UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 2020
DELTA AIR LINES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
001-05424 |
58-0218548 |
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(State or other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
P.O. Box 20706, Atlanta, Georgia 30320-6001
(Address of principal executive offices)
Registrant’s telephone number, including area code: (404) 715-2600
Registrant’s Web site address: www.delta.com
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act
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Title of each class |
Trading Symbol |
Name of each exchange on which registered |
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Common Stock, par value $0.0001 per share |
DAL |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On March 12, 2020, Delta Air Lines, Inc. (“Delta”) and U.S. Bank Trust National Association, as subordination agent (the “Subordination Agent”) and each pass through trustee (the “Trustee”) under two pass through trusts newly formed by Delta, entered into 33 separate Participation Agreements, dated as of March 12, 2020 (each, a “Participation Agreement” and, collectively, the “Participation Agreements”). The Participation Agreements provide for the issuance by Delta of equipment notes (the “Equipment Notes”) in the aggregate principal amount of $1,000,000,000 secured by (i) five Airbus A321-211 aircraft, (ii) 22 Boeing 737-932ER aircraft, and (iii) six Airbus A330-302 aircraft, delivered new to Delta from August 2014 through April 2017 (each such aircraft, an “Aircraft” and, collectively, the “Aircraft”), and which are substantively identical with respect to each model of Aircraft. The Equipment Notes were issued under separate Indenture and Security Agreements (each, an “Indenture” and, collectively, the “Indentures”) entered into by Delta and U.S. Bank Trust National Association, as loan trustee (the “Loan Trustee”), on March 12, 2020, with respect to each Aircraft.
The Equipment Notes were issued in two series: Series AA, bearing interest at the rate of 2.000% per annum, and Series A, bearing interest at the rate of 2.500% per annum, in the aggregate principal amount equal to $795,894,000, in the case of Series AA, and $204,106,000, in the case of Series A. The Equipment Notes were purchased by the Trustee using the proceeds from the sale of a total of $1,000,000,000 of Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1 (the “Certificates”) through the two newly formed pass through trusts. Pursuant to separate Revolving Credit Agreements, each dated March 12, 2020, between National Australia Bank Limited, acting through its New York Branch, as liquidity provider (the “Liquidity Provider”), and the Subordination Agent, the Liquidity Provider will provide a separate liquidity facility for each Class of Certificates, in each case in an amount sufficient to make three semiannual interest distributions on the outstanding balance of the Certificates of such Class.
The interest on the Equipment Notes is payable semiannually on each June 10 and December 10, beginning on June 10, 2020. The principal of the Equipment Notes is scheduled for payment on June 10 and December 10 of each year, commencing on December 10, 2020. Maturity of the Equipment Notes may be accelerated upon the occurrence of certain events of default, including failure by Delta (in some cases after notice or the expiration of a grace period, or both) to make payments under the applicable Indenture when due or to comply with certain covenants, as well as certain bankruptcy events involving Delta. The Equipment Notes issued with respect to each Aircraft will be secured by a lien on such Aircraft and will also be cross-collateralized by the other Aircraft.
This Current Report on Form 8-K is being filed, in part, for the purpose of filing as exhibits to the Registration Statement (as defined below) the documents listed in Item 9.01 below, some of which are described below and all of which are hereby incorporated by reference in the Registration Statement. The descriptions of the agreements described in this Current Report on Form 8-K are qualified in their entirety by reference to the respective agreements, copies of which are filed herewith or incorporated herein as exhibits.
| Item 8.01. | Other Events. |
On March 4, 2020, Delta entered into an underwriting agreement (the “Underwriting Agreement”) with Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representatives of the several underwriters named on Schedule I to the Underwriting Agreement (collectively, the “Underwriters”), in connection with the issuance and sale of the Certificates.
The Certificates are being offered pursuant to the Prospectus Supplement, dated March 4, 2020 (the “Prospectus Supplement”), to the Prospectus, dated March 6, 2019, which forms a part of Delta’s automatic shelf registration statement on Form S-3 (Registration No. 333-230087) (the “Registration Statement”), filed with the Securities and Exchange Commission on March 6, 2019.
The Underwriting Agreement contains customary representations, warranties, covenants and closing conditions for a transaction of this type. The Underwriting Agreement also contains provisions pursuant to which Delta agrees to hold harmless and indemnify the Underwriters against damages under certain circumstances, which are customary for a transaction of this type.
Delivery of the Certificates was made under the Underwriting Agreement on March 12, 2020 in two different series (each series of the Certificates, a “Class”), comprised of $795,894,000 of Class AA Certificates with an interest rate of 2.000% per annum and $ 204,106,000 of Class A Certificates with an interest rate of 2.500% per annum. Each Class was issued by a different pass through trust. The Underwriters purchased the Certificates from such pass through trust at 100% of the principal amount thereof.
As described above, the pass through trusts used the proceeds from the sale of each Class of Certificates to acquire the corresponding series of Equipment Notes from Delta. Payments on the Equipment Notes held in each pass through trust will be passed through to the certificateholders of such trust. Delta will use the proceeds from the issuance of the Equipment Notes to repay in full the $1.0 billion outstanding principal amount of its 2.875% senior unsecured notes due 2020 at maturity on March 13, 2020. Delta will use any proceeds not used in connection with the foregoing to pay fees and expenses relating to the offering of the Certificates and for general corporate purposes.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
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Exhibit
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Description of Exhibit |
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1.1 |
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4.1 |
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4.2 |
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4.3 |
Form of Pass Through Trust Certificate, Series 2020-1AA (included in Exhibit A to Exhibit 4.1) |
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4.4 |
Form of Pass Through Trust Certificate, Series 2020-1A (included in Exhibit A to Exhibit 4.2) |
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4.5 |
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4.6 |
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4.7 |
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4.8 |
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4.9 |
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4.10 |
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4.11 |
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4.12 |
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4.13 |
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4.14 |
Form of Series 2020-1 Equipment Notes (included in Exhibit 4.9) |
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5.1 |
Opinion of Hughes Hubbard & Reed LLP, special counsel to Delta Air Lines, Inc. |
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5.2 |
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5.3 |
Opinion of Alan T. Rosselot, Esq., Assistant General Counsel of Delta Air Lines, Inc. |
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8.1 |
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23.1 |
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23.2 |
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23.3 |
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23.4 |
Consent of Hughes Hubbard & Reed LLP, special counsel to Delta Air Lines, Inc. (included in Exhibit 5.1 and 8.1). |
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23.5 |
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23.6 |
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99.1 |
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99.2 |
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99.3 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 99.1 filed herewith contains a list of documents applicable to the Airbus A321-211 Aircraft (other than Aircraft bearing Registration No. N301DV) that relate to the offering of the Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1, which documents are substantially identical to those which are filed herewith as Exhibits 4.8 and 4.9, except for the information identifying the Aircraft in question and various information relating to the principal amounts of the Equipment Notes relating to such Airbus A321-211 Aircraft. Exhibit 99.1 sets forth the details by which such documents differ from the corresponding representative sample of documents filed herewith as Exhibits 4.8 and 4.9 with respect to Aircraft bearing Registration No. N301DV. |
| ** | Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 99.2 filed herewith contains a list of documents applicable to the Boeing 737-932ER Aircraft (other than Aircraft bearing Registration No. N826DN) that relate to the offering of the Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1, which documents are substantially identical to those which are filed herewith as Exhibits 4.10 and 4.11, except for the information identifying the Aircraft in question and various information relating to the principal amounts of the Equipment Notes relating to such Boeing 737-932ER Aircraft. Exhibit 99.2 sets forth the details by which such documents differ from the corresponding representative sample of documents filed herewith as Exhibits 4.10 and 4.11 with respect to Aircraft bearing Registration No. N826DN. |
| *** | Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 99.3 filed herewith contains a list of documents applicable to the Airbus A330-302 Aircraft (other than Aircraft bearing Registration No. N822NW) that relate to the offering of the Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1, which documents are substantially identical to those which are filed herewith as Exhibits 4.12 and 4.13, except for the information identifying the Aircraft in question and various information relating to the principal amounts of the Equipment Notes relating to such Airbus A330-302 Aircraft. Exhibit 99.3 sets forth the details by which such documents differ from the corresponding representative sample of documents filed herewith as Exhibits 4.12 and 4.13 with respect to Aircraft bearing Registration No. N822NW. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: March 12, 2020 |
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DELTA AIR LINES, INC. |
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By: |
/s/ Paul A. Jacobson |
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Name: |
Paul A. Jacobson |
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Title: |
Executive Vice President & Chief Financial Officer |
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Exhibit 1.1
Execution Version
DELTA AIR LINES, INC.
Pass Through Certificates, Series 2020-1
UNDERWRITING AGREEMENT
March 4, 2020
Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
As Representatives of the several Underwriters named in Schedule I hereto
Ladies and Gentlemen:
Delta Air Lines, Inc., a Delaware corporation (the “Company”), proposes that U.S. Bank Trust National Association (“U.S. Bank Trust”) (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association), acting not in its individual capacity but solely as pass through trustee (the “Trustee”) under the Pass Through Trust Agreement, dated as of November 16, 2000 (the “Basic Agreement”), and supplemented by the Class AA Trust Supplement and the Class A Trust Supplement (each as defined below), as amended, between the Company and the Trustee, issue and sell to the Underwriters named in Schedule I hereto (each, an “Underwriter” and together, the “Underwriters”), the Delta Air Lines Pass Through Certificates, Series 2020-1AA (the “Class AA Certificates”) and the Delta Air Lines Pass Through Certificates, Series 2020-1A (the “Class A Certificates” and, together with the Class AA Certificates, the “Certificates”) in the aggregate amount and with the interest rate and final expected regular distribution date set forth in Schedule II hereto on the terms and conditions stated herein.
The Basic Agreement will be supplemented with respect to (a) the Class AA Certificates by a trust supplement, to be dated as of the day of the Closing Time (the “Class AA Trust Supplement”), which relates to the creation and administration of the Delta Air Lines Pass Through Trust, Series 2020-1AA (the “Class AA Trust”) and (b) the Class A Certificates by a trust supplement, to be dated as of the day of the Closing Time (the “Class A Trust Supplement”), which relates to the creation and administration of the Delta Air Lines Pass Through Trust, Series 2020-1A (the “Class A Trust” and, together with the Class AA Trust, the “Trusts”). The Basic Agreement, as supplemented by the Class AA Trust Supplement and the Class A Trust Supplement, collectively are defined as the “Designated Agreements.”
The cash proceeds of the offering of Certificates by each Trust will be used by such Trust to purchase Equipment Notes (as defined in the Indentures referred to herein). Subject to the terms and conditions of the Indenture relating to each Aircraft and the participation agreement for such Aircraft to be dated as of the day of the Closing Time between the Company and U.S. Bank Trust (each, a “Participation Agreement” and, collectively, the “Participation Agreements”), the Company will issue Equipment Notes in two initial series under 33 separate Indenture and Security Agreements, to be dated as of the day of the Closing Time, between the Company and U.S. Bank Trust, as Loan Trustee (the “Loan Trustee”) (each, including any supplements thereto, an “Indenture” and, collectively, the “Indentures”) and the Company may issue one or more series of Additional Equipment Notes or Refinancing Equipment Notes, each as defined in the Intercreditor Agreement (as defined below).
The holders of the Class AA Certificates and the Class A Certificates will be entitled to the benefits of a separate liquidity facility in respect of each class of Certificates with respect to certain amounts of interest payable thereon. National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”) will enter into a separate revolving credit agreement with respect to each of the Class AA Trust and the Class A Trust (each, a “Liquidity Facility” and collectively, the “Liquidity Facilities”), to be dated as of the day of the Closing Time, for the benefit of the holders of the Class AA Certificates and the Class A Certificates, respectively. The Liquidity Provider and the holders of the Class AA Certificates and the Class A Certificates will be entitled to the benefits of an Intercreditor Agreement, to be dated as of the day of the Closing Time (the “Intercreditor Agreement”), among U.S. Bank Trust, as Trustee of the Class AA Trust and the Class A Trust, the Liquidity Provider and U.S. Bank Trust, as Subordination Agent (the “Subordination Agent”).
Capitalized terms used but not otherwise defined in this Agreement shall have the meanings specified in or pursuant to the Designated Agreements or the Intercreditor Agreement; provided that, as used in this Agreement, the term “Operative Documents” shall mean, collectively, the Intercreditor Agreement, the Liquidity Facilities, the Fee Letter, the Designated Agreements, the Participation Agreements and the Indentures.
As used herein, unless the context otherwise requires, the term “you” shall mean Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representatives of the several Underwriters listed on Schedule I hereto.
1. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter, and agrees with each of the Underwriters, that:
(a) An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “Act”) on Form S-3 (File No. 333-230087) in respect of the Certificates, containing a Base Prospectus (as defined below), has been filed with the Securities and Exchange Commission (the “Commission”) not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing under Rule 462(e) under the Act; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or, to the
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knowledge of the Company, threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company; the base prospectus, dated March 6, 2019, relating to pass through certificates of the Company to be offered from time to time pursuant to Rule 415 under the Act included in the Registration Statement (as defined below) is hereinafter called the “Base Prospectus”; the various parts of such registration statement as of the Effective Date (as defined below), including all exhibits thereto, other than the Form T-1, and the information, if any, deemed to be part of such registration statement at the time of the Effective Date, are hereinafter collectively called the “Registration Statement”; as used herein the term “Effective Date” means the effective date of the Registration Statement pursuant to Rule 430B under the Act for purposes of liability under Section 11 of the Act of the Company and the Underwriters with respect to the offering of the Certificates; the Base Prospectus, as amended and supplemented by the preliminary prospectus supplement, dated March 4, 2020 and filed pursuant to Rule 424(b) under the Act, relating to the Certificates, is hereinafter called the “Preliminary Prospectus”; the Base Prospectus, as amended and supplemented by the final prospectus supplement relating to the Certificates filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 3(a) hereof is hereinafter called the “Prospectus”; any reference herein to the Registration Statement, the Base Prospectus, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the Effective Date of the Registration Statement or the date of such prospectus; any reference to any amendment or supplement to the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement and any documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Preliminary Prospectus or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Certificates is hereinafter called an “Issuer Free Writing Prospectus”.
(b) No order preventing or suspending the use of the Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and the Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters through you expressly for use therein.
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(c) For the purposes of this Agreement, the “Applicable Time” is 3:15 p.m. (Eastern time) on the date of this Agreement; the Preliminary Prospectus as supplemented by, and taken together with, the final term sheet dated the date hereof, in substantially the form attached hereto as Schedule III and to be filed pursuant to Rule 433 under the Act, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule IV(a) hereto did not, as of the time of issue on its issue date, and, to the extent not amended, modified or superseded, at all subsequent times through the Prospectus Delivery Period (as hereinafter defined) will not conflict with the information contained in the Registration Statement, the Preliminary Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters through you expressly for use therein.
(d) (i) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder; (ii) the Registration Statement did not and will not, as of the applicable effective date as to each part of the Registration Statement and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) the Prospectus did not and will not, as of its date and at the Closing Time, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters through you expressly for use therein.
(e) The Basic Agreement has been duly qualified under the Trust Indenture Act.
(f) The consolidated financial statements incorporated by reference in the Pricing Disclosure Package and the Prospectus and any amendments thereof or supplements thereto present fairly in all material respects the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the consolidated results of their operations and cash flows for the periods specified and have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved, except as indicated therein, and the supporting schedules incorporated by reference in the Pricing Disclosure Package and the Prospectus present fairly the information required to be stated therein.
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(g) The documents incorporated by reference in the Preliminary Prospectus and the Prospectus and any amendments thereof or supplements thereto, at the time they were or hereafter are filed with the Commission, complied or will comply, as the case may be, in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder.
(h) Since the date as of which information is given in the Pricing Disclosure Package and the Prospectus, there has been no material adverse change in, or any development known to the Company which would have a material adverse effect on, the consolidated financial condition or operations of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”), except as set forth or contemplated in the Pricing Disclosure Package and the Prospectus.
(i) The Company is a “well-known seasoned issuer” (as defined in Rule 405 under the Act) and is not an “ineligible issuer” pursuant to Rule 405 under the Act, in each case within the time periods set forth in Rule 164(h) of the Act and paragraph (2) of the definition of well-known seasoned issuer under Rule 405 of the Act.
(j) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as it is now being conducted except where the failure to have such power or authority would not individually or in the aggregate have a Material Adverse Effect.
(k) The Company (i) is an “air carrier” within the meaning of 49 U.S.C. Section 40102(a), (ii) holds an air carrier operating certificate issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United States Code for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of cargo, (iii) is a “citizen of the United States” as defined in 49 U.S.C. Section 40102 and (iv) is duly qualified as a foreign corporation for the transaction of business and in good standing under the laws of each jurisdiction (other than the State of Delaware) in which the Company has intrastate routes, or has a principal office or major overhaul facility and where the failure to so qualify would have a Material Adverse Effect; and each material subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation.
(l) Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any
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of its subsidiaries is bound or to which any property or asset of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(m) The execution and delivery by the Company of this Agreement, the Equipment Notes and the Operative Documents to which the Company is, or is to be, a party, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or by which any of the property or assets of the Company or any of its subsidiaries is subject (except for such conflicts, breaches, violations and defaults as would not have a Material Adverse Effect, and that would not affect the validity of the Equipment Notes or Certificates), nor will such action result in any violation of the provisions of the Amended and Restated Certificate of Incorporation or Bylaws of the Company, or any statute or any order, rule or regulation of any court or governmental agency or body, having jurisdiction over the Company or any of its subsidiaries or any of their respective properties; and except as disclosed in the Pricing Disclosure Package and the Prospectus, no consent, approval, authorization, order, registration (other than the registration of the Certificates under the Act) or qualification of or with any such court or governmental agency or body is required for the valid authorization, issuance and delivery of the Certificates and the Equipment Notes, the valid authorization, execution, delivery and performance by the Company of this Agreement, the Equipment Notes and the Operative Documents to which the Company is, or is to be, a party, or the consummation by the Company of the transactions contemplated by this Agreement, the Equipment Notes and the Operative Documents to which the Company is, or is to be, a party, except (i) such as are required under the Blue Sky or securities laws of the various states, (ii) filings or recordings with the Federal Aviation Administration (“FAA”) and under the Uniform Commercial Code as in effect in the State of Delaware, which filings or recordings will have been duly made or duly presented for filing on or prior to the applicable Closing Date (as defined in the applicable Participation Agreement) and (iii) such as may be required in connection with the registration of the “international interests” created pursuant to the Indentures under the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment signed in Cape Town, South Africa on November 16, 2001.
(n) This Agreement, the Equipment Notes and the Operative Documents to which the Company is, or is to be, a party have each been duly authorized by the Company. This Agreement and each Operative Document to which the Company is, or is to be, a party, have been or (subject to the satisfaction of conditions precedent set forth in the Participation Agreements) will be at or prior to the Closing Time, duly executed and delivered by the Company. The Equipment Notes will be (subject to the satisfaction of
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conditions precedent set forth in the Participation Agreements) duly executed and delivered by the Company at or prior to the Closing Time. The Equipment Notes and the Operative Documents to which the Company is, or is to be, a party, when duly executed and delivered by the Company, assuming that such documents constitute the legal, valid and binding obligations of each other party thereto, constitute or will constitute the legal, valid and binding obligations of the Company, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity; and except, in the case of the Indentures, as limited by applicable laws that may affect the remedies provided in the Indentures. The Certificates, the Equipment Notes and the Operative Documents will conform in all material respects to the descriptions thereof in the Pricing Disclosure Package and the Prospectus and any amendments thereof or supplements thereto, to the extent described therein.
(o) Neither the Company nor any of its subsidiaries or affiliates, nor to the Company’s knowledge after due inquiry, any director, officer, employee, agent or representative of the Company or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage; and the Company and its subsidiaries and affiliates have conducted their businesses in material compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.
(p) The operations of the Company and its subsidiaries are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
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(q) (i) Neither the Company nor any of its subsidiaries, nor, to the Company’s knowledge, any director, officer, employee, agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is:
(1) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor
(2) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea and Syria).
(ii) The Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:
(1) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions, except to the extent licensed by OFAC or otherwise authorized under applicable law; or
(2) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).
(r) Ernst & Young LLP, which reported on certain annual consolidated financial statements of the Company incorporated by reference in the Pricing Disclosure Package and the Prospectus, are an independent registered public accounting firm as required by the Act and the rules and regulations thereunder.
(s) When duly executed, authenticated and delivered by the Trustee in accordance with the terms of the related Designated Agreement and offered, sold and paid for as provided in this Agreement, the Certificates will be validly issued pursuant to the related Designated Agreement, and will constitute the legal, valid and binding obligations of the related Trustee enforceable against such Trustee in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity; and the holders thereof will be entitled to the benefits of the related Designated Agreement.
(t) The Equipment Notes, when duly executed and delivered by the Company and when duly authenticated by the Loan Trustee in accordance with the terms of the related Indentures, will be duly issued under such Indentures and will constitute the legal, valid and binding obligations of the Company, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity; and, as so limited, the holders thereof will be entitled to the benefits of the related Indentures.
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(u) The statements set forth in the Pricing Disclosure Package and the Prospectus under the headings “Certain U.S. Federal Income Tax Consequences”, “Certain Delaware Taxes”, “Certain ERISA Considerations” and “Underwriting,” insofar as such statements purport to summarize the laws and legal matter referred to therein, constitute accurate summaries thereof in all material respects.
(v) Other than as set forth in the Pricing Disclosure Package and the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, in the reasonable judgment of the Company, individually or in the aggregate, are likely to have a Material Adverse Effect; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.
(w) The Company has authorized capital stock as set forth in the Pricing Disclosure Package and the Prospectus, and all of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued and outstanding shares of capital stock or other equity interests of each material subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable (except, in the case of any foreign subsidiary, for directors’ qualifying shares) and, other than as disclosed in the Pricing Disclosure Package and the Prospectus, are owned directly or indirectly by the Company.
(x) The Company is subject to Section 13 or 15(d) of the Exchange Act.
(y) Except as otherwise disclosed in the Pricing Disclosure Package and the Prospectus, no labor problem or dispute with the employees of the Company or any of its subsidiaries, that could reasonably be expected to have a Material Adverse Effect, exists or, to the knowledge of the Company, is threatened.
(z) Except as described in the Pricing Disclosure Package and the Prospectus, the Company and each material subsidiary possess all licenses, certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except to the extent that the failure to possess such licenses, certificates, authorizations or permits would not have a Material Adverse Effect; and to the Company’s knowledge neither the Company nor any Significant Subsidiary (as defined in Registration S-X under the Act) has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, with respect to which any unfavorable decision, ruling or finding would, individually or in the aggregate, result in a Material Adverse Effect.
(aa) Except as otherwise disclosed in the Pricing Disclosure Package and the Prospectus, (i) the Company and its subsidiaries are in compliance with any and all applicable foreign, federal, state and local laws, regulations, consent orders and consent decrees, to which the Company or any of its subsidiaries is a party, relating to the protection
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of human health (to the extent related to exposure to hazardous or toxic substances or wastes, pollutants or contaminants, including petroleum products and by-products), the environment or hazardous or toxic substances or wastes, pollutants or contaminants, including petroleum products (collectively, “Environmental Laws”); (ii) the Company and its subsidiaries have and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) the Company and its subsidiaries have not received notice of, or assumed via contract or, to the Company’s knowledge, operation of law, any actual or potential liability for the investigation or remediation of any exposure to, or disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, including petroleum products, and (iv) with respect to the Trainer refinery located in the boroughs of Marcus Hook and Trainer, Pennsylvania (the “Trainer Refinery”) owned by the Company’s wholly-owned subsidiary, Monroe Energy, LLC (“Monroe”), Monroe has been provided by the party from whom the Trainer Refinery was acquired, subject to certain limitations, an indemnity regarding certain known and unknown environmental conditions, at, on, under or emanating from, or relating to the Trainer Refinery, except regarding each of the foregoing clauses (i) through (iv), as would not, individually or in the aggregate, result in a Material Adverse Effect.
(bb) None of the Company or any Trust is, and after giving effect to the offering and sale of the Certificates and the application of the proceeds thereof as described in the Pricing Disclosure Package and the Prospectus, none of the Company or any Trust will be, required to register as an “investment company”, within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). In making this determination, the Trusts are relying upon the exemption from the definition of investment company contained in Rule 3a-7 of the 1940 Act, although additional exclusions or exemptions may be available at the Closing Time or in the future.
(cc) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Pricing Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness identified by management or by the Company’s auditors and communicated to management in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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(dd) The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to provide reasonable assurance that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
(ee) Any statistical and market-related data included in the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources.
(ff) None of Aircraft Information Services, Inc., BK Associates Inc. and Morten Beyer & Agnew, Inc. (each, an “Appraiser” and, collectively, the “Appraisers”) is an affiliate of the Company or, to the knowledge of the Company, has a substantial interest, direct or indirect, in the Company.
(gg) The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Certificates.
2. Purchase and Sale. (a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to cause the Trustee to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trustee, at a purchase price of 100% of the principal amount thereof, the face amount of Certificates set forth opposite the name of such Underwriter in Schedule I, plus any additional principal amount of Certificates which such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof.
(b) Payment of the purchase price for, and delivery of, the Certificates shall be made at the offices of Hughes Hubbard & Reed LLP at 10:00 a.m. (Eastern time) on March 12, 2020, or at such other date, time or location or locations as shall be agreed upon by the Company and you, or as shall otherwise be provided in Section 8 (such date and time being herein called the “Closing Time”). Payment shall be made to or upon the order of the Trustee by federal funds wire transfer or other immediately available funds against delivery to the account of Morgan Stanley & Co. LLC at DTC for the respective accounts of the Underwriters of the Certificates. The Certificates will be registered in the name of Cede & Co. or in such other names, and in such authorized denominations as you may request in writing at least two full business days before the Closing Time. Certificates for such Certificates, which may be in temporary form, will be made available for examination and packaging by you at the location or locations at which they are to be delivered at the Closing Time not later than 9:30 A.M., New York City time, on the business day prior to the Closing Time.
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(c) The Company will pay to Morgan Stanley & Co. LLC at the Closing Time for the accounts of the Underwriters, the sum of $10,000,000 of which $1,625,000 is to be paid to Morgan Stanley & Co. LLC, $1,625,000 is to be paid to Credit Suisse Securities (USA) LLC, $1,625,000 is to be paid to BofA Securities, Inc., $1,625,000 is to be paid to Goldman Sachs & Co. LLC, $850,000 is to be paid to Banco Bilbao Vizcaya Argentaria, S.A., $850,000 is to be paid to Deutsche Bank Securities Inc., $850,000 is to be paid to PNC Capital Markets LLC, $850,000 is to be paid to Standard Chartered Bank, $50,000 is to be paid to AmeriVet Securities, Inc. and $50,000 is to be paid to Natixis Securities Americas LLC. Such payment will be made by federal funds wire transfer or other immediately available funds.
3. Agreements. The Company agrees with each of the Underwriters as follows:
(a) To prepare the Prospectus in a form reasonably approved by you, which sets forth the principal amount of the Certificates and their terms not otherwise specified in the Preliminary Prospectus, the name of each Underwriter participating in the offering and the principal amount of the Certificates that each severally has agreed to purchase, the price at which the Certificates are to be purchased by the Underwriter from the Trustee, any initial public offering price, any selling concession and reallowance, and such other information as you and the Company deem appropriate in connection with the offering of the Certificates, and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the date of this Agreement.
(b) Not to file any amendment or supplement to the Registration Statement, the Preliminary Prospectus, the Prospectus or any free writing prospectus, prior to the Closing Time to which you reasonably object promptly after reasonable notice thereof; to advise the Underwriters, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus or any free writing prospectus has been filed and to furnish you with copies thereof; to prepare a final term sheet, containing solely a description of the Certificates, in a form approved by you and to file such term sheet pursuant to Rule 433(d) under the Act within the time required by such Rule; to timely file all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to timely file all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) (the “Prospectus Delivery Period”) is required in connection with the offering or sale of the Certificates; to advise the Underwriters, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Preliminary Prospectus or other prospectus in respect of the Certificates, of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act, of the suspension of the qualification of the Certificates for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of
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the Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such steps including, without limitation, amending the Registration Statement or filing a new registration statement, at its own expense, as may be necessary to permit offers and sales of the Certificates by the Underwriters (references herein to the Registration Statement shall include any such amendment or new registration statement). None of the foregoing obligations shall extend any later than the Prospectus Delivery Period.
(c) If, at any time during such period after the date hereof and prior to the date on which all of the Certificates shall have been sold by the Underwriters, any event occurs as a result of which the Pricing Disclosure Package or the Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend or supplement the Prospectus to comply with applicable law, the Company promptly will prepare and furnish, at its own expense, to the Underwriters, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.
(d) The Company has furnished or will furnish, if requested, to the Representatives and their counsel, without charge, conformed copies of the Registration Statement and of all amendments thereto, whether filed before or after such Registration Statement originally became effective (including exhibits thereto and the documents incorporated therein by reference) and the copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. So long as delivery of a Prospectus (or in lieu thereof, a notice referred to in Rule 173(a)) by the Underwriters may be required by the Act, the Company will furnish as many copies of any Preliminary Prospectus, the Prospectus and any amendments thereof and supplements thereto as the Representatives may reasonably request and the Prospectus and any amendments or supplements thereto furnished to each Underwriter will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T or required under Rule 424(e).
(e) The Company will qualify the Certificates for offer and sale under the securities and Blue Sky laws of such jurisdictions as you may reasonably request and will continue such qualifications in effect so long as required for the distribution of such Certificates. The Company, however, shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
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(f) To furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request as soon as practicable after the date hereof.
(g) To make generally available to its securityholders and the Representatives as soon as practicable, an earnings statement that satisfies the provisions of Section 11(a) of the Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.
(h) To pay the required Commission filing fees relating to the Certificates within the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act.
(i) To use the net proceeds received by it from the sale of the Equipment Notes pursuant to this Agreement in the manner specified in the Preliminary Prospectus under the caption “Use of Proceeds”.
(j) To cooperate with the Underwriters and use its reasonable efforts to permit the Certificates to be eligible for clearance and settlement through the facilities of DTC.
(k) To issue Class AA Certificates and Class A Certificates that shall be rated at least as high as the ratings for the Class AA Certificates and Class A Certificates set forth in the Issuer Free Writing Prospectus identified as Item (a) in Schedule IV hereto, from each “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act, named therein, and in each case such ratings shall not be under surveillance or review with possible negative implications.
(l) To, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Act.
Each Underwriter agrees that in the aggregate, each class of the Certificates will be widely offered. Each Underwriter and each other member of the underwriting group that offers or sells Certificates agree that the Certificates of each class offered by such Underwriter and such other member of the underwriting group will be primarily offered in the United States to United States persons. The term “United States person” shall have the meaning set forth in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.
4. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase and pay for the Certificates pursuant to this Agreement shall be subject in their discretion to the accuracy of and compliance with the representations and warranties of the Company contained herein as of the date hereof and the Closing Time, to the accuracy of the statements of the Company’s officers made in any certificates furnished pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:
(a) At the Closing Time, you shall have received:
(1) An opinion and a separate negative assurance letter, each dated the day of the Closing Time, of Alan T. Rosselot, Assistant General Counsel of the Company, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion and letter for each of the other Underwriters to the effect set forth in Exhibit A hereto.
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(2) An opinion and a separate negative assurance letter, each dated the day of the Closing Time, of Kilpatrick, Townsend & Stockton LLP, counsel for the Company, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion and letter for each of the other Underwriters to the effect set forth in Exhibit B hereto.
(3) An opinion, dated the day of the Closing Time, of Hughes Hubbard & Reed LLP, special counsel for the Company, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit C hereto.
(4) An opinion, dated the day of the Closing Time, of Shipman & Goodwin LLP, counsel for U.S. Bank Trust National Association, as the Trustee, Subordination Agent and Loan Trustee under the Indentures in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit D hereto.
(5) An opinion, dated the day of the Closing Time, of Richards, Layton & Finger, P.A., tax counsel for the Trustee, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit E-1 hereto.
(6) An opinion, dated the day of the Closing Time, of Richards, Layton & Finger, P.A., special Delaware counsel for the Trustee, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit E-2 hereto.
(7) An opinion, dated the day of the Closing Time, of King & Wood Mallesons for the Liquidity Provider, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit F hereto.
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(8) An opinion, dated the day of the Closing Time, of Pillsbury Winthrop Shaw Pittman LLP, special New York counsel for the Liquidity Provider, in form and substance satisfactory to you, together with signed or reproduced copies of such opinion for each of the other Underwriters to the effect set forth in Exhibit G hereto and to such further effect as counsel to the Underwriters may reasonably request.
(9) An opinion, dated the day of the Closing Time, from Milbank LLP, counsel for the Underwriters, with respect to the issuance and sale of the Certificates, the Pricing Disclosure Package, the Prospectus and other related matters as you may reasonably require.
(b) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act (without giving effect to Rule 424(b)(8)) and in accordance with Section 3(a) hereof; the final term sheet contemplated by Section 3(b) hereof, and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or, to the knowledge of the Company, threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been received by the Company; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or, to the knowledge of the Company, threatened by the Commission; and all requests for additional information by the Commission shall have been complied with to your reasonable satisfaction.
(c) On or after the date hereof, there shall not have been (i) any change or decrease, specified in the letters referred to in paragraph (d) of this Section 4 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company and its subsidiaries, taken as a whole, the effect of which, in any case referred to in clause (i) or (ii) above, is, in your reasonable judgment, so material and adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the Certificates as contemplated by the Pricing Disclosure Package and the Prospectus; and you shall have received a certificate of the President, an Executive Vice President, a Senior Vice President or a Vice President of the Company, dated as of the Closing Time, to the effect that (i) there has been no such material adverse change contemplated by clause (ii) above, in the Company and its subsidiaries, (ii) that the representations and warranties in Section 1 hereof and also the representations and warranties of the Company contained in the Operative Documents are true and correct with the same force and effect as though made at such Closing Time, and as to such other matters as you may reasonably request.
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(d) At the time of the execution of this Agreement and also at the Closing Time, Ernst & Young LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to you, together with signed or reproduced copies of such letter or letters for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to the Underwriters with respect to the financial statements and certain financial information contained in the Pricing Disclosure Package and the Prospectus.
(e) The Company shall have furnished to you and your counsel, in form and substance satisfactory to them, such other documents, certificates and opinions as such counsel may reasonably request for the purpose of enabling such counsel to pass upon the matters to be covered by the opinions required to be delivered under subsection (a)(9) of this Section 4 and in order to evidence the accuracy and completeness of any of the representations, warranties or statements, the performance of any covenant by the Company theretofore to be performed, or the compliance with any of the conditions herein contained.
(f) Each of the Appraisers shall have furnished to the Underwriters a letter from such Appraiser, addressed to the Company and dated the date hereof and the date of the Closing Time, confirming that such Appraiser and each of its directors and officers (i) is not an affiliate of the Company or any of its affiliates, (ii) does not have any substantial interest, direct or indirect, in the Company or any of its affiliates and (iii) is not connected with the Company or any of its affiliates as an officer, employee, promoter, Underwriter, trustee, partner, director or person performing similar functions.
(g) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company’s unsecured debt securities by either nationally recognized statistical rating organization that is rating the Class AA Certificates or Class A Certificates, as set forth in the Issuer Free Writing Prospectus identified as Item (a) in Schedule IV hereto, and (ii) neither such nationally recognized statistical rating organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s unsecured debt securities.
(h) The Class AA Certificates and the Class A Certificates shall have received ratings equal to or higher than the ratings indicated in the free writing prospectus identified as Item (a) in Schedule IV hereto from the nationally recognized statistical rating organizations named therein.
(i) At or prior to the Closing Time, each Indenture and each Participation Agreement shall have been duly executed and delivered by the Company and each other respective party thereto, and copies thereof shall have been furnished to you and your counsel.
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All such opinions, certificates, letters and documents shall be deemed to be in compliance with the provisions hereof only if they are in all respects reasonably satisfactory to you and your counsel.
If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, other than by reason of any default by any Underwriter, such failure to fulfill a condition may be waived by you, or this Agreement may be terminated by you by notice to the Company at any time at or prior to the Closing Time, and such termination shall be without liability of any party to any other party, except as provided in Sections 5, 7 and 10 hereof, which provisions shall remain in effect notwithstanding such termination.
5. Payment of Expenses. The Company will pay or cause to be paid all expenses incident to the performance of the obligations of the Company under this Agreement, including (i) expenses relating to the preparation, printing, filing and distribution of the Pricing Disclosure Package, each Issuer Free Writing Prospectus listed on Schedule IV(a) hereto and the Prospectus and any amendments thereof or supplements thereto, (ii) expenses relating to the preparation, printing and distribution of any agreement among Underwriters, this Agreement, the Certificates, the Equipment Notes, the Operative Documents, the Blue Sky Survey by the Underwriters’ counsel, (iii) expenses relating to the issuance and delivery of the Certificates to the Underwriters, (iv) the fees and disbursements of the Company’s counsel and accountants, (v) reasonable expenses of qualifying the Certificates under state securities laws in accordance with Section 3(e), including filing fees and reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the Blue Sky Survey, (vi) the fees and expenses of the Trustee, the Subordination Agent, the Liquidity Provider and the Loan Trustee, and the fees and disbursements of their respective counsel, (vii) any fees charged by rating agencies for rating the Class AA Certificates and Class A Certificates, (viii) certain fees and expenses of counsel for the Underwriters as previously agreed between the Company and counsel to the Underwriters and (ix) all expenses incurred in connection with any roadshow presentation, if any, or investor presentation, if any, to potential investors. The Company will also cause to be paid all expenses incident to the performance of its obligations under the Operative Documents and each of the other agreements and instruments referred to therein which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 2, 7 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Certificates by them, and any advertising expenses connected with any offers they may make.
6. Offering of Certificates. (a) (i) The Company represents and agrees that, other than the final term sheet prepared and filed pursuant to Section 3(b) hereof, without your prior consent, which consent shall not be unreasonably withheld or conditioned, it has not made and will not make any offer relating to the Certificates that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; (ii) each Underwriter represents and agrees that, without the prior consent of the Company, which consent shall not be unreasonably withheld or conditioned, other than one or more customary “Bloomberg Screens” to offer the Certificates or convey final pricing terms thereof that contain only information contained in the Pricing Disclosure Package, it has not made and will not make any offer relating to the Certificates that would constitute a free writing prospectus; and (iii) any such free writing prospectus the use of which has been consented to by the Company and the Underwriters is listed on Schedule IV(a) hereto (other than the final term sheet described in Section 1(c) hereof).
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(b) The Company has complied and will comply in all material respects with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, and including, as applicable, timely filing with the Commission or retention where required and legending.
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Preliminary Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Underwriters and, if requested by the Underwriters, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this undertaking shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by the Underwriters through you expressly for use therein.
7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, any Underwriter’s officers and directors, each affiliate of any Underwriter within the meaning of Rule 405 under the Act, as well as any affiliate’s officers and directors against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and (ii) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus, the Prospectus or the Pricing Disclosure Package, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act (taken together with the Pricing Disclosure Package), or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
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conformity with, written information furnished to the Company by the Underwriters through you specifically for use in connection with the preparation thereof, it being understood and agreed that the only such information furnished by the Underwriters through you for inclusion in the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus consists of the following information in the Prospectus: the paragraph entitled “Conflicts of Interest” in the Prospectus Supplement Summary under the caption “The Offering”, the third sentence in the fifth paragraph and the seventh, eleventh, twelfth and thirteenth paragraphs under the caption “Underwriting”, provided, that it is understood and agreed that the paragraph entitled “Conflicts of Interest” under the caption “The Offering” and the thirteenth paragraph under the caption “Underwriting” was provided solely by BofA Securities, Inc. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its directors and officers and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any loss, claim, damage, liability or action, but only with reference to written information furnished to the Company by the Underwriters through you specifically for inclusion in the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus (taken together with the Pricing Disclosure Package) or in any amendment thereof or supplement thereto, it being understood and agreed that the only such information furnished by the Underwriters through you for inclusion in the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus consists of the following information in the Prospectus: the paragraph entitled “Conflicts of Interest” in the Prospectus Supplement Summary under the caption “The Offering”, the third sentence in the fifth paragraph and the seventh, eleventh, twelfth and thirteenth paragraphs under the caption “Underwriting”, provided, that it is understood and agreed that the paragraph entitled “Conflicts of Interest” under the caption “The Offering” and the thirteenth paragraph under the caption “Underwriting” was provided solely by BofA Securities, Inc. This indemnity agreement will be in addition to any liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action or proceeding (including any governmental investigation), such indemnified party will, if a claim for indemnification in respect thereof is to be made against the indemnifying party under Section 7(a) or (b) hereof, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under Section 7(a) or (b) hereof, except to the extent that the indemnifying party is materially prejudiced thereby. In case any such action or proceeding is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein (jointly with any other indemnifying party similarly notified), and to the extent that it may elect, by written notice, delivered to such indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof, with counsel
20
reasonably satisfactory to such indemnified party; provided, however, that if the defendants (including any impleaded parties) in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expense of more than one separate counsel (in addition to any local counsel), approved by the Underwriters in the case of paragraph (a) of this Section 7, representing the indemnified parties under such paragraph (a) who are parties to such action), (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice or commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party; and except that, if clause (i) or (iii) is applicable, such liability shall be only in respect of the counsel referred to in such clause (i) or (iii). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld), but if settled with such consent or if there is a final judgment against the indemnified party, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) does not include a statement as to or admission of, fault, culpability or a failure to act by or on behalf of any such indemnified party, and (ii) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraph (a) or (b) of this Section 7 is due in accordance with its terms but is for any reason unavailable on grounds of policy or otherwise, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigation or defending same) to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other, from the offering of the Certificates to which such loss, claim, damage, or liability (or action in respect thereof) relates. If the allocation provided by the immediately
21
preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable to such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Certificates pursuant to this Agreement shall be deemed to be in the same proportion as the total proceeds from the offering of the Certificates pursuant to this Agreement received by the Company as set forth in the Prospectus and the total underwriting discounts and commissions received or to be received by the Underwriters in respect of the offering of the Certificates, bears to the aggregate offering price of the Certificates as set forth on the cover of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such Underwriter and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute hereunder in aggregate any amount in excess of the amount by which (i) the total price at which the Certificates resold by it in the initial placement of such Certificates were offered to investor exceeds (ii) the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Certificates in this subsection (d) to contribute are several in proportion to their respective purchase obligations with respect to such Certificates and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified person at law or in equity.
8. Default. (a) If any Underwriter shall default in its obligation to purchase the Certificates which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Certificates on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Certificates, then the Company shall be entitled to a further period of thirty-six hours
22
within which to procure another party or other parties satisfactory to you to purchase such Certificates on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Certificates, or the Company notifies you that it has so arranged for the purchase of such Certificates, you or the Company shall have the right to postpone the Closing Time for a period of not more than five business days, in order to effect whatever changes may thereby be made necessary in the Prospectus, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments to the Prospectus which in your reasonable opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Certificates.
(b) If, after giving effect to any arrangements for the purchase of the Certificates of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of Certificates which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Certificates, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Certificates which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Certificates which such Underwriter agreed to purchase hereunder) of the Certificates of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Certificates of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of Certificates which remains unpurchased exceeds one–eleventh of the aggregate principal amount of all the Certificates, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Certificates of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 5 hereof and the indemnity and contribution agreements in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
9. Termination. This Agreement shall be subject to termination in your discretion, by notice given to the Company prior to Closing Time, if prior to such time (i) trading in the Company’s common stock shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on the New York Stock Exchange shall have been suspended or materially limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any material outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in your reasonable judgment, impracticable or inadvisable to market the Certificates or to enforce contracts for sale of the Certificates.
