1
EXHIBIT 4.12
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TRUST INDENTURE
AND SECURITY AGREEMENT
dated as of April 1, 1995
between
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
in its individual capacity only as expressly
set forth herein and otherwise solely as Owner Trustee,
and
WILMINGTON TRUST COMPANY,
as Indenture Trustee
__________________________
One Boeing Model ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ TRUST N397SW
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Southwest Airlines Co.
Series SWA 1995 Trust N397SW-I and N397SW Certificates
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 2
THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.01. Certificates; Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.04. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.05. Holder Lists; Ownership of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.06. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . 17
Section 2.07. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.08. Payment on Certificates; Defaulted Principal and Interest . . . . . . . . . . . . . . . . 17
Section 2.09. Payment from Indenture Estate Only . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.10. Execution, Delivery and Dating of Certificates upon Issuance . . . . . . . . . . . . . . 20
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE . . . . . . . . . . . . . . . . . . . . 20
Section 3.01. [Reserved for Potential Future Use] . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.02. Payment in Case of Redemption of Certificates . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.03. Application When No Indenture Event of Default Is
Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.04. Application of Certain Payments in Case of Requisition or Event
of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.05. Payments During Continuance of Indenture Event of Default . . . . . . . . . . . . . . . . 22
Section 3.06. Payments for Which Application Is Provided in Other
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.07. Payments for Which No Application Is Otherwise Provided . . . . . . . . . . . . . . . . . 23
Section 3.08. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4
COVENANTS OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . 24
Section 4.01. Covenants of the Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.02. Covenants of Shawmut Bank Connecticut, National
Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE
OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.01. Disposition, Substitution and Release of Property Included in the
Indenture Estate During Continuation of Lease . . . . . . . . . . . . . . . . . . . 26
Section 5.02. Certificates in Respect of Replacement Aircraft and Engines . . . . . . . . . . . . . . . 27
ARTICLE 6
REDEMPTION OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . 27
Section 6.01. Redemption of Certificates upon Certain Events . . . . . . . . . . . . . . . . . . . . . 27
Section 6.02. Redemption or Purchase of Certificates Upon Certain Indenture
Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.03. Notice of Redemption to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.04. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.05. Certificates Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.06. Selection of Certificates to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.07. Certificates Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 7
MATTERS CONCERNING THE COMPANY . . . . . . . . . . . . . . . . . . . . 31
Section 7.01. Repayment of Monies for Certificate Payments Held by the
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.02. [Reserved for Potential Future Use] . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.03. Assumption of Obligations of Owner Trustee by the Company . . . . . . . . . . . . . . . . 31
ARTICLE 8
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.01. Indenture Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.02. Acceleration; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.03. Other Remedies Available to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.04. Waiver of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.05. Waiver of Existing Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.06. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.07. Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.08. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.09. Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 43
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ARTICLE 9
INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.03. Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.06. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.07. Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.08. Successor Indenture Trustee, Agents by Merger, Etc. . . . . . . . . . . . . . . . . . . . 48
Section 9.09. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.10. Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.11. Withholding Taxes; Information Reporting . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.12. [Reserved for Potential Future Use] . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.13. Certain Rights of Owner Trustee and Owner Participant . . . . . . . . . . . . . . . . . . 49
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 50
Section 10.01. Satisfaction and Discharge of Agreement; Defeasance;
Termination of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.02. Survival of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.03. Monies to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.04. Monies to Be Returned to Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.05. Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 11
AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.01. Amendments to this Agreement Without Consent of Holders . . . . . . . . . . . . . . . . . 54
Section 11.02. Amendments to this Agreement with Consent of Holders . . . . . . . . . . . . . . . . . . 55
Section 11.03. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 11.04. Notation on or Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 11.05. Indenture Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 11.06. Amendments, Waivers, Etc. of Other Operative Agreements . . . . . . . . . . . . . . . . . 56
Section 11.07. Trust Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 12.02. [Reserved for Potential Future Use] . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.03. Successors and Assigns; Agreement of Holders . . . . . . . . . . . . . . . . . . . . . . 61
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Section 12.04. Rules by Indenture Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.05. Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.06. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.07. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.08. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.09. Applicability Only to Original Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 12.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 13
ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE . . . . . . . . . . . . . . . . 62
Section 13.01. Actions to Be Taken upon Termination of Lease . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 14
[RESERVED FOR POTENTIAL FUTURE USE] . . . . . . . . . . . . . . . . . . . 63
ARTICLE 15
ISSUANCE AND APPLICATION OF
PROCEEDS OF SERIES SWA 1995 TRUST N397SW
CERTIFICATES;
SPECIAL PROVISIONS GOVERNING REDEMPTION AND
METHOD OF PAYMENT OF THE
SERIES SWA 1995 TRUST N397SW-I CERTIFICATES;
OTHER SPECIAL PROVISIONS
RELATING TO THE SERIES SWA 1995 TRUST N397SW-I
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 15.01. Conditions Precedent to Issuance of Series SWA 1995 Trust
N397SW Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 15.02. Payment upon Issuance of Series SWA 1995 Trust N397SW
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 15.03. Special Provision Governing Refinancing of the Series SWA 1995
Trust N397SW-I Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 15.04. Special Provision for Payments in Respect of the Series SWA
1995 Trust N397SW-I Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 15.05. Increased Costs, Break Amount, Additional Interest, Taxes,
Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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EXHIBITS
Exhibit A - Form of Series SWA 1995 Trust N397SW-I Certificate
Exhibit A-1 - Form of Series SWA 1995 Trust N397SW Installment Certificates
Exhibit A-2 - Form of Series SWA 1995 Trust N397SW Serial Certificates
Exhibit B - Maturity Dates, Principal Amounts and Interest Rates on Series SWA 1995 Trust N397SW
Certificates
Exhibit B-1 - Installment Payment Dates and Installment Payment Percentages
Exhibit B-2 - Issuance of Series SWA 1995 Trust N397SW Certificates
Exhibit C - [FORM OF] Trust Agreement and Trust Indenture and Security Agreement Supplement
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TRUST INDENTURE AND SECURITY AGREEMENT
This TRUST INDENTURE AND SECURITY AGREEMENT, dated as of April
1, 1995, is between SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association organized under the laws of the United States, in its
individual capacity only as expressly provided herein and otherwise solely as
Owner Trustee under the Trust Agreement (capitalized terms used herein having
the respective meanings specified therefor in Article 1), and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as Indenture Trustee hereunder.
W I T N E S S E T H:
WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust, the Southwest
Airlines 1995 Trust N397SW, for the use and benefit of the Owner Participant,
subject, however, to the Indenture Estate created pursuant hereto for the use
and benefit of, and with the priority of payment to, the holders of the
Certificates issued hereunder, and (ii) the Owner Trustee has been authorized
and directed to execute and deliver this Agreement;
WHEREAS, the parties desire by this Agreement, among other
things, (i) to provide for the issuance by the Owner Trustee of the Series SWA
1995 Trust N397SW-I Certificates and for the potential issuance by the Owner
Trustee of the Series SWA 1995 Trust N397SW Certificates in respect of the
refinancing and redemption of the Series SWA 1995 Trust N397SW-I Certificates
and (ii) to provide for the assignment, mortgage and pledge by the Owner
Trustee to the Indenture Trustee, as part of the Indenture Estate hereunder,
among other things, of certain of the Owner Trustee's right, title and interest
in and to the Aircraft and the Operative Agreements and certain payments and
other amounts received hereunder or thereunder in accordance with the terms
hereof, as security for, among other things, the Owner Trustee's obligations to
the Indenture Trustee, for the ratable benefit and security of the Holders; and
WHEREAS, all things necessary to make this Agreement the
legal, valid and binding obligation of the Owner Trustee and the Indenture
Trustee, for the uses and purposes herein set forth, in accordance with its
terms, have been done and performed and have happened;
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the principal of, Premium, if
any, and interest on, Break Amount, if any, and all other amounts due with
respect to, all Certificates from time to time Outstanding and all other
amounts due to the Holders hereunder and under the Participation Agreement and
the performance and observance by each of the Company and the Owner Trustee of
all the agreements, covenants and provisions contained herein and in the
Operative Agreements to which it is a party, for the benefit of Indenture
Trustee and the Holders, and for the uses and purposes hereof, and in
consideration of the premises and of the covenants herein contained, and of the
acceptance of the Certificates by the Holders, and of the sum of $1 paid to the
Owner Trustee by the Indenture Trustee at or before the delivery hereof, the
receipt whereof is hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors and
assigns, for the security and benefit of the Holders from time to time, a
security interest in and mortgage lien on all estate, right, title and interest
of the Owner Trustee in, to and under the following described property, rights,
interests and privileges, other than Excluded Payments (which collectively,
including all property hereafter specifically subjected to the lien of this
Agreement by any instrument supplemental hereto, but excluding the Excluded
Payments, are herein called the "Indenture Estate"):
(1) the Aircraft (including the Airframe and the
Engines originally installed thereon on the Delivery Date), and all
replacements thereof and substitutions therefor in which the Owner
Trustee shall from time to time acquire an interest in accordance with
the Lease, as more particularly described in the Trust Supplement and
the Lease Supplement executed and delivered with respect to the
Aircraft or any such replacements or substitutions therefor, as
provided in this Agreement, and all Records maintained with respect to
the foregoing property;
(2) the Lease and all Rent thereunder, including,
without limitation, all amounts of Basic Rent, Supplemental Rent,
payments of any kind required to be made by the Company thereunder
(including the purchase price for the Aircraft pursuant to Section
18.2 of the Lease) and any sales proceeds of the Aircraft sold
pursuant to Section 9 of the Lease or otherwise; the Purchase
Agreement (to the extent assigned by the Purchase Agreement
Assignment); the Purchase Agreement Assignment; all subleases of the
Airframe and the Engines and all rent thereunder to the extent
assigned to the Owner Trustee by Lessee; the Bills of Sale; and the
Manufacturer's Consent; including, without limitation, in respect of
each of the foregoing documents and instruments, all rights of the
Owner Trustee to receive any payments or other amounts or to exercise
any election or option or to make any decision or determination or to
give or receive any notice, consent, waiver or approval or to take any
other action under or in respect of any such document or to accept
surrender or redelivery of the Aircraft or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner
Trustee, whether acting under any such document or by statute or at
law or in equity, or otherwise, arising out of any Lease Event of
Default;
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(3) all rents, issues, profits, revenues and
other income of the property subjected or required to be subjected to
the Lien of this Agreement;
(4) all requisition proceeds with respect to the
Aircraft or any part thereof and all insurance proceeds with respect
to the Aircraft or any part thereof;
(5) all moneys and securities now or hereafter
paid or deposited or required to be paid or deposited to or with the
Indenture Trustee by or for the account of the Owner Trustee pursuant
to any term of any Operative Agreement and held or required to be held
by the Indenture Trustee hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee an executed chattel paper original
counterpart of each of the Lease and the Lease Supplement covering the
Aircraft, together with executed copies of the Trust Agreement and each of the
other Indenture Documents received by it (other than the Purchase Agreement,
the Participation Agreement and the FAA bills of sale). All property
constituting part of the Indenture Estate referred to in this Granting Clause,
whenever acquired by the Owner Trustee, shall secure all obligations under and
with respect to the Certificates at any time Outstanding. Any and all
properties constituting part of the Indenture Estate referred to in this
Granting Clause which are hereafter acquired by the Owner Trustee, shall,
without further conveyance, assignment or act by the Owner Trustee or the
Indenture Trustee thereby become and be subject to the security interest hereby
granted as fully and completely as though specifically described herein.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Indenture Trustee and the Holders from time to
time, without any priority of any one Certificate over any other, and for the
uses and purposes and subject to the terms and provisions set forth in this
Agreement.
The Owner Trustee agrees that this Agreement is intended to
and shall create and grant a security interest in the Aircraft to the Indenture
Trustee, which security interest shall attach on the Delivery Date. The
security interest created by this Agreement and granted to the Indenture
Trustee hereunder in the Indenture Estate other than in the Aircraft shall
attach in the case of each other item of property included in the Indenture
Estate upon the delivery thereof or upon the Owner Trustee's acquiring rights
in such property.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Operative Agreements to which it is a party, to perform all of the
obligations assumed by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and the Indenture Trustee
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and the Holders shall have no obligation or liability under any of the
Operative Agreements to which the Owner Trustee is a party by reason of or
arising out of the assignment hereunder, nor shall the Indenture Trustee or the
Holders be required or obligated in any manner to perform or fulfill any
obligations of the Owner Trustee under any of the Operative Agreements to which
the Owner Trustee is a party, or, except as herein expressly provided, to make
any payment, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or present or file any claim, or take any action to
collect or enforce the payment of any amounts which may have been assigned to
it or to which it may be entitled at any time or times.
The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, with full power
(in the name of the Owner Trustee or otherwise) to ask, require, demand,
receive and, to the extent permitted by Article 8 hereof (if an Event of
Default shall have occurred and be continuing), give acquittance for any and
all moneys and claims for moneys due and to become due to the Owner Trustee
(other than Excluded Payments) under or arising out of any Indenture Document
and all other property which now or hereafter constitutes part of the Indenture
Estate, to endorse any checks or other instruments or orders in connection
therewith and, to file any claims or take any action or institute any
proceedings which the Indenture Trustee may deem to be necessary or advisable
in the premises. The Owner Trustee has directed the Company to make all
payments of Rent (other than Excluded Payments) payable to the Owner Trustee by
the Company and all other amounts which are required to be paid to or deposited
with the Owner Trustee pursuant to the Lease directly to the Indenture Trustee
at its address set forth in Schedule I to the Participation Agreement, for
application as provided in this Agreement. The Owner Trustee agrees that
promptly on receipt thereof, it will transfer to the Indenture Trustee at such
address any and all moneys from time to time received by it constituting part
of the Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Agreement, except that the Owner Trustee shall accept for distribution
pursuant to the Trust Agreement any amounts distributed to it by the Indenture
Trustee as expressly provided in this Agreement and any Excluded Payments.
The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and
delivered any and all such further instruments and documents as the Indenture
Trustee may reasonably deem desirable in obtaining the full benefits of the
assignment hereunder and of the rights and powers herein granted.
The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, any of its
right, title or interest hereby assigned, to anyone other than the Indenture
Trustee, and that it will not, except as provided in or permitted by this
Agreement, accept any payment from the Company, enter into an agreement
amending or supplementing any of the Operative Agreements, execute any waiver
or modification of, or consent under the terms of any of the Operative
Agreements, settle or compromise any claim (other than claims in respect of
Excluded Payments) against the Company arising under any of the Operative
Agreements, or submit or consent to the submission of any dispute, difference
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or other matter arising under or in respect of any of the Operative Agreements,
to arbitration thereunder.
The Owner Trustee does hereby ratify and confirm the Indenture
Documents to which it is a party and does hereby agree that (except as
permitted herein) it will not take or omit to take any action, the taking or
omission of which would result in an alteration or impairment of any of the
Indenture Documents or of any of the rights created by any thereof or the
assignment hereunder.
Notwithstanding the Granting Clause, any of the preceding
paragraphs or any other provision of this Indenture, there are hereby expressly
excluded from the foregoing grant, bargain, sale, assignment, transfer,
conveyance, mortgage, pledge and security interest all Excluded Payments.
Further, nothing in the Granting Clause or any of the preceding paragraphs
shall impair in any respect the rights of the Owner Trustee or the Owner
Participant under Section 9.13 or 11.06.
IT IS HEREBY COVENANTED AND AGREED by and among the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article 1 have the
meanings assigned to them in this Article 1, and include the plural as
well as the singular;
(2) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(3) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision; and
(4) unless otherwise specified, all references in
this Agreement to Articles, Sections and Exhibits refer to Articles,
Sections and Exhibits of this Agreement.
(b) For all purposes of this Agreement, the following
capitalized terms have the following respective meanings:
"Affiliate" with respect to a specified Person, means any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the purposes of this
definition, "control" when used with respect to any specified
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Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent" means any Paying Agent or Registrar.
"Bankruptcy Code" means the United States Bankruptcy Code of
1978, as amended, or any successor statute.
"Basis Point" shall have the meaning specified therefor in
Exhibit A.
"Break Amount" shall have the meaning specified therefor in
Section 15.05(b).
"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 the
City of Dallas, Texas; New York, New York; San Francisco, California; the city
and state in which (i) so long as any Certificates shall be Outstanding, the
Indenture Trustee and (ii) thereafter, the Owner Trustee, has its principal
place of business; and the city and state in which the Indenture Trustee or the
Owner Trustee, as the case may be, receives and disburses funds; provided,
however, that so long as the Series SWA 1995 Trust N397SW-I Certificates are
Outstanding, such day must also be a day on which dealings are carried on in
the applicable offshore dollar interbank market.
"Certificate" or "Certificates" means any certificate or other
debt instrument issued under this Agreement, including the Series SWA 1995
Trust N397SW-I Certificates and the Series SWA 1995 Trust N397SW Certificates,
if any, issued hereunder.
"Company" means Southwest Airlines Co., a Texas corporation,
and, subject to the provisions of the Participation Agreement, its permitted
successors and assigns.
"Company Request" means a written request of the Company
executed on its behalf by a Responsible Company Officer of the Company.
"Co-Registrar" shall have the meaning specified therefor in
Section 2.03.
"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.
"Debt Rate" shall have the meaning specified therefor in
Exhibit A.
"Defaulted Installment" shall have the meaning specified
therefor in Section 2.08.
"Defaulted Interest" shall have the meaning specified therefor
in Section 2.08.
"Defeasance Trustee" shall have the meaning specified therefor
in Section 10.05.
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"Deferred Equity Amount" shall have the meaning specified in
Section 8(dd) of the Participation Agreement.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System or
any governmental authority which is the successor thereto, as in effect from
time to time.
"Eurocurrency Reserve Percentage" for any day means the
reserve percentage applicable in respect of such day under Regulation D of the
Board of Governors of the Federal Reserve System (or any governmental authority
which is the successor thereto) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for the Original Holder with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities.
"Excluded Payments" means (i) any right, title or interest of
the Owner Trustee in its individual capacity, the Owner Participant or their
respective Affiliates or their respective, successors, permitted assigns,
directors, officers, employees, servants, partners, and agents to any indemnity
payment, including, but not limited to, any payment which by the terms of
Section 7(b), 7(c), 7(f), 16, 17 or 18 of the Participation Agreement, Section
5.03 or 7.01 of the Trust Agreement or any section of the Tax Indemnity
Agreement or any corresponding payment under Section 3.5 of the Lease shall be
payable to the Owner Trustee in its individual capacity, the Owner Participant
or any such other Person, as the case may be, pursuant to the terms of the
Operative Agreements, (ii) any insurance proceeds payable under insurance
maintained by the Owner Trustee in its individual or trust capacity or the
Owner Participant (whether directly or through the Owner Trustee), or to their
respective Affiliates, successors, permitted assigns, directors, officers,
employees, servants, partners, and agents, (iii) any insurance proceeds (or
proceeds of governmental indemnities in lieu thereof) payable to the Owner
Trustee in its individual capacity or to the Owner Participant or to their
respective Affiliates, successors, permitted assigns, directors, officers,
employees, servants, partners, and agents, under any liability insurance
maintained by the Company pursuant to Section 11 of the Lease or by any other
Person (or proceeds of governmental indemnities in lieu thereof), (iv) payments
to the Owner Participant by the Owner Trustee pursuant to Section 2 of the
Participation Agreement and any funds held by the Owner Trustee or payable to
the Owner Participant pursuant to any funding letter entered into in lieu of
the provisions of Section 2 of the Participation Agreement, (v) amounts paid or
payable to the Owner Trustee from Lessee pursuant to Section 18.2(b) or (c) of
the Lease, (vi) Transaction Costs or other amounts or expenses paid or payable
to, or for the benefit of, the Owner Trustee or the Owner Participant pursuant
to the Participation Agreement, (vii) any portion of Rent attributable to a
payment by the Company in respect to the Tax Indemnity Agreement, (viii) the
respective rights of the Owner Trustee in its individual or trust capacity, the
Owner Participant or any other Person referred to in the foregoing clause (i)
to the proceeds of the foregoing, and (ix) any right to demand, collect, ▇▇▇ or
otherwise receive and enforce the payment of any amount described in clauses
(i) through (viii) above.
"Federal Aviation Act" means Subtitle VII of Title 49, U.S.C.,
as amended.
"Fixed Period" means the period after the Floating Period.
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"Floating Period" means the period any Series SWA 1995 Trust
N397SW-I Certificate is Outstanding.
"Government Obligations" shall have the meaning specified
therefor in Section 10.05.
"Holder" or "Certificate Holder" means a Person in whose name
a Certificate is registered on the Register including, so long as it holds a
Series SWA 1995 Trust N397SW-I Certificate, the Original Holder.
"Indenture Default" means any event which is, or after notice
or passage of time, or both, would be, an Indenture Event of Default.
"Indenture Documents" means each and every document or
instrument referred to in the Granting Clause hereof.
"Indenture Estate" shall have the meaning specified therefor
in the Granting Clause hereof.
"Indenture Event of Default" shall have the meaning specified
therefor in Section 8.01.
"Indenture Trustee" means Wilmington Trust Company, and each
other Person which may from time to time be acting as Indenture Trustee in
accordance with the provisions of this Agreement.
"Independent" when used with respect to an engineer, appraiser
or other expert, means an engineer, appraiser or other expert who (i) is in
fact independent, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or any Affiliate of the
Company and (iii) is not connected with the Company or any Affiliate of the
Company as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
"Independent Investment Banker" means an Independent
investment banking institution of national standing appointed by the Company on
behalf of the Owner Trustee (and reasonably acceptable to the Owner
Participant, which acceptance shall not be unreasonably withheld after notice
to the Owner Participant); provided, that if the Indenture Trustee shall not
have received written notice of such an appointment at least 10 days prior to
the relevant Redemption Date or if a Lease Event of Default shall have occurred
and be continuing, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
"Installment Certificate" means a Certificate, other than a
Series SWA 1995 Trust N397SW-I Certificate, should any such Certificate be
issued hereunder which shall provide for the payments of principal in
installments.
"Installment Payment Amount" means, with respect to each
Installment Certificate, the amount of the installment payment of principal due
and payable on each
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Installment Payment Date, which amount shall be equal to the product of the
original principal amount of such Certificate and the Installment Payment
Percentage for such Installment Payment Date.
"Installment Payment Date" means each date on which an
installment payment of principal is due and payable on the Certificates, as set
forth in Exhibit ▇-▇ as completed in accordance with Article 15.
"Installment Payment Percentage" means, with respect to each
Installment Payment Date, the percentage set forth opposite such Installment
Payment Date in Exhibit ▇-▇ as completed in accordance with Article 15.
The term "interest" payable, or to be payable, on any date
during the Floating Period in respect of the Series SWA 1995 Trust N397SW-I
Certificates shall include, without limitation, any and all accrued and unpaid
compounded interest thereon.
"Interest Payment Date" means each July 1 and January 1
commencing on July 1, 1995.
"Interest Period" shall have the meaning specified therefor in
Exhibit A.
"Lease" means the Sale and Lease Agreement, dated as of the
date hereof, between the Owner Trustee, as lessor, and the Company, as lessee,
relating to the Aircraft as such Sale and Lease Agreement may from time to time
be supplemented, amended or modified in accordance with the terms thereof and
this Agreement. The term "Lease" shall also include each Lease Supplement
entered into pursuant to the terms of the Lease.
"Lease Loss Payment Date" means the date on which Stipulated
Loss Value is payable pursuant to Section 10.1.4 of the Lease in connection
with an Event of Loss in respect of the Aircraft.
"Lease Termination Date" means the date the Lease terminates
pursuant to Section 9 of the Lease.
"Lending Office" of any Holder of a Series SWA 1995 Trust
N397SW-I Certificate means the office through which such Holder makes and/or
books and maintains the loan evidenced by its Certificate, which, in the case
of the Original Holder, is Concord, California, as of the date hereof.
"Maturity Date" means, with respect to the Series SWA 1995
Trust N397SW Certificates, each of the dates specified in Exhibit B as a
maturity date of such Certificates and shall have, in respect of the Series SWA
1995 Trust N397SW-I Certificates, the meaning specified therefor in Exhibit A.
"New Debt" shall have the meaning specified in Section
17(a)(2) of the Participation Agreement.
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"Officers' Certificate" means a certificate signed in the case
of the Company, by (i) the Chairman of the Board of Directors, the President,
or any Executive or Senior Vice President of the Company, signing alone, or
(ii) any Vice President signing together with the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer or the Controller of the
Company or, in the case of the Owner Trustee, a Responsible Officer of the
Owner Trustee.
"Offshore Rate" shall have the meaning specified therefor in
Exhibit A.
"Opinion of Counsel" means a written opinion of legal counsel,
who in the case of counsel for the Company may be (i) the senior corporate
attorney employed by the Company, (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. or (iii) other
counsel designated by the Company and who shall be reasonably satisfactory to
the Indenture Trustee or, in the case of legal counsel for the Owner Trustee,
may be (x) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ or (y) other counsel designated by the Owner
Trustee and who shall be reasonably satisfactory to the Indenture Trustee.
"Original Holder" means Bank of America National Trust and
Savings Association, as the original holder of the loan evidenced by the Series
SWA 1995 Trust N397SW-I Certificate and any branch or agency thereof to which
the Series SWA 1995 Trust N397SW-I Certificate held by it may be transferred.
