therein), by Loan Trustee made pursuant to the terms of this Mortgage
shall bind the Note Holders and shall be effective to transfer or convey all
right, title and interest of Loan Trustee, Owner Trustee, Owner Participant and
such holders in and to such Collateral or part thereof. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application of
any sale or other proceeds with respect thereto by Loan Trustee.
10.04. MORTGAGE BENEFITS SPECIFIED PERSONS ONLY. Nothing in this
Mortgage, whether express or implied, shall be construed to give any person
2002 EETC - Mortgage (LL) (11) 60 Mortgage N__TZ
other than Owner Trustee, Loan Trustee, Owner Participant, Lessee, the Note
Holders, and the other Mortgage Indemnitees, any legal or equitable right,
remedy, or claim under or in respect of this Mortgage.
10.05. NOTICES. Unless otherwise expressly specified or permitted by
the terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Mortgage to be
made, given, furnished, or filed shall be made, given, furnished, or filed, and
shall become effective, in the manner prescribed in (ss.) 14.7 of the
Participation Agreement.
10.06. SEVERABILITY. Any provision of this Mortgage which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS. No term or provision
of this Mortgage or the Equipment Notes may be by Owner Trustee and Loan
Trustee, in compliance with (ss.) 9.01. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.
10.08. SUCCESSORS AND ASSIGNS. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, each of the parties
hereto and the successors and permitted assigns of each, all as herein provided.
Any request, notice, direction, consent, waiver or other instrument or action by
any Note Holder shall bind the successors and assigns of such holder. This
Mortgage and the Collateral shall not be affected by any amendment or supplement
to the Trust Agreement or by any other action taken under or in respect of the
Trust Agreement, except that each reference in this Mortgage to the Trust
Agreement shall mean the Trust Agreement as amended and supplemented from time
to time to the extent permitted hereby, thereby and by the Participation
Agreement. Each Note Holder by its acceptance of a Equipment Note agrees to be
bound by this Mortgage and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
10.09. HEADINGS. The headings of the various sections herein and in
the table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
2002 EETC - Mortgage (LL) (11) 61 Mortgage N__TZ
10.10. NORMAL COMMERCIAL RELATIONS. Anything contained in this Mortgage
to the contrary notwithstanding, WFB, WTC, any Participant or any bank or other
Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee,
fully to the same extent as if this Mortgage were not in effect, including the
making of loans or other extensions of credit to Lessee for any purpose
whatsoever, whether related to any of the transactions contemplated hereby or
otherwise.
10.11. GOVERNING LAW; COUNTERPART FORM. THIS MORTGAGE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THIS
MORTGAGE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Mortgage may be
executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
10.12. VOTING BY NOTE HOLDERS. All votes of the Note Holders shall
be governed by a vote of a Majority in Interest of Note Holders, except as
otherwise provided herein.
10.13. BANKRUPTCY. It is the intention of the parties that Owner
Trustee, as lessor under the Lease (and Loan Trustee as assignee of Owner
Trustee hereunder), shall be entitled to the benefits of Section 1110 with
respect to the right to take possession of the Aircraft, Airframe, Engines and
Parts as provided in the Lease in the event of a proceeding under Chapter 11 of
the Bankruptcy Code in which Lessee is a debtor, and in any instance where more
than one construction is possible of the terms and conditions hereof or any
other pertinent Operative Agreement, each such party agrees that a construction
which would preserve such benefits shall control over any construction which
would not preserve such benefits.
10.14. NO ACTION CONTRARY TO LESSEE'S RIGHTS UNDER THE LEASE.
Notwithstanding any of the provisions of this Mortgage or the Trust Agreement to
the contrary, neither Loan Trustee nor Owner Trustee will take any action
contrary to Lessee's rights under the Lease, including the right to possession
and use of, and the quiet enjoyment of, the Aircraft, except in accordance with
provisions of the Lease.
2002 EETC - Mortgage (LL) (11) 62 Mortgage N__TZ
IN WITNESS WHEREOF, Owner Trustee and Loan Trustee have executed this
Trust Indenture and Mortgage N___TZ.