23
10. Representations, Warranties, Indemnities and Agreements to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company and the Underwriters, as set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by the Underwriters or any controlling person of any Underwriter or the Company or any officer or director or controlling person of the Company and shall survive delivery of and payment for the Certificates.
11. Liability upon Termination. If this Agreement shall be terminated pursuant to Section 8 or 9 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 5 and 7 hereof; but, if for any other reason, the Certificates are not delivered by or on behalf of the Company as provided herein, because the Company fails to satisfy any of the conditions set forth in Section 4 hereof or because of any refusal, inability or failure of the Company to perform any agreement herein or to comply with any provision hereof, other than by reason of a default by the Underwriters, the Company will reimburse the Underwriters for all out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Certificates, but the Company shall then be under no further liability to any Underwriter with respect to such Certificates except as provided in Sections 5 and 7 hereof.
12. Recognition of the U.S. Special Resolution Regimes. (a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Section 12, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
24
13. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Company and the BRRD Party, the Company acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the BRRD Party to the Company under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
(i) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;
(ii) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the BRRD Party or another person, and the issue to or conferral on the Company of such shares, securities or obligations;
(iii) the cancellation of the BRRD Liability;
(iv) the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;
(v) the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.
(b) For purposes of this Section 13:
“Bail-in Legislation” means in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time;
“Bail-in Powers” means any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation;
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms;
“BRRD Liability” means a liability in respect of which the relevant Bail-in Powers in the applicable Bail-in Legislation may be exercised;
“BRRD Party” means each Underwriter;
25
“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/pages.aspx?p=499 (or any such successor webpage); and
“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the BRRD Party.
14. Notices. It is understood and agreed that Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC are the joint lead book runners for the public offering of the Certificates and any determinations or other actions to be made under this Agreement by you shall require the concurrence of each of Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail or facsimile transmission to each of you, if to Morgan Stanley & Co. LLC, 1585 Broadway, New York, NY 10036, Attention: High Yield Syndicate Desk, with a copy to the Legal Department, if to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, Attention IBCM-Legal, fax: 212-325-4296, and if to the Company shall be delivered or sent by mail or facsimile transmission to the address of the Company set forth in the Prospectus, Attention: Chief Financial Officer (with a copy to the General Counsel). Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
15. Parties. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 7 and 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Certificates from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
16. Time of the Essence. Time shall be of the essence of this Agreement.
17. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Certificates pursuant to this Agreement, including the determination of the offering price of the Certificates and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (d) the
26
Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
18. Patriot Act. In accordance with the requirements of the USA Patriot Act, the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
19. Entire Agreement. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.
20. GOVERNING LAW. THIS AGREEMENT AND ANY MATTERS RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK.
21. Waiver of Jury Trial. The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
22. Counterparts. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.
27
If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company.
| Very truly yours, | ||
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: | Kenneth W. Morge II | |
| Title: | Vice President & Treasurer | |
Accepted as of the date hereof:
| MORGAN STANLEY & CO. LLC | ||
| By: |
/s/ Dana Barta |
|
| Name: | Dana Barta | |
| Title: | Executive Director | |
| CREDIT SUISSE SECURITIES (USA) LLC | ||
| By: |
/s/ Daniel Melaugh |
|
| Name: | Daniel Melaugh | |
| Title: | Managing Director | |
SCHEDULE I
to
Underwriting Agreement
| UNDERWRITERS |
FACE AMOUNT OF
CLASS AA CERTIFICATES |
FACE AMOUNT OF CLASS A
CERTIFICATES |
||||||
|
Morgan Stanley & Co. LLC |
$ | 129,333,000 | $ | 33,167,000 | ||||
|
Credit Suisse Securities (USA) LLC |
$ | 129,333,000 | $ | 33,167,000 | ||||
|
BofA Securities, Inc. |
$ | 129,333,000 | $ | 33,167,000 | ||||
|
Goldman Sachs & Co. LLC |
$ | 129,333,000 | $ | 33,167,000 | ||||
|
Banco Bilbao Vizcaya Argentaria, S.A. |
$ | 67,651,000 | $ | 17,349,000 | ||||
|
Deutsche Bank Securities Inc. |
$ | 67,651,000 | $ | 17,349,000 | ||||
|
PNC Capital Markets LLC |
$ | 67,651,000 | $ | 17,349,000 | ||||
|
Standard Chartered Bank |
$ | 67,651,000 | $ | 17,349,000 | ||||
|
AmeriVet Securities, Inc. |
$ | 3,979,000 | $ | 1,021,000 | ||||
|
Natixis Securities Americas LLC |
$ | 3,979,000 | $ | 1,021,000 | ||||
SCHEDULE II
to
Underwriting Agreement
|
Class of Pass Through Certificates |
Aggregate Face
Amount |
Interest Rate |
Final Expected
Regular Distribution Date |
|||||||||
|
Class AA Certificates |
$ | 795,894,000 | 2.000 | % | June 10, 2028 | |||||||
|
Class A Certificates |
$ | 204,106,000 | 2.500 | % | June 10, 2028 | |||||||
SCHEDULE III
to
Underwriting Agreement
Pricing Supplement
March 4, 2020
Delta Air Lines, Inc. (“Delta”)
(NYSE Symbol: DAL)
2020-1 Pass Through Trusts
Class AA and Class A Pass Through Certificates, Series 2020-1
Pricing Supplement dated March 4, 2020 to the preliminary prospectus supplement dated March 4, 2020 (the “Preliminary Prospectus Supplement”) relating to the Class AA Certificates and the Class A Certificates referred to below of Delta.
The information in this Pricing Supplement amends and supplements the Preliminary Prospectus Supplement to provide for the concurrent offerings of the Class AA Certificates and the Class A Certificates pursuant to, and on the terms and conditions described in, the Preliminary Prospectus Supplement. The information in this Pricing Supplement supersedes the information in the Preliminary Prospectus Supplement to the extent inconsistent with the information in the Preliminary Prospectus Supplement.
Terms used but not defined herein shall have the meanings set forth in the Preliminary Prospectus Supplement.
|
Securities: |
Class AA Pass Through
Certificates, Series 2020-1AA (“Class AA Certificates”) |
Class A Pass Through
Certificates, Series 2020-1A (“Class A Certificates”) |
||
|
Amount: |
$795,894,000 | $204,106,000 | ||
|
Public Offering Price: |
100% | 100% | ||
|
CUSIP: |
247361 ZV3 | 247361 ZW1 | ||
|
ISIN: |
US247361ZV38 | US247361ZW11 | ||
|
Coupon/Stated Interest Rate: |
2.000% | 2.500% | ||
|
Regular Distribution Dates: |
June 10 and December 10 of each year, commencing on June 10, 2020 | |||
|
Make-Whole Spread Over Treasuries: |
0.200% | 0.300% | ||
|
Liquidity Provider Rating: |
The Liquidity Provider currently meets the Liquidity Threshold Rating requirement. | |||
|
Initial “Maximum Commitment” under the Liquidity Facilities: |
$23,876,820 | $7,653,975 | ||
|
Underwriters: |
||||
|
Morgan Stanley & Co. LLC |
$129,333,000 | $33,167,000 | ||
|
Credit Suisse Securities (USA) LLC |
$129,333,000 | $33,167,000 | ||
|
BofA Securities, Inc. |
$129,333,000 | $33,167,000 | ||
|
Goldman Sachs & Co. LLC |
$129,333,000 | $33,167,000 | ||
|
Banco Bilbao Vizcaya Argentaria, S.A. |
$67,651,000 | $17,349,000 | ||
|
Deutsche Bank Securities Inc. |
$67,651,000 | $17,349,000 | ||
|
PNC Capital Markets LLC |
$67,651,000 | $17,349,000 | ||
|
Standard Chartered Bank |
$67,651,000 | $17,349,000 | ||
|
AmeriVet Securities, Inc. |
$3,979,000 | $1,021,000 | ||
|
Natixis Securities Americas LLC |
$3,979,000 | $1,021,000 | ||
|
Aggregate Underwriting Commission: |
$10,000,000 | |||
|
Concession to Selling Group Members: |
0.50% | 0.50% | ||
|
Discount to Brokers/Dealers: |
0.25% | 0.25% | ||
|
Settlement: |
March 12, 2020 (T+6) closing date, the 6th business day following the date hereof. | |||
Delta has filed a registration statement (No. 333-230087) (including a prospectus) and a related prospectus supplement with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents Delta has filed with the SEC for more complete information about Delta and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and prospectus supplement if you request them by calling Morgan Stanley & Co. LLC toll-free at 1-800-718-1649 or Credit Suisse Securities (USA) LLC toll-free at 1-800-221-1037.
SCHEDULE IV
to
Underwriting Agreement
| (a) |
Issuer Free Writing Prospectus not included in the Pricing Disclosure Package (other than the final term sheet described in Section 1(c) hereof): |
Investor Presentation dated the date hereof.
| (b) |
Additional Documents Incorporated by Reference: |
[None.]
Exhibit 4.1
TRUST SUPPLEMENT NO. 2020-1AA
Dated as of March 12, 2020
between
DELTA AIR LINES, INC.
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
To
PASS THROUGH TRUST AGREEMENT
Dated as of November 16, 2000
Delta Air Lines Pass Through Trust 2020-1AA
Delta Air Lines Pass Through Certificates,
Series 2020-1AA
|
Trust Supplement No. 2020-1AA (2020-1 EETC) |
Table of Contents
| Page | ||||||
|
ARTICLE I DEFINITIONS |
2 | |||||
|
Section 1.01 |
Definitions | 2 | ||||
|
ARTICLE II DECLARATION OF TRUST |
8 | |||||
|
Section 2.01 |
Declaration of Trust | 8 | ||||
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Section 2.02 |
Permitted Activities | 8 | ||||
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ARTICLE III THE CERTIFICATES |
8 | |||||
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Section 3.01 |
The Certificates | 8 | ||||
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Section 3.02 |
Terms and Conditions | 9 | ||||
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ARTICLE IV ISSUANCE AND TRANSFER OF THE CLASS AA CERTIFICATES |
10 | |||||
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Section 4.01 |
Issuance of Class AA Certificates | 10 | ||||
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Section 4.02 |
Legends | 11 | ||||
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Section 4.03 |
Book-Entry Provisions for Global Certificates | 12 | ||||
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ARTICLE V DISTRIBUTION; STATEMENTS TO CERTIFICATEHOLDERS |
13 | |||||
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Section 5.01 |
Statements to Certificateholders | 13 | ||||
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ARTICLE VI DEFAULT |
14 | |||||
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Section 6.01 |
Purchase Rights of Certificateholders | 14 | ||||
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ARTICLE VII THE TRUSTEE |
17 | |||||
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Section 7.01 |
Delivery of Documents; Delivery Dates | 17 | ||||
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Section 7.02 |
[Reserved] | 18 | ||||
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Section 7.03 |
The Trustee | 18 | ||||
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Section 7.04 |
Representations and Warranties of the Trustee | 19 | ||||
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Section 7.05 |
Trustee Liens | 20 | ||||
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ARTICLE VIII ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS |
20 | |||||
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Section 8.01 |
Amendment of Sections 5.02 and 6.07 of the Basic Agreement | 20 | ||||
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Section 8.02 |
Supplemental Agreements Without Consent of Class AA Certificateholders | 21 | ||||
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Section 8.03 |
Supplemental Agreements with Consent of Class AA Certificateholders | 22 | ||||
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Section 8.04 |
Consent of Trustees for Amendment of Section 6.01 | 22 | ||||
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Section 8.05 |
Amendment of Section 7.12(c) of the Basic Agreement | 22 | ||||
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ARTICLE IX [RESERVED] |
22 | |||||
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ARTICLE X MISCELLANEOUS PROVISIONS |
22 | |||||
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Section 10.01 |
Final Termination Date | 22 | ||||
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Section 10.02 |
Basic Agreement Ratified | 23 | ||||
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Section 10.03 |
Governing Law | 23 | ||||
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Section 10.04 |
Counterparts | 23 | ||||
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Section 10.05 |
Intention of Parties | 23 | ||||
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Section 10.06 |
Submission to Jurisdiction | 23 | ||||
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Section 10.07 |
Successor and Assigns | 24 | ||||
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Section 10.08 |
Normal Commercial Relations | 24 | ||||
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Section 10.09 |
No Recourse against Others | 24 | ||||
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Section 10.10 |
U.S.A. Patriot Act | 24 | ||||
| EXHIBITS | ||||
| Exhibit A | – | Form of Certificate | ||
| Exhibit B | – | DTC Letter of Representations | ||
| SCHEDULES | ||||
| Schedule I | – | Series AA Equipment Notes, Principal Amounts, Maturities and Aircraft | ||
| Schedule II | – | Note Documents | ||
| (ii) |
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TRUST SUPPLEMENT NO. 2020-1AA
This TRUST SUPPLEMENT NO. 2020-1AA, dated as of March 12, 2020 (as amended from time to time, the “Trust Supplement”), between DELTA AIR LINES, INC., a Delaware corporation (together with any successor in interest pursuant to Section 5.02 of the Basic Agreement, the “Company” or “Delta”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as successor trustee (together with any successor in interest and any successor or other trustee appointed as provided in the Basic Agreement, the “Trustee”) under the Pass Through Trust Agreement, dated as of November 16, 2000, between the Company and U.S. Bank Trust National Association, as successor in interest to State Street Bank and Trust Company of Connecticut, National Association (the “Basic Agreement”).
W I T N E S S E T H:
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate face amount of Certificates that may be issued and authenticated thereunder, has heretofore been executed and delivered;
WHEREAS, Delta is the owner of the thirty-three (33) aircraft described in Schedule I (the “Aircraft”), and Delta wishes to finance the Aircraft through the issuance of the Equipment Notes;
WHEREAS, pursuant to each Indenture, Delta will issue on a recourse basis two series of Equipment Notes secured by the related Aircraft and may issue one or more series of Additional Equipment Notes and one or more series of Refinancing Equipment Notes;
WHEREAS, the Trustee shall hereby declare the creation of the Class AA Trust (as defined below) for the benefit of Holders of the Class AA Certificates (as defined below) to be issued in respect of such Class AA Trust, and the initial Holders of the Class AA Certificates, as grantors of such Class AA Trust, by their respective acceptances of the Class AA Certificates, shall join in the creation of the Class AA Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class AA Trust will evidence Fractional Undivided Interests in the Class AA Trust and will have no rights, benefits or interests in respect of any other separate Trust or the property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement, as supplemented by this Trust Supplement and the Participation Agreements, the Trustee on behalf of the Class AA Trust shall purchase the Series AA Equipment Notes issued by the Company pursuant to the Indentures related to the Aircraft having the identical interest rate as, and final maturity dates not later than the final Regular Distribution Date of, the Class AA Certificates issued hereunder and shall hold such Series AA Equipment Notes in trust for the benefit of the Class AA Certificateholders;
WHEREAS, pursuant to the terms and conditions of the Intercreditor Agreement referred to in Section 3.02(j) hereof, the Trustee and the other parties thereto will agree to the terms of subordination set forth therein;
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
WHEREAS, all of the conditions and requirements necessary to make this Trust Supplement, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery of this Trust Supplement in the form and with the terms hereof have been in all respects duly authorized; and
WHEREAS, the Basic Agreement, as supplemented by this Trust Supplement, is subject to the provisions of the Trust Indenture Act and shall, to the extent applicable, be governed by such provisions.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless otherwise specified herein or the context otherwise requires, capitalized terms used but not defined herein, including in the recitals hereto, shall have the respective meanings set forth, and shall be construed and interpreted in the manner described, in the Basic Agreement. As used herein, the term “Agreement” shall mean the Basic Agreement, as supplemented by this Trust Supplement. For all purposes of the Basic Agreement as supplemented by this Trust Supplement, the following capitalized terms have the following meanings (any term used herein which is defined in both this Trust Supplement and the Basic Agreement shall have the meaning assigned thereto in this Trust Supplement for purposes of the Basic Agreement as supplemented by this Trust Supplement).
Additional Certificateholder: Has the meaning specified in the Intercreditor Agreement.
Additional Certificates: Has the meaning specified in the Intercreditor Agreement.
Additional Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Additional Trust: Has the meaning specified in the Intercreditor Agreement.
Additional Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Affiliate: Has the meaning specified in the Intercreditor Agreement.
Agreement: Has the meaning specified in the first paragraph of Section 1.01 of this Trust Supplement.
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Aircraft: Has the meaning specified in the recitals to this Trust Supplement and shall include any Replacement Aircraft and Substitute Aircraft (each as defined in the applicable Indenture) in replacement or substitution thereof in accordance with the applicable Indenture.
Applicable Participation Agreement: Has the meaning specified in Section 7.01(b) of this Trust Supplement.
Basic Agreement: Has the meaning specified in the preamble to this Trust Supplement.
Benefit Plan Investor: (a) Any employee benefit plan (as defined in Section 3(3) of ERISA), that is subject to the fiduciary provisions of Title I of ERISA, (b) any plan to which Section 4975 of the Code applies and (c) any entity whose underlying assets include plan assets by reason of an employee benefit plan’s or a plan’s investment in the entity or otherwise.
Business Day: Has the meaning specified in the Intercreditor Agreement.
Certificate: Means a Class AA Certificate or a Class A Certificate, as applicable.
Certificate Buy-Out Event: Has the meaning specified in the Intercreditor Agreement.
Certificateholder: Means, with respect to any Class of Certificates, the Person in whose name a Certificate is registered in the Register for the Certificates of such Class.
Class: Has the meaning specified in the Intercreditor Agreement.
Class AA Certificateholder: Means, at any time, any Certificateholder of one or more Class AA Certificates.
Class AA Certificates: Has the meaning specified in Section 3.01 of this Trust Supplement.
Class AA Liquidity Facility: Has the meaning specified in the Intercreditor Agreement.
Class AA Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Class AA Trust: Has the meaning specified in Section 2.01 of this Trust Supplement.
Class A Certificateholder: Means, at any time, any Certificateholder of one or more Class A Certificates.
Class A Certificates: Has the meaning specified in the Intercreditor Agreement.
Class A Trust: Has the meaning specified in the Intercreditor Agreement.
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Class A Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Class A Trustee: Has the meaning specified in the Intercreditor Agreement.
Code: Means the Internal Revenue Code of 1986, as amended.
Company: Has the meaning specified in the preamble to this Trust Supplement.
Corporate Trust Office: Has the meaning specified in the Intercreditor Agreement.
Definitive Certificates: Has the meaning specified in Section 4.01(e) of this Trust Supplement.
Delta: Has the meaning specified in the preamble to this Trust Supplement.
Distribution Date: Means a Regular Distribution Date or a Special Distribution Date.
DTC: Has the meaning specified in Section 3.02(f) of this Trust Supplement.
DTC Participants: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
ERISA: Means the Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to any Indenture, has the meaning specified in Section 4.01 of such Indenture.
Fractional Undivided Interests: Has the meaning specified in the Intercreditor Agreement.
Global Certificate: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Holder: Means a Certificateholder.
Indenture: Has the meaning specified in the Intercreditor Agreement.
Indirect Participants: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Intercreditor Agreement: Has the meaning specified in Section 3.02(j) of this Trust Supplement.
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Issuance Date: Has the meaning specified in Section 7.01(a) of this Trust Supplement.
Junior Additional Certificateholder: Means, with respect to any Additional Certificateholder exercising its right to purchase Certificates under Section 6.01 of this Trust Supplement, any holder of any class of Additional Certificates that rank junior, in priority of payment of “Expected Distributions” for such class under the Intercreditor Agreement, to the class of Additional Certificates held by such Additional Certificateholder.
Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Loan Trustee: Means, with respect to any Indenture, the bank, trust company or other financial institution designated as loan trustee thereunder, and any successor to such loan trustee.
Note Documents: Means, collectively, the Participation Agreements, the Indentures, each Indenture Supplement (as defined in any Indenture), each Manufacturer’s Consent (as defined in any Indenture) and the Equipment Notes.
Operative Agreements: Has the meaning specified in the Intercreditor Agreement.
Other Agreements: Means (i) the Class A Trust Agreement, (ii) any Additional Trust Agreement and (iii) any Refinancing Trust Agreement.
Other Trustees: Means the trustees under the Other Agreements, and any successor or other trustee appointed as provided therein.
Other Trusts: Means the Class A Trust, any Additional Trust or Trusts, or any Refinancing Trust or Trusts, in each case created by the applicable Other Agreement.
Participation Agreement: Has the meaning specified in the Intercreditor Agreement.
Paying Agent: Means, with respect to the Class AA Certificates, the paying agent maintained and appointed for such Class AA Certificates pursuant to Section 7.12 of the Basic Agreement.
Person: Means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.
Plan: Means (i) a retirement plan or other employee benefit plan or arrangement, including for this purpose an individual retirement account, annuity or Keogh plan, that is subject to Title I of ERISA or Section 4975 of the Code, (ii) any other entity whose underlying assets are deemed to include the assets of any plan or arrangement described in (i) above by virtue of the U.S. Department of Labor regulation in 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA (or any successor to such regulation), or (iii) such a plan or arrangement which is a foreign, church or governmental plan or arrangement exempt from Title I of ERISA and Section 4975 of the Code but subject to a Similar Law.
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Plan Fiduciary: Has the meaning specified in Section 3.02(i) of this Trust Supplement.
Pool Balance: Means, as of any date, (i) the original aggregate face amount of the Class AA Certificates less (ii) the aggregate amount of all distributions made as of such date in respect of the Class AA Certificates other than distributions made in respect of interest or Premium or reimbursement of any costs or expenses incurred in connection therewith. The Pool Balance as of any date shall be computed after giving effect to any distribution with respect to the payment of principal, if any, of the Series AA Equipment Notes or payment with respect to other Trust Property and the distribution thereof to be made on such date.
Pool Factor: Means, as of any Distribution Date, the quotient (rounded to the seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the original aggregate face amount of the Class AA Certificates. The Pool Factor as of any Distribution Date shall be computed after giving effect to any distribution with respect to payment of principal, if any, of the Series AA Equipment Notes or payment with respect to other Trust Property and the distribution thereof to be made on that date.
Premium: Has the meaning specified in the Intercreditor Agreement.
Prospectus Supplement: Means the final prospectus supplement, dated March 4, 2020, relating to the offering of the Certificates.
Rating Agencies: Has the meaning specified in the Intercreditor Agreement.
Refinancing Certificateholder: Has the meaning specified in the Intercreditor Agreement.
Refinancing Certificates: Has the meaning specified in the Intercreditor Agreement.
Refinancing Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Refinancing Trust: Has the meaning specified in the Intercreditor Agreement.
Refinancing Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Regular Distribution Date: Has the meaning specified in Section 3.02(c) of this Trust Supplement.
Replacement Liquidity Facility: Has the meaning specified in the Intercreditor Agreement.
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Replacement Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Responsible Officer: Has the meaning specified in the Intercreditor Agreement.
Scheduled Payment: Has the meaning specified in the Intercreditor Agreement.
Securities Act: Means the Securities Act of 1933, as amended.
Series AA Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Similar Law: Means a foreign, federal, state, or local law which is substantially similar to the prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code.
Special Distribution Date: Means, with respect to the Class AA Certificates, each date on which a Special Payment is to be distributed as specified in this Agreement.
Special Payment: Means any payment (other than a Scheduled Payment) in respect of, or any proceeds of, any Equipment Note or the Collateral (as defined in any Indenture).
Special Payments Account: Means, with respect to the Class AA Certificates, the account or accounts created and maintained for such series pursuant to Section 4.01(b) of the Basic Agreement (as modified by Section 7.01(c) of this Trust Supplement) and this Trust Supplement.
Subordination Agent: Has the meaning specified in the Intercreditor Agreement.
Triggering Event: Has the meaning specified in the Intercreditor Agreement.
Trust: Means the Class AA Trust or the Class A Trust, as applicable.
Trust Indenture Act: Means the Trust Indenture Act of 1939, as amended.
Trust Property: Means (i) subject to the Intercreditor Agreement, the Series AA Equipment Notes held as the property of the Class AA Trust, all monies at any time paid thereon and all monies due and to become due thereunder, (ii) funds from time to time deposited in the Certificate Account and the Special Payments Account and, subject to the Intercreditor Agreement, any proceeds from the sale by the Trustee pursuant to Article VI of the Basic Agreement of any Equipment Notes and (iii) all rights of the Class AA Trust and the Trustee, on behalf of the Class AA Trust, under the Intercreditor Agreement and the Class AA Liquidity Facility, including, without limitation, all rights to receive certain payments thereunder, and all monies paid to the Trustee on behalf of the Class AA Trust pursuant to the Intercreditor Agreement or the Class AA Liquidity Facility.
Trust Supplement: Has the meaning specified in the preamble hereto.
Trustee: Has the meaning specified in the preamble to this Trust Supplement.
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Underwriters: Means Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, BBVA Securities Inc., Deutsche Bank Securities Inc., PNC Capital Markets LLC, Standard Chartered Bank, AmeriVet Securities, Inc. and Natixis Securities Americas LLC.
Underwriting Agreement: Means the Underwriting Agreement, dated March 4, 2020, among the Representatives (as defined in the Underwriting Agreement) of the Underwriters and the Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
ARTICLE II
DECLARATION OF TRUST
Section 2.01 Declaration of Trust. The Trustee hereby declares the creation of a Trust, designated the “Delta Air Lines Pass Through Trust 2020-1AA” (the “Class AA Trust”), for the benefit of the Holders of the Class AA Certificates to be issued in respect of such Class AA Trust, and the initial Holders of the Class AA Certificates, as grantors of such Class AA Trust, by their respective acceptances of the Class AA Certificates, join in the creation of such Class AA Trust with the Trustee. The Trustee, by the execution and delivery of this Trust Supplement, acknowledges its acceptance of all right, title and interest in and to the Trust Property to be acquired pursuant to Section 7.01(b) of this Trust Supplement and the Participation Agreements and the Trustee will hold such right, title and interest for the benefit of all present and future Holders of the Class AA Certificates, upon the trusts set forth in the Basic Agreement and this Trust Supplement. The provisions of this Section 2.01 supersede and replace the provisions of Section 2.03 of the Basic Agreement, with respect to the Class AA Trust.
Section 2.02 Permitted Activities. The Class AA Trust may only engage in the transactions contemplated by the Operative Agreements, subject to Section 10.05 of this Trust Supplement.
ARTICLE III
THE CERTIFICATES
Section 3.01 The Certificates. There is hereby created a series of Certificates to be issued under this Agreement designated as “Delta Air Lines Pass Through Certificates, Series 2020-1AA” (the “Class AA Certificates”). Each Class AA Certificate represents a Fractional Undivided Interest in the Class AA Trust created hereby. The Class AA Certificates shall be the only instruments evidencing a Fractional Undivided Interest in the Class AA Trust. The Class AA Certificates do not represent indebtedness of the Class AA Trust, and references herein to interest accruing on the Class AA Certificates are included for purposes of computation only.
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Section 3.02 Terms and Conditions. The terms and conditions applicable to the Class AA Certificates and the Class AA Trust are as follows:
(a) The aggregate face amount of the Class AA Certificates that may be authenticated and delivered under this Agreement (except for Class AA Certificates authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Class AA Certificates pursuant to Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement and Section 4.03 of this Trust Supplement) is $795,894,000.
(b) [Reserved]
(c) The distribution dates with respect to any payment of Scheduled Payments (each such distribution date, a “Regular Distribution Date”) shall be June 10 and December 10, commencing on June 10, 2020, until payment of all of the Scheduled Payments to be made under the Equipment Notes has been made; provided, however, that, if any such day shall not be a Business Day, the related distribution shall be made on the next succeeding Business Day without additional interest.
(d) The Special Distribution Date with respect to the Class AA Certificates means any Business Day on which a Special Payment is to be distributed pursuant to this Agreement.
(e) [Reserved]
(f) The Class AA Certificates shall be in the form attached hereto as Exhibit A, shall be Book-Entry Certificates (subject to Section 3.05(d) of the Basic Agreement and Section 4.03 of this Trust Supplement), and shall be subject to the conditions set forth in the Letter of Representations between the Class AA Trust and The Depository Trust Company and any successor agency thereto (“DTC”), as initial Clearing Agency, attached hereto as Exhibit B.
(g) The proceeds of the offering of Class AA Certificates issued by the Class AA Trust shall be used on the date hereof to acquire the Series AA Equipment Notes described in Schedule I that relate to the Aircraft and to the Note Documents described in Schedule II.
(h) Any Person acquiring or accepting a Class AA Certificate or an interest therein will, by such acquisition or acceptance, be deemed to (i) represent and warrant to the Company, the Loan Trustees and the Trustee that either (1) no assets of a Plan or any trust established with respect to a Plan have been used to purchase or hold Class AA Certificates or an interest therein or (2) the purchase and holding of Class AA Certificates or interests therein by such Person are exempt from the prohibited transaction restrictions of ERISA and the Code or provisions of Similar Law pursuant to one or more prohibited transaction statutory or administrative exemptions or similar exemptions under Similar Law and (ii) direct the Trustee to invest the assets held in the Trust pursuant to, and take all other actions contemplated by, the terms and conditions of the Basic Agreement, this Trust Supplement, the Intercreditor Agreement and each Participation Agreement.
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(i) Each Person or transferee of any Class AA Certificate or beneficial interest therein that is a Benefit Plan Investor will be deemed to represent, warrant and agree that (i) none of the Company or any of its affiliates or other persons that provide marketing services, nor any of their affiliates, has provided, and none of them will provide, any investment recommendation or investment advice on which it, or any fiduciary or other person investing the assets of the Benefit Plan Investor (“Plan Fiduciary”), has relied or will rely as a primary basis in connection with its decision to invest in the Class AA Certificates, and they are not otherwise acting as a fiduciary, as defined in Section 3(21) of ERISA or Section 4975(e)(3) of the Code, to the Benefit Plan Investor or the Plan Fiduciary in connection with the Benefit Plan Investor’s acquisition of the Class AA Certificates; and (ii) the Plan Fiduciary is exercising its own independent judgment in evaluating the investment in the Class AA Certificates.
(j) The Class AA Certificates will be subject to the following Intercreditor Agreement (and to the extent the terms thereof (including the definitions of defined terms) are inconsistent with the terms of this Agreement, such Intercreditor Agreement shall control): that certain Intercreditor Agreement, dated as of the date hereof, among U.S. Bank Trust National Association, as Trustee and as Class AA Trustee, National Australia Bank Limited, acting through its New York branch, as each Liquidity Provider, and U.S. Bank Trust National Association, as Subordination Agent thereunder (as may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Intercreditor Agreement”). Under Article VI hereof, the Holders of the Class AA Certificates, Additional Certificates (if issued) or Refinancing Certificates (if issued) shall have the rights upon the occurrence of a Certificate Buy Out Event set forth therein. The Trustee and, by acceptance of any Class AA Certificate, each Certificateholder thereof, agrees to be bound by all of the provisions of the Intercreditor Agreement, including the subordination provisions of Section 9.09 thereof.
(k) [Reserved]
(l) The Class AA Certificates will have the benefit of the following liquidity facility: that certain Revolving Credit Agreement (2020-1AA), dated as of the date hereof, between U.S. Bank Trust National Association, as Subordination Agent under the Intercreditor Agreement, as agent and trustee for the Class AA Trust, and the Class AA Liquidity Provider.
(m) The Responsible Party is the Company.
(n) The Company, any other obligor upon the Class AA Certificates, and any Affiliate thereof may acquire, tender for, purchase, own, hold, become the pledgee of and otherwise deal with any Class AA Certificate.
ARTICLE IV
ISSUANCE AND TRANSFER OF THE CLASS AA CERTIFICATES
Section 4.01 Issuance of Class AA Certificates. (a) The Class AA Certificates will be issued in minimum denominations of $2,000 (or such other denomination that is the lowest integral multiple of $1,000 that is, at the time of issuance, equal to at least 1,000 euros) and integral multiples of $1,000 in excess thereof, except that one Certificate may be issued in a different denomination. Each Class AA Certificate shall be dated the date of its authentication.
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(b) The Class AA Certificates shall be issued initially in the form of one or more global Certificates in definitive, fully registered form without interest coupons, substantially in the form of Exhibit A hereto (each, a “Global Certificate”), duly executed and authenticated by the Trustee as hereinafter provided. Each Global Certificate will be registered in the name of a nominee for DTC for credit to the account of members of, or participants in, DTC (“DTC Participants”) or to the account of indirect participants that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”), and will be deposited with the Trustee, as custodian for DTC. The aggregate principal amount of a Global Certificate may from time to time be decreased by adjustments made on the records of DTC or its nominee, or of the Trustee, as custodian for DTC or its nominee, as hereinafter provided, which adjustments shall be conclusive as to the aggregate principal amount of any such Global Certificate.
(c) [Reserved]
(d) [Reserved]
(e) Certificated Certificates in registered form shall be issued in substantially the form set forth as Exhibit A hereto (the “Definitive Certificates”) and shall be in fully registered form and shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner, all as determined by the officers executing such Definitive Certificates, as evidenced by their execution of such Definitive Certificates.
Section 4.02 Legends. (a) Each Global Certificate shall bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(b) Each Class AA Certificate shall bear the following legend on the face thereof:
BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT EITHER (1) NO ASSETS OF A PLAN OR ANY TRUST ESTABLISHED WITH RESPECT TO A PLAN HAVE BEEN USED TO PURCHASE OR HOLD THIS CERTIFICATE OR AN INTEREST HEREIN, OR (2) THE PURCHASE AND
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HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN BY SUCH A PERSON ARE EXEMPT FROM THE PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE OR PROVISIONS OF SIMILAR LAW PURSUANT TO ONE OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS OR SIMILAR EXEMPTIONS UNDER SIMILAR LAW, AND (B) DIRECTS THE TRUSTEE TO INVEST IN THE ASSETS HELD IN THE CLASS AA TRUST PURSUANT TO THE TERMS AND CONDITIONS DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATED THERETO. CERTAIN TERMS USED IN THIS PARAGRAPH SHALL HAVE THE MEANINGS SPECIFIED IN THE AGREEMENT.
Section 4.03 Book-Entry Provisions for Global Certificates. (a) DTC Participants shall have no rights under this Agreement with respect to any Global Certificate held on their behalf by DTC, or the Trustee as its custodian, and DTC may be treated by the Trustee and any agent of the Trustee as the absolute owner of such Global Certificate for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Trustee or any agent of the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or shall impair, as between DTC and its DTC Participants, the operation of customary practices governing the exercise of the rights of a holder of any Class AA Certificate. Upon the issuance of any Global Certificate, the Registrar or its duly appointed agent shall record Cede & Co. or another nominee of DTC as the registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be limited to transfers of such Global Certificate in whole, but not in part, to nominees of DTC, its successor or such successor’s nominees. Beneficial interests in Global Certificates may be transferred in accordance with the rules and procedures of DTC and the provisions of Section 4.02 of this Trust Supplement. Beneficial interests in Global Certificates shall be delivered to all beneficial owners thereof in the form of Definitive Certificates, only if (i) DTC notifies the Trustee in writing that it is no longer willing or able to discharge properly its responsibilities as depositary for the Global Certificates, and a successor depositary is not appointed by the Trustee within 90 days of such notice, (ii) the Company, at its option, advises the Trustee in writing that it elects to terminate the book-entry system through DTC or (iii) after the occurrence and during the continuance of an Event of Default, Class AA Certificateholders with Fractional Undivided Interests aggregating not less than a majority in interest in all Fractional Undivided Interests in the Class AA Trust advise the Trustee, the Company and DTC through DTC Participants in writing that the continuation of a book-entry system through DTC (or a successor thereto) is no longer in the Class AA Certificateholders’ best interests. Neither the Company nor the Trustee shall be liable if the Company or the Trustee is unable to locate a qualified successor clearing system.
(c) [Reserved]
(d) In connection with the transfer of the entire amount of a Global Certificate to the beneficial owners thereof pursuant to paragraph (b) of this Section 4.03, such Global Certificate shall be deemed to be surrendered to the Trustee for cancellation, and the Trustee shall execute, authenticate and deliver to each beneficial owner, in exchange for the beneficial interest thereof in such Global Certificate, an equal aggregate face amount of Definitive Certificates of
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authorized denominations, in each case as such beneficial owner and related aggregate face amount shall have been identified and otherwise set forth (together with such other information as may be required for the registration of such Definitive Certificates) in registration instructions that shall have been delivered by or on behalf of DTC to the Trustee. None of the Company, the Registrar, the Paying Agent nor the Trustee shall be liable for any delay in delivery of such registration instructions and each such Person may conclusively rely on, and shall be protected in relying on, such registration instructions. Upon the issuance of any Definitive Certificate, the Trustee shall recognize the Person in whose name such Definitive Certificate is registered in the Register as a Certificateholder hereunder.
(e) The registered Holder of a Global Certificate may grant proxies and otherwise authorize any Person, including DTC Participants and Persons that may hold interests through DTC Participants, to take any action which a Holder is entitled to take under this Agreement or the Class AA Certificates.
(f) Neither the Company, nor the Trustee, nor the Registrar, nor the Paying Agent shall have any responsibility or liability for: (i) any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Certificates, (ii) maintaining, supervising or reviewing any records relating to such beneficial ownership interests or (iii) the performance by DTC, any DTC Participant or any Indirect Participant of their respective obligations under the rules, regulations and procedures creating and affecting DTC and its operation or any other statutory, regulatory, contractual or customary procedures governing their obligations.
ARTICLE V
DISTRIBUTION; STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01 Statements to Certificateholders. (a) On each Regular Distribution Date and Special Distribution Date, the Trustee will include with each distribution to the Class AA Certificateholders a statement, giving effect to the distribution to be made on such Regular Distribution Date or Special Distribution Date, setting forth the following information (per $1,000 aggregate face amount of Class AA Certificates as to clauses (ii) and (iii) below):
(i) the aggregate amount of funds distributed on such Distribution Date under this Agreement, indicating the amount, if any, allocable to each source (including any portion thereof paid by the Class AA Liquidity Provider);
(ii) the amount of such distribution under this Agreement allocable to principal and the amount allocable to Premium (if any);
(iii) the amount of such distribution under this Agreement allocable to interest (including any portion thereof paid by the Class AA Liquidity Provider); and
(iv) the Pool Balance and the Pool Factor.
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With respect to the Class AA Certificates registered in the name of DTC or its nominee, on the Record Date prior to each Regular Distribution Date and Special Distribution Date, the Trustee will request that DTC post on its Internet bulletin board a securities position listing setting forth the names of all the DTC Participants reflected on DTC’s books as holding interests in the Class AA Certificates on such Record Date. On each Regular Distribution Date and Special Distribution Date, the Trustee will mail to each such DTC Participant whose name has been provided by DTC the statement described above and will make available additional copies as requested by such DTC Participants for forwarding to holders of interests in the Class AA Certificates.
(b) Within a reasonable period of time after the end of each calendar year but not later than the latest date permitted by law, the Trustee shall furnish to each Person who at any time during such calendar year was a Class AA Certificateholder of record a statement containing the sum of the amounts determined pursuant to clauses (a)(i), (a)(ii) and (a)(iii) above for such calendar year or, in the event such Person was a Class AA Certificateholder of record during a portion of such calendar year, for the applicable portion of such year, and such other items as are readily available to the Trustee and which a Class AA Certificateholder may reasonably request as necessary for the purpose of such Certificateholder’s preparation of its United States federal income tax returns or foreign income tax returns. With respect to Class AA Certificates registered in the name of DTC or its nominee, such statement and such other items shall be prepared on the basis of information supplied to the Trustee by the DTC Participants and shall be delivered by the Trustee to such DTC Participants to be available for forwarding by such DTC Participants to the holders of interests in the Class AA Certificates.
(c) Promptly following the date of any early redemption or purchase of, or any default in the payment of principal or interest in respect of, any of the Series AA Equipment Notes held in the Class AA Trust, the Trustee shall furnish to Class AA Certificateholders of record on such date a statement setting forth (x) the expected Pool Balances for each subsequent Regular Distribution Date following the date of such early redemption, purchase or default, (y) the related Pool Factors for such Regular Distribution Dates and (z) the expected principal distribution schedule of the Series AA Equipment Notes, in the aggregate, held as Trust Property at the date of such notice. With respect to the Class AA Certificates registered in the name of DTC, on the date of such early redemption, purchase or default, the Trustee will request from DTC a securities position listing setting forth the names of all DTC Participants reflected on DTC’s books as holding interests in the Class AA Certificates on such date. The Trustee will send electronically, in accordance with DTC’s applicable procedures, to each such DTC Participant the statement described above and will make available additional copies as requested by such DTC Participant for forwarding to holders of interests in the Class AA Certificates.
(d) The provisions of this Section 5.01 supersede and replace the provisions of Section 4.03 of the Basic Agreement in their entirety with respect to the Class AA Trust.
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ARTICLE VI
DEFAULT
Section 6.01 Purchase Rights of Certificateholders. (a) By acceptance of its Class AA Certificate, each Class AA Certificateholder agrees that at any time after the occurrence and during the continuation of a Certificate Buy-Out Event:
(i) so long as no Additional Certificateholder has elected to exercise its rights to purchase the Class AA Certificates and the Class A Certificates pursuant to, and given notice of such election in accordance with, this Section 6.01(a) (upon such election and notification thereof, the right specified in this Section 6.01(a)(i) shall be suspended and (x) upon consummation of the purchase pursuant to such election, be terminated with respect to such Certificate Buy-Out Event, or (y) upon failure to consummate such purchase on the proposed purchase date, such right shall be revived), each Class A Certificateholder (other than the Company or any of its Affiliates) shall have the right to purchase, at the purchase price set forth herein, all, but not less than all, of the Class AA Certificates upon ten days’ prior written irrevocable notice to the Trustee, the Class A Trustee and each other Class A Certificateholder, on the third Business Day following the expiration of such ten-day notice period, provided that (A) if prior to the end of such ten-day period any other Class A Certificateholder(s) (other than the Company or any of its Affiliates) notifies such purchasing Class A Certificateholder that such other Class A Certificateholder(s) want(s) to participate in such purchase, then such other Class A Certificateholder(s) (other than the Company or any of its Affiliates) may join with the purchasing Class A Certificateholder to purchase all, but not less than all, of the Class AA Certificates pro rata based on the Fractional Undivided Interest in the Class A Trust held by each such Class A Certificateholder and (B) upon consummation of such purchase no Class A Certificateholder shall have a right to purchase the Class AA Certificates pursuant to this Section 6.01(a)(i) during the continuance of such Certificate Buy-Out Event,
(ii) if any Additional Certificates are issued by an Additional Trust, so long as no Junior Additional Certificateholder (if any) has elected to exercise its rights to purchase Certificates pursuant to, and given notice of such election in accordance with, this Section 6.01(a) (upon such election and notification thereof, the right specified in this Section 6.01(a)(ii) shall be suspended and (x) upon consummation of the purchase pursuant to such election, be terminated with respect to such Certificate Buy-Out Event, or (y) upon failure to consummate such purchase on the proposed purchase date, such right shall be revived), each Additional Certificateholder (other than the Company or any of its Affiliates) shall have the right (which shall not expire upon any purchase of the Class AA Certificates or the Class AA Certificates and Class A Certificates pursuant to clause (i) or (ii) above, respectively) to purchase all, but not less than all, of the Class AA Certificates, the Class A Certificates and any Additional Certificates ranked senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder upon ten days’ prior written irrevocable notice to the Trustee, the Class A Trustee, the trustee of any Additional Trust with respect to any Additional Certificates that rank senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder and each other Additional Certificateholder of the same class, on the third Business Day following the expiration of such ten-day notice period, provided that (A) if prior to the end of such ten-day period any other Additional Certificateholder(s) of such class (other than the Company or any of its Affiliates) notifies such purchasing Additional Certificateholder that such other Additional Certificateholder(s) want(s) to participate in such purchase, then such other Additional Certificateholder(s) (other than the Company or any of its Affiliates) may join with the purchasing Additional Certificateholder to purchase all, but not less than
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all, of the Class AA Certificates, the Class A Certificates and such senior Additional Certificates pro rata based on the Fractional Undivided Interest in the applicable Additional Trust held by each such Additional Certificateholder and (B) upon consummation of such purchase no Additional Certificateholder of such class shall have a right to purchase the Class AA Certificates, the Class A Certificates and such senior Additional Certificates pursuant to this Section 6.01(a)(ii) during the continuance of such Certificate Buy-Out Event, and
(iii) if any Refinancing Certificates are issued, each Refinancing Certificateholder shall have the same right (subject to the same terms and conditions) to purchase Certificates pursuant to this Section 6.01(a) (and to receive notice in connection therewith) as the Holders of the Class that such Refinancing Certificates refinanced.