"Outstanding", when used with respect to Certificates, means,
as of the date of determination, all Certificates theretofore executed and
delivered under this Agreement other than:
(i) Certificates theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for cancellation
pursuant to Section 2.07 or otherwise;
(ii) Certificates for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Holders of such Certificates; provided, that
if such Certificates are to be redeemed, notice of such redemption has
been duly given pursuant to this Agreement or provision therefor
satisfactory to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu of which
other Certificates have been executed and delivered pursuant to this
Agreement;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of Certificates Outstanding have given any request,
demand, authorization, declaration, direction, notice, consent or waiver
hereunder, Certificates owned by or pledged to the Company or any Affiliate of
the Company or the Owner Trustee or the Owner Participant or any Affiliate
thereof, shall (unless all Certificates are then owned thereby) be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, declaration, direction, notice, consent or waiver, only
Certificates which the Indenture Trustee knows to be so owned or so pledged
shall be disregarded. Certificates owned by the Company, or the Owner Trustee
or the Owner Participant, which have been pledged in good faith may be regarded
as Outstanding if the Company, or the Owner Trustee or the Owner Participant,
as the case may be, establishes to the satisfaction of the Indenture Trustee
the pledgee's right to act with respect
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to such Certificates and that the pledgee is not the Company, or the Owner
Trustee or the Owner Participant or any Affiliate thereof.
"Owner Trustee" means Shawmut Bank Connecticut, National
Association, not in its individual capacity, except as expressly provided
herein, but solely as trustee under the Trust Agreement, and each other Person
which may from time to time be acting as Owner Trustee in accordance with the
provisions of the Operative Agreements.
"Past Due Rate" means, in respect of any Certificate, the rate
of interest applicable pursuant to the provisions of such Certificate to any
amount of principal or interest payable thereunder not paid when due.
"Paying Agent" means any person acting as Paying Agent
hereunder pursuant to Section 2.03.
"Payment Date" means any Installment Payment Date, Interest
Payment Date or Maturity Date.
"Permitted Investment" means any of the investments permitted
by Section 22.1 of the Lease.
"Premium" means, with respect to each Series SWA 1995 Trust
N397SW Certificate to be redeemed, purchased or otherwise prepaid pursuant to
Article 6, an amount determined as of the Business Day next preceding the
applicable Redemption Date which an Independent Investment Banker determines to
be equal to an excess, if any, of (i) the present values of all remaining
scheduled payments of such principal amount or portion thereof and interest
thereon (excluding interest accrued from the immediately preceding Interest
Payment Date to such Redemption Date) to the Maturity Date of such Certificate
in accordance with generally accepted financial practices assuming a 360-day
year consisting of twelve 30-day months at a discount rate equal to the
Treasury Yield, all as determined by the Independent Investment Banker over
(ii) the unpaid principal amount of such Certificate. Premium shall never be
below zero.
"Premium Termination Date" means, with respect to each Series
SWA 1995 Trust N397SW Certificate, the date set forth as the "Premium
Termination Date" in Exhibit B hereto completed in accordance with Article 15
for Certificates of the Maturity Date of such Certificate.
"Principal Payment Date" shall have the meaning specified
therefor in Exhibit A.
"Record Date" for the interest or Installment Payment Amount
payable on any Interest Payment Date or Installment Payment Date (other than
the Maturity Date of the Certificates), as the case may be, means the calendar
day (whether or not a Business Day) which is 15 calendar days prior to the
related Interest Payment Date or the related Installment Payment Date.
"Redemption Date" means the date on which the Certificates are
to be redeemed or purchased pursuant to Section 6.01 or 6.02.
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"Redemption Price" means the price at which any or all of the
Certificates (as the context may require) are to be redeemed or purchased,
determined as of the applicable Redemption Date, pursuant to Section 6.01, 6.02
or 15.03, as the case may be.
"Refinancing Date" means the date designated by the Company as
the date for a refinancing of the Certificates in accordance with Section 17 of
the Participation Agreement.
"Register" shall have the meaning specified therefor in
Section 2.03.
"Registrar" means any person acting as Registrar hereunder
pursuant to Section 2.03.
"Remaining Weighted Average Life" means, for any Installment
Certificate, at the Redemption Date of such Certificate, 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 payment of
principal, including the payment due on the Maturity Date of such Certificate,
by (ii) the number of days from and including the Redemption Date to but
excluding the regularly scheduled date of such scheduled payment of principal;
by (b) the then unpaid principal amount of such Certificate.
"Responsible Company Officer" means, with respect to the
Company or Owner Participant, its Chairman of the Board, its President, the
Chief Financial Officer, any Vice President, the Treasurer or any other
management employee (a) working under the direct supervision of such Chairman
of the Board, President, Chief Financial Officer, Vice President or Treasurer
and (b) whose responsibilities include the administration of the transactions
and agreements, including the Lease, contemplated by the Participation
Agreement.
"Responsible Officer", with respect to Shawmut Bank
Connecticut, National Association, the Owner Trustee or the Indenture Trustee,
means any officer in its Corporate Trust Administration Department or any
officer of the Owner Trustee or the Indenture Trustee, as the case may be,
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject, and in each case whose responsibilities include the
administration of the transactions and agreements, including the Lease,
contemplated by the Participation Agreement.
"SEC" means the Securities and Exchange Commission.
"Second Payment Amount" shall have the meaning specified in
Section 8(dd) of the Participation Agreement.
"Section 18 Refinancing Date" means the date specified by the
Company for the refinancing of the Series SWA 1995 Trust N397SW-I Certificates
in accordance with Section 18 of the Participation Agreement.
"Series SWA 1995 Trust N397SW Certificate" means any
certificate of such designation issued by the Owner Trustee under this
Agreement substantially in the form of
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Exhibit A-1 or A-2, should any of such certificates be issued hereunder, and
any such certificate issued in replacement or exchange thereof in accordance
with the provisions hereof.
"Series SWA 1995 Trust N397SW-I Certificate" means any
certificate issued by the Owner Trustee under this Agreement, substantially in
the form of Exhibit A, and any such certificate issued in replacement or
exchange thereof in accordance with the provisions hereof.
"Treasury Rate" shall have the meaning specified therefor in
Exhibit A.
"Treasury Yield" means (i) In the case of a Certificate having
a Maturity Date within one year after the Redemption Date the average yield to
maturity on a government bond equivalent basis of the applicable United States
Treasury ▇▇▇▇ due the week of Maturity Date of such Certificate and (ii) in the
case of a Certificate having a Maturity Date one year or more after the
Redemption Date, the average yield of the most actively traded United States
Treasury Notes (as reported by Cantor ▇▇▇▇▇▇▇▇▇▇ Securities Corp. on page 5 of
Telerate Systems, Inc., a financial news service, or if such report is not
available, a source deemed comparable by the Independent Investment Banker
selected to determine the Premium and reasonably acceptable to the Company and
the Owner Participant) corresponding in maturity (x) for any Certificate issued
in serial form, the Maturity Date or (y) for any Certificate issued in
installment form, to the Average Life Date, in each case, of such Certificate
(or, if there is no corresponding maturity, an interpolation of maturities by
the Independent Investment Banker), in each case determined by the Independent
Investment Banker selected to determine the Premium based on the average of the
yields to stated maturity determined from the bid prices as of 10:00 A.M. and
2:00 P.M. New York time, on the second Business Day preceding the Redemption
Date. "Average Life Date" means, with respect to the redemption of an
Installment Certificate, the date which follows the Redemption Date by a period
equal to the Remaining Weighted Average Life of such Certificate.
"Trust Estate" shall have the meaning specified therefor in
the Trust Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Indenture and Security Agreement", "this Indenture" or
"this Agreement" means this Trust Indenture and Security Agreement, as the same
may from time to time be supplemented, amended or modified, including by any
Trust Supplement.
"Trust Office" means the principal corporate trust office of
the Owner Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration, or at such other office at which the
Owner Trustee's corporate trust business shall be administered which the Owner
Trustee shall have specified by notice in writing to the Company, the Indenture
Trustee and each Holder.
"Trust Supplement" means a supplement to the Trust Agreement
and this Agreement substantially in the form of Exhibit C.
"Trustee's Liens" shall have the meaning specified therefor in
Section 9.10.
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Section 1.02 Other Definitions. For all purposes of this
Agreement, terms defined in the heading and recitals of this Agreement are used
as so defined and capitalized terms used but not defined have the meanings
attributed thereto in the Lease.
ARTICLE 2
THE CERTIFICATES
Section 2.01. Certificates; Title and Terms. One or more
Series SWA 1995 Trust N397SW-I Certificates in the aggregate face amount equal
to the Original Holder's Commitment under Section 1(b) of the Participation
Agreement shall be issued on the Delivery Date as provided in Section 3(e) of
the Participation Agreement in substantially the form set forth, and shall bear
interest as provided, in Exhibit A. In the event more than one such Certificate
is so issued, all references in this Indenture to a single Series SWA 1995
Trust N397SW-I Certificate shall be deemed to include each other such
Certificate. The Series SWA 1995 Trust N397SW-I Certificate shall be dated the
Delivery Date and shall be payable in installments on each Principal Payment
Date as set forth in Annex A to the Series SWA 1995 Trust N397SW-I Certificate.
In connection with a refinancing of the Series SWA 1995 Trust
N397SW-I Certificate in accordance with Section 18 of the Participation
Agreement and Section 15.01 hereof, an additional series of Certificates may be
issued hereunder. Such additional series of Certificates shall be designated as
Series SWA 1995 Trust N397SW Certificates. The Series SWA 1995 Trust N397SW
Certificates shall be substantially in the form set forth in Exhibit A-l or
A-2. The Series SWA 1995 Trust N397SW Certificates shall be dated the Delivery
Date, shall be issued in the maturities and principal amounts, and shall bear
the interest rates per annum (subject to Section 2.10 hereof), in each case as
specified in Exhibit B to be delivered in connection with such refinancing of
the Series SWA 1995 Trust N397SW-I Certificate in accordance with Section 15.01
of this Agreement. The principal of each Certificate, other than Installment
Certificates, shall be payable in full on the Maturity Date for such
Certificate. The principal of each Installment Certificate shall be payable in
installments, on each Installment Payment Date, in amounts equal to the
Installment Payment Amount for such Installment Payment Date.
The Series SWA 1995 Trust N397SW Certificates shall be issued
in denominations of $1,000 and integral multiples thereof, except that one of
such Certificates may be issued in any denomination. The Series SWA 1995 Trust
N397SW-I Certificates may be issued in any denomination.
The Certificates shall be issued in registered form only. The
Certificates are not redeemable prior to maturity except as provided in this
Agreement. Interest accrued on the Certificates shall be calculated on the
basis set forth therein.
The principal of, Break Amount, if any, Premium, if any, and
interest on the Certificates shall be payable at the principal corporate trust
office of the Indenture Trustee or at any office or agency maintained for such
purpose pursuant to Section 2.03, provided, that subject to Section 15.04, all
such amounts (other than those payable on the Maturity Date of the Installment
Certificates) may be payable at the option of the Indenture Trustee or the
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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Paying Agent by check mailed on or before the due date by the Indenture Trustee
or the Paying Agent to the address of the Holder entitled thereto as such
address shall appear in the Register.
All payments in respect of the Certificates shall be made in
Dollars. Any payment due on any Certificate on a day that is not a Business
Day shall be made on the next succeeding day which is a Business Day and
(provided such payment is made on such next succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date.
Section 2.02. Execution and Authentication. (a)
Certificates shall be executed on behalf of the Owner Trustee by the manual or
facsimile signature of its president, a senior vice president, a vice
president, an assistant vice president, its treasurer, its secretary, an
assistant secretary or an assistant treasurer.
(b) If any officer of the Owner Trustee executing the
Certificates by facsimile signature no longer holds that office at the time the
Certificate is executed on behalf of the Owner Trustee, the Certificate shall
be valid nevertheless.
(c) At any time and from time to time after the execution
of the Certificates, the Owner Trustee may deliver such Certificates to the
Indenture Trustee for authentication and, subject to the provisions of Section
2.10, the Indenture Trustee shall authenticate the Certificates by manual
signature upon written orders of the Owner Trustee. Certificates shall be
authenticated on behalf of the Indenture Trustee by any authorized officer or
signatory of the Indenture Trustee.
(d) A Certificate shall not be valid or obligatory for
any purpose or entitled to any security or benefit hereunder until executed on
behalf of the Owner Trustee by the manual or facsimile signature of the officer
of the Owner Trustee specified in the first sentence of Section 2.02(a) and
until authenticated on behalf of the Indenture Trustee by the manual signature
of the officer or signatory of the Indenture Trustee specified in the second
sentence of Section 2.02(c). Such signatures shall be conclusive evidence that
such Certificate has been duly executed, authenticated and issued under this
Agreement.
Section 2.03. Registrar and Paying Agent. The Indenture
Trustee shall maintain an office or agency where the Certificates may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where (subject to Sections 2.04 and 2.08) the Certificates may
be presented for payment or for exchange (the "Paying Agent"). The Registrar
shall keep a register (the "Register") with respect to the Certificates and to
their transfer and exchange and the payments of Installment Payment Amounts
thereon, if any. The Indenture Trustee may appoint one or more co-registrars
(the "Co-Registrars") and one or more additional Paying Agents for the
Certificates and the Indenture Trustee may terminate the appointment of any
Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and
Paying Agent.
Section 2.04. Transfer and Exchange. At the option of the
Holder thereof and subject to its compliance with Section 8(bb) of the
Participation Agreement, Series SWA 1995
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Trust N397SW-I Certificates or Series SWA 1995 Trust N397SW Certificates may be
exchanged for an equal aggregate initial principal amount of other Series SWA
1995 Trust N397SW-I Certificates or Series SWA 1995 Trust N397SW Certificates
of the same maturity and type, dated the Delivery Date, and of any authorized
denominations or transferred upon surrender of the Series SWA 1995 Trust
N397SW-I Certificates or Series SWA 1995 Trust N397SW Certificates to be
exchanged or transferred at the principal corporate trust office of the
Indenture Trustee, or at any office or agency maintained for such purpose
pursuant to Section 2.03. Whenever any Series SWA 1995 Trust N397SW-I
Certificate or Series SWA 1995 Trust N397SW Certificate is so surrendered for
exchange, the Owner Trustee shall execute, and the Indenture Trustee shall
authenticate and deliver, the replacement Series SWA 1995 Trust N397SW-I
Certificate or Series SWA 1995 Trust N397SW Certificate which the Holder making
the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of Certificates shall be the valid obligations of the Owner Trustee,
evidencing the same obligations, and entitled to the same security and benefits
under this Agreement, as the Certificates surrendered upon such registration of
transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made to a Holder or any transferee
for any registration of transfer or exchange of Certificates, but the Registrar
may, as a condition to any transfer or exchange hereunder require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of such transfer or exchange of
Certificates.
The Registrar shall not be required to register the transfer
of or to exchange any Certificate called for redemption or purchase pursuant to
Section 6.01 or 6.02.
Section 2.05. Holder Lists; Ownership of Certificates. (a)
The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Company for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee semiannually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the
possession or control of the Registrar as to the names and addresses of the
Holders.
(b) Ownership of the Certificates shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration of
transfer of any Certificate, the Owner Trustee, the Owner Participant, the
Company, the Indenture Trustee, the Paying Agent and the Registrar may deem and
treat the Person in whose name any Certificate is registered as the absolute
owner of such Certificate for the purpose of receiving payment of principal
(including, subject to the provisions herein regarding the applicable record
dates, Installment Payment
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Amounts) of, Premium, if any, and (subject to the provisions herein regarding
the applicable record dates), interest on such Certificate and for all other
purposes whatsoever, whether or not such Certificate is overdue, and none of
the Owner Trustee, the Owner Participant, the Company, the Indenture Trustee,
the Paying Agent or the Registrar shall be affected by notice to the contrary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen
Certificates. If any Certificate shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the Holder of such
Certificate, issue and execute, and the Indenture Trustee shall authenticate
and deliver, in replacement thereof, as applicable, a new Series SWA 1995 Trust
N397SW-I Certificate or a new Series SWA 1995 Trust N397SW Certificate of the
same type and having the same maturity, payable to the same Holder in the same
principal amount and dated the same date as the Certificate so mutilated,
destroyed, lost or stolen. If the Certificate being replaced has become
mutilated, such Certificate shall be surrendered to the Indenture Trustee. If
the Certificate being replaced has been destroyed, lost or stolen, the Holder
of such Certificate shall furnish to the Owner Trustee and the Indenture
Trustee such security or indemnity as may be required by it to save the Owner
Trustee and the Indenture Trustee harmless and evidence satisfactory to the
Owner Trustee and the Indenture Trustee of the destruction, loss or theft of
such Certificate and of the ownership thereof; provided, however, that if the
affected Holder is the Original Holder, the written notice of such destruction,
loss or theft and such ownership and the written undertaking of such Holder
delivered to the Owner Trustee and the Indenture Trustee to hold harmless the
Owner Trustee and the Indenture Trustee in respect of the execution,
authentication and delivery of such new Certificate shall be sufficient
evidence, security and indemnity.
Section 2.07. Cancellation. The Registrar and any Paying
Agent shall forward to the Indenture Trustee all Certificates surrendered to
them for replacement, redemption, registration of transfer, exchange or
payment. The Indenture Trustee shall cancel all Certificates surrendered for
replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy cancelled Certificates.
Section 2.08. Payment on Certificates; Defaulted Principal
and Interest. (a) The Indenture Trustee will arrange directly with any Paying
Agent for the payment, or the Indenture Trustee will make payment, all pursuant
to Section 2.09, of the principal of, the Break Amount, if any, Premium, if
any, and interest on, and any other amounts payable on or in respect of each
Certificate or to the Holder thereof hereunder. Interest, principal and other
amounts payable on or in respect of the Series SWA 1995 Trust N397SW-I
Certificate shall be paid as provided for therein and in Article 15. Payment on
Series SWA 1995 Trust N397SW Certificates in respect of interest and
Installment Payment Amounts, if any, payable on an Interest Payment Date or
Installment Payment Date, respectively (other than the Maturity Date of the
Series SWA 1995 Trust N397SW Certificates) shall be paid in Dollars on each
Interest Payment Date or Installment Payment Date (other than the Maturity Date
of such Series SWA 1995 Trust N397SW Certificates), as the case may be, to the
Holder thereof at the close of business on the relevant Record Date; provided,
however, that the Paying Agent will, at the request of the Indenture Trustee
and may, at its option, pay such interest and Installment Payment Amounts
(other than those payable on the Maturity Date of the Installment Certificate)
by check mailed on or before the due date to such Holder's address as it
appears on the Register. Otherwise, principal of Series SWA 1995 Trust N397SW
Certificates and Premium, if any, with respect
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thereto, shall be payable only against presentation and surrender thereof at
the principal corporate trust office of the Indenture Trustee or at the office
of the Paying Agent maintained for such purpose pursuant to Section 2.03.
A Holder shall have no further interest in, or other right
with respect to, the Indenture Estate when and if the principal amount of,
Premium, if any, Break Amount, if any, and interest on all Certificates held by
such Holder and all other sums payable to such Holder hereunder, under such
Certificates and under the Participation Agreement shall have been paid in
full.
(b) Any Installment Payment Amount payable on an
Installment Payment Date (other than the Maturity Date with respect to a
Certificate) or any interest payable on an Interest Payment Date on any Series
SWA 1995 Trust N397SW Certificate which is not punctually paid on such
Installment Payment Date or such Interest Payment Date, as the case may be
(herein called, respectively, a "Defaulted Installment" and "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Record Date by virtue of his having been such Holder; and such Defaulted
Installment or Defaulted Interest may be paid by the Indenture Trustee, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Indenture Trustee may elect to make
payment of any Defaulted Installment or Defaulted Interest, as the
case may be, to the Person in whose name any Series SWA 1995 Trust
N397SW Certificate is registered at the close of business on a special
record date for the payment of such Defaulted Installment or Defaulted
Interest, as the case may be, which shall be fixed in the following
manner. The Indenture Trustee shall notify the Paying Agent in writing
of the amount of Defaulted Installment or Defaulted Interest, as the
case may be, proposed to be paid on each such Certificate and the date
of the proposed payment, and at the same time the Indenture Trustee
shall make arrangements to set aside an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Installment or Defaulted Interest, as the case may be, prior to the
date of the proposed payment, to be held in trust for the benefit of
the Persons entitled to such Defaulted Installment or Defaulted
Interest, as the case may be, as this clause provides and shall fix a
special record date for the payment of such Defaulted Installment or
Defaulted Interest, as the case may be, which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment. The Indenture Trustee shall promptly notify the Owner
Trustee, the Company and the Registrar of such special record date and
shall cause notice of the proposed payment of such Defaulted
Installment or Defaulted Interest, as the case may be, and the special
record date therefor to be mailed, first class postage prepaid, to
each Holder of a Series SWA 1995 Trust N397SW Certificate at its
address as it appears in the Register, not less than 10 days prior to
such special record date. Notice of the proposed payment of such
Defaulted Installment or Defaulted Interest, as the case may be, and
the special record date therefor having been mailed, as aforesaid,
such Defaulted Installment or Defaulted Interest, as the case may be,
shall be paid to the Persons in whose names the applicable Series SWA
1995 Trust N397SW Certificates are registered on such special record
date and shall no longer be payable pursuant to the following clause
(2).
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(2) The Indenture Trustee may make, or cause to
be made, payment of any Defaulted Installment or Defaulted Interest,
as the case may be, in any other lawful manner not inconsistent with
the requirements of any securities exchange on which Series SWA 1995
Trust N397SW Certificates may be listed, and upon such notice as may
be required by such exchange, if such payment shall be deemed
practicable by the Indenture Trustee.
Any interest, principal or other amount payable on the Series
SWA 1995 Trust N397SW-I Certificates which is not punctually paid when due
shall be paid as provided in such Certificates.
(c) The Indenture Trustee shall require each Paying Agent
to agree in writing that such Paying Agent will hold in trust, for the benefit
of the Holders and the Indenture Trustee, all money held by such Paying Agent
for the payment of the principal of, Break Amount, if any, Premium, if any, or
interest or any other amounts payable to any Holder hereunder or under the
Participation Agreement and shall give to the Indenture Trustee notice of any
default in the making of any such payment upon the Certificates. The Indenture
Trustee at any time may require a Paying Agent to repay to the Indenture
Trustee all money held by it. Upon so doing the Paying Agent shall have no
further liability for the money so paid.
Section 2.09. Payment from Indenture Estate Only. All
amounts payable by the Indenture Trustee and the Owner Trustee under the
Certificates and this Agreement shall be made only from the income and proceeds
of the Indenture Estate and from the other amounts specified in Section 3.03.
Each Holder of a Certificate, by its acceptance of such Certificate, agrees
that (a) it will look solely to the income and proceeds of the Indenture Estate
and from the other amounts specified in Section 3.03 for the payment of such
amounts, to the extent available for distribution to it as herein provided, and
(b) none of the Owner Trustee, the Owner Participant or the Indenture Trustee
is or shall be personally liable to any Holder of any Certificate for any
amount payable under such Certificate or this Agreement (including in respect
of the Deferred Equity Amount or Second Payment Amount) or, except as expressly
provided in this Agreement in the case of the Owner Trustee and the Indenture
Trustee, for any liability thereunder.
Shawmut Bank Connecticut, National Association is entering
into this Agreement solely as Owner Trustee under the Trust Agreement and not
in its individual capacity, and in no case whatsoever shall Shawmut Bank
Connecticut, National Association (or any entity acting as successor trustee
under the Trust Agreement) be personally liable for, or for any loss in respect
of, any statements, representations, warranties, agreements or obligations
hereunder or thereunder; provided, that Shawmut Bank Connecticut, National
Association shall be liable hereunder in its individual capacity, (i) for the
performance of its agreements in its individual capacity hereunder and under
Section 8 of the Participation Agreement, and (ii) for its own willful
misconduct or gross negligence. If a successor Owner Trustee is appointed in
accordance with the terms of the Trust Agreement and the Participation
Agreement, such successor Owner Trustee shall, without any further act, succeed
to all of the rights, duties, immunities and obligations hereunder, and its
predecessor Owner Trustee and Shawmut Bank Connecticut, National Association
shall be released from all further duties and obligations hereunder, without
prejudice to any claims against Shawmut Bank Connecticut, National Association
or such predecessor Owner Trustee for any default by Shawmut Bank Connecticut,
National Association
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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or such predecessor Owner Trustee, respectively, in the performance of its
obligations hereunder prior to such appointment.
Section 2.10. Execution, Delivery and Dating of
Certificates upon Issuance. The Owner Trustee shall issue and execute, and the
Indenture Trustee shall authenticate and deliver, the Certificates for original
issuance upon payment of an amount equal to the aggregate original principal
amount of the Series SWA 1995 Trust N397SW-I Certificates to be issued at such
time in the manner contemplated by Section 2 of the Participation Agreement.
Each Certificate issued hereunder shall be dated the Delivery Date, and the
Indenture Trustee shall note thereon, if issued after the Delivery Date, the
date through which has been paid interest thereon. Interest shall accrue on
the Series SWA 1995 Trust N397SW Certificates only from the date of issuance of
such Certificate pursuant to Section 17 or 18.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. [Reserved for Potential Future Use]
Section 3.02. Payment in Case of Redemption of
Certificates. (a) Except as otherwise provided in Section 3.05, in the event
the Certificates are redeemed in accordance with the provisions of Section
6.01(a) or (b), the Indenture Trustee will apply on the Redemption Date any
amounts then held by it in the Indenture Estate and received by it from or on
behalf of the Owner Trustee or, as assignee of the Owner Trustee, from the
Company, including, without limitation, pursuant to Section 9, 10, 11 or
(subject to Section 7.03) 18.2 of the Lease in the following order of priority:
first, so much thereof as was received by the Indenture
Trustee with respect to the amounts due to it pursuant to Section 9.06
shall be applied to pay the Indenture Trustee such amounts;
second, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price on the Outstanding
Certificates pursuant to Section 6.01(a) or (b), as the case may be,
on the Redemption Date shall be applied to the redemption of the
Certificates on the Redemption Date; and
third, the balance, if any, thereof remaining thereafter shall
be distributed to the Owner Trustee to be held or distributed to the
Owner Participant in accordance with the terms of the Trust Agreement.
