EXHIBIT 4.10
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of
[_]
Among
US AIRWAYS, INC.,
Lessee,
_________________________________________,
Owner Participant,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly provided herein,
but solely as Owner Trustee,
One Airbus A[_] Aircraft
U.S. Registration No. N___U_
Manufacturer's Serial Number __________
INDEX TO PARTICIPATION AGREEMENT
Page
SECTION 1. DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . . . 3
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT . . . . . 3
(a) Participation by Pass Through Trustees on the Delivery Date;
Issuance of Equipment Notes . . . . . . . . . . . . . . . . . . 3
(b) Payment of Owner Participant's Commitment . . . . . . . . . . . 4
(c) Like-Kind Exchange Assignments . . . . . . . . . . . . . . . . 4
(d) Default by Pass Through Trustee or Owner Participant . . . . . 5
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE . . . . . . . . . . . . 5
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 6
(a) Conditions Precedent to the Participations in the Aircraft . . 6
(b) Conditions Precedent to the Obligations of Lessee . . . . . . 17
SECTION 5. EXTENT OF INTEREST OF NOTE HOLDERS . . . . . . . . . . . 18
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES. . 19
(a) Representations and Warranties . . . . . . . . . . . . . . . 19
(b) General Tax Indemnity . . . . . . . . . . . . . . . . . . . . 24
(i) Indemnity . . . . . . . . . . . . . . . . . . . . . . . 24
(ii) Exclusions from General Tax Indemnity . . . . . . . . . 25
(iii) Payments . . . . . . . . . . . . . . . . . . . . . 28
(iv) Contests . . . . . . . . . . . . . . . . . . . . . . . . 30
(v) Refunds . . . . . . . . . . . . . . . . . . . . . . . . 33
(vi) Tax Filing . . . . . . . . . . . . . . . . . . . . . . . 34
(vii) Forms . . . . . . . . . . . . . . . . . . . . . . . 34
(viii) Non-Parties . . . . . . . . . . . . . . . . . . . . 34
(ix) Subrogation . . . . . . . . . . . . . . . . . . . . . . 35
(c) General Indemnity . . . . . . . . . . . . . . . . . . . . . . 35
(d) Section 1031 Exchange Indemnity . . . . . . . . . . . . . . . 40
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . 41
(a) Covenants Regarding Citizenship. . . . . . . . . . . . . . . 41
(b) Location of Records . . . . . . . . . . . . . . . . . . . . . 42
(c) Securities Act . . . . . . . . . . . . . . . . . . . . . . . 42
(d) Reregistration . . . . . . . . . . . . . . . . . . . . . . . 42
(e) Owner Participant Representations and Warranties . . . . . . 46
(f) Lessor Liens . . . . . . . . . . . . . . . . . . . . . . . . 48
(g) Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . 48
(h) Equipment Notes Acquired for Investment . . . . . . . . . . . 49
(i) Representations, Warranties and Covenants of Indenture Trustee 49
(j) Owner Participant Transfers . . . . . . . . . . . . . . . . . 50
(k) Compliance with Trust Indenture . . . . . . . . . . . . . . . 53
(l) ERISA Matters . . . . . . . . . . . . . . . . . . . . . . . . 53
(n) Loan Participant Liens . . . . . . . . . . . . . . . . . . . 54
(o) Indenture Trustee Liens . . . . . . . . . . . . . . . . . . . 54
(p) Representations and Warranties of Owner Trustee . . . . . . . 54
(q) Owner Participant Obligations on Lease Termination . . . . . 58
(r) Transfer of Title; Assumption of Equipment Notes . . . . . . 58
(s) Lessee Merger Covenant . . . . . . . . . . . . . . . . . . . 59
(t) Lessee Financial Statements . . . . . . . . . . . . . . . . 61
(u) Rent Adjustments . . . . . . . . . . . . . . . . . . . . . . 61
(v) Owner Participant Costs on Return . . . . . . . . . . . . . . 61
(w) Transfer of Equipment Notes . . . . . . . . . . . . . . . . . 62
(x) Representations and Warranties of Pass Through Trustee . . . 62
(y) Representations and Warranties of Subordination Agent . . . . 64
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER . . . . . . . . . . . . . 67
SECTION 9. OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . 67
SECTION 10. CERTAIN COVENANTS OF LESSEE . . . . . . . . . . . . . . 68
(a) Further Assurances . . . . . . . . . . . . . . . . . . . . . 68
(b) Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11. OWNER FOR ALL PURPOSES . . . . . . . . . . . . . . . . 70
SECTION 12. NOTICES; CONSENT TO JURISDICTION . . . . . . . . . . . . 70
(a) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(b) Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . 70
SECTION 13. CHANGE OF SITUS OF OWNER TRUST . . . . . . . . . . . . 71
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 72
(a) Consents Under Lease . . . . . . . . . . . . . . . . . . . . 72
(b) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(c) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 73
(d) Amendments and Waivers . . . . . . . . . . . . . . . . . . . 73
(e) Successors and Assigns . . . . . . . . . . . . . . . . . . . 73
(f) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 73
(g) Trust Capacity . . . . . . . . . . . . . . . . . . . . . . . 74
(h) Section 1110 . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . 74
(a) Invoices And Payment . . . . . . . . . . . . . . . . . . . . 74
(b) Payment of Other Expenses. . . . . . . . . . . . . . . . . . 75
SECTION 16. REFINANCINGS . . . . . . . . . . . . . . . . . . . . . . 75
(a) Refinancing Generally . . . . . . . . . . . . . . . . . . . . 75
(b) Limitation on Redemption . . . . . . . . . . . . . . . . . . 78
ANNEXES
ANNEX A - Definitions
[ANNEX B - Like Kind Exchange Documents](1)
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreement and Pass Through Trust
Supplements EXHIBITS
Exhibit A - Form of Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
(Illinois), special counsel for Lessee
Exhibit B - Form of Opinion of Lessee's Legal Department
Exhibit C - Form of Opinion of ▇▇▇▇▇▇▇▇ Chance Regarding Manufacturer
Documents
Exhibit D - Form of Opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of special counsel for the Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special FAA Counsel
Exhibit G - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Indenture Trustee
Exhibit H - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Pass Through Trustee Exhibit I u Form of Opinion of ▇▇▇▇▇▇▇
▇▇▇▇ LLP, special counsel for the Subordination Agent
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(1) To be included in like-kind exchange transactions.
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N___U_)
THIS PARTICIPATION AGREEMENT (US Airways, Inc. Trust No. N___U_)
dated as of [u] (as amended, supplemented or otherwise modified from time
to time, this "Agreement") among (i) US AIRWAYS, INC., a Delaware
corporation (together with its successors and permitted assigns, the
"Lessee"), (ii) ___________________________________, a __________
corporation (together with its successors and permitted assigns, the "Owner
Participant"), (iii) STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity except as otherwise provided herein, but solely as pass through
trustee under each of two separate Pass Through Trust Agreements (in such
capacity, together with its successors and permitted assigns, the "Pass
Through Trustee"), subordination agent and trustee under the Intercreditor
Agreement (in such capacity, together with its successors and permitted
assigns, the "Subordination Agent"), and Indenture Trustee under the Trust
Indenture (in such capacity, together with any successor indenture trustee,
the "Indenture Trustee") and (iv) FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
except as expressly provided herein, but solely as Owner Trustee under the
Trust Agreement (herein, in such latter capacity, together with any
successor owner trustee, called the "Owner Trustee");
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into the Trust Agreement with
the Owner Trustee, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Trust Estate for the use and
benefit of the Owner Participant;
WHEREAS, US Airways Group, Inc., a Delaware corporation, and
AVSA, S.A.R.L. have entered into the Purchase Agreement, pursuant to which,
among other things, the Manufacturer of the Airframe has agreed to
manufacture and sell to US Airways Group, Inc. and US Airways Group, Inc.
has agreed to purchase from AVSA, S.A.R.L., certain aircraft, including the
Aircraft;
WHEREAS, US Airways Group, Inc. has agreed to assign to Lessee
(the "Parent Assignment") all rights and obligations (and AVSA, S.A.R.L.
has consented to such assignment) pertaining to the Purchase Agreement with
respect to the Aircraft;
WHEREAS, on the Delivery Date, Lessee will sell to the Owner
Trustee the Aircraft, and Lessee and the Owner Trustee will enter into a
Purchase Agreement Assignment, pursuant to which, among other things,
Lessee will assign to the Owner Trustee certain of the warranties obtained
from AVSA, S.A.R.L. (and assigned by US Airways Group, Inc.) in respect of
the Aircraft;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Indenture Trustee and the Owner Trustee are entering into
the Trust Indenture pursuant to which the Owner Trustee will issue to the
Loan Participants Equipment Notes in two series, which Equipment Notes are
to be secured by the mortgage and security interests created by the Owner
Trustee in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee will execute and deliver a Trust and Indenture
Supplement covering the Aircraft, supplementing the Trust Agreement and the
Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease
whereby, subject to the terms and conditions set forth therein, the Owner
Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee, the Aircraft on the Delivery Date;
WHEREAS, on the Delivery Date for the Aircraft, the Lessee will
deliver a Lease Supplement covering the Aircraft;
WHEREAS, pursuant to the terms of the Note Purchase Agreement,
the Pass Through Trustee will purchase from the Owner Trustee on the
Delivery Date, on behalf of each Pass Through Trust, all of the Equipment
Notes bearing the same interest rate as the Pass Through Certificates
issued by such Pass Through Trust;
WHEREAS, prior to the execution and delivery of this Agreement,
(i) the Liquidity Provider entered into two separate Liquidity Facilities,
one for the benefit of the holders of Pass Through Certificates of each of
the Class G Pass Through Trust and the Class C Pass Through Trust (each
referenced on Schedule III hereto), with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust;
(ii) the Policy Provider entered into a Policy Provider Agreement with the
Subordination Agent, as agent for the Pass Through Trustee on behalf of the
Class G Trust and has issued the Policy for the benefit of the holders of
Pass Through Certificates of the Class G Pass Through Trust; and (iii) the
Pass Through Trustee, the Liquidity Provider, the Policy Provider and the
Subordination Agent have entered into the Intercreditor Agreement;
WHEREAS, the Equipment Notes will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, the acquisition of the Aircraft by Lessee from the
Seller and the aforementioned sale and leaseback transaction are integrally
related and constitute a series of events designed to provide financing for
such Aircraft and a means of providing the Aircraft to the Lessee for use
in its business; and
[WHEREAS, the Owner Participant will acquire the Aircraft for
federal income tax purposes pursuant to an exchange of like kind properties
under the Code.](2)
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
---------------
(2) Like-Kind Exchange Transactions Only.
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery Date;
Issuance of Equipment Notes. Subject to the terms and conditions of this
Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
make a non-recourse secured loan to the Owner Trustee on the Delivery Date
to finance, in part, the Owner Trustee's payment of Lessor's Cost for the
Aircraft by paying to the Owner Trustee the aggregate purchase price of the
Equipment Notes being issued to such Pass Through Trustee as set forth on
Schedule II opposite the name of such Pass Through Trust. The Pass Through
Trustees shall make such payments to the Owner Trustee by transferring to
the account of the Owner Trustee at State Street Bank and Trust Company of
Connecticut, National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ABA No. [_], Account No. [_], Reference: US Airways, Inc. ▇▇▇▇-▇
▇▇▇▇/▇▇ ▇▇▇▇▇▇▇, Inc. (Trust No. N___U_), not later than 10:00 a.m., New
York City time, on the Delivery Date in immediately available funds in
Dollars, the amount set forth opposite the name of such Pass Through Trust
on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner Trustee, the Owner
Trustee, at the direction of the Owner Participant, shall issue, pursuant
to Article II of the Trust Indenture, to the Subordination Agent on behalf
of the Pass Through Trustee for each of the Pass Through Trusts, Equipment
Notes of the maturity and aggregate principal amount, bearing the interest
rate and for the purchase price set forth on Schedule II opposite the name
of such Pass Through Trust.
(b) Payment of Owner Participant's Commitment. Subject to the
terms and conditions of this Agreement, the Owner Participant agrees with
the Lessee and only with the Lessee on behalf of the Owner Trustee, subject
to the terms and conditions of this Agreement, to make the amount of its
Commitment as set forth on Schedule II available for and on account of the
Owner Trustee on the Delivery Date by wire transfer of such amount in
immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company of Connecticut, National
Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. [_],
Account No. [_], Reference: US Airways, Inc. ▇▇▇▇-▇ ▇▇▇▇/▇▇ ▇▇▇▇▇▇▇, Inc.
(Trust No. N___U_), not later than 10:00 a.m., New York City time. The
amount of the Owner Participant's Commitment shall be held for the account
of the Owner Participant by the Owner Trustee until released by the Owner
Participant or its special counsel at closing.
(c) Like-Kind Exchange Assignments. Notwithstanding anything to
the contrary contained in the Operative Documents, upon notice to Lessee,
each of the Owner Trustee's and Owner Participant's rights (but not any of
its obligations, other than the obligation to pay the Owner Participant's
Commitment for the Aircraft) under this Agreement to acquire the Aircraft
may be assigned to Chicago Deferred Exchange Corporation, an Illinois
corporation ("Intermediary") in connection with a like-kind exchange under
Section 1031 of the Code and pursuant to the following like-kind exchange
documents, each of which are attached hereto in Annex B: (i) Assignment and
Acceptance Replacement Property Contract, dated _________ __, 2000, among
the Owner Participant, the Owner Trustee and Intermediary, and acknowledged
and agreed by Lessee; (ii) Notice of Assignment of Certain Rights in
Participation Agreement and Purchase Agreement Assignment, dated
___________ __, 2000, between the Owner Participant and the Owner Trustee,
and acknowledged and agreed by Lessee and Indenture Trustee, in the
capacities specified in the Participation Agreement, and Lessee; (iii)
Direction of Title Transfer, dated ____________ __, 2000, between
Intermediary and Lessee; and (iv) Reassignment and Reacceptance Replacement
Property Contract, dated ___________ __, 2000, among Intermediary, the
Owner Participant and the Owner Trustee, and acknowledged and agreed by
Lessee. Any such assignment, transfer and reassignment shall occur on the
Delivery Date in connection with the closing of the transactions referred
to in this Agreement and shall not be considered a transfer under Section
7(j). Notwithstanding the first sentence of this paragraph, the Owner
Participant shall be responsible to make its Commitment available in
accordance with the provisions of this Agreement if Intermediary fails to
make such Commitment available, and any such assignment shall not release
the Owner Participant from any of its obligations hereunder or under any
other Owner Participant Document.(3)
(d) Default by Pass Through Trustee or Owner Participant. In
case any of the Pass Through Trustee or the Owner Participant shall default
in its obligation under the provisions of this Section 2, such obligations
being several and not joint, no other such party shall have any obligation
to make any portion of such defaulted amount available or to increase the
amount of its Commitment and the obligation of such nondefaulting party and
Lessee shall remain subject to the terms and conditions set forth in this
Agreement.
(e) Closing. The closing of the transactions referred to in
this Agreement shall take place commencing at 9:30 a.m. local time, on the
Delivery Date, at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
in New York, New York.
(f) Sale-Leaseback. Subject to the terms and conditions of this
Agreement, Lessee agrees that upon receipt by it of Lessor's Cost, it will
sell the Aircraft to the Owner Trustee and, simultaneously therewith will
enter into the Lease and Lease Supplement No. 1 pursuant to which it will
lease the Aircraft from the Owner Trustee.
--------------------
(3) Include only for Like-Kind Exchange Deals.
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE.
The Owner Participant agrees that its releasing the amount of its
Commitment for the Aircraft to the account of the Owner Trustee in
accordance with the terms of Section 2 and its instructions to the Owner
Trustee to release such funds shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee:
(i) to purchase the Aircraft from Lessee and to pay to Lessee
the Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the
Aircraft on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of
Sale, the Consent and Agreement and Engine Agreement Assignment for
the Aircraft referred to in Section 4(a)(iv)(8), 4(a)(iv)(9),
4(a)(iv)(13) and 4(a)(iv)(14);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the
Aircraft;
(v) to borrow from the Pass Through Trustee and issue the
Equipment Notes as provided in Section 2(a); and
(vi) to take such other action as may be required to be taken by
the Owner Trustee on the Delivery Date by the terms of any Owner
Trustee Document.
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to the Participations in the Aircraft.
It is agreed that the respective obligations of the Owner Trustee, the
Owner Participant, the Indenture Trustee, the Subordination Agent and the
Pass Through Trustee on behalf of each Pass Through Trust to participate in
the Transactions contemplated hereby on the Delivery Date are subject to
the fulfillment to the satisfaction of each party (or waiver by such
party), prior to or on the Delivery Date of the following conditions
precedent, except that paragraphs (ii), (iv)(5), (xix), (xx) and (xxi)
shall not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iii), (vi) (insofar as it relates to certificates
and documents to be delivered by the Owner Participant), (xiii) and (xix)
shall not be a condition precedent to the obligation of the Owner
Participant and paragraph (xxiii) shall not be a condition precedent to the
obligations of the Subordination Agent:
(i) On the Delivery Date, no change shall have occurred after
the date of the execution and delivery of this Agreement in applicable
law or regulations or guidelines or interpretations thereof by
appropriate regulatory authorities or any U.S. Federal Court of
Appeals which would make it a violation of law or regulations or
guidelines for the Pass Through Trustee or the Owner Participant to
make its Commitment available in accordance with Section 2 and to
enter into the Transactions.
(ii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for
the Aircraft in accordance with Section 2.
(iii) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment for
the Aircraft in accordance with Section 2.
(iv) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent and shall be in full force and effect and
executed counterparts shall have been delivered to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, Lessee and their respective counsel,
provided that only the Subordination Agent on behalf of each Pass
Through Trustee shall receive an executed original of such Pass
Through Trustee's respective Equipment Note, the chattel paper
counterpart of the Lease and the Lease Supplement covering the
Aircraft dated the Delivery Date shall be delivered to the Indenture
Trustee, the Tax Indemnity Agreement need only be satisfactory to the
Owner Participant and Lessee and shall only be delivered to Lessee and
the Owner Participant and their respective counsel:
(1) a copy of the Purchase Agreement, as filed with
the SEC, with confidential treatment granted with respect to
certain sections;
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Indenture and Trust Supplement covering
the Aircraft dated the Delivery Date;
(8) the ▇▇▇▇ of Sale;
(9) the FAA ▇▇▇▇ of Sale and a copy of the
Manufacturer's Warranty ▇▇▇▇ of Sale;
(10) an acceptance certificate covering the Aircraft in
the form agreed to by the Owner Participant and Lessee
(herein called the "Acceptance Certificate") duly completed
and executed by the Owner Trustee or its agent, which may be
a representative of Lessee, and by such representative on
behalf of Lessee;
(11) the Trust Indenture;
(12) the Equipment Notes;
(13) the Consent and Agreement;
(14) the Engine Agreement Assignment;
(15) the Engine Consent and Agreement;
(16) the French Law Pledge Agreement; and
(17) the Indenture Trustee Parent Guaranty.
In addition, the Pass Through Trustee and the Owner Participant
each shall have received executed counterparts or conformed copies of
the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement;
(3) the Liquidity Facility for each of the Class G and
Class C Pass Through Trusts; and
(4) the Policy Provider Agreement and the Policy for
the Class G Pass Through Trust.
(v) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the
Granting Clause of the Trust Indenture that are not covered by the
recording system established by the Transportation Code shall have
been executed and delivered by the Owner Trustee, and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statement or
statements in all places necessary or advisable, and any additional
Uniform Commercial Code financing statements deemed advisable by the
Owner Participant or the Pass Through Trustee shall have been executed
and delivered by Lessee or the Owner Trustee and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statements.
(vi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, Pass Through Trustee and the Subordination Agent shall have
received the following, in each case in form and substance
satisfactory to it (except it shall not be a condition to the
obligation of any such party that it receive a certificate or other
document required to be delivered by it):
(A) (1) an incumbency certificate of Lessee as to the
person or persons authorized to execute and deliver the
Operative Documents to which the Lessee is a party and any
other documents to be executed on behalf of Lessee in
connection with the Transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of
directors of Lessee or Lessee's executive committee,
certified by the Secretary or an Assistant Secretary of
Lessee, duly authorizing the Transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
Lessee in connection with the Transactions contemplated
hereby;
(3) a copy of the certificate of incorporation of
Lessee, certified by the Secretary of State of the State of
Delaware, a copy of the by-laws of Lessee certified by the
Secretary or Assistant Secretary of Lessee, and a
certificate or other evidence from the Secretary of State of
the State of Delaware, dated as of a date shortly prior to
the closing, as to the due incorporation and good standing
of Lessee in such state; and
(B) (1) an incumbency certificate of the Indenture
Trustee as to the person or persons authorized to execute
and deliver the Operative Documents to which the Indenture
Trustee is a party and any other documents to be executed on
behalf of the Indenture Trustee in connection with the
Transactions contemplated hereby and the signatures of such
person or persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the Transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Indenture Trustee in connection with the Transactions
contemplated hereby;
(3) a copy of the articles of association of the
Indenture Trustee certified by the Comptroller of the
Currency, a copy of the by-laws of the Indenture Trustee
certified by the Secretary or an Assistant Secretary of the
Indenture Trustee, and a certificate or other evidence from
the Comptroller of the Currency, dated as of a date shortly
prior to closing, as to the good standing of the Indenture
Trustee under the laws of the United States of America; and
(4) a certificate signed by an authorized officer of
the Indenture Trustee, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct as though made on and as
of the Delivery Date; except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(C) (1) an incumbency certificate of the Owner Trustee as
to the person or persons authorized to execute and deliver
the Owner Trustee Documents and any other documents to be
executed on behalf of the Owner Trustee in connection with
the Transactions contemplated hereby and the signatures of
such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner Trustee, certified by the Secretary
or an Assistant Secretary of the Owner Trustee, duly
authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to
be executed and delivered on behalf of the Owner Trustee in
connection with the transactions contemplated hereby;
(3) a copy of the articles of association of the Owner
Trustee certified by the Comptroller of the Currency, a copy
of the by-laws of the Owner Trustee certified by the
Secretary or an Assistant Secretary of the Owner Trustee and
a certificate or other evidence from the Comptroller of the
Currency, dated as of a date shortly prior to closing, as to
the good standing of the Owner Trustee under the laws of the
United States; and
(4) a certificate signed by an authorized officer of
the Owner Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the
Owner Trustee (in its individual capacity and as trustee)
are correct as though made on and as of the Delivery Date,
except to the extent that such representations and
warranties relate solely to an earlier date (in which case
such representations and warranties are correct on and as of
such earlier date).
(D) (1) an incumbency certificate of the Owner
Participant as to the person or persons authorized to
execute and deliver the Owner Participant Documents to which
the Owner Participant is a party and any other documents to
be executed on behalf of the Owner Participant in connection
with the Transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner Participant, certified by the
Secretary or an Assistant Secretary of the Owner
Participant, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the certificate of incorporation of the
Owner Participant certified by the Secretary of State of the
State of [_____________], a copy of the by-laws of the Owner
Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant, and a certificate or
other evidence from the Secretary of State of the State of
[________], dated as of a date shortly prior to closing, as to
the due incorporation and good standing of the Owner
Participant in such state; and
(4) a certificate signed by an authorized officer of
the Owner Participant, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Owner Participant are correct as though made on and as
of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(vii) All appropriate action required to have been taken
prior to the Delivery Date in connection with the Transactions
contemplated by the Operative Documents shall have been taken by the
Federal Aviation Administration, or any governmental or political
agency, subdivision or instrumentality of the United States, and all
orders, permits, waivers, authorizations, exemptions and approvals of
such entities required to be in effect on the Delivery Date in
connection with the transactions contemplated by this Agreement shall
have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and
effect on the Delivery Date.
(viii) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent each
shall have received a certificate signed by an authorized officer of
Lessee to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a current
certificate of airworthiness in the transport category
issued by the FAA, and Lessee has the authority to operate
the Aircraft;
(2) the FAA ▇▇▇▇ of Sale, the Lease, the Lease
Supplement, the Trust Indenture and the Trust Supplement
covering the Aircraft shall have been duly filed for
recordation (or shall be in the process of being so duly
filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been
filed (or shall be in the process of being so filed) with
the Federal Aviation Administration;
(3) application for registration of the Aircraft in
the name of the Owner Trustee (together with any required
affidavits) has been duly made with the Federal Aviation
Administration;
(4) the representations and warranties contained
herein of Lessee are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date); and
(5) the conditions to the purchase of the Equipment
Notes by the Pass Through Trustees under the Pass Through
Documents have been duly satisfied or waived in accordance
with their respective terms.
(ix) In the case of the Pass Through Trustees, the conditions
specified in Section 3 of the Note Purchase Agreement shall have been
satisfied or waived.
(x) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, an opinion, dated the
Delivery Date substantially in the form of Exhibit A hereto from
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), special counsel for
Lessee, and an opinion dated the Delivery Date substantially in the
form of Exhibit B hereto from Lessee's legal department.