The purchase price with respect to the Class AA Certificates shall be equal to the Pool Balance of the Class AA Certificates, together with accrued and unpaid interest in respect thereof to the date of such purchase, and any other amounts then due and payable to the Class AA Certificateholders under this Agreement, the Intercreditor Agreement, any Series AA Equipment Note held as the property of the Class AA Trust or the related Indenture and Participation Agreement or on or in respect of the Class AA Certificates but without any Premium, provided, however, that if such purchase occurs after the Record Date relating to any Distribution Date, such purchase price shall be reduced by the amount to be distributed hereunder on such related Distribution Date (which deducted amounts shall remain distributable to, and may be retained by, the Class AA Certificateholders as of such Record Date); provided further that no such purchase of Class AA Certificates pursuant to this Section 6.01(a) shall be effective unless the purchaser(s) shall certify to the Trustee that contemporaneously with such purchase, such purchaser(s) is purchasing, pursuant to the terms of this Agreement, the Class A Trust Agreement, the applicable Additional Trust Agreement (if any) or the applicable Refinancing Trust Agreement (as the case may be), and the Intercreditor Agreement, all of the Class AA Certificates, the Class A Certificates and, if applicable, the Additional Certificates that rank senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder(s) and, if applicable, the Refinancing Certificates that are senior to the securities held by such purchaser(s). Each payment of the purchase price of the Class AA Certificates referred to in the first sentence of this paragraph shall be made to an account or accounts designated by the Trustee and each such purchase shall be subject to the terms of this Section 6.01(a). Each Class AA Certificateholder agrees by its acceptance of its Class AA Certificate that it will, upon payment from such Class A Certificateholder(s), Additional Certificateholder(s) or Refinancing Certificateholder(s), as the case may be, of the purchase price set forth in the first sentence of this paragraph, forthwith sell, assign, transfer and convey to the purchaser(s) thereof (without recourse, representation or warranty of any kind except as to its own acts) all of the right, title, interest and obligation of such Class AA Certificateholder in this Agreement, the Intercreditor Agreement, the Class AA Liquidity Facility, the Note Documents and all Class AA Certificates held by such Class AA Certificateholder (excluding all right, title and interest under any of the foregoing to the extent such right, title or interest is with respect to an obligation not then due and payable as respects any action or inaction or state of affairs occurring prior to such sale) and the purchaser(s) shall assume all of such Class AA Certificateholder’s obligations under this Agreement, the Intercreditor Agreement, the Class AA Liquidity Facility, the Note Documents and all such Class AA Certificates. The Class AA
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Certificates will be deemed to be purchased on the date payment of the purchase price is made notwithstanding the failure of any Class AA Certificateholder to deliver any Class AA Certificate and, upon such a purchase, (i) the Class AA Certificateholders shall have no further rights with respect to the Class AA Certificates and (ii) if the purchaser(s) shall so request, each such Class AA Certificateholder will comply with all the provisions of Section 3.04 of the Basic Agreement and the applicable provisions of this Trust Supplement to enable new Class AA Certificates to be issued to the purchaser(s) in such denominations otherwise authorized under this Agreement as it shall request. All charges and expenses in connection with the issuance of any such new Class AA Certificates shall be borne by the purchaser(s) thereof.
(b) This Section 6.01 supplements and, to the extent inconsistent with any provision of Section 6.01(d) of the Basic Agreement, replaces the provisions of Section 6.01(d) of the Basic Agreement. Notwithstanding anything to the contrary set forth herein or in any Operative Agreement, the provisions of this Section 6.01 may not be amended in any manner without the consent of each Class AA Certificateholder, each Class A Certificateholder and each Additional Certificateholder (if any) or, as the case may be, Refinancing Certificateholder (if any) (in each case, other than the Company or any of its Affiliates in its respective capacity as a Certificateholder) that would be adversely affected thereby; provided that the purchase price under this Section 6.01 (as in effect on the date hereof) for any Certificate held by the Company or any of its Affiliates shall not be modified without the prior written consent of the Company. For the avoidance of doubt, if a Certificate Buy-Out Event ceases to exist and another Certificate Buy-Out Event occurs and is continuing, the purchase rights set forth in Section 6.01(a) shall be revived notwithstanding any exercise of such rights during the continuance of any preceding Certificate Buy-Out Event.
ARTICLE VII
THE TRUSTEE
Section 7.01 Delivery of Documents; Delivery Dates. (a) In accordance with the direction of each Class AA Certificateholder deemed given pursuant to Section 3.02(h) of this Trust Supplement, the Trustee is hereby directed (i) to execute and deliver the Intercreditor Agreement on or prior to the date of the initial issuance of the Class AA Certificates (the “Issuance Date”), in the form delivered to the Trustee by the Company, and (ii) subject to the terms thereof, to perform its obligations thereunder. Upon request of the Company and the satisfaction or waiver of the closing conditions specified in the Underwriting Agreement, the Trustee shall execute, deliver, authenticate, issue and sell Class AA Certificates in authorized denominations equaling in the aggregate the amount set forth, with respect to the Class AA Trust, in Schedule I to the Underwriting Agreement evidencing the entire ownership interest in the Class AA Trust, which amount equals the maximum aggregate principal amount of Series AA Equipment Notes which may be purchased by the Trustee. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement or Section 4.03 of this Trust Supplement, the Trustee shall not execute, authenticate or deliver Class AA Certificates in excess of the aggregate amount specified in this paragraph. The provisions of this Section 7.01(a) supersede and replace the first three sentences of Section 2.02(a) of the Basic Agreement and the first sentence of Section 3.02(a) of the Basic Agreement, with respect to the Class AA Trust.
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(b) On the Issuance Date the Trustee shall enter into and perform its obligations under the Participation Agreement (the “Applicable Participation Agreement”) with respect to each Aircraft and cause such certificates, documents and legal opinions relating to the Trustee to be duly delivered as required by the Applicable Participation Agreement. Upon satisfaction of the conditions specified in the Applicable Participation Agreement, the Trustee shall purchase the applicable Series AA Equipment Notes with the proceeds of the Class AA Certificates on the Issuance Date. The purchase price of such Series AA Equipment Notes shall equal the principal amount of such Series AA Equipment Notes. The provisions of this Section 7.01(b) supersede and replace the provisions of Section 2.02 of the Basic Agreement with respect to the Class AA Trust, and no provisions of the Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic Agreement shall apply to the Class AA Trust.
(c) With respect to the Class AA Trust, Section 4.01(b) of the Basic Agreement is superseded and replaced in its entirety with the following: “The Trustee shall establish and maintain on behalf of the Class AA Certificateholders a Special Payments Account as one or more accounts, which shall be non-interest bearing except as provided in Section 4.04 of the Basic Agreement. The Trustee shall hold the Special Payments Account in trust for the benefit of the Class AA Certificateholders and shall make or permit withdrawals therefrom only as provided in the Agreement or the Intercreditor Agreement. On each day when one or more Special Payments are made to the Trustee under the Intercreditor Agreement, the Trustee, upon receipt thereof, shall immediately deposit the aggregate amount of such Special Payments in the Special Payments Account.”
(d) With respect to the Class AA Trust, the second sentence of Section 4.02(c) of the Basic Agreement shall be superseded and replaced in its entirety with the following sentence: “Subject to the provisions of the Intercreditor Agreement: (i) in the event of redemption or purchase of Series AA Equipment Notes held in the Class AA Trust, such notice shall be mailed (or in the case of Global Certificates, sent electronically in accordance with DTC’s applicable procedures) not less than 15 days prior to the Special Distribution Date for the Special Payment resulting from such redemption or purchase, which Special Distribution Date shall be the date of such redemption or purchase; and (ii) in the case of any other Special Payments, such notice of Special Payment shall be sent as soon as practicable after the Trustee has confirmed that it has received funds for such Special Payment and shall state the Special Distribution Date for such Special Payment, which shall occur 15 days after the date of such notice of Special Payment or (if such 15th day is not practicable) as soon as practicable thereafter.”
(e) With respect to the Class AA Trust, clause (ii) of the third sentence of Section 4.02(c) of the Basic Agreement shall be amended by deleting in its entirety the parenthetical phrase “(taking into account any payment to be made by the Responsible Party pursuant to Section 2.02(b)).”
Section 7.02 [Reserved].
Section 7.03 The Trustee. (a) Subject to Section 7.04 of this Trust Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Trust Supplement or the Intercreditor Agreement or the due execution hereof or thereof by the Company or the other parties
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thereto (other than the Trustee), or for or in respect of the recitals and statements contained herein or therein, all of which recitals and statements are made solely by the Company or the other parties thereto (other than the Trustee), except that the Trustee hereby represents and warrants that each of this Trust Supplement, the Basic Agreement, each Class AA Certificate and the Intercreditor Agreement has been executed and delivered by one of its officers who is duly authorized to execute and deliver such document on its behalf.
(b) The Trustee shall at all times be a bank or trust company, organized and doing business under the laws of the United States or any state thereof, a substantial part of the business of which consists of (i) receiving deposits and making loans or (ii) exercising fiduciary powers similar to those permitted to national banks by the Comptroller of the Currency, and which is subject to supervision and examination by state or federal authority having supervision over banking institutions.
Section 7.04 Representations and Warranties of the Trustee. The Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute, deliver and perform this Trust Supplement, the Intercreditor Agreement, the Class AA Certificates and the Note Documents to which it is or is to become a party and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Supplement, the Intercreditor Agreement, the Class AA Certificates and the Note Documents to which it is or is to become a party;
(b) the execution, delivery and performance by the Trustee of this Trust Supplement, the Intercreditor Agreement, the Class AA Certificates and the Note Documents to which it is or is to become a party (i) will not violate any provision of any United States federal law or the law of the state of the United States where it is located governing the banking and trust powers of the Trustee or any order, writ, judgment, or decree of any court, arbitrator or governmental authority applicable to the Trustee or any of its assets, (ii) will not violate any provision of the articles of association or by-laws of the Trustee, and (iii) will not violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of any lien on any properties included in the Trust Property pursuant to the provisions of, any mortgage, indenture, contract, agreement or other undertaking to which it is a party, which violation, default or lien could reasonably be expected to have an adverse effect on the Trustee’s performance or ability to perform its duties hereunder or thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this Trust Supplement, the Intercreditor Agreement, the Class AA Certificates and the Note Documents to which it is or is to become a party will not require the authorization, consent, or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, any governmental authority or agency of the United States or the state of the United States where it is located regulating the banking and corporate trust activities of the Trustee; and
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(d) this Trust Supplement, the Intercreditor Agreement, the Class AA Certificates and the Note Documents to which it is or is to become a party have been, or will be, as applicable, duly executed and delivered by the Trustee and constitute, or will constitute, as applicable, the legal, valid and binding agreements of the Trustee, enforceable against it in accordance with their respective terms; provided, however, that enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.
Section 7.05 Trustee Liens. The Trustee in its individual capacity agrees, in addition to the agreements contained in Section 7.17 of the Basic Agreement, that it will at its own cost and expense promptly take any action as may be necessary to duly discharge and satisfy in full any Trustee’s Liens on or with respect to the Trust Property which are attributable to the Trustee in its individual capacity and which are unrelated to the transactions contemplated by the Intercreditor Agreement.
ARTICLE VIII
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 8.01 Amendment of Sections 5.02 and 6.07 of the Basic Agreement. (a) Section 5.02 of the Basic Agreement shall be amended, with respect to the Class AA Trust, by (i) replacing the phrase “of this Agreement” set forth in paragraph (a) thereof with the phrase “of the Note Documents and of this Agreement”, (ii) replacing the phrase “under this Agreement” set forth in paragraph (b) thereof with the phrase “under this Agreement and any Note Document” and (iii) deleting the phrase “and an Opinion of Counsel of the Company” in paragraph (c) thereof.
(b) Section 6.07 of the Basic Agreement shall be amended and restated in its entirety to read as follows:
“Section 6.07. Certificateholders May Not Bring Suit Except Under Certain Conditions.
A Certificateholder of any series shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Agreement, the related Trust Supplement or the Certificates or otherwise, or for the appointment of a receiver or for the enforcement of any other remedy under this Agreement, the related Trust Supplement or the Certificates or otherwise, unless:
| (1) |
such Certificateholder previously shall have given written notice to the Trustee of a continuing Event of Default; |
| (2) |
Certificateholders holding Certificates of such series evidencing Fractional Undivided Interests aggregating not less than 25% of the related Trust shall have requested the Trustee in writing to institute such action, suit or proceeding and shall have offered to the Trustee indemnity as provided in Section 7.03(e); |
| (3) |
the Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and |
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| (4) |
no Direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by either Certificateholders holding Certificates of such series evidencing Fractional Undivided Interests aggregating not less than a majority in interest in the related Trust or the Controlling Party under the related Intercreditor Agreement. |
Except to the extent provided in any applicable Intercreditor Agreement or in any applicable Trust Supplement, it is understood and intended that no one or more of the Certificateholders of any series shall have any right in any manner whatsoever hereunder or under the related Trust Supplement or under the Certificates of such series to (i) surrender, impair, waive, affect, disturb or prejudice any property in the Trust Property of the related Trust, or the lien of any related Indenture on any property subject thereto, or the rights of the Certificateholders of such series or the holders of the related Equipment Notes, (ii) obtain or seek to obtain priority over or preference with respect to any other such Certificateholder of such series or (iii) enforce any right under this Agreement, the related Trust Supplement or under the Certificates of such series, except in the manner provided in this Agreement and for the equal, ratable and common benefit of all the Certificateholders of such series.”
Section 8.02 Supplemental Agreements Without Consent of Class AA Certificateholders. Without limitation of Section 9.01 of the Basic Agreement, (i) (a) clauses (2) and (3) of such Section 9.01 shall also be deemed to include the Company’s obligations under (in the case of clause (2)), and the Company’s rights and powers conferred by (in the case of clause (3)), any Participation Agreement, (b) references in clauses (4), (5) and (7) of such Section 9.01 to “any Intercreditor Agreement or any Liquidity Facility” shall also be deemed to refer to “the Intercreditor Agreement, the Class AA Liquidity Facility or any Participation Agreement”, (c) references to “any Intercreditor Agreement, any Participation Agreement, any Indenture or any Liquidity Facility” and to “any Intercreditor Agreement or any Liquidity Facility” in clause (8) of such Section 9.01 shall also be deemed to refer to “the Intercreditor Agreement, any Indenture, the Class AA Liquidity Facility or any Participation Agreement”, and (d) the reference to “this Basic Agreement or any Trust Supplement” in clause (13) of such Section 9.01 shall also be deemed to refer to “any Participation Agreement”, (ii) under the terms of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company’s request, at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the formation of one or more Additional Trusts in existence at any one time, the issuance of one or more Classes of Additional Certificates from time to time, the purchase by any Additional Trust of applicable Additional Equipment Notes and other matters incidental thereto or as otherwise contemplated by Section 2.01(b) of the Basic Agreement, all as provided in Section 8.01(d) of the Intercreditor Agreement, (iii) under the terms of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company’s request, at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the formation of one or more Refinancing Trusts, the issuance of one or more Classes of Refinancing Certificates, the purchase by any Refinancing Trust of applicable Refinancing Equipment Notes and other matters incidental thereto or as otherwise contemplated by Section 2.01(b) of the Basic Agreement, all as provided in Section 8.01(c) of the Intercreditor Agreement, and (iv) under the terms of, and subject to the
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limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the request of the Company at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the substitution of any Aircraft pursuant to Section 7.04(f) of the related Indenture and other matters incidental thereto. In addition, the following provisions of Section 9.01 of the Basic Agreement shall be amended, with respect to the Class AA Trust, as follows: (A) Section 9.01(6) of the Basic Agreement shall be amended by inserting the phrase “(or to facilitate any listing of any Certificates on any exchange or quotation system) or any requirement of DTC or like depositary,” after the phrase “any exchange or quotation system on which the Certificates of any series are listed” but before the phrase “or of any regulatory body”; (B) Section 9.01(7) of the Basic Agreement shall be amended by inserting the phrase “to establish or” after the phrase “to such extent as shall be necessary” but before the phrase “to continue”; and (C) Section 9.01(8) of the Basic Agreement shall be amended by replacing the phrase “and to add to or change” with the phrase “, or to evidence the substitution of a Liquidity Provider with a Replacement Liquidity Provider, to provide for a Replacement Liquidity Facility or to incorporate appropriate mechanics for multiple instruments for a Replacement Liquidity Facility for a single Trust, all as provided in any Intercreditor Agreement; or to add to or change”.
Section 8.03 Supplemental Agreements with Consent of Class AA Certificateholders. Without limitation of Section 9.02 of the Basic Agreement, the provisions of Section 9.02 of the Basic Agreement shall apply to agreements or amendments for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Class AA Liquidity Facility or modifying in any manner the rights and obligations of the Class AA Certificateholders under the Class AA Liquidity Facility.
Section 8.04 Consent of Trustees for Amendment of Section 6.01. Notwithstanding any provision in Section 8.02 or Section 8.03 of this Trust Supplement to the contrary, no amendment or modification of Section 6.01 of this Trust Supplement shall be effective unless the trustee for each Class of Certificates affected by such amendment or modification shall have consented thereto.
Section 8.05 Amendment of Section 7.12(c) of the Basic Agreement. For purposes of this Agreement, references to the term “corporation” as used in Section 7.12(c) of the Agreement shall be deemed to include a bank or trust company.
ARTICLE IX
[RESERVED]
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Final Termination Date. The respective obligations and responsibilities of the Company and the Trustee created hereby and the Class AA Trust created hereby shall terminate upon the distribution to all Class AA Certificateholders and the Trustee of all amounts required to be distributed to them pursuant to this Agreement and the disposition of
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all property held as part of the Trust Property; provided, however, that in no event shall the Trust created hereby continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of the United States, living on the date of this Trust Supplement.
Section 10.02 Basic Agreement Ratified. Except and so far as herein expressly provided, all of the provisions, terms and conditions of the Basic Agreement are in all respects ratified and confirmed; and the Basic Agreement and this Trust Supplement shall be taken, read and construed as one and the same instrument. To the extent that any provisions of the Basic Agreement are superseded by any provisions of this Trust Supplement, any reference to such provisions of the Basic Agreement herein or in the Basic Agreement shall be deemed to be to such provisions of this Trust Supplement.
Section 10.03 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS AA CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.04 Counterparts. This Trust Supplement may be executed in any number of counterparts (and each of the parties shall not be required to execute the same counterpart). Each counterpart of this Trust Supplement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Trust Supplement, but all of such counterparts together shall constitute one instrument.
Section 10.05 Intention of Parties. The parties hereto intend that the Class AA Trust be classified for United States federal income tax purposes as a grantor trust under Subpart E, Part I, Subchapter J, Chapter 1 of Subtitle A of the Code, and not as a trust or association taxable as a corporation or as a partnership. Each Certificateholder of, and each Person acquiring a beneficial interest in, a Class AA Certificate, by its acceptance of its Class AA Certificate or a beneficial interest therein, agrees to treat the Class AA Trust as a grantor trust for all United States federal, state and local income tax purposes. The Trustee shall not be authorized or empowered to do anything that would cause the Class AA Trust to fail to qualify as a grantor trust for such tax purposes (including as subject to this restriction, acquiring any Aircraft by bidding the Equipment Notes relating thereto or otherwise, or taking any action with respect to any such Aircraft once acquired).
Section 10.06 Submission to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Agreements hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
Section 10.07 Successor and Assigns. All covenants, agreements, representations and warranties in this Agreement by the Trustee and the Company shall bind and, to the extent permitted hereby, shall inure to the benefit of and be enforceable by their respective successors and assigns, whether so expressed or not. Any request, notice, direction, consent, waiver or other instrument or action by any Class AA Certificateholder shall bind the successors and assigns of such Class AA Certificateholder.
Section 10.08 Normal Commercial Relations. Anything contained in this Agreement to the contrary notwithstanding, the Trustee and any Class AA Certificateholder, or any bank or other affiliate of any such party, may conduct any banking or other financial transactions, and have banking and other commercial relationships, with the Company fully to the same extent as if this Agreement were not in effect, including without limitation the making of loans or other extensions of credit to the Company for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.
Section 10.09 No Recourse against Others. No past, present or future director, officer, employee, agent, member, manager, trustee or stockholder, as such, of the Company or any successor Person shall have any liability for any obligations of the Company or any successor Person, either directly or through the Company or any successor Person, under the Class AA Certificates or this Agreement or for any claim based on, in respect of or by reason of such obligations or their creation, whether by virtue of any rule of law, statute or constitutional provision of by the enforcement of any assessment or by any legal or equitable proceeding or otherwise. By accepting a Class AA Certificate, each Class AA Certificateholder agrees to the provisions of this Section 10.09 and waives and releases all such liability. Such waiver and release shall be part of the consideration for the issue of the Class AA Certificates.
Section 10.10 U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions, in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. Each party to this Trust Supplement agrees for itself that it will provide the Trustee with such information relating to such party as it may reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
IN WITNESS WHEREOF, the parties have caused this Trust Supplement to be duly executed by their respective officers thereto duly authorized as of the date first written above.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
[Signature Page to Trust Supplement No. 2020-1AA (2020-1 EETC)]
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee |
||
| By: |
/s/ David W. Doucette |
|
| Name: David W. Doucette | ||
| Title: Vice President | ||
[Signature Page to Trust Supplement No. 2020-1AA (2020-1 EETC)]
TRUST SUPPLEMENT NO. 2020-1AA
FORM OF CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT EITHER (1) NO ASSETS OF A PLAN OR ANY TRUST ESTABLISHED WITH RESPECT TO A PLAN HAVE BEEN USED TO PURCHASE OR HOLD THIS CERTIFICATE OR AN INTEREST HEREIN, OR (2) THE PURCHASE AND HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN BY SUCH A PERSON ARE EXEMPT FROM THE PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE OR PROVISIONS OF SIMILAR LAW PURSUANT TO ONE OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS OR SIMILAR EXEMPTIONS UNDER SIMILAR LAW, AND (B) DIRECTS THE TRUSTEE TO INVEST IN THE ASSETS HELD IN THE CLASS AA TRUST PURSUANT TO THE TERMS AND CONDITIONS DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATED THERETO. CERTAIN TERMS USED IN THIS PARAGRAPH SHALL HAVE THE MEANINGS SPECIFIED IN THE AGREEMENT.
| * |
This legend to appear on Book-Entry Certificates to be deposited with The Depositary Trust Company. |
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
[GLOBAL CERTIFICATE]†
DELTA AIR LINES PASS THROUGH TRUST 2020-1AA DELTA AIR LINES PASS
THROUGH CERTIFICATE, SERIES 2020-1AA
Final Expected Regular Distribution Date: June 10, 2028
evidencing a fractional undivided interest in the Trust,
the property of which includes or will include, among
other things, certain Equipment Notes each secured by
an Aircraft owned by Delta Air Lines, Inc.
|
Certificate No. _____ |
$_________ Fractional Undivided Interest representing ___% of the Trust per $1,000 face amount |
CUSIP No. [ ] ISIN No. [ ] |
THIS CERTIFIES THAT , for value received, is the registered owner of a $ ( dollars) Fractional Undivided Interest (or such lesser amounts as shall be the aggregate outstanding face amount hereof as set forth in the records of the Trustee) in the Delta Air Lines Pass Through Trust, Series 2020-1AA (the “Trust”) created by U.S. BANK TRUST NATIONAL ASSOCIATION, as successor trustee (together with any successor in interest and any successor or other trustee appointed pursuant to the Trust Supplement referred to below, the “Trustee”) under a Pass Through Trust Agreement, dated as of November 16, 2000 (the “Basic Agreement”), between U.S. Bank Trust National Association (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association) and Delta Air Lines, Inc., a Delaware corporation (together with any successor in interest pursuant to Section 5.02 of the Basic Agreement, the “Company”), as supplemented by Trust Supplement No. 2020-1AA thereto dated as of March 12, 2020 (collectively, and as may be amended from time to time, the “Agreement”), between the Trustee and the Company, a summary of certain of the pertinent provisions of which is set forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Agreement. This Certificate is one of the duly authorized Certificates designated as “Delta Air Lines Pass Through Certificates, Series 2020-1AA” (herein called the “Certificates”). This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement. By virtue of its acceptance hereof, the Certificateholder of this Certificate assents to and agrees to be bound by all of the provisions of the Agreement and the Intercreditor Agreement, including the subordination provisions of Section 9.09 of the Intercreditor Agreement. The Trust Property is expected to include certain Equipment Notes and includes all rights of the Trust and the Trustee, on behalf of the Trust, to receive any payments under the Intercreditor Agreement and the Class AA Liquidity Facility. Each issue of the Equipment Notes will be secured by, among other things, a security interest in the Aircraft owned by the Company.
| † |
To be included on the face of each Global Certificate. |
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
The Certificates represent Fractional Undivided Interests in the Trust and the Trust Property, and will have no rights, benefits or interest in respect of any other separate trust established pursuant to the terms of the Basic Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the Intercreditor Agreement, from funds then available to the Trustee, there will be distributed on each June 10 and December 10 (each, a “Regular Distribution Date”), commencing on June 10, 2020, to the Person in whose name this Certificate is registered at the close of business on the 15th day preceding the Regular Distribution Date, an amount in respect of the Scheduled Payments on the Series AA Equipment Notes due on such Regular Distribution Date, the receipt of which has been confirmed by the Trustee, equal to the product of the percentage interest in the Trust evidenced by this Certificate and an amount equal to the sum of such Scheduled Payments. Subject to and in accordance with the terms of the Agreement and the Intercreditor Agreement, in the event that Special Payments on the Series AA Equipment Notes are received by the Trustee, from funds then available to the Trustee, there shall be distributed on the applicable Special Distribution Date, to the Person in whose name this Certificate is registered at the close of business on the 15th day preceding the applicable Special Distribution Date, an amount in respect of such Special Payments on the Series AA Equipment Notes, the receipt of which has been confirmed by the Trustee, equal to the product of the percentage interest in the Trust evidenced by this Certificate and an amount equal to the sum of such Special Payments so received. If a Regular Distribution Date or Special Distribution Date is not a Business Day, distribution shall be made on the immediately following Business Day and no interest shall accrue during the intervening period. The Trustee shall mail (or in the case of Global Certificates, send electronically in accordance with DTC’s applicable procedures) notice of each Special Payment and the Special Distribution Date therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check mailed to the Person entitled thereto, without the presentation or surrender of this Certificate or the making of any notation hereon, except that with respect to Certificates registered on the Record Date in the name of a Clearing Agency (or its nominee), such distributions shall be made by wire transfer. Except as otherwise provided in the Agreement and notwithstanding the above, the final distribution on this Certificate will be made after notice mailed (or in the case of Global Certificates, sent electronically in accordance with DTC’s applicable procedures) by the Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an obligation guaranteed by, or an interest in, the Company, the Trustee, the Subordination Agent, any Loan Trustee or any Affiliate of any thereof. The Certificates are limited in right of payment, all as more specifically set forth on the face hereof and in the Agreement. All payments or distributions made to Certificateholders under the Agreement shall be made only from the Trust Property and only to the extent that the Trustee shall have sufficient income or proceeds from the Trust Property to make such payments in accordance with the terms of the Agreement. Each Certificateholder of this Certificate, by its acceptance hereof, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for any payment or distribution to such Certificateholder pursuant to the terms of the Agreement and that it will not have any recourse to the Company, the Trustee, the Loan Trustees or any Affiliate of any thereof except as otherwise expressly provided in the Agreement, in any Note Document or in the Intercreditor Agreement.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for information with respect to the interests, rights, benefits, obligations, proceeds and duties evidenced hereby. A copy of the Agreement may be examined during normal business hours at the principal office of the Trustee, and at such other places, if any, designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the amendment thereof, and the modification of the rights and obligations of the Company and the rights of the Certificateholders under the Agreement, at any time by the Company and the Trustee with the consent of the Certificateholders holding Certificates evidencing Fractional Undivided Interests aggregating not less than a majority in interest in the Trust. Any such consent by the Certificateholder of this Certificate shall be conclusive and binding on such Certificateholder and upon all future Certificateholders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set forth therein, the transfer of this Certificate is registrable in the Register upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Trustee in its capacity as Registrar, or by any successor Registrar, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Registrar, duly executed by the Certificateholder hereof or such Certificateholder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate Fractional Undivided Interest in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in minimum denominations of $2,000 (or such other denomination that is the lowest integral multiple of $1,000 that is, at the time of issuance, equal to at least 1,000 euros) Fractional Undivided Interest and integral multiples of $1,000 in excess thereof except that one Certificate may be issued in a different denomination. As provided in the Agreement and subject to certain limitations therein set forth, the Certificates are exchangeable for new Certificates of authorized denominations evidencing the same aggregate Fractional Undivided Interest in the Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the Trustee shall require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall deem and treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Company, the Trustee, the Registrar or any such agent shall be affected by any notice to the contrary.
Each Certificateholder and Person with a beneficial interest herein, by its acceptance of this Certificate or such interest, agrees to treat the Trust as a grantor trust for all U.S. federal, state and local income tax purposes.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
The obligations and responsibilities created by the Agreement and the Trust created thereby shall terminate upon the distribution to Certificateholders of all amounts required to be distributed to them pursuant to the Agreement and the disposition of all property held as part of the Trust Property.
Any Person acquiring or accepting this Certificate or an interest herein will, by such acquisition or acceptance, be deemed to (a) represent and warrant to the Company, the Loan Trustees and the Trustee that either: (i) no assets of a Plan or any trust established with respect to a Plan have been used to purchase or hold this Certificate or an interest herein or (ii) the purchase and holding of this Certificate or interest herein by such Person are exempt from the prohibited transaction restrictions of ERISA and the Code or provisions of Similar Law pursuant to one or more prohibited transaction statutory or administrative exemptions or similar exemptions under Similar Law and (b) direct the Trustee to invest the assets held in the Trust pursuant to, and take all other actions contemplated by, the terms and conditions of the Basic Agreement, this Trust Supplement, the Intercreditor Agreement and each Participation Agreement.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been executed by the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
| DELTA AIR LINES PASS THROUGH TRUST 2020-1AA | ||
| By: |
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee |
|
| By: |
|
|
| Title: | ||
Dated:
|
Trust Supplement No. 2020-1AA (2020-1 EETC) |
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee |
||
| By: |
|
|
| Authorized Officer | ||
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
Please print or typewrite name and address including zip code of assignee
the within Certificate and all rights thereunder, hereby irrevocably constituting and appointing ___________________________________ attorney to transfer said Certificate on the books of the Trustee with full power of substitution in the premises.
| Date: | NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. | |||
| SIGNATURE GUARANTEE: __________________ | ||||
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
EXHIBIT B to
TRUST SUPPLEMENT NO. 2020-1AA
DTC LETTER OF REPRESENTATIONS
|
Trust Supplement No. 2020-1AA (2020-1 EETC) |
SCHEDULE I to
TRUST SUPPLEMENT NO. 2020-1AA
SERIES AA EQUIPMENT NOTES,
PRINCIPAL AMOUNTS, MATURITIES AND AIRCRAFT
|
Initial Principal
Amount of Series AA Equipment Notes |
Maturity |
Aircraft |
Aircraft Registration Number |
|||||
| $ | 22,203,000 | June 10, 2028 | Airbus A321-211 | N301DV | ||||
| 22,421,000 | June 10, 2028 | Airbus A321-211 | N305DN | |||||
| 22,545,000 | June 10, 2028 | Airbus A321-211 | N306DN | |||||
| 22,545,000 | June 10, 2028 | Airbus A321-211 | N307DX | |||||
| 23,690,000 | June 10, 2028 | Airbus A321-211 | N319DN | |||||
| 17,552,000 | June 10, 2027 | Boeing 737-932ER | N826DN | |||||
| 17,766,000 | June 10, 2027 | Boeing 737-932ER | N827DN | |||||
| 17,906,000 | June 10, 2027 | Boeing 737-932ER | N828DN | |||||
| 18,063,000 | June 10, 2027 | Boeing 737-932ER | N829DN | |||||
| 18,344,000 | June 10, 2027 | Boeing 737-932ER | N830DN | |||||
| 18,268,000 | June 10, 2027 | Boeing 737-932ER | N831DN | |||||
| 18,682,000 | June 10, 2027 | Boeing 737-932ER | N832DN | |||||
| 18,920,000 | June 10, 2027 | Boeing 737-932ER | N834DN | |||||
| 19,220,000 | June 10, 2027 | Boeing 737-932ER | N835DN | |||||
| 19,030,000 | December 10, 2027 | Boeing 737-932ER | N836DN | |||||
| 18,830,000 | December 10, 2027 | Boeing 737-932ER | N837DN | |||||
| 19,402,000 | December 10, 2027 | Boeing 737-932ER | N838DN | |||||
| 19,202,000 | December 10, 2027 | Boeing 737-932ER | N839DN | |||||
| 19,019,000 | December 10, 2027 | Boeing 737-932ER | N840DN | |||||
| 19,688,000 | December 10, 2027 | Boeing 737-932ER | N841DN | |||||
| 20,682,000 | December 10, 2027 | Boeing 737-932ER | N851DN | |||||
| 20,374,000 | December 10, 2027 | Boeing 737-932ER | N852DN | |||||
| 20,801,000 | December 10, 2027 | Boeing 737-932ER | N853DN | |||||
| 20,234,000 | June 10, 2028 | Boeing 737-932ER | N854DN | |||||
| 20,261,000 | June 10, 2028 | Boeing 737-932ER | N855DN | |||||
| 20,569,000 | June 10, 2028 | Boeing 737-932ER | N856DN | |||||
| 20,623,000 | June 10, 2028 | Boeing 737-932ER | N857DZ | |||||
| 41,175,000 | June 10, 2027 | Airbus A330-302 | N822NW | |||||
| 41,350,000 | June 10, 2027 | Airbus A330-302 | N824NW | |||||
| 41,882,000 | December 10, 2027 | Airbus A330-302 | N823NW | |||||
| 44,006,000 | December 10, 2027 | Airbus A330-302 | N825NW | |||||
| 43,407,000 | June 10, 2028 | Airbus A330-302 | N826NW | |||||
| 47,234,000 | June 10, 2028 | Airbus A330-302 | N831NW | |||||
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
SCHEDULE II to
TRUST SUPPLEMENT NO. 2020-1AA
NOTE DOCUMENTS
Participation Agreement
Indenture
Manufacturer’s Consent (as defined in any applicable Indenture)
For each of the aircraft listed in Schedule I.
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Trust Supplement No. 2020-1AA (2020-1 EETC) |
Exhibit 4.2
TRUST SUPPLEMENT NO. 2020-1A
Dated as of March 12, 2020
between
DELTA AIR LINES, INC.
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
To
PASS THROUGH TRUST AGREEMENT
Dated as of November 16, 2000
Delta Air Lines Pass Through Trust 2020-1A
Delta Air Lines Pass Through Certificates,
Series 2020-1A
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Trust Supplement No. 2020-1A (2020-1 EETC) |
Table of Contents
| Page | ||||||
|
ARTICLE I DEFINITIONS |
2 | |||||
|
Section 1.01 |
Definitions | 2 | ||||
|
ARTICLE II DECLARATION OF TRUST |
8 | |||||
|
Section 2.01 |
Declaration of Trust | 8 | ||||
|
Section 2.02 |
Permitted Activities | 8 | ||||
|
ARTICLE III THE CERTIFICATES |
8 | |||||
|
Section 3.01 |
The Certificates | 8 | ||||
|
Section 3.02 |
Terms and Conditions | 9 | ||||
|
ARTICLE IV ISSUANCE AND TRANSFER OF THE CLASS A CERTIFICATES |
10 | |||||
|
Section 4.01 |
Issuance of Class A Certificates | 10 | ||||
|
Section 4.02 |
Legends | 11 | ||||
|
Section 4.03 |
Book-Entry Provisions for Global Certificates | 12 | ||||
|
ARTICLE V DISTRIBUTION; STATEMENTS TO CERTIFICATEHOLDERS |
13 | |||||
|
Section 5.01 |
Statements to Certificateholders | 13 | ||||
|
ARTICLE VI DEFAULT |
15 | |||||
|
Section 6.01 |
Purchase Rights of Certificateholders | 15 | ||||
|
ARTICLE VII THE TRUSTEE |
17 | |||||
|
Section 7.01 |
Delivery of Documents; Delivery Dates | 17 | ||||
|
Section 7.02 |
[Reserved] | 19 | ||||
|
Section 7.03 |
The Trustee | 19 | ||||
|
Section 7.04 |
Representations and Warranties of the Trustee | 19 | ||||
|
Section 7.05 |
Trustee Liens | 20 | ||||
|
ARTICLE VIII ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS |
20 | |||||
|
Section 8.01 |
Amendment of Sections 5.02 and 6.07 of the Basic Agreement | 20 | ||||
|
Section 8.02 |
Supplemental Agreements Without Consent of Class A Certificateholders | 21 | ||||
|
Section 8.03 |
Supplemental Agreements with Consent of Class A Certificateholders | 22 | ||||
|
Section 8.04 |
Consent of Trustees for Amendment of Section 6.01 | 22 | ||||
|
Section 8.05 |
Amendment of Section 7.12(c) of the Basic Agreement | 23 | ||||
| i |
Trust Supplement No. 2020-1A (2020-1 EETC) |
| Page | ||||||
|
ARTICLE IX [RESERVED] |
23 | |||||
|
ARTICLE X MISCELLANEOUS PROVISIONS |
23 | |||||
|
Section 10.01 |
Final Termination Date | 23 | ||||
|
Section 10.02 |
Basic Agreement Ratified | 23 | ||||
|
Section 10.03 |
Governing Law | 23 | ||||
|
Section 10.04 |
Counterparts | 23 | ||||
|
Section 10.05 |
Intention of Parties | 24 | ||||
|
Section 10.06 |
Submission to Jurisdiction | 24 | ||||
|
Section 10.07 |
Successor and Assigns | 24 | ||||
|
Section 10.08 |
Normal Commercial Relations | 24 | ||||
|
Section 10.09 |
No Recourse against Others | 24 | ||||
|
Section 10.10 |
U.S.A. Patriot Act | 25 | ||||
| EXHIBITS | ||||
| Exhibit A | - | Form of Certificate | ||
| Exhibit B | - | DTC Letter of Representations | ||
| SCHEDULES | ||||
| Schedule I | - | Series A Equipment Notes, Principal Amounts, Maturities and Aircraft | ||
| Schedule II | - | Note Documents | ||
(ii)
TRUST SUPPLEMENT NO. 2020-1A
This TRUST SUPPLEMENT NO. 2020-1A, dated as of March 12, 2020 (as amended from time to time, the “Trust Supplement”), between DELTA AIR LINES, INC., a Delaware corporation (together with any successor in interest pursuant to Section 5.02 of the Basic Agreement, the “Company” or “Delta”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as successor trustee (together with any successor in interest and any successor or other trustee appointed as provided in the Basic Agreement, the “Trustee”) under the Pass Through Trust Agreement, dated as of November 16, 2000, between the Company and U.S. Bank Trust National Association, as successor in interest to State Street Bank and Trust Company of Connecticut, National Association (the “Basic Agreement”).
W I T N E S S E T H:
WHEREAS, the Basic Agreement, which is unlimited as to the aggregate face amount of Certificates that may be issued and authenticated thereunder, has heretofore been executed and delivered;
WHEREAS, Delta is the owner of the thirty-three (33) aircraft described in Schedule I (the “Aircraft”), and Delta wishes to finance the Aircraft through the issuance of the Equipment Notes;
WHEREAS, pursuant to each Indenture, Delta will issue on a recourse basis two series of Equipment Notes secured by the related Aircraft and may issue one or more series of Additional Equipment Notes and one or more series of Refinancing Equipment Notes;
WHEREAS, the Trustee shall hereby declare the creation of the Class A Trust (as defined below) for the benefit of Holders of the Class A Certificates (as defined below) to be issued in respect of such Class A Trust, and the initial Holders of the Class A Certificates, as grantors of such Class A Trust, by their respective acceptances of the Class A Certificates, shall join in the creation of the Class A Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Class A Trust will evidence Fractional Undivided Interests in the Class A Trust and will have no rights, benefits or interests in respect of any other separate Trust or the property held therein;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement, as supplemented by this Trust Supplement and the Participation Agreements, the Trustee on behalf of the Class A Trust shall purchase the Series A Equipment Notes issued by the Company pursuant to the Indentures related to the Aircraft having the identical interest rate as, and final maturity dates not later than the final Regular Distribution Date of, the Class A Certificates issued hereunder and shall hold such Series A Equipment Notes in trust for the benefit of the Class A Certificateholders;
WHEREAS, pursuant to the terms and conditions of the Intercreditor Agreement referred to in Section 3.02(j) hereof, the Trustee and the other parties thereto will agree to the terms of subordination set forth therein;
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WHEREAS, all of the conditions and requirements necessary to make this Trust Supplement, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery of this Trust Supplement in the form and with the terms hereof have been in all respects duly authorized; and
WHEREAS, the Basic Agreement, as supplemented by this Trust Supplement, is subject to the provisions of the Trust Indenture Act and shall, to the extent applicable, be governed by such provisions.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless otherwise specified herein or the context otherwise requires, capitalized terms used but not defined herein, including in the recitals hereto, shall have the respective meanings set forth, and shall be construed and interpreted in the manner described, in the Basic Agreement. As used herein, the term “Agreement” shall mean the Basic Agreement, as supplemented by this Trust Supplement. For all purposes of the Basic Agreement as supplemented by this Trust Supplement, the following capitalized terms have the following meanings (any term used herein which is defined in both this Trust Supplement and the Basic Agreement shall have the meaning assigned thereto in this Trust Supplement for purposes of the Basic Agreement as supplemented by this Trust Supplement).
Additional Certificateholder: Has the meaning specified in the Intercreditor Agreement.
Additional Certificates: Has the meaning specified in the Intercreditor Agreement.
Additional Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Additional Trust: Has the meaning specified in the Intercreditor Agreement.
Additional Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Affiliate: Has the meaning specified in the Intercreditor Agreement.
Agreement: Has the meaning specified in the first paragraph of Section 1.01 of this Trust Supplement.
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Aircraft: Has the meaning specified in the recitals to this Trust Supplement and shall include any Replacement Aircraft and Substitute Aircraft (each as defined in the applicable Indenture) in replacement or substitution thereof in accordance with the applicable Indenture.
Applicable Participation Agreement: Has the meaning specified in Section 7.01(b) of this Trust Supplement.
Basic Agreement: Has the meaning specified in the preamble to this Trust Supplement.