(b) In the case of any refinancing or purchase of the
Certificates pursuant to Section 6.01(c) or 6.02, the Indenture Trustee will
apply on the Redemption Date the amounts received by it from or on behalf of
the Owner Trustee, or as assignee of the Owner Trustee, from the Company, to
the payment of the Redemption Price of the Outstanding Certificates pursuant to
Section 6.01(c) or 6.02, as the case may be, on the Redemption Date; it being
understood that any such payment shall be a refinancing or purchase of the
indebtedness
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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represented by the Outstanding Certificates and is not, and shall not be
construed so as to be, a redemption thereof or payment or prepayment thereon.
Section 3.03. Application When No Indenture Event of
Default Is Continuing. Except as otherwise provided in Section 3.02, 3.04, 3.05
or 3.06, each amount of Basic Rent or Advance (as defined in Section 3.8 of the
Lease) received by the Indenture Trustee from the Owner Trustee or, as assignee
of the Owner Trustee, from the Company, any payment of interest payable on any
Interest Payment Date on overdue installments of Basic Rent, any amount
received by the Indenture Trustee pursuant to Section 8(dd) or 18 of the
Participation Agreement as the Deferred Equity Amount or the Second Payment
Amount, together with any amount received by the Indenture Trustee pursuant to
Section 8.03(e)(i), shall be distributed by the Indenture Trustee in the
following order of priority:
first, so much of such aggregate amount as shall be required
to pay in full the interest, principal of, Premium, if any, Break
Amount, if any, and any other amounts then due on, all Outstanding
Certificates shall be distributed to the Persons entitled thereto; and
in case such payments or amounts shall be insufficient to pay in full
the whole amount so due and unpaid, then to the payment of such
interest, principal, Premium, if any, Break Amount, if any, such other
amounts payable to the Holders, and without any preference or priority
of one Certificate over another, ratably according to the aggregate
amount so due for interest, principal, Premium, if any, Break Amount,
if any, and such other amounts at the date fixed by the Indenture
Trustee for the distribution of such payments or amounts;
second, so much of such aggregate amount remaining as shall be
required to pay any amount due the Indenture Trustee pursuant to
Section 9.06 shall be applied to pay the Indenture Trustee such
amounts; and
third, the balance, if any, of such aggregate amount remaining
thereafter shall be distributed to the Owner Trustee to be held or
distributed to the Owner Participant in accordance with the terms of
the Trust Agreement; provided, however, that if an Indenture Default
shall have occurred and be continuing, then such balance shall not be
distributed as provided in this clause "third" but shall be held by
the Indenture Trustee as part of the Indenture Estate until whichever
of the following shall first occur: (i) all Indenture Events of
Default shall have been cured, in which event such balance shall, to
the extent not theretofore distributed as provided herein, be
distributed as provided in this clause "third", or (ii) Section 3.04
or Section 3.05 shall be applicable, in which event such balance shall
be distributed in accordance with the provisions of said Section 3.04
or Section 3.05, as the case may be, or (iii) such installment or
payment shall have been held for a period in excess of 183 days
(during which no Indenture Event of Default which is not a Lease Event
of Default shall have occurred and be continuing and during which
period the Indenture Trustee and the Holders shall not have been
stayed or otherwise precluded by operation of law from taking action
to accelerate the Certificates or to exercise remedies hereunder or
under the Lease), in which event such balance shall, to the extent not
theretofore applied as provided herein, be distributed as provided in
this clause "third".
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Section 3.04. Application of Certain Payments in Case of
Requisition or Event of Loss. Except as otherwise provided in Section 3.05, any
amounts received directly or otherwise pursuant to the Lease from any
governmental authority or other Person pursuant to Section 10 of the Lease with
respect to the Airframe or the Airframe and the Engines or engines then
installed on the Airframe as the result of an Event of Loss, to the extent that
such amounts are not required to be paid to the Company pursuant to said
Section 10, and any amounts of insurance proceeds for damage to the Indenture
Estate received directly or otherwise pursuant to the Lease (and not
constituting Excluded Payments) from any insurer pursuant to Section 11 of the
Lease with respect thereto as the result of an Event of Loss, to the extent
such amounts are not required to be paid to the Company pursuant to said
Section 11, shall, except as otherwise provided in the next sentence, be
applied by the Indenture Trustee on behalf of, and as assignee of, the Owner
Trustee in reduction of the Company's obligations to pay Stipulated Loss Value
and the other amounts payable by the Company pursuant to Section 10 of the
Lease and the remainder, if any, shall, except as provided in the next
sentence, be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Lease and the Trust Agreement. Any portion of
any such amount referred to in the preceding sentence which is not required to
be so paid to the Company pursuant to the Lease, solely because a Lease Default
of the type referred to in Section 14.1 or 14.5 of the Lease or Lease Event of
Default shall have occurred and be continuing, shall, subject to Section 10.04
hereof, be held by the Indenture Trustee on behalf of the Owner Trustee as
security for the obligations of the Company under the Lease and at such time as
there shall not be continuing any Lease Default of the type referred to in
Section 14.1 or 14.5 of the Lease or Lease Event of Default or such earlier
time as shall be provided for in the Lease, or upon satisfaction and discharge
of this Indenture as provided herein, such portion shall be paid to the Owner
Trustee to be held or distributed in accordance with the terms of the Lease,
unless the Indenture Trustee (as assignee from the Owner Trustee of the Lease)
shall have theretofore commenced to exercise remedies pursuant to Section 15
thereof, in which event such portion shall be distributed in accordance with
the provisions of Section 3.05 hereof.
Section 3.05. Payments During Continuance of Indenture
Event of Default. All payments (except Excluded Payments) received and amounts
held or realized by the Indenture Trustee after an Indenture Event of Default
shall have occurred and so long as such an Indenture Event of Default shall be
continuing, and after the Indenture Trustee shall foreclose or enforce this
Indenture or after the Certificates shall have become due and payable as
provided in Section 8.02 (including any amounts realized by the Indenture
Trustee from the exercise of any remedies pursuant to Article 8), as well as
all payments or amounts then held or thereafter received by the Indenture
Trustee as part of the Indenture Estate while such Indenture Event of Default
shall be continuing, shall be distributed by the Indenture Trustee in the
following order of priority:
first, so much of such payments or amounts as shall be
required to pay the Indenture Trustee all amounts then due it pursuant
to Section 9.06 shall be applied to pay the Indenture Trustee such
amounts;
second, so much of such payments or amounts remaining as shall
be required to (i) pay the expenses incurred (including unbilled
expenses in respect of property delivered or contracted for or
services rendered or contracted for if the amount of such expenses is
liquidated) in using, operating, storing, leasing, controlling or
managing the
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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Indenture Estate, and of all maintenance, insurance, repairs,
replacements, alterations, additions and improvements of and to the
Indenture Estate and to make all payments which the Indenture Trustee
may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Indenture Estate or any
part thereof (including the employment of engineers and accountants to
examine and make reports upon the properties, books and records of the
Owner Trustee and, to the extent permitted under the Lease, the
Company), all in accordance with Section 8.03(c), shall be applied for
such purposes and (ii) reimburse the Holders in full for payments made
pursuant to Section 9.01(c) (to the extent not previously reimbursed)
shall be distributed to such Holders, and if the aggregate amount
remaining shall be insufficient to reimburse all such payments in
full, it shall be distributed ratably, without priority of any
Certificate over any other, in the proportion that the aggregate
amount of the unreimbursed payments made by each such Holder pursuant
to Section 9.01(c) bears to the aggregate amount of the unreimbursed
payments made by all Holders pursuant to Section 9.01(c);
third, so much of such payments or amounts remaining as shall
be required to pay the principal of, Break Amount, if any, and accrued
interest on all Certificates Outstanding and all other amounts payable
to the Holders hereunder or under the Participation Agreement and then
due and payable, whether by declaration of acceleration pursuant to
Section 8.02 or otherwise, shall be applied to the payment of such
interest, principal, Break Amount, if any, and such other amounts; and
in case such payments or amounts shall be insufficient to pay in full
the whole amount so due and unpaid, then to the payment of such
interest, principal, Break Amount, if any, such other amounts and
interest, without any preference or priority of one Certificate over
another, ratably according to the aggregate amount so due for
interest, principal, Break Amount, if any, and such other amounts at
the date fixed by the Indenture Trustee for the distribution of such
payments or amounts; and
fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner Trustee to be
held or distributed to the Owner Participant in accordance with the
terms of the Trust Agreement.
Section 3.06. Payments for Which Application Is Provided in
Other Documents. Except as otherwise provided in this Agreement, any payment
received by the Indenture Trustee for which provision as to the application
thereof is made in the Lease or the Participation Agreement shall be
distributed to the Person for whose benefit such payments were made in
accordance with, and subject to the terms, thereof and hereof. The Indenture
Trustee shall be obligated to distribute any Excluded Payments received by the
Indenture Trustee promptly upon receipt thereof by the Indenture Trustee to the
Person entitled thereto.
Section 3.07. Payments for Which No Application Is
Otherwise Provided. Except as otherwise provided in Section 3.05:
(a) any payment received by the Indenture Trustee for
which no provision as to the application thereof is made elsewhere in
this Agreement, and
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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(b) any payment received and amounts realized by the
Indenture Trustee with respect to the Aircraft to the extent received
or realized at any time after the conditions set forth in Article 10
for the satisfaction and discharge of this Agreement or for the
defeasance of the Certificates shall have been duly satisfied, as well
as any other amounts remaining as part of the Indenture Estate after
such satisfaction shall be distributed by the Indenture Trustee in the
following order of priority:
first, so much of such aggregate amount as shall be
required to pay the Indenture Trustee all amounts then due it
pursuant to Section 9.06 shall be applied to pay the Indenture
Trustee such amounts; and
second, the balance, if any, of such aggregate amount
remaining thereafter shall be distributed to the Owner Trustee
to be held or distributed to the Owner Participant in
accordance with the terms of the Trust Agreement.
Section 3.08. Application of Payments. Each payment of
principal and interest or other amounts due hereunder to the Indenture Trustee
or any Holder or in respect of each Certificate shall, except as otherwise
expressly provided herein, be applied, first, to the payment of any amount
(other than the principal of or Premium, Break Amount or interest on such
Certificate) due hereunder or in respect of such Certificate, second, to the
payment of Premium or Break Amount, if any, and interest on such Certificate
(as well as any interest on overdue principal and, to the extent permitted by
law, interest and other amounts payable hereunder and thereunder) due
thereunder, third, to the payment of the principal of such Certificate then due
and fourth, the balance, if any, remaining thereafter, to the payment of the
principal of such Certificate remaining unpaid (provided, that such Certificate
shall not be subject to prepayment or purchase without the consent of the
affected Holder except as expressly permitted hereby). The amounts paid
pursuant to clause fourth above shall be applied to the installments of
principal of such Certificate in inverse order of maturity.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of the Owner Trustee. The Owner
Trustee hereby covenants and agrees that:
(i) the Owner Trustee will duly and punctually
perform its obligations under the Lease and will duly and punctually
pay the principal of, Premium, if any, Break Amount, if any, and
interest on and other amounts due hereunder and under the Certificates
and all other amounts payable by it to the Holders under the
Participation Agreement and the other Operative Agreements;
(ii) the Owner Trustee will not directly or
indirectly create, incur, assume or suffer to exist any Lessor Lien
attributable to it with respect to any of the properties or assets of
the Indenture Estate and shall, at its own cost and expense, promptly
take such action as may be necessary to discharge duly any such Lessor
Lien, and the Owner Trustee will cause restitution to be made to the
Indenture Estate in the
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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amount of any diminution of the value thereof as the result of any
Lessor Liens attributable to it;
(iii) in the event a Responsible Officer of the
Owner Trustee shall have actual knowledge of an Indenture Event of
Default or Indenture Default or an Event of Loss, the Owner Trustee
will give prompt written notice of such Indenture Event of Default or
Indenture Default or Event of Loss to the Indenture Trustee, the Owner
Participant, the Company and, so long as the Series SWA 1995 Trust
N397SW-I Certificate shall be Outstanding, the Original Holder;
(iv) except as contemplated by the Operative
Agreements, the Owner Trustee will not contract for, create, incur,
assume or permit to exist any Debt, and will not guarantee (directly
or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so
doing, or otherwise), endorse or otherwise be or become contingently
liable, directly or indirectly, in connection with the Debt of any
other Person;
(v) the Owner Trustee will not enter into any
activity other than owning the Aircraft, the leasing thereof to the
Company and the carrying out of the transactions contemplated hereby
and by the Participation Agreement, the Trust Agreement and the other
Operative Agreements;
(vi) the Owner Trustee will furnish to the
Indenture Trustee, and the Indenture Trustee will furnish to each
Holder at the time outstanding, promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to
the Owner Trustee under the Lease, including, without limitation, a
copy of each report or notice received pursuant to Section 11 of the
Lease, to the extent that the same shall not have been furnished
directly to such Holder or the Indenture Trustee pursuant to the
Lease; and
(vii) the Owner Trustee will not (except as
permitted herein) assign or pledge or otherwise dispose of, so long as
this Indenture shall remain in effect and shall not have been
terminated pursuant to Section 10.01, any of its right, title or
interest hereby assigned to anyone other than the Indenture Trustee,
and, with respect to such right, title and interest hereby assigned,
will not, except as provided in this Indenture, (1) accept any payment
that is subjected to the Lien of this Indenture from the Lessee or any
sublessee, enter into any agreement amending or supplementing any of
the Indenture Documents, execute any waiver or modification of, or
consent under, the terms of any of the Indenture Documents, (2)
exercise any rights with respect to the Indenture Estate, (3) settle
or compromise any claim arising under any of the Indenture Documents,
or (4) submit or consent to the submission of any dispute, difference
or other matter arising under or in respect of any of the Indenture
Documents to arbitration thereunder.
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Section 4.02. Covenants of Shawmut Bank Connecticut,
National Association. Shawmut Bank Connecticut, National Association, hereby
covenants and agrees that it will not directly or indirectly create, incur,
assume or suffer to exist any Lessor Liens attributable to it with respect to
any of the properties or assets of the Indenture Estate and it shall, at its
own cost and expense, promptly take such action as may be necessary to
discharge duly any such Lessor Lien. Shawmut Bank Connecticut, National
Association, will cause restitution to be made to the Indenture Estate in the
amount of any diminution of the value thereof as the result of any Lessor Liens
thereon attributable to it.
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE
OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE
Section 5.01. Disposition, Substitution and Release of
Property Included in the Indenture Estate During Continuation of Lease. So
long as the Lease is in effect:
(a) Parts. Any Parts and alterations, improvements and
modifications in and additions to the Aircraft shall, to the extent
required or specified by the Lease, become subject to the lien of this
Agreement and be leased to the Company under the Lease; provided, that
to the extent permitted by and as provided in the Lease, the Company
shall have the right, at any time and from time to time, without any
release from or consent by the Owner Trustee or the Indenture Trustee,
to remove, replace and pool Parts and to make alterations,
improvements and modifications in, and additions to, the Aircraft. The
Indenture Trustee agrees that, to the extent permitted by and as
provided in the Lease, title to any such Part shall vest in the
Company. The Indenture Trustee shall from time to time execute an
appropriate written instrument or instruments to confirm the release
of the security interest of the Indenture Trustee in any Part as
provided in this Section 5.01, in each case upon receipt by the
Indenture Trustee of a Company Request stating that said action was
duly taken by the Company in conformity with this Section 5.01 and
that the execution of such written instrument or instruments is
appropriate to evidence such release of a security interest under this
Section 5.01.
(b) Substitution Under the Lease upon an Event of Loss
Occurring to Airframe or Engines or upon Voluntary Termination of
Lease with Respect to Engines. Upon (i) the occurrence of an Event of
Loss occurring to the Airframe or an Engine, or (ii) a voluntary
termination of the Lease with respect to an Engine, the Company, in
accordance with the Lease, may, in the case of an Event of Loss which
has occurred to the Airframe, or shall, except as provided in Section
10.2 of the Lease, in the case of an Event of Loss which has occurred
to or termination of the Lease with respect to an Engine, substitute
an airframe or engine, as the case may be, in which case, upon due
satisfaction of all conditions to such substitution specified in
Section 10 of the Lease, the Indenture Trustee shall release all of
its right, interest and lien in and to the Airframe or such Engine in
accordance with the provisions of the following sentence. The
Indenture Trustee shall execute and deliver to the Owner Trustee an
instrument releasing its lien in and to the Airframe or such Engine
and shall execute for recording in public offices, at the expense of
the Owner Trustee (if requested by the Owner
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Trustee) or the Company (if requested by the Company), such
instruments in writing as the Owner Trustee or the Company shall
reasonably request and as shall be reasonably acceptable to the
Indenture Trustee in order to make clear upon public records that such
lien has been released under the laws of the applicable jurisdiction.
Each of the Owner Trustee and the Company hereby waives and releases any and
all rights existing or that may be acquired to any penalties, forfeit or
damages from or against the Indenture Trustee for failure to execute and
deliver any document in connection with the release of a lien or to file any
certificate in compliance with any law or statute requiring the filing of the
same in connection with the release of a lien, except for failure by the
Indenture Trustee to execute and deliver any document or to file any
certificate as may be specifically requested in writing by the Owner Trustee or
the Company and with respect to which the Owner Trustee or the Company shall be
duly entitled.
Section 5.02. Certificates in Respect of Replacement
Aircraft and Engines. Upon the execution and delivery of a Trust Supplement
covering a Replacement Airframe and/or Replacement Engine, as contemplated by
Section 5.01(b), each Certificate shall be deemed to have been issued in
connection with such Replacement Airframe and/or Replacement Engine and each
Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and/or Replacement Engine, but
without any other change therein.
ARTICLE 6
REDEMPTION OF CERTIFICATES
Section 6.01. Redemption of Certificates upon Certain
Events. (a) If there shall be an Event of Loss to the Aircraft and the
Aircraft is not replaced pursuant to Section 10.1.2 of the Lease, each
Outstanding Certificate shall be redeemed in whole at a Redemption Price equal
to 100% of the outstanding principal amount of such Certificate plus accrued
and unpaid interest thereon to but excluding the applicable Redemption Date
plus, in the case of the Series SWA 1995 Trust N397SW-I Certificates, Break
Amount, if any, and all other amounts payable to the Holders hereunder or under
the Participation Agreement. The Redemption Date for Certificates to be
redeemed pursuant to this Section 6.01(a) shall be the Lease Loss Payment Date.
No Premium shall be paid in the case of a redemption pursuant to any provision
of this Section 6.01(a).
(b) The Certificates shall be redeemed on the Lease
Termination Date or upon the purchase of the Aircraft by the Company at its
option on the Special Purchase Option Date pursuant to Section 18.2(b) of the
Lease (unless the Company shall have elected to assume the rights and
obligations of the Owner Trustee hereunder to the extent and as provided for in
Section 7.03). In the case of any Series SWA 1995 Trust N397SW-I Certificate,
the Redemption Price therefor shall be equal to the unpaid principal amount of
such Certificate as at such date plus accrued and unpaid interest thereon to
but excluding the Redemption Date, the Break Amount, if any, and all other
amounts payable to the Holder thereof hereunder or under any other Operative
Agreement, but without any other premium or penalty. In the case of any Series
SWA 1995 Trust N397SW Certificate, such Redemption Price therefor shall be
equal to the unpaid principal amount of such Certificate as at such Redemption
Date together
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with an amount equal to the accrued but unpaid interest thereon and, in the
case of each Certificate redeemed prior to the Premium Termination Date
applicable to such Certificate, the Premium, if any. The Redemption Date for
Certificates to be redeemed shall be (A) in the case of a termination of the
Lease pursuant to Section 9 thereof, on the Lease Termination Date or (B) in
the case of purchase of the Aircraft by the Company pursuant to Section 18.2(b)
of the Lease, on the Special Purchase Option Date.
(c) (i) The Series SWA 1995 Trust N397SW-I
Certificates may be refinanced in whole in accordance with the provisions of
Article 15 hereof and Sections 17 and 18 of the Participation Agreement and
(ii) the Series SWA 1995 Trust N397SW Certificates may be refinanced, in whole
or in part, if all the conditions to such refunding or refinancing set forth in
Section 17 of the Participation Agreement shall have been satisfied. In any
such event, each Outstanding Certificate may be so refinanced at a Redemption
Price determined in accordance with the procedures described above in Section
6.01(b); provided, however, that the applicable Redemption Date for the Series
SWA 1995 Trust N397SW-I Certificates to be refinanced pursuant to clause (i) of
this Section 6.01(c) shall be the applicable Refinancing Date under Section 17
of the Participation Agreement or the Section 18 Refinancing Date under Section
18 of the Participation Agreement, as the case may be, and the applicable
Redemption Date for Certificates to be redeemed pursuant to clause (ii) of this
Section 6.01(c) shall be the applicable Refinancing Date under Section 17 of
the Participation Agreement.
Section 6.02. Redemption or Purchase of Certificates Upon
Certain Indenture Events of Default. If the Owner Trustee shall have given
notice of redemption or purchase to the Indenture Trustee pursuant to Section
8.03(e)(ii), each Outstanding Certificate shall be redeemed or purchased in
whole at a Redemption Price equal to 100% of its principal amount plus accrued
and unpaid interest thereon (including, without limitation, interest on overdue
interest) to but excluding the applicable Redemption Date as determined below
and all other amounts payable to the Holders hereunder or under the
Participation Agreement and, in the case of the Series SWA 1995 Trust N397SW-I
Certificate, the Break Amount, if any, and, in the case of the Series SWA 1995
Trust N397SW Certificates, if to be purchased or redeemed pursuant to Section
8.03(e)(ii)(A) prior to the 181st day after the first occurrence of the
relevant Lease Event of Default, the Premium, if any. The Redemption Date for
Certificates to be redeemed or purchased pursuant to this Section 6.02 shall be
the date specified in the notice given by the Owner Trustee to the Indenture
Trustee pursuant to Section 8.03(e)(ii) (provided, however, that in the case of
the Series SWA 1995 Trust N397SW-I Certificates, if such date is the last day
of the then current Interest Period therefor, no Break Amount shall be
payable). If the Owner Trustee elects to purchase the Certificates under
Section 8.03(e)(ii), nothing herein, including use of the terms "Redemption
Date" and "Redemption Price", shall be deemed to result in a redemption of the
Certificates.
Section 6.03. Notice of Redemption to Holders. (a) Notice
of redemption or purchase with respect to the Series SWA 1995 Trust N397SW
Certificates shall be given by first-class mail, postage prepaid, mailed not
less than 30 nor more than 60 days prior to the Redemption Date, to each Holder
of such Certificates to be redeemed or purchased, at such Holder's address
appearing in the Register; provided, that in the case of a redemption pursuant
to Section 6.01(b) related to Lessee's exercise of its option pursuant to
Section 9 of the Lease, such notice shall be revocable and shall be deemed
revoked in the event the Lease does not in fact terminate on the related Lease
Termination Date.
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All notices of redemption or purchase shall state:
(1) the Redemption Date,
(2) the applicable basis for determining the Redemption
Price,
(3) if less than all the Outstanding Certificates are to
be redeemed, the identification (and, in the case of partial
redemption of any Certificates, the principal amounts) of the
particular Certificates to be redeemed, and that on and after the
Redemption Date, upon surrender of Certificates, new Certificates in
principal amount equal to the unredeemed part thereof will be issued,
(4) that on the Redemption Date, the Redemption Price
will become due and payable upon each Certificate to be redeemed, and
that interest on Certificates shall cease to accrue on and after such
Redemption Date, and
(5) the place or places where such Certificates are to be
surrendered for payment of the Redemption Price.
Notice of redemption or purchase of Certificates to be redeemed or purchased
shall be given by the Indenture Trustee.
(b) Notice of redemption of the Series SWA 1995 Trust
N397SW-I Certificate shall be given by the Owner Trustee (or by the Company on
behalf of the Owner Trustee) not less than three Business Days prior to the
Redemption Date, shall be irrevocable and shall be given by telephone, telex,
telecopy, cable or other customary means of communication by the Owner Trustee
or the Company, as the case may be, to the other and to the Indenture Trustee
and to the Original Holder at each such Person's address designated in Section
12.01(a); provided, that in the case of redemption pursuant to Section 6.01(b)
related to Lessee's exercise of its option pursuant to Section 9 of the Lease,
such notice shall be revocable and shall be deemed revoked in the event the
Lease does not in fact terminate on the related Lease Termination Date.
Notwithstanding any provision to the contrary contained in this Article 6, the
Series SWA 1995 Trust N397SW-I Certificate shall be redeemable as set forth in
this Article 6 and in Article 15 without any premium, prepayment penalty or
other cost or expense except for the Break Amount, if any, and the payment of
all other amounts payable to the Holders thereof hereunder and under the
Participation Agreement.
Section 6.04. Deposit of Redemption Price. On or before
the Redemption Date, the Owner Trustee (or any Person on behalf of the Owner
Trustee) shall, to the extent an amount equal to the Redemption Price for the
Certificates to be redeemed or purchased on the Redemption Date shall not then
be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 12:00 Noon in immediately available
funds (i) the Redemption Price of the Certificates to be redeemed, refinanced
or purchased, as the case may be, on the Redemption Date and (ii) all other
amounts due and payable hereunder, including any amounts payable to the
Indenture Trustee pursuant to Section 9.06.
Section 6.05. Certificates Payable on Redemption Date.
Notice of redemption, refinancing or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 6.03(a) or
(b)), the Certificates so to be redeemed (or
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the purchase or refinancing price therefor) shall, on the applicable Redemption
Date, become due and payable at the Redemption Price therefor at the principal
corporate trust office of the Indenture Trustee or at any office or agency
maintained for such purposes pursuant to Section 2.03, and from and after such
Redemption Date (unless there shall be a default in the payment of the
Redemption Price) any such Certificates then Outstanding shall cease to bear
interest. Unless payment prior to surrender is expressly provided for herein
or in the Participation Agreement, upon surrender of any such Certificate for
redemption or purchase in accordance with said notice such Certificate shall be
paid at the Redemption Price. The Certificates shall not be subject to
prepayment, redemption, refunding or refinancing except as provided in this
Article 6 and in Section 8.02 hereof.