(xi) The Pass Through Trustee and the Owner Participant shall
have received, addressed to the Pass Through Trustee, the Indenture
Trustee, the Owner Participant, the Owner Trustee and Lessee, an
opinion dated the Delivery Date substantially in the form of Exhibit C
hereto from ▇▇▇▇▇▇▇▇ Chance, with respect to the Manufacturer
Documents.
(xii) The Owner Participant, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, an opinion dated the Delivery Date
substantially in the form of Exhibit D hereto from Ray, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, special counsel for the Owner Trustee.
(xiii) The Owner Trustee, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, an opinion dated the Delivery Date
substantially in the form of Exhibit E-1 hereto from [____________
______________], special counsel for the Owner Participant, and
an opinion dated the Delivery Date substantially in the form of
Exhibit E-2 hereto from the Owner Participant's in-house counsel.
(xiv) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, an opinion dated the
Delivery Date substantially in the form of Exhibit F hereto from ▇▇▇▇▇
& ▇▇▇▇▇▇▇, P.C., special FAA counsel.
(xv) The Owner Trustee, the Owner Participant, the Pass Through
Trustee and the Subordination Agent shall have received, addressed to
each such party, an opinion dated the Delivery Date substantially in
the form of Exhibit G from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the
Indenture Trustee.
(xvi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received an insurance certificate together with an independent
insurance broker's report, in form and substance satisfactory to the
Owner Participant, as to the due compliance with the terms of Section
11 of the Lease relating to insurance with respect to the Aircraft.
(xvii) The Owner Participant shall have received an appraisal
dated the Delivery Date from BK Associates, Inc. in form and substance
satisfactory to it.
(xviii) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at
the time of the Delivery Date to set aside, restrain, enjoin or
prevent the completion and consummation of this Agreement and the
other Operative Documents or the Transactions contemplated hereby and
thereby.
(xix) The Owner Participant shall have received from [_______
___________________________________], special tax counsel to the Owner
Participant, a favorable opinion, in form and substance satisfactory
to the Owner Participant, with respect to certain Federal income tax
aspects of the transaction contemplated by the Operative Documents.
(xx) There shall have been, since the date hereof, no amendment,
modification, addition, or change in or to the provisions of the Code,
the regulations promulgated under the Code (including temporary
regulations), Internal Revenue Service Revenue Procedures or Revenue
Rulings, or other administrative interpretations, applicable judicial
precedents or Executive Orders of the President of the United States,
all as in effect on the date hereof, the effect of which might
preclude the Owner Participant from obtaining any of the anticipated
income tax benefits with respect to the Aircraft.
(xxi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent, and Lessee shall have received (A) a
certificate signed by an authorized officer of the Pass Through
Trustee, dated the Delivery Date, certifying that the representations
and warranties contained herein of the Pass Through Trustee are
correct as though made on and as of the Delivery Date; except to the
extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties are
correct on and as of such earlier date); (B) an opinion dated the
Delivery Date substantially in the form of Exhibit H hereto addressed
to each such party of ▇▇▇▇▇▇▇ ▇▇▇▇, LLP, special counsel for the Pass
Through Trustee and (C) such other documents and evidence with respect
to the Pass Through Trustee as it may reasonably request in order to
establish the due consummation of the Transactions contemplated by
this Agreement and the other Operative Documents, the taking of all
necessary corporate action in connection therewith and compliance with
the conditions herein and therein set forth.
(xxii) No Lease Default or Lease Event of Default has occurred
and is continuing and no Event of Loss has occurred with respect to
the Airframe or any Engine.
(xxiii) The Owner Trustee, the Owner Participant, the Indenture
Trustee and the Pass Through Trustee shall have received, addressed to
each such party, an opinion dated the Delivery Date substantially in
the form of Exhibit I from ▇▇▇▇▇▇▇ ▇▇▇▇, LLP, special counsel for the
Subordination Agent.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft
and the Trust Supplement covering the Aircraft pursuant to the
Transportation Code, Lessee will cause ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special FAA
counsel in Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee,
the Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
an opinion as to the due and valid registration of the Aircraft in the name
of the Owner Trustee, the due recording of the FAA ▇▇▇▇ of Sale, the Trust
Indenture, such Lease Supplement, such Trust Supplement and the Lease and
the filing of the Trust Agreement and the lack of filing of any intervening
documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee. It is
agreed that (A) the obligations of Lessee to sell the Aircraft to the Owner
Trustee and to accept delivery of the Aircraft under the Lease on the
Delivery Date and (B) the obligations of Lessee to enter into the other
Operative Documents on the Delivery Date are all subject to the fulfillment
to the satisfaction of Lessee prior to the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on the
Delivery Date.
(ii) The conditions specified in Sections 4(a)(i), 4(a)(ii) and
4(a)(iii) hereof shall have been satisfied (unless nonsatisfaction
results from Lessee's action or failure to act).
(iii) Those documents described in Section 4(a)(iv) shall
have been duly authorized, executed and delivered by the respective
party or parties thereto (other than Lessee) in the manner specified
in Section 4(a)(iv), shall each be satisfactory in form and substance
to Lessee, shall be in full force and effect on the Delivery Date, and
an executed counterpart of each thereof (other than the Equipment
Notes) shall have been delivered to Lessee or its special counsel, to
the extent contemplated in Section 4(a)(iv).
(iv) Lessee shall have received (A) each certificate referred to
in Section 4(a)(vi) (other than the certificate and documents referred
to in clause (A) thereof), (B) the certificate referred to in Section
4(a)(xxi)(A) and (C) such other documents and evidence with respect to
the Pass Through Trustee as Lessee or its special counsel may
reasonably request in order to establish the due consummation of the
Transactions contemplated by this Agreement, the taking of all
corporate proceedings in connection therewith and compliance with the
conditions herein set forth.
(v) Lessee shall have received the opinions set forth in
Sections 4(a)(xi), 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv),
4(a)(xxi)(B) and 4(a)(xxiii) in each case addressed to Lessee and
dated the Delivery Date.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of the Transactions contemplated by this
Agreement.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for Lessee to enter into any transaction contemplated by
the Operative Documents.
(viii) There shall have been, since the date hereof, no
amendment, modification, addition or change in or to the provisions of
the Code, the regulations promulgated under the Code (including
temporary regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations, applicable
judicial precedents or Executive Orders of the President of the United
States, all as in effect on the date hereof, the effect of which might
give rise to an indemnity obligation of Lessee under any of the
Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
SECTION 5. EXTENT OF INTEREST OF NOTE HOLDERS. No Note Holder
shall have any further interest in, or other right with respect to, the
mortgage and security interests created by the Trust Indenture when and if
the principal of and interest on all Equipment Notes held by such holder
and all other sums payable to such holder hereunder, under the Trust
Indenture and under such Equipment Notes shall have been paid in full.
Each Pass Through Trustee and, by its acceptance of an Equipment Note, each
Note Holder agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for distribution to such
Note Holder as provided in Article III of the Trust Indenture and that
neither the Owner Participant nor the Owner Trustee shall be personally
liable to the Pass Through Trustees, any Note Holder or any other Person
for any amounts payable under the Equipment Notes, the Trust Indenture or
hereunder, except as expressly provided in the Operative Documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES.
(a) Representations and Warranties. Lessee represents and
warrants to the Pass Through Trustee, the Owner Trustee, the Indenture
Trustee, the Liquidity Provider, the Policy Provider, the Subordination
Agent and the Owner Participant that:
(i) Lessee is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, has
the corporate power and authority to own or hold under lease its
properties, has, or had on the respective dates of execution thereof,
the corporate power and authority to enter into and perform its
obligations under the Lessee Documents, the Pass Through Trust
Agreements and the other Operative Documents to which it is a party,
and is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which its operations or the nature of
its business requires other than failures to so qualify which would
not have a material adverse effect on the condition (financial or
otherwise), business or properties of Lessee and its subsidiaries
existing on the date of this Agreement, considered as one enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the Commonwealth of Virginia) is located
in Arlington, Virginia;
(iii) the execution, delivery and performance by Lessee of
the Lessee Documents, the Pass Through Trust Agreements and each other
Operative Document to which Lessee is a party, and the performance of
the obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements and each other Operative Document to which Lessee is
a party, have been duly authorized by all necessary corporate action
on the part of Lessee, do not require any stockholder approval, or
approval or consent of any trustee or holder of any material
indebtedness or material obligations of Lessee, except such as have
been duly obtained and are in full force and effect, and do not
contravene any Law, binding on Lessee or the certificate of
incorporation or by-laws of Lessee, or contravene the provisions of,
or constitute a default under, or result in the creation of any Lien
(other than Permitted Liens) upon the property of Lessee under, any
indenture, mortgage, contract or other agreement to which Lessee is a
party or by which it may be bound or affected which contravention,
default or Lien, individually or in the aggregate, would be reasonably
likely to have a material adverse effect on the condition (financial
or otherwise), business or properties of Lessee and its subsidiaries
existing on the date of this Agreement, considered as one enterprise,
or the ability of Lessee to perform its obligations under the Lessee
Documents, the Pass Through Trust Agreements and any other Operative
Document to which Lessee is a party; provided, that insofar as the
representations and warranties set forth in this Section 6(a)(iii)
apply to the prohibited transaction rules of ERISA and Section 4975 of
the Code, such representations and warranties are based upon and
subject to the truth and accuracy of the representations, warranties
and covenants set forth in Section 7(l) and the representations and
warranties made or deemed made in Section 1.01(e) of the Pass Through
Trust Supplement by each purchaser of Pass Through Certificates issued
by a Pass Through Trust;
(iv) neither the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements or any other Operative
Document to which Lessee is a party, nor the performance of the
obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements or the other Operative Documents to which Lessee is a
party, requires the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect
of, the Department of Transportation, the FAA, or any other Federal,
state or foreign governmental authority having jurisdiction over
Lessee or its property, other than (A) the registration of the Pass
Through Certificates under the Securities Act and under the securities
laws of any state in which the Pass Through Certificates may be
offered for sale if the laws of such state require such action, (B)
the qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the
Securities and Exchange Commission, (C) the orders, permits, waivers,
exemptions, authorizations and approvals of the regulatory
authorities having jurisdiction over the operation of the Aircraft by
Lessee or any Sublessee required to be obtained on or prior to the
Delivery Date, which orders, permits, waivers, exemptions,
authorizations and approvals have been, or on the Delivery Date will
be, duly obtained and are, or on the Delivery Date will be, in full
force and effect, (D) the application for registration of the Aircraft
referred to in Section 4(a)(viii)(3), (E) the registrations and
filings referred to in Section 6(a)(vi) and (F) authorizations,
consents, approvals, actions, notices and filings required to be
obtained, taken, given or made either only after the date hereof or
the failure of which to obtain, take, give or make would not be
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business or properties of Lessee and its
subsidiaries existing on the date of this Agreement, considered as one
enterprise, or the ability of Lessee to perform its obligations under
the Lessee Documents, the Pass Through Trust Agreements and any other
Operative Document to which Lessee is a party;
(v) this Agreement, each of the other Lessee Documents, the Pass
Through Trust Agreements and any other Operative Document to which
Lessee is a party constitute (or, in the case of documents to be
executed on the Delivery Date, will constitute) the legal, valid and
binding obligations of Lessee enforceable against Lessee in accordance
with their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors or lessors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(vi) except for (A) the filing of the Trust Agreement and related
affidavits with the FAA, (B) the registration of the Aircraft pursuant
to the Transportation Code, (C) the filing for recording pursuant to
the Transportation Code of the Lease with the Lease Supplement
covering the Aircraft, the Trust Indenture and the Trust Supplement
attached thereto and made a part thereof, the Trust Indenture with the
Trust Supplement attached thereto and made a part thereof and the FAA
▇▇▇▇ of Sale, (D) the filing of financing statements (and continuation
statements at periodic intervals) with respect to the security
interests created by such documents under the Uniform Commercial Code
of Virginia and Utah and such other states as may be specified in the
opinion furnished pursuant to Section 4(a)(x) hereof and (E) the
taking of possession by the Indenture Trustee of the original chattel
paper counterpart of each of the Lease and the Lease Supplement
covering the Aircraft, no further filing or recording of any document
(including any financing statement in respect thereof under Article 9
of the Uniform Commercial Code of any applicable jurisdiction) or
other action is necessary or advisable under the laws of the United
States of America or any State thereof in order to establish and
perfect the Owner Trustee's title to and interest in the Aircraft as
against Lessee and any third parties, or to perfect the security
interest in favor of the Indenture Trustee in the Owner Trustee's
interest in the Aircraft (with respect to such portion of the Aircraft
as is covered by the recording system established by the FAA pursuant
to 49 U.S.C. Section 44107) and in the Lease in any applicable
jurisdiction in the United States;
(vii) neither Lessee nor any of its Affiliates or anyone
acting on their behalf (including Capstar Partners, LLC) has directly
or indirectly offered any interest in the Trust Estate, the Equipment
Notes or the Pass Through Certificates for sale to any Person other
than in a manner permitted by the Securities Act and by the rules and
regulations thereunder;
(viii) Lessee is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes a
Lease Default or Lease Event of Default;
(x) the Aircraft has been duly certified by the FAA as to type
and airworthiness and no event has occurred and is continuing which
constitutes an Event of Loss or would constitute an Event of Loss with
the lapse of time;
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of
Lessee will not be unreasonably small for the conduct of the business
in which Lessee is engaged or is about to engage; Lessee has no
intention or belief that it is about to incur debts beyond its ability
to pay as they mature; and Lessee's sale of the Aircraft is made
without any intent to hinder, delay or defraud either present or
future creditors;
(xii) none of the proceeds from the issuance of the Equipment
Notes or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee to purchase or carry any "margin security" as
such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System;
(xiii) on the Delivery Date, all sales or use tax then due and
for which Lessee is responsible pursuant to Section 6(b)(i) hereof
shall have been paid, other than such taxes which are being contested
by Lessee in good faith and by appropriate proceedings (and in respect
of which Lessee has established and maintains adequate reserves) so
long as such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Aircraft;
(xiv) except as may have been disclosed in the Lessee's
reports filed with the Securities and Exchange Commission on or prior
to the Delivery Date, there are no pending or threatened actions or
proceedings before any court, arbitrator or administrative agency that
individually or in the aggregate which could be expected to have a
material adverse effect on the condition (financial or otherwise),
business or properties of Lessee and its subsidiaries existing on the
date of this Agreement, considered as one enterprise, or the ability
of Lessee to perform its obligations under the Lessee Documents, the
Pass Through Trust Agreements and any other Operative Document to
which Lessee is a party;
(xv) the Owner Trustee will receive good and marketable title to
the Aircraft from Lessee free and clear of all Liens, except the
rights of Lessee under the Lease and the Lease Supplement covering the
Aircraft, the Lien of the Trust Indenture, the beneficial interest of
the Owner Participant in the Aircraft, and the Liens permitted by
clause (iv) (solely for Taxes not yet due but excluding any such Taxes
being contested) and clause (v) of Section 6 of the Lease (solely
securing obligations that are not yet due, but excluding any such
obligations being contested);
(xvi) the audited consolidated balance sheet of Lessee with
respect to fiscal year ended December 31, 1999 included in Lessee's
annual report on Form 10-K for the year ended December 31, 1999, as
such Form 10-K may have been amended through the Delivery Date, filed
by Lessee with the SEC, and the related consolidated statements of
income, stockholders' equity and cash flows for the period then ended,
have been prepared in conformity with GAAP and present fairly in all
material respects the financial condition of Lessee and its
consolidated subsidiaries as of such date and the result of its
operations and cash flows for such period;
(xvii) Lessee holds all licenses, permits and franchises from
the appropriate Government Entities necessary to authorize Lessee to
lawfully engage in air transportation and to carry on scheduled
commercial passenger service as currently conducted, except where the
failure to so hold any such license, permit or franchise would not be
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business or properties of Lessee and its
subsidiaries existing on the date of this Agreement, considered as one
enterprise and; provided that any such failure will not prevent Lessee
from performing its obligations under the Lessee Documents, Pass
Through Trust Agreements, or any other Operative Document to which the
Lessee is a party;
(xviii) each of the Owner Trustee and the Indenture Trustee is
entitled to the protection of Section 1110 of the Bankruptcy Code in
connection with its right to take possession of the Airframe and
Engines and to enforce any of its rights or remedies under the
Indenture in the event of a case under the Bankruptcy Code in which
Lessee is a debtor;
(xix) assuming the truth of the representations contained in
Section 7(1), neither Lessee nor any Plan nor any trust created
thereunder has engaged in a "prohibited transaction," within the
meaning of Section 406 of ERISA or Section 4975 of the Code with
respect to the Transactions contemplated hereby which could subject
Lessee or the Owner Participant to any Tax or penalty pursuant to
Section 4975 of the Code or Section 502(i) of ERISA;
(xx) no part of the funds used or to be used by Lessee to satisfy
its obligations under the Operative Documents constitute or will
constitute assets of any "employee benefit plan" as defined in Section
3(3) of ERISA or any "plan" within the meaning of Section 4975(e)(1)
of the Code.
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 6(b)(ii) hereof,
Lessee hereby agrees to indemnify, protect, defend and hold harmless
each Indemnitee on an after-tax basis for all Taxes imposed by the
United States or any state, local or foreign government or taxing
authority upon or with respect to (A) the Aircraft, the Airframe, an
Engine or any Part, (B) the manufacture, ownership, delivery, lease,
sale, alteration, change in registration, sublease, possession, use,
operation, condition, maintenance, financing, inspection, overhaul,
testing, modification, storage, purchase, acceptance, rejection,
return, non-delivery or registration of or other disposition, action
or event with respect to the Aircraft, the Airframe, an Engine or any
Part, (C) the rentals or receipts from the Aircraft, (D) the payments
made pursuant to any of the Operative Documents, (E) the interest and
principal paid with respect to the Equipment Notes and (F) the income
or proceeds from the property held in the Trust Estate or the Trust
Indenture Estate.
(ii) Exclusions from General Tax Indemnity. The provisions of
Section 6(b)(i) shall not apply to:
(1) Taxes on, based on, measured by or with respect to
the gross or net income, gross or net receipts, minimum or
alternative taxes, tax preferences, capital, net worth,
franchise or conduct of business (but not excluding sales,
use, license, rental, ad valorem, non-recoverable value
added tax (to the extent that such ad valorem or value added
tax is not imposed as a substitute for an income tax and, if
imposed as a substitute for an income tax, to the extent
such ad valorem or value added tax exceeds the income tax
that it replaces) or property taxes) imposed by the United
States or by any state or local government or taxing
authority in the United States or by any foreign government
or taxing authority except to the extent such Tax (a) is
imposed in a jurisdiction where such Indemnitee would not
have been subject to tax but for (x) the use, location or
operation of the Aircraft, the Airframe, an Engine or any
Part in such jurisdiction or (y) the presence or activities
of Lessee within such jurisdiction and (b) exceeds the Tax
that would have been imposed on the Indemnitee regardless of
the use, location or operation of the Aircraft, the
Airframe, an Engine or any Part in such jurisdiction or the
presence or activities of Lessee within such jurisdiction;
(2) Taxes that would not have been imposed but for a
Lessor's Lien;
(3) Taxes resulting from a voluntary sale, assignment,
transfer or other disposition by the Indemnitee of the
Aircraft, the Airframe, an Engine or any Part, the Trust
Estate, the Trust Indenture Estate, the Equipment Notes, the
Pass Through Certificates or the Operative Documents, or any
interest therein unless such transfer or other disposition
occurs (1) (x) by reason of the exercise of Lessor or the
Owner Participant of remedies in accordance with and
pursuant to Section 15 of the Lease when a Lease Event of
Default has occurred and is continuing, or (y) as a result
of the substitution or replacement of the Aircraft, the
Airframe, an Engine or any Part or (2) in the case of an
Indemnitee other than Lessor or the Owner Participant, while
a Lease Event of Default is continuing;
(4) Taxes resulting from a transfer of the Aircraft,
Airframe, an Engine or any Part, or the Trust Estate arising
out of or relating to bankruptcy or similar proceedings
involving the Owner Participant;
(5) Taxes resulting from the willful misconduct or
gross negligence of the Indemnitee;
(6) Taxes relating to the Aircraft, the Airframe, an
Engine or any Part for any period after (x) the expiration
or early termination of the Lease in accordance with the
terms of the Lease or (y) the return of the Aircraft, the
Airframe, an Engine or any Part by Lessee to Owner Trustee
or Owner Participant in accordance with the terms of the
Lease (in each case as it relates to Taxes for the returned
items) or placement of the Aircraft in storage at the
request of the Owner Trustee in accordance with the terms of
the Lease, except to the extent that Taxes are incurred in
connection with the exercise of any remedies of Lessor or
the Owner Participant in accordance with and pursuant to
Section 15 of the Lease when a Lease Event of Default has
occurred and is continuing;
(7) Taxes imposed on any transferee (a) if such Tax
would not have been imposed on the original Indemnitee, or
(b) to the extent such Tax exceeds the amount of Tax that
would have been imposed on the original Indemnitee;
(8) Taxes which have been included in the Lessor's
Cost;
(9) Taxes imposed by a government or taxing authority
of any jurisdiction to the extent such Taxes would have been
imposed on the Indemnitee solely by reason of activities or
property of such Indemnitee in such jurisdiction unrelated
to the transactions contemplated by the Operative Documents;
(10) Taxes being contested pursuant to the contest
provisions contained in Section 6(b)(iv);
(11) Taxes imposed on the Owner Trustee or the
Indenture Trustee based on, measured by or imposed with
respect to any fees, commissions or compensation received by
it for services rendered in its capacity as Owner Trustee or
Indenture Trustee, as the case may be;
(12) With respect to Lessor and the Owner Participant
only, Taxes imposed on an Indemnitee and indemnified under
the Tax Indemnity Agreement;
(13) Interest, penalties and additions to Tax to the
extent imposed as a result of the failure of the Indemnitee
to timely and properly file any return, unless such failure
is caused by Lessee's failure to timely provide information
required to be provided under the Operative Documents;
(14) Taxes that would not have been imposed but for an
Indemnitee's breach of any covenant or the inaccuracy of any
representation or warranty of such Indemnitee in any of the
Operative Documents;
(15) Taxes in the nature of an intangible or similar
Tax imposed upon, or with respect to, (a) the value of the
Owner Participant's interest in the Trust Estate or the
Indenture Trust Estate or (b) the value or the principal
amount of any Lender's interest in any of the Equipment
Notes;
(16) U.S. withholding taxes imposed on payments to a
foreign person which is a Participant;
(17) Taxes imposed by section 4975 of the Code or any
successor provision thereto; and
(18) With respect to Lessor and the Owner Participant
only, Taxes imposed as a result of the transactions
contemplated to consummate the like kind exchange of the
Aircraft between the Owner Participant and the Intermediary
pursuant to the like kind exchange documents identified in
Section 2(c).(4)
References to the Owner Participant shall include such Person's
respective successors and permitted assigns, officers, directors, servants,
employees, agents and Affiliates.
-------------
(4) Include in like-kind exchange transactions only.
(iii) Payments. The Lessee's indemnity obligation to an
Indemnitee under this Section 6(b) shall include any amount necessary
to hold such Indemnitee harmless (as determined in good faith by such
Indemnitee), after taking into account any tax benefits actually
realized by such Indemnitee (including, without limitation, any
benefits realized as a result of an indemnifiable Tax being utilized
by such Indemnitee as a credit against Taxes not indemnifiable under
this Section 6(b)), from the net amount of all Taxes actually required
to be paid by such Indemnitee by reason of the receipt or accrual of
the amounts payable under this Section 6(b). Each Indemnitee shall
provide Lessee with such certifications, information and documentation
as shall be reasonably requested by Lessee to minimize any indemnity
payment pursuant to this Section 6(b).
At Lessee's request, the computation of the amount of any indemnity
payment owed by Lessee or any amount owed by an Indemnitee to Lessee
pursuant to this Section 6(b) shall be verified and certified by a
nationally recognized independent public accounting firm mutually selected
by the Indemnitee and Lessee. The costs of such verification (including the
fee of such public accounting firm) shall be borne by Lessee unless such
verification shall result in an adjustment in Lessee's favor of 5% or more
of the net present value of the payment as computed by such Indemnitee, in
which case the costs shall be paid by such Indemnitee.
