Exhibit 99(a)
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PARTICIPATION AGREEMENT
[NW 1997 A]
DATED AS OF
SEPTEMBER 25, 1997
AMONG
NORTHWEST AIRLINES, INC.,
LESSEE,
NORTHWEST AIRLINES CORPORATION,
GUARANTOR,
FINOVA CAPITAL CORPORATION,
OWNER PARTICIPANT,
STATE STREET BANK AND TRUST COMPANY,
PASS THROUGH TRUSTEE UNDER EACH OF
THE PASS THROUGH TRUST AGREEMENTS,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, EXCEPT AS EXPRESSLY PROVIDED
HEREIN, BUT SOLELY AS OWNER TRUSTEE,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
SUBORDINATION AGENT,
AND
STATE STREET BANK AND TRUST COMPANY,
IN ITS INDIVIDUAL CAPACITY AND AS INDENTURE TRUSTEE
_____________________
ONE BRITISH AEROSPACE AVRO 146-RJ85A AIRCRAFT
N501XJ
LEASED TO NORTHWEST AIRLINES, INC.
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INDEX TO PARTICIPATION AGREEMENT
Page
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SECTION 1. Participations in Lessor's Cost of the Aircraft. . . . . . . . 3
SECTION 2. Lessee's Notice of Delivery Date . . . . . . . . . . . . . . . 4
SECTION 3. Instructions to the Owner Trustee. . . . . . . . . . . . . . . 4
SECTION 4. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Conditions Precedent to the Participations in
the Aircraft. . . . . . . . . . . . . . . . . . . . . . . 5
(b) Conditions Precedent to the Obligations of
Lessee and the Guarantor. . . . . . . . . . . . . . . . .13
SECTION 5. [Intentionally Omitted]. . . . . . . . . . . . . . . . . . . .15
SECTION 6. Extent of Interest of Certificate Holders. . . . . . . . . . .15
SECTION 7. Representations and Warranties of Lessee and the
Guarantor; Indemnities . . . . . . . . . . . . . . . . . . . .15
(a) Representations and Warranties. . . . . . . . . . . . . .15
(b) General Tax Indemnity . . . . . . . . . . . . . . . . . .18
(c) General Indemnity . . . . . . . . . . . . . . . . . . . .18
(d) Income Tax. . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 8. Representations, Warranties and Covenants. . . . . . . . . . .19
SECTION 9. Reliance of Liquidity Provider . . . . . . . . . . . . . . . .38
SECTION 10. Other Documents. . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 11. Certain Covenants of Lessee. . . . . . . . . . . . . . . . . .39
SECTION 12. Owner for Federal Tax Purposes . . . . . . . . . . . . . . . .39
SECTION 13. Certain Definitions; Notices; Consent to Jurisdiction. . . . .40
SECTION 14. Change of Situs of Owner Trust . . . . . . . . . . . . . . . .41
SECTION 15. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 16. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 17. Refinancings . . . . . . . . . . . . . . . . . . . . . . . . .43
(i)
SCHEDULES
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SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreements
EXHIBITS
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Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, special
counsel for the Lessee and the Guarantor
Exhibit B-2 - Form of Opinion of Cadwalader, Xxxxxxxxxx & Xxxx, special
counsel for the Lessee and the Guarantor
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C - Form of Opinion of Vedder, Price, Xxxxxxx & Kammholz,
special counsel for the Manufacturer
Exhibit D - Form of Opinion of Ray, Xxxxxxx & Xxxxxxx, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of Xxxx & Levi, LLP, special counsel for the
Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of Xxxxx & Xxxxxxx, P.C.
Exhibit G - Form of Opinion of Xxxxxxx, Xxxx & Xxxxx LLP, special
counsel for the Indenture Trustee
Exhibit H-1 - Form of Opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
special counsel for the Liquidity Provider
Exhibit H-2 - Form of Opinion of in-house counsel for the Liquidity
Provider
Exhibit I - Form of Opinion of David, Hagner, Xxxxx & Xxxxxxx, P.C.,
special tax counsel to the Owner Participant
(ii)
Exhibit J - Form of Section 1110 Opinion of Cadwalader, Xxxxxxxxxx &
Xxxx, special counsel for the Lessee
Exhibit K - Form of Opinion of Xxxxxxx, Xxxx & Xxxxx LLP, special
counsel for the Pass Through Trustee
(iii)
PARTICIPATION AGREEMENT
[NW 1997 A]
THIS PARTICIPATION AGREEMENT [NW 1997 A] dated as of September 25,
1997, among (i) NORTHWEST AIRLINES, INC., a Minnesota corporation (the
"LESSEE"), (ii) NORTHWEST AIRLINES CORPORATION, a Delaware corporation (the
"GUARANTOR"), (iii) FINOVA CAPITAL CORPORATION, a Delaware corporation (the
"OWNER PARTICIPANT"), (iv) STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity except as otherwise provided herein, but solely as trustee
(in such capacity, the "PASS THROUGH TRUSTEE") under each of three separate Pass
Through Trust Agreements (as defined below), (v) FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
except as expressly provided herein, but solely as Owner Trustee under the Trust
Agreement (herein, in such latter capacity, together with any successor owner
trustee, called the "OWNER TRUSTEE"), (vi) STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as subordination agent and trustee (in such capacity, the "SUBORDINATION AGENT")
under the Intercreditor Agreement (defined below), and (vii) STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company, in its individual capacity and
as Indenture Trustee under the Trust Indenture (as hereinafter defined) (herein,
in such latter capacity together with any successor indenture trustee, called
the "INDENTURE TRUSTEE");
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement (as such term is defined
in the Lease hereinafter referred to) between Lessee and the Manufacturer, the
Manufacturer has agreed to sell to Lessee, among other things, certain British
Aerospace Avro 146-RJ85 aircraft, including the Aircraft which has been
delivered by the Manufacturer to Lessee and is the subject of this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement,
(i) Lessee and the Owner Trustee are entering into a Purchase
Agreement Assignment [NW 1997 A], dated as of the date hereof (herein
called the "PURCHASE AGREEMENT ASSIGNMENT"), whereby Lessee assigns to the
Owner Trustee certain rights and interests of Lessee under the Purchase
Agreement with respect to the Aircraft; and
(ii) the Manufacturer has executed the Consent and Agreement [NW
1997 A] (herein called the "CONSENT AND AGREEMENT"), substantially in the
form attached to the Purchase Agreement Assignment (herein called the
"CONSENT AND AGREEMENT");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Trust Agreement [NW 1997 A],
dated as of the date hereof (said Trust Agreement, as the same may be amended or
supplemented from time to time, being herein called the "TRUST AGREEMENT", such
term to include, unless the context otherwise
requires, any Trust Supplement referred to below), with the Owner Trustee,
pursuant to which Trust Agreement the Owner Trustee agrees, among other things,
to hold the Trust Estate defined in Section 1.01 thereof (herein called the
"TRUST ESTATE") for the use and benefit of the Owner Participant;
WHEREAS, the Indenture Trustee and the Owner Trustee concurrently with
the execution and delivery of this Agreement are entering into the Trust
Indenture and Security Agreement [NW 1997 A], dated as of the date hereof (said
Trust Indenture and Security Agreement, as the same may be amended or
supplemented from time to time, being herein called the "TRUST INDENTURE", such
term to include, unless the context otherwise requires, the Trust Supplement
referred to below) pursuant to which the Owner Trustee will issue secured
certificates substantially in the form set forth in Section 2.01 thereof (the
"SECURED CERTIFICATES", and individually, a "SECURED CERTIFICATE") in three
series, which Secured Certificates are to be secured by the mortgage and
security interests created by the Owner Trustee in favor of the Indenture
Trustee, and the Owner Trustee shall execute and deliver a Trust and Indenture
Supplement substantially in the form of EXHIBIT A to the Trust Indenture (the
"TRUST SUPPLEMENT") covering the Aircraft, supplementing the Trust Agreement and
the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease Agreement
[NW 1997 A], dated as of the date hereof (such Lease Agreement, as the same may
be amended or supplemented from time to time to the extent permitted by the
terms thereof and this Agreement, herein called the "LEASE", such term to
include, unless the context otherwise requires, the Lease Supplement referred to
below), whereby, subject to the terms and conditions set forth therein, the
Owner Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee the Aircraft on the date (the "DELIVERY DATE") that the Aircraft
is sold and delivered by Lessee to the Owner Trustee under the Xxxx of Sale, and
accepted by the Owner Trustee for all purposes of the Lease, such acceptance to
be evidenced by the execution of the Trust Supplement covering the Aircraft, and
such lease to be evidenced by the execution and delivery of a Lease Supplement
covering the Aircraft;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Participant is entering into a Tax Indemnity Agreement [NW
1997 A], dated as of the date hereof, with Lessee (the "TAX INDEMNITY
AGREEMENT");
WHEREAS, concurrently with the execution and delivery of this
Agreement; the Guarantor is entering into a Guarantee [NW 1997 A], dated as of
the date hereof, pursuant to which the Guarantor guarantees certain obligations
of Lessee under the Operative Documents (the "GUARANTEE");
WHEREAS, pursuant to the Pass Through Trust Agreement and each of the
Pass Through Trust Supplements set forth in Schedule III hereto (collectively,
the "PASS THROUGH TRUST AGREEMENTS"), concurrently with the execution and
delivery of this Agreement, three separate grantor trusts (collectively, the
"PASS THROUGH TRUSTS" and, individually, a "PASS THROUGH TRUST") will be created
to facilitate certain of the transactions contemplated hereby,
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including, without limitation, the issuance and sale by each Pass Through Trust
of pass through certificates pursuant thereto (collectively, the
"CERTIFICATES");
WHEREAS, the proceeds from the issuance and sale of the Certificates
by each Pass Through Trust will be applied in part by the Pass Through Trustee
on the Delivery Date to purchase from the Owner Trustee, on behalf of each Pass
Through Trust, all of the Secured Certificates bearing the same interest rate as
the Certificates issued by such Pass Through Trust;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Royal Bank of Canada (the "LIQUIDITY PROVIDER") entered into
three revolving credit agreements (each, a "LIQUIDITY FACILITY"), one for the
benefit of the holders of Certificates of each Pass Through Trust, with the
Subordination Agent, as agent for the Pass Through Trustee on behalf of each
such Pass Through Trust; and (ii) the Pass Through Trustee, the Liquidity
Provider and the Subordination Agent will enter into the Intercreditor
Agreement, dated as of the date hereof (the "INTERCREDITOR AGREEMENT");
WHEREAS, the Secured Certificates will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, in order to facilitate the transactions contemplated hereby,
Lessee and the Guarantor have entered into the Underwriting Agreement, dated as
of September 16, 1997, among Lessee, the Guarantor and the several underwriters
named therein (the "UNDERWRITING AGREEMENT"); and
WHEREAS, certain terms are used herein as defined in Section 13(a)
hereof;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT. (a)
PARTICIPATION BY PASS THROUGH TRUSTEES. Subject to the terms and conditions of
this Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
finance, in part, the Owner Trustee's payment of Lessor's Cost for the Aircraft
by paying to the Owner Trustee the aggregate purchase price of the Secured
Certificates being issued to such Pass Through Trustee as set forth on SCHEDULE
II opposite the name of such Pass Through Trust. The Pass Through Trustees
shall make such payments to the Owner Trustee on a date to be designated
pursuant to Section 2 hereof, but in no event later than September 25, 1997, by
transferring to the account of the Owner Trustee at State Street Bank and Trust
Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, ABA No. 011-00-0028,
Account No. 0000-000-0, Reference: Northwest/NW 1997 A, not later than 9:30
a.m., New York City time, on the Delivery Date in immediately available funds in
Dollars, the amount set forth opposite the name of such Pass Through Trust on
SCHEDULE II hereto.
Upon the occurrence of the above transfers by the Pass Through Trustee
for each Pass Through Trust to the Owner Trustee, the Owner Trustee, at the
direction of the Owner Participant, shall issue, pursuant to Article II of the
Trust Indenture, to the Subordination Agent
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on behalf of the Pass Through Trustee for each of the Pass Through Trusts,
Secured Certificates of the maturity and aggregate principal amount, bearing the
interest rate and for the purchase price set forth on Schedule II hereto
opposite the name of such Pass Through Trust.
(b) PARTICIPATION BY OWNER PARTICIPANT. Subject to the terms and
conditions of this Agreement, the Owner Participant hereby agrees to participate
in the payment of Lessor's Cost for the Aircraft by making an equity investment
in the beneficial ownership of the Aircraft on a date to be designated pursuant
to Section 2 hereof, but in no event later than September 25, 1997, by
transferring to the account of the Owner Trustee at State Street Bank and Trust
Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, ABA No. 011-00-0028,
Account No. 0000-000-0, Reference: Northwest/NW 1997 A, not later than 9:30
a.m., New York City time, on the Delivery Date in immediately available funds in
Dollars, the amount set forth opposite the Owner Participant's name in SCHEDULE
II hereto.
(c) GENERAL PROVISIONS. The amount of the participation of each of
the Pass Through Trustee and the Owner Participant to be made as provided above
in the payment of Lessor's Cost for the Aircraft is hereinafter called such
party's "COMMITMENT" for the Aircraft. In case any of the Pass Through Trustee
or the Owner Participant shall default in its obligation under the provisions of
this Section 1, no other such party shall have any obligation to make any
portion of such defaulted amount available or to increase the amount of its
Commitment and the obligation of such nondefaulting party shall remain subject
to the terms and conditions set forth in this Agreement. Upon receipt by the
Owner Trustee of all amounts to be furnished to it on the Delivery Date pursuant
to this Section 1 and the satisfaction of the conditions set forth in Section 4
hereof, Lessee shall transfer title to and deliver the Aircraft to the Owner
Trustee, and the Owner Trustee shall purchase and take title to and accept
delivery of the Aircraft. In consideration of the transfer of title to and
delivery of the Aircraft to the Owner Trustee, the Owner Trustee shall,
simultaneously with such transfer of title and delivery, pay to Lessee from the
amounts so furnished it by the Participants, the Lessor's Cost of the Aircraft.