If any Certificate called for redemption or purchase shall not
be so paid upon surrender thereof for redemption or purchase, the principal
amount thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Certificate.
Section 6.06. Selection of Certificates to Be Redeemed. If
less than all the Outstanding Series SWA 1995 Trust N397SW Certificates are to
be redeemed the particular Certificates to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Indenture Trustee, from
the Outstanding Certificates not previously called for redemption, by such
method as the Indenture Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Certificates or any integral multiple thereof) of
the principal amount of Certificates of a denomination larger than the minimum
authorized denomination for Certificates.
The Indenture Trustee shall promptly notify the Owner Trustee and the
Company in writing of the Certificates selected for redemption and, in the case
of any Certificates selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Certificates shall
relate, in the case of any Certificates redeemed or to be redeemed only in
part, to the portion of the principal amount of such Certificates which has
been or is to be redeemed.
Section 6.07. Certificates Redeemed in Part. Any Certificate
which is to be redeemed only in part shall be surrendered at a place of payment
thereof (with, if the Indenture Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Owner Trustee and
the Indenture Trustee duly executed by, the Holder thereof or its attorney duly
authorized in writing), and the Owner Trustee shall execute, and the Indenture
Trustee shall authenticate and deliver to the Holder of such Certificate
without service charge, a new Certificate of like tenor, of any authorized
denomination as requested by such Holder, in principal amount equal to and in
exchange for the unredeemed portion of the principal of the Certificate so
surrendered.
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ARTICLE 7
MATTERS CONCERNING THE COMPANY
Section 7.01. Repayment of Monies for Certificate Payments
Held by the Indenture Trustee. Any money held by the Indenture Trustee or any
Paying Agent in trust for any payment of the principal of, Premium, if any, or
interest on any Series SWA 1995 Trust N397SW Certificate, including without
limitation any money deposited pursuant to Article 10 and remaining unclaimed
for two years and eleven months after the due date for such payment, shall be
paid to the Owner Trustee; and the Holders of any Outstanding Certificates
shall thereafter, as unsecured general creditors, look only to the Owner
Participant (to the extent the Owner Trustee distributed any such trust money
to the Owner Participant and the Owner Participant did not distribute such
trust money to the Company) and to the Company on behalf of the Owner Trustee
for payment thereof, and all liability of the Indenture Trustee or any such
Paying Agent with respect to such trust money shall thereupon cease; provided,
that the Indenture Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be mailed to
each such Holder notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
mailing, any unclaimed balance of such money then remaining will be repaid to
the Owner Trustee as provided herein.
Section 7.02. [Reserved for Potential Future Use]
Section 7.03. Assumption of Obligations of Owner Trustee by
the Company. In the event that the Company shall have elected to assume all of
the rights and obligations of the Owner Trustee under this Agreement in respect
of the Certificates pursuant to Section 8(r) of the Participation Agreement in
connection with the purchase by the Company of the Aircraft on the Special
Purchase Option Date, and if on or prior to the Special Purchase Option Date
(the "Assumption Date") the Indenture Trustee shall have received:
(a) an instrument of assumption (the "Assumption
Agreement") pursuant to which the Company irrevocably and unconditionally
assumes and undertakes, with full recourse to the Company, the Owner Trustee's
obligations with respect to principal, interest, Break Amount, Premium and all
other amounts payable to the Holders or the Indenture Trustee under the
Certificates then Outstanding, this Agreement, and the Participation Agreement
and which incorporates therein events of default substantially similar in scope
and effect to those set forth in the Lease and covenants substantially similar
to the covenants of the Company under the Lease and the Participation
Agreement;
(b) a supplement to this Agreement and/or such other
instruments and documents (including, without limitation, Uniform Commercial
Code financing statement(s)) covering all of the security interests created by
or pursuant to this Indenture that are not covered by the recording system
established by the Federal Aviation Act as may be necessary (or reasonably
requested by the Indenture Trustee) for the security interest of the Indenture
Trustee in the Aircraft and in the other rights, property and interests
included in the Indenture Estate (other than those rights, property and
interests that depend on the existence of the Trust Estate and the
participation of the Owner Trustee and Owner Participant in the transactions
contemplated by the Participation Agreement and this Indenture) to continue to
be perfected and duly recorded with the Federal Aviation Administration and in
all other places necessary
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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or, in the reasonable opinion of the Indenture Trustee, advisable under the
Uniform Commercial Code;
(c) an insurance report dated the Assumption Date of the
independent insurance broker referred to in Section 11.5 of the Lease and the
certificates of insurance, each in form and substance reasonably satisfactory
to the Indenture Trustee as to the due compliance as of the Assumption Date
with the terms of Section 11 of the Lease (as it relates to the Holders and the
Indenture Trustee) relating to the insurance with respect to the Aircraft;
(d) evidence that as of the Assumption Date, and after
giving effect to the transactions contemplated hereby, the Company has good
title to the Aircraft free and clear of all Liens other than the Lien of, and
the security interest created by, this Indenture and other Permitted Liens
(other than Lessor Liens);
(e) a copy of the application that was filed with the FAA
on the Assumption Date regarding the registration of the Aircraft in the name
of the Company;
(f) a certificate from a Responsible Company Officer of
the Company that no Lease Default of the type referred to in Section 14.1 or
14.5 of the Lease or Lease Event of Default shall have occurred and be
continuing as of the Assumption Date;
(g) an opinion of the General Counsel of the Company (or
other counsel reasonably satisfactory to the Indenture Trustee) in form and
substance reasonably satisfactory to the Indenture Trustee, addressed to the
Indenture Trustee and dated the Assumption Date, to the effect that (i) the
execution, delivery and performance of the Assumption Agreement and the
supplement to this Indenture referred to in paragraph (b) of this Section 7.03
(and all other instruments and documents the execution of which are necessary
for and directly related to the assumption of the obligations contemplated by
this Section 7.03 or the continued perfection of the security interests
referred to in paragraph (b) of this Section 7.03) have been duly authorized by
the Company by all necessary action; (ii) the Assumption Agreement, such
supplement to this Indenture, all such other documents and instruments referred
to above and the security interests arising therefrom are legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, and except as limited by
applicable laws which may affect the remedies provided for in this Indenture,
which laws, however, do not in the opinion of such counsel make the remedies
provided for in this Indenture inadequate for the practical realization of the
rights and benefits purported to be provided thereby; (iii) the Assumption
Agreement, such supplement and all such other documents and instruments
referred to above do not and will not contravene any provision of the Company's
articles of incorporation or by-laws or any law or regulation applicable to the
Company or any agreement, mortgage or instrument to which the Company is a
party or by which the Company is bound; and (iv) the Indenture Trustee (on
behalf of the Certificate Holders) should continue to be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to the Aircraft
upon and after the assumption of the obligations by the Company, provided, that
the opinion referred to in this clause (iv) need not be delivered to the extent
that the benefits of Section 1110 of the Bankruptcy Code were not, by reason of
a change of law or governmental
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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interpretation thereof, available to the Indenture Trustee with respect to the
Aircraft immediately prior to such assumption;
(h) an opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel in Oklahoma City (or other counsel reasonably satisfactory to the
Indenture Trustee), in form and substance reasonably satisfactory to the
Indenture Trustee, addressed to the Indenture Trustee and dated the Assumption
Date, (i) to the effect that all documents executed in connection with the
assumption of the obligations contemplated by this Section 7.03 and required to
be filed with the Federal Aviation Administration are in proper form, and all
steps necessary have been taken, for the Aircraft to be duly registered in the
name of the Company and for the Lien of this Agreement with respect to the
Aircraft and Engines to continue to be duly perfected and of first priority;
and
(i) such other documentation reasonably requested by the
Indenture Trustee (in form and substance reasonably satisfactory to the
Indenture Trustee) to amend the Operative Agreements to give effect to the
foregoing;
then, automatically and without the requirement of further action by any
Person, effective as of the Assumption Date, the Owner Trustee shall be
released from all of its obligations under this Agreement in respect of the
Certificates or otherwise (other than any obligations or liabilities of the
Owner Trustee in its individual capacity incurred on or prior to the Assumption
Date or arising out of or based upon events occurring on or prior to the
Assumption Date, which obligations and liabilities shall remain the sole
responsibility of the Owner Trustee in such capacity). Promptly upon the
filing and recording of the documents referred to in the opinion of counsel
specified in Section (h) above with the FAA, the Company shall cause such
counsel to deliver to the Indenture Trustee an opinion addressed to the
Indenture Trustee, in form and substance reasonably satisfactory to the
Indenture Trustee, as to due recording of said documents with the FAA.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. The following
events shall constitute "Indenture Events of Default" under this Agreement
(whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and each such Indenture Event of Default
shall be deemed to exist so long as, but only so long as, it shall not be
waived or remedied:
(a) the failure (other than by reason of a Lease Event of
Default) of the Owner Trustee to pay when due any payment of principal
of or Premium or Break Amount, if any, or interest on any Certificate
and such failure shall have continued unremedied for seven Business
Days, or the failure (other than by reason of a Lease Event of
Default) of the Owner Trustee to pay when due any other amount due and
payable hereunder, or under any Certificate, and such failure shall
have continued unremedied for 10 Business Days after notice thereof to
the Owner Trustee; or
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(b) any Lessor Lien required to be discharged by Shawmut
Bank Connecticut, National Association, pursuant to Section 4.02 or
required to be discharged by the Owner Trustee pursuant to Section
4.01(ii) or required to be discharged or bonded (in a manner
reasonably satisfactory to the Indenture Trustee) by the Owner
Participant pursuant to Section 8(g) of the Participation Agreement
shall remain undischarged for a period of 30 calendar days after a
Responsible Officer or Responsible Company Officer, as the case may
be, of Shawmut Bank Connecticut, National Association, the Owner
Trustee or the Owner Participant, as the case may be, shall have
actual knowledge of such Lessor Lien; or
(c) any representation or warranty made by the Owner
Trustee or the Owner Participant or Shawmut Bank Connecticut, National
Association, herein or in the Participation Agreement, or made by any
Person guaranteeing or supporting the obligations of the Owner
Participant under the Operative Agreements in its guarantee or support
agreement, shall prove to have been false or incorrect when made in
any material respect to the Certificate Holders, is material at the
time of discovery and, if curable, is not cured within 30 days of
notice thereof to the Owner Participant and the Owner Trustee from the
Indenture Trustee; or
(d) [Reserved for Potential Future Use]
(e) any failure by the Owner Trustee or Shawmut Bank
Connecticut, National Association, to observe or perform any other
covenant or obligation of the Owner Trustee or Shawmut Bank
Connecticut, National Association, as the case may be, contained in
this Indenture or in the Participation Agreement or any failure by the
Owner Participant to observe or perform any other covenant or
obligation of the Owner Participant contained in the Participation
Agreement or any failure by any Person guaranteeing or supporting the
obligations of the Owner Participant under the Operative Agreements to
perform any covenant or obligation of such Person under its guarantee
or support agreement which, in any case, is not remedied within a
period of 30 calendar days after notice thereof has been given to the
Owner Trustee and the Owner Participant or such Person, as the case
may be (provided that such period shall be extended to 180 days if the
Owner Trustee, the Owner Participant or such other Person shall, on or
prior to the expiration of such 30 days, have provided a bond (to the
reasonable satisfaction of the Indenture Trustee) in respect of the
consequences of such failure); or
(f) there shall be a Lease Event of Default other than,
without the consent of the Owner Trustee in its sole discretion, a
Lease Event of Default arising by reason of nonpayment when due of any
Excluded Payments; or
(g) either the Trust Estate or the Owner Trustee with
respect thereto (and not in its individual capacity) or the Owner
Participant or any Person guaranteeing or supporting the obligations
of the Owner Participant under the Operative Agreements
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shall (i) file, or consent by answer or otherwise to the filing
against it of a petition for relief or reorganization or arrangement
or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction,
(ii) make an assignment for the benefit of its creditors, or (iii)
consent to the appointment of a custodian, receiver, trustee or other
officer with similar powers of itself or any substantial part of its
property; provided, that an event referred to in this Section 8.01(g)
with respect to the Owner Participant shall not constitute an
Indenture Event of Default if (A) an order, judgment or decree shall
be entered in a proceeding by a court or a trustee, custodian,
receiver or liquidator which is either final and non-appealable or has
not been stayed pending any appeal, or (B) an opinion of counsel
satisfactory to the Indenture Trustee shall be provided by the Owner
Participant, in each case to the effect that no part of the Trust
Estate created by the Trust Agreement (except for the Owner
Participant's beneficial interest in such Trust Estate) and no right,
title or interest under the Indenture Estate shall be included in, or
be subject to, any declaration or adjudication of, or proceedings with
respect to, the bankruptcy, insolvency or liquidation of the Owner
Participant referred to in this Section 8.01(g); or
(h) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Trust Estate or the Owner Trustee with respect thereto (and not in its
individual capacity) or the Owner Participant or any Person
guaranteeing or supporting the obligations of the Owner Participant
under the Operative Agreements, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Trust Estate or the
Owner Trustee with respect thereto (and not in its individual
capacity) or the Owner Participant or any Person guaranteeing or
supporting the obligations of the Owner Participant under the
Operative Agreements and any such order or petition is not dismissed
or stayed within 90 days after the earlier of the entering of any such
order or the approval of any such petition; provided, that an event
referred to in this Section 8.01(h) with respect to the Owner
Participant shall not constitute an Event of Default if (A) an order,
judgment or decree shall be entered in a proceeding by a court or a
trustee, custodian, receiver or liquidator which is either final and
non-appealable or has not been stayed pending any appeal, or (B) an
opinion of counsel satisfactory to the Indenture Trustee shall be
provided by the Owner Participant, in each case to the effect that no
part of the Trust Estate created by the Trust Agreement (except for
the Owner Participant's beneficial interest in such Trust Estate) and
no right, title or interest under the Indenture Estate shall be
included in, or be subject to, any declaration or adjudication of, or
proceedings with respect to, the bankruptcy, insolvency or liquidation
of the Owner Participant referred to in this Section 8.01(h).
Section 8.02. Acceleration; Rescission and Annulment. If an
Indenture Event of Default occurs and is continuing, either the Indenture
Trustee, by notice to the Company and the Owner Trustee, or the Holders of at
least 25% in aggregate principal amount of Outstanding Certificates, by notice
to the Company, the Indenture Trustee and the Owner Trustee may declare the
principal of all the Certificates to be due and payable, whereupon the
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same shall be accelerated and be and become due and payable; provided, that if
an Indenture Event of Default referred to in clause (g) or (h) of Section 8.01
shall have occurred or a Lease Event of Default of the type referred to in
clause (g) or (h) of said Section 8.01 shall have occurred with respect to the
Company, then and in every such case the unpaid principal of all Certificates
then Outstanding shall, unless the Indenture Trustee acting upon instructions
of at least 25% in aggregate principal amount of Outstanding Certificates shall
otherwise direct, immediately and without further act become due and payable,
without presentment, demand, protest or notice, all of which are hereby waived.
Upon such declaration (or automatic acceleration, as the case may be), the
principal of all Certificates together with accrued interest thereon from the
date in respect of which interest was last paid hereunder to the date payment
of such principal has been made or duly provided for, plus, in the case of the
Series SWA 1995 Trust N397SW-I Certificates, the Break Amount, if any, and all
other amounts payable to the Holders hereunder as at such date of payment shall
be immediately due and payable (but not including any Premium). At any time
after such declaration and prior to the sale or disposition of the Indenture
Estate, the Holders of a majority in aggregate principal amount of all of the
Outstanding Certificates, by notice to the Indenture Trustee, the Company and
the Owner Trustee, may rescind such a declaration and thereby annul its
consequences if (i) an amount sufficient to pay all principal of, and, in the
case of the Series SWA 1995 Trust N397SW-I Certificates, the Break Amount, if
any, on any Certificates which have become due otherwise than by such
declaration and any interest thereon and interest due or past due, if any, and
all sums due and payable to the Indenture Trustee have been deposited with the
Indenture Trustee, (ii) the rescission would not conflict with any judgment or
decree and (iii) all existing Indenture Defaults and Indenture Events of
Default under this Agreement have been cured or waived except nonpayment of
principal of, or interest on, the Certificates that has become due solely
because of such acceleration.
Section 8.03. Other Remedies Available to Indenture
Trustee. (a) After an Indenture Event of Default shall have occurred and so
long as such Indenture Event of Default shall be continuing, then and in every
such case the Indenture Trustee, as trustee of an express trust and as assignee
hereunder of the Lease or as holder of a security interest in the Aircraft or
Engines or otherwise, may, and when required pursuant to the provisions of
Article 9 shall, exercise, subject to Sections 8.03(b) and 8.03(e), any or all
of the rights and powers and pursue any and all of the remedies accorded to the
Owner Trustee pursuant to Section 15 of the Lease and this Article 8 (other
than in respect of Excluded Payments), may recover judgment in its own name as
Indenture Trustee against the Indenture Estate and may take possession of all
or any part of the Indenture Estate and may exclude the Owner Trustee and the
Owner Participant and all Persons claiming under any of them wholly or partly
therefrom. The Indenture Trustee shall have and may exercise all of the rights
and remedies of a secured party under the Uniform Commercial Code as in effect
in any applicable jurisdiction.
(b) After an Indenture Event of Default, subject to
Section 8.03(e), the Indenture Trustee may, if at the time such action may be
lawful and always subject to compliance with any mandatory legal requirements,
either with or without taking possession, and either before or after taking
possession, and without instituting any legal proceedings whatsoever, and
having first given notice of such sale to the Owner Trustee, the Owner
Participant and the Company at least 10 days prior to the date of such sale,
sell and dispose of the Indenture Estate, or any part thereof, or interest
therein, at public or private auction, in one
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lot as an entirety or in separate lots, and either for cash or on credit and on
such terms as the Indenture Trustee may determine, and at any place (whether or
not it be the location of the Indenture Estate or any part thereof) and time
designated in the notice above referred to; provided, however, that
notwithstanding any provision herein to the contrary, the Indenture Trustee may
not provide the notice provided for above of its intention to sell any of the
Indenture Estate or exercise other remedies against the Indenture Estate
seeking to deprive the Owner Trustee or the Owner Participant of its rights
therein unless a declaration of acceleration has been made pursuant to Section
8.02 or the Certificates have otherwise theretofore become due and payable
through redemption or otherwise. Any such sale or sales may be adjourned from
time to time by announcement at the time and place appointed for such sale or
sales, or for any such adjourned sale or sales, without further notice, and the
Indenture Trustee and the Holder or Holders of any Certificates, or any
interest therein, may bid and become the purchaser at any such sale, and each
Holder shall be entitled, at any such sale, to credit against the purchase
price bid thereby all or any part of the unpaid obligations owing to such
Holder and secured by the Lien of this Agreement. The Indenture Trustee may
exercise such right without possession or production of the Certificates or
proof of ownership thereof, and as representative of the Holders may exercise
such right without notice to the Holders or including the Holders as parties to
any suit or proceeding relating to foreclosure of any property in the Indenture
Estate. The Owner Trustee hereby irrevocably constitutes the Indenture Trustee
the true and lawful attorney-in-fact of the Owner Trustee (in the name of the
Owner Trustee or otherwise) for the purpose of effectuating any sale,
assignment, transfer or delivery for enforcement of the Lien created under this
Agreement, whether pursuant to foreclosure or power of sale or otherwise, to
execute and deliver all such bills of sale, assignments and other instruments
as the Indenture Trustee may consider necessary or appropriate, with full power
of substitution, the Owner Trustee hereby ratifying and confirming all that
such attorney or any substitute shall lawfully do by virtue hereof.
Nevertheless, if so requested by the Indenture Trustee or any purchaser, the
Owner Trustee shall ratify and confirm any such sale, assignment, transfer or
delivery, by executing and delivering to the Indenture Trustee or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.
(c) Subject to Sections 8.03(b) and 8.03(e), if an
Indenture Event of Default has occurred and is continuing, the Owner Trustee
shall, at the request of the Indenture Trustee, promptly execute and deliver to
the Indenture Trustee such instruments of title or other documents as the
Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Indenture Estate. If the Owner
Trustee shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee, the Indenture Trustee
shall be entitled to a judgment for specific performance of the covenants
contained in the foregoing sentence, conferring upon the Indenture Trustee the
right to immediate possession and requiring the Owner Trustee to execute and
deliver such instruments and documents to the Indenture Trustee. The Indenture
Trustee shall also be entitled to pursue all or any part of the Indenture
Estate wherever it may be found and may enter any of the premises of the Owner
Trustee or any other Person wherever the Indenture Estate may be or be supposed
to be and search for the Indenture Estate and take possession of any item of
the Indenture Estate pursuant to this Section 8.03(c). The Indenture Trustee
may, from time to
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time, at the expense of the Indenture Estate, make all such expenditures for
maintenance, insurance, repairs, replacements, alterations, additions and
improvements to and of the Indenture Estate, as it may deem proper. In each
such case, the Indenture Trustee shall have the right to use, operate, store,
lease, control or manage the Indenture Estate, and to exercise all rights and
powers of the Owner Trustee relating to the Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control
or management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, revenues and other income of the
Indenture Estate and every part thereof, without prejudice, however, to the
right of the Indenture Trustee under any provision of this Agreement to collect
and receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder. In accordance with the terms of this Section 8.03(c), such
tolls, rents (including Rent), issues, profits, products, revenues and other
income shall be applied to pay the expenses of using, operating, storing,
leasing, controlling or managing the Indenture Estate, and of all maintenance,
insurance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Indenture Trustee may be required or may elect
to make, if any, for taxes, assessments, insurance or other proper charges upon
the Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine, inspect and make reports upon the properties and
books and records of the Owner Trustee and, to the extent permitted by the
Lease, the Company), and all other payments which the Indenture Trustee may be
required or authorized to make under any provision of this Agreement, including
this Section 8.03(c), as well as just and reasonable compensation for the
services of the Indenture Trustee, and of all persons properly engaged and
employed by the Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and
the Indenture Trustee shall have obtained possession of or title to the
Aircraft, the Indenture Trustee shall not be obligated to use or operate the
Aircraft or cause the Aircraft to be used or operated directly or indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of the Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its
discretion to protect the Indenture Estate and the Indenture Trustee, as
trustee and individually, against any and all liability for loss or damage to
the Aircraft and for public liability and property damage resulting from use or
operation of the Aircraft and (ii) funds are available in the Indenture Estate
to pay for all such insurance or, in lieu of such insurance, the Indenture
Trustee is furnished with indemnification from the Holders or any other Person
upon terms and in amounts satisfactory to the Indenture Trustee in its
discretion to protect the Indenture Estate and the Indenture Trustee, as
trustee and individually, against any and all such liabilities.
(d) Subject to Sections 8.03(b) and 8.03(e), the
Indenture Trustee may proceed to protect and enforce this Agreement and the
Certificates by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the Indenture Estate or any part thereof, or for the recovery of judgment
for the indebtedness secured by the
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Lien created under this Agreement or for the enforcement of any other power,
legal or equitable remedy available under applicable law.
(e) (i) If the Company shall fail to make any payment
of Basic Rent under the Lease and such failure shall have become a Lease Event
of Default then as long as no other Indenture Event of Default shall have
occurred and be continuing, the Owner Participant or the Owner Trustee may (but
need not) pay to the Indenture Trustee, at any time prior to the expiration of
a period of ten Business Days (the "10-Day Period") after such failure shall
have become a Lease Event of Default (prior to the expiration of which 10-Day
Period the Indenture Trustee shall not (without the prior written consent of
the Owner Trustee), notwithstanding any provision hereof to the contrary,
exercise any of the rights, powers or remedies pursuant to Section 15 of the
Lease or this Article 8), an amount equal to the full amount of such payment of
Basic Rent, together with any interest due thereon under the Lease on account
of the delayed payment thereof to the date of such payment, and such payment by
the Owner Participant or the Owner Trustee shall be deemed to cure any
Indenture Event of Default which arose from such failure of the Company as of
such date of payment (but such cure shall not relieve the Company of any of its
obligations). If the Company shall fail to perform or observe any covenant,
condition or agreement to be performed or observed by it under the Lease (other
than its obligation to pay Basic Rent), and if (but only if) the performance or
observance thereof can be effected by the payment of money alone (it being
understood that actions such as the obtaining of insurance and the procurement
of maintenance services can be so effected), then as long as no other Indenture
Event of Default (other than those arising from a Lease Event of Default) shall
have occurred and be continuing, the Owner Participant or the Owner Trustee may
(but need not) pay to the Indenture Trustee (or to such other Person as may be
entitled to receive the same), at any time prior to the expiration of a period
of ten Business Days after the expiration of the grace period, if any, provided
with respect to such failure on the part of the Company in Section 14 of the
Lease (prior to the expiration of which 10-Day Period the Indenture Trustee
shall not (without the prior written consent of the Owner Trustee),
notwithstanding any provision hereof to the contrary, exercise any of the
rights, powers or remedies pursuant to Section 15 of the Lease or this Article
8), all sums necessary to effect the performance or observance of such covenant
or agreement of the Company, together with any interest due thereon under the
Lease on account of the delayed payment thereof to the date of such payment,
and such payment by the Owner Participant or the Owner Trustee shall be deemed
to cure any Indenture Event of Default which arose from such failure of the
Company as of such date of payment (but such cure shall not relieve the Company
of any of its obligations). If, on the basis specified in the preceding
sentences, any Lease Events of Default shall have been remedied, then any
declaration pursuant to this Indenture that the Certificates are due and
payable or that an Indenture Event of Default exists hereunder, based solely
upon such Lease Events of Default, shall be deemed to be rescinded, and, in the
case of the first and second sentences of this Section 8.03(e)(i), the Owner
Participant or the Owner Trustee shall (to the extent of any such payments made
by it) be subrogated to the rights of the Holders of the Certificates under
Section 3.03, to receive from the Indenture Trustee such payment of overdue
Basic Rent or other amount (and the payment of interest on account of such
Basic Rent or other amount being overdue) and shall be entitled, so long as no
other Indenture Event of Default or Indenture Default shall have occurred and
be continuing or would result therefrom, to receive, subject to the provisions
of this Indenture, such payment upon receipt thereof by the Indenture Trustee;
provided, that the Owner Participant shall not otherwise attempt to recover any
such amount paid by it on behalf of the Company pursuant to this Section
8.03(e)(i) except by demanding of payment of such amount or by commencing
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an action at law against the Company for the payment of such amount; and
provided, further, that:
(x) this Section 8.03(e)(i) shall not apply with respect
to any default in the payment of Basic Rent due under the Lease if the
Lessee itself shall have theretofore failed to pay Basic Rent in the
manner required under the Lease (after giving effect to any applicable
grace period) (i) due on each of the two Rent Payment Dates
immediately preceding the date of such default, or (ii) due on a total
of four Rent Payment Dates; and
(y) neither the Owner Trustee nor the Owner Participant
shall have the right to cure any Lease Event of Default except as
specified in this Section 8.03(e)(i).