Benefit Plan Investor: (a) Any employee benefit plan (as defined in Section 3(3) of ERISA), that is subject to the fiduciary provisions of Title I of ERISA, (b) any plan to which Section 4975 of the Code applies and (c) any entity whose underlying assets include plan assets by reason of an employee benefit plan’s or a plan’s investment in the entity or otherwise.
Business Day: Has the meaning specified in the Intercreditor Agreement.
Certificate: Means a Class AA Certificate or a Class A Certificate, as applicable.
Certificate Buy-Out Event: Has the meaning specified in the Intercreditor Agreement.
Certificateholder: Means, with respect to any Class of Certificates, the Person in whose name a Certificate is registered in the Register for the Certificates of such Class.
Class: Has the meaning specified in the Intercreditor Agreement.
Class AA Certificateholder: Means, at any time, any Certificateholder of one or more Class AA Certificates.
Class AA Certificates: Has the meaning specified in the Intercreditor Agreement.
Class AA Trust: Has the meaning specified in the Intercreditor Agreement.
Class AA Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Class AA Trustee: Has the meaning specified in the Intercreditor Agreement.
Class A Certificateholder: Means, at any time, any Certificateholder of one or more Class A Certificates.
Class A Certificates: Has the meaning specified in Section 3.01 of this Trust Supplement.
Class A Liquidity Facility: Has the meaning specified in the Intercreditor Agreement.
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Class A Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Class A Trust: Has the meaning specified in Section 2.01 of this Trust Supplement.
Code: Means the Internal Revenue Code of 1986, as amended.
Company: Has the meaning specified in the preamble to this Trust Supplement.
Corporate Trust Office: Has the meaning specified in the Intercreditor Agreement.
Definitive Certificates: Has the meaning specified in Section 4.01(e) of this Trust Supplement.
Delta: Has the meaning specified in the preamble to this Trust Supplement.
Distribution Date: Means a Regular Distribution Date or a Special Distribution Date.
DTC: Has the meaning specified in Section 3.02(f) of this Trust Supplement.
DTC Participants: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
ERISA: Means the Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to any Indenture, has the meaning specified in Section 4.01 of such Indenture.
Fractional Undivided Interests: Has the meaning specified in the Intercreditor Agreement.
Global Certificate: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Holder: Means a Certificateholder.
Indenture: Has the meaning specified in the Intercreditor Agreement.
Indirect Participants: Has the meaning specified in Section 4.01(b) of this Trust Supplement.
Intercreditor Agreement: Has the meaning specified in Section 3.02(j) of this Trust Supplement.
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Issuance Date: Has the meaning specified in Section 7.01(a) of this Trust Supplement.
Junior Additional Certificateholder: Means, with respect to any Additional Certificateholder exercising its right to purchase Certificates under Section 6.01 of this Trust Supplement, any holder of any class of Additional Certificates that rank junior, in priority of payment of “Expected Distributions” for such class under the Intercreditor Agreement, to the class of Additional Certificates held by such Additional Certificateholder.
Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Loan Trustee: Means, with respect to any Indenture, the bank, trust company or other financial institution designated as loan trustee thereunder, and any successor to such loan trustee.
Note Documents: Means, collectively, the Participation Agreements, the Indentures, each Indenture Supplement (as defined in any Indenture), each Manufacturer’s Consent (as defined in any Indenture) and the Equipment Notes.
Operative Agreements: Has the meaning specified in the Intercreditor Agreement.
Other Agreements: Means (i) the Class AA Trust Agreement, (ii) any Additional Trust Agreement and (iii) any Refinancing Trust Agreement.
Other Trustees: Means the trustees under the Other Agreements, and any successor or other trustee appointed as provided therein.
Other Trusts: Means the Class AA Trust, any Additional Trust or Trusts, or any Refinancing Trust or Trusts, in each case created by the applicable Other Agreement.
Participation Agreement: Has the meaning specified in the Intercreditor Agreement.
Paying Agent: Means, with respect to the Class A Certificates, the paying agent maintained and appointed for such Class A Certificates pursuant to Section 7.12 of the Basic Agreement.
Person: Means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.
Plan: Means (i) a retirement plan or other employee benefit plan or arrangement, including for this purpose an individual retirement account, annuity or Keogh plan, that is subject to Title I of ERISA or Section 4975 of the Code, (ii) any other entity whose underlying assets are deemed to include the assets of any plan or arrangement described in (i) above by virtue of the U.S. Department of Labor regulation in 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA (or any successor to such regulation), or (iii) such a plan or arrangement which is a foreign, church or governmental plan or arrangement exempt from Title I of ERISA and Section 4975 of the Code but subject to a Similar Law.
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Plan Fiduciary: Has the meaning specified in Section 3.02(i) of this Trust Supplement.
Pool Balance: Means, as of any date, (i) the original aggregate face amount of the Class A Certificates less (ii) the aggregate amount of all distributions made as of such date in respect of the Class A Certificates other than distributions made in respect of interest or Premium or reimbursement of any costs or expenses incurred in connection therewith. The Pool Balance as of any date shall be computed after giving effect to any distribution with respect to the payment of principal, if any, of the Series A Equipment Notes or payment with respect to other Trust Property and the distribution thereof to be made on such date.
Pool Factor: Means, as of any Distribution Date, the quotient (rounded to the seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the original aggregate face amount of the Class A Certificates. The Pool Factor as of any Distribution Date shall be computed after giving effect to any distribution with respect to payment of principal, if any, of the Series A Equipment Notes or payment with respect to other Trust Property and the distribution thereof to be made on that date.
Premium: Has the meaning specified in the Intercreditor Agreement.
Prospectus Supplement: Means the final prospectus supplement, dated March 4, 2020, relating to the offering of the Certificates.
Rating Agencies: Has the meaning specified in the Intercreditor Agreement.
Refinancing Certificateholder: Has the meaning specified in the Intercreditor Agreement.
Refinancing Certificates: Has the meaning specified in the Intercreditor Agreement.
Refinancing Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Refinancing Trust: Has the meaning specified in the Intercreditor Agreement.
Refinancing Trust Agreement: Has the meaning specified in the Intercreditor Agreement.
Regular Distribution Date: Has the meaning specified in Section 3.02(c) of this Trust Supplement.
Replacement Liquidity Facility: Has the meaning specified in the Intercreditor Agreement.
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Replacement Liquidity Provider: Has the meaning specified in the Intercreditor Agreement.
Responsible Officer: Has the meaning specified in the Intercreditor Agreement.
Scheduled Payment: Has the meaning specified in the Intercreditor Agreement.
Securities Act: Means the Securities Act of 1933, as amended.
Series A Equipment Notes: Has the meaning specified in the Intercreditor Agreement.
Similar Law: Means a foreign, federal, state, or local law which is substantially similar to the prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code.
Special Distribution Date: Means, with respect to the Class A Certificates, each date on which a Special Payment is to be distributed as specified in this Agreement.
Special Payment: Means any payment (other than a Scheduled Payment) in respect of, or any proceeds of, any Equipment Note or the Collateral (as defined in any Indenture).
Special Payments Account: Means, with respect to the Class A Certificates, the account or accounts created and maintained for such series pursuant to Section 4.01(b) of the Basic Agreement (as modified by Section 7.01(c) of this Trust Supplement) and this Trust Supplement.
Subordination Agent: Has the meaning specified in the Intercreditor Agreement.
Triggering Event: Has the meaning specified in the Intercreditor Agreement.
Trust: Means the Class AA Trust or the Class A Trust, as applicable.
Trust Indenture Act: Means the Trust Indenture Act of 1939, as amended.
Trust Property: Means (i) subject to the Intercreditor Agreement, the Series A Equipment Notes held as the property of the Class A Trust, all monies at any time paid thereon and all monies due and to become due thereunder, (ii) funds from time to time deposited in the Certificate Account and the Special Payments Account and, subject to the Intercreditor Agreement, any proceeds from the sale by the Trustee pursuant to Article VI of the Basic Agreement of any Equipment Notes and (iii) all rights of the Class A Trust and the Trustee, on behalf of the Class A Trust, under the Intercreditor Agreement and the Class A Liquidity Facility, including, without limitation, all rights to receive certain payments thereunder, and all monies paid to the Trustee on behalf of the Class A Trust pursuant to the Intercreditor Agreement or the Class A Liquidity Facility.
Trust Supplement: Has the meaning specified in the preamble hereto.
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Trustee: Has the meaning specified in the preamble to this Trust Supplement.
Underwriters: Means Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, BBVA Securities Inc., Deutsche Bank Securities Inc., PNC Capital Markets LLC, Standard Chartered Bank, AmeriVet Securities, Inc. and Natixis Securities Americas LLC.
Underwriting Agreement: Means the Underwriting Agreement, dated March 4, 2020, among the Representatives (as defined in the Underwriting Agreement) of the Underwriters and the Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
ARTICLE II
DECLARATION OF TRUST
Section 2.01 Declaration of Trust. The Trustee hereby declares the creation of a Trust, designated the “Delta Air Lines Pass Through Trust 2020-1A” (the “Class A Trust”), for the benefit of the Holders of the Class A Certificates to be issued in respect of such Class A Trust, and the initial Holders of the Class A Certificates, as grantors of such Class A Trust, by their respective acceptances of the Class A Certificates, join in the creation of such Class A Trust with the Trustee. The Trustee, by the execution and delivery of this Trust Supplement, acknowledges its acceptance of all right, title and interest in and to the Trust Property to be acquired pursuant to Section 7.01(b) of this Trust Supplement and the Participation Agreements and the Trustee will hold such right, title and interest for the benefit of all present and future Holders of the Class A Certificates, upon the trusts set forth in the Basic Agreement and this Trust Supplement. The provisions of this Section 2.01 supersede and replace the provisions of Section 2.03 of the Basic Agreement, with respect to the Class A Trust.
Section 2.02 Permitted Activities. The Class A Trust may only engage in the transactions contemplated by the Operative Agreements, subject to Section 10.05 of this Trust Supplement.
ARTICLE III
THE CERTIFICATES
Section 3.01 The Certificates. There is hereby created a series of Certificates to be issued under this Agreement designated as “Delta Air Lines Pass Through Certificates, Series 2020-1A” (the “Class A Certificates”). Each Class A Certificate represents a Fractional Undivided Interest in the Class A Trust created hereby. The Class A Certificates shall be the only instruments evidencing a Fractional Undivided Interest in the Class A Trust. The Class A Certificates do not represent indebtedness of the Class A Trust, and references herein to interest accruing on the Class A Certificates are included for purposes of computation only.
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Section 3.02 Terms and Conditions. The terms and conditions applicable to the Class A Certificates and the Class A Trust are as follows:
(a) The aggregate face amount of the Class A Certificates that may be authenticated and delivered under this Agreement (except for Class A Certificates authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Class A Certificates pursuant to Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement and Section 4.03 of this Trust Supplement) is $204,106,000.
(b) [Reserved]
(c) The distribution dates with respect to any payment of Scheduled Payments (each such distribution date, a “Regular Distribution Date”) shall be June 10 and December 10, commencing on June 10, 2020, until payment of all of the Scheduled Payments to be made under the Equipment Notes has been made; provided, however, that, if any such day shall not be a Business Day, the related distribution shall be made on the next succeeding Business Day without additional interest.
(d) The Special Distribution Date with respect to the Class A Certificates means any Business Day on which a Special Payment is to be distributed pursuant to this Agreement.
(e) [Reserved]
(f) The Class A Certificates shall be in the form attached hereto as Exhibit A, shall be Book-Entry Certificates (subject to Section 3.05(d) of the Basic Agreement and Section 4.03 of this Trust Supplement), and shall be subject to the conditions set forth in the Letter of Representations between the Class A Trust and The Depository Trust Company and any successor agency thereto (“DTC”), as initial Clearing Agency, attached hereto as Exhibit B.
(g) The proceeds of the offering of Class A Certificates issued by the Class A Trust shall be used on the date hereof to acquire the Series A Equipment Notes described in Schedule I that relate to the Aircraft and to the Note Documents described in Schedule II.
(h) Any Person acquiring or accepting a Class A Certificate or an interest therein will, by such acquisition or acceptance, be deemed to (i) represent and warrant to the Company, the Loan Trustees and the Trustee that either (1) no assets of a Plan or any trust established with respect to a Plan have been used to purchase or hold Class A Certificates or an interest therein or (2) the purchase and holding of Class A Certificates or interests therein by such Person are exempt from the prohibited transaction restrictions of ERISA and the Code or provisions of Similar Law pursuant to one or more prohibited transaction statutory or administrative exemptions or similar exemptions under Similar Law and (ii) direct the Trustee to invest the assets held in the Trust pursuant to, and take all other actions contemplated by, the terms and conditions of the Basic Agreement, this Trust Supplement, the Intercreditor Agreement and each Participation Agreement.
(i) Each Person or transferee of any Class A Certificate or beneficial interest therein that is a Benefit Plan Investor will be deemed to represent, warrant and agree that (i) none of the Company or any of its affiliates or other persons that provide marketing services, nor any of their affiliates, has provided, and none of them will provide, any investment recommendation
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or investment advice on which it, or any fiduciary or other person investing the assets of the Benefit Plan Investor (“Plan Fiduciary”), has relied or will rely as a primary basis in connection with its decision to invest in the Class A Certificates, and they are not otherwise acting as a fiduciary, as defined in Section 3(21) of ERISA or Section 4975(e)(3) of the Code, to the Benefit Plan Investor or the Plan Fiduciary in connection with the Benefit Plan Investor’s acquisition of the Class A Certificates; and (ii) the Plan Fiduciary is exercising its own independent judgment in evaluating the investment in the Class A Certificates.
(j) The Class A Certificates will be subject to the following Intercreditor Agreement (and to the extent the terms thereof (including the definitions of defined terms) are inconsistent with the terms of this Agreement, such Intercreditor Agreement shall control): that certain Intercreditor Agreement, dated as of the date hereof, among U.S. Bank Trust National Association, as Trustee and as Class AA Trustee, National Australia Bank Limited, acting through its New York branch, as each Liquidity Provider, and U.S. Bank Trust National Association, as Subordination Agent thereunder (as may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Intercreditor Agreement”). Under Article VI hereof, the Holders of the Class A Certificates, Additional Certificates (if issued) or Refinancing Certificates (if issued) shall have the rights upon the occurrence of a Certificate Buy Out Event set forth therein. The Trustee and, by acceptance of any Class A Certificate, each Certificateholder thereof, agrees to be bound by all of the provisions of the Intercreditor Agreement, including the subordination provisions of Section 9.09 thereof.
(k) [Reserved]
(l) The Class A Certificates will have the benefit of the following liquidity facility: that certain Revolving Credit Agreement (2020-1A), dated as of the date hereof, between U.S. Bank Trust National Association, as Subordination Agent under the Intercreditor Agreement, as agent and trustee for the Class A Trust, and the Class A Liquidity Provider.
(m) The Responsible Party is the Company.
(n) The Company, any other obligor upon the Class A Certificates, and any Affiliate thereof may acquire, tender for, purchase, own, hold, become the pledgee of and otherwise deal with any Class A Certificate.
ARTICLE IV
ISSUANCE AND TRANSFER OF THE CLASS A CERTIFICATES
Section 4.01 Issuance of Class A Certificates. (a) The Class A Certificates will be issued in minimum denominations of $2,000 (or such other denomination that is the lowest integral multiple of $1,000 that is, at the time of issuance, equal to at least 1,000 euros) and integral multiples of $1,000 in excess thereof, except that one Certificate may be issued in a different denomination. Each Class A Certificate shall be dated the date of its authentication.
(b) The Class A Certificates shall be issued initially in the form of one or more global Certificates in definitive, fully registered form without interest coupons,
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substantially in the form of Exhibit A hereto (each, a “Global Certificate”), duly executed and authenticated by the Trustee as hereinafter provided. Each Global Certificate will be registered in the name of a nominee for DTC for credit to the account of members of, or participants in, DTC (“DTC Participants”) or to the account of indirect participants that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”), and will be deposited with the Trustee, as custodian for DTC. The aggregate principal amount of a Global Certificate may from time to time be decreased by adjustments made on the records of DTC or its nominee, or of the Trustee, as custodian for DTC or its nominee, as hereinafter provided, which adjustments shall be conclusive as to the aggregate principal amount of any such Global Certificate.
(c) [Reserved]
(d) [Reserved]
(e) Certificated Certificates in registered form shall be issued in substantially the form set forth as Exhibit A hereto (the “Definitive Certificates”) and shall be in fully registered form and shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner, all as determined by the officers executing such Definitive Certificates, as evidenced by their execution of such Definitive Certificates.
Section 4.02 Legends. (a) Each Global Certificate shall bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(b) Each Class A Certificate shall bear the following legend on the face thereof:
BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT EITHER (1) NO ASSETS OF A PLAN OR ANY TRUST ESTABLISHED WITH RESPECT TO A PLAN HAVE BEEN USED TO PURCHASE OR HOLD THIS CERTIFICATE OR AN INTEREST HEREIN, OR (2) THE PURCHASE AND HOLDING OF THIS CERTIFICATE OR INTEREST
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HEREIN BY SUCH A PERSON ARE EXEMPT FROM THE PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE OR PROVISIONS OF SIMILAR LAW PURSUANT TO ONE OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS OR SIMILAR EXEMPTIONS UNDER SIMILAR LAW, AND (B) DIRECTS THE TRUSTEE TO INVEST IN THE ASSETS HELD IN THE CLASS A TRUST PURSUANT TO THE TERMS AND CONDITIONS DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATED THERETO. CERTAIN TERMS USED IN THIS PARAGRAPH SHALL HAVE THE MEANINGS SPECIFIED IN THE AGREEMENT.
Section 4.03 Book-Entry Provisions for Global Certificates. (a) DTC Participants shall have no rights under this Agreement with respect to any Global Certificate held on their behalf by DTC, or the Trustee as its custodian, and DTC may be treated by the Trustee and any agent of the Trustee as the absolute owner of such Global Certificate for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Trustee or any agent of the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or shall impair, as between DTC and its DTC Participants, the operation of customary practices governing the exercise of the rights of a holder of any Class A Certificate. Upon the issuance of any Global Certificate, the Registrar or its duly appointed agent shall record Cede & Co. or another nominee of DTC as the registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be limited to transfers of such Global Certificate in whole, but not in part, to nominees of DTC, its successor or such successor’s nominees. Beneficial interests in Global Certificates may be transferred in accordance with the rules and procedures of DTC and the provisions of Section 4.02 of this Trust Supplement. Beneficial interests in Global Certificates shall be delivered to all beneficial owners thereof in the form of Definitive Certificates, only if (i) DTC notifies the Trustee in writing that it is no longer willing or able to discharge properly its responsibilities as depositary for the Global Certificates, and a successor depositary is not appointed by the Trustee within 90 days of such notice, (ii) the Company, at its option, advises the Trustee in writing that it elects to terminate the book-entry system through DTC or (iii) after the occurrence and during the continuance of an Event of Default, Class A Certificateholders with Fractional Undivided Interests aggregating not less than a majority in interest in all Fractional Undivided Interests in the Class A Trust advise the Trustee, the Company and DTC through DTC Participants in writing that the continuation of a book-entry system through DTC (or a successor thereto) is no longer in the Class A Certificateholders’ best interests. Neither the Company nor the Trustee shall be liable if the Company or the Trustee is unable to locate a qualified successor clearing system.
(c) [Reserved]
(d) In connection with the transfer of the entire amount of a Global Certificate to the beneficial owners thereof pursuant to paragraph (b) of this Section 4.03, such Global Certificate shall be deemed to be surrendered to the Trustee for cancellation, and the Trustee shall execute, authenticate and deliver to each beneficial owner, in exchange for the beneficial
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interest thereof in such Global Certificate, an equal aggregate face amount of Definitive Certificates of authorized denominations, in each case as such beneficial owner and related aggregate face amount shall have been identified and otherwise set forth (together with such other information as may be required for the registration of such Definitive Certificates) in registration instructions that shall have been delivered by or on behalf of DTC to the Trustee. None of the Company, the Registrar, the Paying Agent nor the Trustee shall be liable for any delay in delivery of such registration instructions and each such Person may conclusively rely on, and shall be protected in relying on, such registration instructions. Upon the issuance of any Definitive Certificate, the Trustee shall recognize the Person in whose name such Definitive Certificate is registered in the Register as a Certificateholder hereunder.
(e) The registered Holder of a Global Certificate may grant proxies and otherwise authorize any Person, including DTC Participants and Persons that may hold interests through DTC Participants, to take any action which a Holder is entitled to take under this Agreement or the Class A Certificates.
(f) Neither the Company, nor the Trustee, nor the Registrar, nor the Paying Agent shall have any responsibility or liability for: (i) any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Certificates, (ii) maintaining, supervising or reviewing any records relating to such beneficial ownership interests or (iii) the performance by DTC, any DTC Participant or any Indirect Participant of their respective obligations under the rules, regulations and procedures creating and affecting DTC and its operation or any other statutory, regulatory, contractual or customary procedures governing their obligations.
ARTICLE V
DISTRIBUTION; STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01 Statements to Certificateholders. (a) On each Regular Distribution Date and Special Distribution Date, the Trustee will include with each distribution to the Class A Certificateholders a statement, giving effect to the distribution to be made on such Regular Distribution Date or Special Distribution Date, setting forth the following information (per $1,000 aggregate face amount of Class A Certificates as to clauses (ii) and (iii) below):
(i) the aggregate amount of funds distributed on such Distribution Date under this Agreement, indicating the amount, if any, allocable to each source (including any portion thereof paid by the Class A Liquidity Provider);
(ii) the amount of such distribution under this Agreement allocable to principal and the amount allocable to Premium (if any);
(iii) the amount of such distribution under this Agreement allocable to interest (including any portion thereof paid by the Class A Liquidity Provider); and
(iv) the Pool Balance and the Pool Factor.
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With respect to the Class A Certificates registered in the name of DTC or its nominee, on the Record Date prior to each Regular Distribution Date and Special Distribution Date, the Trustee will request that DTC post on its Internet bulletin board a securities position listing setting forth the names of all the DTC Participants reflected on DTC’s books as holding interests in the Class A Certificates on such Record Date. On each Regular Distribution Date and Special Distribution Date, the Trustee will mail to each such DTC Participant whose name has been provided by DTC the statement described above and will make available additional copies as requested by such DTC Participants for forwarding to holders of interests in the Class A Certificates.
(b) Within a reasonable period of time after the end of each calendar year but not later than the latest date permitted by law, the Trustee shall furnish to each Person who at any time during such calendar year was a Class A Certificateholder of record a statement containing the sum of the amounts determined pursuant to clauses (a)(i), (a)(ii) and (a)(iii) above for such calendar year or, in the event such Person was a Class A Certificateholder of record during a portion of such calendar year, for the applicable portion of such year, and such other items as are readily available to the Trustee and which a Class A Certificateholder may reasonably request as necessary for the purpose of such Certificateholder’s preparation of its United States federal income tax returns or foreign income tax returns. With respect to Class A Certificates registered in the name of DTC or its nominee, such statement and such other items shall be prepared on the basis of information supplied to the Trustee by the DTC Participants and shall be delivered by the Trustee to such DTC Participants to be available for forwarding by such DTC Participants to the holders of interests in the Class A Certificates.
(c) Promptly following the date of any early redemption or purchase of, or any default in the payment of principal or interest in respect of, any of the Series A Equipment Notes held in the Class A Trust, the Trustee shall furnish to Class A Certificateholders of record on such date a statement setting forth (x) the expected Pool Balances for each subsequent Regular Distribution Date following the date of such early redemption, purchase or default, (y) the related Pool Factors for such Regular Distribution Dates and (z) the expected principal distribution schedule of the Series A Equipment Notes, in the aggregate, held as Trust Property at the date of such notice. With respect to the Class A Certificates registered in the name of DTC, on the date of such early redemption, purchase or default, the Trustee will request from DTC a securities position listing setting forth the names of all DTC Participants reflected on DTC’s books as holding interests in the Class A Certificates on such date. The Trustee will send electronically, in accordance with DTC’s applicable procedures, to each such DTC Participant the statement described above and will make available additional copies as requested by such DTC Participant for forwarding to holders of interests in the Class A Certificates.
(d) The provisions of this Section 5.01 supersede and replace the provisions of Section 4.03 of the Basic Agreement in their entirety with respect to the Class A Trust.
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ARTICLE VI
DEFAULT
Section 6.01 Purchase Rights of Certificateholders. (a) By acceptance of its Class A Certificate, each Class A Certificateholder agrees that at any time after the occurrence and during the continuation of a Certificate Buy-Out Event:
(i) so long as no Additional Certificateholder has elected to exercise its rights to purchase the Class AA Certificates and the Class A Certificates pursuant to, and given notice of such election in accordance with, this Section 6.01(a) (upon such election and notification thereof, the right specified in this Section 6.01(a)(i) shall be suspended and (x) upon consummation of the purchase pursuant to such election, be terminated with respect to such Certificate Buy-Out Event, or (y) upon failure to consummate such purchase on the proposed purchase date, such right shall be revived), each Class A Certificateholder (other than the Company or any of its Affiliates) shall have the right to purchase, at the purchase price set forth in the Class AA Trust Agreement, all, but not less than all, of the Class AA Certificates upon ten days’ prior written irrevocable notice to the Trustee, the Class AA Trustee and each other Class A Certificateholder, on the third Business Day following the expiration of such ten-day notice period, provided that (A) if prior to the end of such ten-day period any other Class A Certificateholder(s) (other than the Company or any of its Affiliates) notifies such purchasing Class A Certificateholder that such other Class A Certificateholder(s) want(s) to participate in such purchase, then such other Class A Certificateholder(s) (other than the Company or any of its Affiliates) may join with the purchasing Class A Certificateholder to purchase all, but not less than all, of the Class AA Certificates pro rata based on the Fractional Undivided Interest in the Class A Trust held by each such Class A Certificateholder and (B) upon consummation of such purchase no Class A Certificateholder shall have a right to purchase the Class AA Certificates pursuant to this Section 6.01(a)(i) during the continuance of such Certificate Buy-Out Event,
(ii) if any Additional Certificates are issued by an Additional Trust, so long as no Junior Additional Certificateholder (if any) has elected to exercise its rights to purchase Certificates pursuant to, and given notice of such election in accordance with, this Section 6.01(a) (upon such election and notification thereof, the right specified in this Section 6.01(a)(ii) shall be suspended and (x) upon consummation of the purchase pursuant to such election, be terminated with respect to such Certificate Buy-Out Event, or (y) upon failure to consummate such purchase on the proposed purchase date, such right shall be revived), each Additional Certificateholder (other than the Company or any of its Affiliates) shall have the right (which shall not expire upon any purchase of the Class AA Certificates or the Class AA Certificates and Class A Certificates pursuant to clause (i) above) to purchase (at the purchase price set forth in (x) with respect to the Class AA Certificates, the Class AA Trust Agreement (y) with respect to the Class A Certificates, this Trust Supplement, and (z) with respect to any Additional Certificates ranked senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder, the applicable Additional Trust Agreement) all, but not less than all, of the Class AA Certificates, the Class A Certificates and any Additional Certificates ranked senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder upon ten days’ prior written irrevocable notice to the Trustee, the
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Class AA Trustee, the trustee of any Additional Trust with respect to any Additional Certificates that rank senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder and each other Additional Certificateholder of the same class, on the third Business Day following the expiration of such ten-day notice period, provided that (A) if prior to the end of such ten-day period any other Additional Certificateholder(s) of such class (other than the Company or any of its Affiliates) notifies such purchasing Additional Certificateholder that such other Additional Certificateholder(s) want(s) to participate in such purchase, then such other Additional Certificateholder(s) (other than the Company or any of its Affiliates) may join with the purchasing Additional Certificateholder to purchase all, but not less than all, of the Class AA Certificates, the Class A Certificates and such senior Additional Certificates pro rata based on the Fractional Undivided Interest in the applicable Additional Trust held by each such Additional Certificateholder and (B) upon consummation of such purchase no Additional Certificateholder of such class shall have a right to purchase the Class AA Certificates, the Class A Certificates and such senior Additional Certificates pursuant to this Section 6.01(a)(ii) during the continuance of such Certificate Buy-Out Event, and
(iii) if any Refinancing Certificates are issued, each Refinancing Certificateholder shall have the same right (subject to the same terms and conditions) to purchase Certificates pursuant to this Section 6.01(a) (and to receive notice in connection therewith) as the Holders of the Class that such Refinancing Certificates refinanced.
The purchase price with respect to the Class A Certificates shall be equal to the Pool Balance of the Class A Certificates, together with accrued and unpaid interest in respect thereof to the date of such purchase, and any other amounts then due and payable to the Class A Certificateholders under this Agreement, the Intercreditor Agreement, any Series A Equipment Note held as the property of the Class A Trust or the related Indenture and Participation Agreement or on or in respect of the Class A Certificates but without any Premium, provided, however, that if such purchase occurs after the Record Date relating to any Distribution Date, such purchase price shall be reduced by the amount to be distributed hereunder on such related Distribution Date (which deducted amounts shall remain distributable to, and may be retained by, the Class A Certificateholders as of such Record Date); provided further that no such purchase of Class A Certificates pursuant to this Section 6.01(a) shall be effective unless the purchaser(s) shall certify to the Trustee that contemporaneously with such purchase, such purchaser(s) is purchasing, pursuant to the terms of this Agreement, the Class AA Trust Agreement, the applicable Additional Trust Agreement (if any) or the applicable Refinancing Trust Agreement (as the case may be), and the Intercreditor Agreement, all of the Class AA Certificates, the Class A Certificates and, if applicable, the Additional Certificates that rank senior, in priority of payment of “Expected Distributions” therefor under the Intercreditor Agreement, to the Additional Certificates held by the purchasing Additional Certificateholder(s) and, if applicable, the Refinancing Certificates that are senior to the securities held by such purchaser(s). Each payment of the purchase price of the Class A Certificates referred to in the first sentence of this paragraph shall be made to an account or accounts designated by the Trustee and each such purchase shall be subject to the terms of this Section 6.01(a). Each Class A Certificateholder agrees by its acceptance of its Class A Certificate that it will, upon payment
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from such Additional Certificateholder(s) or Refinancing Certificateholder(s), as the case may be, of the purchase price set forth in the first sentence of this paragraph, forthwith sell, assign, transfer and convey to the purchaser(s) thereof (without recourse, representation or warranty of any kind except as to its own acts) all of the right, title, interest and obligation of such Class A Certificateholder in this Agreement, the Intercreditor Agreement, the Class A Liquidity Facility, the Note Documents and all Class A Certificates held by such Class A Certificateholder (excluding all right, title and interest under any of the foregoing to the extent such right, title or interest is with respect to an obligation not then due and payable as respects any action or inaction or state of affairs occurring prior to such sale) and the purchaser(s) shall assume all of such Class A Certificateholder’s obligations under this Agreement, the Intercreditor Agreement, the Class A Liquidity Facility, the Note Documents and all such Class A Certificates. The Class A Certificates will be deemed to be purchased on the date payment of the purchase price is made notwithstanding the failure of any Class A Certificateholder to deliver any Class A Certificate and, upon such a purchase, (i) the Class A Certificateholders shall have no further rights with respect to the Class A Certificates and (ii) if the purchaser(s) shall so request, each such Class A Certificateholder will comply with all the provisions of Section 3.04 of the Basic Agreement and the applicable provisions of this Trust Supplement to enable new Class A Certificates to be issued to the purchaser(s) in such denominations otherwise authorized under this Agreement as it shall request. All charges and expenses in connection with the issuance of any such new Class A Certificates shall be borne by the purchaser(s) thereof.
(b) This Section 6.01 supplements and, to the extent inconsistent with any provision of Section 6.01(d) of the Basic Agreement, replaces the provisions of Section 6.01(d) of the Basic Agreement. Notwithstanding anything to the contrary set forth herein or in any Operative Agreement, the provisions of this Section 6.01 may not be amended in any manner without the consent of each Class AA Certificateholder, each Class A Certificateholder and each Additional Certificateholder (if any) or, as the case may be, Refinancing Certificateholder (if any) (in each case, other than the Company or any of its Affiliates in its respective capacity as a Certificateholder) that would be adversely affected thereby; provided that the purchase price under this Section 6.01 (as in effect on the date hereof) for any Certificate held by the Company or any of its Affiliates shall not be modified without the prior written consent of the Company. For the avoidance of doubt, if a Certificate Buy-Out Event ceases to exist and another Certificate Buy-Out Event occurs and is continuing, the purchase rights set forth in Section 6.01(a) shall be revived notwithstanding any exercise of such rights during the continuance of any preceding Certificate Buy-Out Event.
ARTICLE VII
THE TRUSTEE
Section 7.01 Delivery of Documents; Delivery Dates. (a) In accordance with the direction of each Class A Certificateholder deemed given pursuant to Section 3.02(h) of this Trust Supplement, the Trustee is hereby directed (i) to execute and deliver the Intercreditor Agreement on or prior to the date of the initial issuance of the Class A Certificates (the “Issuance Date”), in the form delivered to the Trustee by the Company, and (ii) subject to the terms thereof, to perform its obligations thereunder. Upon request of the Company and the satisfaction or waiver of the closing conditions specified in the Underwriting Agreement, the Trustee shall
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execute, deliver, authenticate, issue and sell Class A Certificates in authorized denominations equaling in the aggregate the amount set forth, with respect to the Class A Trust, in Schedule I to the Underwriting Agreement evidencing the entire ownership interest in the Class A Trust, which amount equals the maximum aggregate principal amount of Series A Equipment Notes which may be purchased by the Trustee. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of the Basic Agreement or Section 4.03 of this Trust Supplement, the Trustee shall not execute, authenticate or deliver Class A Certificates in excess of the aggregate amount specified in this paragraph. The provisions of this Section 7.01(a) supersede and replace the first three sentences of Section 2.02(a) of the Basic Agreement and the first sentence of Section 3.02(a) of the Basic Agreement, with respect to the Class A Trust.
(b) On the Issuance Date the Trustee shall enter into and perform its obligations under the Participation Agreement (the “Applicable Participation Agreement”) with respect to each Aircraft and cause such certificates, documents and legal opinions relating to the Trustee to be duly delivered as required by the Applicable Participation Agreement. Upon satisfaction of the conditions specified in the Applicable Participation Agreement, the Trustee shall purchase the applicable Series A Equipment Notes with the proceeds of the Class A Certificates on the Issuance Date. The purchase price of such Series A Equipment Notes shall equal the principal amount of such Series A Equipment Notes. The provisions of this Section 7.01(b) supersede and replace the provisions of Section 2.02 of the Basic Agreement with respect to the Class A Trust, and no provisions of the Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic Agreement shall apply to the Class A Trust.
(c) With respect to the Class A Trust, Section 4.01(b) of the Basic Agreement is superseded and replaced in its entirety with the following: “The Trustee shall establish and maintain on behalf of the Class A Certificateholders a Special Payments Account as one or more accounts, which shall be non-interest bearing except as provided in Section 4.04 of the Basic Agreement. The Trustee shall hold the Special Payments Account in trust for the benefit of the Class A Certificateholders and shall make or permit withdrawals therefrom only as provided in the Agreement or the Intercreditor Agreement. On each day when one or more Special Payments are made to the Trustee under the Intercreditor Agreement, the Trustee, upon receipt thereof, shall immediately deposit the aggregate amount of such Special Payments in the Special Payments Account.”
(d) With respect to the Class A Trust, the second sentence of Section 4.02(c) of the Basic Agreement shall be superseded and replaced in its entirety with the following sentence: “Subject to the provisions of the Intercreditor Agreement: (i) in the event of redemption or purchase of Series A Equipment Notes held in the Class A Trust, such notice shall be mailed (or in the case of Global Certificates, sent electronically in accordance with DTC’s applicable procedures) not less than 15 days prior to the Special Distribution Date for the Special Payment resulting from such redemption or purchase, which Special Distribution Date shall be the date of such redemption or purchase; and (ii) in the case of any other Special Payments, such notice of Special Payment shall be sent as soon as practicable after the Trustee has confirmed that it has received funds for such Special Payment and shall state the Special Distribution Date for such Special Payment, which shall occur 15 days after the date of such notice of Special Payment or (if such 15th day is not practicable) as soon as practicable thereafter.”
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(e) With respect to the Class A Trust, clause (ii) of the third sentence of Section 4.02(c) of the Basic Agreement shall be amended by deleting in its entirety the parenthetical phrase “(taking into account any payment to be made by the Responsible Party pursuant to Section 2.02(b)).”
Section 7.02 [Reserved].
Section 7.03 The Trustee. (a) Subject to Section 7.04 of this Trust Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Trust Supplement or the Intercreditor Agreement or the due execution hereof or thereof by the Company or the other parties thereto (other than the Trustee), or for or in respect of the recitals and statements contained herein or therein, all of which recitals and statements are made solely by the Company or the other parties thereto (other than the Trustee), except that the Trustee hereby represents and warrants that each of this Trust Supplement, the Basic Agreement, each Class A Certificate and the Intercreditor Agreement has been executed and delivered by one of its officers who is duly authorized to execute and deliver such document on its behalf.
(b) The Trustee shall at all times be a bank or trust company, organized and doing business under the laws of the United States or any state thereof, a substantial part of the business of which consists of (i) receiving deposits and making loans or (ii) exercising fiduciary powers similar to those permitted to national banks by the Comptroller of the Currency, and which is subject to supervision and examination by state or federal authority having supervision over banking institutions.
Section 7.04 Representations and Warranties of the Trustee. The Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute, deliver and perform this Trust Supplement, the Intercreditor Agreement, the Class A Certificates and the Note Documents to which it is or is to become a party and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Supplement, the Intercreditor Agreement, the Class A Certificates and the Note Documents to which it is or is to become a party;
(b) the execution, delivery and performance by the Trustee of this Trust Supplement, the Intercreditor Agreement, the Class A Certificates and the Note Documents to which it is or is to become a party (i) will not violate any provision of any United States federal law or the law of the state of the United States where it is located governing the banking and trust powers of the Trustee or any order, writ, judgment, or decree of any court, arbitrator or governmental authority applicable to the Trustee or any of its assets, (ii) will not violate any provision of the articles of association or by-laws of the Trustee, and (iii) will not violate any provision of, or constitute, with or without notice or lapse of time, a default under, or result in the creation or imposition of any lien on any properties included in the Trust Property pursuant to the provisions of, any mortgage, indenture, contract, agreement or other undertaking to which it is a party, which violation, default or lien could reasonably be expected to have an adverse effect on the Trustee’s performance or ability to perform its duties hereunder or thereunder or on the transactions contemplated herein or therein;
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(c) the execution, delivery and performance by the Trustee of this Trust Supplement, the Intercreditor Agreement, the Class A Certificates and the Note Documents to which it is or is to become a party will not require the authorization, consent, or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, any governmental authority or agency of the United States or the state of the United States where it is located regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Intercreditor Agreement, the Class A Certificates and the Note Documents to which it is or is to become a party have been, or will be, as applicable, duly executed and delivered by the Trustee and constitute, or will constitute, as applicable, the legal, valid and binding agreements of the Trustee, enforceable against it in accordance with their respective terms; provided, however, that enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.
Section 7.05 Trustee Liens. The Trustee in its individual capacity agrees, in addition to the agreements contained in Section 7.17 of the Basic Agreement, that it will at its own cost and expense promptly take any action as may be necessary to duly discharge and satisfy in full any Trustee’s Liens on or with respect to the Trust Property which are attributable to the Trustee in its individual capacity and which are unrelated to the transactions contemplated by the Intercreditor Agreement.
ARTICLE VIII
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 8.01 Amendment of Sections 5.02 and 6.07 of the Basic Agreement. (a) Section 5.02 of the Basic Agreement shall be amended, with respect to the Class A Trust, by (i) replacing the phrase “of this Agreement” set forth in paragraph (a) thereof with the phrase “of the Note Documents and of this Agreement”, (ii) replacing the phrase “under this Agreement” set forth in paragraph (b) thereof with the phrase “under this Agreement and any Note Document” and (iii) deleting the phrase “and an Opinion of Counsel of the Company” in paragraph (c) thereof.
(b) Section 6.07 of the Basic Agreement shall be amended and restated in its entirety to read as follows:
“Section 6.07. Certificateholders May Not Bring Suit Except Under Certain Conditions.
A Certificateholder of any series shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Agreement, the related Trust Supplement or the Certificates or otherwise, or for the appointment of a receiver or for the enforcement of any other remedy under this Agreement, the related Trust Supplement or the Certificates or otherwise, unless:
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| (1) |
such Certificateholder previously shall have given written notice to the Trustee of a continuing Event of Default; |
| (2) |
Certificateholders holding Certificates of such series evidencing Fractional Undivided Interests aggregating not less than 25% of the related Trust shall have requested the Trustee in writing to institute such action, suit or proceeding and shall have offered to the Trustee indemnity as provided in Section 7.03(e); |
| (3) |
the Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and |
| (4) |
no Direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by either Certificateholders holding Certificates of such series evidencing Fractional Undivided Interests aggregating not less than a majority in interest in the related Trust or the Controlling Party under the related Intercreditor Agreement. |
Except to the extent provided in any applicable Intercreditor Agreement or in any applicable Trust Supplement, it is understood and intended that no one or more of the Certificateholders of any series shall have any right in any manner whatsoever hereunder or under the related Trust Supplement or under the Certificates of such series to (i) surrender, impair, waive, affect, disturb or prejudice any property in the Trust Property of the related Trust, or the lien of any related Indenture on any property subject thereto, or the rights of the Certificateholders of such series or the holders of the related Equipment Notes, (ii) obtain or seek to obtain priority over or preference with respect to any other such Certificateholder of such series or (iii) enforce any right under this Agreement, the related Trust Supplement or under the Certificates of such series, except in the manner provided in this Agreement and for the equal, ratable and common benefit of all the Certificateholders of such series.”
Section 8.02 Supplemental Agreements Without Consent of Class A Certificateholders. Without limitation of Section 9.01 of the Basic Agreement, (i) (a) clauses (2) and (3) of such Section 9.01 shall also be deemed to include the Company’s obligations under (in the case of clause (2)), and the Company’s rights and powers conferred by (in the case of clause (3)), any Participation Agreement, (b) references in clauses (4), (5) and (7) of such Section 9.01 to “any Intercreditor Agreement or any Liquidity Facility” shall also be deemed to refer to “the Intercreditor Agreement, the Class A Liquidity Facility or any Participation Agreement”, (c) references to “any Intercreditor Agreement, any Participation Agreement, any Indenture or any Liquidity Facility” and to “any Intercreditor Agreement or any Liquidity Facility” in clause (8) of such Section 9.01 shall also be deemed to refer to “the Intercreditor Agreement, any Indenture, the Class A Liquidity Facility or any Participation Agreement”, and (d) the reference to “this Basic Agreement or any Trust Supplement” in clause (13) of such Section 9.01 shall also be deemed to refer to “any Participation Agreement”, (ii) under the terms
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of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company’s request, at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the formation of one or more Additional Trusts in existence at any one time, the issuance of one or more Classes of Additional Certificates from time to time, the purchase by any Additional Trust of applicable Additional Equipment Notes and other matters incidental thereto or as otherwise contemplated by Section 2.01(b) of the Basic Agreement, all as provided in Section 8.01(d) of the Intercreditor Agreement, (iii) under the terms of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company’s request, at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the formation of one or more Refinancing Trusts, the issuance of one or more Classes of Refinancing Certificates, the purchase by any Refinancing Trust of applicable Refinancing Equipment Notes and other matters incidental thereto or as otherwise contemplated by Section 2.01(b) of the Basic Agreement, all as provided in Section 8.01(c) of the Intercreditor Agreement, and (iv) under the terms of, and subject to the limitations contained in, Section 9.01 of the Basic Agreement, the Company may (but will not be required to), and the Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the request of the Company at any time and from time to time, enter into one or more agreements supplemental to any Operative Agreement to provide for the substitution of any Aircraft pursuant to Section 7.04(f) of the related Indenture and other matters incidental thereto. In addition, the following provisions of Section 9.01 of the Basic Agreement shall be amended, with respect to the Class A Trust, as follows: (A) Section 9.01(6) of the Basic Agreement shall be amended by inserting the phrase “(or to facilitate any listing of any Certificates on any exchange or quotation system) or any requirement of DTC or like depositary,” after the phrase “any exchange or quotation system on which the Certificates of any series are listed” but before the phrase “or of any regulatory body”; (B) Section 9.01(7) of the Basic Agreement shall be amended by inserting the phrase “to establish or” after the phrase “to such extent as shall be necessary” but before the phrase “to continue”; and (C) Section 9.01(8) of the Basic Agreement shall be amended by replacing the phrase “and to add to or change” with the phrase “, or to evidence the substitution of a Liquidity Provider with a Replacement Liquidity Provider, to provide for a Replacement Liquidity Facility or to incorporate appropriate mechanics for multiple instruments for a Replacement Liquidity Facility for a single Trust, all as provided in any Intercreditor Agreement; or to add to or change”.