SECTION 2. LESSEE'S NOTICE OF DELIVERY DATE. Lessee agrees to
give each Participant, the Owner Trustee and the Indenture Trustee at least two
Business Days' telecopy or other written notice of the Delivery Date for the
Aircraft, which Delivery Date shall be a Business Day, which notice shall
specify the amount of Lessor's Cost and the amount of each Participant's
Commitment for the Aircraft. As to each Participant, the making of its
Commitment for the Aircraft available in the manner required by Section 1 shall
constitute a waiver of such notice.
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE. The Owner
Participant agrees that its releasing the amount of its Commitment for the
Aircraft to the account of the Owner Trustee in accordance with the terms of
Section 1 shall constitute, subject to satisfaction or waiver of the conditions
set forth in Section 4(a), without further act, authorization and direction by
the Owner Participant to the Owner Trustee:
(i) to pay to Lessee the Lessor's Cost for the Aircraft;
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(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the Aircraft
on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the Xxxx of Sale and the FAA Xxxx of Sale
for the Aircraft referred to in Section 4(a)(v)(8) and 4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the Aircraft;
(v) to borrow from the Pass Through Trustee to finance a portion of
the Lessor's Cost for the Aircraft and to execute and deliver to the
Subordination Agent on behalf of the Pass Through Trustee for each of the
Pass Through Trusts a principal amount of Secured Certificates bearing the
interest rate set forth opposite the name of such Pass Through Trust on
Schedule II hereto, which Secured Certificates shall be in the principal
amounts set forth on Schedule II hereto, pursuant hereto and to the Trust
Indenture; and
(vi) to take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative Document.
SECTION 4. CONDITIONS. (a) CONDITIONS PRECEDENT TO THE
PARTICIPATIONS IN THE AIRCRAFT. It is agreed that the obligations of each of
the Pass Through Trustee and the Owner Participant to participate in the payment
of Lessor's Cost and to make available the amount of its respective Commitment
are subject to the satisfaction prior to or on the Delivery Date of the
following conditions precedent, except that paragraphs (iii), (v)(5) and (15),
(xxi), (xxii) and (xxiv) shall not be a condition precedent to the obligations
of the Pass Through Trustee, and paragraphs (iv), (vii) (insofar as it relates
to the Owner Participant) and (xiv) shall not be a condition precedent to the
obligation of the Owner Participant:
(i) The Pass Through Trustee and the Owner Participant shall have
received due notice with respect to such participation pursuant to Section
2 hereof (or shall have waived such notice either in writing or as provided
in Section 2).
(ii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations thereof by appropriate regulatory authorities
which would make it a violation of law or regulations or guidelines for the
Pass Through Trustee or the Owner Participant to make its Commitment
available in accordance with Section 1 hereof.
(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for the
Aircraft in accordance with Section 1 hereof.
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(iv) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment for the
Aircraft in accordance with Section 1 hereof.
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto, shall
each be satisfactory in form and substance to the Pass Through Trustee and
the Owner Participant and shall be in full force and effect and executed
counterparts shall have been delivered to the Pass Through Trustee and the
Owner Participant, or their respective counsel, PROVIDED that only the
Subordination Agent on behalf of each Pass Through Trustee shall receive an
executed original of such Pass Through Trustee's respective Secured
Certificate and PROVIDED, FURTHER, that an excerpted copy of the Purchase
Agreement shall only be delivered to and retained by the Owner Trustee (but
the Indenture Trustee shall also retain an excerpted copy of the Purchase
Agreement which may be inspected by the Owner Participant and its counsel
prior to the Delivery Date and subsequent to the Delivery Date may be
inspected and reviewed by the Indenture Trustee if and only if there shall
occur and be continuing an Event of Default), the chattel paper counterpart
of the Lease and the Lease Supplement covering the Aircraft dated the
Delivery Date shall be delivered to the Indenture Trustee, and the Tax
Indemnity Agreement and the Residual Agreement need only be satisfactory to
the Owner Participant and Lessee and shall only be delivered to Lessee and
the Owner Participant and their respective counsel:
(1) an excerpted copy of the Purchase Agreement (insofar
as it relates to the Aircraft);
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Supplement covering the Aircraft dated the
Delivery Date;
(8) the Xxxx of Sale;
(9) the FAA Xxxx of Sale;
(10) an acceptance certificate covering the Aircraft in the
form agreed to by the Owner Participant and Lessee (herein called the
"ACCEPTANCE CERTIFICATE") duly completed and executed by the Owner
Trustee or its agent, which may be a representative of Lessee, and by
such representative on behalf of Lessee;
(11) the Trust Indenture;
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(12) the Secured Certificates;
(13) the Consent and Agreement;
(14) the Guarantee; and
(15) the Residual Agreement.
All of the foregoing documents, together with this Agreement, are sometimes
referred to herein, collectively, as the "OPERATIVE DOCUMENTS" and,
individually, as an "OPERATIVE DOCUMENT".
In addition, the Pass Through Trustee and the Owner Participant each
shall have received executed counterparts or conformed copies of the
following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Class A, Class
B and Class C Trusts.
(vi) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the Granting
Clause of the Trust Indenture that are not covered by the recording system
established by the Federal Aviation Act, shall have been executed and
delivered by the Owner Trustee, and such financing statement or statements
shall have been duly filed in all places necessary or advisable, and any
additional Uniform Commercial Code financing statements deemed advisable by
the Owner Participant or the Pass Through Trustee shall have been executed
and delivered by Lessee or the Owner Trustee and duly filed.
(vii) The Pass Through Trustee and the Owner Participant shall have
received the following:
(A)(1) an incumbency certificate of Lessee and the Guarantor
(as the case may be) as to the person or persons authorized to execute
and deliver this Agreement, the Lease, the Lease Supplement covering
the Aircraft, the Xxxx of Sale, the FAA Xxxx of Sale, the Purchase
Agreement Assignment, the Tax Indemnity Agreement, the Pass Through
Trust Agreements, the Guarantee and any other documents to be executed
on behalf of Lessee or the Guarantor (as the case may be) in
connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of
Lessee and the Guarantor or the executive committee thereof, certified
by the Secretary or an Assistant Secretary of Lessee and the Guarantor
(as the case may be), duly authorizing the transactions contemplated
hereby and the execution and delivery
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of each of the documents required to be executed and delivered on
behalf of Lessee or the Guarantor (as the case may be) in connection
with the transactions contemplated hereby; and
(3) a copy of the certificate of incorporation of Lessee
and the Guarantor, certified by the Secretary of State of the State of
Minnesota in the case of Lessee and certified by the Secretary of
State of the State of Delaware in the case of the Guarantor, a copy of
the by-laws of Lessee and the Guarantor, certified by the Secretary or
Assistant Secretary of Lessee and the Guarantor (as the case may be),
and a certificate or other evidence from the Secretary of State of the
State of Minnesota in the case of Lessee and from the Secretary of
State of the State of Delaware in the case of the Guarantor, dated as
of a date reasonably near the Delivery Date, as to the due
incorporation and good standing of Lessee or the Guarantor (as the
case may be) in such state.
(B)(1) an incumbency certificate of the Indenture Trustee as
to the person or persons authorized to execute and deliver this
Agreement, the Trust Indenture, the Pass Through Trust Agreements and
any other documents to be executed on behalf of the Indenture Trustee
in connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of directors of
the Indenture Trustee, certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, duly authorizing the transactions
contemplated hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of the
Indenture Trustee in connection with the transactions contemplated
hereby;
(3) a copy of the articles of association and by-laws of
the Indenture Trustee, each certified by the Secretary or an Assistant
Secretary of the Indenture Trustee; and
(4) a certificate signed by an authorized officer of the
Indenture Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Indenture
Trustee are correct as though made on and as of the Delivery Date,
except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and
warranties are correct on and as of such earlier date).
(C)(1) an incumbency certificate of the Owner Trustee as to
the person or persons authorized to execute and deliver this
Agreement, the Lease, the Lease Supplement covering the Aircraft, the
Trust Agreement, the Trust Indenture, the Residual Agreement, the
Purchase Agreement Assignment and any other documents to be executed
on behalf of the Owner Trustee in connection with the transactions
contemplated hereby and the signatures of such person or persons;
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(2) a copy of the resolutions of the board of directors of
the Owner Trustee, certified by the Secretary or an Assistant
Secretary of the Owner Trustee, duly authorizing the transactions
contemplated hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of the Owner
Trustee in connection with the transactions contemplated hereby;
(3) a copy of the articles of association and by-laws of
the Owner Trustee, each certified by the Secretary or an Assistant
Secretary of the Owner Trustee; and
(4) a certificate signed by an authorized officer of the
Owner Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner Trustee
(in its individual capacity and as trustee) are correct as though made
on and as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as
of such earlier date).
(D)(1) an incumbency certificate of the Owner Participant as
to the person or persons authorized to execute and deliver this
Agreement, the Tax Indemnity Agreement, the Trust Agreement and any
other documents to be executed on behalf of the Owner Participant in
connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a certificate signed by the Secretary or an Assistant
Secretary of the Owner Participant, to the effect that the
transactions contemplated hereby and the execution and delivery of
each of the documents required to be executed and delivered on behalf
of the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the articles of association and by-laws of
the Owner Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant; and
(4) a certificate signed by an authorized officer of the
Owner Participant, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Owner
Participant are correct as though made on and as of the Delivery Date,
except to the extent that such representations and warranties relate
solely to an earlier date (in which case such representations and
warranties are correct on and as of such earlier date).
(viii) All appropriate action required to have been taken prior to
the Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken by the Federal Aviation Administration, or
any governmental or political agency, subdivision or instrumentality of the
United States, and all orders, permits, waivers, authorizations, exemptions
and approvals of such entities required to be in effect on the
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Delivery Date in connection with the transactions contemplated by this
Agreement shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on the Delivery Date.
(ix) On the Delivery Date the Pass Through Trustee and the Owner
Participant shall have received a certificate signed by an authorized
officer of Lessee (and with respect to the matters set forth in clauses (4)
and (5) below, the Guarantor) to the effect that:
(1) the Aircraft has been duly certified by the Federal
Aviation Administration as to type and has a current certificate of
airworthiness;
(2) the FAA Xxxx of Sale, the Lease, the Lease Supplement,
the Trust Indenture and the Trust Supplement covering the Aircraft
shall have been duly filed for recordation (or shall be in the process
of being so duly filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been filed (or
shall be in the process of being so filed) with the Federal Aviation
Administration;
(3) application for registration of the Aircraft in the
name of the Owner Trustee has been duly made with the Federal Aviation
Administration;
(4) the representations and warranties contained herein of
Lessee and the Guarantor are correct as though made on and as of the
Delivery Date, except to the extent that such representations and
warranties (other than those contained in clause (F) of Section
7(a)(iv)) relate solely to an earlier date (in which case such
representations and warranties were correct on and as of such earlier
date); and
(5) there has been no material adverse change in the
financial condition of the Guarantor and its subsidiaries, taken as a
whole, since December 31, 1996.
(x) Lessee and the Guarantor shall have entered into the
Underwriting Agreement and each of the Pass Through Trust Agreements, the
Certificates shall have been issued and sold pursuant to the Underwriting
Agreement and the Pass Through Trust Agreements, and the Underwriters shall
have transferred to the Pass Through Trustees in immediately available
funds an amount equal to the aggregate purchase price of the Secured
Certificates to be purchased from the Owner Trustee.
(xi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant and the Owner Trustee, and reasonably satisfactory as to
scope and substance to the Pass Through Trustee and the Owner Participant,
an opinion substantially in the form of EXHIBIT B-1 hereto from Xxxxxxx
Xxxxxxx & Xxxxxxxx, special counsel for Lessee and the Guarantor, an
opinion substantially in the form of EXHIBIT B-2 hereto from Cadwalader,
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Xxxxxxxxxx & Xxxx, special counsel for Lessee and the Guarantor, and an
opinion substantially in the form of EXHIBIT B-3 hereto from Lessee's legal
department.
(xii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee, the Guarantor and Lessee and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of EXHIBIT C hereto from Vedder, Price, Xxxxxxx &
Kammholz, special counsel to the Manufacturer, with respect to the
Manufacturer Documents.
(xiii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of EXHIBIT D hereto from Ray, Xxxxxxx & Xxxxxxx,
special counsel for the Owner Trustee.
(xiv) The Pass Through Trustee shall have received, addressed to the
Pass Through Trustee, the Indenture Trustee, the Owner Trustee, the
Guarantor and Lessee, and reasonably satisfactory as to scope and substance
to the Pass Through Trustee, the Guarantor and Lessee, an opinion
substantially in the form of EXHIBIT E-1 hereto from Xxxx & Levi, LLP
special counsel for the Owner Participant, and an opinion substantially in
the form of EXHIBIT E-2 hereto from the Owner Participant's in-house
counsel.
(xv) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of EXHIBIT F hereto from Xxxxx & Xxxxxxx, P.C.
(xvi) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Owner Participant, the
Owner Trustee, the Guarantor and Lessee, and reasonably satisfactory as to
scope and substance to the Pass Through Trustee, the Owner Participant, the
Guarantor and Lessee, an opinion substantially in the form of EXHIBIT G
hereto from Xxxxxxx, Xxxx & Xxxxx LLP, special counsel for the Indenture
Trustee.