Each Indemnitee shall promptly forward to Lessee any written notice,
▇▇▇▇ or advice received by it from any government or taxing authority
concerning any Tax for which it seeks indemnification under this Section
6(b); provided, however, the failure to provide such notice shall not
adversely affect such Indemnitee's right to indemnity under this Section
6(b) except to the extent such failure materially adversely affects the
contest of the Tax. Lessee shall pay any amount for which it is liable
pursuant to this Section 6(b) directly to the appropriate government or
taxing authority if legally permissible or, upon demand of an Indemnitee,
to such Indemnitee within 30 days of such demand (or, if a contest occurs
in accordance with Section (6)(b)(iv), within 30 days after a Final
Determination (as defined below)), but in no event more than one business
day prior to the date the Tax to which such amount payable hereunder
relates is due, provided, Lessee shall not be required to make any payment
pursuant to this Section 6(b)(iii) unless the Indemnitee elects to pay such
Tax claimed and ▇▇▇ for a refund as provided in Section 6(b)(iv). If
requested by an Indemnitee in writing, Lessee shall furnish to the
appropriate Indemnitee the original or a certified copy of a receipt for
Lessee's payment of any Tax or such other evidence of payment of Tax. For
purposes of this Section 6(b), a "Final Determination" shall mean (A) a
decision, judgment, decree or other order by any court of competent
jurisdiction that occurs pursuant to the provisions of Section 6(b)(iv),
which decision, judgment, decree or other order has become final and
unappealable, (B) a closing agreement or settlement agreement entered into
in accordance with Section 6(b)(iv) that has become binding and is not
subject to further review or appeal absent fraud or misrepresentation or
(C) the termination of administrative proceedings and the expiration of the
time for instituting a claim in a court proceeding.
If any Indemnitee shall actually realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 6(b) and
such savings was not otherwise taken into account in computing such payment
or indemnity, such Indemnitee shall pay to Lessee an amount equal to the
lesser of (A) the amount of such tax savings, plus any additional tax
savings actually realized as the result of any payment made pursuant to
this sentence and (B) the amount of all payments made by Lessee to such
Indemnitee (reduced by any payments previously made by such Indemnitee to
Lessee pursuant to this Section 6(b)), and the excess, if any, of the
amount described in clause (A) over the amount described in clause (B)
shall be carried forward and applied to reduce pro tanto any subsequent
obligations of Lessee to make payments to such Indemnitee pursuant to this
Section 6(b)). No Indemnitee shall have any obligation to make any payment
while a Lease Event of Default has occurred and is continuing.
Any Taxes that are imposed on any Indemnitee as a result of the
disallowance or reduction of any tax benefit referred to in this Section
6(b) pursuant to a Final Determination by a tax authority as to which such
Indemnitee has made the payment to Lessee required hereby or which tax
benefit was otherwise taken into account in computing Lessee's indemnity
obligation pursuant to this Section 6(b) in a taxable year subsequent to
the utilization by such Indemnitee shall be treated as a Tax for which
Lessee is obligated to indemnify pursuant to this Section 6(b).
To the extent permitted by applicable law, interest at the Base
Rate plus two percent (2.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6(b) until the same
shall be paid. Such interest shall be paid in the same manner as the
unpaid amount in respect of which such interest is due.
Any amount which is payable to Lessee by any Person pursuant to
this Section 6(b) shall not be paid to Lessee if a Lease Event of Default
has occurred and is continuing or if any payment is due and owing by Lessee
to such Person under the Lease or any other Operative Document. Any such
amount shall be held by such Person (the Lessee hereby granting a security
interest in such amount to such Person) and, if a Lease Event of Default
shall have occurred and be continuing, shall be applied against Lessee's
obligations hereunder to such Person as and when due (and, to the extent
that Lessee has no obligations hereunder to such Person, such amount shall
be paid to Lessee). At such time as there shall not be continuing any such
Lease Event of Default or there shall not be due and owing any such
payment, such amount (to the extent not theretofore applied as provided
herein) shall be paid to Lessee to the extent not previously applied in
accordance with the immediately preceding sentence.
(iv) Contests. If a written claim is made against an Indemnitee
or if any proceeding is commenced against an Indemnitee (including a
written notice of such proceeding) for Taxes as to which Lessee could
be liable for payment or indemnity hereunder, or if an Indemnitee
makes a determination that a Tax is due for which Lessee could have an
indemnity obligation hereunder, such Indemnitee shall promptly give
Lessee notice in writing of such claim (provided, however, that the
failure to provide such notice shall not affect Lessee's obligations
hereunder to the Owner Participant unless such failure shall
materially adversely affect the right to contest such claim) and shall
not take any action with respect to such claim or Tax without the
consent of Lessee for 30 days following the receipt of such notice by
Lessee; provided, however, that, if such Indemnitee shall be required
by law to take action prior to the end of such 30-day period, such
Indemnitee shall, in such notice to Lessee, so inform Lessee, and such
Indemnitee shall take no action for as long as it is legally able to
do so (it being understood that an Indemnitee shall be entitled to pay
the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day
period if (A)(I) the failure to so pay the Tax would result in
substantial penalties (unless immediately reimbursed by Lessee) and
the act of paying the Tax would not prejudice the right to contest or
(II) the failure to so pay would result in criminal penalties and (B)
such Indemnitee shall act in connection with paying the Tax in the
manner that is the least prejudicial to the pursuit of the contest).
In addition, such Indemnitee shall (provided that Lessee shall have
agreed to keep such information confidential other than to the extent
necessary in order to contest the claim) furnish Lessee with copies of
any requests for information from any taxing authority relating to
such Taxes with respect to which Lessee may be required to indemnify
hereunder. If requested by Lessee in writing within 30 days after its
receipt of such notice, such Indemnitee shall, at the expense of
Lessee (including all reasonable out-of-pocket costs, in-house
attorney fees and outside attorney and accountants fees), in good
faith contest (or, if permitted by applicable law, allow Lessee to
contest, but not if such contest involves issues unrelated to the
transactions contemplated by the Operative Documents that cannot be
severed from issues related to such indemnifiable Taxes by good faith
diligent efforts) through appropriate administrative and judicial
proceedings the validity, applicability or amount of such Taxes by (X)
resisting payment thereof, (Y) not paying the same except under
protest if protest is necessary and proper or (Z) if the payment is
made, using reasonable efforts to obtain a refund thereof in an
appropriate administrative and/or judicial proceeding. If requested
to do so by Lessee in writing, the Indemnitee shall appeal any adverse
administrative or judicial decision, except that the Indemnitee shall
not be required to pursue any appeals to the United States Supreme
Court. If and to the extent the Indemnitee is able to separate the
contested issue or issues from other issues arising in the same
administrative or judicial proceeding that are unrelated to the
transactions contemplated by the Operative Documents without, in the
good faith judgment of such Indemnitee, adversely affecting such
Indemnitee, such Indemnitee shall permit Lessee to control the conduct
of any such proceeding and shall provide to Lessee such information or
data that is in such Indemnitee's control or possession that is
reasonably necessary to conduct such contest. In the case of a
contest controlled by an Indemnitee, such Indemnitee shall consult
with Lessee in good faith regarding the manner of contesting such
claim and shall keep Lessee reasonably informed regarding the progress
of such contest. An Indemnitee shall not fail to take any action
expressly required by this Section 6(b)(iv) (including, without
limitation, any action regarding any appeal of an adverse
determination with respect to any claim) or settle or compromise any
claim without the prior written consent of Lessee (except as
contemplated by this Section 6(b)(iv)).
Notwithstanding the foregoing, in no event shall an Indemnitee be
required to pursue any contest (or to permit Lessee to pursue any contest)
unless (A) Lessee shall have agreed to pay such Indemnitee on demand all
reasonable out-of-pocket costs, in-house attorney fees and outside
attorney and accountants fees that such Indemnitee shall incur in
connection with contesting such claim, (B) if such contest shall involve
the payment of the claim, Lessee shall advance the amount thereof plus (to
the extent indemnified hereunder) interest, penalties and additions to tax
with respect thereto that are required to be paid prior to the commencement
of such contest on an interest-free basis and with no additional net after-
tax cost to such Indemnitee (and such Indemnitee shall promptly pay to
Lessee any net realized tax benefits resulting from any imputed interest
deduction arising from such interest free advance from Lessee plus any tax
benefits resulting from making any such payment), (C) such Indemnitee shall
have reasonably determined that the action to be taken will not result in
any material risk of forfeiture, sale or loss of the Aircraft (unless
Lessee shall have made provisions to protect the interests of any such
Indemnitee), (D) no Lease Event of Default shall have occurred and be
continuing at the time the contest is begun unless Lessee has provided
security for its obligations hereunder by advancing to such Indemnitee
before proceeding with such contest, the amount of the Tax being contested,
plus any interest and penalties and an amount estimated in good faith by
such Indemnitee for reasonable expenses, (E) in the case of a contest that
is being pursued by an Indemnitee, the aggregate amount of the claim
(together with the amount of all related claims that have been or could be
raised with any or all of the other Aircraft leased by the Owner
Participant to Lessee or raised in any other audit for which Lessee would
have an indemnity obligation under this Section 6(b)(iv)) is at least
$50,000 and (F) if requested prior to or during the contest by the
Indemnitee, independent tax counsel selected by Lessee and reasonably
acceptable to the Indemnitee, renders to the Indemnitee a written opinion
that there is a reasonable basis (under the standard set forth in ABA
Formal Opinion 85-352 or any successor thereto) for contesting such claim.
Notwithstanding the foregoing, (X) Lessee shall not be permitted to contest
in the name of the Indemnitee if such contest involves Taxes based on or
measured by the gross or net income of the Indemnitee and, provided, that
if the Indemnitee determines in good faith that it is reasonably likely
that such contest may have a material adverse impact on the Indemnitee,
such Indemnitee may retain or reassert control of any contest Lessee would
otherwise be permitted to contest, and (Y) if any Indemnitee shall release,
waive, compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 6(b) without the written permission of Lessee,
Lessee's obligation to indemnify such Indemnitee with respect to such claim
(and any claim the contest of which is materially prejudiced as a result of
the release, waiver, compromise or settlement) shall terminate, subject to
this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee
shall repay to Lessee any amount previously paid or advanced to such
Indemnitee with respect to such claim, plus interest at the rate that would
have been payable by the relevant taxing authority with respect to a refund
of such Tax.
(v) Refunds. If any Indemnitee shall receive a refund or credit
(or would have received such refund or credit but for a counterclaim
or other claim not indemnified by Lessee hereunder (a "deemed refund
or credit")) with respect to all or any part of any Taxes paid,
reimbursed or advanced by Lessee, in each case, whether by means of a
deduction, credit, refund or otherwise, and which was not taken into
account in computing such payment or indemnity, such Indemnitee shall
pay to Lessee within 30 days of such receipt or, in the case of a
deemed refund or credit, within 30 days of the resolution of such
contest, an amount equal to the lesser of (A) the amount of such
refund or credit or deemed refund or credit actually realized by such
Indemnitee, plus any additional tax savings actually realized by such
Indemnitee as a result of any payment made pursuant to this sentence
(including clause (A)), and (B) such tax payment, reimbursement or
advance by Lessee to such Indemnitee theretofore made pursuant to this
Section 6(b) and the excess, if any, of the amount described in clause
(A) over the amount described in clause (B) shall be carried forward
and applied to reduce pro tanto any subsequent obligations of Lessee
to make payments to such Indemnitee pursuant to this Section 6(b)).
If, in addition to such refund or credit (or deemed refund or credit),
such Indemnitee shall receive or be credited with (or would have
received but for a counterclaim or other claim not indemnified by
Lessee hereunder) an amount representing interest on the amount of
such refund or credit or deemed refund or credit, as the case may be,
such Indemnitee shall pay to Lessee within 30 days of such receipt or,
in the case of a deemed refund or credit, within 30 days of the
resolution or such contest, that portion of such interest that shall
be fairly attributable to Taxes paid, reimbursed or advanced by Lessee
prior to the receipt of such refund or credit or deemed refund or
credit. Each Indemnitee agrees to reasonably cooperate with Lessee in
claiming and pursuing any such refunds or credits of any Taxes payable
or indemnifiable pursuant to this Section 6(b).
(vi) Tax Filing. If any report, return or statement is required
to be filed with respect to any Tax which is subject to
indemnification under this Section 6(b), Lessee shall timely file the
same (except for any such report, return or statement which an
Indemnitee has timely notified Lessee in writing that such Indemnitee
intends to file, or for which such Indemnitee is required by law to
file, in its own name); provided, that the relevant Indemnitee shall
furnish Lessee with any information in such Indemnitee's possession or
control that is reasonably necessary to file any such return, report
or statement and is reasonably requested in writing by Lessee, but in
no event shall be obligated to furnish tax returns, although it may be
required to furnish relevant information contained therein. Lessee
shall either file such report, return or statement and send a copy of
such report, return or statement to such Indemnitee, and the Owner
Trustee if the Indemnitee is not the Owner Trustee, or, where Lessee
is not permitted to file such report, return or statement, it shall
notify such Indemnitee of such requirement and prepare and deliver
such report, return or statement to such Indemnitee in a manner
satisfactory to such Indemnitee within a reasonable time prior to the
time such report, return or statement is to be filed.
(vii) Forms. Each Indemnitee agrees to furnish from time to
time to Lessee or the Indenture Trustee or to such other Person as
Lessee or the Indenture Trustee may designate, at Lessee's or the
Indenture Trustee's request, such duly executed and properly completed
forms as may be necessary or appropriate in order to claim any
reduction of or exemption from any withholding or other Tax imposed by
any government or taxing authority, if (A) such reduction or exemption
is available to such Indemnitee and (B) Lessee has provided such
Indemnitee with any information necessary to complete such form not
otherwise reasonably available to such Indemnitee.
(viii) Non-Parties. If an Indemnitee is not a party to this
Agreement, Lessee may require the Indemnitee to agree in writing, in a
form reasonably acceptable to Lessee, to the terms of this Section
6(b) prior to making any payment to such Indemnitee under this Section
6(b).
(ix) Subrogation. Upon payment of any Tax by Lessee pursuant to
this Section 6(b) to or on behalf of an Indemnitee, Lessee, without
any further action, shall be subrogated to any claims that such
Indemnitee may have relating thereto. Such Indemnitee shall cooperate
with Lessee to permit Lessee to pursue such claims.
(c) General Indemnity. Lessee hereby agrees to indemnify each
Indemnitee against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein or in any of
the other Lessee Documents, the Pass Through Trust Agreements or any other
Operative Documents to which Lessee is a party are consummated), any and
all Expenses imposed on, incurred by or asserted against any Indemnitee, in
any way relating to, based on or arising out of (A) the execution, delivery
and performance of the Operative Documents or the Pass Through Documents
and the Transactions contemplated hereby and thereby; (B) the manufacture,
purchase, acceptance or rejection of the Airframe or any Engine or Parts;
(C) the registration, reregistration, financing, refinancing, ownership,
delivery, nondelivery, inspection, lease, sublease, possession, storage,
use, non-use, operation, maintenance, overhaul, testing, modification,
alteration, condition, replacement, repair, substitution, sale, transfer,
return, or other disposition of the Aircraft, Airframe, Engine(s) (or any
engine used on the Airframe) or any Part or part used on the Aircraft, the
Airframe or any Engine (or any engine used on the Airframe) by Lessee, any
Sublessee or any other Person including, without limitation, any violation
of law relating to the Aircraft (including environmental and noise
pollution laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; (D) the offer or sale of any interest in the Aircraft, the
Trust Estate or the Trust Agreement or any similar interest on or prior to
the Delivery Date (including any violation of securities laws or ERISA) and
any Lien relating to or arising during such period; (E) the offer, sale or
delivery of any interest in the Equipment Notes or the Pass Through
Certificates (or other evidence of the debt relating to the Aircraft) on
the Delivery Date or in connection with a refinancing in accordance with
the terms hereof (including any violation of securities laws or ERISA); and
(F) the Transactions contemplated by the Lessee Documents, the Pass Through
Trust Agreements and the other Operative Documents to which the Lessee is a
party; provided, that the foregoing indemnity shall not extend to an
Indemnitee with respect to any Expense to the extent such Expense is
directly related to one or more of the following: (1) any representation
or warranty by such Indemnitee in the Operative Documents or the Pass
Through Documents being incorrect (except to the extent such representation
or warranty was based on a Lessee representation or warranty which was
incorrect), or (2) the failure by such Indemnitee to perform or observe any
of its agreements, covenants or conditions in any of the Operative
Documents or the Pass Through Documents, or (3) the willful misconduct or
the gross negligence of such Indemnitee, or (4) (A) in the case of any
Indemnitee, the offer, sale or other disposition (voluntary or involuntary)
by such Indemnitee of all or any part of its interest in the Airframe, any
Engine or any Part (other than during the continuance of a Lease Event of
Default or pursuant to and in accordance with Sections 9, 10, 15, 19 or 20
of the Lease), (B) in the case of a Note Holder, the offer, sale or other
disposition (voluntary or involuntary) by such Note Holder of all or any
part of its interest in any Equipment Note or (C) in the case of any
Indemnitee, the offer, sale or other disposition by such Indemnitee of all
or any part of such Indemnitee's interest in the Operative Documents,
except to the extent such offer, sale or other disposition is made while a
Lease Event of Default has occurred and is continuing and in accordance
with the Operative Documents, or (5) any Tax (other than taxes under ERISA
or Section 4975 of the Code that are not excluded from the foregoing
indemnity by reason of clause 18 below) whether or not Lessee is required
to indemnify for such Tax pursuant to Section 6(b) hereof (it being
understood that Section 6(b) hereof and the Tax Indemnity Agreement
exclusively provide for Lessee's liability with respect to Taxes), or (6)
in the case of the Owner Participant, the offer, sale or other disposition
by the Owner Participant after the Delivery Date of any interest in the
Trust Estate or the Trust Agreement or any similar interest except to the
extent such offer, sale or other disposition is made (A) while a Lease
Event of Default has occurred and is continuing and (B) in accordance with
Section 7(j), or (7) in the case of the Owner Trustee in its individual and
trust capacities, and the Affiliates, successors and assigns thereof, a
failure on the part of the Owner Trustee to distribute in accordance with
the Trust Agreement any amounts distributable by it thereunder, or (8) in
the case of the Indenture Trustee in its individual and trust capacities,
failure on the part of the Indenture Trustee to distribute in accordance
with the Trust Indenture any amounts distributable by it thereunder, or (9)
in the case of any Pass Through Trustee, failure on the part of such Pass
Through Trustee or the Subordination Agent to distribute in accordance with
the Intercreditor Agreement and the Pass Through Trust Agreements amounts
distributable thereunder, or (10) the authorization, giving or withholding
of any future amendments, supplements, waivers or consents with respect to
any of the Operative Documents which amendments, supplements, waivers or
consents (a) are not or were not requested by Lessee, (b) are not
occasioned by a specific requirement of the Operative Documents, and (c)
are not entered into in connection with the exercise of remedies pursuant
to Section 15 of the Lease while a Lease Event of Default has occurred and
is continuing or (11) except to the extent fairly attributable to acts or
events occurring, or circumstances or conditions existing, during the Term
or actions taken (or required to be taken and not taken) during the Term,
actions taken (or required to be taken and not taken) or events occurring
after the earlier of: (I) the return of possession of the Aircraft to the
Owner Trustee or its designee (including the placement in storage pursuant
to Section 5 of the Lease) pursuant to and in accordance with the terms of
the Lease unless and to the extent an Expense is directly related to
actions, omissions or events occurring in connection with the exercise of
remedies under Section 15 of the Lease while a Lease Event of Default has
occurred and is continuing, (II) the termination of the Term in accordance
with Section 9 of the Lease, (III) the payment by Lessee of all amounts
required to be paid under the Lease and the other Operative Documents
following an Event of Loss or (IV) termination of the Lease and payment by
Lessee of all amounts required to be paid by Lessee pursuant to the terms
of the Operative Documents or (12) any amount which any Indemnitee
expressly agrees to pay under any Operative Document or any amount which is
expressly stated to be an Expense that is not reimbursable by Lessee under
the Operative Documents, or (13) any amount that is an ordinary and usual
operating or overhead expense of any Indemnitee (it being understood out-
of-pocket expenses payable to third parties do not constitute "ordinary and
usual operating and overhead expenses"), or (14) any amounts relating to
the deregistration with the FAA of the Aircraft as a result of the Owner
Participant or the Owner Trustee, as the case may be, not being a Citizen
of the United States or any other act or omission of the Owner Trustee, the
Owner Participant or such Indemnitee, other than during the continuance of
a Lease Event of Default when the Lease has been duly declared (or deemed
declared) in default and the Owner Trustee is exercising remedies
thereunder seeking to dispossess Lessee of its interest in the Aircraft or
(15) any amounts attributable to any Lien which such Indemnitee is required
to remove pursuant to the terms of the Operative Documents or the Pass
Through Documents, or (16) any loss of tax benefits or increases in tax
liability whether or not the Lessee is required to indemnify an Indemnitee
elsewhere in the Operative Documents, or (17) principal of, or interest or
premium on the Equipment Notes or (18) any prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code,
occurring with respect to the purchase or holding of any Pass Through
Certificate (i) over which purchase or holding the Owner Participant or any
Affiliate thereof has discretion or control (other than in the capacity of
a directed trustee or custodian), or (ii) by an employee benefit plan,
within the meaning of Section 3(3) of ERISA, or individual retirement
account or plan subject to Section 4975 of the Code with respect to which
the Owner Participant (or any Affiliate thereof) has the power, directly or
indirectly, to appoint or terminate, or to negotiate the terms of the
management agreement with, the Person or Persons having discretion or
control (other than in the capacity of a directed trustee or custodian),
over such purchase or holding, or (19) without limiting any indemnification
otherwise expressly provided under the Operative Documents, any amount
payable under the Pass Through Documents (other than the Participation
Agreement) to the extent not included in the definition of Supplemental
Rent.
Lessee's indemnity obligation to an Indemnitee under this Section
6(c) shall equal the amount which, after taking into account any Tax
imposed upon the receipt or accrual of the amounts payable under this
Section 6(c) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(c).
If any Indemnitee shall realize a tax savings by reason of any
Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether
such tax savings shall be by means of a foreign tax credit, depreciation or
cost recovery deduction or otherwise) and such savings is not otherwise
taken into account in computing such payment or indemnity, such Indemnitee
shall pay to Lessee an amount equal to the lesser of (i) the amount of such
tax savings, plus any additional tax savings recognized as the result of
any payment made pursuant to this sentence, when, as if, and to the extent,
realized or (ii) the amount of all payments pursuant to this Section 6(c)
by Lessee to such Indemnitee (less any payments previously made by such
Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if
any, of the amount described in clause (i) over the amount described in
clause (ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Lessee to make payments to such Indemnitee
pursuant to this Section 6(c)). No Indemnitee shall have any obligation to
make any such payment while a Lease Event of Default has occurred and is
continuing.
Nothing in this Section 6(c) shall be construed as a guaranty by
Lessee of payments due pursuant to the Equipment Notes or of the residual
value of the Aircraft.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Lessee;
provided that the failure to give such notice shall not affect the
obligations of Lessee hereunder except to the extent Lessee is prejudiced
by such failure to give notice in a timely manner or the Lessee's
indemnification obligations are increased as a result of such failure, in
which case, Lessee's obligations shall be released to the extent of such
increase. If no Lease Event of Default shall have occurred and be
continuing, Lessee shall be entitled, at its sole cost and expense, acting
through counsel reasonably acceptable to the respective Indemnitee, (A) in
any judicial or administrative proceeding that involves solely a claim for
one or more Expenses, to assume responsibility for and control thereof, (B)
in any judicial or administrative proceeding involving a claim for one or
more Expenses and other claims related or unrelated to the transactions
contemplated by the Operative Documents, to assume responsibility for and
control of such claim for Expenses to the extent that the same may be and
is severed from such other claims (and such Indemnitee shall use
commercially reasonable efforts to obtain such severance) and (C) in any
other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Lessee's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Lessee shall not be entitled to assume
responsibility for and control of any such judicial or administrative
proceedings if such proceedings will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any
part thereof unless in such an event Lessee shall have posted a bond or
other security satisfactory to the relevant Indemnitees in respect to such
risk or if such proceedings could result in any criminal liability for an
Indemnitee. The Indemnitee may participate at its own expense and with its
own counsel in any judicial proceeding controlled by Lessee pursuant to the
preceding provisions.
The affected Indemnitee shall supply Lessee with such information
reasonably requested by Lessee as is necessary or advisable for Lessee to
control or participate in any proceeding to the extent permitted by this
Section 6(c). Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Lessee, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 6(c).
Lessee shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 6(c).
Upon payment of any Expense pursuant to this Section 6(c),
Lessee, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Lessee to permit
Lessee to pursue such claims, if any, to the extent reasonably requested by
Lessee.
If an Indemnitee is reimbursed, in whole or in part, with respect
to any Expense paid by Lessee hereunder, except as otherwise provided
herein, it will promptly pay the amount refunded, including interest
received thereto (but not an amount in excess of the amount Lessee or any
of its insurers has paid in respect of such Expense pursuant to this
Section 6(c)) over to Lessee.
To the extent permitted by applicable law, interest at the Base
Rate plus two percent (2.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6(c) until the same
shall be paid. Such interest shall be paid in the same manner as the
unpaid amount in respect of which such interest is due.