Section 8.03 Supplemental Agreements with Consent of Class A Certificateholders. Without limitation of Section 9.02 of the Basic Agreement, the provisions of Section 9.02 of the Basic Agreement shall apply to agreements or amendments for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Class A Liquidity Facility or modifying in any manner the rights and obligations of the Class A Certificateholders under the Class A Liquidity Facility.
Section 8.04 Consent of Trustees for Amendment of Section 6.01. Notwithstanding any provision in Section 8.02 or Section 8.03 of this Trust Supplement to the contrary, no amendment or modification of Section 6.01 of this Trust Supplement shall be effective unless the trustee for each Class of Certificates affected by such amendment or modification shall have consented thereto.
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Section 8.05 Amendment of Section 7.12(c) of the Basic Agreement. For purposes of this Agreement, references to the term “corporation” as used in Section 7.12(c) of the Agreement shall be deemed to include a bank or trust company.
ARTICLE IX
[RESERVED]
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Final Termination Date. The respective obligations and responsibilities of the Company and the Trustee created hereby and the Class A Trust created hereby shall terminate upon the distribution to all Class A Certificateholders and the Trustee of all amounts required to be distributed to them pursuant to this Agreement and the disposition of all property held as part of the Trust Property; provided, however, that in no event shall the Trust created hereby continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, Sr., the father of John F. Kennedy, former President of the United States, living on the date of this Trust Supplement.
Section 10.02 Basic Agreement Ratified. Except and so far as herein expressly provided, all of the provisions, terms and conditions of the Basic Agreement are in all respects ratified and confirmed; and the Basic Agreement and this Trust Supplement shall be taken, read and construed as one and the same instrument. To the extent that any provisions of the Basic Agreement are superseded by any provisions of this Trust Supplement, any reference to such provisions of the Basic Agreement herein or in the Basic Agreement shall be deemed to be to such provisions of this Trust Supplement.
Section 10.03 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE CLASS A CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.04 Counterparts. This Trust Supplement may be executed in any number of counterparts (and each of the parties shall not be required to execute the same counterpart). Each counterpart of this Trust Supplement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Trust Supplement, but all of such counterparts together shall constitute one instrument.
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Section 10.05 Intention of Parties. The parties hereto intend that the Class A Trust be classified for United States federal income tax purposes as a grantor trust under Subpart E, Part I, Subchapter J, Chapter 1 of Subtitle A of the Code, and not as a trust or association taxable as a corporation or as a partnership. Each Certificateholder of, and each Person acquiring a beneficial interest in, a Class A Certificate, by its acceptance of its Class A Certificate or a beneficial interest therein, agrees to treat the Class A Trust as a grantor trust for all United States federal, state and local income tax purposes. The Trustee shall not be authorized or empowered to do anything that would cause the Class A Trust to fail to qualify as a grantor trust for such tax purposes (including as subject to this restriction, acquiring any Aircraft by bidding the Equipment Notes relating thereto or otherwise, or taking any action with respect to any such Aircraft once acquired).
Section 10.06 Submission to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Agreements hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
Section 10.07 Successor and Assigns. All covenants, agreements, representations and warranties in this Agreement by the Trustee and the Company shall bind and, to the extent permitted hereby, shall inure to the benefit of and be enforceable by their respective successors and assigns, whether so expressed or not. Any request, notice, direction, consent, waiver or other instrument or action by any Class A Certificateholder shall bind the successors and assigns of such Class A Certificateholder.
Section 10.08 Normal Commercial Relations. Anything contained in this Agreement to the contrary notwithstanding, the Trustee and any Class A Certificateholder, or any bank or other affiliate of any such party, may conduct any banking or other financial transactions, and have banking and other commercial relationships, with the Company fully to the same extent as if this Agreement were not in effect, including without limitation the making of loans or other extensions of credit to the Company for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.
Section 10.09 No Recourse against Others. No past, present or future director, officer, employee, agent, member, manager, trustee or stockholder, as such, of the Company or any successor Person shall have any liability for any obligations of the Company or any successor Person, either directly or through the Company or any successor Person, under the Class A Certificates or this Agreement or for any claim based on, in respect of or by reason of such obligations or their creation, whether by virtue of any rule of law, statute or constitutional provision of by the enforcement of any assessment or by any legal or equitable proceeding or otherwise. By accepting a Class A Certificate, each Class A Certificateholder agrees to the provisions of this Section 10.09 and waives and releases all such liability. Such waiver and release shall be part of the consideration for the issue of the Class A Certificates.
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Section 10.10 U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions, in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. Each party to this Trust Supplement agrees for itself that it will provide the Trustee with such information relating to such party as it may reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
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IN WITNESS WHEREOF, the parties have caused this Trust Supplement to be duly executed by their respective officers thereto duly authorized as of the date first written above.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
[Signature Page to Trust Supplement No. 2020-1A (2020-1 EETC)]
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee | ||
| By: |
/s/ David W. Doucette |
|
| Name: David W. Doucette | ||
| Title: Vice President | ||
[Signature Page to Trust Supplement No. 2020-1A (2020-1 EETC)]
TRUST SUPPLEMENT NO. 2020-1A
FORM OF CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
BY ITS ACQUISITION HEREOF, THE HOLDER (A) REPRESENTS THAT EITHER (1) NO ASSETS OF A PLAN OR ANY TRUST ESTABLISHED WITH RESPECT TO A PLAN HAVE BEEN USED TO PURCHASE OR HOLD THIS CERTIFICATE OR AN INTEREST HEREIN, OR (2) THE PURCHASE AND HOLDING OF THIS CERTIFICATE OR INTEREST HEREIN BY SUCH A PERSON ARE EXEMPT FROM THE PROHIBITED TRANSACTION RESTRICTIONS OF ERISA AND THE CODE OR PROVISIONS OF SIMILAR LAW PURSUANT TO ONE OR MORE PROHIBITED TRANSACTION STATUTORY OR ADMINISTRATIVE EXEMPTIONS OR SIMILAR EXEMPTIONS UNDER SIMILAR LAW, AND (B) DIRECTS THE TRUSTEE TO INVEST IN THE ASSETS HELD IN THE CLASS A TRUST PURSUANT TO THE TERMS AND CONDITIONS DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATED THERETO. CERTAIN TERMS USED IN THIS PARAGRAPH SHALL HAVE THE MEANINGS SPECIFIED IN THE AGREEMENT.
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This legend to appear on Book-Entry Certificates to be deposited with The Depositary Trust Company. |
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Trust Supplement No. 2020-1A (2020-1 EETC) |
[GLOBAL CERTIFICATE]†
DELTA AIR LINES PASS THROUGH TRUST 2020-1A DELTA AIR LINES PASS
THROUGH CERTIFICATE, SERIES 2020-1A
Final Expected Regular Distribution Date: June 10, 2028
evidencing a fractional undivided interest in the Trust,
the property of which includes or will include, among
other things, certain Equipment Notes each secured by
an Aircraft owned by Delta Air Lines, Inc.
| Certificate No. | $_________ Fractional Undivided Interest representing ___% of the Trust per $1,000 face amount |
CUSIP No. [ ] ISIN No. [ ] |
THIS CERTIFIES THAT , for value received, is the registered owner of a $ ( dollars) Fractional Undivided Interest (or such lesser amounts as shall be the aggregate outstanding face amount hereof as set forth in the records of the Trustee) in the Delta Air Lines Pass Through Trust, Series 2020-1A (the “Trust”) created by U.S. BANK TRUST NATIONAL ASSOCIATION, as successor trustee (together with any successor in interest and any successor or other trustee appointed pursuant to the Trust Supplement referred to below, the “Trustee”) under a Pass Through Trust Agreement, dated as of November 16, 2000 (the “Basic Agreement”), between U.S. Bank Trust National Association (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association) and Delta Air Lines, Inc., a Delaware corporation (together with any successor in interest pursuant to Section 5.02 of the Basic Agreement, the “Company”), as supplemented by Trust Supplement No. 2020-1A thereto dated as of March 12, 2020 (collectively, and as may be amended from time to time, the “Agreement”), between the Trustee and the Company, a summary of certain of the pertinent provisions of which is set forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Agreement. This Certificate is one of the duly authorized Certificates designated as “Delta Air Lines Pass Through Certificates, Series 2020-1A” (herein called the “Certificates”). This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement. By virtue of its acceptance hereof, the Certificateholder of this Certificate assents to and agrees to be bound by all of the provisions of the Agreement and the Intercreditor Agreement, including the subordination provisions of Section 9.09 of the Intercreditor Agreement. The Trust Property is expected to include certain Equipment Notes and includes all rights of the Trust and the Trustee, on behalf of the Trust, to receive any payments under the Intercreditor Agreement and the Class A Liquidity Facility. Each issue of the Equipment Notes will be secured by, among other things, a security interest in the Aircraft owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust and the Trust Property, and will have no rights, benefits or interest in respect of any other separate trust established pursuant to the terms of the Basic Agreement for any other series of certificates issued pursuant thereto.
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To be included on the face of each Global Certificate. |
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Trust Supplement No. 2020-1A (2020-1 EETC) |
Subject to and in accordance with the terms of the Agreement and the Intercreditor Agreement, from funds then available to the Trustee, there will be distributed on each June 10 and December 10 (each, a “Regular Distribution Date”), commencing on June 10, 2020, to the Person in whose name this Certificate is registered at the close of business on the 15th day preceding the Regular Distribution Date, an amount in respect of the Scheduled Payments on the Series A Equipment Notes due on such Regular Distribution Date, the receipt of which has been confirmed by the Trustee, equal to the product of the percentage interest in the Trust evidenced by this Certificate and an amount equal to the sum of such Scheduled Payments. Subject to and in accordance with the terms of the Agreement and the Intercreditor Agreement, in the event that Special Payments on the Series A Equipment Notes are received by the Trustee, from funds then available to the Trustee, there shall be distributed on the applicable Special Distribution Date, to the Person in whose name this Certificate is registered at the close of business on the 15th day preceding the applicable Special Distribution Date, an amount in respect of such Special Payments on the Series A Equipment Notes, the receipt of which has been confirmed by the Trustee, equal to the product of the percentage interest in the Trust evidenced by this Certificate and an amount equal to the sum of such Special Payments so received. If a Regular Distribution Date or Special Distribution Date is not a Business Day, distribution shall be made on the immediately following Business Day and no interest shall accrue during the intervening period. The Trustee shall mail (or in the case of Global Certificates, send electronically in accordance with DTC’s applicable procedures) notice of each Special Payment and the Special Distribution Date therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check mailed to the Person entitled thereto, without the presentation or surrender of this Certificate or the making of any notation hereon, except that with respect to Certificates registered on the Record Date in the name of a Clearing Agency (or its nominee), such distributions shall be made by wire transfer. Except as otherwise provided in the Agreement and notwithstanding the above, the final distribution on this Certificate will be made after notice mailed (or in the case of Global Certificates, sent electronically in accordance with DTC’s applicable procedures) by the Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an obligation guaranteed by, or an interest in, the Company, the Trustee, the Subordination Agent, any Loan Trustee or any Affiliate of any thereof. The Certificates are limited in right of payment, all as more specifically set forth on the face hereof and in the Agreement. All payments or distributions made to Certificateholders under the Agreement shall be made only from the Trust Property and only to the extent that the Trustee shall have sufficient income or proceeds from the Trust Property to make such payments in accordance with the terms of the Agreement. Each Certificateholder of this Certificate, by its acceptance hereof, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for any payment or distribution to such Certificateholder pursuant to the terms of the Agreement and that it will not have any recourse to the Company, the Trustee, the Loan Trustees or any Affiliate of any thereof
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Trust Supplement No. 2020-1A (2020-1 EETC) |
except as otherwise expressly provided in the Agreement, in any Note Document or in the Intercreditor Agreement. This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for information with respect to the interests, rights, benefits, obligations, proceeds and duties evidenced hereby. A copy of the Agreement may be examined during normal business hours at the principal office of the Trustee, and at such other places, if any, designated by the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the amendment thereof, and the modification of the rights and obligations of the Company and the rights of the Certificateholders under the Agreement, at any time by the Company and the Trustee with the consent of the Certificateholders holding Certificates evidencing Fractional Undivided Interests aggregating not less than a majority in interest in the Trust. Any such consent by the Certificateholder of this Certificate shall be conclusive and binding on such Certificateholder and upon all future Certificateholders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Certificate. The Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set forth therein, the transfer of this Certificate is registrable in the Register upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by the Trustee in its capacity as Registrar, or by any successor Registrar, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Registrar, duly executed by the Certificateholder hereof or such Certificateholder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate Fractional Undivided Interest in the Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in minimum denominations of $2,000 (or such other denomination that is the lowest integral multiple of $1,000 that is, at the time of issuance, equal to at least 1,000 euros) Fractional Undivided Interest and integral multiples of $1,000 in excess thereof except that one Certificate may be issued in a different denomination. As provided in the Agreement and subject to certain limitations therein set forth, the Certificates are exchangeable for new Certificates of authorized denominations evidencing the same aggregate Fractional Undivided Interest in the Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the Trustee shall require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.
The Company, the Trustee, the Registrar and any Paying Agent shall deem and treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Company, the Trustee, the Registrar or any such agent shall be affected by any notice to the contrary.
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Trust Supplement No. 2020-1A (2020-1 EETC) |
Each Certificateholder and Person with a beneficial interest herein, by its acceptance of this Certificate or such interest, agrees to treat the Trust as a grantor trust for all U.S. federal, state and local income tax purposes.
The obligations and responsibilities created by the Agreement and the Trust created thereby shall terminate upon the distribution to Certificateholders of all amounts required to be distributed to them pursuant to the Agreement and the disposition of all property held as part of the Trust Property.
Any Person acquiring or accepting this Certificate or an interest herein will, by such acquisition or acceptance, be deemed to (a) represent and warrant to the Company, the Loan Trustees and the Trustee that either: (i) no assets of a Plan or any trust established with respect to a Plan have been used to purchase or hold this Certificate or an interest herein or (ii) the purchase and holding of this Certificate or interest herein by such Person are exempt from the prohibited transaction restrictions of ERISA and the Code or provisions of Similar Law pursuant to one or more prohibited transaction statutory or administrative exemptions or similar exemptions under Similar Law and (b) direct the Trustee to invest the assets held in the Trust pursuant to, and take all other actions contemplated by, the terms and conditions of the Basic Agreement, this Trust Supplement, the Intercreditor Agreement and each Participation Agreement.
THIS CERTIFICATE AND THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been executed by the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose.
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Trust Supplement No. 2020-1A (2020-1 EETC) |
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
| DELTA AIR LINES PASS THROUGH TRUST 2020-1A | ||
| By: | U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee | |
| By: |
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| Title: | ||
Dated:
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Trust Supplement No. 2020-1A (2020-1 EETC) |
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee | ||
| By: |
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| Authorized Officer | ||
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Trust Supplement No. 2020-1A (2020-1 EETC) |
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
Please print or typewrite name and address including zip code of assignee
the within Certificate and all rights thereunder, hereby irrevocably constituting and appointing ___________________________________ attorney to transfer said Certificate on the books of the Trustee with full power of substitution in the premises.
| Date: | ||
| NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. | ||
| SIGNATURE GUARANTEE: __________________ | ||
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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Trust Supplement No. 2020-1A (2020-1 EETC) |
EXHIBIT B to
TRUST SUPPLEMENT NO. 2020-1A
DTC LETTER OF REPRESENTATIONS
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Trust Supplement No. 2020-1A (2020-1 EETC) |
SCHEDULE I to
TRUST SUPPLEMENT NO. 2020-1A
SERIES A EQUIPMENT NOTES,
PRINCIPAL AMOUNTS, MATURITIES AND AIRCRAFT
|
Initial Principal Amount of Series A Equipment Notes |
Maturity |
Aircraft |
Aircraft Registration Number |
|||
| $ 5,694,000 | June 10, 2028 | Airbus A321-211 | N301DV | |||
| 5,750,000 | June 10, 2028 | Airbus A321-211 | N305DN | |||
| 5,782,000 | June 10, 2028 | Airbus A321-211 | N306DN | |||
| 5,782,000 | June 10, 2028 | Airbus A321-211 | N307DX | |||
| 6,075,000 | June 10, 2028 | Airbus A321-211 | N319DN | |||
| 4,501,000 | June 10, 2027 | Boeing 737-932ER | N826DN | |||
| 4,556,000 | June 10, 2027 | Boeing 737-932ER | N827DN | |||
| 4,592,000 | June 10, 2027 | Boeing 737-932ER | N828DN | |||
| 4,632,000 | June 10, 2027 | Boeing 737-932ER | N829DN | |||
| 4,704,000 | June 10, 2027 | Boeing 737-932ER | N830DN | |||
| 4,685,000 | June 10, 2027 | Boeing 737-932ER | N831DN | |||
| 4,791,000 | June 10, 2027 | Boeing 737-932ER | N832DN | |||
| 4,852,000 | June 10, 2027 | Boeing 737-932ER | N834DN | |||
| 4,929,000 | June 10, 2027 | Boeing 737-932ER | N835DN | |||
| 4,880,000 | December 10, 2027 | Boeing 737-932ER | N836DN | |||
| 4,829,000 | December 10, 2027 | Boeing 737-932ER | N837DN | |||
| 4,976,000 | December 10, 2027 | Boeing 737-932ER | N838DN | |||
| 4,924,000 | December 10, 2027 | Boeing 737-932ER | N839DN | |||
| 4,877,000 | December 10, 2027 | Boeing 737-932ER | N840DN | |||
| 5,049,000 | December 10, 2027 | Boeing 737-932ER | N841DN | |||
| 5,304,000 | December 10, 2027 | Boeing 737-932ER | N851DN | |||
| 5,225,000 | December 10, 2027 | Boeing 737-932ER | N852DN | |||
| 5,334,000 | December 10, 2027 | Boeing 737-932ER | N853DN | |||
| 5,189,000 | June 10, 2028 | Boeing 737-932ER | N854DN | |||
| 5,196,000 | June 10, 2028 | Boeing 737-932ER | N855DN | |||
| 5,275,000 | June 10, 2028 | Boeing 737-932ER | N856DN | |||
| 5,289,000 | June 10, 2028 | Boeing 737-932ER | N857DZ | |||
| 10,559,000 | June 10, 2027 | Airbus A330-302 | N822NW | |||
| 10,604,000 | June 10, 2027 | Airbus A330-302 | N824NW | |||
| 10,741,000 | December 10, 2027 | Airbus A330-302 | N823NW | |||
| 11,285,000 | December 10, 2027 | Airbus A330-302 | N825NW | |||
| 11,132,000 | June 10, 2028 | Airbus A330-302 | N826NW | |||
| 12,113,000 | June 10, 2028 | Airbus A330-302 | N831NW |
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Trust Supplement No. 2020-1A (2020-1 EETC) |
SCHEDULE II to
TRUST SUPPLEMENT NO. 2020-1A
NOTE DOCUMENTS
Participation Agreement
Indenture
Manufacturer’s Consent (as defined in any applicable Indenture)
For each of the aircraft listed in Schedule I.
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Trust Supplement No. 2020-1A (2020-1 EETC) |
Exhibit 4.5
Execution Version
INTERCREDITOR AGREEMENT
(2020-1)
Dated as of March 12, 2020
among
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee of the
Delta Air Lines Pass Through Trust 2020-1AA and
Delta Air Lines Pass Through Trust 2020-1A
NATIONAL AUSTRALIA BANK LIMITED
acting through its New York Branch
as Class AA Liquidity Provider and
Class A Liquidity Provider
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Subordination Agent
Intercreditor Agreement (2020-1)
Table of Contents
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| ARTICLE I |
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| DEFINITIONS |
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Section 1.01 |
Definitions | 2 | ||||
| ARTICLE II |
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| TRUST ACCOUNTS; CONTROLLING PARTY |
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Section 2.01 |
Agreement to Terms of Subordination; Payments from Monies Received Only | 21 | ||||
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Section 2.02 |
Trust Accounts | 21 | ||||
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Section 2.03 |
Deposits to the Collection Account and Special Payments Account | 23 | ||||
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Section 2.04 |
Distributions of Special Payments | 23 | ||||
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Section 2.05 |
Designated Representatives | 24 | ||||
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Section 2.06 |
Controlling Party | 25 | ||||
| ARTICLE III |
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| RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED |
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Section 3.01 |
Written Notice of Distribution | 27 | ||||
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Section 3.02 |
Distribution of Amounts on Deposit in the Collection Account | 29 | ||||
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Section 3.03 |
Other Payments | 31 | ||||
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Section 3.04 |
Payments to the Trustees and the Liquidity Providers | 32 | ||||
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Section 3.05 |
Liquidity Facilities | 32 | ||||
| ARTICLE IV |
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| EXERCISE OF REMEDIES |
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Section 4.01 |
Directions from the Controlling Party | 40 | ||||
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Section 4.02 |
Remedies Cumulative | 42 | ||||
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Section 4.03 |
Discontinuance of Proceedings | 42 | ||||
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Section 4.04 |
Right of Certificateholders and the Liquidity Providers to Receive Payments Not to Be Impaired | 42 | ||||
Intercreditor Agreement (2020-1)
| ARTICLE V |
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| DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC. |
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Section 5.01 |
Notice of Indenture Event of Default or Triggering Event | 43 | ||||
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Section 5.02 |
Indemnification | 44 | ||||
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Section 5.03 |
No Duties Except as Specified in Intercreditor Agreement | 44 | ||||
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Section 5.04 |
Notice from the Liquidity Providers and Trustees | 45 | ||||
| ARTICLE VI |
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| THE SUBORDINATION AGENT |
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Section 6.01 |
Authorization; Acceptance of Trusts and Duties | 45 | ||||
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Section 6.02 |
Absence of Duties | 45 | ||||
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Section 6.03 |
No Representations or Warranties as to Documents | 45 | ||||
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Section 6.04 |
No Segregation of Monies; No Interest | 45 | ||||
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Section 6.05 |
Reliance; Agents; Advice of Counsel | 46 | ||||
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Section 6.06 |
Capacity in Which Acting | 46 | ||||
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Section 6.07 |
Compensation | 46 | ||||
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Section 6.08 |
May Become Certificateholder | 46 | ||||
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Section 6.09 |
Subordination Agent Required; Eligibility | 46 | ||||
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Section 6.10 |
Money to Be Held in Trust | 47 | ||||
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Section 6.11 |
Notice of Substitution or Replacement of Airframe | 47 | ||||
| ARTICLE VII |
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| SUCCESSOR SUBORDINATION AGENT |
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Section 7.01 |
Replacement of Subordination Agent; Appointment of Successor | 47 | ||||
| ARTICLE VIII |
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| SUPPLEMENTS AND AMENDMENTS |
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Section 8.01 |
Amendments, Waivers, Etc. | 49 | ||||
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Section 8.02 |
Subordination Agent Protected | 54 | ||||
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Section 8.03 |
Effect of Supplemental Agreements | 54 | ||||
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Section 8.04 |
Notice to Rating Agencies | 55 | ||||
| ARTICLE IX |
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| MISCELLANEOUS |
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Section 9.01 |
Termination of Intercreditor Agreement | 55 | ||||
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Section 9.02 |
Intercreditor Agreement for Benefit of Trustees, Liquidity Providers and Subordination Agent | 55 | ||||
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Section 9.03 |
Notices | 55 | ||||
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Section 9.04 |
Severability | 56 | ||||
Intercreditor Agreement (2020-1)
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Section 9.05 |
No Oral Modifications or Continuing Waivers | 56 | ||||
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Section 9.06 |
Successors and Assigns | 57 | ||||
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Section 9.07 |
Headings | 57 | ||||
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Section 9.08 |
Counterparts | 57 | ||||
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Section 9.09 |
Subordination | 57 | ||||
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Section 9.10 |
Governing Law | 58 | ||||
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Section 9.11 |
Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity | 59 | ||||
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Section 9.12 |
Non-Petition | 59 | ||||
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Section 9.13 |
U.S.A. Patriot Act | 60 | ||||
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ANNEXES |
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Annex A – Aircraft |
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Intercreditor Agreement (2020-1)
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of March 12, 2020, is made by and among U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association (in its individual capacity, together with its successors and permitted assigns, “U.S. Bank”), not in its individual capacity but solely as trustee of each Trust (such term and other capitalized terms used herein without definition being defined as provided in Article I), NATIONAL AUSTRALIA BANK LIMITED, acting through its New York branch, a company incorporated in the Commonwealth of Australia (“NAB”), as Class AA Liquidity Provider and Class A Liquidity Provider, and U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity except as expressly set forth herein, but solely as Subordination Agent and trustee hereunder (in such capacity, together with any successor appointed pursuant to Article VII, the “Subordination Agent”).
WHEREAS, pursuant to each Indenture with respect to an Aircraft, Delta will issue on a recourse basis two series of Equipment Notes secured by, among other things, such Aircraft and may issue one or more series of Additional Equipment Notes and one or more series of Refinancing Equipment Notes;
WHEREAS, pursuant to each Participation Agreement, each Trust will acquire Equipment Notes having an interest rate identical to the interest rate applicable to the Certificates issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby proposes to issue a single Class of Certificates bearing the interest rate and having the final distribution date described in such Trust Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters propose to purchase the Certificates;
WHEREAS, the Liquidity Provider proposes to enter into two separate revolving credit agreements with the Subordination Agent, as agent and trustee for the Trustee of each of the Class AA Trust and the Class A Trust, respectively, for the benefit of the Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the Underwriters under the Underwriting Agreement that the Subordination Agent, the Trustees and the Liquidity Provider agree to the terms of subordination set forth in this Agreement in respect of each Class of Certificates, and the Subordination Agent, the Trustees and the Liquidity Provider, by entering into this Agreement, hereby acknowledge and agree to such terms of subordination and the other provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Intercreditor Agreement (2020-1)
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) The definitions stated herein apply equally to the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.
(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, it shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
(f) For purposes of this Agreement, unless the context otherwise requires, the following capitalized terms shall have the following meanings:
“60-Day Period” means the 60-day period specified in Section 1110(a)(2)(A) of the Bankruptcy Code.
“Acceleration” means, with respect to the amounts payable in respect of the Equipment Notes issued under any Indenture, such amounts becoming immediately due and payable by declaration or otherwise. “Accelerate”, “Accelerated” and “Accelerating” have meanings correlative to the foregoing.
“Actual Disposition Event” means, in respect of any Equipment Note: (i) the sale or disposition by the applicable Loan Trustee of the Aircraft securing such Equipment Note for cash, (ii) the occurrence of the mandatory redemption date for such Equipment Note following an Event of Loss (as defined in such Indenture) with respect to such Aircraft or (iii) the sale by the Subordination Agent of such Equipment Note for cash.
“Additional Certificateholder” has the meaning specified in Section 8.01(d).
“Additional Certificates” has the meaning specified in Section 8.01(d).
“Additional Equipment Notes” has the meaning specified in Section 8.01(d).
“Additional Trust” has the meaning specified in Section 8.01(d).
Intercreditor Agreement (2020-1)
2
“Additional Trust Agreement” has the meaning specified in Section 8.01(d).
“Additional Trustee” has the meaning specified in Section 8.01(d).
“Administration Expenses” has the meaning specified in clause “first” of Section 3.02.
“Advance” means, with respect to any Liquidity Facility, any Advance as defined in such Liquidity Facility.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. For the purposes of this definition, “control”, when used with respect to any specified Person, means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agreement” means this Intercreditor Agreement, as it may be amended, supplemented or otherwise modified from time to time.
“Aircraft” means, with respect to each Indenture, the “Aircraft” referred to therein.
“Appraisal” has the meaning specified in Section 4.01(a)(iv).
“Appraised Current Market Value” of any Aircraft means the lower of the average and the median of the three most recent Post-Default Appraisals of such Aircraft.
“Appraisers” means Aircraft Information Services, Inc., BK Associates, Inc. and Morten Beyer & Agnew, Inc. or, so long as the Person entitled or required hereunder to select such Appraiser acts reasonably, any other nationally recognized appraiser reasonably satisfactory to the Controlling Party.
“Available Amount” means, with respect to any Liquidity Facility on any drawing date, subject to the proviso contained in the first sentence of Section 3.05(g), an amount equal to (a) the Stated Amount of such Liquidity Facility at such time, less (b) the aggregate amount of each Interest Drawing honored by the Liquidity Provider under such Liquidity Facility on or prior to such date that has not been reimbursed or reinstated as of such date; provided that, following a Downgrade Drawing (subject to any reinstatement of the obligations of such Liquidity Provider pursuant to Section 2.06(d) of such Liquidity Facility), a Non-Extension Drawing, a Special Termination Advance or a Final Drawing under such Liquidity Facility, the Available Amount of such Liquidity Facility shall be zero.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 United States Code §§101 et seq., as amended, or any successor statutes thereto.
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“Basic Agreement” means that certain Pass Through Trust Agreement, dated as of November 16, 2000, between Delta and U.S. Bank, as successor in interest to State Street Bank and Trust Company of Connecticut, National Association, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, but does not include any Trust Supplement.
“Business Day” means, with respect to the Certificates of any Class, any day other than a Saturday, or a Sunday or a day on which commercial banks are required or authorized to close in New York, New York, Atlanta, Georgia, Wilmington, Delaware, or, so long as any Certificate is outstanding, the city and state in which any Trustee, the Subordination Agent or any related Loan Trustee maintains its Corporate Trust Office or receives and disburses funds, and that, solely with respect to draws under any Liquidity Facility, also is a “Business Day” as defined in such Liquidity Facility.
“Cash Collateral Account” means the Class AA Cash Collateral Account or the Class A Cash Collateral Account, as applicable.
“Certificate” means a Class AA Certificate or a Class A Certificate, as applicable.
“Certificate Buy-Out Event” means that a Delta Bankruptcy Event has occurred and is continuing and either of the following events has occurred: (A) (i) the 60-Day Period has expired, and (ii) Delta has not entered into one or more agreements under Section 1110(a)(2)(A) of the Bankruptcy Code to perform all of its obligations under all of the Indentures and cured defaults under all of the Indentures in accordance with Section 1110(a)(2)(B) of the Bankruptcy Code or, if it has entered into such agreements, has at any time thereafter failed to cure any default under any of the Indentures in accordance with Section 1110(a)(2)(B) of the Bankruptcy Code; or (B) prior to the expiry of the 60-Day Period, Delta shall have abandoned any Aircraft.
“Certificateholder” means, with respect to any Class of Certificates, the Person in whose name a Certificate is registered in the Register for the Certificates of such Class.
“Citizen of the United States” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“Class” means a single class of Certificates issued by a Trust pursuant to a Trust Agreement.
“Class AA Cash Collateral Account” means, in respect of the Class AA Liquidity Facility, an Eligible Deposit Account in the name of the Subordination Agent maintained at an Eligible Institution, which shall be the Subordination Agent if it so qualifies, into which amounts shall be deposited as referred to in Section 3.05(f).
“Class AA Certificateholder” means, at any time, any Certificateholder of one or more Class AA Certificates.
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“Class AA Certificates” means the certificates issued by the Class AA Trust, substantially in the form of Exhibit A to the Class AA Trust Agreement, and authenticated by the Class AA Trustee, representing Fractional Undivided Interests in the Class AA Trust, and any certificates issued in exchange therefor or replacement thereof pursuant to the terms of the Class AA Trust Agreement.
“Class AA Liquidity Expenses” means all Class AA Liquidity Obligations other than (i) the principal amount of any Drawings under the Class AA Liquidity Facility and (ii) any interest accrued on any Class AA Liquidity Obligations.
“Class AA Liquidity Facility” means, initially, the Revolving Credit Agreement (2020-1AA), dated as of the date hereof, between the Subordination Agent, as agent and trustee for the Class AA Trustee, and NAB and, from and after the replacement of such agreement pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each case as amended, supplemented or otherwise modified from time to time in accordance with its terms; provided that, for purposes of any obligation of Delta, no amendment, modification or supplement to, or substitution or replacement of, any Class AA Liquidity Facility shall be effective unless consented to by Delta.
“Class AA Liquidity Obligations” means all principal, interest, fees and other amounts owing to the Class AA Liquidity Provider under the Class AA Liquidity Facility, Section 4.02 of the Participation Agreements or the applicable Fee Letter.
“Class AA Liquidity Provider” means NAB, together with any Replacement Liquidity Provider that has issued a Replacement Liquidity Facility to replace the Class AA Liquidity Facility pursuant to Section 3.05(c) or 3.05(e).
“Class AA Trust” means the Delta Air Lines Pass Through Trust 2020-1AA created and administered pursuant to the Class AA Trust Agreement.
“Class AA Trust Agreement” means the Basic Agreement, as supplemented by Trust Supplement No. 2020-1AA thereto, dated as of the date hereof, governing the creation and administration of the Delta Air Lines Pass Through Trust 2020-1AA and the issuance of the Class AA Certificates, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Class AA Trustee” means U.S. Bank, not in its individual capacity except as expressly set forth in the Class AA Trust Agreement, but solely as trustee under the Class AA Trust Agreement, together with any successor trustee appointed pursuant thereto.
“Class A Adjusted Interest” means, as of any Current Distribution Date: (I) any interest described in clause (II) of this definition accrued prior to the immediately preceding Distribution Date which remains unpaid and (II) the sum of (A) interest determined at the Stated Interest Rate for the Class A Certificates for the period commencing on, and including, the immediately preceding Distribution Date (or, if the Current Distribution Date is the first Distribution Date, the Closing Date) and ending on, but excluding, the Current Distribution Date,
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on the Eligible A Pool Balance on such Current Distribution Date and (B) the sum of interest for each Series A Equipment Note with respect to which, or with respect to the Aircraft with respect to which such Equipment Note was issued, a disposition, distribution, sale or Deemed Disposition Event has occurred since the immediately preceding Distribution Date (but only if no such event has previously occurred with respect to such Series A Equipment Note), determined at the Stated Interest Rate for the Class A Certificates for each day during the period commencing on, and including, the immediately preceding Distribution Date (or, if the Current Distribution Date is the first Distribution Date, the Closing Date) and ending on, but excluding, the date of the earliest of such disposition, distribution, sale or Deemed Disposition Event with respect to such Series A Equipment Note or such Aircraft, as the case may be, on the principal amount of such Series A Equipment Note calculated pursuant to clause (B)(i), (ii), (iii) or (iv), as applicable, of the definition of Eligible A Pool Balance.
“Class A Cash Collateral Account” means, in respect of the Class A Liquidity Facility, an Eligible Deposit Account in the name of the Subordination Agent maintained at an Eligible Institution, which shall be the Subordination Agent if it so qualifies, into which amounts shall be deposited as referred to in Section 3.05(f).
“Class A Certificateholder” means, at any time, any Certificateholder of one or more Class A Certificates.
“Class A Certificates” means the certificates issued by the Class A Trust, substantially in the form of Exhibit A to the Class A Trust Agreement, and authenticated by the Class A Trustee, representing Fractional Undivided Interests in the Class A Trust, and any certificates issued in exchange therefor or replacement thereof pursuant to the terms of the Class A Trust Agreement.
“Class A Liquidity Expenses” means all Class A Liquidity Obligations other than (i) the principal amount of any Drawings under the Class A Liquidity Facility and (ii) any interest accrued on any Class A Liquidity Obligations.
“Class A Liquidity Facility” means, initially, the Revolving Credit Agreement (2020-1A), dated as of the date hereof, between the Subordination Agent as agent and trustee for the Class A Trustee, and NAB and, from and after the replacement of such agreement pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each case as amended, supplemented or otherwise modified from time to time in accordance with its terms; provided that, for purposes of any obligation of Delta, no amendment, modification or supplement to, or substitution or replacement of, any Class A Liquidity Facility shall be effective unless consented to by Delta.
“Class A Liquidity Obligations” means all principal, interest, fees and other amounts owing to the Class A Liquidity Provider under the Class A Liquidity Facility, Section 4.02 of the Participation Agreements or the applicable Fee Letter.
“Class A Liquidity Provider” means NAB, together with any Replacement Liquidity Provider that has issued a Replacement Liquidity Facility to replace the Class A Liquidity Facility pursuant to Section 3.05(c) or 3.05(e).
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“Class A Trust” means the Delta Air Lines Pass Through Trust 2020-1A created and administered pursuant to the Class A Trust Agreement.
“Class A Trust Agreement” means the Basic Agreement, as supplemented by Trust Supplement No. 2020-1A thereto, dated as of the date hereof, governing the creation and administration of the Delta Air Lines Pass Through Trust 2020-1A and the issuance of the Class A Certificates, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Class A Trustee” means U.S. Bank, not in its individual capacity except as expressly set forth in the Class A Trust Agreement, but solely as trustee under the Class A Trust Agreement, together with any successor trustee appointed pursuant thereto.
“Closing Date” means March 12, 2020.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.
“Collateral” means, with respect to any Indenture, the “Collateral” referred to therein.
“Collection Account” means the Eligible Deposit Account established by the Subordination Agent pursuant to Section 2.02(a) in and from which the Subordination Agent shall make deposits and withdrawals in accordance with this Agreement.
“Consent Notice” has the meaning set forth in Section 3.05(d)(ii).
“Consent Period” has the meaning set forth in Section 3.05(d)(ii).
“Controlling Party” means the Person entitled to act as such pursuant to the terms of Section 2.06.
“Corporate Trust Office” means, with respect to any Trustee, the Subordination Agent or any Loan Trustee, the office of such Person in the city at which, at any particular time, its corporate trust business shall be principally administered, which on the date hereof is the address set forth in Section 9.03.
“Current Distribution Date” means a Distribution Date specified as a reference date for calculating the Expected Distributions with respect to the Certificates of any Trust as of such Distribution Date.
“Deemed Disposition Event” means, in respect of any Equipment Note, the continuation of an Indenture Event of Default in respect of such Equipment Note without an Actual Disposition Event occurring in respect of such Equipment Note for a period of five years from the date of the occurrence of such Indenture Event of Default.
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“Delta” means Delta Air Lines, Inc., a Delaware corporation, and its successors and permitted assigns.
“Delta Bankruptcy Event” means the occurrence and continuation of any of the following:
(a) Delta consents to the appointment of or the taking of possession by a receiver, trustee or liquidator of itself or of a substantial part of its property, admits in writing its inability to pay its debts generally as they come due or makes a general assignment for the benefit of creditors;
(b) Delta files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief as a debtor in a case under any bankruptcy laws or insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against Delta as a debtor in any such case, or Delta seeks relief as a debtor by voluntary petition, answer or consent, under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time), or Delta seeks an agreement, composition, extension or adjustment with its creditors under such laws;
(c) an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of Delta, a receiver, trustee or liquidator of Delta or sequestering any substantial part of its property, or granting any other relief in respect of Delta as a debtor under any bankruptcy laws or insolvency laws (as in effect at such time), and any such order, judgment or decree of appointment or sequestration remains in force undismissed, unstayed and unvacated for a period of 90 days after the date of entry thereof; or
(d) a petition against Delta as a debtor in a case under the federal bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations that applies to Delta, any court of competent jurisdiction assumes jurisdiction, custody or control of Delta or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed and unterminated for a period of 90 days.
“Delta Provisions” has the meaning specified in Section 8.01(a).
“Designated Representatives” means the Subordination Agent Representatives, the Trustee Representatives and the LP Representatives identified under Section 2.05(c).
“Distribution Date” means a Regular Distribution Date or a Special Distribution Date.
“Dollars” or “$” means the lawful currency of the United States.
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“Downgrade Date” has the meaning specified in Section 3.05(c)(i).
“Downgrade Drawing” has the meaning specified in Section 3.05(c)(iii).
“Downgrade Event”, with respect to any Liquidity Facility, has the meaning specified in such Liquidity Facility.
“Downgraded Facility” has the meaning specified in Section 3.05(c)(i).
“Drawing” means an Interest Drawing, a Final Drawing, a Non-Extension Drawing, a Special Termination Advance or a Downgrade Drawing, as the case may be.
“DTC” means The Depository Trust Company.
“Eligible A Pool Balance” means, as of any date of determination, the excess of (A) the Pool Balance of the Class A Certificates as of the immediately preceding Distribution Date (or, if such date of determination is on or before the first Distribution Date, the original aggregate face amount of the Class A Certificates) (after giving effect to distributions made on such date of determination) over (B) the sum of, with respect to each Series A Equipment Note, one of the following amounts, if applicable: (i) if there has previously been a sale or disposition by the applicable Loan Trustee of the applicable Aircraft for cash under the Indenture pursuant to which such Series A Equipment Note was issued, the outstanding principal amount of such Series A Equipment Note that remains unpaid as of such date of determination subsequent to such sale or disposition and after giving effect to any distributions of the proceeds of such sale or disposition applied under such Indenture to the payment of such Series A Equipment Note, (ii) if there has previously been an Event of Loss (as defined in such Indenture) with respect to the applicable Aircraft to which such Series A Equipment Note relates, the outstanding principal amount of such Series A Equipment Note that remains unpaid as of such date of determination subsequent to the scheduled date of mandatory redemption of such Series A Equipment Note following such Event of Loss and after giving effect to the distributions of any proceeds in respect of such Event of Loss applied under such Indenture to the payment of such Series A Equipment Note, (iii) if such Series A Equipment Note has previously been sold for cash by the Subordination Agent, the excess, if any, of (x) the outstanding amount of principal and interest as of the date of such sale by the Subordination Agent of such Series A Equipment Note over (y) the purchase price received with respect to such sale of such Series A Equipment Note for cash (net of any applicable costs and expenses of such sale) or (iv) if a Deemed Disposition Event has occurred with respect to such Series A Equipment Note, the outstanding principal amount of such Series A Equipment Note; provided, however, that if more than one of the clauses (i), (ii), (iii) and (iv) is applicable to any one Series A Equipment Note, only the amount determined pursuant to the clause that first became applicable shall be counted with respect to such Series A Equipment Note.
“Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such
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depository institution has a Long-Term Rating (or, if a Long-Term Rating is not available, its Short-Term Rating equivalent) of at least A3 from Moody’s or a Long-Term Rating (or, if a Long-Term Rating is not available, its Short-Term Rating equivalent) of at least A- from S&P. An Eligible Deposit Account may be maintained with the Subordination Agent or a Liquidity Provider so long as the Subordination Agent or such Liquidity Provider is an Eligible Institution; provided that the Subordination Agent, in its individual capacity, or such Liquidity Provider shall have waived all rights of set-off and counterclaim with respect to such account.