(xvii) The Pass Through Trustee and the Owner Participant shall have
received, addressed to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee, the Guarantor and Lessee, and
reasonably satisfactory as to scope and substance, to the Pass Through
Trustee, the Owner Participant, the Guarantor and Lessee, an opinion
substantially in the form of EXHIBIT H-1 hereto from Powell, Goldstein,
Xxxxxx & Xxxxxx LLP, special counsel for the Liquidity Provider, and an
opinion substantially in the form of EXHIBIT H-2 hereto from in-house
counsel for the Liquidity Provider.
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(xviii) The Pass Through Trustee and Owner Participant shall have
received an independent insurance broker's report, in form and substance
satisfactory to the Pass Through Trustee and the Owner Participant, as to
the due compliance with the terms of Section 11 of the Lease relating to
insurance with respect to the Aircraft.
(xix) Lessor's Cost for the Aircraft shall be $21,000,000.
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery Date
to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the transactions contemplated hereby.
(xxi) The Owner Participant shall have received from David, Hagner,
Xxxxx & Xxxxxxx, P.C., special tax counsel to the Owner Participant, a
favorable opinion substantially in the form of EXHIBIT I hereto, in form
and substance satisfactory to the Owner Participant, with respect to
certain Federal income tax aspects of the transaction contemplated by the
Operative Documents.
(xxii) In the opinion of the Owner Participant and its special tax
counsel, there shall have been, since the date hereof, no amendment,
modification, addition, or change in or to the provisions of the Internal
Revenue Code of 1986, as amended through the date hereof, and the
regulations promulgated under the Code (including temporary regulations),
Internal Revenue Service Revenue Procedures or Revenue Rulings, or other
administrative interpretations, applicable judicial precedents or Executive
Orders of the President of the United States, all as in effect on the date
hereof, the effect of which might preclude the Owner Participant from
obtaining any of the income tax benefits and consequences assumed to be
available to the Owner Participant as set forth in Section 2 of the Tax
Indemnity Agreement.
(xxiii) The Pass Through Trustee and the Owner Participant shall have
received a favorable opinion substantially in the form of EXHIBIT J hereto
addressed to the Pass Through Trustee and the Owner Participant, and
reasonably satisfactory as to scope and substance to the Pass Through
Trustee and the Owner Participant, from Cadwalader, Xxxxxxxxxx & Xxxx,
special counsel for the Lessee, which opinion shall state (with customary
assumptions and qualifications) that the Owner Trustee, as lessor under the
Lease, and the Indenture Trustee, as assignee of the Owner Trustee's rights
under the Lease pursuant to the Trust Indenture, would be entitled to the
benefits of 11 U.S.C. Section 1110 with respect to the Aircraft.
(xxiv) The Owner Participant shall have received (A) a certificate
signed by an authorized officer of the Pass Through Trustee, dated the
Delivery Date, certifying that the representations and warranties contained
herein of the Pass Through Trustee are correct as though made on and as of
the Delivery Date, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such
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representations and warranties are correct on and as of such earlier date),
(B) an opinion substantially in the form of EXHIBIT K hereto addressed to
the Owner Participant, the Guarantor and Lessee of Xxxxxxx, Xxxx & Xxxxx
LLP, special counsel for the Pass Through Trustee, and reasonably
satisfactory as to scope and substance to the Owner Participant, the
Guarantor and Lessee, and (C) such other documents and evidence with
respect to the Pass Through Trustee as it may reasonably request in order
to establish the due consummation of the transactions contemplated by this
Agreement, the taking of all necessary corporate action in connection
therewith and compliance with the conditions herein set forth.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft and
the Trust Supplement covering the Aircraft pursuant to the Federal Aviation Act,
Lessee will cause Xxxxx & Xxxxxxx, P.C., special counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee, the
Owner Participant, the Owner Trustee and Lessee an opinion as to the due and
valid registration of the Aircraft in the name of the Owner Trustee, the due
recording of the FAA Xxxx of Sale, the Trust Indenture, such Lease Supplement,
such Trust Supplement and the Lease and the filing of the Trust Agreement and
the lack of filing of any intervening documents with respect to the Aircraft.
(b) CONDITIONS PRECEDENT TO THE OBLIGATIONS OF LESSEE AND THE
GUARANTOR. It is agreed that (A) the obligations of Lessee to sell the Aircraft
to the Owner Trustee and to accept delivery of the Aircraft under the Lease, and
(B) the obligations of Lessee and the Guarantor to enter into the other
Operative Documents, are all subject to the fulfillment to the satisfaction of
Lessee and the Guarantor prior to or on the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or prior
to the Delivery Date in connection with the transactions contemplated by
this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision or
instrumentality of the United States, and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to be in
effect on the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been issued, and all such orders,
permits, waivers, exemptions, authorizations and approvals shall be in full
force and effect on the Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii), 4(a)(iii) and
4(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than Lessee and the Guarantor) in the manner specified in
Section 4(a)(v), shall each be satisfactory in form and substance to Lessee
and the Guarantor, shall be in full force and effect on the Delivery Date,
and an executed counterpart of each thereof (other than the Secured
Certificates) shall have been delivered to Lessee or its special counsel
and the Guarantor or its special counsel.
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(iv) Lessee and the Guarantor shall have received (A) each
certificate referred to in Section 4(a)(vii) (other than the certificate
referred to in clause (A) thereof), (B) the certificate referred to in
Section 4(a)(xxiv)(A), and (C) such other documents and evidence with
respect to the Pass Through Trustee as Lessee or its special counsel and
the Guarantor or its special counsel may reasonably request in order to
establish the due consummation of the transactions contemplated by this
Agreement, the taking of all corporate proceedings in connection therewith
and compliance with the conditions herein set forth.
(v) Lessee and the Guarantor shall have received the opinions set
forth in Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), 4(a)(xvi),
4(a)(xvii) and 4(a)(xxiv)(B) in each case addressed to Lessee and the
Guarantor and dated the Delivery Date and in each case in scope and
substance reasonably satisfactory to Lessee and its special counsel and the
Guarantor and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any court or governmental agency at the time of the Delivery Date
to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations or
guidelines or interpretations by appropriate regulatory authorities which
would make it a violation of law or regulations or guidelines for Lessee or
the Guarantor to enter into any transaction contemplated by the Operative
Documents.
(viii) In the opinion of Lessee and its special counsel, there shall
have been, since the date hereof, no amendment, modification, addition or
change in or to the Internal Revenue Code of 1986, as amended through the
date hereof, the regulations promulgated under the Code (including
temporary regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations, applicable
judicial precedents or Executive Orders of the President of the United
States which might give rise to an indemnity obligation of Lessee under any
of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
SECTION 5. [INTENTIONALLY OMITTED].
SECTION 6. EXTENT OF INTEREST OF CERTIFICATE HOLDERS. No
Certificate Holder (as defined in the Trust Indenture) shall have any further
interest in, or other right with respect to, the mortgage and security interests
created by the Trust Indenture when and if the principal of and interest on all
Secured Certificates held by such holder and all other sums payable to such
holder hereunder, under the Trust Indenture and under such Secured Certificates
shall have been
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paid in full. Each Pass Through Trustee and, by its acceptance of a Secured
Certificate, each Certificate Holder agrees that it will look solely to the
income and proceeds from the Trust Indenture Estate to the extent available for
distribution to such Certificate Holder as provided in Article III of the Trust
Indenture and that neither the Owner Participant nor the Owner Trustee shall be
personally liable to the Pass Through Trustees or any Certificate Holder for any
amounts payable under the Secured Certificates, the Trust Indenture or
hereunder, except as expressly provided in the Operative Documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF LESSEE AND THE
GUARANTOR; INDEMNITIES. (a) REPRESENTATIONS AND WARRANTIES. Lessee and the
Guarantor represent and warrant to the Pass Through Trustee, the Owner Trustee,
the Indenture Trustee, the Liquidity Provider, the Subordination Agent and the
Owner Participant that as of the Delivery Date:
(i) each of Lessee and the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, has the corporate power and authority to own or
hold under lease its properties, has, or had on the respective dates of
execution thereof, the corporate power and authority to enter into and
perform its obligations under (i) in the case of Lessee, the Lessee
Documents, the Pass Through Trust Agreements, the Underwriting Agreement
and the other Operative Documents to which it is a party and (ii) in the
case of the Guarantor, this Agreement, the Pass Through Trust Agreements,
the Underwriting Agreement and the other Operative Documents to which it is
a party, and is duly qualified to do business as a foreign corporation in
each state in which its operations or the nature of its business requires
other than failures to so qualify which would not have a material adverse
effect on the condition (financial or otherwise), consolidated business or
properties of it and its subsidiaries considered as one enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code in
effect in the State of Minnesota) is located at Eagan, Minnesota;
(iii) the execution and delivery by Lessee or the Guarantor (as the
case may be) of the Lessee Documents, the Pass Through Trust Agreements,
the Underwriting Agreement and each other Operative Document to which
Lessee or the Guarantor (as the case may be) is a party, and the
performance of the obligations of Lessee or the Guarantor (as the case may
be) under the Lessee Documents, the Pass Through Trust Agreements, the
Underwriting Agreement and each other Operative Document to which Lessee or
the Guarantor (as the case may be) is a party, have been duly authorized by
all necessary corporate action on the part of Lessee or the Guarantor, do
not require any stockholder approval, or approval or consent of any trustee
or holder of any material indebtedness or material obligations of Lessee or
the Guarantor, except such as have been duly obtained and are in full force
and effect, and do not contravene any law, governmental rule, regulation or
order binding on Lessee or the Guarantor (as the case may be) or the
certificate of incorporation or by-laws of Lessee or the Guarantor (as the
case may be), or contravene the provisions of, or constitute a default
under, or result in the creation of any Lien (other than Permitted Liens)
upon the property of Lessee or the Guarantor (as the
-15-
case may be) under, any indenture, mortgage, contract or other agreement to
which Lessee or the Guarantor (as the case may be) is a party or by which
it may be bound or affected which contravention, default or Lien,
individually or in the aggregate, would be reasonably likely to have a
material adverse effect on the condition (financial or otherwise), business
or properties of the Guarantor and its subsidiaries considered as one
enterprise;
(iv) neither the execution and delivery by Lessee or the Guarantor
(as the case may be) of the Lessee Documents, the Pass Through Trust
Agreements, the Underwriting Agreement or any other Operative Document to
which Lessee or the Guarantor (as the case may be) is a party, nor the
performance of the obligations of Lessee or the Guarantor (as the case may
be) under the Lessee Documents, the Pass Through Trust Agreements, the
Underwriting Agreement or the other Operative Documents to which Lessee or
the Guarantor (as the case may be) is a party, requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action in respect of, the Department of Transportation, the
FAA, or any other federal, state or foreign governmental authority having
jurisdiction over Lessee or the Guarantor, other than (A) the registration
of the Certificates under the Securities Act of 1933, as amended, and under
the securities laws of any state in which the Certificates may be offered
for sale if the laws of such state require such action, (B) the
qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the Securities
and Exchange Commission, (C) the orders, permits, waivers, exemptions,
authorizations and approvals of the regulatory authorities having
jurisdiction over the operation of the Aircraft by Lessee or any Sublessee
required to be obtained on or prior to the Delivery Date, which orders,
permits, waivers, exemptions, authorizations and approvals have been duly
obtained and are, or on the Delivery Date will be, in full force and effect
(other than a flying time wire, all steps to obtain the issuance of which
will have been, on the Delivery Date, taken or caused to be taken by
Lessee), (D) the registration of the Aircraft referred to in Section
4(a)(ix)(3), (E) the registrations and filings referred to in Section
7(a)(vi), and (F) authorizations, consents, approvals, actions, notices and
filings required to be obtained, taken, given or made either only after the
date hereof or the failure of which to obtain, take, give or make would not
be reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business or properties of the Guarantor and its
subsidiaries considered as one enterprise;
(v) this Agreement, each of the other Lessee Documents, the Pass
Through Trust Agreements and the Guarantee constitute the legal, valid and
binding obligations of Lessee or the Guarantor (as the case may be)
enforceable against Lessee or the Guarantor (as the case may be) in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors or lessors generally and by general principles of equity, whether
considered in a proceeding at law or in equity, and except, in the case of
the Lease, as limited by applicable laws which may affect the remedies
provided in the Lease, which laws, however, do not make the remedies
provided in the Lease inadequate for practical realization of the benefits
intended to be afforded thereby;
-16-
(vi) except for (A) the filing of the Trust Agreement with the FAA,
(B) the filing for recording pursuant to the Federal Aviation Act of the
termination of the Mortgage and the Predecessor Lease and the filing of a
UCC-3 termination statement in connection with the Mortgage, (C) the
registration of the Aircraft pursuant to the Federal Aviation Act, (D) the
filing for recording pursuant to the Federal Aviation Act of the Lease with
the Lease Supplement covering the Aircraft, the Trust Indenture and the
Trust Supplement attached thereto and made a part thereof, the Trust
Indenture with the Trust Supplement attached thereto and made a part
thereof and the FAA Xxxx of Sale, (E) the filing of financing statements
(and continuation statements at periodic intervals) with respect to the
security interests created by such documents under the Uniform Commercial
Code of Minnesota and Utah and such other states as may be specified in the
opinion furnished pursuant to Section 4(a)(xi) hereof and the filing of a
UCC-3 termination statement relating to the financing statement filed in
connection with the Mortgage, and (F) the taking of possession by the
Indenture Trustee of the original chattel paper counterpart of each of the
Lease and the Lease Supplement covering the Aircraft, no further filing or
recording of any document (including any financing statement in respect
thereof under Article 9 of the Uniform Commercial Code of any applicable
jurisdiction) is necessary under the laws of the United States of America
or any State thereof in order to perfect the Owner Trustee's interest in
the Aircraft as against Lessee and any third parties, or to perfect the
security interest in favor of the Indenture Trustee in the Owner Trustee's
interest in the Aircraft (with respect to such portion of the Aircraft as
is covered by the recording system established by the FAA pursuant to 49
U.S.C. Section 44107) and in the Lease in any applicable jurisdiction in
the United States;
(vii) neither Lessee, the Guarantor nor any of their affiliates has
directly or indirectly offered the Certificates for sale to any Person
other than in a manner permitted by the Securities Act of 1933, as amended,
and by the rules and regulations thereunder;
(viii) neither Lessee nor the Guarantor is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes an
Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time lapse or both;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of time;
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of Lessee
will not be unreasonably small for the conduct of the business in which
Lessee is engaged or is about to engage; Lessee has no intention or belief
that it is about to incur debts beyond its ability to pay as they mature;
and Lessee's sale of the Aircraft is made without any intent to hinder,
delay or defraud either present or future creditors;
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(xii) none of the proceeds from the issuance of the Secured
Certificates or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or indirectly
by Lessee to purchase or carry any "margin security" as such term is
defined in Regulation G of the Board of Governors of the Federal Reserve
System; and
(xiii) On the Delivery Date, all sales or use tax then due and for
which Lessee is responsible pursuant to Section 7(b)(i) hereof shall have
been paid, other than such taxes which are being contested by Lessee in
good faith and by appropriate proceedings so long as such proceedings do
not involve any material risk of the sale, forfeiture or loss of the
Aircraft.