Any amount which is payable to Lessee by any Person pursuant to
this Section 6(c) shall not be paid to Lessee if a Specified Default or
Lease Event of Default has occurred and is continuing. Any such amount
shall be held by such Person (the Lessee hereby granting a security
interest in such amount to such Person) and, if a Specified Default or
Lease Event of Default shall have occurred and be continuing, shall be
applied against Lessee's obligations hereunder to such Person as and when
due (and, to the extent that Lessee has no obligations hereunder to such
Person, such amount shall be paid to Lessee). At such time as there shall
not be continuing any such Specified Default or Lease Event of Default,
such amount shall be paid to Lessee to the extent not previously applied in
accordance with the immediately preceding sentence.
(d) Section 1031 Exchange Indemnity. The Owner Participant
hereby agrees to indemnify Lessee and its Affiliates against, and agrees to
protect, defend and keep harmless each of them from, any and all Expenses
(including, but not limited to, all Taxes) imposed on, incurred by or
asserted against Lessee and its Affiliates in any way relating to, based on
or arising out of the transactions contemplated to consummate the like kind
exchange of the Aircraft between Owner Participant and the Intermediary,
pursuant to the agreements listed in Section 2(c) hereof, between the Owner
Participant and the Intermediary. The notice, contest and payment rules
set forth in Section 6(c) of this Agreement shall apply for purposes of
this indemnity.(5)
-----------------
(5) Include in like-kind exchange transactions only.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Covenants Regarding Citizenship. Each of the Owner
Participant and First Security Bank, National Association, in its
individual capacity, represents and warrants to the other parties to this
Agreement that it is, and on the Delivery Date will be, a Citizen of the
United States without making use of any voting trust, voting powers
agreement or similar arrangement. The Owner Participant agrees, solely for
the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United
States and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Transportation Code
and regulations then applicable thereunder, then the Owner Participant
shall (at its own expense and without any reimbursement or indemnification
from Lessee) as soon as is reasonably practicable, but in any event within
sixty (60) days of when a Senior Vice President, Contract Manager of
[______________________], or any other responsible officer of the Owner
Participant, customarily having responsibilities for transactions
comparable to the Transactions, obtains actual knowledge of such
ineligibility and loss of citizenship effect a voting trust, voting powers
agreement or other similar arrangement or take any other action as may be
necessary to prevent any deregistration and to maintain the United States
registration of the Aircraft. It is agreed that: (A) the Owner
Participant shall be liable to pay on request to Lessee and to each holder
of an Equipment Note for any damages suffered by Lessee or any holder as
the result of the representation and warranty of the Owner Participant in
the first sentence of this Section 7(a) proving to be untrue as of the
Delivery Date; and (B) the Owner Participant shall be liable to Lessee, any
Sublessee and the Loan Participants for any damages which may be incurred
by Lessee, any Sublessee or the Loan Participants as a result of the Owner
Participant's failure to comply with its obligations pursuant to the second
sentence of this Section 7(a). Each party hereto agrees, upon the request
and at the sole expense of the Owner Participant, to cooperate with the
Owner Participant in complying with its obligations under the provisions of
the second sentence of this Section 7(a). First Security Bank, National
Association, in its individual capacity, agrees that if at any time a
responsible officer or responsible employee of the Corporate Trust
Department of First Security Bank, National Association, shall obtain
actual knowledge that First Security Bank, National Association, has ceased
to be a Citizen of the United States without making use of a voting trust,
voting powers agreement or similar arrangement, it will promptly resign as
Owner Trustee (if and so long as such citizenship is necessary under the
Transportation Code as in effect at such time or, if it is not necessary,
if and so long as the Owner Trustee's citizenship would have any adverse
effect on the Loan Participants, Lessee or the Owner Participant),
effective upon the appointment of a successor Owner Trustee in accordance
with Section 9.01 of the Trust Agreement. If the Owner Participant or
First Security Bank, National Association, in its individual capacity, does
not comply with the requirements of this Section 7(a), the Owner Trustee,
the Indenture Trustee and the Participants hereby agree that a Lease
Default or Lease Event of Default shall not have occurred and be continuing
due to non-compliance by Lessee with the registration requirements in the
Lease.
(b) Location of Records. First Security Bank, National
Association, in its individual capacity, agrees that it will not change
the location of its principal place of business or the office where it
maintains its books and records with respect to the Aircraft and the Trust
Estate to a location outside of Salt Lake City, Utah, without prior written
notice to all parties.
(c) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting on its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any Person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act or the
rules and regulations thereunder.
(d) Reregistration. The Owner Participant, the Indenture
Trustee, the Pass Through Trustee and each Loan Participant agree that, at
any time after the Depreciation Period, so long as no Specified Default or
Lease Event of Default shall have occurred and be continuing, Lessee may
elect to effect a change in registration of the Aircraft, at Lessee's cost
and expense, so long as the country of registry of the Aircraft is a
country listed in the last paragraph of this Section 7(d) and the United
States maintains normal diplomatic relations with such country. Upon the
request of the Lessee and provided no Lease Event of Default shall have
occurred and be continuing, the country list in the last paragraph of this
Section 7(d) may be amended from time to time to include any other country
which the Owner Participant and the Indenture Trustee have determined,
acting reasonably, would provide substantially equivalent protection (both
as a matter of law and practice) for the rights and remedies of owner
participants, lessors or lenders in similar transactions as provided under
the laws of the United States and the states thereof. In order for Lessee
to effect a change in the country of registry of the Aircraft, Lessee shall
deliver to the Owner Participant, the Owner Trustee (in its individual
capacity) and the Indenture Trustee the following:
(I) an Officer's Certificate certifying that (A) the insurance or
self-insurance required by Section 11 of the Lease shall be in
full force and effect at the time of such change in registration
after giving effect to such change in registration, (B) all
indemnities in favor of the Owner Participant, the Owner Trustee
(in its individual capacity and as trustee under the Trust
Agreement) and the Indenture Trustee under any Operative Document
afford each such party substantially the same protection as
provided prior to such change of registry, (C) the lien of the
Trust Indenture in favor of the Trustee will continue as a first
priority lien following such change of registry, (D) such change
will not result in the imposition of, or increase in the amount
of, any Tax for which Lessee is not required to indemnify, or is
not then willing to enter into a binding agreement to indemnify,
the Owner Participant, the Note Holders, the Indenture Trustee,
the Owner Trustee (in its individual capacity and as trustee
under the Trust Agreement), the Indenture Trustee or the Trust
Estate pursuant to this Agreement or the Tax Indemnity Agreement,
(E) that the new country of registry imposes aircraft maintenance
standards not materially less stringent than those of any
Permitted Foreign Air Authority, (F) any import or export permits
necessary to take the Aircraft into or out of such jurisdiction
of reregistration and any exchange permits necessary to allow all
Rent and other payments provided for hereunder and under the
other Operative Documents are in full force and effect to the
extent obtainable with reasonable effort and to the extent
customary to obtain, and (G) any value added tax, customs duty,
tariff or other governmental charge or tax relating to the change
in jurisdiction of registration of the Aircraft shall have been
paid in full, or to the extent not yet due, adequately provided
for, by Lessee; provided that the Owner Participant shall not be
required to accept any certificate unless the Owner Participant,
in its reasonable judgment, agrees that the new country of
registry imposes aircraft maintenance standards not materially
less stringent than those of a Permitted Foreign Air Authority;
and
(II) a favorable opinion (subject to customary bankruptcy and
equitable exceptions and to other exceptions customary in
foreign legal opinions generally) of counsel (opinion and counsel
reasonably acceptable to the Owner Participant, it being
understood that the Owner Participant shall not be required to
accept any opinion to the extent that it provides that there
exists under the laws of the applicable jurisdiction possessory
rights in favor of a lessee or sublessee which have the practical
effect of materially prejudicing the Indenture Trustee's or Owner
Trustee's ability to exercise remedies under the Lease if, in the
Owner Participant's reasonable judgment, such possessory rights
are materially greater than those available to lessees and
sublessees under the laws of the United States) addressed to the
Owner Participant, the Owner Trustee and the Indenture Trustee,
from counsel of recognized reputation qualified in the laws of
the relevant jurisdiction to the effect that: (A) the
obligations of Lessee, and the rights and remedies of the Owner
Trustee, under the Lease shall remain valid, binding and
enforceable under the laws of such jurisdiction (or the laws of
the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law); (B) it is not necessary,
solely as a consequence of such change in registration and
without giving effect to any other activity of the Owner Trustee,
the Owner Participant or the Indenture Trustee (or any Affiliate
thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to register or qualify to do
business in such jurisdiction; (C) there is no tort liability of
the owner of an aircraft not in possession thereof under the laws
of such jurisdiction (it being agreed that, in the event such
latter opinion cannot be given in a form satisfactory to the
Owner Participant, such opinion shall be waived if insurance
reasonably satisfactory to the Owner Participant is provided to
cover such risk); (D) unless Lessee shall have agreed to provide
insurance reasonably satisfactory to the Owner Participant and in
an amount not less than Termination Value covering the risk of
requisition of use or title of such Aircraft by the government of
such jurisdiction so long as such Aircraft is registered under
the laws of such jurisdiction, the laws of such jurisdiction
require fair compensation by the government of such jurisdiction
payable in currency freely convertible into Dollars for the loss
of use or title of such Aircraft in the event of the requisition
by such government of such use or title; and (E) after giving
effect to such change in registration, the ownership interest of
the Owner Trustee in the Aircraft (including each Engine) shall
be recognized and the Lien of the Trust Indenture on the Owner
Trustee's right, title and interest in and to the Aircraft and
the Lease shall continue as a valid and duly perfected first
priority security interest and all filing, recording or other
action necessary to protect the same shall have been accomplished
(or, if such opinion cannot be given at the time of such proposed
change in registration because such change in registration is not
yet effective, (1) the opinion shall detail what filing,
recording or other action is necessary and (2) the Owner Trustee,
the Owner Participant and the Indenture Trustee shall have
received a certificate (which shall be true and correct) from
Lessee that all possible preparations to accomplish such filing,
recording and other action shall have been done, and such filing,
recording and other action shall be accomplished and a
supplemental opinion to that effect shall be delivered to the
Owner Trustee, the Owner Participant and the Indenture Trustee on
or prior to the effective date of such change in registration).
Upon receipt of the foregoing certificate and acceptable opinion, the Owner
Participant and the Indenture Trustee will instruct the Owner Trustee to
make such change of registration.
Lessee shall pay all costs, expenses, fees, recording and
registration Taxes, including the reasonable fees and expenses of counsel
to the Owner Trustee, the Owner Participant and the Indenture Trustee, and
other charges in connection with any such change in registration (including
without limitation, costs of filing of financing statements and
continuation statements under the Uniform Commercial Code of any applicable
jurisdiction).
The list of countries in which Lessee is permitted to effect a
reregistration of the Aircraft in accordance with the procedures of this
Section 7(d) is as follows:
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China*
Canada Phillippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Greece Spain
Grenada Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States
Malaysia Venezuela
*So long as on the date of registration such country and the United
States of America have diplomatic relations at least as good as those in
effect on the Delivery Date.
(e) Owner Participant Representations and Warranties. The Owner
Participant represents and warrants to Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider, the Policy Provider and the Owner Trustee, in its
capacity as such and in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good
standing under the laws of the State of [_________] and has the corporate
power and authority to carry on its present business and operations
and to own or lease its properties, and has the corporate power and
authority to enter into and to perform its obligations under the Owner
Participant Documents; this Agreement and the other Owner Participant
Documents have been duly authorized, executed and delivered by it; and
this Agreement and each of the other Owner Participant Documents
constitute the legal, valid and binding obligations of the Owner
Participant enforceable against it in accordance with its respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at
law or in equity; and the Owner Participant is a Qualified Owner
Participant;
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance by
it with all of the provisions thereof, (x) will contravene any Law
applicable to or binding on the Owner Participant (it being understood
that no representation or warranty is made with respect to laws, rules
or regulations relating to aviation or to the nature of the equipment
owned by the Owner Trustee other than such Laws relating to the
citizenship requirements of the Owner Participant under applicable
law) or (y) will contravene the provisions of, or constitutes a
default under, or result in the creation of any Lien (other than Liens
provided for or otherwise permitted in the Operative Documents) upon
the Trust Estate under its certificate of incorporation or by-laws or
any indenture, mortgage, contract or other agreement or instrument to
which the Owner Participant is a party or by which it or any of its
property may be bound or affected;
(iii) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body (other than as required by the Transportation Code or the
regulations promulgated thereunder) is required for the due execution,
delivery or performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings before any court or administrative agency or
arbitrator which would materially adversely affect the Owner
Participant's ability to perform its obligations under this Agreement,
the Participation Agreement, the Tax Indemnity Agreement and the Trust
Agreement;
(v) neither the Owner Participant nor anyone authorized by it to
act on its behalf (it being understood that in proposing, facilitating
and otherwise taking any action in connection with the financing
contemplated hereby and agreed to herein by the Owner Participant,
Lessee has not acted as agent of the Owner Participant) has directly
or indirectly offered any Equipment Note or Pass Through Certificate
or any interest in and to the Trust Estate or the Trust Agreement for
sale to, or solicited any offer to acquire any of the same from, any
Person in violation of the Securities Act, the Owner Participant's
interest in the Trust Estate and the Trust Agreement is being acquired
for its own account and is being purchased for investment and not with
a view to any resale or distribution thereof, provided that subject to
the restrictions on transfer set forth in Section 7(j), the
disposition by the Owner Participant of its beneficial interest shall
at all times be within its control;
(vi) on the Delivery Date, the Trust Estate shall be free of
Lessor Liens attributable to the Owner Participant; and
(vii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangement).
(f) Lessor Liens. Each of First Security Bank, National
Association, in its individual capacity, and the Owner Participant
covenants and agrees that it shall not cause or permit to exist a Lessor
Lien attributable to it with respect to the Aircraft or any other portion
of the Trust Estate. Each of First Security Bank, National Association, in
its individual capacity, and the Owner Participant agrees that it will
promptly, at its own expense, take such action as may be necessary duly to
discharge such Lessor Lien attributable to it. Each of First Security
Bank, National Association, in its individual capacity, and the Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from Lessor Liens
attributable to it. The Owner Participant agrees to make restitution to
the Trust Estate for any actual diminution of the assets of the Trust
Estate resulting from any Taxes or Expenses imposed on the Trust Estate
against which Lessee is not required to indemnify the Trust Estate pursuant
to Section 6 or the Tax Indemnity Agreement.
(g) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent, the Owner Trustee, the Pass
Through Trustee and the Owner Participant covenants and agrees that, so
long as no Lease Event of Default shall have occurred and be continuing and
the Lessee has not been duly declared or deemed declared in default and,
notwithstanding default by any Loan Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee or the Owner Participant, that such
Person shall not (and shall not permit any Affiliate or other Person
claiming by, through or under it to) interfere with Lessee's (or any
Sublessee's; provided that such Sublease is and remains expressly subject
and subordinate to the Lease) continued possession, use and operation of,
and quiet enjoyment of, the Aircraft or Lessee's rights, benefits and
obligations pursuant to the Transactions during the Term of the Lease, and
the Lease shall not be terminated except as expressly provided therein.
(h) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Trust Indenture is being acquired by it for investment
and not with a view to resale or distribution (it being understood that
such Loan Participant may pledge or assign as security its interest in each
Equipment Note issued to it), except that the Loan Participants may sell,
transfer or otherwise dispose of any Equipment Note or any portion thereof,
or grant participations therein, in a manner which in itself does not
require registration under the Securities Act or violate applicable law.
(i) Representations, Warranties and Covenants of Indenture
Trustee. State Street Bank and Trust Company of Connecticut, National
Association represents, warrants (as of the Delivery Date) and covenants,
in its individual capacity, to Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent, the Liquidity Provider, the Policy
Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a national banking association duly
incorporated, validly existing and in good standing under the laws of
the United States, is a Citizen of the United States (without making
use of any voting trust, voting powers agreement or similar
arrangement), will notify promptly all parties to this Agreement if in
its reasonable opinion its status as a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement) is likely to change and will resign as Indenture
Trustee as provided in Section 8.02 of the Trust Indenture promptly
after it obtains actual knowledge that it has ceased to be such a
Citizen of the United States (without making use of a voting trust,
voting powers agreement or similar arrangement), and has the full
corporate power, authority and legal right under the laws of the State
of Connecticut and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver each of this Agreement,
the Trust Indenture and each other Operative Document to which it is a
party and to carry out its obligations under this Agreement, the Trust
Indenture, each other Operative Document to which it is a party and to
authenticate the Equipment Notes;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Equipment
Notes and the performance by the Indenture Trustee of its obligations
under the Indenture Trustee Documents have been duly authorized by the
Indenture Trustee and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or
other agreement to which it is a party or by which it is bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and by general principles of equity, whether considered in a
proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court,
administrative agency or arbitrator which, if determined adversely to
it, would materially adversely affect the ability of the Indenture
Trustee, in its individual capacity or as Indenture Trustee as the
case may be, to perform its obligations under the Operative Documents
to which it is a party;
(v) there are no Indenture Trustee Liens on the Aircraft or any
portion of the Trust Estate; and
(vi) the Indenture Trustee will furnish to the Note Holders and
the Policy Provider, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates and
other instruments furnished to the Indenture Trustee under any
Operative Document to the extent that the same shall not have been
furnished or be required to have been furnished to the Note Holders
and the Policy Provider pursuant to the applicable Operative
Documents.
(j) Owner Participant Transfers. So long as the Aircraft shall
be leased to the Lessee under the Lease, the Owner Participant will not,
directly or indirectly, sell, assign, convey or otherwise transfer any of
its right, title or interest in and to this Agreement, the Trust Estate or
the Trust Agreement to any Person or entity, unless (i) the proposed
transferee is a "Transferee" (as defined below), (ii) Lessee shall have
(1) received an opinion (in form and substance reasonably satisfactory to
Lessee) of counsel to the Owner Participant (who shall be reasonably
satisfactory to Lessee) to the effect that such transfer will not result in
any risk of loss of tax benefits to, or any increase in the tax liability
of, Lessee and (2) received from the Owner Participant so seeking to
transfer such right, title or interest reasonably satisfactory
indemnification for any loss of tax benefits to, and increase in the tax
liability of, Lessee, and (iii) the Owner Participant sells, assigns,
conveys or otherwise transfers all of its right, title and interest in and
to this Agreement, the Trust Estate, the Trust Agreement and the proceeds
therefrom to a single entity. A "Transferee" shall mean either (A) a bank
or other financial institution with a tangible net worth of at least
$50,000,000 as of the date of such transfer, (B) a corporation whose
tangible net worth is at least $50,000,000 as of the date of such transfer,
as determined in accordance with generally accepted accounting principles,
(C) a general partnership that (i) has a tangible net worth of at least
$50,000,000 and (ii) has a general partner that has a tangible net worth of
at least $50,000,000, in each case as of the date of such transfer, (D) a
limited partnership that (i) has a tangible net worth of at least
$50,000,000 and (ii) has a managing general partner that has a tangible net
worth of at least $50,000,000, in each case as of the date of transfer, or
(E) a limited liability company that (ii) has a tangible net worth of at
least $50,000,000 and (ii) has a member that is responsible for the day-to-
day management of such limited liability company that has a tangible net
worth of at least $50,000,000 (any bank, financial institution,
corporation, general partnership, limited partnership or limited liability
company meeting the requirements of clause (A), (B), (C) or (D), as
applicable, a "Qualifying Institution," or (E) any Affiliate of a Qualified
Institution, provided that such Qualified Institution furnishes to the
Owner Trustee, the Indenture Trustee and Lessee a guaranty with respect to
the Owner Participant's obligations under the Operative Documents to which
the Owner Participant is a party in form and substance reasonably
satisfactory to Lessee, the Owner Trustee, and the Indenture Trustee, or
(F) is an Affiliate of the Owner Participant and the Owner Participant
agrees to remain liable for all obligations of the Owner Participant under
the Operative Documents; provided, further, that any Transferee shall not
be an airline, a commercial aircraft operator, an air freight forwarder, an
entity principally engaged in the business of parcel transport by air or an
Affiliate thereof. Each such transfer to a Transferee shall be subject to
the conditions that (S) upon giving effect to such transfer, the Transferee
is a Citizen of the United States to the extent required to maintain the
registration of the Aircraft under the Transportation Code and is a U.S.
Person, and has full power and authority to enter into the transactions
contemplated hereby, (T) the Transferee has the requisite power and
authority to enter into and carry out the transactions contemplated hereby
and such Transferee shall have delivered to Lessee, the Owner Trustee and
the Indenture Trustee an opinion of counsel in form and substance
reasonably satisfactory to Lessee and the Owner Trustee as to the due
authorization, delivery, legal, valid and binding effect and enforceability
of the agreement or agreements referred to in the next clause with respect
to the Transferee and any guaranty provided pursuant to the provisions of
this Section 7(j) as to the guarantor, (U) the Transferee enters into an
agreement or agreements, in form and substance reasonably satisfactory to
the Owner Trustee and Lessee, whereby the Transferee confirms that it shall
be deemed a party to this Agreement and a party to the Trust Agreement and
agrees to be bound by all the terms of, and to undertake all of the
obligations of the transferor Owner Participant contained in, the Owner
Participant Documents (to the extent of the participation so transferred to
it) and makes the representations and warranties made by the Owner
Participant thereunder, (V) such transfer does not invalidate or affect
registration of the Aircraft under the Transportation Code, or any rules or
regulations promulgated thereunder such that Lessee's operation of the
Aircraft, as permitted by the Operative Documents, becomes impaired thereby
or create a relationship which would be in violation thereof or violate any
provision of the Securities Act or any other applicable Federal or state
law and the Lessee shall be entitled to require an opinion of counsel to
such effect, (W) the transferor Owner Participant assumes the risk of any
adverse tax consequences with respect to the true lease nature of the
transaction (including, without limitation, loss of depreciation and
amortization deductions and interest deductions resulting from such
transfer), (X) the transferor Owner Participant pays all of the reasonable
costs and expenses (including, without limitation, the reasonable fees and
expenses of counsel) incurred in connection with such transfer, including
the reasonable costs and expenses of the Owner Trustee, the Indenture
Trustee, Lessee and the Loan Participants in connection therewith without
the right of indemnification or reimbursement by Lessee unless a Lease
Event of Default has occurred and is continuing, in which case the
transferor Owner Participant shall only pay all direct, reasonable, out-of-
pocket expenses and incidental costs of the Owner Trustee, the Indenture
Trustee and the Loan Participants and any such payment shall remain subject
to all rights of indemnification or reimbursement by Lessee, (Y) the terms
of the Operative Documents and the Transactions shall not be altered and
(Z) such transfer will not give rise to a Default under the Trust Indenture
or an Indenture Event of Default. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents
and each reference herein to the transferor Owner Participant shall
thereafter be deemed for all purposes to be to the Transferee and the
transferor Owner Participant shall be relieved of all obligations of the
transferor Owner Participant under the Owner Participant Documents; with
respect to the period arising after the date of such transfer except to the
extent fully attributable to or arising out of acts or events occurring
prior thereto and not assumed by the Transferee. If the Owner Participant
intends to transfer any of its interests hereunder, it shall give thirty
(30) days prior written notice thereof to the Indenture Trustee, the Owner
Trustee and Lessee, specifying the name and address of the proposed
Transferee and providing the financial statements of such proposed
Transferee.
(k) Compliance with Trust Indenture. First Security Bank,
National Association, and State Street Bank and Trust Company of
Connecticut, National Association, each in its individual capacity, agrees
for the benefit of Lessee to comply with the terms of the Trust Indenture
which it is required to comply with in its individual capacity.
(l) ERISA Matters. The Owner Participant represents and
warrants as of the Delivery Date that no part of the source of funds used
to acquire and hold its interest in the Trust Estate constitutes the assets
of any "employee benefit plan" as defined in Section 3(3) of ERISA or of
any "plan" within the meaning of Section 4975(e)(1) of the Code, including,
without limitation, as applicable, an insurance company general account
("Plan Assets"). Each Loan Participant agrees that it will not transfer
any Equipment Note (or any part thereof) to any entity (except pursuant to
Section 2.14 of the Trust Indenture) unless such entity makes a
representation and warranty as of the date of transfer that no part of the
funds to be used by it for the purchase and holding of such Equipment Note
(or any part thereof) constitutes Plan Assets or that such purchase and
holding will not constitute or result in a non-exempt prohibited
transaction (as defined in Section 4975 of the Code and ERISA), provided,
that Equipment Notes may be transferred to a Pass Through Trustee in
connection with an offering of Pass Through Certificates by the related
Pass Through Trust if, as a condition of such offering, each Person or
entity acquiring such Pass Through Certificates makes (or is deemed to
make) the foregoing representation and warranty with respect to its
purchase and holding of such Pass Through Certificates. The Owner
Participant agrees that it will not transfer any of its right, title or
interest in and to this Agreement, the Trust Estate or the Trust Agreement
or any proceeds therefrom to any entity unless such entity makes (or is
deemed to have made) a representation and warranty as of the date of
transfer that either (i) no part of the funds to be used by it for the
purchase and holding of such right, title, interest and proceeds (or any
part thereof) constitutes Plan Assets or (ii) it is an insurance company
general account that represents, warrants and covenants both as of the date
it acquires such right, title, interest and proceeds and at all times while
it holds such right, title, interest and proceeds that (x) less than 25% of
the assets of such general account will constitute Plan Assets and (y) the
Reserves and Liabilities Conditions as defined in PTCE 95-60 will be
satisfied, such that such transfer will not constitute or result in a non-
exempt prohibited transaction (as defined in Section 4975 of the Code and
ERISA). The Pass Through Trustee agrees that it will not agree to any
amendment, modification or waiver of Section 1.01(e)(1) of the initial
supplement to each Pass Through Trust Agreement without the prior written
consent of the Owner Participant.