(ii) In the event that (A) at any time one or more
Lease Events of Default shall have occurred and be continuing or (B) the
Certificates shall have been accelerated pursuant to Section 8.02, the Owner
Trustee or the Owner Participant may, at its option, give at least 30 days'
prior irrevocable notice to the Indenture Trustee that the Owner Trustee or the
Owner Participant will redeem (except subsequent to the establishment of the
Redemption Date in respect of the Certificates) or purchase all Certificates
then Outstanding on a date determined consistently with the applicable
provisions of Article 6 and, concurrently with such notice, the Owner Trustee
or the Owner Participant will deposit with the Indenture Trustee an amount
sufficient to redeem (except subsequent to the establishment of the Redemption
Date in respect of the Certificates) or purchase at the applicable Redemption
Price determined in accordance with Article 6 all Certificates then Outstanding
(including, when applicable, an estimate of the Premium to be paid on the
Redemption Date computed using the Treasury Yield determined as if the
Redemption Date were the date of such notice) and to pay the Indenture Trustee
all amounts then due it hereunder, which funds shall be held by the Indenture
Trustee as provided in Section 9.04. Subject to the subsequent satisfaction by
the Owner Trustee of its obligations pursuant to the next following sentence,
upon the giving of such notice and the receipt by the Indenture Trustee of such
deposit, the Indenture Trustee shall deem all instructions received from the
Owner Trustee as having been given by the Holders of 100% of the Outstanding
principal amount of Certificates for all purposes of this Indenture. If such
notice is given, the Owner Trustee further agrees that it will deposit or cause
to be deposited with the Indenture Trustee, on or prior to the applicable
Redemption Date, whether or not an Indenture Event of Default is then
continuing, funds sufficient, when added to the funds already held by the
Indenture Trustee for such purpose, to redeem or purchase at the applicable
Redemption Price (including the Break Amount or Premium (if the Redemption
Price includes Premium) actually payable in respect thereof, if any, and all
other amounts payable to the Holders hereunder or under any other Operative
Agreement on such Redemption Date) all Certificates then Outstanding and to pay
the Indenture Trustee all amounts then due it hereunder. Whenever the Owner
Trustee or the Owner Participant shall be entitled to purchase Certificates
pursuant to this Section 8.03(e)(ii), each Holder shall sell its Certificates
to the Owner Trustee or the Owner Participant, as the case may be, in
compliance herewith.
(iii) Anything in this Agreement to the contrary
notwithstanding, the Indenture Trustee shall not be entitled to exercise any
remedy hereunder as a result of an
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Indenture Event of Default which arises solely by reason of one or more events
or circumstances which constitute a Lease Event of Default unless the Indenture
Trustee as security assignee of the Owner Trustee shall have exercised or
concurrently be exercising one or more of the remedies provided for in Section
15 of the Lease with respect to the Aircraft, provided, that the requirement to
exercise such remedies under the Lease shall not apply in circumstances where
the Indenture Trustee is involuntarily stayed or otherwise prohibited by
applicable law or court order from exercising such remedies under the Lease
after the Section 1110 Period. The "Section 1110 Period" shall mean the period
commencing on the date of such stay or prohibition and ending on the earlier of
(x) the 60th day thereafter (or such longer period (A) as may be specified in
Section 1110(a)(1) of the Bankruptcy Code, (B) equal to the period of an
extension with the consent of the Indenture Trustee of the 60-day period
specified therein pursuant to Section 1110(b) of the Bankruptcy Code, or (C)
resulting from the Indenture Trustee's own failure to give any requisite notice
to any Person) and (y) the date of repossession of the Aircraft. References in
this sentence to particular sections of the Bankruptcy Code as in effect on the
date hereof shall include any substantially similar successor provisions.
(f) Notwithstanding any provision of this Agreement to
the contrary, including, without limitation, Sections 8.03(b), 8.03(c) and
8.03(d), as long as no Lease Event of Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Owner Trustee shall take any
action in violation of the Company's rights under the Lease, including, without
limitation, (x) the right to receive all monies due and payable to it in
accordance with the provisions of the Lease and (y) the Company's rights to
possession and use of, and of quiet enjoyment of, the Aircraft.
(g) Subject to Sections 8.03(b) and 8.03(e), each and
every right, power and remedy herein given to the Indenture Trustee
specifically or otherwise in this Agreement shall be cumulative and shall be in
addition to every other right, power and remedy herein specifically given or
now or hereafter existing at law, in equity or by statute, and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often in such order as may be deemed
expedient by the Indenture Trustee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Indenture Trustee in the exercise of any
right, remedy or power or in pursuing any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of
the Owner Trustee or the Company or to be an acquiescence therein.
Section 8.04. Waiver of Owner Trustee. To the extent now
or at any time hereafter enforceable under applicable law, the Owner Trustee
covenants that it will not at any time insist upon or plead, or in any manner
whatsoever claim or take any benefit or advantage of or from any law now or
hereafter in force providing for the valuation or appraisement of the Indenture
Estate or any part thereof, prior to any sale or sales thereof to be made
pursuant to any provision herein contained, or prior to any applicable decree,
judgment or order of any court of competent jurisdiction; nor, after such sale
or sales, claim or exercise any right under any statute now or hereafter made
or enacted by any state or otherwise to redeem the property so sold or any part
thereof, and hereby expressly waives for itself and on behalf of each and
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every Person, except decree or judgment creditors of the Owner Trustee
acquiring any interest in or title to the Indenture Estate or any part thereof
subsequent to the date of this Agreement, all benefit and advantage of any such
law or laws, and covenants that it will not invoke or utilize any such law or
laws, but will suffer and permit the execution of every such power as though no
such law or laws had been made or enacted. Nothing in this Section 8.04 shall
be deemed to be a waiver by the Owner Trustee of its rights under Section
8.03(e).
The Indenture Trustee may maintain such a pleading, or in any
manner whatsoever claim or take any benefit or advantage of or from any law now
or hereafter in force even if it does not possess any of the Certificates or
does not produce any of them in the proceeding. A delay or omission by the
Indenture Trustee or any Holder in exercising any right or remedy accruing upon
an Indenture Event of Default under this Agreement shall not impair the right
or remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
Section 8.05. Waiver of Existing Defaults. The Holders of
a majority in aggregate principal amount of the Outstanding Certificates by
notice to the Indenture Trustee may waive on behalf of the Holders an existing
Indenture Default or Indenture Event of Default and its consequences except (i)
an Indenture Default or Indenture Event of Default in the payment of the
principal of or interest on any Certificate or (ii) in respect of a covenant or
provision hereof which pursuant to Section 11.02 cannot be amended or modified
without the consent of the Holder affected.
Section 8.06. Control by Majority. The Holders of a
majority in aggregate principal amount of the Outstanding Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee or exercising any trust or power conferred
on it by this Agreement. However, the Indenture Trustee may refuse to follow
any direction that conflicts with law or this Agreement, that is unduly
prejudicial to the rights of the Holders so affected, or that would, without
satisfactory indemnity from the Holders, subject the Indenture Trustee to
personal liability.
Section 8.07. Limitation on Suits by Holders. A Holder of
a Certificate may pursue a remedy under this Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written
notice of a continuing Indenture Event of Default under this
Agreement;
(2) the Holders of at least 25% in aggregate principal
amount of the Outstanding Certificates make a written request to the
Indenture Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee
indemnity satisfactory to the Indenture Trustee against any loss,
liability or expense to be, or which may be, incurred by the Indenture
Trustee in pursuing the remedy;
(4) the Indenture Trustee does not comply with the
request within 60 days after receipt of the request and the offer of
indemnity; and
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(5) during such 60-day period the Holders of a majority
in aggregate principal amount of the Outstanding Certificates do not
give the Indenture Trustee a direction inconsistent with the request.
A Holder may not use this Agreement to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 8.08. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Agreement the right of any Holder
to receive payment of principal of, Premium or Break Amount, if any, and
interest on such Holder's Certificate on or after the respective due dates
expressed in such Certificate, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 8.09. Indenture Trustee May File Proofs of Claim.
The Indenture Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and of the Holders allowed in any judicial proceedings
relating to any obligor on the Certificates, its creditors, or its property.
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01. Duties of Indenture Trustee.
(a) The Indenture Trustee will furnish to each
Certificate Holder promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Indenture Trustee under any Operative
Agreement or received from the Owner Trustee pursuant to Section 4.01(vi) to
the extent the same shall not have been otherwise directly distributed to the
Holders pursuant to the express provision of any other Operative Agreement.
(b) Subject to the terms of Sections 8.03(e), 8.05, 8.06,
9.01(c), 11.02 and 11.06, upon the written instructions at any time and from
time to time of Holders of a majority in aggregate principal amount of the
Outstanding Certificates, the Indenture Trustee shall take such of the
following actions as may be specified in such instructions: (i) exercise such
election or option, or make such decision or determination, or give such
notice, consent, waiver or approval or exercise such right, remedy or power or
take such other action hereunder or under any other Operative Agreement or in
respect of any part or all of the Indenture Estate as shall be specified in
such instructions; (ii) take such action with respect to, or to preserve or
protect, the Indenture Estate (including the discharge of Liens) as shall be
specified in such instructions and as are consistent with this Indenture; and
(iii) take such other action in respect of the subject matter of this Indenture
as is consistent with the terms hereof and the other Indenture Documents. The
Indenture Trustee will execute and the Owner Trustee will file or cause to be
filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Indenture Estate as
may be specified from time to time in written instructions of Holders of a
majority in aggregate principal amount of the Outstanding
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Certificates (which instructions may, by their terms, be operative only at a
future date and which shall be accompanied by the execution form of such
continuation statement so to be filed).
(c) The Indenture Trustee shall not be required to take
any action or refrain from taking any action under Section 8.06 or 9.01(b)
unless the Indenture Trustee shall have been indemnified by the Holders against
any liability, cost or expense (including counsel fees) which may be incurred
in connection therewith. The Indenture Trustee shall not be under any
obligation to take any action under this Agreement and nothing in this
Agreement contained shall require the Indenture Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. The Indenture Trustee shall not be required to take any action under
Section 8.06 or 9.01(b), nor shall any other provision of this Indenture be
deemed to impose a duty on the Indenture Trustee to take any action, if the
Indenture Trustee shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
(d) The Indenture Trustee shall not have any duty or
obligation to use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Indenture Estate, or
to otherwise take or refrain from taking any action under, or in connection
with, this Indenture or any part of the Indenture Estate, except as expressly
provided by the terms of this Indenture or as expressly provided in written
instructions from Holders as provided in this Indenture; and no implied duties
or obligations shall be read into this Indenture against the Indenture Trustee.
(e) The Owner Trustee and the Indenture Trustee agree
that they will not use, operate, store, lease, control, manage, sell, dispose
of or otherwise deal with the Aircraft or any other part of the Indenture
Estate except (i) in accordance with the terms of the Lease or the
Participation Agreement, or (ii) in accordance with the powers granted or
reserved to, or the authority conferred upon, the Owner Trustee and the
Indenture Trustee pursuant to this Indenture and in accordance with the express
terms hereof.
(f) Subject to the provisions of Section 9.04, the
Indenture Trustee shall not be liable for interest on any money received except
as otherwise provided in any other Operative Agreement. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to be
extent required by law.
Section 9.02. Rights of Indenture Trustee. (a) The
Indenture Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may consult with counsel or require an Officer's Certificate or an
Opinion of Counsel from the Company or the Owner Trustee after which it will
take such action or refrain from acting as it deems appropriate. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith and in accordance herewith in reliance on a resolution of the Board of
Directors
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of the Company, the written advice of counsel acceptable to the Owner Trustee,
the Company and the Indenture Trustee, officer's certificates or opinions of
counsel provided by the Company or the Owner Trustee.
(c) The Indenture Trustee may act through agents and
shall not be responsible for the misconduct or negligence of any such agent
appointed with due care; provided, that so long as no Indenture Event of
Default shall have occurred and be continuing no such agents shall be appointed
by the Indenture Trustee without the consent of the Company and the Owner
Trustee, which consent shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(e) If an Indenture Event of Default under this Agreement
has occurred and is continuing, the Indenture Trustee shall exercise its rights
and powers under this Agreement, and shall use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
Section 9.03. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates and may otherwise deal with the Owner Trustee, the
Company or an Affiliate of the Owner Trustee or the Company or a subsidiary of
the Owner Trustee or the Company with the same rights it would have if it were
not the Indenture Trustee. Any Agent may do the same with like rights.
Section 9.04. Funds May Be Held by Indenture Trustee or
Paying Agent; Investments. Any monies (including without limitation for
purposes of this Section 9.04 Permitted Investments constituting the proceeds
of the maturity, sale or other disposition of any Permitted Investment) held by
the Indenture Trustee or the Paying Agent hereunder as part of the Indenture
Estate, until paid out by the Indenture Trustee or the Paying Agent as herein
provided, (i) subject to clause (ii) below, may be carried by the Indenture
Trustee or the Paying Agent on deposit with itself or on deposit to its account
with any bank, trust company or national banking association incorporated or
doing business under the laws of the United States of America or one of the
States thereof having combined capital and surplus and retained earnings of at
least $100,000,000, and neither the Indenture Trustee nor the Paying Agent
shall have any liability for interest upon any such monies except as otherwise
agreed in writing or (ii) at any time and from time to time, so long as no
Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or
Lease Event of Default shall have occurred and be continuing, at the request
(given directly by the Company to the Indenture Trustee) of the Company acting
as the agent of the Owner Trustee, shall be invested and reinvested in
Permitted Investments as specified in such request (if such investments are
reasonably available for purchase) and sold, in any case at such prices,
including accrued interest or its equivalent, as are set forth in such request,
and such Permitted Investments shall be held by the Indenture Trustee in trust
as part of the Indenture Estate until so sold; provided, that the Company, on
behalf of the Owner Trustee, as agent of the Owner Trustee, shall upon demand
pay to the Indenture Trustee the amount of any loss realized upon maturity,
sale or other disposition of any such Permitted Investment and, so long as no
Lease Default (of the type referred to in Section 14.1 or 14.5 of the Lease) or
Lease Event of Default shall have occurred and be
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continuing, be entitled to receive from the Indenture Trustee, and the
Indenture Trustee on behalf of the Owner Trustee, shall promptly pay to the
Company pursuant to Section 22.1 of the Lease, any profit, income, interest,
dividend or gain realized upon maturity, sale or other disposition of any
Permitted Investment. If any Lease Default (of the type referred to in Section
14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be
continuing, any net income, profit, interest, dividend or gain realized upon
maturity, sale or other disposition of any Permitted Investment shall be held
as part of the Indenture Estate and shall be applied by the Indenture Trustee
at the same time, on the same conditions and in the same manner as the amounts
in respect of which such income, profit, interest, dividend or gain was
realized are required to be distributed in accordance with the provisions
hereof or of the Lease pursuant to which such amounts were required to be held.
The Indenture Trustee shall not be responsible for any losses on any
investments or sales of Permitted Investments made pursuant to the procedure
specified in this Section 9.04.
Section 9.05. Notice of Defaults. If an Indenture Event of
Default under this Agreement occurs and is continuing and the Indenture Trustee
has actual knowledge of same, the Indenture Trustee shall (i) promptly send
written notice thereof to the Company, the Owner Trustee and the Owner
Participant and, so long as the Series SWA 1995 Trust N397SW-I Certificates
shall be Outstanding, the Holders thereof and (ii) within 90 days after it
occurs, mail to each other Holder notice of all uncured Indenture Events of
Default under this Agreement. Except in the case of a default in the payment of
the principal of, Premium, if any, or interest on any Certificates or during
any period when the Series SWA 1995 Trust N397SW-I Certificate shall be
Outstanding, Break Amount, the Indenture Trustee shall be protected in
withholding the notice required under clause (ii) above if and so long as the
executive committee or trust committee of directors of the Indenture Trustee
and/or Responsible Officers thereof in good faith determines that withholding
such notice is in the interest of the Holders. In addition, if an Indenture
Default under this Agreement occurs and is continuing and if the Indenture
Trustee has actual knowledge of same, the Indenture Trustee shall promptly send
written notice thereof to the Company, the Owner Trustee and the Owner
Participant and, so long as the Series SWA 1995 Trust N397SW-I Certificates
shall be Outstanding, the Holders thereof.
Section 9.06. Compensation and Indemnity. (a) The Owner
Trustee shall pay to the Indenture Trustee from time to time (i) reasonable
compensation for its services, which compensation shall not be limited by any
law on compensation of a trustee of an express trust, (ii) reimbursement for
all reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement (including
the reasonable compensation and expenses of the Indenture Trustee's counsel and
any agent appointed in accordance with Section 9.02(c)), and (iii)
indemnification against any loss or liability incurred by it arising out of or
in connection with its acceptance or administration of the trust or trusts
hereunder except (A) as such expenses or loss or liability might result from
the gross negligence or willful misconduct of the Indenture Trustee or the
inaccuracy of any representation or warranty of the Indenture Trustee in its
individual capacity in Section 8 of the Participation Agreement or failure by
the Indenture Trustee to perform its payment and investment obligations
hereunder, (B) as otherwise provided in Section 9.10 and (C) as otherwise
excluded by the terms of Sections 7(b) and 7(c) of the Participation Agreement
from the Company's indemnities under said Sections; provided, that the
Indenture Trustee shall not make any claim
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under this Section 9.06(a) for any claim or expense indemnified against by the
Company under the Participation Agreement without first making demand on, and
pursuing such demand on a reasonable basis for a reasonable length of time, the
Company for payment of such claim or expense. The Indenture Trustee shall
notify the Owner Trustee and the Company promptly of any claim for which it is
entitled to be indemnified hereunder. The Indenture Trustee may have separate
counsel and the Owner Trustee shall pay the reasonable fees and expenses of
such counsel. The Owner Trustee need not pay for any settlement made without
its and the Company's consent.
(b) To secure the payment obligations of the Owner
Trustee pursuant to this Section 9.06, the Indenture Trustee shall have a lien
prior to that of the Holders of the Certificates on all money or property
constituting a part of the Indenture Estate held or collected by the Indenture
Trustee, except that held in trust to pay the principal of, and interest on,
the Certificates.
Section 9.07. Replacement of Indenture Trustee. (a) The
resignation or removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee shall become effective only upon the successor
Indenture Trustee's acceptance of appointment as provided in this Section.
(b) The Indenture Trustee may resign by giving at least
30 days' prior written notice to the Company, the Owner Trustee and the Holders
of a majority in aggregate principal amount of the Outstanding Certificates.
The Holders of a majority in aggregate principal amount of the Outstanding
Certificates may remove the Indenture Trustee by giving at least 30 days' prior
written notice to the Indenture Trustee, the Owner Trustee and the Company and
may appoint a successor Indenture Trustee with the Owner Trustee's and the
Company's consent. At such time as Series SWA 1995 Trust N397SW Certificates
are Outstanding, the Owner Trustee may remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with
Section 9.09, fails to perform its payment obligations hereunder or
otherwise fails to perform any of its material obligations hereunder;
(2) the Indenture Trustee is adjudged a bankrupt
or an insolvent;
(3) a receiver or public officer takes charge of
the Indenture Trustee or its property; or
(4) the Indenture Trustee becomes incapable of
acting.
(c) If the Indenture Trustee resigns or is removed, or if
a vacancy exists in the office of Indenture Trustee for any reason, Holders of
a majority in aggregate principal amount of the Certificates or, at such time
as Series SWA 1995 Trust N397SW Certificates are Outstanding, the Owner
Trustee, shall promptly appoint a successor Indenture Trustee.
(d) If a successor Indenture Trustee does not take office
within 30 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the
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Company, the Owner Trustee or the Holders of a majority in aggregate principal
amount of the Outstanding Certificates may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section
9.09, any Holder may petition any court of competent jurisdiction for the
removal of such Indenture Trustee and the appointment of a successor Indenture
Trustee.
(f) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Company
and to the Owner Trustee. Thereupon, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
for which the successor Indenture Trustee is to be acting as Indenture Trustee
under this Agreement. The retiring Indenture Trustee shall promptly transfer
all property and all books and records relating to the administration of the
Indenture Estate held by it as Indenture Trustee to the successor Indenture
Trustee subject to the lien provided for in Section 9.06. The successor
Indenture Trustee shall give notice of each appointment of a successor
Indenture Trustee if there are Certificates Outstanding, by mailing written
notice of such event by first-class mail to the Holders.
(g) All provisions of this Section 9.07 except
subparagraphs (b)(l) and (e) and the words "subject to the lien provided for in
Section 9.06" in subparagraph (f) shall apply also to any Paying Agent.
Section 9.08. Successor Indenture Trustee, Agents by
Merger, Etc. If the Indenture Trustee or any Agent consolidates with, merges
or converts into, or transfers all or substantially all of its corporate trust
business assets to, another corporation, the successor corporation, without any
further act, shall be the successor Indenture Trustee or Agent, as the case may
be.
Section 9.09. Eligibility; Disqualification. This
Agreement shall at all times have an Indenture Trustee which shall have a
combined capital and surplus of at least $100,000,000 and shall be a "citizen
of the United States" as defined in the Federal Aviation Act. If such
corporation publishes reports of conditions at least annually, pursuant to law
or to the requirements of Federal, State, Territorial, or District of Columbia
supervising or examining authority, then for the purposes of this Section 9.09,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
conditions so published.
In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.09, the Indenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07.
Section 9.10. Trustee's Liens. The Indenture Trustee in
its individual capacity agrees that it will at its own cost and expense
promptly take such action as may be necessary to duly discharge and satisfy in
full all Liens ("Trustee's Liens") on the Indenture Estate which are either (i)
attributable to the Indenture Trustee in its individual capacity and which are
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unrelated to the transactions contemplated by the Operative Agreements, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.
Section 9.11. Withholding Taxes; Information Reporting.
Without limitation of subsections 15.05(d) and 15.05(e), the Indenture Trustee
shall exclude and withhold from each distribution of principal, Premium, if
any, Break Amount, if any, and interest and other amounts due hereunder or
under the Certificates any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect to the Certificates, to withhold such amounts and timely pay the same
to the appropriate authority in the name of and on behalf of the Holders, that
it will file any necessary withholding tax returns or statements when due, and
that, as promptly as possible after the payment thereof, it will deliver to
each Holder appropriate documentation showing the payment thereof, together
with such additional documentary evidence as such Holders may reasonably
request from time to time. The Indenture Trustee agrees to file any other
information reports as it may be required to file under United States law. Such
withholding by the Indenture Trustee shall in no event give rise to an
Indenture Event of Default and shall be deemed to constitute payment in full of
the amount withheld.
Section 9.12. [Reserved for Potential Future Use]
Section 9.13. Certain Rights of Owner Trustee and Owner
Participant. Notwithstanding any other provisions of this Indenture, including
the Granting Clause, the following rights shall be reserved to the Owner
Trustee or the Owner Participant, as the case may be (as separate and
independent rights) to the extent described herein:
(a) at all times the Owner Trustee and the Owner
Participant shall have the right, together with the Indenture Trustee,
to receive from the Lessee all notices, certificates, reports,
filings, opinions of counsel and other documents and all information
which the Company is permitted or required to give or furnish to the
Owner Participant, the Owner Trustee or the Lessor pursuant to any
Indenture Document;
(b) at all times (unless otherwise specified) the Owner
Trustee shall have the right (1) to the exclusion of the Indenture
Trustee but subject to and without affecting the provisions of Section
11.06, (i) to exercise the rights, elections and options of the Lessor
to make any decision or determination and to give any notice, consent,
waiver or approval with respect to any adjustments under Section 3.7
of the Lease or the identification of Permitted Foreign Air Carriers
pursuant to Section 23 of the Lease, Sections 17 and 18 of the
Participation Agreement, the Tax Indemnity Agreement and any provision
of the Operative Agreements related to Excluded Payments, (ii) to
exercise the rights, elections and options of the Lessor and to
approve the purchase or other acquisition of the Aircraft by a
Prohibited Person with respect to the termination of the Lease and
solicitations of bids and appraisals pursuant to Section 9 of the
Lease, or with respect to renewals or purchase options and
terminations to take effect upon or after the payment in full (or
assumption by the Company) of the obligations secured hereby,
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(iii) without limiting the terms of Section 8.03(e)(i), to effect
cures pursuant to Section 20 of the Lease, and (iv) to maintain and
exercise all rights regarding separate insurance with respect to the
Aircraft for its own account pursuant to Section 11.7 of the Lease
(provided, that no such insurance impairs or reduces coverage under
any insurance required to be maintained by the Company under Section
11 of the Lease) and (2) so long as no Indenture Event of Default
shall have occurred and be continuing, (x) during the Floating Period,
together with the Indenture Trustee (agreement of both being required)
and (y) during the Fixed Period, to the exclusion of the Indenture
Trustee (i) to approve as satisfactory any other accountants,
inspectors, engineers or counsel to render services for or issue
opinions to the Owner Trustee, together with the contents of any
certificates and opinions to be delivered by such Persons, in each
case pursuant to express provisions of the Operative Agreements and
(ii) to grant such consents, approvals and waivers as may be requested
under the Indenture Documents and (3) together with the Indenture
Trustee (each acting separately), to request all certificates and
documents of Lessee, to request assignment of any sublease of the
Aircraft and to exercise inspection rights pursuant to Section 12 of
the Lease;
(c) at all times, the Owner Trustee shall have the
non-exclusive right, as Lessor, to seek specific performance of the
covenants of the Company under the Lease relating to the protection,
insurance, maintenance, possession and use of the Aircraft and to
obtain performance by Lessee under Sections 11(a) and (b) of the
Participation Agreement; and
(d) at all times each of the Owner Trustee (as Owner
Trustee, individually and as Lessor) and the Owner Participant shall
have the right, to the exclusion of the Indenture Trustee, to demand,
collect, ▇▇▇ for or receive the payment of, and waive, modify or
otherwise deal with Excluded Payments due and payable to it, and, in
the case of the Owner Participant, to give the written notice referred
to in the proviso to Section 14.1 of the Lease.