(b) GENERAL TAX INDEMNITY. [Intentionally Omitted].
(c) GENERAL INDEMNITY. [Intentionally Omitted].
(d) INCOME TAX. [Intentionally Omitted].
SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) Each of the Owner Participant and First Security Bank,
National Association, in its individual capacity, represents and warrants to the
other parties to this Agreement that it is, and on the Delivery Date will be, a
Citizen of the United States without making use of any voting trust, voting
powers agreement or similar arrangement. The Owner Participant agrees, solely
for the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United States
and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Federal Aviation Act and
regulations then applicable thereunder, then the Owner Participant shall (at its
own expense and without any reimbursement or indemnification from Lessee)
promptly effect a voting trust, voting powers agreement or other similar
arrangement or take any other action as may be necessary to prevent any
deregistration and to maintain the United States registration of the Aircraft.
It is agreed that: (A) the Owner Participant shall be liable to pay on request
to each of the other parties hereto and to each holder of a Secured Certificate
for any damages suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence of
this Section 8(c) proving to be untrue as of the Delivery Date; and (B) the
Owner Participant shall be liable to pay on request to Lessee, any Sublessee and
the Loan Participants for any damages which may be incurred by Lessee, any
Sublessee or the Loan Participants as a result of the Owner Participant's
failure to comply with its obligations pursuant to the second sentence of this
Section 8(c). Each party hereto agrees, upon the request and at the sole
expense of the Owner Participant, to cooperate with the Owner Participant in
complying with its obligations under the provisions of the second sentence of
this Section 8(c). First Security Bank, National Association, in its
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individual capacity, agrees that if at any time an officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, shall obtain actual knowledge that First Security Bank, National
Association, has ceased to be a Citizen of the United States without making use
of a voting trust, voting powers agreement or similar arrangement, it will
promptly resign as Owner Trustee (if and so long as such citizenship is
necessary under the Federal Aviation Act as in effect at such time or, if it is
not necessary, if and so long as the Owner Trustee's citizenship would have any
material adverse effect on the Loan Participants, Lessee or the Owner
Participant), effective upon the appointment of a successor Owner Trustee in
accordance with Section 9.01 of the Trust Agreement. If the Owner Participant
or First Security Bank, National Association, in its individual capacity, does
not comply with the requirements of this Section 8(c), the Owner Trustee, the
Indenture Trustee and the Participants hereby agree that an Event of Default (or
an event which would constitute an Event of Default but for lapse of time or the
giving of notice or both) shall not have occurred and be continuing under the
Lease due to non-compliance by Lessee with the registration requirements in the
Lease.
(d) First Security Bank, National Association, in its individual
capacity, represents and warrants that both the principal place of business of
the Owner Trustee and the place where its records concerning the Aircraft and
all of its interest in, to and under the Operative Documents to which it is a
party are kept is Salt Lake City, Utah. First Security Bank, National
Association, in its individual capacity, agrees that it will not change the
location of such office to a location outside of Salt Lake City, Utah, without
prior written notice to all parties. First Security Bank, National Association,
in its individual capacity, further represents and warrants that (A) on the
Delivery Date the Owner Trustee shall have received whatever title to the
Aircraft as was conveyed to it by Lessee, and (B) the Trust Agreement, and,
assuming due authorization, execution and delivery of the Trust Agreement by the
Owner Participant, the other Owner Trustee Documents, when executed and
delivered, shall have been duly executed and delivered by one of its officers
who is duly authorized to execute and deliver such instruments on behalf of the
Owner Trustee. First Security Bank, National Association, in its individual
capacity, represents that it has not offered any interest in the Trust Estate or
any Secured Certificates or any similar securities for sale to, or solicited any
offer to acquire the same from, anyone, and that no officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, has knowledge of any such offer or solicitation by anyone other
than Lessee.
(e) Each Loan Participant represents and warrants that neither it
nor anyone acting in its behalf has offered any Secured Certificates for sale
to, or solicited any offer to buy any Secured Certificate from, any person or
entity other than in a manner in compliance with, and which does not require
registration under, the Securities Act of 1933, as amended, or the rules and
regulations thereunder.
(f) The Owner Participant and the Indenture Trustee agree that, at
any time after the Depreciation Period, Lessee may elect to effect a change in
registration of the Aircraft, at Lessee's cost and expense, so long as (a) the
country of registry of the Aircraft is a country listed on EXHIBIT A hereto (or
such other country as the Owner Trustee approves) and (b) the following
conditions are met: (i) unless the country of registry is Taiwan, the United
States maintains normal diplomatic relations with the country of registry of the
Aircraft, and if the
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country of registry is Taiwan, the United States maintains diplomatic relations
at least as good as those in effect on the Delivery Date; and (ii) the Owner
Trustee and the Indenture Trustee shall have received favorable opinions
(subject to customary exceptions) addressed to each such party, from counsel of
recognized reputation qualified in the laws of the relevant jurisdiction to the
effect that:
(A) the Owner Trustee's ownership interest in the Aircraft shall
be recognized under the laws of such jurisdiction, (B) the obligations of
Lessee, and the rights and remedies of the Owner Trustee, under the Lease
shall remain valid, binding and (subject to customary bankruptcy and
equitable remedies exceptions and to other exceptions customary in foreign
opinions generally) enforceable under the laws of such jurisdiction (or the
laws of the jurisdiction to which the laws of such jurisdiction would refer
as the applicable governing law), (C) after giving effect to such change in
registration, the Lien of the Trust Indenture on the Owner Trustee's right,
title and interest in and to the Aircraft and the Lease shall continue as a
valid and duly perfected first priority security interest and all filing,
recording or other action necessary to protect the same shall have been
accomplished (or, if such opinion cannot be given at the time of such
proposed change in registration because such change in registration is not
yet effective, (1) the opinion shall detail what filing, recording or other
action is necessary and (2) the Owner Trustee and the Indenture Trustee
shall have received a certificate from Lessee that all possible
preparations to accomplish such filing, recording and other action shall
have been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be delivered
to the Owner Trustee and the Indenture Trustee on or prior to the effective
date of such change in registration), (D) it is not necessary, solely as a
consequence of such change in registration and without giving effect to any
other activity of the Owner Trustee, the Owner Participant or the Indenture
Trustee (or any Affiliate thereof), as the case may be, for the Owner
Trustee, the Owner Participant or the Indenture Trustee to qualify to do
business in such jurisdiction, (E) there is no tort liability of the owner
of an aircraft not in possession thereof under the laws of such
jurisdiction (it being agreed that, in the event such latter opinion cannot
be given in a form satisfactory to the Owner Participant, such opinion
shall be waived if insurance reasonably satisfactory to the Owner
Participant is provided to cover such risk), and (F) (unless Lessee shall
have agreed to provide insurance covering the risk of requisition of use of
such Aircraft by the government of such jurisdiction so long as such
Aircraft is registered under the laws of such jurisdiction) the laws of
such jurisdiction require fair compensation by the government of such
jurisdiction payable in currency freely convertible into Dollars for the
loss of use of such Aircraft in the event of the requisition by such
government of such use.
In addition, as a condition precedent to any such change in registration, Lessee
shall furnish to the Owner Trustee and the Indenture Trustee an Officer's
Certificate to the effect that the insurance required by Section 11 of the Lease
shall be in full force and effect at the time of such change in registration
after giving effect to such change in registration and that the new country of
registry imposes aircraft maintenance standards not materially different from
those of the United States, France, Germany, Japan, the Netherlands or the
United Kingdom. Lessee shall pay all costs, expenses, fees, recording and
registration taxes, including the reasonable fees and
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expenses of counsel to the Owner Trustee, the Owner Participant and the
Indenture Trustee, and other charges in connection with any such change in
registration.
(g) The Owner Participant represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Subordination
Agent, the Liquidity Provider and the Owner Trustee, in its capacity as such and
in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and
authority to carry on its present business and operations and to own or
lease its properties, and has the corporate power and authority to enter
into and to perform its obligations under the Owner Participant Documents;
this Agreement and the other Owner Participant Documents have been duly
authorized, executed and delivered by it; and this Agreement and each of
the other Owner Participant Documents constitute the legal, valid and
binding obligations of the Owner Participant enforceable against it in
accordance with its respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity; and it has a tangible net worth (exclusive of goodwill) greater
than $75,000,000;
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance by it
with all of the provisions thereof, (x) will contravene any law or order of
any court or governmental authority or agency applicable to or binding on
the Owner Participant (it being understood that no representation or
warranty is made with respect to laws, rules or regulations relating to
aviation or to the nature of the equipment owned by the Owner Trustee other
than such laws, rules or regulations relating to the citizenship
requirements of the Owner Participant under applicable law), or (y) will
contravene the provisions of, or constitutes or has constituted or will
constitute a default under, or result in the creation of any Lien (other
than Liens provided for in the Operative Documents) upon any property of
the Owner Participant under, its certificate of incorporation or by-laws or
any indenture, mortgage, contract or other agreement or instrument to which
the Owner Participant is a party or by which it or any of its property may
be bound or affected;
(iii) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body (other
than as required by the Federal Aviation Act or the regulations promulgated
thereunder) is required for the due execution, delivery or performance by
it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings before any court or administrative agency or arbitrator
which would materially adversely affect the Owner Participant's ability to
perform its obligations under this Agreement, the Participation Agreement,
the Tax Indemnity Agreement and the Trust Agreement;
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(v) neither the Owner Participant nor anyone authorized by it to
act on its behalf (it being understood that in proposing, facilitating and
otherwise taking any action in connection with the financing contemplated
hereby and agreed to herein by the Owner Participant, Lessee has not acted
as agent of the Owner Participant) has directly or indirectly offered any
Secured Certificate or Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or
solicited any offer to acquire any of the same from, any Person; the Owner
Participant's interest in the Trust Estate and the Trust Agreement is being
acquired for its own account and is being purchased for investment and not
with a view to any resale or distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of Lessor
Liens attributable to the Owner Participant other than any Lessor Liens
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens); and
(vii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangement).
(h) Each of First Security Bank, National Association, in its
individual capacity, and the Owner Participant covenants and agrees that it
shall not cause or permit to exist a Lessor Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each of First
Security Bank, National Association, in its individual capacity, and the Owner
Participant agrees that it will promptly, at its own expense, take such action
as may be necessary duly to discharge such Lessor Lien attributable to it. Each
of First Security Bank, National Association, in its individual capacity, and
the Owner Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from Lessor Liens
(including for this purpose Liens which would be Lessor Liens but for the
proviso in the definition of Lessor Liens) attributable to it. The Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from any Taxes or
Expenses imposed on the Trust Estate against which Lessee is not required to
indemnify the Trust Estate pursuant to Section 7 hereof.
(i) State Street Bank and Trust Company, in its individual
capacity, covenants and agrees that it shall not cause or permit to exist any
Lien, arising as a result of (A) claims against the Indenture Trustee not
related to its interest in the Aircraft or the administration of the Trust
Indenture Estate pursuant to the Trust Indenture, (B) acts of the Indenture
Trustee not permitted by, or failure of the Indenture Trustee to take any action
required by, the Operative Documents to the extent such acts arise or such
failure arises from or constitutes gross negligence or willful misconduct, (C)
claims against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 7 pursuant to said Section
7, or (D) claims against the Indenture Trustee arising out of the transfer by
the Indenture Trustee of all or any portion of its interest in the Aircraft, the
Trust Estate, the Trust Indenture Estate or the Operative Documents other than a
transfer of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article
IV or V of the Trust Indenture, any borrowing pursuant to Section 9 hereof or a
transfer of the Aircraft pursuant to Section 15 of the Lease while an Event of
Default is
-22-
continuing and prior to the time that the Indenture Trustee has received all
amounts due pursuant to the Trust Indenture.
(j) [Intentionally Omitted].
(k) Each Loan Participant represents and warrants that the Secured
Certificate to be issued to it pursuant to the Trust Indenture is being acquired
by it for investment and not with a view to resale or distribution (it being
understood that such Loan Participant may pledge or assign as security its
interest in each Secured Certificate issued to it), PROVIDED that the
disposition of its property shall at all times be and remain within its control,
except that the Loan Participants may sell, transfer or otherwise dispose of any
Secured Certificate or any portion thereof, or grant participations therein, in
a manner which in itself does not require registration under the Securities Act
of 1933, as amended.