(m) Registration Agreement. Lessee shall use commercially
reasonable efforts to avoid a Registration Default.
(n) Loan Participant Liens. Each Loan Participant covenants and
agrees that it shall not cause or permit to exist a Loan Participant Lien
attributable to it with respect to the Aircraft or any other portion of the
Trust Estate. Each Loan Participant agrees that it will promptly, at its
own expense, take such other action as may be necessary duly to discharge
such Loan Participant Lien attributable to it. Each Loan Participant agrees
to make restitution (including interest to the date of payment) to the
Trust Estate for any actual diminution of the assets of the Trust Estate
resulting from such Loan Participant Lien attributable to it.
(o) Indenture Trustee Liens. State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any
Indenture Trustee's Liens with respect to the Trust Indenture Estate or the
Trust Estate. State Street Bank and Trust Company of Connecticut, National
Association, in its individual capacity, agrees that it will promptly, at
its own expense, take such action as may be necessary duly to discharge
such Indenture Trustee's Liens. State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity, agrees to
make restitution (including interest to the date of payment) to the Trust
Estate for any actual diminution of the assets of the Trust Indenture
Estate or the Trust Estate resulting from such Indenture Trustee's Liens.
(p) Representations and Warranties of Owner Trustee. The Owner
Trustee, in its individual capacity (except as provided in clauses (iii)
and (vii) below) and (but only as provided in clauses (iii) and (vii) and,
to the extent that it relates to the Owner Trustee, clauses (ii), (ix) and
(xi) below) as Owner Trustee, represents and warrants to Lessee, the Pass
Through Trustee, the Subordination Agent, the Liquidity Provider, the
Policy Provider and the Owner Participant as follows:
(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good
standing under the laws of the United States, has full corporate power
and authority to carry on its business as now conducted, has the
corporate power and authority to execute and deliver the Trust
Agreement, has the corporate power and authority to carry out the
terms of the Trust Agreement, and has (assuming the authorization,
execution and delivery of the Trust Agreement by the Owner
Participant), as Owner Trustee, and to the extent expressly provided
herein or therein, in its individual capacity, the corporate power and
authority to execute and deliver and to carry out the terms of the
Owner Trustee Documents;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered this Agreement, in its individual
capacity, has duly authorized, executed and delivered the Trust
Agreement and in its trust capacity, except as expressly provided
therein, has duly authorized, executed and delivered (or, in the case
of Owner Trustee Documents to be executed on the Delivery Date, will
on the Delivery Date, execute and deliver) the other Owner Trustee
Documents and (assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant) this Agreement and
each of the other Owner Trustee Documents constitutes (or, in the case
of documents to be executed and delivered on the Delivery Date, upon
execution and delivery will constitute) the legal, valid and binding
obligations of the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, enforceable against it in its
individual capacity or as Owner Trustee, as the case may be, in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, the Owner Trustee has
duly authorized, and on the Closing Date shall have duly issued,
executed and delivered to the Indenture Trustee for authentication,
the Equipment Notes pursuant to the terms and provisions hereof and of
the Trust Indenture, and each Equipment Note on the Closing Date will
constitute the valid and binding obligation of the Owner Trustee;
(iv) neither the execution and delivery by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of
any Owner Trustee Document, nor the consummation by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, of
any of the Transactions contemplated thereby, nor the compliance by
the Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, with any of the terms and provisions thereof, (A)
requires or will require any approval of its stockholders, or approval
or consent of any trustees or holders of any indebtedness or
obligations of it, or (B) violates or will violate its articles of
association or by-laws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or
results or will result in any breach of, or results or will result in
the creation of any Lien (other than the Lien of the Trust Indenture)
upon its property under, any indenture, mortgage, chattel mortgage,
deed of trust, conditional sale contract, bank loan or credit
agreement, license or other agreement or instrument to which it is a
party or by which it is bound, or contravenes or will contravene any
law, governmental rule or regulation of the United States of America
or the State of Utah governing the trust powers of the Owner Trustee,
or any judgment or order applicable to or binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Utah state or local governmental authority or agency
or any United States Federal governmental authority or agency
regulating the trust powers of the Owner Trustee in its individual
capacity is required for the execution and delivery of, or the
carrying out by, the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the Transactions
contemplated by the Owner Trustee Documents or any other Operative
Document to which it will be a party or by which it will be bound,
other than any such consent, approval, order, authorization,
registration, notice or action as has been duly obtained, given or
taken;
(vi) there exists no Lessor Lien attributable to the Owner
Trustee, in its individual capacity;
(vii) there exists no Lessor Lien attributable to the Owner
Trustee;
(viii) there are no Taxes payable by the Owner Trustee, either
in its individual capacity or as Owner Trustee, imposed by the State
of Utah or any political subdivision thereof in connection with the
issuance of the Equipment Notes, or the execution and delivery in its
individual capacity or as Owner Trustee, as the case may be, of the
Owner Trustee Documents above, that, in each case, would not have been
imposed if the Trust Estate were not located in the State of Utah and
First Security Bank, National Association had not (a) had its
principal place of business in, (b) performed (in its individual
capacity or as Owner Trustee) any or all of its duties under the
Operative Documents in and (c) engaged in any activities unrelated to
the Transactions contemplated by the Operative Documents in, the State
of Utah;
(ix) there are no pending or, to its knowledge, threatened
actions or proceedings against the Owner Trustee, either in its
individual capacity or as Owner Trustee, before any court or
administrative agency or arbitrator which, if determined adversely to
it, would materially adversely affect the ability of the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, to perform its obligations under any of the Owner Trustee
Documents;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and under
all documents relating to the Trust Estate, are located in Salt Lake
City, Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Equipment Note or
Pass Through Certificate or any interest in or to the Trust Estate,
the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Pass
Through Trustee and the Owner Participant; and the Owner Trustee has
not authorized anyone to act on its behalf (it being understood that
in arranging and proposing the financing contemplated hereby and
agreed to herein by the Owner Trustee, Lessee has not acted as agent
of the Owner Trustee) to offer directly or indirectly any Equipment
Note, any Pass Through Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or to
solicit any offer to acquire any of the same from, any Person;
(xii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangements);
(xiii) there has not occurred any event which constitutes (or,
to the best of its knowledge would, with the passing of time or the
giving of notice or both, constitute) an Indenture Event of Default
which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing; and
(xiv) on the Delivery Date the Owner Trustee shall have
received whatever title to the Aircraft as was conveyed to it by
Lessee.
(q) Owner Participant Obligations on Lease Termination. The
Owner Participant covenants and agrees, solely for Lessee's benefit, that
if (i) Lessee has elected pursuant to Section 9(a)(i) of the Lease to
terminate the Lease by causing the Aircraft to be sold pursuant to Section
9(b) of the Lease and (ii) the Owner Trustee has, pursuant to Section 9(b)
of the Lease, given to Lessee written notice of Lessor's election to retain
title to the Aircraft, the Owner Participant will provide the Owner Trustee
with sufficient funds to make, on or before the Termination Date, any
payment required to be made by the Owner Trustee pursuant to Section 9(b)
of the Lease in connection with its retention of title to the Aircraft; the
Owner Participant will indemnify Lessee for any losses, damages, costs or
expenses of any kind (including any additional rents paid by Lessee and any
reasonable fees and expenses of lawyers, appraisers, brokers or
accountants) incurred as a consequence of such failure by the Owner
Participant to provide such sufficient funds. The Owner Participant
agrees, for the benefit of the Note Holders and the Indenture Trustee to
perform the obligations of the Owner Participant and of the Owner Trustee
under Section 9(b) of the Lease and Section 2.14 of the Trust Indenture.
(r) Transfer of Title; Assumption of Equipment Notes. Each of
the Owner Participant, the Owner Trustee, the Indenture Trustee and Lessee
covenants and agrees that if Lessee elects (A) to purchase the Aircraft
pursuant to Section 19(b)(2) or (3) of the Lease or (B) to terminate the
Lease and purchase the Aircraft pursuant to Section 19(b)(1) or Section 20
of the Lease, then each of the parties will execute and deliver appropriate
documentation transferring all of their respective right, title and
interest (without recourse or warranty except as to the absence of Lessor
Liens prohibited by the Owner Trustee Documents) in the Aircraft to Lessee
(including, without limitation, such bills of sale and other instruments
and documents as Lessee shall reasonably request to evidence (on the public
record or otherwise) such transfer and the vesting of all such right,
title and interest in and to the Aircraft in Lessee), and if Lessee, in
connection with such purchase, elects to assume the obligations of the
Owner Trustee pursuant to the Trust Indenture and the Equipment Notes each
of the parties will execute and deliver appropriate documentation
permitting Lessee to assume such obligations on the basis of full recourse
to Lessee, maintaining the security interest in the Aircraft created by the
Trust Indenture, releasing the Owner Participant and the Owner Trustee from
all future obligations in respect of the Equipment Notes, the Trust
Indenture and all other Operative Documents and all such other actions as
are reasonably necessary to permit such assumption by Lessee.
Notwithstanding the provisions of this Section 7(r), unless waived by the
Loan Participants, the Owner Trustee and the Owner Participant, Lessee
shall not be entitled to purchase the Aircraft and to assume the Equipment
Notes on the date for purchase of the Aircraft pursuant to Section 19(b) or
20 of the Lease if on such date a Specified Default or Lease Event of
Default shall have occurred and be continuing.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Equipment
Notes unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest
in and to the Aircraft, (ii) the Indenture Trustee will be entitled to the
benefits of Section 1110 of the Bankruptcy Code; provided that the opinion
required by subclause (ii) need only be given if immediately prior to such
assumption the Owner Trustee would have been entitled to the benefits of
Section 1110 of the Bankruptcy Code and (iii) the Pass Through Trusts will
not be subject to Federal income taxation and the Note Holders will not
recognize income, gain or loss for Federal income tax purposes as a result
of such assumption and will be subject to taxation in the same amounts, in
the same manner, and at the same times as would have been the case if such
assumption had not occurred.
(s) Lessee Merger Covenant. Lessee will not consolidate with
or merge into any other Person or convey, transfer or lease substantially
all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety
shall be (i) organized and validly existing under the laws of the
United States of America or any state thereof or the District of
Columbia, (ii) a Citizen of the United States and (iii) a Certificated
Air Carrier, if and so long as such status is a condition of
entitlement to the benefits of Section 1110 of the Bankruptcy Code
with respect to the Lease or the Aircraft;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety,
within a reasonable period of time (but in no event more than thirty
(30) days) after the merger or consolidation and on or before the date
of any such conveyance, transfer or lease of substantially all of the
assets of Lessee as an entirety, shall execute and deliver to the
Owner Trustee, the Indenture Trustee and the Owner Participant, in
form and substance reasonably satisfactory to the Owner Participant, a
duly authorized, valid, binding and enforceable agreement containing
an assumption by such successor corporation or Person of the due and
punctual performance and observance of each covenant, agreement and
condition of the Lessee Documents to be performed or observed by
Lessee (including, without limitation, suitable arrangements to make
all recordings and filings and to take other actions with respect to
the Lessee Documents as shall be necessary or advisable in the
reasonable opinion of the Owner Participant to protect the Owner
Participant's interests);
(iii) immediately after giving effect to such transaction, no
Specified Default or Lease Event of Default shall have occurred and be
continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant a certificate signed by
the President, any Executive Vice President, any Senior Vice President
or any Vice President and by the Secretary or an Assistant Secretary
of Lessee, and an opinion of counsel (which may be Lessee's General
Counsel, Deputy General Counsel, Associate General Counsel or
Assistant General Counsel) reasonably satisfactory to the Owner
Participant, each to the effect that such consolidation, merger,
conveyance, transfer or lease and the assumption agreement mentioned
in clause (ii) above comply with this Section 7(s) and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Lessee as an
entirety in accordance with this Section 7(s), the successor corporation or
Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under
this Agreement with the same effect as if such successor corporation or
Person had been named as Lessee herein. No such conveyance, transfer or
lease of substantially all of the assets of Lessee as an entirety shall
have the effect of releasing Lessee or any successor corporation or Person
which shall theretofore have become such in the manner prescribed in this
Section 7(s) from its liability in respect of any Operative Document to
which it is a party.
(t) Lessee Financial Statements. Lessee will deliver to Lessor,
the Owner Participant and the Indenture Trustee (i) within sixty (60) days
after each of the first three quarterly periods of each fiscal year of
Lessee, the Form 10-Q report of Lessee and (ii) within 120 days after the
end of the fiscal year of Lessee, the annual report and Form 10-K report of
Lessee, in each case, as filed with the Securities and Exchange Commission,
and subject to any extensions for filing permitted by the Securities and
Exchange Commission.
(u) Rent Adjustments. Section 3 of the Lease contemplates that,
under certain circumstances, the Owner Participant will make certain
recalculations of Basic Rent, EBO Amount and Termination Value, and the
Owner Participant hereby agrees to make such recalculations as and when
contemplated by the Lease and subject to all the terms and conditions of
the Lease and promptly to take such further actions as may be necessary or
desirable to give effect to and to cause the Owner Trustee to give effect
to the provisions of Section 3 of the Lease.
(v) Owner Participant Costs on Return. The Owner Participant
hereby agrees with Lessee that it will pay, or cause to be paid, all costs
and expenses that are for the account of the Lessor or the Owner
Participant pursuant to Section 5 of the Lease without the right of
reimbursement or indemnification from Lessee; provided that if Lessee is
required to return the Aircraft to Lessor pursuant to Section 15 of the
Lease or as a result of the occurrence of a Lease Event of Default, Lessee
shall pay, or cause to be paid, all costs and expenses in connection with
such return.
(w) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Lessee, the
Owner Trustee and the Owner Participant) to make the representations
contemplated to be made by a Loan Participant in this Agreement and to be
bound by the terms of this Agreement and the Trust Indenture (including,
without limitation, the representations and covenants set forth in Sections
7(c), 7(g), 7(h), 7(l) and 7(n) hereof and this Section 7(w) and Sections
2.03, 2.14 and 4.03 of the Trust Indenture). Lessee hereby agrees that
neither it nor any of its Affiliates shall purchase or acquire any interest
in any Equipment Note without the consent of the Owner Participant and the
Owner Trustee; provided that Lessee, by its execution of the Operative
Documents, the Pass Through Documents or any other document related to the
transactions contemplated by the Operative Documents and the Pass Through
Documents, shall not be deemed to have acquired an any interest in the
Equipment Notes.
(x) Representations and Warranties of Pass Through Trustee. The
Pass Through Trustee represents and warrants to Lessee, the Indenture
Trustee, the Subordination Agent, the Liquidity Provider, the Policy
Provider, the Owner Participant and the Owner Trustee, in its capacity as
such and in its individual capacity, as follows:
(i) the Pass Through Trustee is a national banking association
duly organized, validly existing and in good standing under the laws
of the United States and has the full corporate power, authority and
legal right under the laws of the State of Connecticut and the United
States pertaining to its banking, trust and fiduciary powers to
execute and deliver each of the Pass Through Documents and to perform
its obligations under the Pass Through Documents;
(ii) each of the Pass Through Documents have been duly
authorized, executed and delivered by the Pass Through Trustee; each
of the Pass Through Documents constitute the legal, valid and binding
obligations of the Pass Through Trustee enforceable against it in
accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Documents, the
purchase by the Pass Through Trustee of the Equipment Notes pursuant
to this Agreement, or the issuance of the Pass Through Certificates
pursuant to the Pass Through Trust Agreements, contravenes any law,
rule or regulation of the State of Connecticut or any United States
governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Pass Through Trustee and does not contravene or
result in any breach of, or constitute a default under, the Pass
Through Trustee's articles of association or by-laws or any agreement
or instrument to which the Pass Through Trustee is a party or by which
it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Documents, nor the consummation by
the Pass Through Trustee of any of the transactions contemplated
thereby, requires the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action with respect
to, any Connecticut governmental authority or agency or any Federal
governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Pass Through Trustee of any of the Pass Through
Documents (other than franchise or other Taxes based on or measured by
any fees or compensation received by the Pass Through Trustee for
services rendered in connection with the transactions contemplated by
any of the Pass Through Documents), and there are no Taxes payable by
the Pass Through Trustee imposed by the State of Connecticut or any
political subdivision thereof in connection with the acquisition,
possession or ownership by the Pass Through Trustee of any of the
Equipment Notes (other than franchise or other taxes based on or
measured by any fees or compensation received by the Pass Through
Trustee for services rendered in connection with the transactions
contemplated by any of the Pass Through Documents), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be
taxable as corporations, but rather, each will be characterized either
as a grantor trust under subpart E, Part I, of Subchapter J of the
Code or as a partnership, such trusts will not be subject to any Taxes
imposed by the State of Connecticut or any political subdivision
thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court, administrative
agency or arbitrator which individually or in the aggregate, if
determined adversely to it, would materially adversely affect the
ability of the Pass Through Trustee to perform its obligations under
any Pass Through Document;
(vii) except for the issue and sale of the Pass Through
Certificates contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Equipment Note for sale to any
Person or solicited any offer to acquire any Equipment Notes from any
Person, nor has the Pass Through Trustee authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note for sale
to any Person, or to solicit any offer to acquire any Equipment Note
from any Person; and the Pass Through Trustee is not in default under
any Pass Through Document; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
(y) Representations and Warranties of Subordination Agent. The
Subordination Agent represents and warrants to Lessee, the Indenture
Trustee, the Pass Through Trustee, the Liquidity Provider, the Policy
Provider, the Owner Participant and the Owner Trustee, in its capacity as
such and in its individual capacity, as follows:
(i) the Subordination Agent is a national banking organization,
duly organized, validly existing and in good standing under the laws
of the United States, and has the full corporate power, authority and
legal right under the laws of the State of Connecticut and the United
States pertaining to its banking, trust and fiduciary powers to
execute and deliver this Agreement, the Liquidity Facilities, the
Policy Provider Agreement and the Intercreditor Agreement and to
perform its obligations under this Agreement, the Liquidity
Facilities, the Policy Provider Agreement and the Intercreditor
Agreement;
(ii) this Agreement, each of the Liquidity Facilities, the Policy
Provider Agreement and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Subordination Agent; this
Agreement, each of the Liquidity Facilities, the Policy Provider
Agreement and the Intercreditor Agreement constitute the legal, valid
and binding obligations of the Subordination Agent enforceable against
it in accordance with their respective terms, except as the same may
be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Policy
Provider Agreement, the Intercreditor Agreement or this Agreement
contravenes any law, rule or regulation of the State of Connecticut or
any United States governmental authority or agency regulating the
Subordination Agent's banking, trust or fiduciary powers or any
judgment or order applicable to or binding on the Subordination Agent
and do not contravene or result in any breach of, or constitute a
default under, the Subordination Agent's articles of association or
by-laws or any agreement or instrument to which the Subordination
Agent is a party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of any of the Liquidity Facilities, the Policy Provider
Agreement, the Intercreditor Agreement or this Agreement nor the
consummation by the Subordination Agent of any of the transactions
contemplated hereby or thereby requires the consent or approval of,
the giving of notice to, the registration with, or the taking of any
other action with respect to, any Connecticut governmental authority
or agency or any Federal governmental authority or agency regulating
the Subordination Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Subordination Agent of this Agreement, any of
the Liquidity Facilities, the Policy Provider Agreement or the
Intercreditor Agreement (other than franchise or other Taxes based on
or measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement, the Policy Provider
Agreement or any of the Liquidity Facilities), and there are no Taxes
payable by the Subordination Agent imposed by the State of Connecticut
or any political subdivision thereof in connection with the
acquisition, possession or ownership by the Subordination Agent of any
of the Equipment Notes (other than franchise or other Taxes based on
or measured by any fees or compensation received by the Subordination
Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement, the Policy Provider
Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court, administrative
agency or arbitrator which individually or in the aggregate, if
determined adversely to it, would materially adversely affect the
ability of the Subordination Agent to perform its obligations under
this Agreement, the Intercreditor Agreement, the Policy Provider
Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person, or
to solicit any offer to acquire any Equipment Note from any Person;
and the Subordination Agent is not in default under any Policy
Provider Agreement or Liquidity Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER AND POLICY PROVIDER.
Each of the parties hereto agrees and acknowledges that the Liquidity
Provider and the Policy Provider shall each be third party beneficiaries of
each of the representations, warranties and covenants made herein by such
party, and that each of the Liquidity Provider and the Policy Provider may
rely on such representations and warranties to the same extent as if such
representations and warranties were made to each of the Liquidity Provider
and the Policy Provider directly. Lessee agrees and acknowledges that each
of the Liquidity Provider and the Policy Provider shall be third party
beneficiaries of the indemnities contained in Section 6(c) hereof, and each
of the Liquidity Provider and Policy Provider may rely on such indemnities
to the same extent as if such indemnities were made to each of the
Liquidity Provider and Policy Provider directly.
SECTION 9. OTHER DOCUMENTS. Each of the Owner Participant and the
Owner Trustee hereby (a) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may
hereafter be amended or supplemented from time to time in accordance with
the terms thereof) applicable to it; (b) agrees with Lessee and the
Indenture Trustee not to amend, supplement or otherwise modify any
provision of the Trust Agreement in a manner adversely affecting such party
without the prior written consent of such party; and (c) agrees with Lessee
and the Loan Participants not to revoke the Trust Agreement without the
prior written consent of Lessee (provided that the prior written consent of
Lessee shall not be required if (x) the Lease has been terminated and
Lessee has either purchased the Aircraft, sold the Aircraft to a third
party or returned the Aircraft to Lessor or (y)(i) a Lease Event of Default
has occurred and is continuing, (ii) the Lease has been duly declared (or,
in the case of a Lease Event of Default of the type described in Section
14(e) or 14(f) of the Lease, deemed declared) in default, and (iii) Lessor
or the Indenture Trustee (so long as the Lien of the Trust Indenture is in
effect) is exercising remedies seeking to dispossess Lessee of the
Aircraft). Notwithstanding the foregoing, so long as the Lease has not
been terminated, the Subordination Agent, the Pass Through Trustee, the
Indenture Trustee, the Owner Participant and the Owner Trustee hereby agree
for the benefit of Lessee that without the consent of Lessee they will not
amend, modify or supplement the definition of "Secured Obligations" or
Articles II, III, IX or Section 5.02 of the Trust Indenture. Furthermore,
the Pass Through Trustee, the Subordination Agent, the Indenture Trustee,
the Owner Participant and the Owner Trustee hereby agree for the benefit of
Lessee that without Lessee's consent, each such party will not amend any
other provision of any Operative Document or Pass Through Document to which
the Lessee is not a party in a manner adversely affecting Lessee; (provided
that the prior written consent of Lessee shall not be required if (x) the
Lease has been terminated and Lessee has either purchased the Aircraft,
sold the Aircraft to a third party or returned the Aircraft to Lessor or
(y)(i) a Lease Event of Default has occurred and is continuing, (ii) the
Lease has been duly declared (or, in the case of a Lease Event of Default
of the type described in Section 14(e) or 14(f) of the Lease, deemed
declared) in default, and (iii) Lessor or the Indenture Trustee (so long as
the Lien of the Trust Indenture is in effect) is exercising remedies
seeking to dispossess Lessee of the Aircraft. For avoidance of doubt, the
Pass Through Trustee, the Subordination Agent, the Indenture Trustee, the
Owner Participant and the Owner Trustee agree that no such party will
amend, or purport to amend, any Operative Document or Pass Through Document
to which Lessee is a party without the prior written consent of Lessee.
Each of the Owner Participant, the Indenture Trustee, the Subordination
Agent, the Pass Through Trustee and the Owner Trustee agree to promptly
furnish to Lessee copies of any supplement, amendment, waiver or
modification of any of the Operative Documents or Pass Through Documents to
which Lessee is not a party. Each Loan Participant agrees that it will not
take any action in respect of the Trust Indenture Estate except through the
Indenture Trustee pursuant to the Trust Indenture or as otherwise permitted
by the Trust Indenture.