“Eligible Institution” means (a) the corporate trust department of the Subordination Agent or any Trustee, as applicable, or (b) a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), which has a Long-Term Rating (or, if a Long-Term Rating is not available, its Short-Term Rating equivalent) of at least A3 from Moody’s or a Long-Term Rating (or, if a Long-Term Rating is not available, its Short-Term Rating equivalent) of at least A- from S&P.
“Eligible Investments” means investments in (a) obligations of the United States government or agencies thereof, or obligations guaranteed by the United States government having maturities no later than 365 days following the date of such investment, (b) open market commercial paper of any corporation incorporated under the laws of the United States or any state thereof having a Short-Term Rating of at least P-1 or its equivalent by Moody’s and a Long-Term Rating of at least AA- or its equivalent by S&P and having maturities no later than 365 days following the date of such investment, (c) certificates of deposit, time deposits, banker’s acceptances, commercial paper or other direct obligations of, or obligations guaranteed by, commercial banks organized under the laws of the United States or of any political subdivision thereof (or any United States branch of a foreign bank) having a combined capital and surplus in excess of $500,000,000 which banks or their holding companies have a Long-Term Rating of at least Aa3 or its equivalent from Moody’s and a Long-Term Rating of at least AA- or its equivalent from S&P having maturities no later than 365 days following the date of such investment; provided, however, that the aggregate amount at any one time invested in certificates of deposit issued by any one bank shall not be in excess of 5% of such bank’s capital and surplus, (d) Dollar denominated offshore certificates of deposit issued by, or offshore time deposits with, any commercial bank described in clause (c) or any subsidiary thereof having maturities no later than 365 days following the date of such investment, (e) repurchase agreements with any financial institution having combined capital and surplus of at least $500,000,000 with any of the obligations described in clauses (a) through (d) as collateral having maturities no later than 365 days following the date of such investment and (f) shares of United States Securities and Exchange Commission registered money market mutual fund(s) having a money market fund rating of at least Aaa-mf or its equivalent from Moody’s and a money market fund rating of at least AAAm or its equivalent from S&P. If none of the above investments is available, the entire amounts to be invested may be used to purchase Federal funds from an entity described in clause (c). All Eligible Investments must be held in an Eligible Deposit Account. Any of the investments described herein may be made through or with, as applicable, the bank acting as Trustee or its Affiliates.
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“Equipment Note Special Payment” means a Special Payment on account of the redemption, purchase or prepayment of all of the Equipment Notes issued pursuant to an Indenture.
“Equipment Notes” means, at any time, the Series AA Equipment Notes and the Series A Equipment Notes and in either case, any Equipment Notes issued in exchange therefor or replacement thereof pursuant to the terms of the Indentures.
“Excess Liquidity Obligations” means, with respect to an Indenture, the amounts payable under clauses (a), (b), (c), (d), (e) and (f) of Section 2.14 of such Indenture.
“Expected Distributions” means, with respect to the Certificates of any Trust on any Current Distribution Date, the difference between (A) the Pool Balance of such Certificates as of the immediately preceding Distribution Date (or, if the Current Distribution Date is the first Distribution Date after the date of issuance of such Certificates, the original aggregate face amount of the Certificates of such Trust) and (B) the Pool Balance of such Certificates as of the Current Distribution Date calculated on the basis that (i) the principal of any Non-Performing Equipment Notes held in such Trust has been paid in full and such payments have been distributed to the holders of such Certificates, (ii) the principal of any Performing Equipment Notes held in such Trust has been paid when due (whether at stated maturity or upon prepayment or purchase or otherwise, but without giving effect to any Acceleration of Performing Equipment Notes) and such payments have been distributed to the holders of such Certificates and (iii) the principal of any Equipment Notes formerly held in such Trust that have been sold pursuant to the terms hereof has been paid in full and such payments have been distributed to the holders of such Certificates. For purposes of calculating Expected Distributions with respect to the Certificates of any Trust, any Premium paid on the Equipment Notes held in such Trust which has not been distributed to the Certificateholders of such Trust (other than such Premium or a portion thereof applied to the payment of interest in respect of the Certificates of such Trust or the reduction of the Pool Balance of such Trust) shall be added to the amount of such Expected Distributions.
“Expiry Date”, with respect to any Liquidity Facility, has the meaning specified in such Liquidity Facility.
“Fee Letter” means any fee letter entered into among the Subordination Agent, Delta and a Liquidity Provider and “Fee Letters” has a correlative meaning.
“Final Distributions” means, with respect to the Certificates of any Trust on any Distribution Date, the sum of (x) the aggregate amount of all accrued and unpaid interest on such Certificates and (y) the Pool Balance of such Certificates as of the immediately preceding Distribution Date. For purposes of calculating Final Distributions with respect to the Certificates of any Trust, any Premium paid on the Equipment Notes held in such Trust which has not been distributed to the Certificateholders of such Trust (other than such Premium or a portion thereof applied to the payment of interest on the Certificates of such Trust or the reduction of the Pool Balance of such Trust) shall be added to the amount of such Final Distributions.
“Final Drawing” has the meaning specified in Section 3.05(i).
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“Final Legal Distribution Date” means (i) with respect to the Class AA Certificates, December 10, 2029 and (ii) with respect to the Class A Certificates, December 10, 2029.
“Fractional Undivided Interest” means the fractional undivided interest in a Trust that is represented by a Certificate relating to such Trust.
“Indenture” means the Indenture and Security Agreement entered into by the Loan Trustee and Delta with respect to each aircraft described in Annex A hereto (and any aircraft substituted therefor pursuant to the related Indenture and Security Agreement), in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Indenture Event of Default” means, with respect to any Indenture, any Event of Default (as such term is defined in such Indenture) thereunder.
“Interest Drawing” has the meaning specified in Section 3.05(a).
“Interest Payment Date” means, with respect to any Liquidity Facility, each date on which interest is due and payable under such Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing, Special Termination Advance or Final Drawing thereunder, other than any such date on which interest is due and payable under such Liquidity Facility only on an Applied Provider Advance or an Applied Special Termination Advance (as such terms are defined in such Liquidity Facility).
“Investment Earnings” means investment earnings on funds on deposit in the Trust Accounts net of losses and the Subordination Agent’s reasonable expenses in making such investments.
“Lending Office” has the meaning specified in the applicable Liquidity Facility.
“Lien” means any mortgage, pledge, lien, charge, claim, disposition of title, encumbrance, lease, sublease or security interest of any kind, including, without limitation, any of the foregoing arising under any conditional sales or other title retention agreement.
“Liquidity Event of Default”, with respect to any Liquidity Facility, has the meaning specified in such Liquidity Facility.
“Liquidity Expenses” means the Class AA Liquidity Expenses and the Class A Liquidity Expenses.
“Liquidity Facility” means, at any time, the Class AA Liquidity Facility or the Class A Liquidity Facility, as applicable.
“Liquidity Obligations” means the Class AA Liquidity Obligations and the Class A Liquidity Obligations.
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“Liquidity Provider” means, at any time, the Class AA Liquidity Provider or the Class A Liquidity Provider, as applicable.
“Loan Trustee” means, with respect to any Indenture, the bank, trust company or other financial institution designated as loan trustee thereunder, and any successor to such loan trustee.
“Long-Term Rating” means, for any entity (a) in the case of Moody’s, the long-term senior unsecured debt rating of such entity and (b) in the case of S&P, the long-term issuer credit rating of such entity.
“LP Incumbency Certificate” has the meaning specified in Section 2.05(c).
“LP Representatives” has the meaning specified in Section 2.05(c).
“Majority in Interest of Noteholders”, with respect to any Indenture, has the meaning specified in such Indenture.
“Minimum Sale Price” means, with respect to any Aircraft or the Equipment Notes issued in respect of such Aircraft, at any time, the lesser of (1) in the case of the sale of an Aircraft, 80%, or in the case of the sale of such Equipment Notes, 90%, of the Appraised Current Market Value of such Aircraft and (2) the sum of the aggregate Note Target Price of such Equipment Notes and an amount equal to the Excess Liquidity Obligations in respect of the Indenture under which such Equipment Notes were issued.
“Moody’s” means Moody’s Investors Service, Inc.
“Non-Controlling Party” means, at any time, any Trustee, Liquidity Provider or other Person a party hereto, which, in each case, is not the Controlling Party at such time.
“Non-Extended Facility” has the meaning specified in Section 3.05(d)(i).
“Non-Extension Drawing” has the meaning specified in Section 3.05(d)(i).
“Non-Performing Equipment Note” means an Equipment Note issued pursuant to an Indenture that is not a Performing Equipment Note.
“Note Target Price” means, for any Equipment Note issued under any Indenture, (i) the aggregate outstanding principal amount of such Equipment Note, plus (ii) the accrued and unpaid interest thereon, together with all other sums owing on or in respect of such Equipment Note under such Indenture (including, without limitation, enforcement costs incurred by the Subordination Agent in respect of such Equipment Note).
“Notice Date” has the meaning specified in Section 3.05(d)(i).
“Operative Agreements” means this Agreement, the Liquidity Facilities, the Fee Letter(s), the Indentures, the Trust Agreements, the Participation Agreements, the Equipment Notes and the Certificates, together with all exhibits and schedules included with any of the foregoing.
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“Outstanding” means, when used with respect to each Class of Certificates, as of the date of determination, all Certificates of such Class theretofore authenticated and delivered under the related Trust Agreement, except:
(i) Certificates of such Class theretofore canceled by the Registrar (as defined in such Trust Agreement) or delivered to the Trustee thereunder or such Registrar for cancellation;
(ii) all of the Certificates of such Class for which money in the full amount required to make the Final Distribution with respect to such Certificates pursuant to Section 11.01 of such Trust Agreement has been theretofore deposited with the related Trustee in trust for the holders of such Certificates as provided in Section 4.01 of such Trust Agreement, pending distribution of such money to such Certificateholders pursuant to such Final Distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which other Certificates of such Class have been authenticated and delivered pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite Fractional Undivided Interest of such Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder, any Certificates owned by Delta or any of its Affiliates shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee of the applicable Trust shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Certificates that such Trustee knows to be so owned shall be so disregarded. Notwithstanding the foregoing, (x) if Delta and its Affiliates own 100% of the Certificates of any Class, such Certificates shall not be so disregarded and (y) if any amount of such Certificates owned by Delta and its Affiliates have been pledged in good faith, such Certificates shall not be disregarded if the pledgee establishes to the satisfaction of the applicable Trustee the pledgee’s right so to act with respect to such Certificates and that the pledgee is not Delta or any of its Affiliates.
“Overdue Scheduled Payment” means any Scheduled Payment which is not in fact received by the Subordination Agent within five days after the Scheduled Payment Date relating thereto.
“Participation Agreement” means, with respect to each Indenture, the “Participation Agreement” referred to therein, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Payees” has the meaning specified in Section 2.04(c).
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“Payment Default”, with respect to any Indenture, has the meaning specified in such Indenture.
“Performing Equipment Note” means an Equipment Note issued pursuant to an Indenture with respect to which no Payment Default has occurred and is continuing (without giving effect to any Acceleration); provided that, in the event of a bankruptcy proceeding in which Delta is a debtor under the Bankruptcy Code, (i) any payment default occurring before the date of the order for relief in such proceeding shall not be taken into consideration during the 60-Day Period (or such longer period as may apply under Section 1110(b) of the Bankruptcy Code) (the “Section 1110 Period”), (ii) any payment default occurring after the date of the order for relief in such proceeding shall not be taken into consideration if such payment default is cured under Section 1110(a)(2)(B) of the Bankruptcy Code before the later of 30 days after the date of such default or the expiration of the Section 1110 Period and (iii) any payment default occurring after the Section 1110 Period will not be taken into consideration if such payment default is cured before the end of the grace period, if any, set forth in the related Indenture.
“Performing Note Deficiency” means any time that less than 65% of the then aggregate outstanding principal amount of all Series AA Equipment Notes and Series A Equipment Notes are Performing Equipment Notes.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.
“Pool Balance” means, with respect to the Certificates of any Class, as of any date, (i) the original aggregate face amount of the Certificates of such Class less (ii) the aggregate amount of all distributions made in respect of such Certificates of such Class, other than distributions made as of such date in respect of interest or Premium or reimbursement of any costs or expenses incurred in connection therewith. The Pool Balance as of any Distribution Date with respect to each Class shall be computed after giving effect to the payment of principal, if any, on the Equipment Notes or payment with respect to other Trust Property held in the related Trust and the distribution thereof to be made on such date.
“Post-Default Appraisal” has the meaning specified in Section 4.01(a)(iv).
“Premium” means any “Make-Whole Amount” as such term is defined in any Indenture.
“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.
“PTC Event of Default” means, with respect to each Trust Agreement, the failure to distribute within 10 Business Days after the applicable Distribution Date: (i) the outstanding Pool Balance of the applicable Class of Certificates on the Final Legal Distribution Date for such Class or (ii) interest scheduled for distribution on such Certificates on any Distribution Date (unless, in the case of the Class AA Trust Agreement or the Class A Trust Agreement, the Subordination Agent shall have made an Interest Drawing or a withdrawal from the Cash Collateral Account relating to a Liquidity Facility for such Class, with respect thereto in an aggregate amount sufficient to pay such interest and shall have distributed such amount to the Trustee entitled thereto).
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“Rating Agencies” means, with respect to any Class of Certificates, collectively, at any time, each nationally recognized rating agency which shall have been requested to rate such Class of Certificates and which shall then be rating such Class of Certificates. The initial Rating Agencies for the Certificates will be Moody’s and S&P.
“Ratings Confirmation” means, with respect to any action proposed to be taken, with respect to any Class of Certificates, a written confirmation from each of the Rating Agencies to the effect that such action would not result in (i) a reduction of the rating for such Class of Certificates below the then current rating for such Class of Certificates or (ii) a withdrawal or suspension of the rating of such Class of Certificates.
“Refinancing Certificateholders” has the meaning specified in Section 8.01(c).
“Refinancing Certificate” has the meaning specified in Section 8.01(c).
“Refinancing Equipment Notes” has the meaning specified in Section 8.01(c).
“Refinancing Trust” has the meaning specified in Section 8.01(c).
“Refinancing Trust Agreement” has the meaning specified in Section 8.01(c).
“Refinancing Trustee” has the meaning specified in Section 8.01(c).
“Register”, with respect to any Trust, has the meaning ascribed to such term in the Trust Agreement for such Trust.
“Regular Distribution Dates” means each June 10 and December 10, commencing on June 10, 2020; provided, however, that, if any such day shall not be a Business Day, the related distribution shall be made on the next succeeding Business Day without additional interest.
“Replacement Airframe”, with respect to any Indenture, has the meaning specified in such Indenture.
“Replacement Liquidity Facility” means, for any Liquidity Facility, an irrevocable revolving credit agreement (or agreements) in substantially the form of the replaced Liquidity Facility, including reinstatement provisions, or an agreement (or agreements) in such other form (which may include, without limitation, one or more letters of credit, surety bonds, financial insurance policies or guaranties), or any combination thereof, as shall permit the Rating Agencies to confirm in writing their respective ratings then in effect for the Certificates of the Class with respect to which such Liquidity Facility was issued (before downgrading of such ratings, if any, as a result of the downgrading, if any, of the applicable Liquidity Provider), in a face amount (or in an aggregate face amount) equal to the applicable Required Amount and issued by a Person (or
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Persons) having the minimum Long-Term Rating specified by each Rating Agency as the applicable Threshold Rating for such Rating Agency and the applicable Class of Certificates. A Replacement Liquidity Facility for any Class of Certificates may have a stated expiration date earlier than 15 days after the Final Legal Distribution Date of such Class of Certificates so long as such Replacement Liquidity Facility provides for a Non-Extension Drawing as contemplated by Section 3.05(d) hereof.
“Replacement Liquidity Provider” means a Person (or Persons) who issues a Replacement Liquidity Facility.
“Required Amount” means, with respect to each Liquidity Facility or the Cash Collateral Account for any Class, for any day, the sum of the aggregate amount of interest, calculated at the rate per annum equal to the Stated Interest Rate for the related Class of Certificates on the basis of a 360-day year comprised of twelve 30-day months, that would be distributable on such Class of Certificates on each of the three successive Regular Distribution Dates immediately following such day or, if such day is a Regular Distribution Date, on such day and the two succeeding Regular Distribution Dates, in each case calculated on the basis of the Pool Balance of such Class of Certificates on such day and without regard to expected future distributions of principal on such Class of Certificates.
“Responsible Officer” means (i) with respect to the Subordination Agent and each of the Trustees, any officer in the Corporate Trust Office of the Subordination Agent or such Trustee, as the case may be, who is responsible for the transaction contemplated hereunder, or any other officer customarily performing functions similar to those performed by the persons who at the time shall be such officers or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject, and (ii) with respect to any Liquidity Provider, any authorized officer of such Liquidity Provider.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.
“Scheduled Payment” means, with respect to any Equipment Note, (i) any payment of principal or interest on such Equipment Note (other than an Overdue Scheduled Payment) or (ii) any distribution in respect of interest on such Equipment Note to the Certificateholders of Certificates of the corresponding Class of Certificates with funds drawn under the Liquidity Facility for such Class or withdrawn from the Cash Collateral Account for such Class, which payment in the case of clause (i) or clause (ii) represents an installment of principal on such Equipment Note at the stated maturity of such installment, or the payment of regularly scheduled interest accrued on the unpaid principal amount of such Equipment Note, or both; provided, however, that any payment of principal, Premium, if any, or interest resulting from the redemption, purchase or prepayment of any Equipment Note shall not constitute a Scheduled Payment.
“Scheduled Payment Date” means, with respect to any Scheduled Payment, the date on which such Scheduled Payment is scheduled to be made.
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“Section 2.04 Fraction” means, with respect to any Special Distribution Date, a fraction, the numerator of which shall be the amount of principal of the applicable Series AA Equipment Notes and Series A Equipment Notes being redeemed, purchased or prepaid on such Special Distribution Date, and the denominator of which shall be the aggregate unpaid principal amount of all Series AA Equipment Notes and Series A Equipment Notes outstanding as of such Special Distribution Date immediately before giving effect to such redemption, purchase or prepayment.
“Series AA Equipment Notes” means the equipment notes issued pursuant to each Indenture by Delta and authenticated by the Loan Trustee thereunder, and designated “Series AA Equipment Notes” thereunder, and any such Equipment Notes issued in exchange therefor or replacement thereof pursuant to the terms of such Indenture.
“Series A Equipment Notes” means the equipment notes issued pursuant to each Indenture by Delta and authenticated by the Loan Trustee thereunder, and designated “Series A Equipment Notes” thereunder, and any such Equipment Notes issued in exchange therefor or replacement thereof pursuant to the terms of such Indenture.
“Short-Term Rating” means, for any entity, (a) in the case of Moody’s, the short-term senior unsecured debt rating of such entity and (b) in the case of S&P, the short-term issuer credit rating of such entity.
“Special Distribution Date” means, with respect to any Special Payment, the Business Day chosen by the Subordination Agent pursuant to Section 2.04(a) for the distribution of such Special Payment in accordance with this Agreement.
“Special Payment” means any payment (other than a Scheduled Payment) in respect of, or any proceeds of, any Equipment Note or Collateral.
“Special Payments Account” means the Eligible Deposit Account created pursuant to Section 2.02(a) as a sub-account to the Collection Account.
“Special Termination Advance” has the meaning assigned to such term in the applicable Liquidity Facility.
“Special Termination Notice” with respect to any Liquidity Facility has the meaning assigned to such term (if such term is used therein) in such Liquidity Facility.
“Stated Amount”, with respect to any Liquidity Facility, means the Maximum Commitment (as defined in such Liquidity Facility) of the applicable Liquidity Provider thereunder.
“Stated Expiration Date” has the meaning specified in Section 3.05(d).
“Stated Interest Rate” means (i) with respect to the Class AA Certificates, 2.00% per annum and (ii) with respect to the Class A Certificates, 2.50% per annum.
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“Subordination Agent” has the meaning specified in the introductory paragraph to this Agreement.
“Subordination Agent Incumbency Certificate” has the meaning specified in Section 2.05(a).
“Subordination Agent Representatives” has the meaning specified in Section 2.05(a).
“Substitute Aircraft”, with respect to any Indenture, has the meaning specified in such Indenture.
“Substitute Airframe”, with respect to any Indenture, has the meaning specified in such Indenture.
“Tax” and “Taxes” means all governmental fees (including, without limitation, license, filing and registration fees) and all taxes (including, without limitation, franchise, excise, stamp, value added, income, gross receipts, sales, use and property taxes), withholdings, assessments, levies, imposts, duties or charges, of any nature whatsoever, together with any related penalties, fines, additions to tax or interest thereon imposed, withheld, levied or assessed by any country, taxing authority or governmental subdivision thereof or therein or by any international authority, including any taxes imposed on any Person as a result of such Person being required to collect and pay over withholding taxes.
“Termination Notice” has the meaning specified in the Liquidity Facility.
“Threshold Rating” means (i) for the Class AA Trust, a Long-Term Rating of Baa2 as determined by Moody’s and a Long-Term Rating of A- as determined by S&P and (ii) for the Class A Trust, a Long-Term Rating of Baa2 as determined by Moody’s and a Long-Term Rating of BBB- as determined by S&P.
“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.
“Triggering Event” means (x) the occurrence of an Indenture Event of Default under all of the Indentures resulting in a PTC Event of Default with respect to the most senior Class of Certificates then Outstanding, (y) the Acceleration of all of the outstanding Equipment Notes or (z) the occurrence of a Delta Bankruptcy Event.
“Trust” means the Class AA Trust or the Class A Trust, as applicable.
“Trust Accounts” has the meaning specified in Section 2.02(a).
“Trust Agreement” means the Class AA Trust Agreement or the Class A Trust Agreement, as applicable.
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“Trust Property”, with respect to any Trust, has the meaning specified in the Trust Agreement for such Trust.
“Trust Supplement” means an agreement supplemental to the Basic Agreement pursuant to which (i) a separate trust is created for the benefit of the holders of Certificates of a Class, (ii) the issuance of the Certificates of a Class representing Fractional Undivided Interests in such trust is authorized and (iii) the terms of the Certificates of such Class are established, as such agreement may from time to time be supplemented, amended or otherwise modified.
“Trustee” means the Class AA Trustee or the Class A Trustee, as applicable.
“Trustee Incumbency Certificate” has the meaning specified in Section 2.05(b).
“Trustee Representatives” has the meaning specified in Section 2.05(b).
“Unapplied Provider Advance” has the meaning specified in the applicable Liquidity Facility.
“Unapplied Special Termination Advance ” has the meaning specified in the applicable Liquidity Facility.
“Underwriters” means Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, BofA Securitie, Inc., Goldman Sachs & Co. LLC, Banco Bilbao Vizcaya Argentaria, S.A., Deutsche Bank Securities Inc., PNC Capital Markets LLC and Standard Chartered Bank.
“Underwriting Agreement” means the Underwriting Agreement, dated March 4, 2020 among the Representatives (as defined in the Underwriting Agreement) of the Underwriters and Delta, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“United States” means the United States of America.
“U.S. Bank” has the meaning specified in the introductory paragraph of this Agreement.
“Withdrawal Notice” has the meaning specified in Section 3.05(d)(ii).
“Written Notice” means, from the Subordination Agent, any Trustee or Liquidity Provider, a written instrument executed by the Designated Representative of such Person. An invoice delivered by a Liquidity Provider pursuant to Section 3.01 in accordance with its normal invoicing procedures shall constitute Written Notice under such Section.
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ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01 Agreement to Terms of Subordination; Payments from Monies Received Only. (a) Each Trustee hereby (i) acknowledges and agrees to the terms of subordination and distribution set forth in this Agreement in respect of each Class of Certificates and (ii) agrees to enforce such provisions and cause all payments in respect of the Equipment Notes held by the Subordination Agent and the Liquidity Facilities to be applied in accordance with the terms of this Agreement. In addition, each Trustee hereby agrees to cause the Equipment Notes purchased by the related Trust to be registered in the name of the Subordination Agent or its nominee, as agent and trustee for such Trustee, to be held in trust by the Subordination Agent solely for the purpose of facilitating the enforcement of the subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding sentence of this Section 2.01(b), all payments to be made by the Subordination Agent hereunder shall be made only from amounts received by it that constitute Scheduled Payments, Special Payments and other payments under the Operative Agreements, including payments under Section 4.02 of the Participation Agreements and Section 2.14 of the Indentures, and only to the extent that the Subordination Agent shall have received sufficient income or proceeds therefrom to enable it to make such payments in accordance with the terms hereof. Each Trustee and the Subordination Agent hereby agrees, and each Certificateholder, by its acceptance of a Certificate, and each Liquidity Provider, by entering into the Liquidity Facility to which it is a party, has agreed to look solely to such amounts to the extent available for distribution to it as provided in this Agreement or the applicable Trust Agreement, as the case may be, and that none of the Trustees, the Loan Trustees or the Subordination Agent is personally liable to any of them for any amounts payable or any liability arising under this Agreement, any Trust Agreement, any Liquidity Facility or such Certificate, except (in the case of the Subordination Agent) as expressly provided herein or (in the case of the Trustees) as expressly provided herein and in each Trust Agreement or (in the case of the Loan Trustees) as expressly provided in any Operative Agreement.
(c) Notwithstanding anything to the contrary in this Agreement and in the other Operative Agreements, the Certificates do not represent indebtedness of the related Trust, and references in this Agreement and the Operative Agreements to accrued interest or principal amounts payable on the Certificates of any Class are included only for computational purposes. For purposes of such computations, the Certificates of any Class shall be deemed to be comprised of interest and principal components, with the principal component deemed to be the Pool Balance, and the interest component deemed to equal interest accruing at the Stated Interest Rate for such Class of Certificates from the later of (1) the date of the issuance thereof and (2) the most recent but preceding Distribution Date to which such interest was distributed to, but excluding, the applicable date of determination, such interest to be considered payable in arrears and to be calculated on the basis of a 360-day year comprised of twelve 30-day months.
Section 2.02 Trust Accounts. (a) Upon the execution of this Agreement, the Subordination Agent shall establish and maintain in its name (i) the Collection Account as an Eligible Deposit Account, bearing a designation clearly indicating that the funds deposited therein are held in trust for the benefit of the Trustees, the Certificateholders and the Liquidity Providers, and (ii) as a sub-account in the Collection Account, the Special Payments Account as an Eligible Deposit Account, bearing a designation clearly indicating that the funds deposited therein are held
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in trust for the benefit of the Trustees, the Certificateholders and the Liquidity Providers. The Subordination Agent shall establish and maintain the Cash Collateral Accounts pursuant to and under the circumstances set forth in Section 3.05(f). Upon such establishment and maintenance under Section 3.05(f), the Cash Collateral Accounts shall, together with the Collection Account, constitute the “Trust Accounts” hereunder. Without limiting the foregoing, all monies credited to the Trust Accounts shall be, and shall remain, the property of the relevant Trust(s).
(b) Funds on deposit in the Trust Accounts shall be invested and reinvested by the Subordination Agent in Eligible Investments selected by Delta or its designated representative if such investments are reasonably available and have maturities no later than the earlier of (i) 90 days following the date of such investment and (ii) the Business Day immediately preceding the Regular Distribution Date or the date of the related distribution pursuant to Section 2.04, as the case may be, next following the date of such investment; provided, however, that, following the making of a Non-Extension Drawing, a Downgrade Drawing or a Special Termination Advance under any Liquidity Facility, the Subordination Agent shall invest and reinvest the amounts in the applicable Cash Collateral Account in Eligible Investments pursuant to the written instructions of the Liquidity Provider funding such Drawing, and provided further, however, that upon the occurrence and during the continuation of a Triggering Event, the Subordination Agent shall invest and reinvest the amounts on deposit in the Trust Accounts (other than amounts in the Cash Collateral Accounts as a result of a Non-Extension Drawing, a Downgrade Drawing or a Special Termination Advance, which shall be governed by the foregoing proviso) in Eligible Investments in accordance with the written instructions of the Controlling Party. Unless otherwise expressly provided in this Agreement (including, without limitation, with respect to Investment Earnings on amounts on deposit in the Cash Collateral Accounts, Section 3.05(f)), any Investment Earnings shall be deposited in the Collection Account when received by the Subordination Agent and shall be applied by the Subordination Agent in the same manner as the other amounts on deposit in the Collection Account are to be applied. The Subordination Agent’s reasonable fees and expenses actually incurred in making such investments and any losses incurred in such investments shall be charged against the principal amount invested. The Subordination Agent shall not be liable for any loss resulting from any investment, reinvestment or liquidation required to be made under this Agreement other than by reason of its willful misconduct or negligence. Eligible Investments and any other investment required to be made hereunder shall be held to their maturities except that any such investment may be sold (without regard to its maturity) by the Subordination Agent without instructions whenever such sale is necessary to make a distribution required under this Agreement. Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof (including all income thereon, except as otherwise expressly provided herein with respect to Investment Earnings). The Trust Accounts shall be held in trust by the Subordination Agent under the sole dominion and control of the Subordination Agent for the benefit of the applicable Trustee, the applicable Certificateholders and the applicable Liquidity Provider, as the case may be. If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Subordination Agent shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, to which a Rating Agency may consent) establish a new Collection Account, Special Payments Account or Cash
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Collateral Account, as the case may be, as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Collection Account, Special Payments Account or Cash Collateral Account, as the case may be. So long as the Subordination Agent is an Eligible Institution, the Trust Accounts shall be maintained with it as Eligible Deposit Accounts.
Section 2.03 Deposits to the Collection Account and Special Payments Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in the Collection Account all Scheduled Payments received by it (other than any Scheduled Payment which by the express terms hereof is to be deposited to a Cash Collateral Account).
(b) The Subordination Agent shall, on each day when one or more Special Payments are made to the Subordination Agent as holder of the Equipment Notes, deposit in the Special Payments Account the aggregate amount of such Special Payments.
Section 2.04 Distributions of Special Payments. (a) Notice of Special Payment. Except as provided in Section 2.04(c) below, upon receipt by the Subordination Agent, as registered holder of the Equipment Notes, of any notice of a Special Payment (or, in the absence of any such notice, upon receipt by the Subordination Agent of a Special Payment), the Subordination Agent shall promptly give notice thereof to each Trustee and the Liquidity Providers. The Subordination Agent shall promptly calculate the amount of the proceeds of any redemption, purchase or prepayment of any Equipment Note or the amount of any Overdue Scheduled Payment or the proceeds of Equipment Notes or Collateral, as the case may be, comprising such Special Payment under the applicable Indenture or Indentures and shall promptly send to each Trustee and the Liquidity Providers a Written Notice of such amount and the amount allocable to each Trust. Such Written Notice shall also set the distribution date for such Special Payment (a “Special Distribution Date”), which shall be the Business Day which immediately follows the later to occur of (x) the 15th day after the date of such Written Notice and (y) the date the Subordination Agent has received or expects to receive such Special Payment. Amounts on deposit in the Special Payments Account shall be distributed in accordance with Sections 2.04(b) and 2.04(c) and Article III hereof, as applicable.
For the purposes of the application of any Special Payment in respect of any Equipment Note to be distributed on any Special Distribution Date in accordance with Section 3.02 hereof, so long as no Indenture Event of Default shall have occurred and be continuing under any Indenture:
(i) clause “second” thereof shall be deemed to read as follows: “second, accrued and unpaid Liquidity Expenses then overdue plus an amount equal to all accrued and unpaid Liquidity Expenses not yet overdue multiplied by the Section 2.04 Fraction shall be distributed to the Liquidity Providers pro rata on the basis of the amount of the Liquidity Expenses owed to each Liquidity Provider”;
(ii) clause “third” thereof shall be deemed to read as follows: “third, (i) such amount as shall be required to pay accrued and unpaid interest then overdue on all Liquidity Obligations (at the rate, or in the amount, provided in the applicable Liquidity Facility) plus an amount equal to the amount of accrued and unpaid interest on the Liquidity
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Obligations not yet overdue multiplied by the Section 2.04 Fraction, and (ii) if one or more Special Termination Advances have been made under the Liquidity Facilities and have not been converted into a Final Drawing, the outstanding amount of such Special Termination Advances, shall be distributed to the Liquidity Providers, pro rata on the basis of the amounts owed to each Liquidity Provider”;
(iii) clause “seventh” thereof shall be deemed to read as follows: “seventh, such amount as shall be required to pay accrued, due and unpaid interest at the Stated Interest Rate on the outstanding Pool Balance of the Class AA Certificates, together with (without duplication) any other accrued and unpaid interest at the Stated Interest Rate on the outstanding principal amount of the Series AA Equipment Notes held in the Class AA Trust being redeemed, purchased or prepaid shall be paid to the Class AA Trustee”;
(iv) clause “eighth” thereof shall be deemed to read as follows: “eighth, such amount as shall be required to pay any accrued, due and unpaid Class A Adjusted Interest to the holders of the Class A Certificates shall be paid to the Class A Trustee”; and
(v) clause “tenth” thereof shall be deemed to read as follows: “tenth, such amount as shall be required to pay in full accrued, due and unpaid interest at the Stated Interest Rate on the outstanding Pool Balance of the Class A Certificates which was not previously paid pursuant to clause “eighth” above to the holders of the Class A Certificates, together with (without duplication) any other accrued and unpaid interest at the Stated Interest Rate on the outstanding principal amount of the Series A Equipment Notes held in the Class A Trust and being redeemed, purchased or prepaid shall be paid to the Class A Trustee”.
(b) Investment of Amounts in Special Payments Account. Any amounts on deposit in the Special Payments Account prior to the distribution thereof pursuant to Section 2.04 or 3.02 shall be invested in accordance with Section 2.02(b). Investment Earnings on such investments shall be distributed in accordance with Article III hereof.
(c) Certain Payments. Except for amounts constituting Liquidity Obligations which shall be distributed as provided in Section 3.02, the Subordination Agent will distribute promptly upon receipt thereof (i) any indemnity payment or expense reimbursement received by it from Delta in respect of any Trustee or any Liquidity Provider (collectively, the “Payees”) and (ii) any compensation received by it from Delta under any Operative Agreement in respect of any Payee, directly to the Person entitled thereto, provided that if such Payee has previously received from the Collection Account such payment, compensation or reimbursement, then the Subordination Agent shall deposit such amount in the Collection Account.
Section 2.05 Designated Representatives. (a) With the delivery of this Agreement, the Subordination Agent shall furnish to each Liquidity Provider and each Trustee, and from time to time thereafter may furnish to each Liquidity Provider and each Trustee, at the Subordination Agent’s discretion, or upon any Liquidity Provider’s or any Trustee’s request (which request shall not be made more than one time in any 12-month period), a certificate (a “Subordination Agent Incumbency Certificate”) of a Responsible Officer of the Subordination
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Agent certifying as to the incumbency and specimen signatures of the officers of the Subordination Agent and the attorney-in-fact and agents of the Subordination Agent (the “Subordination Agent Representatives”) authorized to give Written Notices on behalf of the Subordination Agent hereunder. Until each Liquidity Provider and Trustee receives a subsequent Subordination Agent Incumbency Certificate, it shall be entitled to rely on the last Subordination Agent Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to the Subordination Agent, and from time to time thereafter may furnish to the Subordination Agent, at such Trustee’s discretion, or upon the Subordination Agent’s request (which request shall not be made more than one time in any 12-month period), a certificate (with respect to each such Trustee, a “Trustee Incumbency Certificate”) of a Responsible Officer of such Trustee certifying as to the incumbency and specimen signatures of the officers of such Trustee and the attorney-in-fact and agents of such Trustee (with respect to each such Trustee, the “Trustee Representatives”) authorized to give Written Notices on behalf of such Trustee hereunder. Until the Subordination Agent receives a subsequent Trustee Incumbency Certificate from a Trustee, it shall be entitled to rely on the last Trustee Incumbency Certificate with respect to such Trustee delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider shall furnish to the Subordination Agent, and from time to time thereafter may furnish to the Subordination Agent, at such Liquidity Provider’s discretion, or upon the Subordination Agent’s request (which request shall not be made more than one time in any 12-month period), a certificate (with respect to each such Liquidity Provider, an “LP Incumbency Certificate”) of a Responsible Officer of such Liquidity Provider certifying as to the incumbency and specimen signatures of the officers of such Liquidity Provider and the attorney-in-fact and agents of such Liquidity Provider (with respect to each such Liquidity Provider, the “LP Representatives” and, together with the Subordination Agent Representatives and the Trustee Representatives, the “Designated Representatives”) authorized to give Written Notices on behalf of such Liquidity Provider hereunder. Until the Subordination Agent receives a subsequent LP Incumbency Certificate from a Liquidity Provider, it shall be entitled to rely on the last LP Incumbency Certificate with respect to such Liquidity Provider delivered to it hereunder.
Section 2.06 Controlling Party. (a) Subject to Section 8.01(b), the Trustees and the Liquidity Providers hereby agree that, with respect to any Indenture at any given time, the Loan Trustee thereunder will be directed: (i) so long as no Indenture Event of Default has occurred and is continuing thereunder, in taking, or refraining from taking, any action under such Indenture or with respect to the Equipment Notes issued thereunder by a Majority in Interest of Noteholders of such Equipment Notes (provided that, for so long as the Subordination Agent is the registered holder of such Equipment Notes, the Subordination Agent shall act with respect to this clause (i) in accordance with the directions of the Trustees (in the case of each such Trustee, with respect to the Equipment Notes issued under such Indenture and held as Trust Property of such Trust) constituting, in the aggregate, directions with respect to an outstanding principal amount of such Equipment Notes that, if held by such Trustees directly, would make such Trustees a Majority in Interest of Noteholders), and (ii) after the occurrence and during the continuance of an Indenture
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Event of Default thereunder, in taking, or refraining from taking, any action under such Indenture or with respect to such Equipment Notes issued thereunder, including exercising remedies thereunder (including Accelerating the Equipment Notes issued thereunder or foreclosing the Lien created thereunder on the Aircraft securing such Equipment Notes), by the Controlling Party.
(b) Subject to paragraph (c) below, the “Controlling Party” shall be (i) the Class AA Trustee and (ii) upon payment of Final Distributions to the holders of Class AA Certificates, but prior to payment of Final Distributions to the holders of Class A Certificates, the Class A Trustee, and (iii) upon payment of Final Distributions to the holders of Class AA Certificates and Class A Certificates, but, if any class or classes of Additional Certificates are outstanding, prior to payment of Final Distributions to the holders of the most senior, in priority of payment of “Expected Distributions” under this Agreement, class of Additional Certificates, the Additional Trustee for the Additional Trust related to such most senior class of Additional Certificates. For purposes of giving effect to the provisions of Section 2.06(a) and this Section 2.06(b), the Trustees (other than the Controlling Party) irrevocably agree (and the Certificateholders (other than the Certificateholders represented by the Controlling Party) shall be deemed to agree by virtue of their purchase of Certificates) that the Subordination Agent, as record holder of the Equipment Notes, and subject always to the provisions of Section 2.06(a) and Article VIII, shall exercise its voting rights in respect of the Equipment Notes so held by the Subordination Agent as directed by the Controlling Party and any vote so exercised shall be binding upon the Trustees and all Certificateholders.
The Subordination Agent shall give Written Notice to all of the other parties to this Agreement promptly upon a change in the identity of the Controlling Party. Each of the parties hereto agrees that it shall not exercise any of the rights of the Controlling Party at such time as it is not the Controlling Party hereunder; provided, however, that nothing herein contained shall prevent or prohibit any Non-Controlling Party from exercising such rights as shall be specifically granted to such Non-Controlling Party hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from the earliest to occur of (i) the date on which the entire Available Amount as of such date under any Liquidity Facility shall have been drawn (for any reason other than a Downgrade Drawing or a Non-Extension Drawing but including a Final Drawing, a Special Termination Advance or a Downgrade Drawing or Non-Extension Drawing that has been converted into a Final Drawing under such Liquidity Facility) and remains unreimbursed, (ii) the date on which the entire amount of any Downgrade Drawing or Non-Extension Drawing under any Liquidity Facility shall have become and remain “Applied Downgrade Advances” or “Applied Non-Extension Advances”, as the case may be, under and as defined in such Liquidity Facility and (iii) the date on which all Equipment Notes under all Indentures shall have been Accelerated (provided that in the event of a bankruptcy proceeding under the Bankruptcy Code in which Delta is a debtor, any amounts payable in respect of Equipment Notes which have become immediately due and payable by declaration or otherwise shall not be considered Accelerated for purposes of this subclause (iii) until the expiration of the 60-Day Period or such longer period as may apply under Section 1110(a)(2)(B) or Section 1110(b) of the Bankruptcy Code), the Liquidity Provider with the greatest amount of unreimbursed Liquidity Obligations owed to it (so long as such Liquidity
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Provider has not defaulted in its obligation to make any Drawing under its Liquidity Facility) shall have the right to elect, by Written Notice to the Subordination Agent and each of the Trustees, to become the Controlling Party hereunder with respect to any Indenture at any time from and including the last day of such 18-month period.
(d) [Reserved].
(e) The exercise of remedies by the Controlling Party under this Agreement shall be expressly limited by Sections 4.01(a)(ii) and 4.01(a)(iii) hereof.
(f) The Controlling Party shall not be entitled to require or obligate any Non-Controlling Party to provide funds necessary to exercise any right or remedy hereunder.
(g) Notwithstanding anything contained herein, neither the Controlling Party nor the Subordination Agent shall be authorized or empowered to do anything that would cause any Trust to fail to qualify as a “grantor trust” for federal income tax purposes.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED
Section 3.01 Written Notice of Distribution. (a) No later than 3:00 P.M. (New York City time) on the Business Day immediately preceding each Distribution Date, each of the following Persons shall deliver to the Subordination Agent a Written Notice setting forth the following information as at the close of business on such Business Day:
(i) With respect to the Class AA Certificates, the Class AA Trustee shall separately set forth the amounts to be paid in accordance with clause “first” (to reimburse payments made by such Trustee or the Class AA Certificateholders, as the case may be, pursuant to subclause (ii) or (iv) of clause “first”) of Section 3.02 hereof, subclauses (ii) and (iii) of clause “sixth” of Section 3.02 hereof and clauses “seventh” and “ninth” of Section 3.02 hereof;
(ii) With respect to the Class A Certificates, the Class A Trustee shall separately set forth the amounts to be paid in accordance with clause “first” (to reimburse payments made by such Trustee or the Class A Certificateholders, as the case may be, pursuant to subclause (ii) or (iv) of clause “first”) of Section 3.02 hereof, subclauses (ii) and (iii) of clause “sixth” of Section 3.02 hereof and clauses “eighth”, “tenth” and “eleventh” of Section 3.02 hereof;
(iii) With respect to each Liquidity Facility, the Liquidity Provider thereunder shall separately set forth the amounts to be paid to it in accordance with subclauses (iii) and (iv) of clause “first” of Section 3.02 hereof, clause “second” of Section 3.02 hereof, clause “third” of Section 3.02 hereof, clause “fourth” of Section 3.02 hereof and clause “fifth” of Section 3.02 hereof; and
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(iv) Each Trustee shall set forth the amounts to be paid in accordance with clause “sixth” of Section 3.02 hereof.
(b) At such time as a Trustee or a Liquidity Provider shall have received all amounts owing to it (and, in the case of a Trustee, the Certificateholders for which it is acting) pursuant to Section 3.02 hereof, as applicable, and, in the case of a Liquidity Provider, its commitment or obligations under the related Liquidity Facility shall have terminated or expired, such Person shall, by a Written Notice, so inform the Subordination Agent, Delta and each other party to this Agreement.
(c) As provided in Section 6.05, the Subordination Agent shall be fully protected in relying on any of the information set forth in a Written Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs (a) and (b) above and shall have no independent obligation to verify, calculate or recalculate any amount set forth in any Written Notice delivered in accordance with such paragraphs.