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS
Section 10.01. Satisfaction and Discharge of Agreement;
Defeasance; Termination of Obligations. Subject to Section 10.02, this
Agreement shall cease to be of further effect, and the Owner Trustee and the
Indenture Trustee shall, except as herein provided, be deemed to have been
discharged from their respective obligations hereunder and with respect to the
Certificates (and the Indenture Trustee, on demand and at the expense of the
Owner Trustee, shall execute proper instruments acknowledging satisfaction and
discharge of this Agreement in respect of the Certificates), when
(a) (i) all Certificates theretofore executed and
delivered (other than (A) Certificates which have been mutilated, destroyed,
lost or stolen and which have been replaced or exchanged as provided in Section
2.06 and (B) Certificates for the payment of which money
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held in trust hereunder has been paid and discharged from such trust, as
provided in Section 7.01) have been delivered to the Indenture Trustee for
cancellation; or
(ii) all Certificates not theretofore delivered to
the Indenture Trustee for cancellation have become due and payable (whether
upon stated maturity or as a result of redemption or upon acceleration), or
will become due and payable (including as a result of redemption in respect of
which irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Certificates not theretofore
canceled by the Indenture Trustee or delivered to the Indenture Trustee for
cancellation, an amount of cash and/or Government Obligations sufficient to
discharge such indebtedness, including the principal of, Premium, if any, and
interest on the Certificates to the date of such deposit (in the case of
Certificates which have become due and payable), or to the maturity thereof, as
the case may be and, in the case of the Series SWA 1995 Trust N397SW-I
Certificate, Break Amount, if any, and all other amounts payable to the
Original Holder hereunder or under any other Operative Agreement; or
(iii) the Certificates shall have been defeased as
provided in Section 10.05; provided, however, that upon the making of the
deposit referred to in subsection A of Section 10.05, the right of the Owner
Trustee or the Company to cause the redemption of Certificates (except a
redemption in respect of which irrevocable notice has theretofore been given)
shall terminate;
(b) all other amounts then due and payable hereunder have
been paid; and
(c) the Owner Trustee or the Company on behalf of the
Owner Trustee has delivered to the Indenture Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
for or relating to the satisfaction and discharge of this Agreement
contemplated by this Section 10.01 have been complied with.
Section 10.02. Survival of Certain Obligations.
Notwithstanding the provisions of Section 10.01, the obligations of the
Indenture Trustee contained in Sections 2.01 through 2.08, 2.10, Article III
(other than Section 3.05), Section 7.01, Section 9.11, Section 10.03 and
Section 10.04, and the rights, duties, immunities and privileges hereunder of
the Indenture Trustee shall survive.
Section 10.03. Monies to Be Held in Trust. All money and
Government Obligations deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Certificates and this Agreement, to the payment in the case
of the Series SWA 1995 Trust N397SW-I Certificates, as provided for in Section
15.04 or, in the case of the Series SWA 1995 Trust N397SW Certificates, either
directly or through any Paying Agent as the Indenture Trustee may determine, to
the Holders, of all sums due and to become due thereon for principal, Premium,
if any, interest, and, in the case of the Series SWA 1995 Trust N397SW-I
Certificates, Break Amount, if any, and all other amounts payable to the
Holders hereunder or under any other Operative Agreement, but such money need
not be segregated from other funds except to the extent required by law.
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Section 10.04. Monies to Be Returned to Owner Trustee. The
Indenture Trustee and any Paying Agent shall promptly pay or return to the
Owner Trustee upon request of the Owner Trustee any money or Government
Obligations held by them at any time that are not required for the payment of
the amounts described above in Section 10.03 on the Certificates for which
money or Government Obligations have been deposited pursuant to Section 10.01,
and the Holders shall have no claim in respect of any money or Government
Obligations so paid or returned.
Section 10.05. Defeasance. The Owner Trustee may, at any
time, defease the interest of the Indenture Trustee in the Indenture Estate in
whole, but not in part, through the deposit with the Defeasance Trustee, in
accordance with the provisions of this Section 10.05, of cash and/or Government
Obligations; provided, however, that such defeasance shall not be applicable in
respect of the Series SWA 1995 Trust N397SW-I Certificates. Such deposit shall
be made pursuant to a declaration or other appropriate instrument of trust
satisfactory in form and substance to the Defeasance Trustee and the Indenture
Trustee; such deposit shall be absolute and irrevocable and the instrument of
trust shall expressly provide that the Owner Trustee shall have no further
title to or interest in or power to direct the use or application of the cash
and/or Government Obligations so deposited or any of the proceeds arising
therefrom; such instrument shall state that the trust created thereby and the
cash and/or Government Obligations deposited pursuant thereto are for the sole
and exclusive benefit of the Holders and shall expressly provide that the
Defeasance Trustee shall apply such cash and payments of principal and/or
interest on such Government Obligations to, and only to, the punctual payment
of the principal and interest on the Certificates as and when such payments
become due (such declaration or instrument to contain appropriate provisions
for the recording of transfers of Certificates and the names and addresses of
the Holders); and the Owner Trustee shall agree to pay, as the same shall
become due and payable, all fees, costs and charges of the Defeasance Trustee
under such instrument of trust, including those which may become payable after
the date the conditions hereinbelow specified have been met. Upon compliance
with the following conditions, and provided, that no Indenture Event of Default
or Indenture Default shall have occurred and be continuing on a date 91 days
after the date of the deposit of Government Obligations and/or cash with the
Defeasance Trustee as provided in Subsection A below, the Owner Trustee's
obligations with respect to the Certificates will be discharged and this
Indenture shall terminate as provided in Section 10.01:
A. the Owner Trustee shall have deposited with the
Defeasance Trustee absolutely and irrevocably (irrespective of whether
the conditions in Subsections B, C, D and E of this Section 10.05 have
been satisfied) (1) cash and/or (2) Government Obligations which
through the payment of principal and interest in respect thereof in
accordance with their terms, without any reinvestment or further
investment of the principal of or interest earned on such Government
Obligations, will absolutely and unconditionally provide in any and
all circumstances not later than one day before each Payment Date an
amount sufficient to pay and discharge the payment of principal and
interest to be due and payable on such Payment Date;
B. no Indenture Event of Default or Indenture Default
shall have occurred and be continuing on the date of the deposit of
cash and/or Government Obligations as contemplated hereby;
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C. the Owner Trustee shall have delivered to the
Defeasance Trustee and to the Certificate Holders written confirmation
by a nationally recognized firm of independent public accountants
(other than the accounting firm then serving as Shawmut Bank
Connecticut, National Association's or the Owner Participant's regular
auditors) selected by the Owner Trustee, the form and substance of
which confirmation and the identity of such accounting firm shall be
satisfactory to the Indenture Trustee, that the Government Obligations
deposited for payment of the Certificates, together with any cash
deposited by the Owner Trustee, are sufficient to satisfy the
requirements of Subsection A hereof;
D. the Owner Trustee shall have delivered to the
Defeasance Trustee, the Indenture Trustee and the Certificate Holders
an opinion of counsel in form and substance satisfactory to the
Indenture Trustee to the effect that (1) the trust declaration or
other instrument, as the case may be, is legal, valid, binding and
enforceable in accordance with its terms for the sole benefit and use
of the Holders, is irrevocable and the Government Obligations and/or
cash deposited thereunder and the proceeds thereof and therefrom are
held by the Defeasance Trustee thereunder in trust solely for the
benefit of the Holders and will not be subject to any valid interest,
lien, claim or encumbrance of any other Person, including the Owner
Trustee or the Owner Participant or any Person claiming by, through,
under or in the name or on behalf of the Owner Trustee or the Owner
Participant or any creditor or beneficiary of the Owner Trustee or the
Owner Participant, or by any court or trustee in bankruptcy and (2)
such deposit will not constitute a preferential transfer or a
fraudulent conveyance under any bankruptcy or other similar law and
shall cover such other matters as the Indenture Trustee may reasonably
require in connection with such final deposit and matters relating
thereto;
E. the Owner Trustee shall have delivered to the
Defeasance Trustee, the Indenture Trustee and the Certificate Holders
an Officers' Certificate and an Opinion of Counsel (1) to the effect
that there has been published by the Internal Revenue Service a
ruling, or (2) since the date of this Agreement that there has been a
change in or clarification of the applicable Federal income tax law,
in either case to the effect that Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of the
exercise by the Owner Trustee of its option under Section
10.01(a)(iii) and will be subject to Federal income tax on the same
amounts and in the same manner and at the same times, as would have
been the case if such option had not been exercised; and
F. the Owner Trustee shall have (1) taken such further
action and executed such further documents as may be reasonably
required by any Holder, the Indenture Trustee or the Defeasance
Trustee and (2) delivered to the Defeasance Trustee, the Indenture
Trustee and to the Holders a certificate of a Responsible Officer of
the Owner Trustee stating that all conditions precedent herein to the
defeasance of the Certificates contemplated by this Section 10.05 have
been satisfied.
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The Owner Trustee will pay all expenses (including, without
limitation, reasonable legal fees) incident to the implementation of the
transactions contemplated by this Section 10.05.
For the purpose of this Article 10, the following terms have
the following definitions:
"Defeasance Trustee" shall mean an institution authorized to
transact in the State of New York the business of a trust company
selected by the Owner Trustee and approved by the Indenture Trustee;
provided, that at the time of the delivery of cash and/or Government
Obligations pursuant to this Section 10.05, the institution selected
shall have a combined capital and surplus of at least $500,000,000 and
shall not be an Affiliate of the Company, the Owner Participant or
Shawmut Bank Connecticut, National Association.
"Government Obligations" shall mean direct U.S. Dollar
obligations of the United States of America which are not callable,
redeemable or prepayable, directly or indirectly, by any Person.
ARTICLE 11
AMENDMENTS AND WAIVERS
Section 11.01. Amendments to this Agreement Without Consent
of Holders. The Owner Trustee and the Indenture Trustee may enter into one or
more agreements supplemental hereto without the consent of any Holder for any
of the following purposes:
(1) to correct any mistake or cure any ambiguity,
defect or inconsistency herein or in the Certificates or to make any
change not inconsistent with the provisions hereof; provided, that
such change does not adversely affect the interests of any Holder;
(2) to evidence the succession of another party
as the Owner Trustee in accordance with the terms of the Trust
Agreement or to evidence (in accordance with Article 9) the succession
of a new trustee hereunder, the removal of the trustee hereunder or
the appointment of any co-trustee or co-trustees or any separate or
additional trustee or trustees;
(3) to convey, transfer, assign, mortgage or
pledge any property to or with the Indenture Trustee or to make any
other provisions with respect to matters or questions arising
hereunder so long as such action shall not adversely affect the
interests of the Holders;
(4) to correct or amplify the description of any
property at any time subject to the Lien of this Agreement or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subject to the Lien of this Agreement or to
subject to the Lien of this Agreement the Airframe or Engines or
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airframe or engines substituted for the Airframe or Engines in
accordance herewith or with the Lease; provided, that Trust
Supplements entered into for the purpose of subjecting to the Lien of
this Agreement the Airframe or Engines (or the Replacement Airframe or
any Replacement Engines) in accordance with the Lease need only be
executed by the Owner Trustee;
(5) to add to the covenants of the Owner Trustee,
for the benefit of the Holders, or to surrender any rights or power
herein conferred upon the Owner Trustee or the Owner Participant;
(6) to add to the rights of the Holders;
(7) to provide for the assumption by the Company
of the obligations of the Owner Trustee hereunder in accordance with
the terms and conditions applicable thereto specified in Section 7.03;
(8) to provide for the redemption of (i) the
Series SWA 1995 Trust N397SW-I Certificate and the issuance of the
Series SWA 1995 Trust N397SW Certificates in accordance with the terms
and conditions applicable thereto specified in Article 15 or (ii) any
Series SWA 1995 Trust N397SW Certificates issued hereunder and the
issuance of the New Debt in accordance with the terms and conditions
applicable thereto specified in Section 17 of the Participation
Agreement; or
(9) to include on the Certificates any legend as
may be required by applicable law.
Section 11.02. Amendments to this Agreement with Consent of
Holders. (a) With the written consent of the Holders of a majority of the
aggregate principal amount of the Outstanding Certificates, the Owner Trustee
and the Indenture Trustee may enter into such supplemental agreements to add
any provisions to or to change or eliminate any provisions of this Agreement or
of any such supplemental agreements or to modify the rights of the Holders;
provided, however, that without the consent of each Holder affected thereby, an
amendment under this Section 11.02 may not:
(1) reduce the principal amount of, Premium or
Break Amount, if any, or any installment of interest on, any
Certificate; or
(2) change the date on which any principal amount
of, any Installment Payment Amount payable with respect to, Premium or
Break Amount, if any, or interest on any Certificate, is due or
payable; or
(3) create any Lien on the Indenture Estate prior
to or pari passu with the Lien thereon under this Agreement except such
as are permitted by this Agreement, or deprive any Holder of the
benefit of the Lien on the Indenture Estate created by this Agreement;
or
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(4) reduce the percentage in principal amount of
the Outstanding Certificates, the consent of whose holders is required
for any such supplemental agreement, or the consent of whose holders
is required for any waiver (of compliance with certain provisions of
this Agreement or of certain defaults hereunder or their consequences)
provided for in this Agreement; or
(5) make any change in Section 8.05, 8.08, or
(but only for so long as the Series SWA 1995 Trust N397SW-I
Certificates shall be Outstanding) Article 15, or this Section
11.02(a).
(b) It is not necessary under this Section 11.02 for the
Holders to consent to the particular form of any proposed supplemental
agreement, but it is sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner Trustee and
the Indenture Trustee of any supplemental agreement pursuant to the provisions
of this Section 11.02, the Indenture Trustee shall transmit by first-class mail
a notice, setting forth in general terms the substance of such supplemental
agreement, to all Holders, as the names and addresses of such Holders appear on
the Register. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental agreement.
Section 11.03. Revocation and Effect of Consents. Until an
amendment or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder, even if notation
of the consent is not made on any Certificate. However, any such Holder or
subsequent Holder may revoke the consent as to his Certificate if the Indenture
Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder affected by such amendment or waiver.
Section 11.04. Notation on or Exchange of Certificates. The
Indenture Trustee may place an appropriate notation about an amendment or
waiver on any Certificate thereafter executed. The Indenture Trustee in
exchange for such Certificates may execute new Certificates that reflect the
amendment or waiver.
Section 11.05. Indenture Trustee Protected. The Indenture
Trustee need not sign any supplemental agreement that adversely affects its
rights.
Section 11.06. Amendments, Waivers, Etc. of Other Operative
Agreements. (a) Subject to Section 11.01, without the consent of the Holders
of a majority in principal amount of Outstanding Certificates, the respective
parties to the Participation Agreement, the Lease and the Trust Agreement may
not modify, amend or supplement any of said agreements, or give any consent,
waiver, authorization or approval thereunder, for any purpose, including adding
any provisions to or changing in any manner or eliminating any of the
provisions thereof or modifying in any manner the rights of the respective
parties thereunder; provided, however, that the actions specified in subsection
(b) of this Section 11.06 may be taken without the consent of the Indenture
Trustee or any Holder.
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(b) Subject to the provisions of subsection (c) of this
Section 11.06, the respective parties to the Participation Agreement, the Lease
and the Trust Agreement, at any time and from time to time without the consent
of the Indenture Trustee or of any Holder may:
(1) so long as no Indenture Event of Default
shall have occurred and be continuing, modify, amend or supplement the
Lease, or give any consent, waiver, authorization or approval with
respect thereto, except that without compliance with subsection (a) of
this Section 11.06 (except as specifically provided below) the parties
to the Lease shall not modify, amend or supplement, or give any
consent, waiver, authorization or approval for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the
respective parties thereunder, with respect to the following
provisions of the Lease as originally executed: Sections 2, 3.1, 3.2
(if the result thereof would be to shorten the Term of the Lease to a
period shorter than the period ending with the final Principal Payment
Date, Installment Date or Maturity Date of the Certificates), 3.3,
3.4, 3.5 (except to the extent such Section relates to Excluded
Payments and amounts payable to the Indenture Trustee in its
individual capacity), 3.6 (except insofar as it relates to the address
or account information of the Owner Trustee or the Indenture Trustee),
the first sentence of Section 3.8 or any proviso in said Section, 4, 5
(but only insofar as it relates to return condition upon termination
of the Lease pursuant to Section 15), 6, 7 (except that further
restrictions may be imposed on the Company), 9, 10 (except that
additional requirements may be imposed on the Company), 11 (except for
Section 11.6 insofar as such Section relates to the Owner Participant
and the Lessor and except that additional insurance requirements may
be imposed on the Company), 12 (except in order to increase the
Company's liabilities or enhance the Lessor's rights thereunder), 13
(except in the case of an assignment by the Lessor in circumstances
where the Aircraft shall remain registrable under the Federal Aviation
Act), 14 (except to impose additional or more stringent Lease Events
of Default), 15 (except to impose additional remedies), 16, 17,
18.2(b) (except to impose additional requirements on the Company), 19,
20, 21 and 22, and (i) any definition of terms used in the Lease, to
the extent that any modification of such definition would result in a
modification of the Lease not permitted pursuant to this subsection
(b) and (ii) any other provision of the Lease not hereinabove referred
to if the modification, amendment or supplement thereto, or consent,
waiver, authorization or approval in respect thereof would adversely
affect the Indenture Trustee's interest in the Trust Estate, reduce
Lessee's obligations in respect of maintaining the Aircraft or
otherwise impair the value of the Trust Estate; provided, that in the
event an Indenture Event of Default shall have occurred and be
continuing, the Indenture Trustee shall have all rights of the Owner
Trustee as Lessor under the Lease to modify, amend or supplement the
Lease or give any consent, waiver, authorization or approval
thereunder, for any purpose, including, adding any provisions to or
changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the Lessor thereunder;
provided, further, that without the prior consent of the Owner
Trustee, and whether or not an Indenture Event of Default shall have
occurred and be continuing, no such action shall be taken with respect
to any of the provisions of Sections 1 (to the extent any modification
of a definition contained therein would result in a modification of
the Lease not permitted by this proviso), 3.4 (to the extent any
modification would result in amounts payable by
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Lessor under the Indenture not also being payable by Lessee to Lessor
under the Lease), 3.7, 3.8, 4, 5 (to the extent not related to return
upon termination of the Lease pursuant to Section 15 of the Lease), 6
(to the extent such action would reduce the Company's obligations), 7,
8, 9, 10, 11, 12, 13, 14, 15, 16 (insofar as it relates to the
Lessor), 17, 18, 19, 20, 21 and 22 of the Lease, or any other Section
of the Lease to the extent such action shall affect any Excluded
Payment or the amount or timing of any amounts payable by the Company
under the Lease as originally executed (or as subsequently modified
with the consent of the Owner Trustee) which, absent the occurrence
and continuance of an Indenture Event of Default, will be
distributable to the Owner Trustee under Article 3; and provided,
further, that the parties to the Lease may take any such action
without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or
the Owner Trustee's, the Owner Participant's or the Company's rights
or obligations with respect to, Excluded Payments;
(2) modify, amend or supplement the Trust
Agreement, or give any consent, waiver, authorization or approval with
respect thereto, in each case only to the extent any such action shall
not adversely affect the interests of the Holders;
(3) modify, amend or supplement the Participation
Agreement, or give any consent, waiver, authorization or approval with
respect thereto, except that without compliance with subsection (a) of
this Section 11.06 the parties to the Participation Agreement shall
not modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof
or of modifying in any manner the rights of the respective parties
thereunder, with respect to the following provisions of the
Participation Agreement as originally executed: Sections 1(b), 7
(insofar as such Section 7 relates to the Indenture Trustee and the
Holders), 8, 11, 13, 17, 18 and 19 and (i) any definition of terms
used in the Participation Agreement, to the extent that any
modification of such definition would result in a modification of the
Participation Agreement not permitted pursuant to this subsection (b)
and (ii) any other provision of the Participation Agreement not
hereinabove referred to if the modification, amendment or supplement
thereto, or consent, authorization or approval in respect thereof
would adversely affect the Indenture Trustee's interest in the Trust
Estate or otherwise impair the value of the Trust Estate; and
(4) modify, amend or supplement any of said
agreements in order to cure any ambiguity, to correct or supplement
any provisions thereof which may be defective or inconsistent with any
other provision thereof or of any provision of this Indenture, or to
make any other provision with respect to matters or questions arising
thereunder or under this Agreement which shall not be inconsistent
with the provisions of this Agreement, provided the making of any such
other provision shall not adversely affect the interests of the
Holders.
(c) No modification, amendment, supplement, consent,
waiver, authorization or approval with respect to the Lease or the
Participation Agreement, whether effected pursuant to subsection (a) or
pursuant to subsection (b) of this Section 11.06 and anything in such
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subsections or elsewhere in this Agreement to the contrary notwithstanding,
shall, without the consent of the holder of each Outstanding Certificate
affected thereby,
(1) modify, amend or supplement the Lease in such
a way as to extend the time of, or the manner of making any, payment
of any Advance or Basic Rent, or Stipulated Loss Value or any other
amounts payable to the Indenture Trustee for its own account or for
the account of the Holders (subject in any event to the last paragraph
of Section 3.3 of the Lease) upon the occurrence of an Event of Loss
or Termination Value and any other amounts payable to the Indenture
Trustee for its own account or for the account of the Holders (subject
in any event to the last paragraph of Section 3.3 of the Lease) upon
termination of the Lease with respect to the Aircraft, payable under,
or as provided in, the Lease as originally executed, or reduce the
amount of any installment of any Advance or Basic Rent or Supplemental
Rent so that the same is less than the payment of principal of,
Premium, if any, Break Amount, if any, and interest on the
Certificates, as the case may be, to be made from such installment of
any Advance or Basic Rent or Supplemental Rent, or reduce the
aggregate amount of Stipulated Loss Value, or any other amounts
payable under, or as provided in, the Lease as originally executed
upon the occurrence of an Event of Loss so that the same is less than
the accrued interest on and the principal as of the Lease Loss Payment
Date, and Break Amount, if any, of the Certificates at the time
Outstanding or reduce the amount of Termination Value or Special
Purchase Price and any other amounts payable under, or as provided in,
the Lease as originally executed upon termination of the Lease so that
the same is less than the accrued interest on and principal as of the
date of any such termination and Premium, if any, and Break Amount, if
any of Certificates at the time Outstanding, or
(2) modify, amend or supplement the Lease in such
a way as to, or consent to any assignment of the Lease or give any
consent, waiver, authorization or approval which would, release the
Company from its obligations in respect of payment of Basic Rent or
Supplemental Rent, or Stipulated Loss Value and any other amounts
payable to the Indenture Trustee for its own account or the account of
the Holders (subject in any event to the last paragraph of Section 3.3
of the Lease) upon the occurrence of any Event of Loss, or Termination
Value or Special Purchase Price and any other amounts payable to the
Indenture Trustee for its own account or the account of the Holders
(subject in any event to the last paragraph of Section 3.3 of the
Lease), payable under, or as provided in, the Lease as originally
executed, except for any such assignment pursuant to Section 8(s) of
the Participation Agreement, and except as provided in the Lease as
originally executed.
Section 11.07. Trust Supplement. The Owner Trustee and the
Indenture Trustee hereby confirm and agree that upon execution and delivery of
any Trust Supplement covering the Aircraft by the Owner Trustee substantially
in the form attached hereto as Exhibit C or any trust supplement covering a
sublease of the Aircraft, this Agreement shall be supplemented by such Trust
Supplement or such trust supplement without further action by the Owner Trustee
or Indenture Trustee.
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ARTICLE 12
MISCELLANEOUS
Section 12.01. Notices. (a) Unless otherwise specifically
provided herein, all notices required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice may be given
by courier service, telegram, telex, telemessage, telecopy, telefax, cable or
facsimile (confirmed by telephone or in writing in the case of notice by
telegram, telex, telemessage, telecopy, telefax, cable or facsimile) or any
other customary means of written communication, and any such notice shall be
effective when delivered,
if to the Indenture Trustee, to:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telex: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Owner Trustee, to:
Shawmut Bank Connecticut, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telex: 221086 CTNB-HFD
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or if to any other Person, addressed to such Person as provided in the
Participation Agreement.