SECTION 10. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the
Indenture Trustee and the Owner Trustee, as follows:
(a) Further Assurances. Lessee will cause to be done, executed,
acknowledged and delivered all and every such further acts, conveyances and
assurances as the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee or the Owner Participant shall reasonably require for accomplishing
the purposes of this Agreement and the other Operative Documents; provided
that any instrument or other document so executed by Lessee will not expand
any obligations or limit any rights of Lessee in respect of the
transactions contemplated by any Operative Documents. Lessee, forthwith
upon delivery of the Aircraft under the Lease, shall cause the Aircraft to
be duly registered, and at all times thereafter to remain duly registered,
in the name of the Owner Trustee, except as otherwise required or permitted
hereunder or under the Lease, under the Transportation Code, or shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration (at the expense
of Lessee including, without limitation, reasonable attorneys' fees and
expenses), and shall promptly furnish to the Owner Trustee such information
as may be required to enable the Owner Trustee to timely file any reports
required to be filed by it as the Lessor under the Lease or with respect to
the Owner Trustee Documents or as the owner of the Aircraft with any
governmental authority (including Tax authorities).
Lessee, at its expense, will take, or cause to be taken, such action
with respect to the recording, filing, re-recording and refiling of the
Lease, the Lease Supplement, the Trust Agreement, the Trust Indenture, the
Trust Supplement and any financing statements or other instruments as are
necessary or advisable to maintain, so long as the Trust Indenture or the
Lease is in effect, the perfection of the security interests created by the
Trust Indenture and any security interest that may be claimed to have been
created by the Lease and the ownership interest of the Owner Trustee in the
Aircraft or will furnish to the Owner Trustee, the Owner Participant and
the Indenture Trustee timely notice of the necessity of such action,
together with such instruments, in execution form, and such other
information as may be required to enable them to take such action at
Lessee's expense. Lessee will notify in writing the Owner Trustee, the
Owner Participant and the Indenture Trustee of any change in the location
of its chief executive office (as such term is used in Article 9 of the
Uniform Commercial Code) promptly after making such change or in any event
within the period of time necessary under applicable law to prevent the
lapse of perfection (absent refiling) of financing statements filed
pursuant to the Operative Documents.
(b) Filings. Lessee, at its expense, will cause the Lease, all
Lease Supplements, all amendments to the Lease, the Trust Indenture, all
supplements and amendments to the Trust Indenture and the Trust Agreement
to be promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code, or required under any other
applicable law. Upon the execution and delivery of the FAA ▇▇▇▇ of Sale,
the Lease, the Lease Supplement covering the Aircraft, the Trust Supplement
and the Trust Indenture shall be filed for recording with the Federal
Aviation Administration in the following order of priority: First, the
FAA ▇▇▇▇ of Sale, Second, the Lease, with the Lease Supplement covering the
Aircraft, the FAA registration application, the Trust Agreement (including
the affidavits of the Owner Trustee, in its individual capacity, and the
Owner Participant) and the Trust Supplement, and Third, the Trust
Indenture, with the Trust Supplement attached. Lessee shall furnish
Lessor, the Indenture Trustee and the Owner Participant with copies of the
foregoing, including recording data, as promptly as practicable following
issuance thereof by the FAA. Lessee shall pay all reasonable expenses
incurred by Lessor, the Indenture Trustee, and the Owner Participant
incurred after the Delivery Date in connection with any supplements or
amendments to the Operative Documents (including, without limitation, any
related recording or filing costs) which are (i) requested by Lessee, (ii)
necessary or required to effectuate the intent of the Operative Documents,
or (iii) waivers or consents requested by Lessee.
SECTION 11. OWNER FOR ALL PURPOSES. It is the intent of the
parties to this Agreement that the Lease be treated as a true lease, the
Owner Participant be treated as the owner of the Aircraft to be delivered
under the Lease, and Lessee be treated as the lessee thereof for all
purposes, including federal income tax purposes and Section 1110 of the
Bankruptcy Code.
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
facsimile, or by prepaid courier service, and shall be deemed to be given
for purposes of this Agreement on the day that such writing is delivered to
the recipient thereof in accordance with the provisions of this Section
12(a). Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provisions of this Section 12(a), notices,
demands, instructions and other communications in writing shall be given to
or made upon the respective parties hereto at their respective addresses
(or to their respective telecopier or facsimile numbers) as follows: (A)
if to Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent, the Indenture Trustee or the Owner Participant, to the
respective addresses set forth on Schedule I hereto, or (B) if to a
subsequent Owner Participant, addressed to such subsequent Owner
Participant at such address as such subsequent Owner Participant shall have
furnished by notice to Lessee, or (C) if to any subsequent Note Holder,
addressed to such Note Holder at its address set forth in the Equipment
Note register maintained pursuant to Section 2.07 of the Trust Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document, the subject matter of any
thereof or any of the Transactions contemplated hereby or thereby brought
by any party or parties thereto, or their successors or permitted assigns
and (B) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, to the
extent permitted by applicable law, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that this Agreement, the Lease, the Tax
Indemnity Agreement or any other Operative Document or the subject matter
of any thereof or any of the Transactions contemplated hereby or thereby
may not be enforced in or by such courts; provided, however that the
foregoing shall not apply to the right any party may have to seek removal
of such suit, action or proceeding to federal court or to seek
consolidation of any separate actions, suits or proceedings brought by one
or more of the other parties in the same or different jurisdictions. The
agreement set forth in this Section 12(b) is given solely for the benefit
of the parties hereto and shall not inure to the benefit of any other
Person.
SECTION 13. CHANGE OF SITUS OF OWNER TRUST. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes
for which it is indemnified pursuant to Section 6(b) hereof and if, as a
consequence thereof, Lessee should request that the situs of the trust be
moved to another state in the United States from the state in which it is
then located, the situs of the trust may be moved with the written consent
of the Owner Participant (not to be unreasonably withheld) and the Owner
Participant will take whatever action may be reasonably necessary to
accomplish such removal; provided that (A) Lessee shall provide such
additional Tax indemnification on an after-Tax basis as the Owner
Participant and the Indenture Trustee may reasonably request, (B) the
rights and obligations under the Operative Documents of the Owner
Participant and the Indenture Trustee shall not be altered as a result of
the taking of such action, (C) the Lien of the Trust Indenture on the Trust
Indenture Estate shall not be adversely affected by such action and (D) the
Owner Participant and the Indenture Trustee shall have received an opinion
or opinions of counsel (reasonably satisfactory to the Owner Participant),
in scope, form and substance satisfactory to the Owner Participant to the
effect that (I) the trust, as thus removed, shall remain a validly
established trust, (II) any amendments to the Trust Agreement necessitated
by such removal shall have been duly authorized, executed and delivered by
the parties thereto and shall constitute the valid and binding obligations
of such parties, enforceable in accordance with their terms (including any
additional indemnification obligation of Lessee pursuant to clause (A) of
this sentence), (III) such removal will not result in the imposition of, or
increase in the amount of, any Tax for which Lessee is not required to
indemnify the Owner Participant, the Indenture Trustee, the Owner Trustee
or the Trust Estate pursuant to Section 6(b) hereof (taking into account
any additional indemnification provided by Lessee pursuant to clause (A) of
this sentence), (IV) to such further effect as the Owner Participant may
reasonably request, and (V) if such removal involves the replacement of the
Owner Trustee, an opinion of counsel to such successor Owner Trustee in
form and substance reasonably satisfactory to the Owner Participant
covering the matters described in the opinion delivered pursuant to Section
4(a)(xii) and such other matters as the Owner Participant may reasonably
request and (E) Lessee shall pay, and indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-Tax basis against, any
and all costs and expenses including reasonable counsel fees and all
disbursements, registration fees, recording or filing fees and Taxes
incurred by the Owner Trustee, the Owner Participant and the Indenture
Trustee in connection with such change of situs. Notwithstanding anything
to the contrary contained herein or in any other Operative Document, the
Owner Participant agrees with Lessee that it will not consent to or direct
a change in the situs of the Trust Estate without the prior consent of
Lessee unless the Owner Trustee, the Indenture Trustee, the Note Holders
and the Trust Estate each waives its right to any indemnity payable by the
Lessee under Section 6(b) to the extent such indemnity obligation is a
result of the change in situs.
SECTION 14. MISCELLANEOUS.
(a) Consents Under Lease. The Owner Participant and each Loan
Participant covenants and agrees that it shall not unreasonably withhold
its consent to any consent requested of the Owner Trustee, as Lessor, or
the Indenture Trustee under the terms of the Lease which by its terms is
not to be unreasonably withheld by the Owner Trustee, as Lessor or the
Indenture Trustee.
(b) Survival. The representations, warranties, indemnities and
agreements of Lessee, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant
provided for in this Agreement or any other Operative Document, and
Lessee's, the Owner Trustee's, the Indenture Trustee's, the Subordination
Agent's, the Pass Through Trustee's and the Owner Participant's obligations
under any and all thereof, shall survive the making available of the
respective Commitments by the Pass Through Trustee and the Owner
Participant, the payment of Lessor's Cost, the delivery or return of the
Aircraft, the transfer of any interest of the Owner Participant in the
Trust Estate or the Aircraft or any Engine or the transfer of any interest
by any Loan Participant in any Equipment Note or the Trust Indenture Estate
or any Sublease and the expiration or other termination of this Agreement
or any other Operative Document.
(c) Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(d) Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee, the Owner Participant
and the Owner Trustee.
(e) Successors and Assigns. The terms of this Agreement shall
be binding upon, and inure to the benefit of, Lessee and, subject to the
terms of this Agreement, its successors and permitted assigns, the Pass
Through Trustee and its successors as Pass Through Trustee (and any
additional trustee appointed) under any of the Pass Through Trust
Agreements, the Owner Participant and, subject to the terms of this
Agreement, its successors and permitted assigns, each Note Holder and its
successors and registered assigns, the Indenture Trustee and its successors
as Indenture Trustee under the Trust Indenture and the Owner Trustee and
its successors as Owner Trustee under the Trust Agreement. The terms of
this Agreement shall inure to the benefit of the Liquidity Provider and
Policy Provider, and each of their successors and permitted assigns.
(f) Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
(g) Trust Capacity. The parties hereto agree that all of the
statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Agreement 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 Agreement or such other agreements to
the contrary notwithstanding (except for any express provisions that the
Owner Trustee is responsible for in its individual capacity), no recourse
shall be had with respect to this Agreement or such other agreements
against the Owner Trustee in its individual capacity or against any
institution or other 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; provided, however, that this
Section 14(g) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or negligent
conduct for which it would otherwise be liable; and provided, further, that
nothing contained in this Section 14(g) shall be construed to limit the
exercise and enforcement in accordance with the terms of this Agreement or
such other agreements of rights and remedies against the Trust Estate. The
foregoing provisions of this Section 14(g) shall survive the termination of
this Agreement and the other Operative Documents.
(h) Section 1110. It is the intention of the parties hereto
(and each party agrees that each Operative Document is intended to be
construed so as to ensure) that the Owner Trustee, as Lessor under the
Lease, and the Indenture Trustee, as assignee of such Lessor's rights under
the Lease pursuant to the Trust Indenture, will be entitled to the full
benefits of Section 1110 of the Bankruptcy Code in all circumstances.
SECTION 15. EXPENSES.
(a) Invoices And Payment. Each of the parties hereto shall
promptly submit to the Owner Trustee and Lessee for their prompt approval
(which shall not be unreasonably withheld) copies of invoices in reasonable
detail of the Transaction Expenses for which it is responsible for
providing information as they are received. The Owner Participant agrees
to transfer to the Owner Trustee promptly after receipt by the Owner
Participant of approved invoices such amount as shall be necessary in order
to enable the Owner Trustee to pay, or if such approved invoice has
previously been paid by Lessee, to reimburse Lessee for, Transaction
Expenses. To the extent of funds received by it, the Owner Trustee agrees
to pay all invoices of Transaction Expenses that have been approved by it
and Lessee promptly upon receipt thereof and, to the extent such approved
invoices have previously been paid by Lessee, to reimburse Lessee promptly
therefor. Notwithstanding the foregoing, to the extent that Transaction
Expenses exceed two percent (2%) of Lessor's Cost, Lessee at its sole
option shall have the right to pay directly any or all Transaction Expenses
which are in excess of two (2%) of Lessor's Cost.
(b) Payment of Other Expenses. In the event that the
transactions contemplated by this Participation Agreement fail to close
solely as a result of the Owner Participant's failure to comply with the
terms and conditions upon which its participation in the transaction was
predicated, the Owner Participant will be responsible for all of its fees
and expenses, including but not limited to the fees, expenses and
disbursements of its special counsel. If the transactions fail to close
for any other reason, Lessee shall be responsible for all Transaction
Expenses.
SECTION 16. REFINANCINGS.
(a) Refinancing Generally. So long as no Lease Event of Default
shall have occurred and be continuing, Lessee shall have the right to
refinance all (but not less than all) of the Equipment Notes no more than
two (2) times by giving written notice to the Owner Participant and the
Owner Trustee that there shall be effected a voluntary redemption of the
Equipment Notes by the Owner Trustee, whereupon the Owner Participant
agrees to negotiate promptly in good faith to conclude an agreement with
Lessee as to the terms of such refinancing operation (including the terms
of any debt to be issued in connection with such refinancing); provided
that no such refinancing shall require an increase in the amount of the
Owner Participant's investment in the beneficial ownership of the Aircraft
or in the principal amount of the Equipment Notes; and provided further
that the Owner Participant may reject any terms that, in its reasonable
judgment, adversely affect the Owner Participant.
Upon such agreement:
(1) within ten (10) Business Days after the reaching
of such agreement, the Owner Participant will deliver to
Lessee a certificate of an authorized representative of the
Owner Participant (the "Refinancing Certificate") setting
forth (i) (based upon information provided by Lessee and on
the agreement reached between Lessee and the Owner
Participant) the proposed date on which the outstanding
Equipment Notes will be redeemed and a description of any
new debt to be issued and the other aspects of such
refinancing that will be consummated (such date, the
"Refinancing Date") and (ii) the following information
calculated pursuant to the provisions of paragraph (6) of
this Section 16(a): (A) the proposed adjusted debt/equity
ratio, (B) the principal amount of debt to be issued by the
Owner Trustee on the Refinancing Date, (C) the amount, if
any, by which the Owner Participant's aggregate investment
in the beneficial interest in the Aircraft is to be
decreased and (D) the proposed revised schedules of Basic
Rent percentages, debt amortization, EBO Amount, Termination
Value percentages and other purchase option or termination
percentages. The Refinancing Certificate shall not provide
for a debt/equity ratio which is materially different from
the then existing ratio. Within fourteen days of its
receipt of the Refinancing Certificate, Lessee may demand a
verification pursuant to Section 3(g) of the Lease of the
information set forth in the Refinancing Certificate. Upon
the acceptance by Lessee of the accuracy of the information
set forth in the Refinancing Certificate (or the
determination pursuant to such verification procedures), as
to the debt/equity ratio, the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date and the
revised Basic Rent percentages, debt amortization, EBO
Amount, Termination Value percentages and other buyout and
termination percentages (such information, whether as set
forth or as so determined, the "Refinancing Information")
the appropriate parties will take the actions specified in
paragraphs (2) through (5) below;
(2) the appropriate parties will enter into
appropriate documentation (which may involve an underwriting
agreement in connection with such sale or the sale of the
Owner Trustee's interest in the Trust Estate and/or the
Aircraft and its resale to the Owner Trustee) with the
institution or institutions to be named therein providing
for (A) (i) the issuance and sale by the Owner Trustee to
such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified
in the Refinancing Information which amount shall be equal
to the aggregate principal amount of all Equipment Notes
outstanding on the Refinancing Date (such debt securities,
the "New Debt");
(3) application of the proceeds of the sale of the New
Debt to the redemption of all such Equipment Notes on the
Refinancing Date and (iii) the payment of the excess, if
any, of such proceeds over the amounts necessary to effect
such redemption to the Owner Trustee and (B) pursuant to
which the parties to the refinancing transaction (including
the Owner Participant, the Lessee, the Owner Trustee and the
Loan Participants, but excluding the holders of the Pass
Through Certificates) make such representations, warranties
and covenants as Lessee and Owner Participant reasonably
require;
(4) Lessee shall give notice to the Indenture Trustee
pursuant to Section 2.11 of the Trust Indenture, and Lessee
and the Owner Trustee will amend the Lease to provide that
(i) Basic Rent payable in respect of the period from and
after the Refinancing Date shall be as provided in the
Refinancing Information and (ii) amounts payable in respect
of EBO Amount and Termination Value from and after the
Refinancing Date shall be as provided in the Refinancing
Information;
(5) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the New Debt in like
manner as the Equipment Notes and will enter into such
amendments and supplements to the Trust Indenture (or such
new indenture or other security agreement) as may be
necessary to effect such refinancing;
(6) the Lessee shall pay all of the costs and expenses
of such refinancing (including, but not limited to, the
reasonable fees, expenses and disbursements of counsel and
any placement or underwriting fees and, subject to the
exclusions to the general indemnity in Section 6(c), shall
confirm in writing that Lessee's indemnification obligation
with respect to the Owner Participant and the Owner Trustee
(in its individual and trust capacity) under Section 6(c)
extends to the refinancing transaction and any additional
indemnification which such party shall require; and
(7) when calculating any of the information required
to be set forth in a Refinancing Certificate, the Owner
Participant shall make such calculations in a manner which
(A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred are the
subject of the recalculations being conducted by the Owner
Participant) and (B) minimizes the Net Present Value of
Rents to Lessee to the extent possible consistent with
clause (A).
(8) the Owner Participant shall receive a favorable
tax opinion from independent tax counsel selected by the
Owner Participant and reasonably acceptable to Lessee to the
effect that there is no significant additional risk, as a
result of such refinancing, of adverse tax consequences
under Section 467 of the Code and related regulations, rules
and judicial interpretations as in effect on the date of
such refinancing (the "Section 467 Tax Opinion") provided,
however, that if (i) the Owner Participant has not received
the Section 467 Tax Opinion or (ii) has received the Section
467 Tax Opinion but adverse tax consequences nonetheless
result, then Lessee shall indemnify the Owner Participant
for any such additional adverse Tax consequences that
actually result as if such event were an Income Inclusion
under the Tax Indemnity Agreement, but only to the extent
Section 467 of the Code and related regulations were
satisfied as of the Delivery Date.
(b) Limitation on Redemption. The Equipment Notes shall not be
subject to voluntary redemption by the Owner Trustee without the consent of
Lessee except as set forth in Section 2.14 of the Trust Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first above written.
US AIRWAYS, INC.,
Lessee
By:
-------------------------------
Name:
Title:
_____________________________________,
as Owner Participant
By:
-------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise provided herein, but solely as
Indenture Trustee
By:
-------------------------------
Name:
Title:
Address:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee
By:
-------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee
By:
-------------------------------
Name:
Title:
Address:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent
By:
-------------------------------
Name:
Title:
Address:
Definitions
N___U_
ANNEX A
DEFINITIONS
-----------
(US Airways, Inc. Trust No. N___U_)
Manufacturer's Serial Number ____
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document and such meanings shall be equally
applicable to both the singular and the plural forms of the terms herein
defined. In the case of any conflict between the provisions of this Annex A
and the provisions of the main body of any Operative Document, the
provisions of the main body of such Operative Document shall control the
construction of such Operative Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein. Any reference to any
Person shall be deemed to include its successors and permitted assigns.
"Acceptable Alternate Engine" means (i) a [CFM International
Model 56- 5] (or improved type) engine suitable for use on the Airframe and
having not less than 1,500 cycles left before such engine's next scheduled
shop visit in accordance with Lessee's FAA approved maintenance program or
(ii) an engine of the same manufacturer suitable for use on the Airframe
and having a value and utility equal to or greater than a CFM Model 56-5
type engine, assuming such engine is in the condition required by the
Lease, provided that the primary purpose of designating any engine as an
Acceptable Alternate Engine is not to reduce the aggregate life, value and
utility from that of the substituted Engine.
"Acceptance Certificate" has the meaning specified for such
term in Section 4(a)(iv)(10) of the Participation Agreement.
"Actual Knowledge" means, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the
Corporate Trust Office of the Indenture Trustee, as the case may be, and
(ii) as it applies to the Owner Participant or Lessee, actual knowledge of
a vice president or other higher officer of the Owner Participant or
Lessee, respectively, having responsibility for the transactions
contemplated by the Operative Documents.
"Additional Insured" means Lessor, in its individual capacity
and as Owner Trustee and owner of the Aircraft, the Indenture Trustee, the
Owner Participant, the Pass Through Trustee, the Liquidity Provider, the
Policy Provider, and each of their respective Affiliates, successors and
permitted assigns, and the respective directors, officers, employees and
agents of the foregoing.
"Additional Part" or "Additional Parts" has the meaning
specified for such term in Section 8(c) of the Lease.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" (including
"controlled by" and "under common control with") shall mean the power,
directly or indirectly, to direct or cause the direction of the management
and policies of such Person whether through the ownership of voting
securities or by contract or otherwise.
"AIFS" means Airbus Industrie Financial Services, a corporation
formed under the laws of Ireland.
"Aircraft" means the Airframe to be delivered and leased under
the Lease pursuant to Lease Supplement No. 1 (or any airframe from time to
time substituted for such Airframe pursuant to Section 10(a) of the Lease)
together with the two Engines initially leased under the Lease pursuant to
Lease Supplement No. 1 (or any Acceptable Alternate Engine substituted for
either of such Engines pursuant to the terms of the Lease), in each case as
specified in the applicable Lease Supplement, whether or not any of such
initial or substituted Engines may from time to time be installed on such
initial or substituted Airframe or may be installed on any other airframe
or on any other aircraft and including all logs, manuals, and data and
inspection, modification, repair and overhaul records required to be
maintained with respect to the foregoing.
Definitions
N___U_
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the Lease
Supplement No. 1, which aircraft shall be leased by Lessor to Lessee under
the Lease and under such Lease Supplement, and any aircraft (except Engines
or engines from time to time installed thereon) which may from time to time
be substituted for such aircraft (except Engines or engines from time to
time installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the
same shall be incorporated or installed in or attached to such aircraft
(except Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however,
that at such time as an aircraft (except Engines or engines from time to
time installed thereon) shall be deemed part of the property leased under
the Lease in substitution for the Airframe pursuant to the applicable
provisions of the Lease, the replaced Airframe shall cease to be an
Airframe under the Lease; provided further that the Airframe shall not
include Passenger Convenience Equipment.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
The Chase Manhattan Bank in New York, New York from time to time as its
base rate.
"Basic Rent" means, for the Basic Term, the rent payable for
the Aircraft pursuant to Section 3(b) of the Lease as adjusted as provided
in Section 3(c) of the Lease but subject always to the provisions of
Section 3(c)(iv) of the Lease and, for any Renewal Term, Basic Rent
determined pursuant to Section 19 of the Lease.
"Basic Term" means the term for which the Aircraft is leased
pursuant to Section 3(a) of the Lease, commencing on the Delivery Date and
ending on the Basic Term Expiration Date.
"Basic Term Expiration Date" means the date that is 22 years
and six months after the Delivery Date, or such earlier date as the Lease
may be terminated in accordance with the provisions thereof.
"▇▇▇▇ of Sale" means a full warranty ▇▇▇▇ of sale covering the
Aircraft, executed by Lessee in favor of the Owner Trustee, dated the
Delivery Date, specifically referring to the Airframe and each Engine,
which ▇▇▇▇ of Sale shall contain, among other things, a statement that such
▇▇▇▇ of Sale thereby conveys to the Owner Trustee good title to the
Airframe and each Engine described in such ▇▇▇▇ of Sale, free and clear of
all liens, encumbrances and rights of others except Permitted Liens
described in Section 6(a)(xv) of the Participation Agreement.
"Burdensome Termination Event" means an event which shall be
deemed to have occurred if (A) one or more events have occurred which give
rise to an obligation on the part of Lessee to pay any costs or expenses or
indemnity under Sections 6(b) or 6(c) of the Participation Agreement or
under the Tax Indemnity Agreement if the aggregate amount of such indemnity
or other payments would exceed (as to future payments on a present value
basis discounted semi-annually at the Debt Rate to the determination date)
2.50% of Lessor's Cost, (B) Lessee plans non-severable improvements to the
Aircraft which (i) are necessary to comply with any applicable law,
regulations, rules or orders or as required by Lessee's insurance policies
maintained pursuant to Section 11 of the Lease, in Lessee's sole
discretion, (ii) will cost in excess of $2.5 million and (iii) the Owner
Participant will not permit to be financed under similar terms then
available in the market for similar transactions or (C) Lessee has
requested a change in registration or consent to enter into a Sublease with
a Permitted Sublessee with respect to the Aircraft, at a time after the
Depreciation Period and no Lease Event of Default has occurred and is
continuing, in accordance with the procedures and requirements set forth in
Section 7(d) of the Participation Agreement and Section 7(b)(x) of the
Lease, and the Owner Participant does not consent to such change in
registration or sublease in accordance with the provisions of such Section
7(d) and Section 7(b)(x) of the Lease.
"Business Day" means any day other than a Saturday or Sunday or
a day on which commercial banks are required or authorized to close in New
York, New York, Corporate Trust Office, Pittsburgh, Pennsylvania or the
city and state where the office of the Owner Trustee is located.