(d) Any Written Notice delivered by a Trustee, a Liquidity Provider or the Subordination Agent, as applicable, pursuant to Section 3.01, if made prior to 10:00 A.M. (New York City time) on any Business Day shall be effective on the date delivered (or if delivered later on a Business Day or if delivered on a day that is not a Business Day shall be effective as of the next Business Day). Subject to the terms of this Agreement, the Subordination Agent shall as promptly as practicable comply with any such instructions; provided, however, that any transfer of funds pursuant to any instruction received after 10:00 A.M. (New York City time) on any Business Day may be made on the next succeeding Business Day.
(e) In the event the Subordination Agent shall not receive from any Person any information set forth in paragraph (a) above which is required to enable the Subordination Agent to make a distribution to such Person pursuant to Section 3.02 hereof, the Subordination Agent shall request such information and, failing to receive any such information, the Subordination Agent shall not make such distribution(s) to such Person. In such event, the Subordination Agent shall make distributions pursuant to clauses “first” through “eleventh” of Section 3.02 to the extent it shall have sufficient information to enable it to make such distributions, and shall continue to hold any funds remaining on the terms hereof, including Section 2.02(b), after making such distributions, until the Subordination Agent shall receive all necessary information to enable it to distribute any funds so withheld, and upon receipt of the information necessary to distribute any funds so withheld, the Subordination Agent shall distribute such funds.
(f) On such dates (but not more frequently than monthly) as any Liquidity Provider or any Trustee shall request, but in any event automatically at the end of each calendar quarter, the Subordination Agent shall send to such party a written statement reflecting all amounts on deposit with the Subordination Agent pursuant to Section 3.01(e).
The notices required under Section 3.01(a) may be in the form of a schedule or similar document provided to the Subordination Agent by the parties referenced therein or by any one of them, which schedule or similar document may state that, unless there has been a prepayment of the Equipment Notes, such schedule or similar document is to remain in effect until any substitute notice or amendment shall be given to the Subordination Agent by the party providing such notice.
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Section 3.02 Distribution of Amounts on Deposit in the Collection Account. Except as otherwise provided in Sections 2.04, 3.01(e), 3.03, 3.05(b) and 3.05(l), amounts on deposit in the Collection Account (including amounts on deposit in the Special Payments Account) shall be promptly distributed on each Regular Distribution Date (or, in the case of any amount described in Sections 2.04(a) or 2.04(b), on the Special Distribution Date thereof) in the following order of priority and in accordance with the information provided to the Subordination Agent pursuant to Section 3.01(a):
first, such amount as shall be required to reimburse (i) the Subordination Agent for any reasonable out-of-pocket costs and expenses actually incurred by it (to the extent not previously reimbursed) or reasonably expected to be incurred by it for the period ending on the next succeeding Regular Distribution Date (which shall not exceed $150,000 unless approved in writing by the Controlling Party and accompanied by evidence that such costs are actually expected to be incurred) in the protection of, or the realization of the value of, the Equipment Notes or any Collateral, shall be applied by the Subordination Agent in reimbursement of such costs and expenses, (ii) any Trustee for any amounts of the nature described in clause (i) above actually incurred by it under the applicable Trust Agreement (to the extent not previously reimbursed), shall be distributed to such Trustee, (iii) any Liquidity Provider for any amounts of the nature described in clause (i) above actually incurred by it (to the extent not previously reimbursed), shall be distributed to such Liquidity Provider, and (iv) any Liquidity Provider or any Certificateholder for payments, if any, made by it to the Subordination Agent or any Trustee in respect of amounts described in clause (i) above actually incurred by it (to the extent not previously reimbursed) (collectively, the “Administration Expenses”), shall be distributed to such Liquidity Provider or the applicable Trustee for the account of such Certificateholder, in each such case, pro rata on the basis of all amounts described in clauses (i) through (iv) above;
second, such amount as shall be required to pay all accrued and unpaid Liquidity Expenses owed to each Liquidity Provider (other than amounts distributed pursuant to clause “first” of this Section 3.02) shall be distributed to the Liquidity Providers pro rata on the basis of the amount of Liquidity Expenses owed to each Liquidity Provider;
third, (i) such amount as shall be required to pay the aggregate amount of accrued and unpaid interest on all Liquidity Obligations (at the rate, or in the amount, provided in the applicable Liquidity Facility) shall be distributed to the Liquidity Providers pro rata on the basis of the amounts owed to each Liquidity Provider, and, after giving effect to clause (i) above, (ii) if one or more Special Termination Advances have been made under the Liquidity Facilities that have not been converted into a Final Drawing, the outstanding amount of such Special Termination Advances shall be distributed to the Liquidity Providers pro rata on the basis of the amounts owed to each Liquidity Provider;
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fourth, such amount as shall be required (A) if any Cash Collateral Account had been previously funded as provided in Section 3.05(f), unless (i) on such Distribution Date a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing with respect to the relevant Liquidity Facility or (ii) a Final Drawing shall have occurred with respect to such Liquidity Facility or an Interest Drawing for such Liquidity Facility shall have been converted into a Final Drawing, to fund such Cash Collateral Account up to its Required Amount shall be deposited in such Cash Collateral Account, (B) if any Liquidity Facility shall become a Downgraded Facility or a Non-Extended Facility at a time when unreimbursed Interest Drawings under such Liquidity Facility have reduced the Available Amount thereunder to zero, unless (i) on such Distribution Date a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing with respect to the relevant Liquidity Facility or (ii) a Final Drawing shall have occurred with respect to such Liquidity Facility or an Interest Drawing for such Liquidity Facility shall have been converted into a Final Drawing, to fund such Cash Collateral Account up to its Required Amount shall be deposited in the related Cash Collateral Account, and (C) if, with respect to any particular Liquidity Facility neither subclause (A) nor subclause (B) of this clause “fourth” is applicable, to pay or reimburse the Liquidity Provider in respect of such Liquidity Facility in an amount equal to the outstanding amount of all Liquidity Obligations then due under such Liquidity Facility (other than amounts distributed pursuant to clauses “first”, “second” or “third” of this Section 3.02), pro rata on the basis of the amounts of all such fundings and/or unreimbursed Liquidity Obligations payable to each Liquidity Provider;
fifth, if, with respect to any particular Liquidity Facility, any amounts are to be distributed pursuant to either subclause (A) or (B) of clause “fourth” above, then the Liquidity Provider with respect to such Liquidity Facility shall be paid the excess of (x) the aggregate outstanding amount of unreimbursed Advances (whether or not then due) under such Liquidity Facility over (y) the Required Amount for the relevant Cash Collateral Account without duplication of any amounts distributed pursuant to clauses “first”, “second”, “third”, and “fourth” of this Section 3.02, pro rata on the basis of such amounts in respect of such Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the Subordination Agent for any Tax (other than Taxes imposed on compensation paid hereunder), expense, fee, charge or other loss incurred by, or any other amount payable to, the Subordination Agent in connection with the transactions contemplated hereby (to the extent not previously reimbursed), shall be applied by the Subordination Agent in reimbursement of such amount, (ii) each Trustee for any Tax (other than Taxes imposed on compensation paid under the applicable Trust Agreement), expense, fee, charge or other loss incurred by, or any other amount payable to, such Trustee under the applicable Trust Agreements (to the extent not previously reimbursed), shall be distributed to such Trustee, and (iii) each Certificateholder for payments, if any, made by it pursuant to Section 5.02 hereof in respect of amounts described in clause (i) above (without duplication of any amounts distributed pursuant to subclause (iv) of clause “first” of this Section 3.02) shall be distributed to the applicable Trustee for the account of such Certificateholder, in each such case, pro rata, without duplication, on the basis of all amounts described in clauses (i) through (iii) above;
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seventh, such amount as shall be required to pay in full accrued and unpaid interest at the Stated Interest Rate on the Pool Balance of the Class AA Certificates shall be distributed to the Class AA Trustee;
eighth, such amount as shall be required to pay unpaid Class A Adjusted Interest to the holders of the Class A Certificates shall be distributed to the Class A Trustee;
ninth, such amount as shall be required to pay in full Expected Distributions to the holders of the Class AA Certificates on such Distribution Date shall be distributed to the Class AA Trustee;
tenth, such amount as shall be required to pay in full accrued and unpaid interest at the Stated Interest Rate on the Pool Balance of the Class A Certificates which was not previously paid pursuant to clause “eighth” above to the holders of the Class A Certificates shall be distributed to the Class A Trustee;
eleventh, such amount as shall be required to pay in full Expected Distributions to the holders of the Class A Certificates on such Distribution Date shall be distributed to the Class A Trustee; and
twelfth, the balance, if any, of any such amount remaining thereafter shall be held in the Collection Account for later distribution in accordance with this Article III.
With respect to clauses “first” and “sixth” above, no amounts shall be reimbursable to the Subordination Agent, any Trustee, any Liquidity Provider or any Certificateholder for any payments made by any such Person in connection with any Equipment Note that is no longer held by the Subordination Agent (to the extent that such payments relate to periods after such Equipment Note ceases to be held by the Subordination Agent).
Section 3.03 Other Payments. (a) Any payments received by the Subordination Agent for which no provision as to the application thereof is made in this Agreement shall be distributed by the Subordination Agent (i) in the order of priority specified in Section 3.02 hereof and (ii) to the extent received or realized at any time after the Final Distributions for each Class of Certificates have been made, in the manner provided in clause “first” of Section 3.02 hereof.
(b) Notwithstanding the priority of payments specified in Section 3.02, in the event any Investment Earnings on amounts on deposit in any Cash Collateral Account resulting from an Unapplied Provider Advance or an Unapplied Special Termination Advance are deposited in the Collection Account or the Special Payments Account, such Investment Earnings shall be used to pay interest payable in respect of such Unapplied Provider Advance or such Unapplied Special Termination Advance, as the case may be, to the extent of such Investment Earnings.
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(c) If the Subordination Agent receives any Scheduled Payment after the Scheduled Payment Date relating thereto, but prior to such payment becoming an Overdue Scheduled Payment, then the Subordination Agent shall deposit such Scheduled Payment in the Collection Account and promptly distribute such Scheduled Payment in accordance with the priority of distributions set forth in Section 3.02; provided that, for the purposes of this Section 3.03(c) only, each reference in clauses “ninth” and “eleventh” of Section 3.02 to “Distribution Date” shall be deemed to refer to such Scheduled Payment Date.
Section 3.04 Payments to the Trustees and the Liquidity Providers. Any amounts distributed hereunder to any Liquidity Provider shall be paid by wire transfer of funds to the account that such Liquidity Provider shall provide to the Subordination Agent. The Subordination Agent shall provide a Written Notice of any such transfer to the applicable Liquidity Provider at the time of such transfer. Any amounts distributed hereunder by the Subordination Agent to any Trustee that is not the same institution as the Subordination Agent shall be paid to such Trustee by wire transfer of funds at the account such Trustee shall provide to the Subordination Agent.
Section 3.05 Liquidity Facilities. (a) Interest Drawings. If on any Distribution Date, after giving effect to the subordination provisions of this Agreement, the Subordination Agent shall not have sufficient funds for the payment of any amounts due and owing in respect of accrued interest on the Class AA Certificates or the Class A Certificates (at the Stated Interest Rate for such Class of Certificates), then, prior to 12:30 p.m. (New York City time) on such Distribution Date, (i) the Subordination Agent shall request a drawing (each such drawing, an “Interest Drawing”) under the Liquidity Facility with respect to such Class of Certificates in an amount equal to the lesser of (x) an amount sufficient to pay the amount of such accrued interest shortfall (at the applicable Stated Interest Rate for such Class of Certificates) and (y) the Available Amount under such Liquidity Facility, and (ii) the Subordination Agent shall upon receipt of such amount pay such amount to the Trustee with respect to each such Class of Certificates in payment of such accrued interest shortfall.
(b) Application of Interest Drawings. Notwithstanding anything to the contrary contained in this Agreement, (i) all payments received by the Subordination Agent in respect of an Interest Drawing under the Class AA Liquidity Facility and all amounts withdrawn by the Subordination Agent from the Class AA Cash Collateral Account, and payable in each case to the Class AA Certificateholders or the Class AA Trustee, shall be promptly distributed to the Class AA Trustee and (ii) all payments received by the Subordination Agent in respect of an Interest Drawing under the Class A Liquidity Facility and all amounts withdrawn by the Subordination Agent from the Class A Cash Collateral Account, and payable in each case to the Class A Certificateholders or the Class A Trustee, shall be promptly distributed to the Class A Trustee.
(c) Downgrade Drawings. (i) Each Liquidity Provider will promptly, but in any event within 10 days of the occurrence of a Downgrade Event with respect to it (the date of such occurrence, the “Downgrade Date”), deliver notice to the Subordination Agent and Delta of the occurrence of such Downgrade Event and the Downgrade Date therefor. After the occurrence of a Downgrade Event with respect to any Liquidity Provider, each Liquidity Facility provided by such Liquidity Provider shall become a “Downgraded Facility” on the 35th day after the related
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Downgrade Date, unless, not later than such 35th day (or, if earlier, the expiration date of such Downgraded Facility), the Rating Agency whose downgrading of such Liquidity Provider resulted in such Downgrade Event shall have provided a written confirmation to the effect that the occurrence of such Downgrade Event will not result in the downgrading, withdrawal or suspension of the ratings then issued by such Rating Agency of the related Class of Certificates. Notwithstanding the foregoing, if at any time after the occurrence of such Downgrade Event, such Liquidity Provider notifies the Subordination Agent in writing that no such confirmation will be provided by such Rating Agency, each Liquidity Facility provided by such Liquidity Provider shall become a Downgraded Facility as of the date of such notice to the Subordination Agent.
(ii) If at any time any Liquidity Facility becomes a Downgraded Facility, not later than the 35th day after the related Downgrade Date (or, if earlier, the expiration date of such Downgraded Facility), the Liquidity Provider under such Downgraded Facility (at its own expense, except as provided in the applicable Fee Letter) or Delta (at its own expense, except as provided in the applicable Fee Letter) may arrange for a Replacement Liquidity Provider to issue and deliver a Replacement Liquidity Facility to the Subordination Agent in accordance with Section 3.05(e).
(iii) If a Downgraded Facility has not been replaced by a Replacement Liquidity Facility in accordance with Section 3.05(c)(ii), the Subordination Agent shall, on the 35th day referred to in Section 3.05(c)(ii) (or if such 35th day is not a Business Day, on the next succeeding Business Day) (or, if earlier, the expiration date of such Downgraded Facility), request a drawing in accordance with and to the extent permitted by such Downgraded Facility (such drawing, a “Downgrade Drawing”) of the Available Amount thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be maintained and invested as provided in Section 3.05(f) hereof. Subject to Section 3.05(e)(iii), the applicable Liquidity Provider may also arrange for a Replacement Liquidity Provider to issue and deliver a Replacement Liquidity Facility at any time after such Downgrade Drawing so long as such Downgrade Drawing has not been reimbursed in full to such Liquidity Provider.
(iv) For the avoidance of doubt, the provisions of this Section 3.05(c) shall apply to each occurrence of a Downgrade Event with respect to a Liquidity Provider, regardless of whether or not one or more Downgrade Events have occurred prior thereto and whether or not any confirmation by a Rating Agency specified in Section 3.05(c)(i) has been obtained with respect to any prior occurrence of a Downgrade Event.
(v) If, at any time after making a Downgrade Drawing, the applicable Liquidity Provider satisfies the Threshold Rating and delivers written notice to such effect to the Subordination Agent and Delta, as of the second Business Day following receipt of such notice, (A) such Downgraded Facility shall cease to be a Downgraded Facility, (B) the Subordination Agent shall withdraw the unapplied amount of such Downgrade Drawing on deposit in the applicable Cash Collateral Account and reimburse such amount to such Liquidity Provider, (C) any applied amount of such Downgrade Drawing shall be deemed to have been converted to an Interest Drawing as of such date in accordance with the applicable Liquidity Facility, (D) the obligations of such Liquidity Provider shall be reinstated in accordance with the applicable Liquidity Facility, and (E) the proviso in the definition of Available Amount shall no longer apply to such Downgrade Drawing.
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(d) Non-Extension Drawings. If any Liquidity Facility with respect to any Class of Certificates is scheduled to expire on a date (the “Stated Expiration Date”) prior to the date that is 15 days after the Final Legal Distribution Date for such Class of Certificates, then the following provisions shall apply:
(i) In the case of either initial Liquidity Facility or any other Liquidity Facility having extension provisions identical to those set forth in Section 2.10 of either initial Liquidity Facility, then, if before the 60th day prior to any anniversary date of the Closing Date (such 60th day, the “Notice Date”), the Liquidity Provider shall have advised the Subordination Agent and Delta that such Liquidity Facility shall not be extended beyond the immediately following anniversary date of the Closing Date and on or before the 25th day prior to such anniversary date such Liquidity Facility shall not have been replaced in accordance with Section 3.05(e), the Subordination Agent shall, on such 25th day (or as soon thereafter as possible but prior to the date of expiration of the expiring Liquidity Facility (a “Non-Extended Facility”), in accordance with the terms of such Non-Extended Facility, request a drawing under such Non-Extended Facility (such drawing, a “Non-Extension Drawing”) of the Available Amount thereunder.
(ii) In the case of any other Liquidity Facility, no earlier than the 60th day and no later than the 40th day prior to the then applicable Stated Expiration Date, the Subordination Agent shall request in writing that such Liquidity Provider extend the Stated Expiration Date to the earlier of (i) the date that is 15 days after the Final Legal Distribution Date for such Class of Certificates and (ii) the date that is the day immediately preceding the 364th day after the last day of the Consent Period (unless the obligations of such Liquidity Provider thereunder are earlier terminated in accordance with such Liquidity Facility). Whether or not the applicable Liquidity Provider has received a request from the Subordination Agent, such Liquidity Provider shall by notice (the “Consent Notice”) to the Subordination Agent, during the period commencing on the date that is 60 days prior to the then effective Stated Expiration Date (or if earlier, the date of such Liquidity Provider’s receipt of such request, if any, from the Subordination Agent) and ending on the date that is 25 days prior to such Stated Expiration Date (the “Consent Period”) advise the Subordination Agent whether, in its sole discretion, it agrees to so extend the Stated Expiration Date; provided, that such extension shall not be effective with respect to such Liquidity Provider if, by notice (the “Withdrawal Notice”) to the Subordination Agent prior to the end of the Consent Period, such Liquidity Provider revokes its Consent Notice. If a Liquidity Provider advises the Subordination Agent on or before the end of the Consent Period that such Stated Expiration Date shall not be so extended or fails to irrevocably and unconditionally advise the Subordination Agent on or before the end of the Consent Period that such Stated Expiration Date shall be so extended or gives a Withdrawal Notice to the Subordination Agent prior to the end of the Consent Period (and, in each case, if such Liquidity Provider shall not have been replaced in accordance with Section 3.05(e)), the Subordination Agent shall, on the date on which the Consent Period ends (or as soon as possible thereafter but prior to the Stated Expiration Date), in accordance with and to the extent permitted by the terms of the Non-Extended Facility, request a Non-Extension Drawing under such Non-Extended Facility of the Available Amount thereunder.
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(iii) Amounts drawn pursuant to a Non-Extension Drawing shall be maintained and invested in accordance with Section 3.05(f).
(e) Issuance of Replacement Liquidity Facility. (i) Subject to Section 3.05(e)(iii) and the agreements, if any, in the applicable Fee Letter, at any time, Delta may, at its option and at its own expense, with cause or without cause, arrange for a Replacement Liquidity Facility to replace any Liquidity Facility for any Class of Certificates (including any Replacement Liquidity Facility provided pursuant to Section 3.05(e)(ii)). If such Replacement Liquidity Facility is provided at any time after a Downgrade Drawing, a Non-Extension Drawing or a Special Termination Advance has been made, all funds on deposit in the relevant Cash Collateral Account resulting from such Downgrade Drawing, Non-Extension Drawing or Special Termination Advance will be returned to the Liquidity Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend its Liquidity Facility in accordance with Section 3.05(d), then such Liquidity Provider may, at its option and its own expense, arrange for a Replacement Liquidity Facility to replace such Liquidity Facility during the period no earlier than 40 days and no later than 25 days prior to the then effective Stated Expiration Date of such Liquidity Facility. At any time after a Non-Extension Drawing has been made under any Liquidity Facility, the Liquidity Provider thereunder may, at its option and its own expense, arrange for a Replacement Liquidity Facility to replace the Liquidity Facility under which such Non-Extension Drawing has been made.
(iii) No Replacement Liquidity Facility arranged by Delta or a Liquidity Provider in accordance with clause (i) or (ii) above or pursuant to Section 3.05(c), respectively, shall become effective and no such Replacement Liquidity Facility shall be deemed a “Liquidity Facility” under the Operative Agreements, unless and until (A) each of the conditions referred to in sub-clauses (iv)(x) and (z) below shall have been satisfied, (B) if such Replacement Liquidity Facility shall materially adversely affect the rights, remedies, interests or obligations of the Class AA Certificateholders or the Class A Certificateholders under any of the Operative Agreements, the applicable Trustee shall have consented, in writing, to the execution and issuance of such Replacement Liquidity Facility and (C) in the case of a Replacement Liquidity Facility arranged by a Liquidity Provider under Section 3.05(e)(ii) or pursuant to Section 3.05(c), such Replacement Liquidity Facility is reasonably acceptable to Delta.
(iv) In connection with the issuance of each Replacement Liquidity Facility, the Subordination Agent shall (x) prior to the issuance of such Replacement Liquidity Facility, obtain written confirmation from each Rating Agency to the effect that such Replacement Liquidity Facility will not cause a reduction, withdrawal or suspension of any rating then in effect for the related Class of Certificates by such Rating Agency (without regard to any downgrading of any rating of the Liquidity Provider being replaced pursuant to Section 3.05(c)), (y) pay all Liquidity Obligations then owing to the replaced Liquidity Provider (which payment shall be made first from available funds in the applicable Cash Collateral Account as described in Section 3.05(f), and thereafter from any other available source, including, without limitation, a drawing under the Replacement Liquidity Facility) and (z) cause the issuer of the Replacement Liquidity Facility to deliver the Replacement Liquidity Facility to the Subordination Agent, together with a legal opinion opining that such Replacement Liquidity Facility is an enforceable obligation of such Replacement Liquidity Provider.
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(v) Upon satisfaction of the conditions set forth in clauses (iii) and (iv) of this Section 3.05(e) with respect to a Replacement Liquidity Facility, (1) the replaced Liquidity Facility shall terminate, (2) the Subordination Agent shall, if and to the extent so requested by Delta or the Liquidity Provider being replaced, execute and deliver any certificate or other instrument required in order to terminate the replaced Liquidity Facility, shall surrender the replaced Liquidity Facility to the Liquidity Provider being replaced and shall execute and deliver the Replacement Liquidity Facility and any associated Fee Letter, (3) each of the parties hereto shall enter into any amendments to this Agreement necessary to give effect to (a) the replacement of the applicable Liquidity Provider with the applicable Replacement Liquidity Provider and (b) the replacement of the applicable Liquidity Facility with the applicable Replacement Liquidity Facility, and (4) the applicable Replacement Liquidity Provider shall be deemed to be a Liquidity Provider with the rights and obligations of a Liquidity Provider hereunder and under the other Operative Agreements and such Replacement Liquidity Facility shall be deemed to be a Liquidity Facility hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the event the Subordination Agent shall draw all Available Amounts under the Class AA Liquidity Facility or the Class A Liquidity Facility pursuant to Section 3.05(c), 3.05(d), 3.05(i) or 3.05(k), or in the event amounts are to be deposited in the Class AA Cash Collateral Account or the Class A Cash Collateral Account pursuant to subclause (A) or (B) of clause “fourth” of Section 3.02, amounts so drawn or to be deposited, as the case may be, shall be deposited by the Subordination Agent in the Class AA Cash Collateral Account or the Class A Cash Collateral Account, as applicable. All amounts on deposit in each Cash Collateral Account shall be invested and reinvested in Eligible Investments in accordance with Section 2.02(b).
On each Interest Payment Date (or, in the case of any Special Distribution Date with respect to the distribution of a Special Payment, on such Special Distribution Date), Investment Earnings on amounts on deposit in each Cash Collateral Account with respect to any Liquidity Facility (or in the case of any Special Distribution Date with respect to the distribution of a Special Payment, so long as no Indenture Event of Default shall have occurred and be continuing under any Indenture, a fraction of such Investment Earnings equal to the Section 2.04 Fraction) shall be deposited in the Collection Account (or, in the case of any Special Distribution Date with respect to the distribution of a Special Payment, the Special Payments Account) and applied on such Interest Payment Date (or Special Distribution Date, as the case may be) in accordance with Section 3.02 or 3.03 (as applicable). The Subordination Agent shall deliver a written statement to Delta and each Liquidity Provider one day prior to each Interest Payment Date and Special Distribution Date setting forth the aggregate amount of Investment Earnings held in the Cash Collateral Accounts as of such date. In addition, from and after the date funds are so deposited, the Subordination Agent shall make withdrawals from such accounts as follows:
(i) on each Distribution Date, the Subordination Agent shall, to the extent it shall not have received funds to pay accrued and unpaid interest due and owing on the Class AA Certificates (at the Stated Interest Rate for the Class AA Certificates) after giving
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effect to the subordination provisions of this Agreement, withdraw from the Class AA Cash Collateral Account, and pay to the Class AA Trustee, an amount equal to the lesser of (x) an amount necessary to pay accrued and unpaid interest (at the Stated Interest Rate for the Class AA Certificates) on the Class AA Certificates and (y) the amount on deposit in the Class AA Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the extent it shall not have received funds to pay accrued and unpaid interest due and owing on the Class A Certificates (at the Stated Interest Rate for the Class A Certificates) after giving effect to the subordination provisions of this Agreement, withdraw from the Class A Cash Collateral Account, and pay to the Class A Trustee, an amount equal to the lesser of (x) an amount necessary to pay accrued and unpaid interest (at the Stated Interest Rate for the Class A Certificates) on the Class A Certificates and (y) the amount on deposit in the Class A Cash Collateral Account;
(iii) on each date on which the Pool Balance of the Class AA Trust shall have been reduced by payments made to the Class AA Certificateholders pursuant to Section 3.02 hereof, the Subordination Agent shall withdraw from the Class AA Cash Collateral Account such amount as is necessary so that, after giving effect to the reduction of the Pool Balance on such date (and any reduction in the amounts on deposit in the Class AA Cash Collateral Account resulting from a prior withdrawal of amounts on deposit in the Class AA Cash Collateral Account on such date) and any transfer of Investment Earnings from such Cash Collateral Account to the Collection Account or the Special Payments Account on such date, an amount equal to the sum of the Required Amount (with respect to the Class AA Liquidity Facility) plus (if on a Distribution Date not coinciding with an Interest Payment Date) Investment Earnings on deposit in such Cash Collateral Account (after giving effect to any such transfer of Investment Earnings) will remain on deposit in the Class AA Cash Collateral Account and shall first, pay such withdrawn amount to the Class AA Liquidity Provider until the Class AA Liquidity Obligations owing to such Liquidity Provider shall have been paid in full, and second, deposit any remaining withdrawn amount in the Collection Account;
(iv) on each date on which the Pool Balance of the Class A Trust shall have been reduced by payments made to the Class A Certificateholders pursuant to Section 3.02 hereof, the Subordination Agent shall withdraw from the Class A Cash Collateral Account such amount as is necessary so that, after giving effect to the reduction of the Pool Balance on such date (and any reduction in the amounts on deposit in the Class A Cash Collateral Account resulting from a prior withdrawal of amounts on deposit in the Class A Cash Collateral Account on such date) and any transfer of Investment Earnings from such Cash Collateral Account to the Collection Account or the Special Payments Account on such date, an amount equal to the sum of the Required Amount (with respect to the Class A Liquidity Facility) plus (if on a Distribution Date not coinciding with an Interest Payment Date) Investment Earnings on deposit in such Cash Collateral Account (after giving effect to any such transfer of Investment Earnings) will remain on deposit in the Class A Cash Collateral Account and shall first, pay such withdrawn amount to the Class A Liquidity Provider until the Class A Liquidity Obligations owing to such Liquidity Provider shall have been paid in full, and second, deposit any remaining withdrawn amount in the Collection Account;
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(v) if a Replacement Liquidity Facility for any relevant Class of Certificates shall be delivered to the Subordination Agent following the date on which funds have been deposited into the Cash Collateral Account for such Class of Certificates, the Subordination Agent shall withdraw all amounts remaining on deposit in such Cash Collateral Account and shall pay such amounts to the replaced Liquidity Provider, if any, until all Liquidity Obligations owed to such Person shall have been paid in full, and deposit any remaining amount in the Collection Account;
(vi) if the Liquidity Provider with respect to a Downgraded Facility satisfies the Threshold Rating and delivers written notice to such effect to the Subordination Agent and Delta, on the second Business Day following receipt of such notice, the Subordination Agent shall withdraw all amounts remaining on deposit in the applicable Cash Collateral Account constituting the unapplied amount of any Downgrade Drawing and shall pay such amounts to such Liquidity Provider and the obligations of such Liquidity Provider shall be reinstated in accordance with the applicable Liquidity Facility; and
(vii) following (x) the payment of Final Distributions or (y) the Final Legal Distribution Date with respect to any Class of Certificates covered by a Liquidity Facility, on the date on which the Subordination Agent shall have been notified by the Liquidity Provider for such Class of Certificates that the Liquidity Obligations owed to such Liquidity Provider have been paid in full, or, if earlier, the first Business Day after such Final Legal Distribution Date, the Subordination Agent shall withdraw all amounts on deposit in the Cash Collateral Account in respect of such Class of Certificates, if any, and shall deposit such amounts in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under the Liquidity Facility for any relevant Trust, upon the reimbursement of the applicable Liquidity Provider for all or any part of the amount of such Interest Drawing, together with any accrued interest thereon, the Available Amount of such Liquidity Facility shall be reinstated by an amount equal to the amount of such Interest Drawing so reimbursed to the applicable Liquidity Provider but not to exceed the Stated Amount for such Liquidity Facility; provided, however, that the Available Amount of such Liquidity Facility shall not be so reinstated in part or in full pursuant to the foregoing provisions of this Section 3.05(g) at any time if (x) both a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing with respect to the relevant Liquidity Facility or (y) a Final Drawing, Downgrade Drawing, Non-Extension Drawing or Special Termination Advance shall have occurred with respect to such Liquidity Facility or an Interest Drawing shall have been converted into a Final Drawing. Notwithstanding anything to the contrary, in the event that, with respect to any particular Liquidity Facility, (i) funds are withdrawn from the related Cash Collateral Account pursuant to clause (i) or (ii) of Section 3.05(f) or (ii) such Liquidity Facility shall become a Downgraded Facility or a Non-Extended Facility at a time when unreimbursed Interest Drawings under such Liquidity Facility have reduced the Available Amount thereunder to zero, then funds received by the Subordination Agent at any time,
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other than (x) any time when both a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing with respect to such Liquidity Facility or (y) any time after a Final Drawing shall have occurred with respect to such Liquidity Facility or an Interest Drawing for such Liquidity Facility shall have been converted into a Final Drawing, shall be deposited in such Cash Collateral Account as and to the extent provided in clause “fourth” of Section 3.02 and applied in accordance with Section 3.05(f).
(h) Reimbursement. The amount of each drawing under the Liquidity Facilities shall be due and payable, together with interest thereon, on the dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing. Upon receipt from a Liquidity Provider of a Termination Notice with respect to its applicable Liquidity Facility, the Subordination Agent shall, not later than the date specified in such Termination Notice, in accordance with the terms of such Liquidity Facility, request a drawing under such Liquidity Facility of the Available Amount thereunder (a “Final Drawing”). Amounts drawn pursuant to a Final Drawing shall be maintained and invested in accordance with Section 3.05(f).
(j) Adjustments of Stated Amount. Promptly following each date on which the Required Amount of the Liquidity Facility for a relevant Class of Certificates is reduced as a result of a reduction in the Pool Balance with respect to such Certificates or otherwise, the Subordination Agent shall, if any such Liquidity Facility provides for reductions of the Stated Amount of such Liquidity Facility and if such reductions are not automatic, request such Liquidity Provider for such Class of Certificates to reduce such Stated Amount to an amount equal to the Required Amount with respect to such Liquidity Facility (as calculated by the Subordination Agent after giving effect to such payment). Each such request shall be made in accordance with the provisions of the applicable Liquidity Facility.
(k) Special Termination Advance. Upon receipt from a Liquidity Provider of a Special Termination Notice with respect to any Liquidity Facility, the Subordination Agent shall, not later than the date specified in such Special Termination Notice, in accordance with the terms of such Liquidity Facility, request a Special Termination Advance under such Liquidity Facility. Amounts drawn pursuant to a Special Termination Advance shall be maintained and invested in accordance with Section 3.05(f) hereof.
(l) Relation to Subordination Provisions. Interest Drawings under the Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each case, in respect of interest on the Certificates of any Class, will be distributed to the Trustee for such Class of Certificates, notwithstanding Sections 2.01(b) and 3.02.
(m) Assignment of Liquidity Facility. The Subordination Agent agrees not to consent to the assignment by any Liquidity Provider of any of its rights or obligations under any Liquidity Facility or any interest therein unless (i) Delta shall have consented to such assignment and (ii) each Rating Agency shall have provided a Ratings Confirmation with respect to each Class of Certificates then rated by such Rating Agency in connection with such assignment; provided, that the Subordination Agent shall consent to such assignment if the conditions in the foregoing clauses (i) and (ii) are satisfied, and the foregoing is not intended to and shall not be construed to limit the rights of any initial Liquidity Provider under Section 3.05(e)(ii).
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ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01 Directions from the Controlling Party. (a) (i) Following the occurrence and during the continuation of an Indenture Event of Default under any Indenture, the Controlling Party shall direct the Subordination Agent, as the holder of the Equipment Notes issued under such Indenture, which in turn shall direct the Loan Trustee under such Indenture, in the exercise of remedies available to the holders of such Equipment Notes, including, without limitation, the ability to vote all such Equipment Notes held by the Subordination Agent in favor of Accelerating such Equipment Notes in accordance with the provisions of such Indenture. Subject to Section 4.01(a)(iii), if the Equipment Notes issued pursuant to any Indenture have been Accelerated following an Indenture Event of Default with respect thereto, the Controlling Party may direct the Subordination Agent to sell, assign, contract to sell or otherwise dispose of and deliver all (but not less than all) of such Equipment Notes to any Person at public or private sale, at any location at the option of the Controlling Party, all upon such terms and conditions as the Controlling Party may reasonably deem advisable and in accordance with applicable law.
(ii) Following the occurrence and during the continuation of an Indenture Event of Default under any Indenture, in the exercise of remedies pursuant to such Indenture, the Loan Trustee under such Indenture may be directed to lease the related Aircraft to any Person (including Delta) so long as the Loan Trustee in doing so acts in a “commercially reasonable” manner within the meaning of Article 9 of the Uniform Commercial Code as in effect in any applicable jurisdiction (including Sections 9-610 and 9-627 thereof).
(iii) Notwithstanding the foregoing, so long as any Certificates remain Outstanding, during the period ending on the date which is nine months after the earlier of (x) the Acceleration of the Equipment Notes issued pursuant to any Indenture or (y) the occurrence of a Delta Bankruptcy Event, without the consent of each Trustee (other than the Trustee of any Trust all of the Certificates of which are held or beneficially owned by Delta and/or its Affiliates), no Aircraft subject to the Lien of such Indenture or such Equipment Notes may be sold if the net proceeds from such sale would be less than the Minimum Sale Price for such Aircraft or such Equipment Notes.
(iv) Upon the occurrence and continuation of an Indenture Event of Default under any Indenture, the Subordination Agent will obtain a desktop appraisal from each of the three Appraisers selected by the Controlling Party setting forth the current market value, current lease rate and distressed value (in each case, as defined by the International Society of Transport Aircraft Trading or any successor organization) of the Aircraft subject to such Indenture (each such appraisal, an “Appraisal” and the current market value appraisals being referred to herein as the “Post-Default Appraisals”). For so long as any Indenture Event of Default shall be continuing under any Indenture, and without limiting the right of the Controlling Party to request more frequent Appraisals, the Subordination Agent will obtain updated Appraisals on the date that
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is 364 days from the date of the most recent Appraisal (or if a Delta Bankruptcy Event shall have occurred and is continuing, on the date that is 180 days from the date of the most recent Appraisal) and shall (acting on behalf of each Trustee) post such Appraisals on DTC’s Internet bulletin board or make such other commercially reasonable efforts as the Subordination Agent may deem appropriate to make such Appraisals available to all Certificateholders.
(b) Following the occurrence and during the continuance of an Indenture Event of Default under any Indenture, the Controlling Party shall take such actions as it may reasonably deem most effectual to complete the sale or other disposition of the relevant Aircraft or Equipment Notes. In addition, in lieu of any sale, assignment, contract to sell or other disposition, the Controlling Party may maintain or cause the Subordination Agent to maintain possession of such Equipment Notes and continue to apply monies received in respect of such Equipment Notes in accordance with Article III hereof. In addition, in lieu of such sale, assignment, contract to sell or other disposition, or in lieu of such maintenance of possession, the Controlling Party may direct the Subordination Agent to, subject to the terms and conditions of the related Indenture, instruct the Loan Trustee under such Indenture to foreclose on the Lien on the related Aircraft or to take any other remedial action permitted under such Indenture or under any applicable law.
(c) If following a Delta Bankruptcy Event and during the pendency thereof, the Controlling Party receives a proposal from or on behalf of Delta to restructure the financing of any one or more of the Aircraft, the Controlling Party shall promptly thereafter give the Subordination Agent, each Trustee and each Liquidity Provider that has not made a Final Drawing notice of the material economic terms and conditions of such restructuring proposal whereupon the Subordination Agent acting on behalf of each Trustee shall post such terms and conditions of such restructuring proposal on DTC’s Internet bulletin board or make such other commercially reasonable efforts as the Subordination Agent may deem appropriate to make such terms and conditions available to all Certificateholders. Thereafter, neither the Subordination Agent nor any Trustee, whether acting on instructions of the Controlling Party or otherwise, may, without the consent of each Trustee and each Liquidity Provider that has not made a Final Drawing, enter into any term sheet, stipulation or other agreement (a “Restructuring Arrangement”) (whether in the form of an adequate protection stipulation, an extension under Section 1110(b) of the Bankruptcy Code or otherwise) to effect any such restructuring proposal with or on behalf of Delta unless and until the material economic terms and conditions of such restructuring proposal shall have been made available to all Certificateholders and each Liquidity Provider that has not made a Final Drawing for a period of not less than 15 days (except that such requirement shall not apply to any such term sheet, stipulation or other agreement that is to be effective on or as of any date occurring during the 60-Day Period and that is initially effective for a period not exceeding three months from the expiry of the 60-Day Period (an “Interim Restructuring Arrangement”)). The foregoing provisions of this Section 4.01(c): (i) shall not apply to any extension of a Restructuring Arrangement with respect to which such provisions have been complied with in connection with the original entry thereof if the possibility of such extension has been disclosed in satisfaction of the notification requirements of such provisions and such extension shall not amend or modify any of the other terms and conditions of such Restructuring Arrangement and (ii) shall apply to the initial extension of an Interim Restructuring Arrangement beyond the three months following the expiry of the 60-Day Period but not to any subsequent extension of such Interim Restructuring
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Arrangement, if the possibility of such subsequent extension has been disclosed in satisfaction of the notification requirements of such provisions and such subsequent extension shall not amend or modify any of the other terms and conditions of such Interim Restructuring Arrangement. In the event that any Certificateholder gives irrevocable notice of the exercise of its right to purchase all (but not less than all) of the Class of Certificates represented by the then Controlling Party pursuant to the applicable Trust Agreement, prior to the expiry of the 15-day notice period specified above, such Controlling Party may not direct the Subordination Agent or any Trustee to enter into any such restructuring proposal with respect to any of the Aircraft, unless and until such Certificateholder shall fail to purchase such Class of Certificates on the date that it is required to make such purchase.
Section 4.02 Remedies Cumulative. To the extent permitted by applicable law, each and every right, power and remedy given to the Trustees, the Liquidity Providers, the Controlling Party or the Subordination Agent specifically or otherwise in this Agreement shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may, subject always to the terms and conditions hereof, be exercised from time to time and as often and in such order as may be deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party or the Subordination Agent, as appropriate, and the exercise or the beginning of the exercise of any right, power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by any Trustee, any Liquidity Provider, the Controlling Party or the Subordination Agent in the exercise of any right, remedy or power or in the pursuit of any remedy shall, to the extent permitted by applicable law, impair any such right, power or remedy or be construed to be a waiver of any default or to be an acquiescence therein.
Section 4.03 Discontinuance of Proceedings. In case any party to this Agreement (including the Controlling Party in such capacity) shall have instituted any Proceeding to enforce any right, power or remedy under this Agreement by foreclosure, entry or otherwise, and such Proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Person instituting such Proceeding, then and in every such case each such party shall, subject to any determination in such Proceeding, be restored to its former position and rights hereunder, and all rights, remedies and powers of such party shall continue as if no such Proceeding had been instituted.
Section 4.04 Right of Certificateholders and the Liquidity Providers to Receive Payments Not to Be Impaired. Anything in this Agreement to the contrary notwithstanding but subject to each Trust Agreement, the right of any Certificateholder or any Liquidity Provider, respectively, to receive payments hereunder (including, without limitation, pursuant to Section 3.02) when due, or to institute suit for the enforcement of any such payment on or after the applicable Distribution Date, shall not be impaired or affected without the consent of such Certificateholder or such Liquidity Provider, respectively.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.
Section 5.01 Notice of Indenture Event of Default or Triggering Event. (a) If the Subordination Agent shall have knowledge of an Indenture Event of Default or a Triggering Event, the Subordination Agent shall promptly give notice thereof to the Rating Agencies, Delta, the Liquidity Providers and the Trustees by telegram, cable, facsimile or telephone (to be promptly confirmed in writing), unless such Indenture Event of Default or Triggering Event shall have been cured or waived. For all purposes of this Agreement, in the absence of actual knowledge, the Subordination Agent shall not be deemed to have knowledge of any Indenture Event of Default or Triggering Event unless notified in writing by Delta, one or more Trustees, one or more Liquidity Providers or one or more Certificateholders; and “actual knowledge” (as used in the foregoing clause) of the Subordination Agent shall mean actual knowledge of a Responsible Officer of the Subordination Agent.
(b) Other Notices. The Subordination Agent will furnish to each Liquidity Provider and each Trustee, promptly upon receipt thereof, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and other instruments furnished to the Subordination Agent as registered holder of the Equipment Notes or otherwise in its capacity as Subordination Agent to the extent the same shall not have been otherwise directly distributed to such Liquidity Provider or such Trustee, as applicable, pursuant to any other Operative Agreement.
(c) Securities Position. Upon the occurrence of an Indenture Event of Default, the Subordination Agent shall instruct the Trustees to, and the Trustees shall, request that DTC post on its Internet bulletin board a securities position listing setting forth the names of all the parties reflected on DTC’s books as holding interests in the Certificates.