(l) The Indenture Trustee, and by acceptance of the Secured
Certificates the Certificate Holders, hereby (i) agree that for purposes of the
application of Section 1111(b) of Title 11 of the United States Code or any
successor provision or any comparable provisions that the "debtor" in any
bankruptcy proceeding involving the assets held or administered pursuant to the
Trust Agreement shall be strictly limited to the Trust Estate (excluding the
Excluded Payments) and (ii) make (and hereby agree to make), with respect to the
Trust Indenture Estate, the election provided for in Section 1111(b)(2) of Title
11 of the United States Code. It is hereby agreed by the Indenture Trustee, and
by the acceptance of the Secured Certificates the Certificate Holders hereby
agree, that if (i) all or any part of the Trust Estate becomes the property of,
or the Owner Participant becomes, a debtor subject to the reorganization
provisions of the Bankruptcy Reform Act of 1978 or any successor provision or
any comparable proceeding, (ii) pursuant to such reorganization provisions the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to the holder(s) of the
Secured Certificates or to the Indenture Trustee, directly or indirectly (other
than the recourse liability of the Owner Participant under this Participation
Agreement), to make payment on account of any amount payable as principal or
interest on the Secured Certificates and (iii) any holder(s) of the Secured
Certificates or the Indenture Trustee actually receives any Excess Payment (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of (ii) above, then
such holder(s) or the Indenture Trustee, as the case may be, shall promptly
refund to the Owner Trustee or the Owner Participant (whichever shall have made
such payment) such Excess Payment. For purposes of this Section 8(l), "EXCESS
PAYMENT" means the amount by which such payment exceeds the amount which would
have been received by the holder(s) of the Secured Certificates or the Indenture
Trustee if the Owner Trustee (in its individual capacity) or the Owner
Participant had not become subject to the recourse liability referred to in (ii)
above. Nothing contained in this Section 8(l) shall prevent the holder of a
Secured Certificate or the Indenture Trustee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under this Agreement or
the Trust Indenture (and any exhibits or annexes thereto).
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(m) State Street Bank and Trust Company represents, warrants and
covenants, in its individual capacity, to Lessee, the Guarantor, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Liquidity
Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
Massachusetts, is a Citizen of the United States (without making use of any
voting trust, voting powers agreement or similar arrangement), will notify
promptly all parties to this Agreement if in its reasonable opinion its
status as a Citizen of the United States (without making use of any voting
trust, voting powers agreement or similar arrangement) is likely to change
and will resign as Indenture Trustee as provided in Section 8.02 of the
Trust Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use of a
voting trust, voting powers agreement or similar arrangement), and has the
full corporate power, authority and legal right under the laws of the
Commonwealth of Massachusetts and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver each of this
Agreement, the Trust Indenture and each other Operative Document to which
it is a party and to carry out its obligations under this Agreement, the
Trust Indenture, each other Operative Document to which it is a party and
to authenticate the Secured Certificates;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Secured
Certificates and the performance by the Indenture Trustee of its
obligations under the Indenture Trustee Documents have been duly authorized
by the Indenture Trustee and will not violate its articles of association
or by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against the Indenture Trustee, either in its individual
capacity or as Indenture Trustee, before any court or administrative agency
which, if determined adversely to it, would materially adversely affect the
ability of the Indenture Trustee, in its individual capacity or as
Indenture Trustee as the case may be, to perform its obligations under the
Operative Documents to which it is a party; and
(v) there are no Indenture Trustee Liens on the Aircraft or any
portion of the Trust Estate.
(n) The Owner Participant will not, directly or indirectly, sell,
assign, convey or otherwise transfer any of its right, title or interest in and
to this Agreement, the Trust Estate or
-24-
the Trust Agreement or any proceeds therefrom to any person or entity, unless
(i) the proposed transferee is a "Transferee" (as defined below), (ii) Lessee
shall have (1) received an opinion (in form and substance reasonably
satisfactory to Lessee) of counsel to the Owner Participant (who shall be
reasonably satisfactory to Lessee) to the effect that such transfer will not
result in any risk of loss of tax benefits to, or any increase in the tax
liability of, Lessee and (2) received from the Owner Participant so seeking to
transfer such right, title or interest reasonably satisfactory indemnification
for any loss of tax benefits to, and increase in the tax liability of, Lessee,
and (iii) the Owner Participant sells, assigns, conveys or otherwise transfers
all of its right, title and interest in and to this Agreement, the Trust Estate,
the Trust Agreement and the proceeds therefrom to a single entity. A
"TRANSFEREE" shall mean either (A) a bank or other financial institution with a
combined capital, surplus and undivided profits of at least $75,000,000 or a
corporation whose tangible net worth is at least $75,000,000, exclusive of
goodwill, in either case as of the proposed date of such transfer, as determined
in accordance with generally accepted accounting principles, or (B) any
subsidiary of such a bank, financial institution or corporation, PROVIDED that
such bank, financial institution or corporation furnishes to the Owner Trustee,
the Indenture Trustee and Lessee a guaranty with respect to the Owner
Participant's obligations, in the case of the Owner Trustee, under the Trust
Agreement and, in the case of the Indenture Trustee and Lessee, the Owner
Participant's obligations hereunder, including but not limited to, under Section
8(c) and Section 8(h) hereof, in form and substance reasonably satisfactory to
Lessee, the Owner Trustee and the Indenture Trustee; PROVIDED, HOWEVER, that any
Transferee shall not be an airline, a commercial air carrier, an air freight
forwarder, an entity engaged in the business of parcel transport by air or other
similar person or a corporation or other entity controlling, controlled by or
under common control with such an airline, a commercial air carrier, an air
freight forwarder, an entity engaged in the business of parcel transport by air
or other similar person. Each such transfer to a Transferee shall be subject to
the conditions that (M) upon giving effect to such transfer, the Transferee is a
Citizen of the United States (without making use of a voting trust agreement,
voting powers agreement or other similar arrangement unless approved by Lessee),
and has full power and authority to enter into the transactions contemplated
hereby, (N) the Transferee has the requisite power and authority to enter into
and carry out the transactions contemplated hereby and such Transferee shall
have delivered to Lessee, the Owner Trustee and the Indenture Trustee an opinion
of counsel in form and substance reasonably satisfactory to such persons as to
the due authorization, delivery, legal, valid and binding effect and
enforceability of the agreement or agreements referred to in the next clause
with respect to the Transferee and any guaranty provided pursuant to the
provisions of this Section 8(n) as to the guarantor, (O) the Transferee enters
into an agreement or agreements, in form and substance reasonably satisfactory
to the Owner Trustee, Lessee and the Indenture Trustee, whereby the Transferee
confirms that it shall be deemed a party to this Agreement and a party to the
Trust Agreement and agrees to be bound by all the terms of, and to undertake all
of the obligations of the transferor Owner Participant contained in, the Owner
Participant Documents (to the extent of the participation so transferred to it)
and makes the representations and warranties made by the Owner Participant
thereunder, (P) such transfer does not affect registration of the Aircraft under
the Federal Aviation Act, or any rules or regulations promulgated thereunder or
create a relationship which would be in violation thereof or violate any
provision of the Securities Act of 1933, as amended, or any other applicable
Federal or state law, (Q) the transferor Owner Participant assumes the risk of
any loss of Interest Deductions,
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Amortization Deductions and MACRS Deductions and the risk of any Inclusion Event
(each as defined in the Tax Indemnity Agreement) resulting from such transfer,
(R) the transferor Owner Participant pays all of the costs and expenses
(including, without limitation, fees and expenses of counsel) incurred in
connection with such transfer, including the costs and expenses of the Owner
Trustee, the Indenture Trustee, Lessee and the Loan Participants in connection
therewith, and (S) the terms of the Operative Documents and the Overall
Transaction shall not be altered. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents and
each reference herein to the transferor Owner Participant shall thereafter be
deemed for all purposes to be to the Transferee and the transferor Owner
Participant shall be relieved of all obligations of the transferor Owner
Participant under the Owner Participant Documents arising after the date of such
transfer except to the extent fully attributable to or arising out of acts or
events occurring prior thereto and not assumed by the Transferee (in each case,
to the extent of the participation so transferred). If the Owner Participant
intends to transfer any of its interests hereunder, it shall give 30 days prior
written notice thereof to the Indenture Trustee, the Owner Trustee and Lessee,
specifying the name and address of the proposed Transferee.
(o) Notwithstanding the provisions of Section 8(x) hereof, unless
waived by the Loan Participants, Lessee shall not be entitled to assume the
Secured Certificates on the date for purchase of the Aircraft pursuant to
Section 19(d) of the Lease if on such date an Event of Default shall have
occurred and be continuing or any condition or event shall exist which, with the
passage of time or giving of notice or both, would become such an Event of
Default.
(p) First Security Bank, National Association, and State Street
Bank and Trust Company, each in its individual capacity, agrees for the benefit
of Lessee to comply with the terms of the Trust Indenture which it is required
to comply with in its individual capacity.
(q) The Owner Participant represents and warrants that it is not
acquiring its interest in the Trust Estate, any Secured Certificate or any
interests represented thereby with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA or of any "plan" within the meaning of Section
4975(e)(1) of the Code. Each Loan Participant agrees that it will not transfer
any Secured Certificate (or any part thereof) to any entity (except pursuant to
Section 2.14 of the Trust Indenture) unless such entity makes (or is deemed to
have made) a representation and warranty as of the date of transfer that either
no part of the funds to be used by it for the purchase and holding of such
Secured Certificate (or any part thereof) constitutes assets of any "employee
benefit plan" or that such purchase and holding will not result in a prohibited
transaction (as defined in Section 4975 of the Code and ERISA). The Owner
Participant agrees that it will not transfer any of its right, title or interest
in and to this Agreement, the Trust Estate or the Trust Agreement or any
proceeds therefrom to any entity unless such entity makes (or is deemed to have
made) a representation and warranty as of the date of transfer that either no
part of the funds to be used by it for the purchase of such right, title and
interest (or any part thereof) constitutes assets of any "employee benefit plan"
or that such transfer will not result in a prohibited transaction (as defined in
Section 4975 of the Code and ERISA). The Pass Through Trustee agrees that it
will not agree to any amendment, modification or waiver of Section 1.01(e)(1) of
the initial supplement to each Pass Through Trust Agreement without the prior
written consent of the Owner Participant.
-26-
(r) Each Participant, the Owner Trustee and the Indenture Trustee
agrees for the benefit of the Manufacturer and Lessee that it will not disclose
or suffer to be disclosed the terms of the Purchase Agreement to any third party
except (A) as may be required by any applicable statute, court or administrative
order or decree or governmental ruling or regulation or to any regulatory
authorities having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Secured Certificates (including
by way of participation or assignment of an interest, PROVIDED such participant
or assignee agrees to hold such terms confidential to the same extent as herein
provided) or the Owner Participant's beneficial interest in the Trust Estate and
any exercise of remedies under the Lease and the Trust Indenture), (C) with the
prior written consent of the Manufacturer and Lessee, (D) to the Owner
Trustee's, the Indenture Trustee's and each Participant's counsel or special
counsel, independent insurance brokers or other agents who agree to hold such
information confidential, or (E) in the case of the Owner Participant and/or the
Owner Trustee, it may disclose so much of the Purchase Agreement as has been
assigned to the Owner Trustee under the Purchase Agreement Assignment to bona
fide potential purchasers of the Aircraft.
(s) The Owner Trustee and the Owner Participant severally, not
jointly, represent and warrant that none of the funds made available by the Pass
Through Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation G of the
Board of Governors of the Federal Reserve System or for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or carry
such margin security or for any other purpose which might cause the transaction
contemplated by this Agreement to constitute a "purpose credit" within the
meaning of Regulation X of the Board of Governors of the Federal Reserve System,
assuming that the proceeds were and are applied as contemplated by the
provisions of this Agreement.
(t) Each Loan Participant covenants and agrees that it shall not
cause or permit to exist a Loan Participant Lien attributable to it with respect
to the Aircraft or any other portion of the Trust Estate. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as may
be necessary duly to discharge such Loan Participant Lien attributable to it.
Each Loan Participant agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Estate resulting from such Loan
Participant Lien attributable to it.
(u) State Street Bank and Trust Company, in its individual
capacity, covenants and agrees that it shall not cause or permit to exist any
Indenture Trustee's Liens with respect to the Trust Indenture Estate or the
Trust Estate. State Street Bank and Trust Company, in its individual capacity,
agrees that it will promptly, at its own expense, take such action as may be
necessary duly to discharge such Indenture Trustee's Liens. State Street Bank
and Trust Company, in its individual capacity, agrees to make restitution to the
Trust Estate for any actual diminution of the assets of the Trust Indenture
Estate or the Trust Estate resulting from such Indenture Trustee's Liens.