"Cash Equivalents" means (i) direct obligations of the United
States of America and agencies guaranteed by the United States government
having a final maturity of ninety (90) days or less from date of purchase
thereof; (ii) certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national banking
association incorporated under the laws of the United States of America or
one of the states thereof having combined capital and surplus and retained
earnings as of its last report of condition of at least $500,000,000 and
having a rating of Aa or better by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial
paper of any corporation or finance company incorporated or doing business
under the laws of the United States of America or any state thereof having
a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's
and having a final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United States
holding an air carrier operating certificate issued pursuant to Chapter 447
of Title 49, United States Code, for aircraft capable of carrying ten or
more individuals or 6,000 pounds or more of cargo or that otherwise is
certified or registered to the extent required to fall within the purview
of Section 1110 of the Bankruptcy Code or any analogous successor provision
of the Bankruptcy Code.
"Citizen of the United States" has the meaning specified for
such term in Section 40102(a)(15) of Title 49 of the United States Code or
any similar legislation of the United States of America enacted in
substitution or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class C Liquidity Provider" means [-], or any successor
thereto.
"Class C Purchase Agreement" means that certain Purchase
Agreement, dated as of _____________________, by and between Lessee and
AIFS.
"Class G Liquidity Provider" means [-], or any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the Participation
Agreement of each Loan Participant or of the Owner Participant, as the case
may be, to finance the Owner Trustee's payment of Lessor's Cost for the
Aircraft.
"Consent and Agreement" means, collectively, each Consent and
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, executed by the Seller and the Manufacturer, respectively, as the
same may be amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof.
"Continuous Stay Period" has the meaning specified for such
term in Section 4.04(a) of the Trust Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford,
Connecticut 06103, Attention: Corporate Trust Administration, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Lessee, the Owner Trustee, the Owner Participant, the Loan
Participants and each Note Holder.
"Debt" means any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments or for the deferred purchase
price of property, goods or services.
"Debt Rate" means, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in
Schedule I to the Trust Indenture.
"Default" means any event or condition that with the giving of
notice or the lapse of time or both would become an Event of Default or
Lease Event of Default.
"Delivery Date" means the date of the Lease Supplement No. 1
for the Aircraft, which date shall be the date the Aircraft is leased by
Lessor to Lessee and accepted by Lessee under the Lease.
"Depositary" means [-], as Class G Depositary and Class C
Depositary under the Deposit Agreements, or any permitted successor
thereto.
"Deposit Agreements" means, collectively, (i) that certain
Deposit Agreement (Class G), dated as of the Pass Through Trust Closing
Date, between First Security Bank, National Association, as escrow agent
under the Escrow Agreement referred to therein, and the Depositary and (ii)
that certain Deposit Agreement (Class C), dated as of the Pass Through
Trust Closing Date, between First Security Bank, National Association, as
escrow agent under the Escrow Agreement referred to therein, and the
Depositary.
"Depreciation Period" means the period commencing on the
Delivery Date and ending at the end of the calendar year during which the
seventh (7th) anniversary of the Delivery Date occurs.
"Determination Date" has the meaning set forth in Section
10(a)(i) of the Lease.
"Dollars" and "$" mean the lawful currency of the United States
of America.
"EBO Amount" means the applicable amount for the EBO Date set
forth on Exhibit D to the Lease (as such Exhibit D may be adjusted from
time to time as provided in Section 3(c) of the Lease). Unless Lessee shall
have assumed the Equipment Notes in accordance with the Operative
Documents, the first installment of EBO Amount shall always be sufficient
to pay in full the aggregate unpaid principal amount of all Equipment Notes
outstanding as of such date, together with all accrued and unpaid interest
or all such Equipment Notes as of such date.
"EBO Date" means the first date set forth under the caption
"EBO Date" on Exhibit D to the Lease.
"Enforcement Date" has the meaning specified for such term in
Section 4.03 of the Trust Indenture.
"Engine" means (i) each of the two CFM International 56-5 type
engines listed by manufacturer's serial number in the Lease Supplement No.
1, whether or not from time to time thereafter installed on the Airframe or
installed on any other airframe or on any other aircraft; and (ii) any
Acceptable Alternate Engine that may from time to time be substituted,
pursuant to the terms of the Lease, for either of such two Engines,
together in each case with any and all Parts incorporated or installed in
or attached thereto or any and all Parts removed therefrom so long as title
thereto shall remain vested in Lessor in accordance with the terms of
Section 8 of the Lease after removal from such Engine; provided, however,
that at such time as an engine shall be deemed part of the property leased
under the Lease in substitution for an Engine pursuant to the applicable
provisions of the Lease, the replaced Engine shall cease to be an Engine
under the Lease or other Operative Documents. The term "Engines" means, as
of any date of determination, all Engines then leased under the Lease.
"Engine Agreement Assignment" means the Engine Warranties
Assignment, dated as of the date of the Lease, between Lessee and Lessor,
as the same may be amended, supplemented or modified from time to time,
with a form of Consent and Agreement to be executed by the Engine
Manufacturer attached thereto.
"Engine Consent and Agreement" means the Engine Manufacturer's
Consent and Agreement, dated as of the date of the Lease, executed by the
Engine Manufacturer, as the same may be amended, modified or supplemented
from time to time in accordance with the applicable provisions thereof.
"Engine Manufacturer" means CFM International, Inc. and its
successors and assigns.
"Equipment Note Register" has the meaning specified for such
term in Section 2.07 of the Trust Indenture.
"Equipment Note Registrar" has the meaning specified for such
term in Section 2.07 of the Trust Indenture.
"Equipment Notes" means and include any Equipment Notes issued
under the Trust Indenture in the form specified in Section 2.01 of the
Trust Indenture, and issued in exchange therefor or replacement thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Escrow Agreements" means, collectively, (i) that certain
Escrow and Paying Agent Agreement (Class G), dated as of the Pass Through
Trust Closing Date, among First Security Bank, National Association, as
escrow agent, the Underwriters, the Pass Through Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, as paying
agent thereunder and (ii) that certain Escrow and Paying Agent Agreement
(Class C), dated as of the Pass Through Trust Closing Date, among First
Security Bank, National Association, as escrow agent, AIFS, the Pass
Through Trustee, and State Street Bank and Trust Company of Connecticut,
National Association, as paying agent thereunder.
"Estimated Value" means the amount equal to the fair market
value of the Aircraft at the expiration of the Basic Term, as specified in
the appraisal received pursuant to Section 4(a)(xvii) of the Participation
Agreement.
"Event of Default" (i) when such term is used in or with
respect to the Lease has the meaning specified for such term in Section 14
of the Lease and (ii) when such term is used in or with respect to the
Trust Indenture has the meaning specified for such term in Section 4.02 of
the Trust Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe
or any Engine, any of the following events with respect to such property:
(i) the loss of such property or of the use thereof due to the destruction
of or damage to such property which renders repair uneconomic or which
renders such property permanently unfit for normal use for any reason
whatsoever; (ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total loss, or a
constructive or compromised total loss; (iii) the theft or disappearance of
such property for a period in excess of one hundred eighty (180) days or,
if earlier, the expiration of the Term; (iv) the requisition for use of
such property by any governmental authority (other than a requisition for
use by the United States Government Entity or any government of registry of
the Aircraft or any agency or instrumentality thereof) that shall have
resulted in the loss of possession of such property by Lessee (or any
Sublessee) for a period in excess of one hundred eighty (180) consecutive
days or, if earlier, the expiration of the Term; (v) the requisition for
use by the United States Government Entity or any government of registry of
the Aircraft or any instrumentality or agency thereof, which shall have
occurred during the Basic Term (or any Renewal Term) and shall have
continued for a period of thirty (30) days beyond the Term, provided,
however, that no Event of Loss pursuant to this clause (v) shall exist if
Lessor shall have furnished to Lessee the written notice specified in
Section 10(d) of the Lease; (vi) the condemnation, confiscation or
requisition of the Aircraft by the United States Government or any
government of registry, if such condemnation, confiscation or requisition
results in a loss by the Owner Trustee of its title to the Aircraft or the
taking of title to the Aircraft or the Airframe by the United States
Government or any government of registry; (vii) as a result of any law,
rule, regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government of registry of
the Aircraft having jurisdiction, the use of such property in the normal
course of the business of commercial passenger air transportation shall
have been prohibited for a period of one hundred eighty (180) consecutive
days, unless Lessee (or Sublessee) shall have undertaken and shall be
diligently carrying forward all steps which are necessary and desirable to
permit the normal use of the Aircraft by Lessee (or such Sublessee), but in
any event an "Event of Loss" shall occur if such "grounding" extends for a
period of more than three hundred sixty (360) days (or, if earlier, the
expiration of the Term); provided that no Event of Loss shall be deemed to
occur if such "grounding" is applicable to Lessee's entire fleet of
A[319/320/321] aircraft and Lessee, prior to the expiration of one year
from the prohibition of such use, shall have conformed at least one such
aircraft in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of
the same in such jurisdiction and shall be diligently carrying forward, on
a non-discriminatory basis, all steps which are necessary or desirable to
permit the normal use of the Aircraft by Lessee (or such Sublessee), but in
any event an "Event of Loss" shall be deemed to have occurred if such use
shall have been prohibited for a period of two consecutive years or such
use shall be prohibited at the expiration of the Term; and (viii) with
respect to an Engine only, any divestiture of title to or interest in an
Engine or any event with respect to an Engine that is deemed to be an Event
of Loss with respect to such Engine pursuant to Section 7(b)(v) of the
Lease. An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if an Event of Loss occurs with respect to the Airframe.
"Excluded Payments" means (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner
Trustee in its individual capacity, their respective Affiliates, successors
and permitted assigns and their directors, officers, employees, servants
and agents (collectively, the "Owner Indemnitees") pursuant to Sections
6(b), 6(c), 15 or 16 of the Participation Agreement, (ii) proceeds of
public liability insurance in respect of the Aircraft payable as a result
of insurance claims made, or losses suffered, by the Owner Trustee or the
Indenture Trustee in their respective individual capacities or by any of
the Owner Indemnitees, (iii) proceeds of insurance maintained with respect
to the Aircraft by the Owner Participant (whether directly or through the
Owner Trustee) or any other Owner Indemnitee and permitted under Section 11
of the Lease, (iv) all payments required to be made under the Tax Indemnity
Agreement by Lessee and all payments of Supplemental Rent by Lessee in
respect of any amounts payable under the Tax Indemnity Agreement, (v)
Transaction Expenses payable by Lessee to the Owner Trustee in its
individual capacity or to the Owner Participant pursuant to Section 15 of
the Participation Agreement and fees payable to the Owner Trustee or the
Indenture Trustee, (vi) any amount payable to the Owner Participant by any
transferee in consideration for the assignment of the Owner Participant's
interest in the Trust Estate, (vii) provided that the Equipment Notes shall
have been duly assumed by Lessee pursuant to Section 2.13 of the Trust
Indenture, the amounts payable to the Owner Trustee pursuant to Section
19(b) or 20 of the Lease plus all expenses incurred by the Owner Trustee
and the Owner Participant in connection with such assumption, as
applicable, (viii) interest accrued on any of the above, (ix) any right to
enforce the payment of any amount described in clauses (i) through (viii)
above (provided the rights referred to in this clause (ix) shall not be
deemed to include the exercise of any remedies provided for in the Lease
other than the right to ▇▇▇ for specific performance of any covenant or to
make such payment or to ▇▇▇ for damages in respect of the breach of any
such covenant) and (x) any right to exercise any election or option or make
any decision or determination, or give or receive any notice, consent,
waiver or approval, or take any other action, in each case, with respect to
any amount described in clauses (i) through (viii) above, including the
right to declare a Lease Event of Default, in respect of Lessee's failure
to pay any amounts described in clauses (i) through (viii) above (provided
the rights referred to in this clause (x) shall not be deemed to include
the exercise of any remedies provided for in the Lease other than the
remedies described in clause (ix) above and right to exercise any election,
option or make any decision or determination or give or receive any notice,
covenant, waiver or approval or take other action, in each case, to the
extent and only to the extent relating to an "Excluded Payment" described
in clauses (i) through (viii) of this definition).
"Expenses" means all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or
other professionals and reasonable costs of investigation) of whatsoever
kind and nature.
"FAA ▇▇▇▇ of Sale" means a ▇▇▇▇ of sale for the Aircraft on AC
Form 8050-2 (or such other form as may be approved by the Federal Aviation
Administration), executed by Lessee in favor of the Owner Trustee and dated
and delivered on the Delivery Date.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all times
be equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
are not, in the Owner Participant's reasonable judgment, materially less
stringent than the standards imposed by the Federal Aviation Administration
or any Permitted Foreign Air Authority.
"French Pledge Agreement" means the French Pledge Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Trustee and the Indenture Trustee, as the same may be amended,
supplemented or modified from time to time.
"General Terms Agreement" or "GTA" means that certain General
Terms Agreement dated as of February 5, 1999, by and between Engine
Manufacturer and US Airways Group, Inc. (as the same has been assigned to
Lessee), but excluding any and all Side Letter Agreements attached thereto,
to the extent that such contract relates to the Engines, as such contract
may hereafter be amended, supplemented and modified to the extent relating
to the Engines.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government
or otherwise exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or (b) any other
government entity having jurisdiction over any matter contemplated by the
Operative Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Incremental Amount" means, as of any Rent Payment Date (such
Rent Payment Date, the "Applicable Rent Payment Date"), the difference
between (i) the aggregate amount of interest (other than overdue interest)
then due and payable on the Series C Equipment Notes (or due and payable on
the next Business Day, if such date is not a Business Day) and (ii) the
aggregate amount of interest (other than overdue interest) on the Series C
Equipment Notes that would have been due and payable on such date if such
Series C Equipment Notes had borne interest at ___% from the immediately
preceding Rent Payment Date to, but excluding, the Applicable Rent Payment
Date.
"Indemnitee" means (i) the Owner Trustee, in its individual
capacity and as trustee under the Trust Agreement, (ii) the Indenture
Trustee, (iii) the Owner Participant, (iv) the Trust Estate, (v) the Loan
Participants and each other Note Holder, (vi) the Subordination Agent,
(vii) the Liquidity Provider, (viii) the Policy Provider, (ix) the Pass
Through Trustees, (x) each Affiliate of the Persons described in clauses
(i) through (iv), inclusive, (xi) each Affiliate of the Persons described
in clauses (vi), (vii), (viii) and (ix), (xii) the respective directors,
officers, employees, agents and servants of each of the Persons described
in clauses (i) through (ix), inclusive, (xiii) the successors and permitted
transferees and assigns of the Persons described in clauses (i) through
(ix), inclusive.
"Indemnity Agreement" means that certain Indemnity Agreement,
dated as of the Pass Through Trust Closing Date, between the Depositary and
Lessee.
"Indenture Agreements" means the Participation Agreement, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Bills of Sale and any other contract, agreement
or instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Default" means any condition, circumstance, act or
event which with the giving of notice or the lapse of time or both would
become an Indenture Event of Default.
"Indenture Event of Default" has the meaning given the term
"Event of Default" in the Trust Indenture.
"Indenture Excess Amount" has the meaning specified for such
term in Section 2.03(b) of the Trust Indenture.
"Indenture Indemnitees" means (i) State Street and the
Indenture Trustee, (ii) each separate or additional trustee appointed
pursuant to the Trust Indenture, (iii) the Subordination Agent, (iv) each
Liquidity Provider, (v) the Policy Provider, (vi) each Pass Through Trustee
and (vii) each of the respective directors, officers, employees, agents and
servants of each of the Persons described in clauses (i) through (vi),
inclusive.
"Indenture Trustee" means State Street Bank and Trust Company
of Connecticut, National Association, a national banking association, not
in its individual capacity, but solely as Indenture Trustee, and any entity
which may from time to time be acting as indenture trustee under the Trust
Indenture.
"Indenture Trustee Documents" means the Participation
Agreement, the Trust Indenture, the Indenture Trustee Parent Guaranty, and
the French Pledge Agreement and any other agreements between the Indenture
Trustee and any other party to the Participation Agreement relating to the
Transactions, delivered on the Delivery Date.
"Indenture Trustee Event" means either (i) the Equipment Notes
shall have been declared due and payable by the Indenture Trustee pursuant
to Section 4.04(b) of the Trust Indenture, (ii) the Indenture Trustee has
taken action or notified the Owner Trustee that it intends to take action
to foreclose the Lien of the Trust Indenture or otherwise commence the
exercise of any significant remedy under the Trust Indenture or the Lease
or (iii) in the event of a reorganization proceeding under Chapter 11 of
the Bankruptcy Code in which the Lessee is a debtor, (A) the trustee in
such proceeding or Lessee not agreeing to perform its obligations under the
Lease, as contemplated under Section 1110, during the 60-day period under
Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period as may
apply under Section 1110(b) of the Bankruptcy Code) or (B) at any time
after agreeing to perform such obligations, such trustee or Lessee ceasing
to perform such obligations with the result that the Continuous Stay Period
comes to an end.
"Indenture Trustee Parent Guaranty" means the Indenture Trustee
Parent Guaranty of State Street Bank and Trust Company, dated as of the
date of the Lease.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft or the administration of the Trust Indenture
Estate pursuant to the Trust Indenture, (B) acts of the Indenture Trustee
not permitted by, or failure of the Indenture Trustee to take any action
required by, the Operative Documents to the extent such acts arise or such
failure arises from or constitutes gross negligence or willful misconduct,
(C) claims against the Indenture Trustee relating to Taxes or Expenses
which are excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer
of the Aircraft pursuant to Section 9, 10, 19 or 20 of the Lease or Article
IV or V of the Trust Indenture, or a transfer of the Aircraft pursuant to
Section 15 of the Lease while an Event of Default is continuing and prior
to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
"Insurance Brokers" has the meaning specified for such term in
Section 11 of the Lease.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the Pass Through Trust Closing Date, among the Pass
Through Trustees, the Liquidity Provider, the Policy Provider and the
Subordination Agent.
["Intermediary" means Chicago Deferred Exchange Corporation, an
Illinois corporation, the like kind exchange participant.]1
"Law" means (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" means that certain Lease Agreement (US Airways, Inc.
Trust No. N___U_), dated as of [-], entered into by the Owner Trustee and
Lessee concurrently with the execution and delivery of the Trust Indenture,
as said Lease Agreement has been, or may from time to time be, supplemented
or amended to the extent permitted by, and in accordance with, the terms of
the Trust Indenture (for so long as the Trust Indenture remains in effect).
The term "Lease" shall also include each Lease Supplement from time to time
entered into pursuant to the terms of the Lease.
"Lease Default" means any condition, circumstance, act or event
which with the giving of notice or the lapse of time or both would become a
Lease Event of Default.
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1 Include only for deals with like-kind exchange.
"Lease Event of Default" means an "Event of Default" as defined
in Section 14 of the Lease.
"Lease Period" means (i) with respect to the Basic Term, the
"Lease Periods" identified on Exhibit B-2 to the Lease and (ii) with
respect to any Renewal Term, each of the consecutive periods throughout
such Renewal Term ending on a Rent Payment Date, the first such period
commencing on and including the first day of such Renewal Term.
"Lease Supplement" means a Lease Supplement, substantially in
the form of Exhibit A to the Lease, to be entered into between Lessor and
Lessee on the Delivery Date for the purpose of leasing the Aircraft under
and pursuant to the terms of the Lease, and any subsequent Lease Supplement
entered into in accordance with the terms of the Lease.
"Lessee" means US Airways, Inc., a Delaware corporation.
"Lessee Documents" means the Participation Agreement, the
Lease, the Lease Supplement covering the Aircraft, the Purchase Agreement
(insofar as it relates to the Aircraft), the FAA ▇▇▇▇ of Sale, the ▇▇▇▇ of
Sale, the Purchase Agreement Assignment, the Engine Agreement Assignment,
the Tax Indemnity Agreement and each other agreement between the Lessee and
the respective parties thereto relating to the transactions contemplated by
the Operative Documents thereof, delivered on the Delivery Date.
"Lessor" means First Security Bank, National Association, not
in its individual capacity, but solely as Owner Trustee, or any of its
successors and permitted assigns acting as lessor under the Lease.
"Lessor Liens" means any Lien or disposition of title or
interest arising as a result of (i) claims against Lessor, First Security
Bank, National Association, in its individual capacity, or the Owner
Participant not related to the Transactions contemplated by the Operative
Documents, (ii) any act or omission of the Owner Participant, Lessor, or
First Security Bank, National Association, in its individual capacity,
which is not related to the transactions contemplated by the Operative
Documents or is in violation of any of the terms of the Operative
Documents, (iii) claims against the Owner Participant, Lessor, or First
Security Bank, National Association, in its individual capacity, with
respect to Taxes or Expenses against which Lessee is not required to
indemnify the Owner Participant, Lessor or First Security Bank,
National Association, in its individual capacity, pursuant to Section 6 of
the Participation Agreement or the Tax Indemnity Agreement [or] (iv) claims
against Lessor or the Owner Participant arising out of any transfer by
Lessor or the Owner Participant of all or any portion of the respective
interests of Lessor or the Owner Participant in the Aircraft, the Trust
Estate or the Operative Documents other than the transfer of possession of
the Aircraft by Lessor pursuant to the Lease, the transfer pursuant to the
Trust Indenture or a transfer of the Aircraft pursuant to Section 9, 10, 19
or 20 of the Lease or pursuant to the exercise of the remedies set forth in
Section 15 of the Lease [, (v) claims against the Lessor, the Owner
Participant or First Security Bank, National Association arising out of or
related to the agreements described in Section 2(c) of the Participation
Agreement or the transactions contemplated thereby (except to the extent
intended to accomplish the like-kind exchange under Section 1031 of the
Code) or (vi) claims against the Aircraft, Airframe or any Engine or any
Part arising out of or related to the agreements described in Section 2(c)
of the Participation Agreement or the transactions contemplated thereby]2;
provided that the Lien of the Trust Indenture shall not be considered a
"Lessor Lien."
"Lessor's Cost" for the Aircraft means the amount denominated
as such in Exhibit B-3 to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease or security interest affecting the title to or
any interest in property.
"Liquidity Facility" means each of the two separate Revolving
Credit Agreements, dated as of the Pass Through Trust Closing Date, between
the Subordination Agent, as borrower, and the applicable Liquidity
Provider, and any replacement thereof, as the same may be amended, modified
or supplemented.
"Liquidity Provider" means [-], as Class G Liquidity Provider
and Class C Liquidity Provider under the Liquidity Facilities, or any
successor thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered permitted assigns, including any Note Holder.
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2 Include only for like-kind exchange transactions.
"Loan Participant Liens" means any Lien or disposition of title
or interest which arises from acts or claims against any Loan Participant
not related to the Transactions contemplated by the Operative Documents.
"Loss Payment Date" has the meaning specified for such term in
Section 10(a) of the Lease.
"Majority in Interest of Note Holders" as of a particular date
of determination means the holders of at least a majority in aggregate
unpaid principal amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by the Owner Trustee or the Owner
Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by the Owner Trustee or the
Owner Participant or any Affiliate thereof) or Lessee or any Affiliate of
any thereof).
"Make-Whole Amount" means, with respect to any Equipment Note,
the amount (as determined by an independent investment banker selected by
Lessee and reasonably acceptable to the Indenture Trustee and the Owner
Participant) by which (a) the present value of the remaining scheduled
payments of principal and interest from the redemption date to maturity of
such Equipment Note computed by discounting each such payment on a
semiannual basis from its respective Payment Date (assuming a 360- day year
of twelve 30-day months) using a discount rate equal to the Treasury Yield
exceeds (b) the outstanding principal amount of such Equipment Note plus
accrued interest accrued to the time of determination. For purposes of
determining the Make- Whole Amount, "Treasury Yield" means, at the time of
determination, the interest rate (expressed as a semiannual equivalent and
as a decimal and, in the case of United States Treasury bills, converted to
a bond equivalent yield) determined to be the per annum rate equal to the
semiannual yield to maturity for United States Treasury securities maturing
on the Average Life Date of such Equipment Note and trading in the public
securities markets either as determined by interpolation between the most
recent weekly average yield to maturity for two series of United States
Treasury securities, trading in the public securities markets, (A) one
maturing as close as possible to, but earlier than, the Average Life Date
of such Equipment Note and (B) the other maturing as close as possible to,
but later than, the Average Life Date of such Equipment Note, in each case
as published in the most recent H.15(519) or, if a weekly average yield to
maturity for United States Treasury securities maturing on the Average Life
Date is reported on the most recent H.15(519), such weekly average yield to
maturity as published in such H.15(519). "H.15(519)" means the weekly
statistical release designated as such, or any successor
publication, published by the Board of Governors of the Federal Reserve
System. The date of determination of a Make-Whole Amount shall be the third
Business Day prior to the applicable redemption date and the "most recent
H.15(519)" means the H.15(519) published prior to the close of business on
the third Business Day prior to the applicable redemption date. "Average
Life Date" means, for each Equipment Note to be redeemed, the date which
follows the redemption date by a period equal to the Remaining Weighted
Average Life at the redemption date of such Equipment Note.