(b) The Company, the Owner Trustee, the Indenture
Trustee, the Owner Participant or the Original Holder by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Holders of the Series
SWA 1995 Trust N397SW Certificates shall be mailed by first-class mail to the
addresses for Holders shown on the Register kept by the Registrar and to
addresses filed with the Indenture Trustee for other Holders. Failure so to
mail a notice or communication or any defect in such notice or
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communication shall not affect its sufficiency with respect to other Holders of
such Certificates of that or any other series entitled to receive notice.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to have
been duly given, whether or not the addressee receives it.
(e) Notwithstanding the foregoing, all communications or
notices to the Indenture Trustee shall be deemed to be given only when received
by a Responsible Officer of the Indenture Trustee.
Section 12.02. [Reserved for Potential Future Use]
Section 12.03. Successors and Assigns; Agreement of Holders.
All covenants and agreements contained herein shall be binding upon, and inure
to the benefit of, each of the parties hereto and the successors and assigns of
each, whether so expressed or not. Any request, notice direction, consent,
waiver or other action by any Certificate Holder shall bind the successors and
assigns of such Certificate Holder. Each Certificate Holder, by its acceptance
of a Certificate, agrees to be bound by all provisions of this Indenture and
the Participation Agreement applicable to it.
Section 12.04. Rules by Indenture Trustee and Agents. The
Indenture Trustee may make reasonable rules for action by or a meeting of the
Holders. The Paying Agent or Registrar may make reasonable rules and set
reasonable requirements for its functions.
Section 12.05. Non-Business Days. With respect to the
Series SWA 1995 Trust N397SW Certificates only, if a payment date is not a
Business Day at a place of payment, payment may be made at such place on the
next succeeding day that is a Business Day, and no interest shall accrue for
the intervening period.
Section 12.06. GOVERNING LAW. THIS AGREEMENT AND THE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
OF THE STATE OF NEW YORK.
Section 12.07. No Recourse Against Others. No director,
officer, employee or stockholder, as such, of the Company, the Owner Trustee or
the Owner Participant, as the case may be, shall have any liability for any
obligations of the Company, the Owner Trustee or the Owner Participant, as the
case may be, under any Operative Agreement or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Certificate waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Certificates.
Section 12.08. Execution in Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one instrument.
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Section 12.09. Applicability Only to Original Holder.
Notwithstanding any provision to the contrary herein, Sections 15.03 through
15.05 shall only be applicable to the Holders of Series SWA Trust N397SW-I
Certificates.
Section 12.10. Severability. Any provision of this
Indenture which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
ARTICLE 13
ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE
Section 13.01. Actions to Be Taken upon Termination of
Lease. Upon any of:
(a) the voluntary termination of the Lease by the Company
pursuant to Section 9 thereof on the Lease Termination Date, and upon payment
to the Indenture Trustee of an amount equal to the Redemption Price of all
Outstanding Certificates, or
(b) the purchase of the Aircraft by the Company at its
option pursuant to Section 18.2 of the Lease on the Special Purchase Option
Date (unless the Company shall have elected to assume all of the rights and
obligations of the Owner Trustee hereunder as provided for in Section 8(r) of
the Participation Agreement), and upon payment to the Indenture Trustee of an
amount equal to the Redemption Price as at the applicable Redemption Date of
all Outstanding Certificates, or
(c) the termination of the Lease, on the Lease Loss
Payment Date, following an Event of Loss suffered by the Airframe under
circumstances where the Company does not exercise its option to substitute a
Replacement Airframe therefor pursuant to Section 10.1.2 of the Lease, and upon
payment to the Indenture Trustee of an amount equal to the Redemption Price as
at the Redemption Date of all Outstanding Certificates, or
(d) the satisfaction, discharge, defeasance and
termination of obligations under this Agreement in accordance with Section
10.01,
the Lien of this Agreement on the Indenture Estate shall terminate (except for
the Lien on funds held by the Indenture Trustee to pay the Certificates and the
Lien on amounts due from the Company under the Lease necessary to pay the
Certificates or the Indenture Trustee) and the Indenture Trustee shall execute
such instruments as may be requested by the Company or the Owner Trustee to
evidence such termination (at the Company's or the Owner Trustee's expense).
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ARTICLE 14
[RESERVED FOR POTENTIAL FUTURE USE]
ARTICLE 15
ISSUANCE AND APPLICATION OF
PROCEEDS OF SERIES SWA 1995 TRUST N397SW
CERTIFICATES;
SPECIAL PROVISIONS GOVERNING REDEMPTION AND
METHOD OF PAYMENT OF THE
SERIES SWA 1995 TRUST N397SW-I CERTIFICATES;
OTHER SPECIAL PROVISIONS
RELATING TO THE SERIES SWA 1995 TRUST N397SW-I
CERTIFICATES
Section 15.01. Conditions Precedent to Issuance of Series
SWA 1995 Trust N397SW Certificates. The issuance of the Series SWA 1995 Trust
N397SW Certificates pursuant to Section 18 of the Participation Agreement is
subject to all conditions specified in such section.
Simultaneously with the satisfaction of such conditions, the
Owner Trustee shall deliver to the Indenture Trustee a completed version of
Exhibits B, ▇-▇ and B-2 with respect to the Series SWA 1995 Trust N397SW
Certificates, which completed Exhibits B, ▇-▇ and B-2 shall specify the
maturities and principal amounts of the Series SWA 1995 Trust N397SW
Certificates and the applicable interest rates, together with the reference
dates for purposes of determining the Owner Trustee's rights to redeem such
Certificates as provided for in the Operative Agreements. Such completed
Exhibits B, ▇-▇ and B-2 shall be deemed upon such delivery automatically to
have been incorporated herein without further action of the parties hereto.
Section 15.02. Payment upon Issuance of Series SWA 1995
Trust N397SW Certificates. Simultaneously with the receipt of the proceeds of
the issuance of the Series SWA 1995 Trust N397SW Certificates, the Indenture
Trustee, on behalf of the Owner Trustee, shall apply an amount equal to the
Redemption Price of the Series SWA 1995 Trust N397SW-I Certificates to the
redemption of the Series SWA 1995 Trust N397SW-I Certificates in accordance
with Section 15.03.
Section 15.03. Special Provision Governing Refinancing of
the Series SWA 1995 Trust N397SW-I Certificate. Notwithstanding any other
provision of this Agreement, as long as any Series SWA 1995 Trust N397SW-I
Certificate is Outstanding, if a refinancing shall be effected pursuant to
Section 17 or 18 of the Participation Agreement and if all the conditions to
such refinancing set forth herein and in such Section 17 or 18 shall have been
satisfied, the Series SWA 1995 Trust N397SW-I Certificates may be refinanced in
whole at a Redemption Price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to, but excluding, the applicable
Redemption Date plus the Break Amount, if any, and any other amounts payable to
the Holders thereof hereunder or under the Participation Agreement,
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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but without any other premium or penalty; provided, however, that the
applicable Redemption Date for the redemption of the Series SWA 1995 Trust
N397SW-I Certificates pursuant to this Section 15.03 shall be the applicable
Refinancing Date or Section 18 Refinancing Date, as the case may be.
Section 15.04. Special Provision for Payments in Respect of
the Series SWA 1995 Trust N397SW-I Certificate. Notwithstanding any other
provision of this Agreement, all amounts payable in respect of the Series SWA
1995 Trust N397SW-I Certificates shall be paid by the Indenture Trustee (i) if
to the Original Holder by FedWire transfer in immediately available funds in
Dollars through the Federal Reserve Bank of San Francisco for the account of
Bank of America National Trust and Savings Association ABA #▇▇▇▇▇▇▇▇▇, for
credit to GPO Account Administration #5693, Account No. 12331-83980, ref:
Southwest Airlines Interim Debt, or (ii) if to any other Holder of such
Certificates (or as may otherwise be directed by the Original Holder), to such
account maintained by such Holder with any bank located in the United States
and designated by such Holder to the Indenture Trustee, in any case without
presentment or surrender of any Certificate, except that in the case of any
final payment with respect to any Series SWA 1995 Trust N397SW-I Certificate,
such Certificate shall be surrendered promptly thereafter to the Indenture
Trustee by the Holder thereof for cancellation. Such payment shall be made by
the Indenture Trustee, in the case of any such designated account in New York,
New York, prior to 2:00 P.M., New York time, on the due date thereof if such
payment is received by the Indenture Trustee by 1:00 P.M., New York time, or by
12:00 Noon, New York time on the next succeeding Business Day if such payment
is received after 1:00 P.M., New York time. In the event the Indenture Trustee
shall fail to make any such payment as provided in the immediately foregoing
sentence after its receipt of funds at the place and prior to the time
specified above, the Indenture Trustee, in its individual capacity and not as
trustee, agrees to compensate the Certificate Holders for loss of use of funds
in a commercially reasonable manner.
Section 15.05. Increased Costs, Break Amount, Additional
Interest, Taxes, Etc. (a) If, due to either (i) the introduction of or any
change (other than any change by way of imposition or increase of reserve
requirements which are provided for in subsection (c), below) after the
Delivery Date in any law or regulation or in the interpretation thereof by any
government or central bank or other governmental department, agency, board,
service or governmental body charged with responsibility for the administration
or interpretation thereof or (ii) the compliance with any guideline or request
made after the Delivery Date by any government or central bank or other
governmental department, agency, board, service or other governmental body
(whether or not having the force of law), there shall be any increase in the
cost to, or any reduction of the rate of return on assets or equity of, any
Holder (or any of its Affiliates) of the Series SWA 1995 Trust N397SW-I
Certificate of agreeing to make or making, funding or maintaining the loan
evidenced by its Series SWA 1995 Trust N397SW-I Certificate in respect of (x)
any period as to which the applicable Debt Rate is determined by reference to
the Offshore Rate and (y) capital adequacy requirements, then the Owner Trustee
shall from time to time pay to such Holder such amount as shall be necessary to
reimburse such Holder for such increase in cost within 10 Business Days after
delivery to the Owner Trustee, the Indenture Trustee and the Company of a
certificate of an officer of such Holder setting forth in reasonable detail the
event by reason of which it claims such increase in cost and the basis for the
determination of the amount of such increase in cost; provided, however, that
the
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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Original Holder shall not be entitled to assert any claim under this subsection
15.05(a) in respect of taxes (including Taxes (as defined in the Participation
Agreement) and the taxes referred to in subsections (d) and (e) of this Section
15.05). Such certificate shall, in the absence of manifest error, be binding
and conclusive. Such Holder shall notify the Owner Trustee, the Indenture
Trustee and the Company as soon as possible of the occurrence of any event by
reason of which it is entitled to make a claim as described in this subsection
(a), but the failure to give such notice shall not affect the obligations of
the Owner Trustee hereunder.
(b) In the event that any Holder of the Series SWA 1995
Trust N397SW-I Certificate incurs any Break Amount (as defined below) in
connection with any payment, prepayment, acceleration, redemption, refinancing
or purchase, in whole or in part, of the principal of its Series SWA 1995 Trust
N397SW-I Certificate in accordance with the provisions of this Agreement or
otherwise on a date other than the last day of an Interest Period, then the
Owner Trustee shall pay to such Holder such Break Amount on the date of such
payment, prepayment, acceleration, redemption, refinancing or purchase, as the
case may be.
For the purposes hereof, "Break Amount" means an amount equal
to the net funding loss or additional expense which any Holder of a Series SWA
1995 Trust N397SW-I Certificate sustains or incurs or will sustain or incur as
a result of any payment, prepayment, acceleration, redemption, refinancing or
purchase (whether by mandatory or voluntary prepayment, optional purchase,
acceleration or otherwise) of any principal of its Series SWA 1995 Trust
N397SW-I Certificate on a date other than the last day of an Interest Period,
as reasonably determined by such Holder and set forth in a certificate of such
Holder which includes in reasonable detail the basis or the calculations of the
amount being claimed.
(c) The Owner Trustee agrees to pay to any Holder of a
Series SWA 1995 Trust N397SW-I Certificate, to the extent that such Holder
shall require, due to either (i) the introduction of or any change after the
Delivery Date in any law or regulation or in the interpretation thereof by the
Federal Reserve Board (or any governmental authority succeeding thereto) or
(ii) compliance with any guideline or request made after the Delivery Date by
the Federal Reserve Board (whether or not having the force of law), to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
the loan evidenced by its Series SWA 1995 Trust N397SW-I Certificate, in
respect of any period to which such reserve maintenance requirement is so
applicable and the applicable Debt Rate is determined by reference to the
Offshore Rate, in an amount as to any such period equal to the amount obtained
by applying to the outstanding principal amount of such loan during such period
an interest rate equal at all times to the remainder obtained by subtracting
(A) the applicable Offshore Rate from (B) the rate obtained by dividing such
Offshore Rate by a percentage equal to 100% minus the Eurocurrency Reserve
Percentage, if any, applicable from time to time to such Holder. Such
additional interest shall be paid by the Owner Trustee to any Holder of a
Series SWA 1995 Trust N397SW-I Certificate from time to time as and when
interest is payable under such Holder's Certificate, subject to receipt of
notice of the amount of such additional interest for such Holder.
(d) Should any Holder of a Series SWA 1995 Trust N397SW-I
Certificate fail to qualify for a complete exemption from withholding of United
States Federal income tax
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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because of a change in the provisions of the Code or other relevant laws from
those in effect on the Delivery Date, and the Indenture Trustee is required by
law to deduct or withhold United States Federal income tax from amounts paid to
such Holder, the amounts payable hereunder and under its Series SWA 1995 Trust
N397SW-I Certificate shall be increased as may be necessary so that, after all
required deductions and withholdings for United States Federal income tax
resulting from any such change in the Code, such Holder receives an amount
equal to the excess of (i) the amount it would have received had no such
deduction or withholding been made over (ii) the additional amount of United
States Federal income tax that would have been payable by it under Section 882
of the Code in the absence of such change in the Code.
(e) Each Holder of a Series SWA 1995 Trust N397SW-I
Certificate by its acceptance of such Series SWA 1995 Trust N397SW-I
Certificate, agrees that it will, promptly after it becomes aware of any event
or the existence of a condition that would give rise to reimbursement or
payment pursuant to subsection 15.05(a), 15.05(c) or 15.05(d) or to increased
payment hereunder and under the Series SWA 1995 Trust N397SW-I Certificate
pursuant to subsection 15.05(d), to the extent not inconsistent with such
Holder's internal policies, use reasonable efforts to make, fund or maintain
the loan evidenced by the Series SWA 1995 Trust N397SW-I Certificate through a
different Lending Office if, as a result thereof, the amount of such
reimbursement or payment or increased payment, as the case may be, which would
otherwise be required to be made would be materially reduced and if, as
determined by such Holder in its reasonable discretion the making, funding or
maintaining of such loan through such different Lending Office would not
otherwise adversely affect such loan or such Holder. Each Holder agrees that it
will consult with the Owner Trustee in connection with any relocation of its
Lending Office. The Owner Trustee hereby agrees to pay all reasonable expenses
incurred by each such Holder in considering or taking action pursuant to this
subsection (e).
(f) Amounts payable to the Holder of any Series SWA 1995
Trust N397SW-I Certificate pursuant to this Article 15 that are not paid when
due shall bear interest from the due date thereof to, but excluding the date
paid, at the Past Due Rate.
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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IN WITNESS WHEREOF, the Owner Trustee and the Indenture
Trustee have caused this Indenture to be duly executed by their respective
officers thereunto duly authorized, as of the day and year first above written.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
in its individual capacity only as expressly provided
herein and otherwise solely as Owner Trustee
By: /s/ Pablo de la Canal
-----------------------------------------------
Corporate Trust Officer
WILMINGTON TRUST COMPANY,
not in its individual capacity, except as otherwise
expressly provided herein, but solely as Indenture
Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------
Senior Financial Services Officer
TRUST INDENTURE AND SECURITY AGREEMENT [N397SW]
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Exhibit A
to Trust Indenture
and Security Agreement
Form of Series SWA 1995 Trust N397SW-I Certificate
THIS CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS CERTIFICATE MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
$________________ No. ________________
SERIES SWA 1995 TRUST N397SW-I CERTIFICATE
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
Not in its Individual Capacity,
but solely as Owner Trustee under a
Trust Agreement
Dated as of April 1, 1995
Issued in Connection with Aircraft N397SW
Leased to
SOUTHWEST AIRLINES CO.
Date: _________ ___, 1995
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION not in its
individual capacity, but solely as owner trustee (the "Owner Trustee") under
that certain Trust Agreement, dated as of April 1, 1995 between the Owner
Trustee in its individual capacity and the institution referred to therein as
the "Owner Participant" relating to the Aircraft (such agreement as the same
may be modified, amended or supplemented being referred to herein as the "Trust
Agreement"), for value received hereby promises to pay to BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank"), the principal sum of
________________ Dollars on or before _____________________ (the "Maturity
Date"), together with interest on such principal amount remaining unpaid from
time to time from the date hereof until such principal amount is paid in full.
The principal amount of this Certificate shall be payable in installments on
the dates (each a "Principal Payment Date") set forth in Annex A hereto equal
to the corresponding percentage of the original principal amount of this
Certificate set forth in Annex A hereto.
75
Notwithstanding the foregoing, the final payment made on this
Certificate shall be in an amount sufficient to discharge in full the unpaid
principal amount and all accrued and unpaid interest on, and any other amounts
due under this Certificate or as provided for in the Trust Indenture and
Security Agreement, dated as of April 1, 1995 relating to the Aircraft (such
agreement as the same may be modified, amended or supplemented being referred
to herein as the "Indenture"; the defined terms used therein and not otherwise
defined herein being used herein with the same meanings), between the Owner
Trustee and Wilmington Trust Company, as Indenture Trustee thereunder.
Interest on the principal amount of this Certificate shall
accrue at the applicable Debt Rate (as defined below). The "Debt Rate"
applicable in respect of any day in any Interest Period (as defined below)
selected by the Owner Trustee or Southwest Airlines Co. (the "Company") (acting
on behalf of the Owner Trustee) as provided for below, or portion thereof,
shall be the Offshore Rate (as defined below) applicable to such Interest
Period as selected by the Owner Trustee or the Company (acting on behalf of the
Owner Trustee) as provided for below, plus in each case the margin applicable
from time to time determined pursuant to the following table:
Interest Period:
---------------------------------------------------
Ending on Margin in Basis
Commencing On: And Including: Points Per Annum:
------------- -------------- ----------------
Delivery Date First anniversary 40
of the Delivery Date
First day subsequent to One-year and six-months 50
the first anniversary of anniversary of the
the Delivery Date Delivery Date
First day subsequent to the Second anniversary of the 75
one-year and six months Delivery Date
anniversary of the
Delivery Date
First day subsequent to the Third anniversary of the 500
second anniversary of the Delivery Date
Delivery Date
First day subsequent to the Fourth anniversary of the 600
third anniversary of the Delivery Date
Delivery Date
First day subsequent to the Any date subsequent to the 700
fourth anniversary of the fourth anniversary of the
Delivery Date Delivery Date
provided, however, for any Interest Period beginning after the second
anniversary of the Delivery Date, the Debt Rate shall never be less than the
Treasury Rate applicable to such Interest
A-2
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Period, plus in each case the margin applicable from time to time determined
pursuant to the foregoing table.
Interest accrued and unpaid on any Interest Payment Date shall
be paid on such Interest Payment Date; provided, however, that all interest
accrued and unpaid on this Certificate on the date this Certificate shall be
paid in full shall be paid on such date; provided, however, that if any
Interest Period Date (as defined below) is not also an Interest Payment Date,
all interest accrued during the Interest Period relevant thereto and unpaid as
at such Interest Period Date shall be compounded until the next succeeding
Interest Payment Date and shall bear interest at the Debt Rate applicable from
time to time hereunder during the period from such Interest Period Date to the
next succeeding Interest Payment Date and all such compounded interest shall be
due and payable on such next succeeding Interest Payment Date; provided,
finally, that any amount of principal or interest payable hereunder which is
not paid when due shall, to the maximum extent permitted by law, bear interest,
payable on demand, from the due date therefor until the date of payment at an
interest rate equal to the Debt Rate plus 2% per annum. All computations of
interest shall be made by the Original Holder on the basis of a year of 360
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable.
Notwithstanding any provision hereof to the contrary, this
Certificate shall not constitute an obligation to pay nor shall the Bank be
entitled hereunder to collect any amount of interest to the extent not
permitted by applicable law.
Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Certificate becomes due and payable is
not a Business Day, then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day.
For purposes of this Certificate, the following capitalized
terms used herein shall have the following meanings:
"Basis Point" shall mean one one-hundredth of one percent
(1/100 of 1%).
"Interest Payment Date" shall mean each July 1 and January 1
beginning July 1, 1995.
"Interest Period" shall mean, with reference to the Offshore
Rate, a period of up to 30 consecutive days, as available, or one,
two, three or six months, as selected by the Owner Trustee or the
Company (acting on behalf of the Owner Trustee) as provided for below,
and shall mean, with reference to the Treasury Rate, a period of 30,
60, 90 or 180 days, corresponding to the one, two, three or six month
Interest Period, as the case may be, which shall have been so selected
with reference to the Offshore Rate; provided, however, that (i) the
initial Interest Period shall commence on the Delivery Date; (ii) each
Interest Period immediately succeeding an Interest Period shall
commence on the last day of the preceding Interest Period; (iii) if
any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding
Business Day; and (iv) notwithstanding anything to the contrary
A-3
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contained herein, no Interest Period shall extend beyond a date which
is a Principal Payment Date.
"Interest Period Date" shall mean each Business Day on which
an Interest Period expires.
"Offshore Rate" shall mean, for each Interest Period, the rate
at which deposits in U.S. dollars in same day funds would be offered
at 11:00 A.M., New York time, two Business Days prior to the
commencement of such Interest Period by the Bank's Grand Cayman Branch
(or such other office as the Bank may designate for such purpose,
including its London Branch, but in that case such time shall be
London rather than New York time) to major banks in the offshore
interbank market upon request of such major banks for a period equal
to the relevant interest period and in the amount of the advance
scheduled to be outstanding during such interest period. The exact
length of interest periods shall be determined in accordance with
standard practices of the offshore dollar interbank market.
"Treasury Rate" shall mean, as to any Interest Period, the
yield to maturity (rounded to the nearest 1/100 of 1%) of the most
recently auctioned United States Treasury securities having maturities
most closely corresponding (linearly interpolating between the next
preceding and next succeeding maturities) to the Maturity Date, as
determined at 11 a.m. (New York City time) on the first day of such
Interest Period by reference to the Telerate Trading Assistant or, if
such Telerate Trading Assistant is not available to provide such data,
the average (rounded upwards to the nearest 1/100 of 1%), as
determined by the Bank, of quotes furnished at (or as proximately
thereto as is reasonably practicable) such time by two reputable
dealers in United States Treasury securities, which shall be selected
by the Bank.
The selection of the Offshore Rate and the duration of the
Interest Period related thereto shall be made by telephonic notice (followed by
telex, telecopy or other written confirmation) from the Owner Trustee or the
Company (acting on behalf of the Owner Trustee) to the Original Holder or its
designee by not later than (i) 11:00 A.M. (New York time) on the second
Business Day preceding the first day of the relevant Interest Period or (ii)
11:00 A.M. (New York time) on the third Business Day preceding the first day
of the relevant Interest Period, if such Offshore Rate is to relate to the
Bank's London Branch; provided, however, that if a Lease Default shall have
occurred or be continuing or no such notice shall have been given, the Debt
Rate will be deemed, effective upon the last day of the then current Interest
Period, to be determined by reference to the Offshore Rate for an Interest
Period of one month.
All payments of principal, interest and other amounts, if any,
to be made by the Owner Trustee hereunder and under the Indenture shall be made
only from the income and proceeds from the Indenture Estate and the other
amounts referred to in Section 3.03 of the Indenture and only to the extent
that the Indenture Trustee shall have sufficient income or proceeds from the
Indenture Estate and such other amounts to make such payments in accordance
with the terms of the Indenture, and the Bank, by its acceptance of this
Certificate, agrees that it will look solely to the income and proceeds from
the Indenture Estate and the other amounts referred to in Section 3.03 of the
Indenture to the extent available for distribution to the Holder hereof as
above provided and that none of the Owner Participant,
A-4
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the Owner Trustee or the Indenture Trustee is or shall be personally liable or
liable in any manner extending to any assets, other than the Indenture Estate,
to the Bank for any amounts payable under this Certificate or the Indenture or,
except as provided in the Indenture, for any liability under the Indenture;
provided, however, that nothing herein contained shall limit, restrict or
impair the right of the Indenture Trustee, subject always to the terms and
provisions of the Indenture, to accelerate the maturity of this Certificate
upon an Indenture Event of Default, to bring suit and obtain a judgment against
the Owner Trustee on this Certificate for purposes of realizing upon the
Indenture Estate and to exercise all rights and remedies provided under the
Indenture or otherwise realized upon the Indenture Estate.
Both the original amount of principal due hereunder and
interest and other amounts due hereunder shall be payable in United States
currency in immediately available funds pursuant to Section 15.04 of the
Indenture. Each such payment shall be made on the date such payment is due and
without any presentment or surrender of this Certificate, except that in the
case of any final payment with respect to this Certificate, the Certificate
shall be surrendered promptly thereafter to the Indenture Trustee by the Bank
for cancellation.
The Bank, by its acceptance of this Certificate, agrees that
each payment received by it hereunder shall be applied in the manner provided
in Section 3.08 of the Indenture.
This Certificate is one of the Series SWA 1995 Trust N397SW-I
Certificates referred to in the Indenture which has been or is to be issued by
the Owner Trustee pursuant to the terms of the Indenture. The Indenture Estate
is held by the Indenture Trustee as security for the Certificates. The rights
of the Owner Trustee under the Indenture, as well as the beneficial interest of
the Owner Participant in and to the properties of the Owner Trustee assigned,
pledged or mortgaged as part of the Indenture Estate, are subject and
subordinate to the rights of the Holders of the Certificates to the extent
provided for in the Indenture. Reference is hereby made to the Indenture and
the Participation Agreement for a statement of the rights of the Bank in
respect of, and the nature and extent of the security for, this Certificate,
and the rights of the Owner Trustee and the Owner Participant, as well as for a
statement of the terms and conditions of the trusts created by the Indenture,
to all of which terms and conditions in the Indenture the Bank agrees by its
acceptance of this Certificate.