(v) The Owner Trustee, in its individual capacity (except as
provided in clauses (iii) and (vii) below) and (but only as provided in clauses
(iii) and (vii) and, to the extent
-27-
that it relates to the Owner Trustee, clauses (ii), (ix) and (xi) below) as
Owner Trustee, represents and warrants to Lessee, the Guarantor, the Pass
Through Trustee, the Subordination Agent, the Liquidity Provider and the Owner
Participant that:
(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good standing
under the laws of the United States, has full corporate power and authority
to carry on its business as now conducted, has the corporate power and
authority to execute and deliver the Trust Agreement, has the corporate
power and authority to carry out the terms of the Trust Agreement, and has
(assuming the authorization, execution and delivery of the Trust Agreement
by the Owner Participant), as Owner Trustee, and to the extent expressly
provided herein or therein, in its individual capacity, the corporate power
and authority to execute and deliver and to carry out the terms of this
Agreement, the Trust Indenture, the Secured Certificates, the Lease and
each other Operative Document (other than the Trust Agreement) to which it
is a party;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly authorized,
executed and delivered this Agreement, in its individual capacity, has duly
authorized, executed and delivered the Trust Agreement and in its trust
capacity, except as expressly provided therein, has duly authorized,
executed and delivered the other Owner Trustee Documents and (assuming the
due authorization, execution and delivery of the Trust Agreement by the
Owner Participant) this Agreement and each of the other Owner Trustee
Documents constitute the legal, valid and binding obligations of the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case may
be, enforceable against it in its individual capacity or as Owner Trustee,
as the case may be, in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or in
equity;
(iii) assuming the due authorization, execution and delivery of the
Trust Agreement by the Owner Participant, the Owner Trustee has duly
authorized, and on the Delivery Date shall have duly issued, executed and
delivered to the Indenture Trustee for authentication, the Secured
Certificates pursuant to the terms and provisions hereof and of the Trust
Indenture, and each Secured Certificate on the Delivery Date will
constitute the valid and binding obligation of the Owner Trustee and will
be entitled to the benefits and security afforded by the Trust Indenture in
accordance with the terms of such Secured Certificate and the Trust
Indenture;
(iv) neither the execution and delivery by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of any
Owner Trustee Document, nor the consummation by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, of any of the
transactions contemplated thereby, nor the compliance by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, with
any of the terms and provisions thereof, (A) requires or will require any
approval of its stockholders, or approval or consent of any trustees or
holders of any indebtedness or
-28-
obligations of it, or (B) violates or will violate its articles of
association or by-laws, or contravenes or will contravene any provision of,
or constitutes or will constitute a default under, or results or will
result in any breach of, or results or will result in the creation of any
Lien (other than as permitted under the Operative Documents) upon its
property under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sale contract, bank loan or credit agreement, license or other
agreement or instrument to which it is a party or by which it is bound, or
contravenes or will contravene any law, governmental rule or regulation of
the United States of America or the State of Utah governing the trust
powers of the Owner Trustee, or any judgment or order applicable to or
binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in respect
of, any Utah state or local governmental authority or agency or any United
States federal governmental authority or agency regulating the trust powers
of the Owner Trustee in its individual capacity is required for the
execution and delivery of, or the carrying out by, the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of any of
the transactions contemplated hereby or by the Trust Agreement, the
Participation Agreement, the Trust Indenture, the Lease or the Secured
Certificates, or any other Operative Document to which it is a party or by
which it is bound, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly obtained,
given or taken or which is described in Section 7(iv);
(vi) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of Lessor
Liens) attributable to the Owner Trustee, in its individual capacity, other
than any Lessor Liens (including for this purpose Liens which would be
Lessor Liens but for the proviso in the definition of Lessor Liens) (A) the
existence of which poses no material risk of the sale, forfeiture or loss
of the Aircraft, Airframe or any Engine or any interest therein, (B) the
existence of which does not interfere in any way with the use or operation
of the Aircraft by the Lessee (or any Sublessee), (C) the existence of
which does not affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Trust Indenture, (D) which the Owner Trustee is
diligently contesting by appropriate proceedings and (E) the existence of
which does not result in actual interruption in the receipt and
distribution by the Indenture Trustee in accordance with the Trust
Indenture of Rent assigned to the Indenture Trustee for the benefit of the
Certificate Holders;
(vii) there exists no Lessor Lien (including for this purpose Liens
which would be Lessor Liens but for the proviso in the definition of Lessor
Liens) attributable to the Owner Trustee, as lessor under the Lease, other
than any Lessor Liens (including for this purpose Liens which would be
Lessor Liens but for the proviso in the definition of Lessor Liens) (A) the
existence of which poses no material risk of the sale, forfeiture or loss
of the Aircraft, Airframe or any Engine or any interest therein, (B) the
existence of which does not interfere in any way with the use or operation
of the Aircraft by the Lessee (or any Sublessee), (C) the existence of
which does not affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Trust Indenture, (D) which the Owner Trustee is
diligently contesting by appropriate proceedings and (E) the existence of
which does not
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result in actual interruption in the receipt and distribution by the
Indenture Trustee in accordance with the Trust Indenture of Rent assigned
to the Indenture Trustee for the benefit of the Certificate Holders;
(viii) there are no Taxes payable by the Owner Trustee, either in its
individual capacity or as Owner Trustee, imposed by the State of Utah or
any political subdivision thereof in connection with the issuance of the
Secured Certificates, or the execution and delivery in its individual
capacity or as Owner Trustee, as the case may be, of any of the instruments
referred to in clauses (i), (ii), (iii) and (iv) above, that, in each case,
would not have been imposed if the Trust Estate were not located in the
State of Utah and First Security Bank, National Association had not (a) had
its principal place of business in, (b) performed (in its individual
capacity or as Owner Trustee) any or all of its duties under the Operative
Documents in, and (c) engaged in any activities unrelated to the
transactions contemplated by the Operative Documents in, the State of Utah;
(ix) there are no pending or, to its knowledge, threatened actions
or proceedings against the Owner Trustee, either in its individual capacity
or as Owner Trustee, before any court or administrative agency which, if
determined adversely to it, would materially adversely affect the ability
of the Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, to perform its obligations under any of the instruments
referred to in clauses (i), (ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and under all
documents relating to the Trust Estate, are located in Salt Lake City,
Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Secured Certificate or
Certificate or any interest in or to the Trust Estate, the Trust Agreement
or any similar interest for sale to, or solicited any offer to acquire any
of the same from, anyone other than the Pass Through Trustee and the Owner
Participant; and the Owner Trustee has not authorized anyone to act on its
behalf (it being understood that in arranging and proposing the refinancing
contemplated hereby and agreed to herein by the Owner Trustee, the Lessee
has not acted as agent of the Owner Trustee) to offer directly or
indirectly any Secured Certificate, any Certificate or any interest in and
to the Trust Estate, the Trust Agreement or any similar interest for sale
to, or to solicit any offer to acquire any of the same from, any person;
(xii) it is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or similar arrangements);
and
(xiii) there has not occurred any event which constitutes (or, to the
best of its knowledge would, with the passing of time or the giving of
notice or both, constitute) an Event of Default as defined in the Trust
Indenture which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing.
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(w) The Owner Participant covenants and agrees that if (i) Lessee
has elected pursuant to Section 9(a)(2) of the Lease to terminate the Lease by
causing the Aircraft to be sold pursuant to Section 9(c) of the Lease and (ii)
the Owner Trustee has, pursuant to Section 9(c) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and (iii)
the Owner Trustee has failed to make, on or before the Termination Date, any
payment required to be made by the Owner Trustee pursuant to Section 9(c) in
connection with its retention of title to the Aircraft, the Owner Participant
will indemnify Lessee for any losses, damages, costs or expenses of any kind
(including any additional rents paid by Lessee and any fees and expenses of
lawyers, appraisers, brokers or accountants) incurred as a consequence of such
failure by the Owner Trustee. The Owner Participant further covenants and
agrees to pay those costs and expenses specified to be paid by the Owner
Participant pursuant to EXHIBIT E to the Lease.
(x) Each of the Owner Participant, the Owner Trustee, the
Indenture Trustee and Lessee covenants and agrees that if Lessee elects (a) to
purchase the Aircraft pursuant to Section 19(b) of the Lease or (b) to terminate
the Lease and purchase the Aircraft pursuant to Section 19(d) of the Lease, then
each of the parties will execute and deliver appropriate documentation
transferring all right, title and interest in the Aircraft to Lessee (including,
without limitation, such bills of sale and other instruments and documents as
Lessee shall reasonably request to evidence (on the public record or otherwise)
such transfer and the vesting of all right, title and interest in and to the
Aircraft in Lessee), and if Lessee, in connection with such purchase, elects to
assume the obligations of the Owner Trustee pursuant to the Trust Indenture and
the Secured Certificates each of the parties will execute and deliver
appropriate documentation permitting Lessee to assume such obligations on the
basis of full recourse to Lessee, maintaining the security interest in the
Aircraft created by the Trust Indenture, releasing the Owner Participant and the
Owner Trustee from all future obligations in respect of the Secured
Certificates, the Trust Indenture and all other Operative Documents and all such
other actions as are reasonably necessary to permit such assumption by Lessee.
Notwithstanding the foregoing, Lessee shall not be entitled to assume
the obligations of the Owner Trustee in respect of the Secured Certificates
unless Lessee causes to be delivered to the Indenture Trustee an opinion of
counsel to the effect that (i) the Lien of the Trust Indenture continues to be a
valid and duly perfected first priority security interest in and to the Aircraft
and (ii) the Indenture Trustee should be entitled to the benefits of 11 U.S.C.
Section 1110; PROVIDED that the opinion required by subclause (ii) need only be
given if immediately prior to such assumption the Owner Trustee should have been
entitled to the benefits of 11 U.S.C. Section 1110.
(y) (A) Lessee will not consolidate with or merge into any
other corporation or convey, transfer or lease substantially all of its assets
as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of Lessee as an entirety shall be a
Certificated Air Carrier;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer or
lease substantially all of
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the assets of Lessee as an entirety shall execute and deliver to the Owner
Trustee, the Indenture Trustee and the Owner Participant an agreement in
form and substance reasonably satisfactory to the Indenture Trustee and the
Owner Participant containing an assumption by such successor corporation or
Person of the due and punctual performance and observance of each covenant
and condition of this Agreement, the Lease, the Purchase Agreement
Assignment and the Tax Indemnity Agreement to be performed or observed by
Lessee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default under the Lease shall have occurred and be
continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant a certificate signed by the
President, any Executive Vice President, any Senior Vice President or any
Vice President and by the Secretary or an Assistant Secretary of Lessee,
and an opinion of counsel reasonably satisfactory to the Indenture Trustee
and the Owner Participant, each stating that such consolidation, merger,
conveyance, transfer or lease and the assumption agreement mentioned in
clause (ii) above comply with this subparagraph (A) of Section 8(y) and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any such consolidation or merger or any such conveyance, transfer
or lease of substantially all of the assets of Lessee as an entirety in
accordance with this subparagraph (A) of Section 8(y), the successor corporation
or Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under this
Agreement with the same effect as if such successor corporation or Person had
been named as Lessee herein. No such conveyance, transfer or lease of
substantially all of the assets of Lessee as an entirety shall have the effect
of releasing Lessee or any successor corporation or Person which shall
theretofore have become such in the manner prescribed in this subparagraph (A)
of Section 8(y) from its liability in respect of any Operative Document to which
it is a party.
(B) Lessee shall at all times maintain its corporate
existence except as permitted by subparagraph (A) of this Section 8(y).
(z) Lessee, at its expense, will take, or cause to be taken, such
action with respect to the recording, filing, re-recording and refiling of the
Lease, the Lease Supplement, the Trust Agreement, the Trust Indenture, the Trust
Supplement and any financing statements or other instruments as are necessary to
maintain, so long as the Trust Indenture or the Lease is in effect, the
perfection of the security interests created by the Trust Indenture and any
security interest that may be claimed to have been created by the Lease and the
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee and the Indenture Trustee timely notice of the necessity of such action,
together with such instruments, in execution form, and such other information as
may be required to enable them to take such action. Lessee will notify the
Owner Trustee, the Owner Participant and the Indenture Trustee of any change in
the location of its chief executive office (as such term is used in Article 9 of
the Uniform Commercial Code) promptly after making such change or in any event
within the period of time necessary under
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applicable law to prevent the lapse of perfection (absent refiling) of financing
statements filed under the Operative Documents.
(aa) Section 3 of the Lease contemplates that, under certain
circumstances, the Owner Participant will make certain recalculations of Basic
Rent, Excess Amounts, Stipulated Loss Value and Termination Value, and the Owner
Participant hereby agrees to make such recalculations as and when contemplated
by the Lease and subject to all the terms and conditions of the Lease and
promptly to take such further actions as may be necessary or desirable to give
effect to and to cause the Owner Trustee to give effect to the provisions of
Section 3 of the Lease.
(bb) The Owner Participant hereby agrees with Lessee, and only with
Lessee, and not for the benefit of any other party to this Participation
Agreement, that it will promptly pay in full to the Owner Trustee any funds
necessary to enable the Owner Trustee promptly to pay to Lessee the full amount
of any Reimbursement Amount owed to Lessee.
(cc) The Owner Participant hereby agrees to notify Lessee or cause
Lessee to be notified by telecopier not later than 10:00 a.m. New York time on
the third Business Day prior to the day for which an Excess Amount is indicated
stating whether or not the Owner Participant intends to pay such Excess Amount
in full by 10:30 A.M. (New York time) on the due date.
(dd) The Owner Participant hereby agrees with Lessee that it will
pay, or cause to be paid, all costs and expenses that are for the account of the
Owner Trustee pursuant to Sections 5(a) and 5(d) of the Lease.
(ee) Each Loan Participant hereby represents, warrants and agrees
that it shall not transfer any interest in any Secured Certificate unless and
until the transferee agrees in writing (copies of which shall be provided by the
Indenture Trustee to Lessee, the Owner Trustee and the Owner Participant) to
make the representations contemplated to be made by a Loan Participant in this
Agreement and to be bound by the terms of this Agreement and the Trust Indenture
(including, without limitation, the representations and covenants set forth in
Sections 8(e), 8(k), 8(l), 8(q), and 8(t) hereof and this Section 8(ee) and
Sections 2.03, 2.14 and 4.03 of the Trust Indenture).