"Manufacturer" means, with respect to the Airframe, Airbus
Industrie G.I.E., a groupement d'interet economique established under
Ordinance No. 67-821 dated September 23, 1967 of the Republic of France,
and its successors and permitted assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term in
Section 3.03 of the Trust Indenture.
"Net Economic Return" means the Owner Participant's net
after-tax book yield and aggregate after-tax cash flow utilizing the
multiple investment sinking fund method of analysis, computed on the basis
of the same methodology and assumptions as were utilized by the Owner
Participant in determining Basic Rent, Termination Value percentages and
EBO Amounts as of the Delivery Date.
"Net Present Value of Rents" means the net present value, as of
the date of calculation, of Basic Rent set forth in Exhibit B-1 to the
Lease, discounted at an annual interest rate of ten percent (10%) on a
semi-annual basis, expressed as a percentage of Lessor's Cost.
"New Debt" has the meaning specified for such term in Section
16(a) of the Participation Agreement.
"Non-U.S. Person" means any Person other than a U.S. Person.
"Note Holder" means any registered holder from time to time of
one or more Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of the Pass Through Trust Closing Date among Lessee, the Pass
Through Trustee for the Class G and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company of Connecticut, National
Association, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Operative Documents" means, collectively, the Participation
Agreement, the Lease, the Trust Indenture, the Trust Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by the
Participants and Lessee, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the
Equipment Notes, the ▇▇▇▇ of Sale, the FAA ▇▇▇▇ of Sale, the French Pledge
Agreement, the Purchase Agreement (insofar as it relates to the Aircraft
and only to the extent assigned under the Purchase Agreement Assignment),
the Purchase Agreement Assignment, the Consent and Agreement, the GTA
(insofar as it relates to the Engines and only to the extent assigned under
the Engine Agreement Assignment), the Engine Agreement Assignment and the
Engine Consent and Agreement and the Indenture Trustee Parent Guaranty
(each, an "Operative Document").
"Operative Indentures" means each of the indentures under which
notes have been issued and purchased by the Pass Through Trustee pursuant
to the Note Purchase Agreement.
"Owner Indemnitee" has the meaning specified for such term in
the definition of Excluded Payments.
"Owner Participant" means ________________________, a ______
corporation, so long as such party shall have any interest in the Trust
Estate, its successors and transferees thereof as permitted by Section 7(j)
of the Participation Agreement and Section 8.01 of the Trust Agreement.
"Owner Participant Documents" means the Participation
Agreement, the Trust Agreement, and the Tax Indemnity Agreement and each
other agreement between the Owner Participant and the respective parties
thereto relating to the Transactions contemplated by the Operative
Documents, delivered on the Delivery Date.
"Owner Trustee" means First Security Bank, National
Association, not in its individual capacity but solely as owner trustee,
and any entity appointed as successor Owner Trustee pursuant to Section
9.01 of the Trust Agreement, and references to a predecessor Owner Trustee
in its individual capacity by name in the Operative Documents shall include
such successor Owner Trustee in its individual capacity from and after such
succession.
"Owner Trustee Documents" means the Participation Agreement,
the Trust Agreement, the Trust Supplement covering the Aircraft, the Lease,
the Lease Supplement covering the Aircraft, the Purchase Agreement
Assignment, the Engine Agreement Assignment, the French Pledge Agreement,
the Trust Indenture and the Equipment Notes and each other agreement
between the Owner Trustee and the respective parties thereto relating to
the Transactions contemplated by the Operative Documents, delivered on the
Delivery Date.
"Owner Trustee's pro rata share" has the meaning specified for
such term in the Trust Indenture.
"Participants" means the Loan Participants and the Owner
Participant, collectively (each individually, a "Participant").
"Participation Agreement" means that certain Participation
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, among the Owner Trustee, the Subordination Agent, the Indenture
Trustee, Lessee, the Owner Participant and the Pass Through Trustee, as the
same may from time to time be supplemented or further amended, to the
extent permitted by, and in accordance with, the terms thereof.
"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature (other than (a) complete Engines or engines and (b) cargo
containers) which may from time to time be incorporated or installed in or
attached to the Airframe or any Engine or so long as title thereto shall
remain vested in Lessor in accordance with Section 8 of the Lease after
removal therefrom; provided that "Parts" shall not include Passenger
Convenience Equipment.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Transactions.
"Pass Through Documents" means the Participation Agreement, the
Pass Through Trust Agreement, the Note Purchase Agreement, the Deposit
Agreement, the Escrow Agreement, the Liquidity Facility, the Policy
Provider Agreement, the Policy and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination Agent,
the Liquidity Provider, the Policy Provider and the Pass Through Trustee,
(ii) each Affiliate of a Person described in the preceding clause (i),
(iii) the respective directors, officers, employees, agents and servants of
each of the Persons described in the preceding clauses (i) and (ii) and
(iv) the successors and permitted assigns of the Persons described in the
preceding clauses (i), (ii) and (iii).
"Pass Through Trust" means, collectively, the two separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreement, to facilitate
certain of the Transactions contemplated by the Operative Documents.
"Pass Through Trust Agreement" or "Pass Through Trust
Agreements" means the pass through trust agreement and each of the two
separate pass through trust supplements referred to on Schedule III to the
Participation Agreement.
"Pass Through Trust Closing Date" means [-], 2000.
"Pass Through Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, in its capacity as trustee under each Pass Through Trust
Agreement, and each other Person that may from time to time be acting as
successor trustee under and pursuant to the terms of any such Pass Through
Trust Agreement.
"Pass Through Trust Supplement" means each of the Trust
Supplement No. 2000-3G and the Trust Supplement No. 2000-3C, each dated as
of the Pass Through Trust Closing Date.
"Passenger Convenience Equipment" means components or systems
installed on or affixed to the Airframe that are used to provide individual
telecommunications to passengers aboard the Aircraft.
"Past Due Rate" means (i) with respect to any portion of any
payment of Rent that may be required by the Trust Indenture to be paid by
the Indenture Trustee to the Loan Participants, or the holders of any
outstanding Equipment Notes, a rate per annum equal to one percent (1%)
over the interest rate then in effect for such Equipment Notes, and (ii)
with respect to the remaining portion of any payment of Rent (and the
entire amount of any payment of Rent after the satisfaction and discharge
of the Trust Indenture) to any other Person, a rate per annum equal to two
percent (2%) over the Base Rate.
"Payment Date" means each March 1 and September 1, commencing
on [-], (or, if any such day is not a Business Day, the immediately
succeeding Business Day) until the Equipment Notes have been paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan, the European Joint
Aviation Authorities or the Federal Ministry of Transport of Canada (and
any agency or instrumentality of the applicable government succeeding to
the functions of any of the foregoing entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 6 of the Lease.
"Permitted Sublessee" means any air carrier domiciled in a
country listed in the last paragraph of Section 7(d) of the Participation
Agreement as in effect from time to time and as may be modified in
accordance with Section 7(d) of the Participation Agreement and which is
authorized to conduct commercial airline operations and to operate Similar
Aircraft under the Laws of such country.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency, authority
or political subdivision thereof.
"Policy" means the financial guarantee insurance policy, dated
as of the Pass Through Trust Closing Date, issued by the Policy Provider in
favor of the Subordination Agent for the benefit of the Class G Pass
Through Trust.
"Policy Provider" means MBIA Insurance Corporation, or any
successor thereto.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the Pass Through Trust Closing Date, among the
Policy Provider, Lessee and the Subordination Agent.
"Principal Amount", with respect to an Equipment Note, means
the stated original principal amount of such Equipment Note and, with
respect to all Equipment Notes, means, as of any determination date, the
amount then outstanding, of the aggregate stated original principal amounts
of all Equipment Notes.
"Purchase Agreement" means the Sale and Purchase Agreement,
dated as of October 31, 1997, between the Seller and US Airways Group, Inc.
(including all exhibits thereto, together with all letter agreements
entered into that by their terms constitute part of any such Purchase
Agreement), as the same may be amended or otherwise supplemented from time
to time, as the same has been assigned to Lessee, relating to the purchase
by Lessee of the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between Lessee and Lessor, as the same may be amended, supplemented
or modified from time to time, with a form of Consent and Agreement to be
executed by the Seller attached thereto.
"Purchase Option Date" has the meaning specified for such term
in Section 19(b) of the Lease.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section 2.08
of the Trust Indenture.
"Qualified Owner Participant" means a Person (x) that is not an
Affiliate of Lessee and (y) that has a tangible net worth, calculated in
accordance with generally accepted accounting principles, greater than
$50,000,000 or such lesser amount as is acceptable to Lessee, or (z) whose
obligations under the Owner Participant Documents are unconditionally
guaranteed by a Person meeting the requirements of clauses (x) and (y).
"Qualifying Institution" has the meaning specified for such
term in Section 7(j) of the Participation Agreement.
"Refinancing Certificate" has the meaning specified for such
term in Section 16(a)(1) of the Participation Agreement.
"Refinancing Date" has the meaning specified for such term in
Section 16(a)(1) of the Participation Agreement.
"Refinancing Information" has the meaning specified for such
term in Section 16(a)(1) of the Participation Agreement.
"Registration Agreement" means the Registration Agreement dated
___________ made by US Airways, Inc., and confirmed and accepted by AIFS,
in respect of the ___% Pass Through Certificates, Series 2000-3C, as such
Registration Agreement may be amended, modified and supplemented from time
to time in accordance with the provisions thereof.
"Registration Default" has the meaning specified for such term
in the Registration Agreement.
"Remaining Weighted Average Life" of an Equipment Note, at the
redemption date of such Equipment Note, means the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining scheduled installment of
principal, including the payment due on the maturity date of such Equipment
Note, by (ii) the number of days from and including the redemption date to
but excluding the scheduled payment date of such principal installment; by
(b) the then outstanding unpaid principal amount of such Equipment Note.
"Renewal Notice" has the meaning specified for such term in
Section 19(a)(1) of the Lease.
"Renewal Term" has the meaning specified for such term in
Section 19(a)(1) of the Lease.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Rent Payment Date" means [-], and each succeeding March 1 and
September 1 in the Term, the Basic Term Expiration Date, and the last
Business Day of any Renewal Term, as the case may be.
"Replacement Airframe" means any airframe substituted for the
Airframe pursuant to Section 10(a) of the Lease.
"Replacement Engine" means any engine substituted for an Engine
pursuant to Sections 9(c) and 10(b) of the Lease.
"Responsible Officer" means with respect to the Owner Trustee,
a responsible officer in the Trust Office of the Owner Trustee (including,
without limitation, any authorized officer in the Trust Office of the Owner
Trustee), and with respect to the Indenture Trustee, a responsible officer
in the Corporate Trust Office of the Indenture Trustee.
"Scheduled Expiry Date" has the meaning specified for such term
in Section 12 of the Lease.
"Section 1110 Period" has the meaning specified for such term
in Section 4.04(a) of the Trust Indenture.
"Secured Obligations" has the meaning specified for such term
in the Granting Clause of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means AVSA, S.A.R.L., a societe a responsabilite limitee
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organized and existing under the laws of the Republic of France.
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued and designated as "Series C" under the Trust Indenture, in the
original Principal Amount and maturities and bearing interest as specified
in Schedule I to the Trust Indenture under the heading "Series C."
"Series G" or "Series G Equipment Notes" means Equipment Notes
issued and designated as "Series G" under the Trust Indenture, in the
original Principal Amount and maturities and bearing interest as specified
in Schedule I to the Trust Indenture under the heading "Series G."
"Significant Expenditure" means an expenditure or planned
expenditure of the type described in clause (B) of the definition of
Burdensome Termination Event.
"Similar Aircraft" has the meaning specified for such term in
Section 7(a)(1) of the Lease.
"Specified Default" means a Lease Default of the type described
in Section 14(a), (b) or (e) of the Lease.
"State Street" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its capacity as Indenture Trustee under the Trust Indenture, but in its
individual capacity.
"Sublease" means any sublease permitted by the terms of Section
7(b)(x) of the Lease and Section 7(d) of the Participation Agreement.
"Sublessee" means any air carrier for so long, but only so
long, as such Person is in possession of the Airframe and/or any Engine
pursuant to the terms of a Sublease which is then in effect pursuant to
Section 7(b)(x) of the Lease and Section 7(d) of the Participation
Agreement.
"Subordination Agent" means State Street Bank and Trust Company
of Connecticut, National Association, a national banking association, as
subordination agent under the Intercreditor Agreement, or any successor
thereto.
"Subsequent Owner Participant" means any entity to which the
Owner Participant or any transferee from the Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest held by the
successor Owner Participant in the Trust Agreement, the Trust Estate and
the Participation Agreement, to the extent permitted by Section 8.01 of the
Trust Agreement and Section 7(j) of the Participation Agreement.
"Supplemental Rent" means, without duplication, (a) all
amounts, liabilities, indemnities and obligations (other than Basic Rent)
that Lessee assumes or becomes obligated to or agrees to pay under any
Lessee Document to or on behalf of Lessor or any other Person, including,
without limitation, payments of the Incremental Amount pursuant to Section
3(d) of the Lease, Termination Value, any amounts in respect of a purchase
price payable pursuant to Section 19(c) or 20 of the Lease and payments of
indemnities under Section 6 of the Participation Agreement, but excluding
any amount as to which Lessee is obligated to pay a pro rata share pursuant
to clause (d) or (e) of this definition, (b) (i) to the extent not payable
(whether or not in fact paid) under Sections 7(a) or 7(b) of the Note
Purchase Agreement (as applicable) (as originally in effect or amended with
the consent of the Owner Participant), an amount or amounts equal to the
fees payable (whether or not in fact paid) to (x) the Liquidity Provider
under Section 2.03 of each Liquidity Facility and the related Fee Letter
(as defined in the Intercreditor Agreement) multiplied by a fraction the
numerator of which shall be the then outstanding aggregate principal amount
of the Series G Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal
amount of all "Series G Equipment Notes" and "Series C Equipment Notes" (in
each case as defined in the relevant Operative Indenture) issued under the
Operative Indentures and (y) the Policy Provider under the Policy Fee
Letter (as defined in the Policy Provider Agreement) multiplied by a
fraction the numerator of which shall be the sum of the then outstanding
aggregate principal amount of the Series G Equipment Notes and the
denominator of which shall be the sum of the then outstanding aggregate
principal amount of all "Series G Equipment Notes" (in each case as defined
in the relevant Operative Indenture) issued under the Operative Indentures;
(ii) (x) the amount equal to interest on any Downgrade Advance (other than
any Applied Downgrade Advance) payable (whether or not in fact paid) under
Section 3.07 of each Liquidity Facility minus Investment Earnings from such
Downgrade Advance multiplied by (y) the fraction specified in the foregoing
clause (i); (iii) (x) the amount equal to interest on any Non-Extension
Advance (other than any Applied Non-Extension Advance) payable (whether or
not in fact paid) under Section 3.07 of each Liquidity Facility minus
Investment Earnings from such Non-Extension Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iv) if any payment default
shall have occurred and be continuing with respect to interest on any
Series G Equipment Note or Series C Equipment Note, (x) the excess, if any,
of (1) an amount equal to interest on any Unpaid Advance, Applied Downgrade
Advance or Applied Non- Extension Advance payable (whether or not in fact
paid) under Section 3.07 of each Liquidity Facility (or, in the case of the
Series G Equipment Notes, if the Policy Provider has made a payment
equivalent to such an Advance, as would have been payable under Section
3.07 of the applicable Liquidity Facility in respect of the Class G Pass
Through Certificates had such Advance been made) over (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at
the Past Due Rate actually payable (whether or not in fact paid) by Lessee
in respect of the overdue scheduled interest on the Equipment Notes in
respect of which such Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance was made by the applicable Liquidity Provider (or, in
the case of the Series G Equipment Notes, an equivalent payment was made by
the Policy Provider) multiplied by (y) a fraction the numerator of which
shall be the then aggregate overdue amounts of interest on the Series G
Equipment Notes and Series C Equipment Notes (other than interest becoming
due and payable solely as a result of acceleration of any such Equipment
Notes) and the denominator of which shall be the then aggregate overdue
amounts of interest on all "Series G Equipment Notes" and "Series C
Equipment Notes" (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures (other than interest
becoming due and payable solely as a result of acceleration of any such
"Equipment Notes," (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures); and (v) Lessee's pro
rata share of any other amounts payable (whether or not in fact paid) to
the Liquidity Provider by the Subordination Agent as borrower under each
Liquidity Facility (other than amounts due as repayment of advances
thereunder or as interest on such advances), except to the extent payable
(whether or not in fact paid) pursuant to clause (i), (ii), (iii) or (iv)
above, (c) Lessee's pro rata share of all compensation and reimbursement of
expenses, disbursements and advances payable (whether or not in fact paid)
by Lessee under the Pass Through Trust Agreements, (d) Lessee's pro rata
share of (I) all compensation and reimbursement of expenses and
disbursements payable (whether or not in fact paid) to the Subordination
Agent under the Intercreditor Agreement except with respect to any income
or franchise taxes incurred by the Subordination Agent in connection with
the transactions contemplated by the Intercreditor Agreement and (II) all
amounts payable (whether or not in fact paid) to the Policy Provider under
Section 3.7(i) of the Intercreditor Agreement, and (e) Lessee's pro rata
share of any amount payable (whether or not in fact paid) under Section
6(c) of the Participation Agreement to any Pass Through Indemnitee to the
extent such amount relates to, results from or arises out of or in
connection with (i) the Pass Through Trust Agreement or the enforcement of
any of the terms of any Pass Through Document, (ii) the offer, sale, or
delivery of the Pass Through Certificates or any interest therein or
represented thereby or (iii) any breach of or failure to perform or
observe, or any other noncompliance with, any covenant or agreement or
other obligation to be performed by Lessee under any Pass Through Document
or the falsity of any representation or warranty of Lessee in any Pass
Through Document. As used herein, "Lessee's pro rata share" means as of any
time a fraction, the numerator of which is the principal balance then
outstanding of Equipment Notes and the denominator of which is the
aggregate principal balance then outstanding of all "Equipment Notes" (in
each case as defined in the relevant Operative Indenture) issued under the
Operative Indentures. For purposes of this definition, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility. For the avoidance of doubt, it is
understood and agreed that Supplemental Rent includes, without limitation,
any amounts payable (whether or not in fact paid) under the third paragraph
of Section 2.02 of the Trust Indenture.
"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between the Owner Participant and Lessee, as originally executed or
as modified, amended or supplemented pursuant to the applicable provisions
thereof.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value added, property (tangible and intangible), excise and stamp taxes),
license, levies, imposts, duties, recording charges and assessments of any
kind whatsoever that are in the nature of taxes or other governmental
charges including interest, penalties and additions to tax (each,
individually a "Tax").
"Term" means the Basic Term and, if actually entered into, any
Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a) of
the Lease.
"Termination Value" with respect to the Aircraft (a) as of any
date during the Basic Term means, but subject always to the provisions of
Section 3(c)(v) of the Lease, the amount determined by multiplying Lessor's
Cost for the Aircraft by the percentage specified in Exhibit C to the Lease
under the caption "Total Termination Payment" opposite the Termination
Value Date with respect to which the amount is determined (as such Exhibit
C may be adjusted from time to time as provided in Section 3(c) of the
Lease (such Termination Value shall equal the sum of, and represent, (i) a
payment (or reduction) of Basic Rent in an amount equal to the "Basic Rent
Amount" set forth on Exhibit C to the Lease (which includes all amounts of
Basic Rent allocated to any period prior to the termination and not yet
paid and reduced by all amounts paid prior to the termination and allocated
to periods after the termination and (ii) a payment of the "Termination
Amount" set forth on Exhibit C to the Lease) and (b) as of any date during
the Renewal Term, shall have the meaning set forth in Section 19(a)(4) of
the Lease. Notwithstanding anything to the contrary in any Operative
Document, Termination Value shall always be an amount sufficient to satisfy
in full, as of the date of payment, the aggregate unpaid Principal Amount
of all Equipment Notes outstanding as of such date, together with accrued
and unpaid interest thereon as of such date.
"Termination Value Date" means each date set forth on Exhibit C
to the Lease under the caption "Termination Date."
"Transaction Expenses" means: all of the reasonable
out-of-pocket costs, fees and expenses incurred by Lessee, the Owner
Trustee, the Owner Participant, Seller, Manufacturer, Engine Manufacturer,
the Pass Through Trustees, the Subordination Agent, the Indenture Trustee,
the Liquidity Providers and the Policy Provider in connection with the
transactions contemplated by the Participation Agreement, the other
Operative Documents, the Pass Through Documents and the Underwriting
Agreement (except, in each case, as otherwise provided therein) including,
without limitation:
(a) the reasonable and actual fees, expenses and
disbursements of (A) ▇▇▇▇▇▇▇ ▇▇▇▇, LLP, special counsel for the Pass
Through Trustee, the Subordination Agent and the Indenture Trustee, (B)
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Owner Trustee, (C) Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel for the Underwriters and (D)
▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., special counsel in Oklahoma City, Oklahoma;
(b) the initial fees and reasonable and actual disbursements
of the Owner Trustee under the Trust Agreement;
(c) the initial fee and reasonable and actual disbursements
of the Indenture Trustee under the Trust Indenture;
(d) the initial fees and expenses of the Liquidity Providers,
the Policy Provider, the Pass Through Trustees and the Subordination Agent;
(e) underwriting fees and commissions;
(f) the fees and expenses with respect to the appraisal of
the Aircraft;
(g) the reasonable fees, expenses and disbursements of
[ - ], special counsel to the Owner Participant, such fees not to exceed the
amount previously agreed to by the Owner Participant and Lessee;
(h) the fees, expenses and disbursements of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and its affiliates, special counsel for Lessee;
(i) the costs of filing and recording documents with the FAA
and filing Uniform Commercial Code statements in the United States;
(j) the reasonable fees, expenses and disbursements of
special counsel to each of the Liquidity Providers and the Policy Provider;
(k) the expenses of the Depositary payable under Section
10(a) of the Indemnity Agreement;
(l) the reasonable fees, expenses and disbursements of
special counsel to the Seller, the Manufacturer and the Engine Manufacturer;
and
(m) the reasonable fees, expenses and disbursements of
Capstar Partners, LLC, financial advisors for Lessee.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transferee" has the meaning specified for such term in Section
7(j) of the Participation Agreement.
"Transportation Code" means that portion of the United States
Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Trust Agreement" means that certain Trust Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Participant and First Security Bank, National Association, in its
individual capacity, as originally executed or as modified, amended or
supplemented pursuant to the applicable provisions thereof, including,
without limitation, supplementation thereof by one or more Trust
Supplements entered into pursuant to the applicable provisions thereof.
"Trust Agreement and Indenture Supplement" or "Trust
Supplement" means a supplement to the Trust Agreement and the Trust
Indenture, substantially in the form of Exhibit A to the Trust Indenture,
which shall particularly describe the Aircraft, and any Replacement
Airframe and Replacement Engine included in the property of the Owner
Trustee covered by the Trust Agreement.
"Trust Estate" means all estate, right, title and interest of
the Owner Trustee in and to the Aircraft, the Lease, any Lease Supplement,
the Purchase Agreement, the Purchase Agreement Assignment, the GTA, the
Engine Agreement Assignment, the ▇▇▇▇ of Sale and the FAA ▇▇▇▇ of Sale,
including, without limitation, all amounts of Basic Rent and Supplemental
Rent including without limitation insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee, in its
individual capacity, the Owner Participant, the Loan Participants or the
Indenture Trustee) and requisition, indemnity or other payments of any kind
for or with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee, in its
individual capacity, or to the Loan Participants or any other holder of a
Equipment Note, or to any of their respective directors, officers,
employees, servants and agents, pursuant to Section 6 of the Participation
Agreement or the Tax Indemnity Agreement). Notwithstanding the foregoing,
"Trust Estate" shall not include any Excluded Payments.
"Trust Indenture" or "Indenture" means that certain Trust
Indenture and Security Agreement (US Airways, Inc. Trust No. N___U_), dated
as of the date of the Lease, between Lessor and the Indenture Trustee, as
it may from time to time be supplemented or amended as therein provided,
including supplementing by the Trust Agreement and Indenture Supplement
pursuant to the Trust Indenture.
"Trust Indenture Estate" means all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in
the Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriters" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Credit
Lyonnais Securities (USA) Inc., Deutsche Bank Securities Inc. and ▇▇ ▇▇▇▇▇
Securities Corporation.
"United States Government" means the Federal government of the
United States of America.
"U.S. Air Carrier" means any Certificated Air Carrier as to
which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the Transportation Code, or
which may operate as an air carrier by certification or otherwise under any
successor or substitute provisions therefor or in the absence thereof.
"U.S. Person" means any Person that qualifies as a "United States
person" under Section 7701(a)(30) of the Code.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Lessee (or any
Sublessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Lessee (or any Sublessee); and provided that
any pilot is a regular employee of Lessee (or any Sublessee)) and (ii)
shall be maintained by Lessee (or any Sublessee) in accordance with its
normal maintenance practices with respect to Similar Aircraft operated by
it and without in any way discriminating against the Aircraft on the basis
of its leased status or otherwise.