XXXXX FARGO BANK NORTHWEST, N.A.,
not in its individual capacity
(except as expressly provided herein)
but solely as trustee, as Owner
Trustee
By:
----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Loan
Trustee
By:
----------------------------------
Name:
Title:
SCHEDULE I
ORIGINAL AMOUNT, INTEREST RATE, AND AMORTIZATION
A ____% Equipment Notes due ______, 20__ $__________
B ____% Equipment Notes due ______, 20__ $__________
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
A-2
Equipment Notes Amortization
Series A
Aircraft N___TZ
Percentage of Original
Payment Date Amount to be Paid
------------ -------------------
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
A-3
Equipment Notes Amortization
Series B
Aircraft N___TZ
Percentage of Original
Payment Date Amount to be Paid
------------ -------------------
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
A-4
EXHIBIT A
AIRCRAFT DESCRIPTION
The Aircraft is a Boeing model 737-800 aircraft, consisting of (1) an airframe
bearing FAA registration no. N___TZ and manufacturer's serial no. __________,
(2) two CFM International model CFM56-7B27 engines (each of which has 750 or
more rated takeoff horsepower or its equivalent), bearing manufacturer's serial
nos. __________ and __________, and (3) all appliances, parts, instruments,
appurtenances, accessories, furnishings, and other equipment or property
incorporated in such airframe and engines.
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
EXHIBIT B
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER
THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS
IS AVAILABLE.
XXXXX FARGO BANK NORTHWEST, N.A., AS OWNER TRUSTEE UNDER TRUST
AGREEMENT N___TZ DATED AS OF __________ 1, 200_
Series 2002-1_ Equipment Note due ___________ [1], 20__, issued in
connection with the Boeing model 737-800 aircraft bearing United
States registration xxxx N___TZ
No. ____ ________________, 200_
$_____________________
Interest Rate Maturity Date
------------- -------------
_______% ________________, 20__
Xxxxx Fargo Bank Northwest, N.A., not in its individual capacity but
solely as trustee (in such capacity, the "Owner Trustee") under Trust Agreement
N___TZ (as supplemented or amended from time to time, the "Trust Agreement"),
dated as of __________ 1, 200_, between [Owner Participant] and Owner Trustee,
hereby promises to pay to __________________, or the registered assignee
thereof, the principal sum of $___________ (the "Original Amount"), together
with interest at the Debt Rate on the unpaid balance of the Original Amount
(calculated on the basis of a 360-day year of twelve 30-day months from the date
hereof until paid in full). The Original Amount of this Equipment Note shall be
payable in installments on the dates set forth in Schedule I hereto equal to the
corresponding percentage of the Original Amount of this Equipment Note set forth
in Schedule I hereto. Accrued but unpaid interest shall be due and payable in
quarterly installments commencing __________, 200_, and on each [February 20],
[May 20], [August 20] and [November 20] thereafter, to and including __________,
20__. Notwithstanding the foregoing, the final payment made on this Equipment
Note shall be an amount sufficient to discharge in full the unpaid Original
Amount and all accrued and unpaid interest on, and any other amounts due under,
this Equipment Note. If any date on which a payment under this Equipment Note
becomes due and payable is not a Business Day, then such payment shall not be
made on such scheduled date but shall be made on the following Business Day, and
if such
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
payment is made on such following Business Day, no interest shall accrue on the
amount of such payment during such extension.
The "Mortgage" is Trust Indenture and Mortgage N___TZ, dated as of
__________, 200_, between Owner Trustee and Wilmington Trust Company, as trustee
(the "Loan Trustee"), as amended or supplemented from time to time. All terms
used in this Equipment Note, if defined in the Mortgage and not in this
Equipment Note, have the same meanings as in the Mortgage.
This Equipment Note shall bear interest, payable on demand, at the
Past-Due Rate (calculated on the basis of a 360-day year of twelve 30-day
months) on any overdue Original Amount, any overdue Make-Whole Amount, and (to
the extent permitted by applicable Law) any overdue interest and any other
amounts payable hereunder which are overdue, in each case for the period that it
is overdue. Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration, or otherwise). The interest rate borne by this
Equipment Note shall be subject to adjustments to the extent, and under the
circumstances, specified by the Registration Rights Agreement.
All payments of Original Amount, interest, Make-Whole Amount (if any),
and other amounts (if any) to be made by Owner Trustee hereunder and under the
Mortgage or the Participation Agreement shall be payable only from the income
and proceeds from the Trust Estate to the extent included in the Collateral and
only to the extent that Owner Trustee has sufficient income or proceeds from the
Trust Estate (to the extent included in the Collateral) to enable Loan Trustee
to make such payments in accordance with (ss.) 2.03 and (ss.) 3 of the Mortgage,
and each holder hereof, by its acceptance of this Equipment Note, agrees (1)
that it will look solely to the income and proceeds from the Collateral to the
extent available for distribution to the holder hereof as above provided, and
(2) that neither Owner Participant nor Owner Trustee nor Loan Trustee is
personally liable or liable in any manner extending to any assets other than
the Collateral to the holder hereof for any amounts payable or any liability
under this Equipment Note or, except as provided in the Mortgage or in the
Participation Agreement, for any liability under the Mortgage or the
Participation Agreement; provided, that nothing herein contained shall limit,
restrict, or impair Loan Trustee's right (subject to the terms of the Mortgage)
to accelerate the maturity of this Equipment Note, if a Mortgage Event of
Default exists, in accordance with (ss.) 4.04(b) of the Mortgage, to bring suit
and obtain a judgment against Owner Trustee on this Equipment Note for purposes
of realizing upon the Collateral, and to exercise all rights and remedies
provided under the Mortgage or otherwise realize upon the Collateral.