(ff) The Pass Through Trustee represents and warrants to Lessee,
the Guarantor, the Indenture Trustee, the Subordination Agent, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
(i) the Pass Through Trustee is duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts, and has the full corporate power, authority and legal right
under the laws of the Commonwealth of Massachusetts and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of the Pass Through Trust Agreements, the Intercreditor
Agreement and this Agreement and to perform its obligations under the Pass
Through Trust Agreements, the Intercreditor Agreement and this Agreement;
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(ii) this Agreement, each of the Pass Through Trust Agreements and
the Intercreditor Agreement have been duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement, each of the Pass
Through Trust Agreements and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Pass Through Trustee
enforceable against it in accordance with their respective terms, except as
the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether considered
in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the Pass
Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass Through
Trustee of the Secured Certificates pursuant to this Agreement, or the
issuance of the Certificates pursuant to the Pass Through Trust Agreements,
contravenes any law, rule or regulation of the Commonwealth of
Massachusetts or any United States governmental authority or agency
regulating the Pass Through Trustee's banking, trust or fiduciary powers or
any judgment or order applicable to or binding on the Pass Through Trustee
and does not contravene or result in any breach of, or constitute a default
under, the Pass Through Trustee's articles of association or by-laws or any
agreement or instrument to which the Pass Through Trustee is a party or by
which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through Trustee
of any of the Pass Through Trust Agreements, the Intercreditor Agreement or
this Agreement, nor the consummation by the Pass Through Trustee of any of
the transactions contemplated hereby or thereby, requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action with respect to, any Massachusetts governmental
authority or agency or any federal governmental authority or agency
regulating the Pass Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee imposed
by the Commonwealth of Massachusetts or any political subdivision or taxing
authority thereof in connection with the execution, delivery and
performance by the Pass Through Trustee of this Agreement, any of the Pass
Through Trust Agreements or the Intercreditor Agreement (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political subdivision
thereof in connection with the acquisition, possession or ownership by the
Pass Through Trustee of any of the Secured Certificates (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Pass Through Trustee for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but rather, each will
be characterized either as a grantor trust under subpart E, Part I, of
Subchapter J of the Code or as a partnership, such trusts will not be
subject to
-34-
any Taxes imposed by the Commonwealth of Massachusetts or any political
subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Pass Through Trustee
to perform its obligations under this Agreement, the Intercreditor
Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Certificates contemplated
hereby, the Pass Through Trustee has not directly or indirectly offered any
Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the Pass Through
Trustee authorized anyone to act on its behalf to offer directly or
indirectly any Secured Certificate for sale to any Person, or to solicit
any offer to acquire any Secured Certificate from any Person; and the Pass
Through Trustee is not in default under any Pass Through Trust Agreement;
and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
(gg) The Subordination Agent represents and warrants to Lessee, the
Guarantor, the Indenture Trustee, the Pass Through Trustee, the Liquidity
Provider, the Owner Participant and the Owner Trustee, in its capacity as such
and in its individual capacity, as follows:
(i) the Subordination Agent is a duly organized national banking
association, validly existing and in good standing with the Comptroller of
the Currency under the laws of the United States and has the full corporate
power, authority and legal right under the laws of the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of the Liquidity Facilities, the Intercreditor Agreement and
this Agreement and to perform its obligations under this Agreement, the
Liquidity Facilities and the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and delivered
by the Subordination Agent; this Agreement, each of the Liquidity
Facilities and the Intercreditor Agreement constitute the legal, valid and
binding obligations of the Subordination Agent enforceable against it in
accordance with their respective terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Intercreditor
Agreement or this Agreement contravenes any law, rule or regulation of the
State of Connecticut or any United States
-35-
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable to
or binding on the Subordination Agent and do not contravene or result in
any breach of, or constitute a default under, the Subordination Agent's
articles of association or by-laws or any agreement or instrument to which
the Subordination Agent is a party or by which it or any of its properties
may be bound;
(iv) neither the execution and delivery by the Subordination Agent
of any of the Liquidity Facilities, the Intercreditor Agreement or this
Agreement nor the consummation by the Subordination Agent of any of the
transactions contemplated hereby or thereby requires the consent or
approval of, the giving of notice to, the registration with, or the taking
of any other action with respect to, any Connecticut governmental authority
or agency or any federal governmental authority or agency regulating the
Subordination Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent imposed
by the State of Connecticut or any political subdivision or taxing
authority thereof in connection with the execution, delivery and
performance by the Subordination Agent of this Agreement, any of the
Liquidity Facilities or the Intercreditor Agreement (other than franchise
or other taxes based on or measured by any fees or compensation received by
the Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the Subordination
Agent imposed by the State of Connecticut or any political subdivision
thereof in connection with the acquisition, possession or ownership by the
Subordination Agent of any of the Secured Certificates (other than
franchise or other taxes based on or measured by any fees or compensation
received by the Subordination Agent for services rendered in connection
with the transactions contemplated by the Intercreditor Agreement or any of
the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the Intercreditor Agreement
or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly offered
any Secured Certificate for sale to any Person or solicited any offer to
acquire any Secured Certificates from any Person, nor has the Subordination
Agent authorized anyone to act on its behalf to offer directly or
indirectly any Secured Certificate for sale to any Person, or to solicit
any offer to acquire any Secured Certificate from any Person; and the
Subordination Agent is not in default under any Liquidity Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter, Lessee or the Guarantor.
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SECTION 9. RELIANCE OF LIQUIDITY PROVIDER. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and warranties were
made to the Liquidity Provider directly. Lessee agrees and acknowledges that
the Liquidity Provider shall be a third party beneficiary of the indemnities
contained in Section 7(c) hereof, and may rely on such indemnities to the same
extent as if such indemnities were made to the Liquidity Provider directly.
SECTION 10. OTHER DOCUMENTS. Each of the Owner Participant and
the Owner Trustee hereby (A) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may hereafter
be amended or supplemented from time to time in accordance with the terms
thereof) applicable to it; (B) agrees with Lessee and the Indenture Trustee not
to amend, supplement or otherwise modify any provision of the Trust Agreement in
a manner adversely affecting such party without the prior written consent of
such party; and (C) agrees with Lessee and the Loan Participants not to revoke
the Trust Agreement without the prior written consent of Lessee and the
Indenture Trustee. Notwithstanding the foregoing, so long as the Lease has not
been terminated, the Indenture Trustee and the Owner Trustee hereby agree for
the benefit of Lessee that without the consent of Lessee they will not (i) amend
or modify Article III or IX of the Trust Indenture, (ii) make any amendment
which will affect the stated principal amount or interest on the Secured
Certificates or (iii) amend or modify the provisions of Sections 2.05 or 10.14
of the Trust Indenture. The Indenture Trustee and the Owner Trustee agree to
promptly furnish to Lessee copies of any supplement, amendment, waiver or
modification of any of the Operative Documents to which Lessee is not a party.
Notwithstanding anything to the contrary contained herein, in the Trust
Agreement or in any other Operative Document, the Owner Participant will not
consent to or direct a change in the situs of the Trust Estate without the prior
written consent of Lessee. Each Loan Participant agrees that it will not take
any action in respect of the Trust Indenture Estate except through the Indenture
Trustee pursuant to the Trust Indenture or as otherwise permitted by the Trust
Indenture.
SECTION 11. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the Indenture
Trustee and the Owner Trustee, in its capacity as such and in its individual
capacity as follows:
(a) Lessee will cause to be done, executed, acknowledged and
delivered all and every such further acts, conveyances and assurances as the
Owner Trustee, the Indenture Trustee or the Owner Participant shall reasonably
require for accomplishing the purposes of this Agreement and the other Operative
Documents; PROVIDED that any instrument or other document so executed by Lessee
will not expand any obligations or limit any rights of Lessee in respect of the
transactions contemplated by any Operative Documents. Lessee, forthwith upon
delivery of the Aircraft under the Lease, shall cause the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the name
of the Owner Trustee, except as otherwise required or permitted hereunder or
under the Lease, under the Federal Aviation Act, or shall furnish to the Owner
Trustee such information as may be required to enable the Owner Trustee to make
application for such registration, and shall promptly furnish to the Owner
Trustee such
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information as may be required to enable the Owner Trustee to timely file any
reports required to be filed by it as the lessor under the Lease or as the owner
of the Aircraft with any governmental authority.
(b) Lessee will cause the Lease, all Lease Supplements, all
amendments to the Lease, the Trust Indenture, all supplements and amendments to
the Trust Indenture and this Agreement to be promptly filed and recorded, or
filed for recording, to the extent permitted under the Federal Aviation Act, or
required under any other applicable law. Upon the execution and delivery of the
FAA Xxxx of Sale, the Lease, the Lease Supplement covering the Aircraft, the
Trust Supplement and the Trust Indenture shall be filed for recording with the
Federal Aviation Administration in the following order of priority; FIRST, the
FAA Xxxx of Sale, SECOND, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and THIRD, the
Trust Indenture, with the Trust Supplement attached.
SECTION 12. OWNER FOR FEDERAL TAX PURPOSES. It is hereby agreed
among Lessee, the Owner Participant and the Owner Trustee that for Federal
income tax purposes the Owner Participant will be the owner of the Aircraft to
be delivered under the Lease and Lessee will be the lessee thereof, and each
party hereto agrees to characterize the Lease as a lease for Federal income tax
purposes.
SECTION 13. CERTAIN DEFINITIONS; NOTICES; CONSENT TO JURISDICTION.
(a) Except as otherwise defined in this Agreement, terms used herein in
capitalized form shall have the meanings attributed thereto in the Lease. The
term "TRUST OFFICE" shall have the meaning set forth in the Trust Agreement.
Unless the context otherwise requires, any reference herein to any of the
Operative Documents refers to such document as it may be amended from time to
time.
(b) All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or to the
Guarantor shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or sent to the intended recipient
thereof in accordance with the provisions of this Section 13(b). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 13(b), notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telecopier
numbers) as follows: (A) if to Lessee, the Guarantor, the Owner Trustee, the
Pass Through Trustee, the Subordination Agent, the Indenture Trustee or the
Owner Participant, to the respective addresses set forth below the signatures of
such parties at the foot of this Agreement, or (B) if to a subsequent Owner
Participant, addressed to such subsequent Owner Participant at such address as
such subsequent Owner Participant shall have furnished by notice to the parties
hereto, or (C) if to any subsequent Certificate Holder, addressed to such
Certificate Holder at its address set forth in the Secured Certificate register
maintained pursuant to Section 2.07 of the Trust Indenture.
(c) Each of the parties hereto (A) hereby irrevocably submits
itself to the non-exclusive jurisdiction of the United States District Court for
the Southern District of New York and to the non-exclusive jurisdiction of the
Supreme Court of the State of New York, New York
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County, for the purposes of any suit, action or other proceeding arising out of
this Agreement, the Lease, the Tax Indemnity Agreement or any other Operative
Document, the subject matter of any thereof or any of the transactions
contemplated hereby or thereby brought by any party or parties thereto, or their
successors or assigns, and (B) hereby waives, and agrees not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding,
to the extent permitted by applicable law, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document or the subject matter of any thereof
or any of the transactions contemplated hereby or thereby may not be enforced in
or by such courts. Lessee hereby generally consents to service of process at
Cadwalader, Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Managing Attorney, or such office of Lessee in New York City as from
time to time may be designated by Lessee in writing to the Owner Participant,
the Owner Trustee and the Indenture Trustee.
SECTION 14. CHANGE OF SITUS OF OWNER TRUST. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes for
which it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
thereof, Lessee should request that the situs of the trust be moved to another
state in the United States from the state in which it is then located, the situs
of the trust may be moved with the written consent of the Owner Participant
(which consent shall not be unreasonably withheld) and the Owner Participant
will take whatever action may be reasonably necessary to accomplish such
removal; PROVIDED that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative Documents
of the Owner Participant and the Indenture Trustee shall not be altered as a
result of the taking of such action, (C) the lien of the Trust Indenture on the
Trust Indenture Estate shall not be adversely affected by such action, and (D)
the Owner Participant and the Indenture Trustee shall have received an opinion
or opinions of counsel (satisfactory to the Owner Participant and the Indenture
Trustee), in scope, form and substance satisfactory to the Owner Participant and
the Indenture Trustee to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust Agreement
necessitated by such removal shall have been duly authorized, executed and
delivered by the parties thereto and shall constitute the valid and binding
obligations of such parties, enforceable in accordance with their terms, (III)
such removal will not result in the imposition of, or increase in the amount of,
any Tax for which Lessee is not required to indemnify the Owner Participant, the
Indenture Trustee, the Owner Trustee or the Trust Estate pursuant to Section
7(b) hereof (taking into account any additional indemnification provided by
Lessee pursuant to clause (A) of this sentence), (IV) such removal will not
result in any loss of Interest Deductions or MACRS Deductions or an Inclusion
Event (as defined in the Tax Indemnity Agreement) with respect to which Lessee
is not required to indemnify the Owner Participant pursuant to Section 4 of the
Tax Indemnity Agreement (taking into account any additional indemnification
provided by Lessee pursuant to clause (A) of this sentence) and (V) if such
removal involves the replacement of the Owner Trustee, an opinion of counsel to
such successor Owner Trustee in form and substance reasonably satisfactory to
the Indenture Trustee and to the Owner Participant covering the matters
described in the opinion delivered pursuant to Section 4(a)(xiii) hereof and
such other matters as the Indenture Trustee and the Owner Participant may
reasonably request, and (E) Lessee shall indemnify and hold
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harmless the Owner Participant and the Indenture Trustee on a net after-tax
basis against any and all reasonable and actual costs and expenses including
reasonable counsel fees and disbursements, registration fees, recording or
filing fees and taxes incurred by the Owner Trustee, the Owner Participant and
the Indenture Trustee in connection with such change of situs.
SECTION 15. MISCELLANEOUS. (a) The Owner Participant covenants
and agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease which by
its terms is not to be unreasonably withheld by the Owner Trustee, as Lessor.