Any Holder of this Certificate shall be deemed to have made
the following representation by its acquisition of this Certificate: either
that (a) no part of the funds used by it to acquire this Certificate
constitutes "plan assets" of any "employee benefit plan" within the meaning of
ERISA or any "plan" within the meaning of Section 4975(e)(1) of the Code, or
(b) its purchase or acquisition of this Certificate will not result in a
non-exempt prohibited transaction under Section 4975 of the Code or Section 406
of ERISA.
This Certificate is subject to prepayment by redemption or
acceleration as provided in Articles 6 and 15 of the Indenture.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar, the Owner Participant and the Company may deem and treat the Person
in whose name this Certificate is registered as the absolute owner hereof for
the purpose of receiving payment of the principal of and interest on this
Certificate and for all other purposes whatsoever whether or not this
Certificate be overdue,
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and neither the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar, the Owner Participant nor the Company shall be affected by notice to
the contrary.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PROVISIONS OF THE STATE OF NEW YORK.
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80
IN WITNESS WHEREOF, the Owner Trustee has caused this
Certificate to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Owner Trustee
By:
------------------------------------------
Title:
A-7
81
[FORM OF INDENTURE TRUSTEE'S
CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred to in the within-
mentioned Indenture.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as
Indenture Trustee
By:
------------------------------------------
Title:
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82
Annex A to
Equipment Trust
Certificate
Percentage of Original
Principal Payment Date Principal Amount
---------------------- ---------------------------
A-9
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Exhibit A-1 to
Trust Indenture and
Security Agreement
Form of Series SWA 1995 Trust N397SW Installment Certificates
$________________ No. ________________
Dated as of ______________ __, 199_
SERIES SWA 1995 TRUST N397SW CERTIFICATE
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
Not in its Individual Capacity,
but Solely as Owner Trustee
Under the Trust Agreement
Dated as of April 1, 1995
Issued in connection with Aircraft N397SW
Leased to
SOUTHWEST AIRLINES CO.
INTEREST RATE MATURITY DATE
------------- -------------
________________ ________________, 2___
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as owner trustee (the "Owner Trustee") under
that certain Trust Agreement dated as of April 1, 1995, between the Owner
Trustee in its individual capacity and the institution referred to therein as
the "Owner Participant" relating to the Aircraft (herein as such Trust
Agreement may be amended or supplemented from time to time called the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns the principal sum of ________________ Dollars in
installments on each Installment Payment Date as set forth herein with the
final installment due and payable on the Maturity Date specified above and to
pay interest on the principal amount remaining unpaid from time to time at the
rate per annum specified above from ________________, 1995 or from the most
recent date to which interest has been paid or duly provided for, semiannually,
on _____________ and _______ in each year, commencing ____________________,
1995, until the principal hereof is paid or made available for payment in full.
All amounts payable by the Owner Trustee hereunder and under the Trust
Indenture and Security Agreement dated as of April 1, 1995, as supplemented (as
amended or supplemented from time to time referred to herein as the
"Indenture", the defined terms therein not otherwise defined herein being used
herein with the same meanings), by and among the Owner Trustee and Wilmington
Trust Company, as Indenture Trustee thereunder, shall be made only from the
income and proceeds of the Indenture Estate and the other amounts referred to
in Section 3.03 of the Indenture. Each Holder hereof, by its acceptance of
this Certificate, agrees that (a) it will look solely to the income and
proceeds of the Indenture Estate and the other amounts referred to in Section
3.03 of the Indenture for
84
payment of such amounts, to the extent available for distribution to the Holder
hereof as provided in the Indenture and (b) neither the Owner Trustee, the
Owner Participant nor the Indenture Trustee is or shall be personally liable to
the Holder hereof for any amount payable hereunder or under the Indenture or
the other Operative Agreements or, except as provided in the Indenture, for any
liability under the Indenture.
Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Certificate becomes due and payable is
not a Business Day, then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day.
Any amount of interest or principal (including any Installment
Payment Amount) payable hereunder which is not paid when due shall, to the
maximum extent permitted by law, bear interest from the due date thereof until
the date of payment at an interest rate equal to the interest rate specified
above plus 2% per annum. Any other amounts payable to the Holder hereof
hereunder (including, without limitation, Premium) or under the Indenture which
is not paid when due shall bear interest from the due date thereof, until the
date of payment at an interest rate equal to the Overdue Rate. All
computations of interest hereunder shall be calculated on the basis of a year
of twelve 30-day months.
The interest or Installment Payment Amount (other than that
payable on the Maturity Date hereof) so payable, and punctually paid or duly
provided for, on the applicable Interest Payment Date or Installment Payment
Date, as the case may be, will, as provided in the Indenture, be paid to the
Person in whose name this Certificate (or one or more predecessor Certificates)
is registered at the close of business on the Record Date for payment of such
interest or Installment Payment Amount, which shall be the fifteenth day
(whether or not a Business Day) next preceding such Interest Payment Date or
Installment Payment Date, as the case may be. Any such interest or Installment
Payment Amount not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holder hereof on such Record Date (or to
the Person in whose name this Certificate is registered upon issuance) and may
be paid to the Person in whose name this Certificate (or one or more
predecessor Certificates) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Installment or Defaulted Interest
to be fixed by the Indenture Trustee, notice whereof shall be given to Holders
of Certificates entitled thereto not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Certificates may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of, Premium, if any, and interest on
this Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest and Installment Payments Amounts
(other than that payable on the Maturity Date hereof) may be made at the option
of the Indenture Trustee or the Paying Agent by check mailed on or before the
due date to the address of the Holder entitled thereto as such address shall
appear on the Register.
A-1-2
85
This Certificate shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose unless this Certificate
has been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02
of the Indenture.
Reference is made to the Indenture and all supplements and
amendments thereto (a copy of which is on file with the Indenture Trustee at
its principal corporate trust office) for a more complete statement of the
terms and provisions thereof, including a statement of the properties thereby
conveyed, pledged and assigned, the nature and extent of the security, the
respective rights thereunder of the Owner Trustee, the Indenture Trustee, the
Owner Participant and the Holders of the Certificates, the terms upon which the
Certificates are, and are to be, executed and delivered, and the terms upon
which the Certificates may be redeemed, as well as for a statement of the terms
and conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of this
Certificate.
On each Installment Payment Date, the Holder hereof will
receive a payment of principal equal to the Installment Payment Percentage for
such Installment Payment Date multiplied by the initial principal amount of
this Certificate which is set forth herein.
Installment Installment
Payment Payment
Date Percentage
----------- -----------
___________, _____ ______%
___________, _____ ______%
___________, _____ ______%
___________, _____ ______%
As more fully provided in the Indenture, the Certificates are
subject to redemption on not less than 30 nor more than 60 days' notice by
mail, under the circumstances set forth in the Indenture, at a Redemption Price
equal to the unpaid principal amount thereof, Premium, if any, plus accrued
interest thereon to the Redemption Date.
If an Indenture Event of Default shall occur and be
continuing, the principal amount remaining unpaid of the Certificates may be
declared due and payable in the manner and with the effect provided in the
Indenture. If, and only if, such an Indenture Event of Default constitutes a
Lease Event of Default by the Company under the Lease, the Indenture Trustee
may, to the exclusion of the Owner Trustee, exercise one or more of the
remedies of the Owner Trustee provided in the Lease. Such remedies include (but
are not limited to) the right to repossess and use or operate the Aircraft, to
sell or relet the Aircraft free and clear of the Company's rights and retain
the proceeds and to require the Company to pay as liquidated damages (i) any
unpaid Basic Rent plus an amount equal to the excess of the Stipulated Loss
A-1-3
86
Value of the Aircraft over the aggregate fair market rental value thereof for
the remainder of the term for the Aircraft, (ii) any unpaid Basic Rent plus the
excess of the Stipulated Loss Value of the Aircraft over the fair market sales
value thereof or (iii) if the Aircraft has been sold, any unpaid Basic Rent
plus the excess of the Stipulated Loss Value thereof over the net sales
proceeds.
By acceptance of this Certificate, the Holder hereof agrees to
be bound by the provisions of the Participation Agreement applicable to
Holders.
The Owner Trustee or the Owner Participant may cure any
default by the Company under the Lease arising from the failure of the Company
to make any payment of Basic Rent under the Lease, provided, that such failure
of the Company is not the third consecutive such failure, or the fifth or
subsequent cumulative such failure. The Owner Trustee or the Owner Participant
may (but need not) cure any other default by the Company in the performance of
its obligations under the Lease which can be cured by the payment of money, by
making such payment on behalf of the Company, subject, however, to certain
limitations.
The right of the Holder of this Certificate to institute
action for any remedy under the Indenture, including the enforcement of payment
of any amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Owner Trustee and the Indenture Trustee will be discharged
from their respective obligations in respect of the Certificates (except for
certain matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates, maintain paying
agencies and hold money for payment in trust), and the Indenture Trustee may
thereupon cause the release of the Indenture Estate from the lien of the
Indenture, if (a) the Owner Trustee deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, Premium, if any, and interest on the
Outstanding Certificates on the dates such payments are due in accordance with
the terms of such Certificates and (b) certain other conditions are satisfied,
including the publication by the United States Internal Revenue Service of a
ruling to the effect that the deposit and related defeasance would not cause
the Holders of the Certificates to recognize income, gain or loss for Federal
income tax purposes.
As provided in the Indenture and subject to certain
limitations therein set forth, this Certificate is transferable, and upon
surrender of this Certificate for registration of transfer at the principal
corporate trust office of the Registrar, or at the office or agency maintained
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by, the Holder or
his attorney duly authorized in writing, one or more new Certificates of the
same maturity and type and of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates.
The Certificates are issuable in denominations of $1,000 and integral multiples
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Certificates are exchangeable for
A-1-4
87
a like aggregate principal amount of Certificates of the same maturity and type
and of authorized denominations, as requested by the Holder surrendering the
same, upon presentation thereof for such purpose at the principal corporate
trust office of the Registrar, or at an office or agency maintained for such
purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar, the Owner Participant and the Company may deem and treat the Person
in whose name this Certificate is registered as the absolute owner hereof for
the purpose of receiving payment of the principal of and interest on this
Certificate and for all other purposes whatsoever whether or not this
Certificate be overdue, and neither the Owner Trustee, the Indenture Trustee,
the Paying Agent, the Registrar, the Owner Participant nor the Company shall be
affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS
CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
OF THE STATE OF NEW YORK.
* * *
A-1-5
88
IN WITNESS WHEREOF, the Owner Trustee has caused this
instrument to be duly executed under its corporate seal.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Owner Trustee
By:
------------------------------------------
Title:
Issue Date:
A-1-6
89
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Indenture.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as
Indenture Trustee
By:
------------------------------------------
Authorized officer or signatory
▇-▇-▇
▇▇
▇▇▇▇▇▇▇ ▇-▇ to
Trust Indenture and
Security Agreement
Form of Series SWA 1995 Trust N397SW Serial Certificates
$________________ No. ________________
Dated as of __________________ __, 199_
SERIES SWA 1995 TRUST N397SW CERTIFICATE
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
Not in its Individual Capacity,
but Solely as Owner Trustee
Under the Trust Agreement
Dated as of April 1, 1995
Issued in connection with Aircraft N397SW
Leased to
SOUTHWEST AIRLINES CO.
INTEREST RATE MATURITY DATE
------------- -------------
________________ ________________, 2___
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as owner trustee (the "Owner Trustee") under
that certain Trust Agreement dated as of April 1, 1995 between the Owner
Trustee in its individual capacity and the institution referred to therein as
the "Owner Participant" relating to the Aircraft (herein as such Trust
Agreement may be amended or supplemented from time to time called the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns the principal sum of ________________ Dollars on the
Maturity Date specified above and to pay interest thereon at the rate per annum
specified above from ________________, 1995 or from the most recent date to
which interest has been paid or duly provided for, semiannually, on
_______________________ and ___________________ in each year, commencing
______________________, 1995, until the principal hereof is paid or made
available for payment. All amounts payable by the Owner Trustee hereunder and
under the Trust Indenture and Security Agreement dated as of April 1, 1995, as
supplemented (as amended or supplemented from time to time referred to herein
as the "Indenture", the defined terms therein not otherwise defined herein
being used herein with the same meanings), by and among the Owner Trustee and
Wilmington Trust Company, as Indenture Trustee thereunder, shall be made only
from the income and proceeds of the Indenture Estate and the other amounts
referred to in Section 3.03 of the Indenture. Each Holder hereof, by its
acceptance of this Certificate, agrees that (a) it will look solely to the
income and proceeds of the Indenture Estate and the other amounts referred to
in Section 3.03 of the Indenture for payment of such amounts, to the extent
available for distribution to the Holder hereof as provided in the Indenture
and (b) neither the Owner Trustee, the Owner Participant nor the Indenture
Trustee is or shall be personally liable to the Holder hereof for
91
any amount payable hereunder or under the Indenture or the other Operative
Agreements or, except as provided in the Indenture, for any liability under the
Indenture.
Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Certificate becomes due and payable is
not a Business Day, then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day.
Any amount of interest or principal payable hereunder which is
not paid when due shall, to the maximum extent permitted by law, bear interest
from the due date thereof until the date of payment at an interest rate equal
to the interest rate specified above plus 2% per annum. Any other amounts
payable to the Holder hereof hereunder (including, without limitation, Premium)
or under the Indenture which is not paid when due shall bear interest from the
due date thereof, until the date of payment at an interest rate equal to the
Overdue Rate. All computations of interest hereunder shall be calculated on
the basis of a year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided
for, on the applicable Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Certificate (or one or more
predecessor Certificates) is registered at the close of business on the Record
Date for payment of such interest, which shall be the fifteenth day (whether or
not a Business Day) next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to
be payable to the registered Holder hereof on the such Record Date (or to the
Person in whose name this Certificate is registered upon issuance) and may be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Indenture
Trustee, notice whereof shall be given to Holders of Certificates entitled
thereto not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Certificates may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
Payment of the principal of, Premium, if any, and interest on
this Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Indenture Trustee or the Paying Agent by check mailed on or before the due date
to the address of the Holder entitled thereto as such address shall appear on
the Register.
This Certificate shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose unless this Certificate
has been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02
of the Indenture.
A-2-2
92
Reference is made to the Indenture and all supplements and
amendments thereto (a copy of which is on file with the Indenture Trustee at
its principal corporate trust office) for a more complete statement of the
terms and provisions thereof, including a statement of the properties thereby
conveyed, pledged and assigned, the nature and extent of the security, the
respective rights thereunder of the Owner Trustee, the Indenture Trustee, the
Owner Participant and the Holders of the Certificates, and the terms upon which
the Certificates are, and are to be, executed and delivered, the terms upon
which the Certificates may be redeemed, as well as for a statement of the terms
and conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of this
Certificate.
As more fully provided in the Indenture, the Certificates are
subject to redemption on not less than 30 nor more than 60 days' notice by
mail, under the circumstances set forth in the Indenture, at a Redemption Price
equal to the unpaid principal amount thereof, Premium, if any, plus accrued
interest thereon to the Redemption Date.
If an Indenture Event of Default shall occur and be
continuing, the principal of the Certificates may be declared due and payable
in the manner and with the effect provided in the Indenture. If, and only if,
such an Indenture Event of Default constitutes a Lease Event of Default by the
Company under the Lease, the Indenture Trustee may, to the exclusion of the
Owner Trustee, exercise one or more of the remedies of the Owner Trustee
provided in the Lease. Such remedies include (but are not limited to) the right
to repossess and use or operate the Aircraft, to sell or relet the Aircraft
free and clear of the Company's rights and retain the proceeds and to require
the Company to pay as liquidated damages (i) any unpaid Basic Rent plus an
amount equal to the excess of the Stipulated Loss Value of the Aircraft over
the aggregate fair market rental value thereof for the remainder of the term
for the Aircraft, (ii) any unpaid Basic Rent plus the excess of the Stipulated
Loss Value of the Aircraft over the fair market sales value thereof or (iii) if
the Aircraft has been sold, any unpaid Basic Rent plus the excess of the
Stipulated Loss Value thereof over the net sales proceeds.
The Owner Trustee or the Owner Participant may cure any
default by the Company under the Lease arising from the failure of the Company
to make any payment of Basic Rent under the Lease, provided, that such failure
of the Company is not the third consecutive such failure, or the fifth or
subsequent cumulative such failure. The Owner Trustee or the Owner Participant
may (but need not) cure any other default by the Company in the performance of
its obligations under the Lease which can be cured by the payment of money, by
making such payment on behalf of the Company, subject, however, to certain
limitations.
The right of the Holder of this Certificate to institute
action for any remedy under the Indenture, including the enforcement of payment
of any amount due hereon, is subject to certain restrictions specified in the
Indenture.
By acceptance of this Certificate, the Holder hereof agrees to
be bound by the provisions of the Participation Agreement applicable to
Holders.
The Owner Trustee and the Indenture Trustee will be discharged
from their respective obligations in respect of the Certificates (except for
certain matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated
A-2-3
93
Certificates, maintain paying agencies and hold money for payment in trust),
and the Indenture Trustee may thereupon cause the release of the Indenture
Estate from the lien of the Indenture, if (a) the Owner Trustee deposits or
causes to be deposited irrevocably with the Indenture Trustee, in trust, money
or Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay principal of, Premium, if any, and interest on the
Outstanding Certificates on the dates such payments are due in accordance with
the terms of such Certificates and (b) certain other conditions are satisfied,
including the publication by the United States Internal Revenue Service of a
ruling to the effect that the deposit and related defeasance would not cause
the Holders of the Certificates to recognize income, gain or loss for Federal
income tax purposes.
As provided in the Indenture and subject to certain
limitations therein set forth, this Certificate is transferable, and upon
surrender of this Certificate for registration of transfer at the principal
corporate trust office of the Registrar, or at the office or agency maintained
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by, the Holder or
his attorney duly authorized in writing, one or more new Certificates of the
same maturity and type and of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates.
The Certificates are issuable in denominations of $1,000 and integral multiples
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Certificates are exchangeable for a like aggregate principal
amount of Certificates of the same maturity and type and of authorized
denominations, as requested by the Holder surrendering the same, upon
presentation thereof for such purpose at the principal corporate trust office
of the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar, the Owner Participant and the Company may deem and treat the Person
in whose name this Certificate is registered as the absolute owner hereof for
the purpose of receiving payment of the principal of and interest on this
CertifiCate and for all other purposes whatsoever whether or not this
Certificate be overdue, and neither the Owner Trustee, the Indenture Trustee,
the Paying Agent, the Registrar, the Owner Participant nor the Company shall be
affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS
CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
OF THE STATE OF NEW YORK.
* * *
A-2-4
94
IN WITNESS WHEREOF, the Owner Trustee has caused this
instrument to be duly executed under its corporate seal.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Owner Trustee
By:
-------------------------------------------
Title:
Issue Date:
A-2-5
95
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Indenture.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as
Indenture Trustee
By:
--------------------------------------------
Authorized officer or signatory
▇-▇-▇
▇▇
▇▇▇▇▇▇▇ ▇ to
Trust Indenture and
Security Agreement
Maturity Dates, Principal Amounts and
Interest Rates of Series SWA 1995 Trust N397SW Certificates
Premium
Principal Termination
Maturity Date Amount Interest Rate Date
------------- -------- ------------- ------------
[To be completed at time of issuance of Series SWA 1995 Trust N397SW
Certificates, if any shall be issued hereunder.]
97
Exhibit B-1 to
Trust Indenture and
Security Agreement
Installment Payment Dates and Installment Payment Percentages
Installment Certificates shall be those
Certificates with the following Maturity Dates:
Installment Certificate No. 1 - Maturity Date: ________________
Installment Payment Installment Payment Aggregate Installment
------------------- ------------------- ---------------------
Date Percentage Payment Amount
---- ---------- --------------
[To be completed at time of issuance of Series SWA 1995 Trust N397SW
Certificates, if any shall be issued hereunder.]
TOTAL 100.00000000 ________________
Installment Certificate No. 2 - Maturity Date: ________________
Installment Payment Installment Payment Aggregate Installment
------------------- ------------------- ---------------------
Date Percentage Payment Amount
---- ---------- --------------
[To be completed at time of issuance of Series SWA 1995 Trust N397SW
Certificates, if any shall be issued hereunder.]
TOTAL 100.00000000 ________________
98
Exhibit B-2 to
Trust Indenture and
Security Agreement
Issuance of Series SWA 1995 Trust N397SW Certificates
The Series SWA 1995 Trust N397SW Certificates issued hereunder
shall be issued to and shall be payable to _________ under the __________ with
respect to the [grantor trusts created thereby], in each case as set forth
below:
99
Exhibit C to
Trust Indenture and
Security Agreement
[FORM OF]
TRUST AGREEMENT AND TRUST INDENTURE AND
SECURITY AGREEMENT SUPPLEMENT
This TRUST AGREEMENT AND TRUST INDENTURE AND SECURITY
AGREEMENT SUPPLEMENT, is dated ____________, 1995 (herein called the
"Supplement") of SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee (herein called the "Owner
Trustee"), under the Trust Agreement, dated as of April 1, 1995 (herein called
the "Trust Agreement"), between the Owner Trustee and the Owner Participant
named therein,
WITNESSETH:
WHEREAS, the Trust Agreement provides for the execution and
delivery of one or more supplements thereto substantially in the form hereof,
which shall particularly describe the Aircraft (such term and other terms
defined in the Trust Indenture referred to below, or in the Lease therein
referred to, being used herein as therein defined) included in the property
covered by the Trust Agreement;
WHEREAS, the Trust Indenture and Security Agreement, dated as
of April 1, 1995 (herein called the "Trust Indenture"), between the Owner
Trustee and Wilmington Trust Company, as Indenture Trustee (herein called the
"Indenture Trustee"), provides for the execution and delivery of a supplement
thereto substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Indenture
Trustee; and
WHEREAS, each of the Trust Agreement and Trust Indenture
relates to the Airframe and Engines described below, and a counterpart of the
Trust Indenture is attached hereto and made a part hereof and this Supplement,
together with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the Federal Aviation Administration as one
document;
NOW, THEREFORE, This Supplement Witnesseth, that, to secure
the prompt payment of the principal of, Break Amount, if any, Premium, if any,
and interest on, and all other amounts due with respect to, all Certificates
from time to time Outstanding and all other amounts due to the Holders under
the Trust Indenture and the Participation Agreement and the performance and
observance by each of the Company and the Owner Trustee of all the agreements,
covenants and provisions in the Trust Indenture and in the other Operative
Agreements for the benefit of the Indenture Trustee and the Holders of the
Certificates and in the Certificates contained, and the prompt payment of all
amounts from time to time owing under the Operative Agreements to the Holders
of the Certificates, and for the uses and purposes of the Trust Indenture, and
in consideration of the premises and of the covenants contained in the Trust
Indenture, and of the acceptance of the Certificates by the Holders thereof,
and of the sum of $1.00 paid to the Owner Trustee by the Indenture Trustee at
or before the delivery hereof, the receipt whereof is hereby acknowledged, the
Owner Trustee has
100
granted, bargained, sold, assigned, transferred, conveyed, mortgaged, pledged
and confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm unto the Indenture Trustee, its successors and
assigns, for the security and benefit of the Holders from time to time of the
Certificates, upon the trusts created by the Trust Indenture, all right, title
and interest of the Owner Trustee in, to and under the following described
property:
AIRFRAME
One Airframe Identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ ---------------
The Boeing Company 737-3H4 N397SW 27691
together with all Parts relating to such airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more
rated take-off horsepower or the equivalent thereof, whether or not such
engines shall be installed in or attached to the Airframe or any other
airframe, identified as follows:
Manufacturer's
Manufacturer Model Serial Number
------------ ----- ---------------
CFM International CFM56-3-B1 859142
CFM International CFM56-3-B1 859144
together with all Parts relating to such engines.
Together with all substitutions or replacements of and
additions, improvements, accessories and accumulations to the property above
described for which title vests in the Owner Trustee under the Operative
Agreements and all property which shall hereafter become physically attached to
or incorporated in the property above described, whether the same are now owned
by the Owner Trustee or shall hereafter be acquired by it for which title vests
in the Owner Trustee under the Operative Agreements.
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors and
assigns, for the security and benefit of the Holders from time to time of the
Certificates, in the trust created by the Trust Indenture, all of the right,
title and interest of the Owner Trustee in, to and under the Lease Supplement
of even date herewith covering the property described above.
C-2
101
Notwithstanding any provision hereof, no Excluded Payment
shall constitute security for any of the aforementioned obligations, and
nothing herein shall impair in any respect the rights of the Owner Trustee or
the Owner Participant under Section 9.13 or 11.06 of the Trust Indenture.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Holders from time to time of the Certificates for
the uses and purposes and subject to the terms and provisions set forth in the
Trust Indenture.
This Supplement shall be construed as supplemental to the
Trust Indenture and to the Trust Agreement and shall form a part of each, and
the Trust Agreement and the Trust Indenture are each hereby incorporated by
reference herein and each is hereby ratified, approved and confirmed.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Supplement and the aforesaid Lease Supplement has
been delivered to the Owner Trustee and is included in the property of the
Owner Trustee covered by all the terms and conditions of the Trust Agreement,
subject to the pledge and mortgage thereof under the Trust Indenture.
THIS SUPPLEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK AND 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.
C-3
102
IN WITNESS WHEREOF, the Owner Trustee has caused this
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Owner Trustee
By:
------------------------------------------
Title:
C-4