An Equipment Note Register shall be maintained at Loan Trustee's
Corporate Trust Office (or at the office of any successor) for the purpose of
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
registering transfers and exchanges of Equipment Notes, in the manner provided
in (ss.) 2.07 of the Mortgage.
The Original Amount and interest and other amounts due hereunder shall
be payable in Dollars in immediately available funds at Loan Trustee's Corporate
Trust Office, or as otherwise provided in the Mortgage. Each such payment shall
be made without any presentment or surrender of this Equipment Note, except that
this Equipment Note shall be surrendered for cancellation promptly after any
final payment.
The holder hereof, by its acceptance of this Equipment Note, agrees
that (except as otherwise provided in the Mortgage) each payment received by it
hereunder shall be applied, first, to pay accrued interest on this Equipment
Note (as well as any interest on any overdue Original Amount, any overdue
Make-Whole Amount, or (to the extent permitted by Law) any overdue interest and
other amounts hereunder) to the date of such payment, second, to pay the
Original Amount of this Equipment Note then due, third, to pay any Make-Whole
Amount and any other amount due hereunder or under the Mortgage, and fourth, the
balance, if any, remaining thereafter, to pay installments of the Original
Amount of this Equipment Note remaining unpaid in the inverse order of their
normal maturity.
This Equipment Note is one of the Equipment Notes referred to in the
Mortgage which have been or are to be issued by Owner Trustee pursuant to the
terms of the Mortgage. The Collateral is held by Loan Trustee as security, in
part, for the Equipment Notes. The provisions of this Equipment Note are subject
to the Mortgage. Reference is made to the Mortgage and the Participation
Agreement which contain a complete statement of (1) the rights and obligations
of the holder of this Equipment Note, and the nature and extent of the security
for this Equipment Note, (2) the rights and obligations of the holders of any
other Equipment Notes executed and delivered under the Mortgage, and the nature
and extent of the security for any other Equipment Notes executed and delivered
under the Mortgage, and (3) the terms and conditions of the Trust created by the
Mortgage, to all of which terms and conditions in the Mortgage and the
Participation Agreement each holder hereof agrees by its acceptance of this
Equipment Note.
As provided in the Mortgage and subject to certain limitations therein
set forth, this Equipment Note is exchangeable for a like aggregate Original
Amount of Equipment Notes of different authorized denominations, as requested by
the holder surrendering it.
Before this Equipment Note is duly presented for registration of
transfer, Owner Trustee and Loan Trustee shall treat the person in whose name
this Equipment Note is registered as the owner hereof for all purposes, whether
or
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
not this Equipment Note is overdue, and neither Owner Trustee nor Loan Trustee
shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in (ss.) 2.10,
(ss.) 2.12, and (ss.) 2.13 of the Mortgage, but not otherwise. This Equipment
Note is also subject to assumption by Lessee as provided in (ss.) 2.11 of the
Mortgage, and to exchange and to purchase by Owner Participant or Owner Trustee
as provided in (ss.) 2.14 of the Mortgage, but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the Mortgage, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Mortgage) in respect of Series A Equipment Notes, and this Equipment Note is
issued subject to such provisions. The holder of this Equipment Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs Loan Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Mortgage, and (c) appoints Loan Trustee his attorney-in-fact for such purpose.]*
The holder of this Equipment Note, by accepting the same, also agrees
to be subject to the transfer restrictions set forth in (ss.) 2.07 of the
Mortgage.
Unless the certificate of authentication hereon has been executed by or
on behalf of Loan Trustee by manual signature, this Equipment Note shall not be
entitled to any benefit under the Mortgage or be valid or obligatory for any
purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
* * *
-----------------------------
* To be inserted for each Equipment Note other than any Series A Equipment Note.
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
IN WITNESS WHEREOF, Owner Trustee has executed this Equipment Note.
XXXXX FARGO BANK NORTHWEST, N.A.,
not in its individual capacity but
solely as trustee, Owner Trustee
By:
------------------------------------
Name:
Title:
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the Mortgage (as
defined in the foregoing Equipment Note).
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Loan Trustee
By:
-------------------------------------
Name:
Title:
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ
Schedule I
to
Equipment Note
Equipment Note Amortization
---------------------------
Percentage of Original
Payment Date Amount to be Paid
------------ ----------------------
[see Schedule I to Mortgage
which is inserted upon issuance]
2002 EETC - Mortgage (LL)(11) Mortgage N_TZ