(b) The representations, warranties, indemnities and agreements of
Lessee, the Guarantor, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant provided
for in this Agreement, and Lessee's, the Guarantor's, the Owner Trustee's, the
Indenture Trustee's, the Subordination Agent's, the Pass Through Trustee's and
the Owner Participant's obligations under any and all thereof, shall survive the
making available of the respective Commitments by the Pass Through Trustee and
the Owner Participant, the delivery or return of the Aircraft, the transfer of
any interest of the Owner Participant in the Trust Estate or the Aircraft or any
Engine or the transfer of any interest by any Loan Participant in any Secured
Certificate or the Trust Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(c) This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought; and no such
termination, amendment, supplement, waiver or modification shall be effective
unless a signed copy thereof shall have been delivered to the Indenture Trustee
and the Owner Trustee. The terms of this Agreement shall be binding upon, and
inure to the benefit of, Lessee and, subject to the terms of this Agreement, its
successors and permitted assigns, the Guarantor, the Pass Through Trustee and
its successors as Pass Through Trustee (and any additional trustee appointed)
under any of the Pass Through Trust Agreements, the Owner Participant and,
subject to the terms of this Agreement, its successors and permitted assigns,
each Certificate Holder and its successors and registered assigns, the Indenture
Trustee and its successors as Indenture Trustee under the Trust Indenture and
the Owner Trustee and its successors as Owner Trustee under the Trust Agreement.
The terms of this Agreement shall inure to the benefit of the Liquidity
Provider, its successors and permitted assigns. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(d) The parties hereto agree that all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Agreement and any agreement referred to
herein other than the Trust Agreement, unless
-40-
expressly otherwise stated, are made and intended only for the purpose of
binding the Trust Estate and establishing the existence of rights and remedies
which can be exercised and enforced against the Trust Estate. Therefore,
anything contained in this Agreement or such other agreements to the contrary
notwithstanding (except for any express provisions that the Owner Trustee is
responsible for in its individual capacity), no recourse shall be had with
respect to this Agreement or such other agreements against the Owner Trustee in
its individual capacity or against any institution or person which becomes a
successor trustee or co-trustee or any officer, director, trustee, servant or
direct or indirect parent or controlling person or persons of any of them;
PROVIDED, HOWEVER, that this Section 15(d) shall not be construed to prohibit
any action or proceeding against any party hereto for its own willful misconduct
or grossly negligent conduct for which it would otherwise be liable; and
PROVIDED, FURTHER, that nothing contained in this Section 15(d) shall be
construed to limit the exercise and enforcement in accordance with the terms of
this Agreement or such other agreements of rights and remedies against the Trust
Estate. The foregoing provisions of this Section 15(d) shall survive the
termination of this Agreement and the other Operative Documents.
(e) It is the intention of the parties hereto that the Owner
Trustee, as Lessor under the Lease, and the Indenture Trustee, as assignee of
such Owner Trustee's rights under the Lease pursuant to the Trust Indenture,
will be entitled to the benefits of 11 U.S.C. Section 1110 in the event of any
reorganization of Lessee under such Section.
SECTION 16. EXPENSES. (a) Invoices
and Payment. Each of the parties hereto shall promptly submit to the Owner
Trustee and Lessee for their prompt approval (which shall not be unreasonably
withheld) copies of invoices in reasonable detail of the Transaction Expenses
for which it is responsible for providing information as they are received (but
in no event later than November 30, 1997). The Owner Participant agrees to
transfer to the Owner Trustee promptly but in any event no later than December
15, 1997 such amount as shall be necessary in order to enable the Owner Trustee
to pay Transaction Expenses. To the extent of funds received by it, the Owner
Trustee agrees to pay all invoices of Transaction Expenses that have been
approved by it and Lessee promptly upon receipt thereof. Notwithstanding the
foregoing, to the extent that Transaction Expenses exceed 1.37% of Lessor's
Cost, Lessee at its sole option shall have the right to pay directly any or all
Transaction Expenses which are in excess of 1.37% of Lessor's Cost.
(b) PAYMENT OF OTHER EXPENSES. In the event that the transaction
contemplated by this Participation Agreement fails to close as a result of the
Owner Participant's failure to negotiate in good faith or to comply with the
terms and conditions upon which its participation in the transaction was
predicated, the Owner Participant will be responsible for all of its fees and
expenses, including but not limited to the fees, expenses and disbursements of
its special counsel.
SECTION 17. REFINANCINGS.
(a) So long as no Event of Default shall have occurred and be
continuing, Lessee shall have the right to refinance all (but not less than all)
of the Secured Certificates no more than three times by giving written notice to
the Owner Participant and the Owner Trustee that there be effected a voluntary
redemption of the Secured Certificates by the Owner Trustee,
-41-
whereupon the Owner Participant agrees to negotiate promptly in good faith to
conclude an agreement with Lessee as to the terms of such refinancing operation
(including the terms of any debt to be issued in connection with such
refinancing); PROVIDED that no such refinancing shall require an increase in the
amount of the Owner Participant's investment in the beneficial ownership of the
Aircraft or in the principal amount of the Secured Certificates.
Upon such agreement:
(1) within ten Business Days after the reaching of such agreement,
the Owner Participant will deliver to Lessee a certificate of an authorized
representative of the Owner Participant (the "REFINANCING CERTIFICATE") setting
forth (i) the proposed date on which the outstanding Secured Certificates will
be redeemed, any new debt will be issued and the other aspects of such
refinancing will be consummated (such date, the "REFINANCING DATE") and (ii) the
following information calculated pursuant to the provisions of paragraph (6) of
this Section 17(a): (A) subject to the limitations set forth in this Section
17, the proposed adjusted debt/equity ratio, (B) the principal amount of debt to
be issued by the Owner Trustee on the Refinancing Date, (C) the amount, if any,
by which the Owner Participant's aggregate investment in the beneficial interest
in the Aircraft is to be decreased and (D) the proposed revised schedules of
Basic Rent percentages, debt amortization, Stipulated Loss Value percentages and
Termination Value percentages. The Refinancing Certificate shall not provide
for a debt/equity ratio of more than 4:1. Within fourteen days of its receipt
of the Refinancing Certificate, Lessee may demand a verification pursuant to
EXHIBIT E to the Lease of the information set forth in the Refinancing
Certificate. Upon the acceptance by Lessee of the accuracy of the information
set forth in the Refinancing Certificate (or the determination pursuant to such
verification procedures), as to the debt/equity ratio, the principal amount of
debt to be issued by the Owner Trustee on the Refinancing Date and the revised
Basic Rent percentages, debt amortization, Stipulated Loss Value percentages and
Termination Value percentages (such information, whether as set forth or as so
determined, the "REFINANCING INFORMATION") the appropriate parties will take the
actions specified in paragraphs (2) through (5) below;
(2) the appropriate parties will enter into appropriate
documentation (which may involve an underwriting agreement in connection with
such sale or the sale of the Owner Trustee's interest in the Trust Estate and/or
the Aircraft and its resale to the Owner Trustee) with the institution or
institutions to be named therein providing for (i) the issuance and sale by the
Owner Trustee to such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified in the Refinancing
Information which amount shall be equal to the aggregate principal amount of all
Secured Certificates outstanding on the Refinancing Date (such debt securities,
the "NEW DEBT") except that the principal amount of New Debt may exceed the
principal amount of all outstanding Secured Certificates in connection with the
first refinancing under this Section 17, (ii) the application of the proceeds of
the sale of the New Debt to the redemption of all such Secured Certificates on
the Refinancing Date and (iii) the payment of the excess, if any, of such
proceeds over the amounts necessary to effect such redemption to the
Owner Trustee;
(3) Lessee shall give the notice to the Indenture Trustee pursuant
to Section 2.11 of the Trust Indenture, and Lessee and the Owner Trustee will
amend the Lease to provide
-42-
that (i) Basic Rent payable in respect of the period from and after the
Refinancing Date shall be as provided in the Refinancing Information and (ii)
amounts payable in respect of Stipulated Loss Value and Termination Value from
and after the Refinancing Date shall be as provided in the Refinancing
Information;
(4) the Owner Trustee will enter into an agreement to provide for
the securing thereunder of the New Debt in like manner as the Secured
Certificates and will enter into such amendments and supplements to the Trust
Indenture (or such new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Owner Participant shall pay all of the expenses (other
than those of Lessee) of such refinancing (including, but not limited to, the
fees, expenses and disbursements of counsel and any placement or underwriting
fees) and such expenses shall be treated as Transaction Expenses; and
(6) when calculating any of the information required to be set
forth in a Refinancing Certificate, the Owner Participant shall make such
calculations in a manner which (A) maintains the Owner Participant's Net
Economic Return (except to the extent the assumptions referred to in the
definition of "Net Economic Return" have been altered since the Delivery Date in
connection with an adjustment to Rents pursuant to Section 3(d) of the Lease or
such assumptions are the subject of the recalculations being conducted by the
Owner Participant), and (B) minimizes the Net Present Value of Rents to Lessee
to the extent possible consistent with clause (A). All adjustments to Basic
Rent shall also be in compliance with the tests of Sections 4.02(5) and 4.07 of
Rev. Proc. 75-28 and with one or more of any "safe harbors" from
characterization of the Lease as a "disqualified leaseback or long-term
agreement" set forth in Section 467 of the Code (or any proposed, temporary or
final regulations thereunder applicable to the Lease) or, if no "safe harbor"
exists, made in a manner to avoid characterization of the Lease as a
"disqualified leaseback or long-term agreement" within the meaning of Section
467 of the Code.
(b) The Secured Certificates shall not be subject to voluntary
redemption by the Owner Trustee without the consent of Lessee except as set
forth in Section 2.14 of the Trust Indenture.
-43-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NORTHWEST AIRLINES, INC.,
LESSEE
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President-Finance
and Assistant Treasurer
Address: U.S. MAIL
---------
0000 Xxxxxxxxx Xxxxx (A4010)
Xx. Xxxx, Xxxxxxxxx 00000-
3034
OVERNIGHT COURIER
-----------------
0000 Xxxx Xxx Xxxxxxx (A4010)
Xxxxx, Xxxxxxxxx 00000
Attn: Senior Vice President-Finance
and Treasurer
Telecopy No.: (000) 000-0000
NORTHWEST AIRLINES CORPORATION,
GUARANTOR
Name: Xxxx X. Xxxxxx
----------------------------------------
Title: Vice President-Finance
and Assistant Treasurer
Address: U.S. MAIL
---------
0000 Xxxxxxxxx Xxxxx (A4010)
Xx. Xxxx, Xxxxxxxxx 00000-
3034
OVERNIGHT COURIER
-----------------
0000 Xxxx Xxx Xxxxxxx (A4010)
Xxxxx, Xxxxxxxxx 00000
Attn: Senior Vice President-Finance
and Treasurer
Telecopy No.: (000) 000-0000
-Signature Page-
[OWNER PARTICIPANT]
By:[/s/ Vice President of Owner Participant]
-----------------------------------------
Name:
Title:
Address:
Attn:
Telecopy No.:
STATE STREET BANK AND
TRUST COMPANY,
INDENTURE TRUSTEE
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address: Xxx Xxxxxxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly provided herein,
but solely as Owner Trustee,
OWNER TRUSTEE
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Address: 00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
-Signature Page-
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee,
PASS THROUGH TRUSTEE
By: /s/ XXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address: Xxx Xxxxxxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent,
SUBORDINATION AGENT
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address: x/x Xxxxx Xxxxxx Xxxx and
Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
-Signature Page-
SCHEDULE I
NAMES AND ADDRESSES
-------------------
Lessee: Northwest Airlines, Inc.
U.S. MAIL
---------
0000 Xxxxxxxxx Xxxxx (X0000)
Xx. Xxxx, Xxxxxxxxx 00000-0000
OVERNIGHT COURIER
-----------------
0000 Xxxx Xxx Xxxxxxx (A4010)
Xxxxx, Xxxxxxxxx 00000
Attn: Senior Vice President-Finance and
Treasurer
Telecopy No.: (000) 000-0000
WIRE TRANSFER
-------------
First Bank, N.A., Minneapolis
ABA No. 000000000
Acct. No. 150250099440
Owner Participant:
---------------------
Attn:
Telecopy No.:
Indenture Trustee: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
WIRE TRANSFER
-------------
State Street Bank and Trust Company
ABA No. 011-00-0028
for credit to State Street Bank and Trust
Company
Acct. No. 0000-000-0
Attn: Corporate Trust Department
Reference: Northwest/NW 1997 A
Owner Trustee: First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
Payments made to the Owner Trustee as
provided in Section 3(f) of the Lease shall
be made to:
First Security Bank, National Association
ABA No. 000-0000-00
Acct. No. 051-0922115
Attn: Corporate Trust Department
Credit: Northwest/NW 1997 A
Loan Participants:
SCHEDULE I - PAGE 2
SCHEDULE II
COMMITMENTS
INTEREST RATE PERCENTAGE OF
PURCHASERS AND MATURITY PURCHASE PRICE LESSOR'S COST
---------- ------------- -------------- -------------
Northwest Airlines
Pass Through Trust
1997-1A 7.068% Series A Secured $10,481,250.00 49.91071429%
Certificates due January 2,
2015
1997-1B 7.248% Series B Secured $ 4,387,500.00 20.89285714%
Certificates due January 2,
2011
1997-1C 7.039% Series C Secured $ 1,931,250.00 9.19642857%
Certificates due January 2,
2005
OWNER PARTICIPANT EQUITY INVESTMENT
----------------- -----------------
_____________ $ 4,200,000.00 20.00000000%
Total Commitments $21,000,000.00 100%
SCHEDULE III
PASS THROUGH TRUST AGREEMENTS
-----------------------------
1. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1A, dated as of
September 25, 1997.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1B, dated as of
September 25, 1997.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1C, dated as of
September 25, 1997.
EXHIBIT A
TO PARTICIPATION
AGREEMENT
[NW 1997 A]
SCHEDULE OF COUNTRIES FOR REREGISTRATION
----------------------------------------
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Tobago
Italy Trinidad
Japan United Kingdom
Luxembourg Uruguay
Malaysia Venezuela