(d) Reports. Promptly after the occurrence of a Triggering Event or an Indenture Event of Default resulting from the failure of Delta to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Event of Default shall be continuing, the Subordination Agent will provide to the Trustees, the Liquidity Providers, the Rating Agencies and Delta a statement setting forth the following information:
(i) after a Delta Bankruptcy Event, with respect to each Aircraft, whether such Aircraft is (A) subject to the 60-Day Period, (B) subject to an election by Delta under Section 1110(a) of the Bankruptcy Code, (C) covered by an agreement contemplated by Section 1110(b) of the Bankruptcy Code or (D) not subject to any of (A), (B) or (C);
(ii) to the best of the Subordination Agent’s knowledge, after requesting such information from Delta, (A) whether the Aircraft are currently in service or parked in storage, (B) the maintenance status of the Aircraft and (C) the location of the Engines (as defined in the Indentures);
(iii) the current Pool Balance of each Class of Certificates, the Eligible A Pool Balance and the outstanding principal amount of all Equipment Notes;
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(iv) the expected amount of interest which will have accrued on the Equipment Notes and on the Certificates as of the next Regular Distribution Date;
(v) the amounts paid to each Person on such Distribution Date pursuant to this Agreement;
(vi) details of the amounts paid on such Distribution Date identified by reference to the relevant provision of this Agreement and the source of payment (by Aircraft and party);
(vii) if the Subordination Agent has made a Final Drawing or a Special Termination Advance under any Liquidity Facility;
(viii) the amounts currently owed to each Liquidity Provider;
(ix) the amounts drawn under each Liquidity Facility; and
(x) after a Delta Bankruptcy Event, any operational reports filed by Delta with the bankruptcy court which are available to the Subordination Agent on a non-confidential basis.
Section 5.02 Indemnification. The Subordination Agent shall not be required to take any action or refrain from taking any action under Article IV unless the Subordination Agent shall have received indemnification against any risks that may be incurred in connection therewith in form and substance reasonably satisfactory to it, including, without limitation, adequate advances against costs (including fees and expenses) that may be incurred by it in connection therewith. The Subordination Agent shall not be required to take any action under Article IV, nor shall any other provision of this Agreement or any other Operative Agreement be deemed to impose a duty on the Subordination Agent to take any action, if the Subordination Agent shall have been advised by outside counsel that such action is contrary to the terms hereof or is otherwise contrary to law. Under no circumstances shall the Subordination Agent be required to expend or risk its own funds or otherwise incur any financial liability in performing its duties or exercising its rights or powers hereunder if it shall have reasonable grounds for believing that repayment of such funds is not assured to it.
Section 5.03 No Duties Except as Specified in Intercreditor Agreement. The Subordination Agent shall not have any duty or obligation to take or refrain from taking any action under, or in connection with, this Agreement, except as expressly provided by the terms of this Agreement; and no implied duties or obligations shall be read into this Agreement against the Subordination Agent. The Subordination Agent agrees that it will, in its individual capacity and at its own cost and expense (but without any right of indemnity in respect of any such cost or expense) promptly take such action as may be necessary to discharge duly all Liens on any of the Trust Accounts or any monies deposited therein that are attributable to the Subordination Agent in its individual capacity and that are unrelated to the transaction contemplated hereby and by the other Operative Agreements.
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Section 5.04 Notice from the Liquidity Providers and Trustees. If any Liquidity Provider or Trustee has notice of an Indenture Event of Default or a Triggering Event, such Person shall promptly give notice thereof to all other Liquidity Providers and Trustees and to the Subordination Agent; provided, however, that no such Person shall have any liability hereunder as a result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01 Authorization; Acceptance of Trusts and Duties. Each Trustee hereby designates and appoints the Subordination Agent as the agent and trustee of such Trustee under the applicable Liquidity Facility (if any) and authorizes the Subordination Agent to enter into the applicable Liquidity Facility as agent and trustee for such Trustee. Each of the Liquidity Providers and the Trustees hereby designates and appoints the Subordination Agent as the Subordination Agent under this Agreement. U.S. Bank accepts the trusts and duties hereby created and applicable to it and agrees to perform such duties, but only upon the terms of this Agreement and agrees to receive, handle and disburse all monies received by it in accordance with the terms hereof. The Subordination Agent shall have no liability hereunder or any other Operative Agreement except (a) for its own willful misconduct or negligence, (b) as provided in Section 2.02 and the last sentence of Section 5.03, (c) for liabilities that may result from the inaccuracy of any representation or warranty of the Subordination Agent made in its individual capacity in any Operative Agreement and (d) as otherwise expressly provided herein or in the other Operative Agreements.
Section 6.02 Absence of Duties. The Subordination Agent shall have no duty to see to any recording or filing of this Agreement or any other document, or to see to the maintenance of any such recording or filing.
Section 6.03 No Representations or Warranties as to Documents. The Subordination Agent shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of this Agreement or any other Operative Agreement or as to the correctness of any statement contained herein or therein (other than the representations and warranties of the Subordination Agent made in its individual capacity under any Operative Agreement), except that the Subordination Agent hereby represents and warrants that each of said specified documents to which it is a party has been or will be duly executed and delivered by one of its officers who is and will be duly authorized to execute and deliver such document on its behalf. The Certificateholders, the Trustees and the Liquidity Providers make no representation or warranty hereunder whatsoever.
Section 6.04 No Segregation of Monies; No Interest. Any monies paid to or retained by the Subordination Agent pursuant to any provision hereof and not then required to be distributed to any Trustee or any Liquidity Provider as provided in Articles II and III or deposited into one or more Trust Accounts need not be segregated in any manner except to the extent required by such Articles II and III and by law, and the Subordination Agent shall not (except as otherwise provided in Section 2.02) be liable for any interest thereon; provided, however, that any payments received or applied hereunder by the Subordination Agent shall be accounted for by the Subordination Agent so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.
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Section 6.05 Reliance; Agents; Advice of Counsel. The Subordination Agent shall not incur any liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. As to the Pool Balance of any Trust as of any date, the Subordination Agent may for all purposes hereof rely on a certificate signed by any Responsible Officer of the applicable Trustee, and such certificate shall constitute full protection to the Subordination Agent for any action taken or omitted to be taken by it in good faith in reliance thereon. As to any fact or matter relating to the Liquidity Providers or the Trustees the manner of ascertainment of which is not specifically described herein, the Subordination Agent may for all purposes hereof rely on a certificate, signed by any Responsible Officer of the applicable Liquidity Provider or Trustee, as the case may be, as to such fact or matter, and such certificate shall constitute full protection to the Subordination Agent for any action taken or omitted to be taken by it in good faith in reliance thereon. In the administration of the trusts hereunder, the Subordination Agent may (a) execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents or attorneys and (b) consult with counsel, accountants and other skilled Persons to be selected and retained by it. The Subordination Agent shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled Persons acting within such counsel’s, accountants’ or Person’s area of competence (so long as the Subordination Agent shall have exercised reasonable care and judgment in selecting such Persons).
Section 6.06 Capacity in Which Acting. The Subordination Agent acts hereunder and under the other Operative Agreements solely as agent or trustee herein and not in its individual capacity, except as otherwise expressly provided herein and in the Operative Agreements.
Section 6.07 Compensation. The Subordination Agent shall be entitled to such compensation, including reasonable expenses and disbursements, for all services rendered hereunder as Delta and the Subordination Agent may agree from time to time in writing and shall have a priority claim to the extent set forth in Article III on all monies collected hereunder for the payment of such compensation, to the extent that such compensation shall not be paid by others. The Subordination Agent agrees that it shall have no right against any Trustee or any Liquidity Provider for any fee as compensation for its services as agent under this Agreement. The provisions of this Section 6.07 shall survive the termination of this Agreement.
Section 6.08 May Become Certificateholder. The institution acting as Subordination Agent hereunder may become a Certificateholder and have all rights and benefits of a Certificateholder to the same extent as if it were not the institution acting as the Subordination Agent.
Section 6.09 Subordination Agent Required; Eligibility. There shall at all times be a Subordination Agent hereunder that is a Citizen of the United States, a bank, trust company or other financial institution organized and doing business under the laws of the United States or
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any state thereof and eligible to act as a trustee under Section 310(a) of the Trust Indenture Act of 1939, as amended, and that has a combined capital and surplus of at least $75,000,000 (or a combined capital and surplus in excess of $5,000,000 and the obligations of which, whether now in existence or hereafter incurred, are fully and unconditionally guaranteed by a corporation organized under the laws of the United States or any State or territory thereof or the District of Columbia and having a combined capital and surplus of at least $75,000,000). If such bank, trust company or other financial institution or such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 6.09 the combined capital and surplus of such bank, trust company or other financial institution or such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
In case at any time the Subordination Agent shall cease to be eligible in accordance with the provisions of this Section 6.09, the Subordination Agent shall resign immediately in the manner and with the effect specified in Section 7.01.
Section 6.10 Money to Be Held in Trust. All Equipment Notes, monies and other property deposited with or held by the Subordination Agent pursuant to this Agreement shall be held in trust for the benefit of the parties entitled to such Equipment Notes, monies and other property and the Subordination Agent, in its individual capacity, hereby waives all rights of set-off and counterclaim with respect to all such property.
Section 6.11 Notice of Substitution or Replacement of Airframe. If the Subordination Agent, in its capacity as a holder of Equipment Notes issued under an Indenture, receives a notice of substitution of a Substitute Airframe (as defined in such Indenture) pursuant to Section 7.04(e) of such Indenture, a notice of substitution of a Substitute Aircraft (as defined in such Indenture) pursuant to Section 7.04(f) of such Indenture or a notice of delivery of a Replacement Airframe (as defined in such Indenture) pursuant to Section 7.05(a) of such Indenture, the Subordination Agent shall promptly (i) provide a copy of such notice to each Trustee, each Liquidity Provider and each Rating Agency and (ii) direct each Trustee to post such notice on DTC’s Internet bulletin board or make such other commercially reasonable efforts as the Subordination Agent may deem appropriate to make the contents of such notice available to all Certificateholders.
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01 Replacement of Subordination Agent; Appointment of Successor. (a) The Subordination Agent or any successor thereto must resign if at any time it fails to comply with Section 6.09 and may resign at any time without cause by giving 60 days’ prior written notice to Delta, the Trustees and the Liquidity Providers. The Controlling Party or Delta (only so long as no Indenture Event of Default has occurred or is continuing) may remove the Subordination Agent for cause by so notifying the Subordination Agent and may appoint a successor Subordination Agent. The Controlling Party (or the party that would be the Controlling Party if an Indenture Event of Default had occurred) shall remove the Subordination Agent if:
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(1) the Subordination Agent fails to comply with Section 6.09;
(2) the Subordination Agent is adjudged bankrupt or insolvent or files a bankruptcy petition;
(3) a receiver of the Subordination Agent shall be appointed or any public officer shall take charge or control of the Subordination Agent or its property or affairs for the purpose of rehabilitation, conservation or liquidation; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy exists in the office of Subordination Agent for any reason (the Subordination Agent in such event being referred to herein as the retiring Subordination Agent), the Controlling Party (or the party that would be the Controlling Party if an Indenture Event of Default had occurred) shall promptly appoint a successor Subordination Agent. If a successor Subordination Agent shall not have been appointed within 60 days after such notice of resignation or removal, the retiring Subordination Agent, one or more of the Trustees or one or more of the Liquidity Providers may petition any court of competent jurisdiction for the appointment of a successor Subordination Agent to act until such time, if any, as a successor shall have been appointed as provided above.
A successor Subordination Agent shall deliver (x) a written acceptance of its appointment as Subordination Agent hereunder to the retiring Subordination Agent and (y) a written assumption of its obligations hereunder and under each Liquidity Facility to each party hereto, upon which the resignation or removal of the retiring Subordination Agent shall become effective, and the successor Subordination Agent shall have all the rights, powers and duties of the Subordination Agent under this Agreement. The successor Subordination Agent shall mail a notice of its succession to Delta, the Liquidity Providers and the Trustees. The retiring Subordination Agent shall promptly transfer its rights under each of the Liquidity Facilities and all of the property and all books and records, or true, complete and correct copies thereof, held by it as Subordination Agent to the successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.09 (to the extent applicable), one or more of the Trustees or one or more of the Liquidity Providers may petition a court of competent jurisdiction for the removal of the Subordination Agent and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the Subordination Agent shall be effective unless and until a successor has been appointed. No appointment of a successor Subordination Agent shall be effective unless and until the Rating Agencies shall have delivered a Ratings Confirmation with respect to each Class of Certificates then rated by the Rating Agencies.
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(b) Any corporation, bank, trust company or other financial institution into which the Subordination Agent may be merged or converted or with which it may be consolidated, or any corporation, bank, trust company or other financial institution resulting from any merger, conversion or consolidation to which the Subordination Agent shall be a party, or any corporation, bank, trust company or other financial institution succeeding to all or substantially all of the corporate trust business of the Subordination Agent, shall be the successor of the Subordination Agent hereunder, provided that such corporation, bank, trust company or other financial institution shall be otherwise qualified and eligible under Section 6.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, except that such corporation, bank, trust company or other financial institution shall give prompt notice of such transaction to the Liquidity Providers and Delta.
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01 Amendments, Waivers, Etc. (a) This Agreement may not be supplemented, amended or modified without the consent of each Trustee (acting, except in the case of any amendment pursuant to Section 3.05(e)(v) or any amendment contemplated by the last sentence of this Section 8.01(a), with the consent of holders of Outstanding Certificates of the related Class evidencing Fractional Undivided Interests in the related Trust aggregating not less than a majority in interest in such Trust or as otherwise authorized pursuant to the relevant Trust Agreement (including, without limitation, without the consent of the Certificateholders to the extent permitted thereby, Section 9.01 thereof)), the Subordination Agent and each Liquidity Provider; provided, however, that this Agreement may be supplemented, amended or modified by a written agreement of Delta and the Subordination Agent (which will execute such agreement as directed by Delta, to the extent such amendment is in accordance with this Section 8.01(a)) without the consent of any Trustee or any Liquidity Provider (i) in order to cure any ambiguity or omission or to correct any mistake, (ii) in order to make any other provision in regard to matters or questions arising hereunder that will not materially adversely affect the interests of any Trustee or the holders of the related Class of Certificates or any Liquidity Provider (provided, that the consent of any Trustee or Liquidity Provider shall be required only if such Trustee’s interests (or the interests of the holders of the related Class of Certificates) or such Liquidity Provider’s interests, respectively, will be materially adversely affected), (iii) in order to give effect to substitution of any Aircraft pursuant to Section 7.04(f) of the related Indenture and other matters incidental thereto or (iv) if such supplement, amendment or modification is in accordance with Section 8.01(c) or 8.01(d); provided further, however, that, if such supplement, amendment or modification (x) would directly or indirectly amend, modify or supersede, or otherwise conflict with, Section 2.02(b), 3.05(c), 3.05(e), 3.05(f), 3.05(m), 4.01(a)(ii) or 4.01(c), this proviso of Section 8.01(a), the last sentence of Section 8.01(a) or Section 8.01(c), 8.01(d) or 9.06 (collectively, the “Delta Provisions”), (y) would otherwise adversely affect the interests of any potential Replacement Liquidity Provider or of Delta with respect to Delta’s ability to replace any Liquidity Facility or with respect to Delta’s payment obligations under any Operative Agreement or (z) is made pursuant to the last sentence of this Section 8.01(a) or pursuant to Section 8.01(c) or pursuant to Section 8.01(d), then such supplement, amendment or modification shall not be effective without the additional written
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consent of Delta. Notwithstanding the foregoing, without the consent of each Certificateholder affected thereby and each Liquidity Provider, no supplement, amendment or modification of this Agreement may (i) reduce the percentage of the interest in any Trust evidenced by the Certificates issued by such Trust necessary to consent to modify or amend any provision of this Agreement or to waive compliance therewith or (ii) except as provided in the last sentence of this Section 8.01(a) or Section 8.01(c) or Section 8.01(d), modify Section 2.04, 3.02 or 3.03 hereof relating to the distribution of monies received by the Subordination Agent hereunder from the Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained in this Section 8.01(a) shall require the consent of a Trustee at any time following the payment of Final Distributions with respect to the related Class of Certificates. If the Replacement Liquidity Facility for any Liquidity Facility is to be comprised of more than one instrument as contemplated by the definition of the term “Replacement Liquidity Facility”, then each party hereto agrees to amend this Agreement and the other Operative Agreements to incorporate appropriate mechanics for multiple instruments for such Replacement Liquidity Facility for a single Trust (including without limitation clauses (i) and (ii) of Section 2.04(a) and clauses “first” through “fifth” of Section 3.02, in each case, with respect to the Replacement Liquidity Provider of such Replacement Liquidity Facility).
(b) In the event that the Subordination Agent, as the registered holder of any Equipment Notes, receives a request for the giving of notice or its consent to any amendment, supplement, modification, approval, consent or waiver under such Equipment Notes, the Indenture pursuant to which such Equipment Notes were issued, the related Participation Agreement or other related document, (i) if no Indenture Event of Default shall have occurred and be continuing with respect to such Indenture, the Subordination Agent shall request directions with respect to each series of such Equipment Notes from the Trustee of the Trust which holds such Equipment Notes and shall vote or consent in accordance with the directions of such Trustee and (ii) if any Indenture Event of Default shall have occurred and be continuing with respect to such Indenture, the Subordination Agent will exercise its voting rights as directed by the Controlling Party, subject to Sections 4.01 and 4.04. Notwithstanding the foregoing, without the consent of each Liquidity Provider and each affected Certificateholder holding Certificates representing a Fractional Undivided Interest in the Equipment Notes under the applicable Indenture held by the Subordination Agent, no such amendment, supplement, modification, approval, consent or waiver shall (i) reduce the principal amount of, Premium, if any, or interest on, any such Equipment Note under such Indenture (other than any change in the principal amount of any such Equipment Note in connection with any substitution pursuant to Section 7.04(f) of such Indenture); (ii) change the date on which any principal amount of, Premium, if any, or interest on any such Equipment Note under such Indenture, is due or payable; (iii) create any Lien with respect to the Collateral subject to such Indenture prior to or pari passu with the Lien thereon under such Indenture except such as are permitted by such Indenture; provided that, without the consent of each Certificateholder, no such amendment, supplement, modification, approval, consent or waiver shall modify Section 3.03 or Section 9.02(a)(3) of such Indenture or deprive any Certificateholder of the benefit of the Lien of such Indenture on such Collateral, except as provided in connection with the exercise of remedies under Article IV of such Indenture or as otherwise permitted by such Indenture; (iii) reduce the percentage of the outstanding principal amount of the Equipment Notes under such Indenture the consent of whose holders is required for any supplemental agreement, or the consent of whose holders is required for any waiver of compliance with certain provisions of such
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Indenture or of certain defaults thereunder or their consequences provided for in such Indenture; or (v) make any change in Section 4.05 or Section 9.02 of such Indenture, except to provide that certain other provisions of such Indenture cannot be modified or waived without the consent of each holder of an Equipment Note under such Indenture affected thereby.
(c) If (x) the Series A Equipment Notes (or any series of Additional Equipment Notes), with respect to all of the Aircraft for which Series A Equipment Notes (or such series of Additional Equipment Notes) are at the time outstanding, are redeemed and new Equipment Notes of a corresponding series are to be issued with respect to any or all of the Aircraft under the applicable Indentures or (y) at any time following the payment in full at maturity or otherwise of the Series A Equipment Notes (or any series of Additional Equipment Notes) with respect to all of the Aircraft for which Series A Equipment Notes (or such series of Additional Equipment Notes) are at the time outstanding and new Equipment Notes of a corresponding series are to be issued with respect to any or all of the Aircraft under the applicable Indentures, in each case in accordance with the terms of Section 2.02 of each such Indenture, such series of new Equipment Notes in each case (the “Refinancing Equipment Notes”) shall be issued to a new pass through trust (a “Refinancing Trust”) that issues a class of pass through certificates (the “Refinancing Certificates”) to certificateholders (each, a “Refinancing Certificateholder”) pursuant to a pass through trust agreement (a “Refinancing Trust Agreement”) with a trustee (a “Refinancing Trustee”). A Refinancing Trust, a Refinancing Trustee and the Refinancing Certificates shall be subject to all of the provisions of this Agreement in the same manner as the Trust, the Trustee and the Certificates of the Class corresponding to the series of the refinanced Equipment Notes, including, the subordination of the Refinancing Certificates to the extent provided herein to (A) in the case of any Refinancing Certificates issued in respect of Class A Certificates, the Administration Expenses, the Liquidity Obligations and the Class AA Certificates and (B) in the case of any Refinancing Certificates issued in respect of any Additional Certificates, the Administration Expenses, the Liquidity Obligations, the Class AA Certificates, the Class A Certificates, and, if applicable, any other class of Additional Certificates that rank senior, in priority of payment of “Expected Distributions” under this Agreement, to such Refinancing Certificates. Such issuance of Refinancing Equipment Notes and Refinancing Certificates and the amendment of this Agreement as provided below shall require Ratings Confirmation with respect to each Class of Certificates then rated by the Rating Agencies and shall not materially adversely affect any of the Trustees in their individual capacities or any of the Liquidity Providers. This Agreement shall be amended by written agreement of Delta and the Subordination Agent to give effect to the issuance of any Refinancing Certificates subject to the following terms and conditions:
(i) the Refinancing Trustee shall be added as a party to this Agreement;
(ii) the definitions of “Certificate”, “Class”, “Class A Certificates”, “Final Legal Distribution Date”, “Trust”, “Trust Agreement” and “Controlling Party” (and such other applicable definitions) shall be revised, as appropriate, to reflect such issuance (and the subordination, as applicable, of the Refinancing Certificates and the Refinancing Equipment Notes);
(iii) the Refinancing Certificates may have the benefit of credit support similar to the Liquidity Facilities or different therefrom and claims for fees, interest, expenses,
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reimbursement of advances and other obligations arising from such credit support (A) in the case of any Refinancing Certificates issued in respect of the Class A Certificates, may rank pari passu with similar claims in respect of the Class AA Liquidity Facility, (B) in the case of any Refinancing Certificates issued in respect of any class of Additional Certificates generally subordinated to the Class AA Certificates and Class A Certificates (but not to any other class of Additional Certificates), may rank pari passu with similar claims in respect of the Class AA Liquidity Facility and the Class A Liquidity Facility, and (C) in the case of any Refinancing Certificates issued in respect of any class of Additional Certificates to which clause (B) is not applicable, shall be subordinated to the Administration Expenses and the Liquidity Obligations relating to each of the Class AA Certificates, the Class A Certificates and any more senior, in priority of “Expected Distributions” under this Agreement, class of Additional Certificates; provided that, (x) in each case, Ratings Confirmation with respect to each Class of Certificates then rated by the Rating Agencies shall have been obtained and (y) (1) in the case of clause (A) the prior written consent of the Class AA Liquidity Provider shall have been obtained and (2) in the case of clause (B) the prior written consent of the Class AA Liquidity Provider and the Class A Liquidity Provider shall have been obtained;
(iv) the Refinancing Certificates cannot be issued to Delta but may be issued to any of Delta’s Affiliates so long as such Affiliate shall have bankruptcy remote and special purpose provisions in its certificate of incorporation or other organizational documents and any subsequent transfer of such Refinancing Certificates from such Affiliate to any other Affiliate of Delta shall be similarly restricted; and
(v) the scheduled payment dates on the Refinancing Equipment Notes shall be the Regular Distribution Dates.
The issuance of the Refinancing Certificates in compliance with all of the foregoing terms in clauses (i) to (v) of this Section 8.01(c) shall be deemed to not materially adversely affect any of the Trustee’s rights and obligations and shall not require the consent of any of the Trustees or the holders of any Class of Certificates. Each of the Liquidity Providers hereby agrees and confirms that it shall be deemed to consent to any issuance and amendment in accordance with this Section 8.01(c) (without prejudice to the consent rights of the Liquidity Providers described in the proviso to clause (iii) thereof) and that any such issuance and amendment shall not affect any of its respective obligations under the applicable Liquidity Facility, provided that a condition to the issuance of any Refinancing Certificates issued in respect of a Class of Certificates with a Liquidity Facility shall be the payment in full of all amounts owed to the Liquidity Provider under such Liquidity Facility and the termination of such Liquidity Facility upon the issuance of such Refinancing Certificates. The Subordination Agent shall deliver to each Trustee and each Liquidity Provider (other than the Liquidity Provider of such terminated Liquidity Facility) a copy of the amendments made to this Agreement and all opinions, certificates and other documents delivered in connection with the issuance of any Refinancing Certificates.
(d) Pursuant to the terms of Section 2.02 of each applicable Indenture, one or more additional series of Equipment Notes (the “Additional Equipment Notes”), which shall be subordinated in right of payment to the Series AA Equipment Notes, the Series A Equipment Notes
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and, if applicable, one or more series of Additional Equipment Notes under such Indenture, may be issued at any time and from time to time with respect to any or all of the Aircraft. If any series of Additional Equipment Notes are issued under any Indenture, each such series of Additional Equipment Notes shall be issued to a new pass through trust (an “Additional Trust”) that issues a class of pass through certificates (the “Additional Certificates”) to certificateholders (each, an “Additional Certificateholder”) pursuant to a pass through trust agreement (an “Additional Trust Agreement”) with a trustee (an “Additional Trustee”). In such case, this Agreement, including without limitation Sections 2.04, 3.01 and 3.02 hereof, shall be amended by written agreement of Delta and the Subordination Agent to provide for the subordination of such class of Additional Certificates to, and to provide for distributions on the Additional Certificates after payment of, the Administration Expenses, the Liquidity Obligations, the Class AA Certificates, the Class A Certificates and, if applicable, any other Additional Certificates that rank senior, in priority of payment of “Expected Distributions” under this Agreement, to such Additional Certificates (subject to clause (iii) below). Such issuance, and the amendment of this Agreement as provided below shall require Ratings Confirmation with respect to each Class of Certificates then rated by the Rating Agencies and shall not materially adversely affect any of the Trustees in their individual capacities or any of the Liquidity Providers. This Agreement shall be amended by written agreement of Delta and the Subordination Agent to give effect to the issuance of any Additional Certificates subject to the following terms and conditions:
(i) the Additional Trustee shall be added as a party to this Agreement;
(ii) the definitions of “Certificate”, “Class”, “Equipment Notes”, “Final Legal Distribution Date”, “Trust”, “Trust Agreement”, and “Controlling Party” (and such other applicable definitions) shall be revised, as appropriate, to reflect the issuance of the Additional Certificates (and the subordination thereof);
(iii) Section 3.02 may be revised, with respect to any class of Additional Certificates, to provide for the distribution of “Adjusted Interest” for such class of Additional Certificates (calculated in a manner substantially similar to the calculation of Class A Adjusted Interest) after the Class A Adjusted Interest (and, if applicable, after any “Adjusted Interest” for any Additional Certificates that rank senior, in priority of payment of “Expected Distributions” under this Agreement, to such Additional Certificates) but before Expected Distributions on the Class AA Certificates;
(iv) the Additional Certificates may have the benefit of credit support similar to the Liquidity Facilities or different therefrom, provided that (A) claims for fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (1) may, in the case of any class of Additional Certificates generally subordinated to the Class AA Certificates and the Class A Certificates (but not any other class of Additional Certificates), rank pari passu with similar claims in respect of the Class AA Liquidity Facility and the Class A Liquidity Facility so long as the prior written consent of the Class AA Liquidity Provider and the Class A Liquidity Provider shall have been obtained or (2) shall, in the case of any class of Additional Certificates to which clause (1) is not applicable, be subordinated to the Administration Expenses and the Liquidity Obligations relating to each of the Class AA Certificates, Class A Certificates and any more senior, in priority of “Expected Distributions” under this Agreement, class of Additional Certificates, and (B) Ratings Confirmation with respect to each Class of Certificates then rated by the Rating Agencies shall have been obtained;
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(v) the Additional Certificates may be rated by the Rating Agencies;
(vi) the Additional Certificates cannot be issued to Delta but may be issued to any of Delta’s Affiliates so long as such Affiliate shall have bankruptcy remote and special purpose provisions in its certificate of incorporation or other organizational documents and any subsequent transfer of such Additional Certificates from such Affiliate to any other Affiliate of Delta shall be similarly restricted; and
(vii) the scheduled payment dates on such series of Additional Equipment Notes shall fall on a Regular Distribution Date.
The issuance of the Additional Certificates in compliance with all of the foregoing terms in clauses (i) to (vii) of this Section 8.01(d) shall be deemed to not materially adversely affect any of the Trustee’s rights and obligations and shall not require the consent of any of the Trustees or the holders of any Class of Certificates. Each of the Liquidity Providers hereby agrees and confirms that it shall be deemed to consent to any issuance and amendment in accordance with this Section 8.01(d) (without prejudice to the consent right of the Liquidity Providers described in clause (iv)(1) thereof) and that any such issuance and amendment shall not affect any of its respective obligations under the applicable Liquidity Facility. The Subordination Agent shall deliver to each Trustee and each Liquidity Provider a copy of the amendments made to this Agreement and all opinions, certificates and other documents delivered in connection with the issuance of any Additional Certificates.
Section 8.02 Subordination Agent Protected. If, in the reasonable opinion of the institution acting as the Subordination Agent hereunder, any document required to be executed by it pursuant to the terms of Section 8.01 adversely affects any right, duty, immunity or indemnity with respect to such institution under this Agreement or any Liquidity Facility, the Subordination Agent may in its discretion decline to execute such document.
Section 8.03 Effect of Supplemental Agreements. Upon the execution of any amendment, consent or supplement hereto pursuant to the provisions hereof, this Agreement shall be and shall be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Agreement of the parties hereto and beneficiaries hereof shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental agreement shall be and be deemed to be part of the terms and conditions of this Agreement for any and all purposes. In executing or accepting any supplemental agreement permitted by this Article VIII, the Subordination Agent shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement.
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Section 8.04 Notice to Rating Agencies. Promptly following its receipt of each amendment, consent, modification, supplement or waiver contemplated by this Article VIII, the Subordination Agent shall send a copy thereof to each Rating Agency.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Termination of Intercreditor Agreement. Following payment of Final Distributions with respect to each Class of Certificates and the payment in full of all Liquidity Obligations to the Liquidity Providers and provided that there shall then be no other amounts due to the Certificateholders, the Trustees, the Liquidity Providers and the Subordination Agent hereunder or under the Trust Agreements, and that the commitment of the Liquidity Providers under the Liquidity Facilities shall have expired or been terminated, this Agreement and the trusts created hereby shall terminate and this Agreement shall be of no further force or effect. Except as aforesaid or otherwise provided, this Agreement and the trusts created hereby shall continue in full force and effect in accordance with the terms hereof.
Section 9.02 Intercreditor Agreement for Benefit of Trustees, Liquidity Providers and Subordination Agent. Subject to the second sentence of Section 9.06 and the provisions of Section 4.04 and 8.01, nothing in this Agreement, whether express or implied, shall be construed to give to any Person other than the Trustees, the Liquidity Providers and the Subordination Agent any legal or equitable right, remedy or claim under or in respect of this Agreement.
Section 9.03 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and any such notice may be given by United States mail, courier service or facsimile or any other customary means of communication, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class United States mail and, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received),
if to the Subordination Agent, to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Telecopy: (617) 603-6683
if to any Trustee, to:
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U.S. Bank Trust National Association
300 Delaware Avenue, 9th Floor
Mail Code EX-DE-WDAW
Wilmington, Delaware 19801
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (302) 576-3703
Telecopy: (302) 576-3717
if to the Liquidity Provider, to:
NATIONAL AUSTRALIA BANK LIMITED, acting through its New York Branch
245 Park Avenue, 28th Floor
New York, N.Y. 10167
Attention: Cathy McManus
Telephone: +1 212-916-9593
Facsimile: +1 212-490-8087
Email: ny_lending_administration@nabny.com
with a copy to:
National Australia Bank Limited
245 Park Avenue
New York, NY 10167
Attention: Director, Asset Finance & Leasing
Telephone: +1 (212) 916-9500
Facsimile: +1 (212) 490-8087
Any party, by notice to the other parties hereto, may designate additional or different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 9.03.
Section 9.04 Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 9.05 No Oral Modifications or Continuing Waivers. No terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party or other Person against whom enforcement of the change, waiver, discharge or termination is sought and any other party or other Person whose consent is required pursuant to this Agreement and any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
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Section 9.06 Successors and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of, and be enforceable by, each of the parties hereto and the successors and permitted assigns of each, all as herein provided. In addition, the Delta Provisions shall inure to the benefit of Delta and its successors and permitted assigns, and (without limitation of the foregoing) Delta is hereby constituted, and agreed to be, an express third party beneficiary of the Delta Provisions.
Section 9.07 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 9.08 Counterparts. This Agreement may be executed in any number of counterparts (and each party shall not be required to execute the same counterpart). Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts together constitute one instrument. The parties intend that faxed signatures hereto and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The parties’ original signatures hereto shall be promptly delivered, if requested.
Section 9.09 Subordination. (a) As between the Liquidity Providers (and any additional liquidity providers in respect of any class of Refinancing Certificates or any Additional Certificates), on the one hand, and the Trustees (and any Refinancing Trustees or any Additional Trustees) and the Certificateholders (and any Refinancing Certificateholders or any Additional Certificateholders), on the other hand, and as among the Trustees (and any Refinancing Trustees or any Additional Trustee) and the related Certificateholders (and any Refinancing Certificateholders or any Additional Certificateholders) this Agreement shall be a subordination agreement for purposes of Section 510 of the Bankruptcy Code.
(b) Notwithstanding the provisions of this Agreement, if prior to the payment in full to the Liquidity Providers of all Liquidity Obligations then due and payable any party hereto shall have received any payment or distribution in respect of Equipment Notes or any other amount under the Indentures or other Operative Agreements which, had the subordination provisions of this Agreement been properly applied to such payment, distribution or other amount, would not have been distributed to such Person, then such payment, distribution or other amount shall be received and held in trust by such Person and paid over or delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent receives any payment in respect of any obligations owing or amounts distributable hereunder (or, in the case of the Liquidity Providers, in respect of the Liquidity Obligations), which is subsequently invalidated, declared preferential, set aside and/or required to be repaid to a trustee, receiver or other party, then, to the extent of such payment, such obligations or amounts (or, in the case of the Liquidity Providers, such Liquidity Obligations) intended to be satisfied shall be revived and continue in full force and effect as if such payment had not been received.
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(d) The Trustees (on behalf of themselves and the holders of Certificates), the Liquidity Providers and the Subordination Agent expressly confirm and agree that the payment priorities and subordination specified in Articles II and III shall apply in all circumstances, notwithstanding (x) the fact that the obligations owed to the Trustees are secured by certain assets and the Liquidity Obligations may not be so secured or (y) the occurrence of a Delta Bankruptcy Event or any similar event or occurrence relating to any other Person (it being expressly agreed that the payment priorities and subordination specified in Articles II and III shall apply whether or not a claim for post-petition or post-filing interest is allowed in the proceedings resulting from such Delta Bankruptcy Event or other event or occurrence). The Trustees expressly agree (on behalf of themselves and the holders of Certificates) not to assert priority over the holders of Liquidity Obligations (except as specifically set forth in Section 3.02) due to their status as secured creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of Certificates), the Liquidity Providers and the Subordination Agent may take any of the following actions without impairing its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to it hereunder, including, in the case of the Liquidity Providers, the Liquidity Obligations;
(ii) obtain the primary or secondary obligation of any other obligor with respect to any amounts owing to it hereunder, including, in the case of the Liquidity Providers, any of the Liquidity Obligations;
(iii) renew, extend, increase, alter or exchange any amounts owing to it hereunder, including, in the case of the Liquidity Providers, any of the Liquidity Obligations, or release or compromise any obligation of any obligor with respect thereto;
(iv) refrain from exercising any right or remedy, or delay in exercising any right or remedy, which it may have; or
(v) take any other action which might discharge a subordinated party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees, the Liquidity Providers or the Subordination Agent shall not prejudice the rights or adversely affect the obligations of any other party under this Agreement.
Section 9.10 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
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Section 9.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity. (a) Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Agreements hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns, (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts, and (iii) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each of the parties warrants and represents that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THIS WAIVER IS IRREVOCABLE AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) To the extent that any Liquidity Provider or any of its properties has or may hereafter acquire any right of immunity, whether characterized as sovereign immunity or otherwise, and whether under the United States Foreign Sovereign Immunities Act of 1976 (or any successor legislation) or otherwise, from any legal proceedings, whether in the United States or elsewhere, to enforce or collect upon this Agreement, including, without limitation, immunity from suit or service of process, immunity from jurisdiction or judgment of any court or tribunal or execution of a judgment, or immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, each of the Class AA Liquidity Provider and the Class A Liquidity Provider, hereby irrevocably and expressly waives any such immunity, and agrees not to assert any such right or claim in any such proceeding, whether in the United States or elsewhere.
Section 9.12 Non-Petition. Each Liquidity Provider covenants that until one year and one day after the Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing any Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against such Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Trust or any substantial part of its property or ordering the winding up or liquidation of the affairs of such Trust.
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Section 9.13 U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Subordination Agent, like all financial institutions, in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Subordination Agent. Each party to this Agreement agrees for itself that it will provide the Subordination Agent with such information relating to such party as it may reasonably request in order for the Subordination Agent to satisfy the requirements of the U.S.A. Patriot Act.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized, as of the date first above written.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee for the Class AA Trust and Class A Trust | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page
Intercreditor Agreement (2020-1)
ANNEX A to
INTERCREDITOR AGREEMENT (2020-1)
AIRCRAFT
|
No. |
U.S.
|
Airframe
|
Airframe
Model
|
Airframe
|
Engine Manufacturer |
Engine Model
|
||||||
| 1 | N301DV | Airbus | A321-211 | 6923 | CFM International, Inc. | CFM56-5B3/3 | ||||||
| 2 | N305DN | Airbus | A321-211 | 7149 | CFM International, Inc. | CFM56-5B3/3 | ||||||
| 3 | N306DN | Airbus | A321-211 | 7165 | CFM International, Inc. | CFM56-5B3/3 | ||||||
| 4 | N307DX | Airbus | A321-211 | 7214 | CFM International, Inc. | CFM56-5B3/3 | ||||||
| 5 | N319DN | Airbus | A321-211 | 7479 | CFM International, Inc. | CFM56-5B3/3 | ||||||
| 6 | N826DN | Boeing | 737-932ER | 31937 | CFM International, Inc. | CFM56-7B26E | ||||||
| 7 | N827DN | Boeing | 737-932ER | 31938 | CFM International, Inc. | CFM56-7B26E | ||||||
| 8 | N828DN | Boeing | 737-932ER | 31939 | CFM International, Inc. | CFM56-7B26E | ||||||
| 9 | N829DN | Boeing | 737-932ER | 31941 | CFM International, Inc. | CFM56-7B26E | ||||||
| 10 | N830DN | Boeing | 737-932ER | 31940 | CFM International, Inc. | CFM56-7B26E | ||||||
| 11 | N831DN | Boeing | 737-932ER | 31942 | CFM International, Inc. | CFM56-7B26E | ||||||
| 12 | N832DN | Boeing | 737-932ER | 31943 | CFM International, Inc. | CFM56-7B26E | ||||||
| 13 | N834DN | Boeing | 737-932ER | 31946 | CFM International, Inc. | CFM56-7B26E | ||||||
| 14 | N835DN | Boeing | 737-932ER | 31945 | CFM International, Inc. | CFM56-7B26E | ||||||
| 15 | N836DN | Boeing | 737-932ER | 31947 | CFM International, Inc. | CFM56-7B26E | ||||||
| 16 | N837DN | Boeing | 737-932ER | 31948 | CFM International, Inc. | CFM56-7B26E | ||||||
| 17 | N838DN | Boeing | 737-932ER | 31949 | CFM International, Inc. | CFM56-7B26E | ||||||
| 18 | N839DN | Boeing | 737-932ER | 31950 | CFM International, Inc. | CFM56-7B26E | ||||||
| 19 | N840DN | Boeing | 737-932ER | 31951 | CFM International, Inc. | CFM56-7B26E |
Intercreditor Agreement (2020-1)
|
No. |
U.S.
|
Airframe
|
Airframe
Model
|
Airframe
|
Engine Manufacturer |
Engine Model
|
||||||
| 20 | N841DN | Boeing | 737-932ER | 31952 | CFM International, Inc. | CFM56-7B26E | ||||||
| 21 | N851DN | Boeing | 737-932ER | 31962 | CFM International, Inc. | CFM56-7B26E | ||||||
| 22 | N852DN | Boeing | 737-932ER | 31963 | CFM International, Inc. | CFM56-7B26E | ||||||
| 23 | N853DN | Boeing | 737-932ER | 31964 | CFM International, Inc. | CFM56-7B26E | ||||||
| 24 | N854DN | Boeing | 737-932ER | 31965 | CFM International, Inc. | CFM56-7B26E | ||||||
| 25 | N855DN | Boeing | 737-932ER | 31966 | CFM International, Inc. | CFM56-7B26E | ||||||
| 26 | N856DN | Boeing | 737-932ER | 31967 | CFM International, Inc. | CFM56-7B26E | ||||||
| 27 | N857DZ | Boeing | 737-932ER | 31968 | CFM International, Inc. | CFM56-7B26E | ||||||
| 28 | N822NW | Airbus | A330-302 | 1627 | General Electric | CF6-80E1A4 | ||||||
| 29 | N824NW | Airbus | A330-302 | 1637 | General Electric | CF6-80E1A4 | ||||||
| 30 | N823NW | Airbus | A330-302 | 1628 | General Electric | CF6-80E1A4 | ||||||
| 31 | N825NW | Airbus | A330-302 | 1679 | General Electric | CF6-80E1A4 | ||||||
| 32 | N826NW | Airbus | A330-302 | 1701 | General Electric | CF6-80E1A4 | ||||||
| 33 | N831NW | Airbus | A330-302 | 1783 | General Electric | CF6-80E1A4 |
Intercreditor Agreement (2020-1)
Exhibit 4.6
EXECUTION VERSION
REVOLVING CREDIT AGREEMENT
(2020-1AA)
Dated as of March 12, 2020
between
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
Delta Air Lines Pass Through Trust 2020-1AA,
as Borrower
and
NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH,
as Liquidity Provider
Delta Air Lines Pass Through Trust 2020-1AA
Delta Air Lines
Pass Through Certificates,
Series 2020-1AA
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
Table of Contents
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ARTICLE I DEFINITIONS |
1 | |||||
|
Section 1.01 |
Definitions |
1 | ||||
|
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT |
12 | |||||
|
Section 2.01 |
The Advances |
12 | ||||
|
Section 2.02 |
Making of Advances |
12 | ||||
|
Section 2.03 |
Fees |
14 | ||||
|
Section 2.04 |
Reduction or Termination of the Maximum Commitment |
14 | ||||
|
Section 2.05 |
Repayments of Interest Advances, the Special Termination Advance or the Final Advance |
15 | ||||
|
Section 2.06 |
Repayments of Provider Advances |
16 | ||||
|
Section 2.07 |
Payments to the Liquidity Provider Under the Intercreditor Agreement |
17 | ||||
|
Section 2.08 |
Book Entries |
17 | ||||
|
Section 2.09 |
Payments from Available Funds Only |
17 | ||||
|
Section 2.10 |
Extension of the Expiry Date; Non-Extension Advance |
18 | ||||
|
ARTICLE III OBLIGATIONS OF THE BORROWER |
18 | |||||
|
Section 3.01 |
Increased Costs |
18 | ||||
|
Section 3.02 |
Reserved |
19 | ||||
|
Section 3.03 |
Withholding Taxes |
19 | ||||
|
Section 3.04 |
Payments |
21 | ||||
|
Section 3.05 |
Computations |
21 | ||||
|
Section 3.06 |
Payment on Non-Business Days |
22 | ||||
|
Section 3.07 |
Interest |
22 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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|
Section 3.08 |
Replacement of Borrower | 24 | ||||
|
Section 3.09 |
Funding Loss Indemnification | 24 | ||||
|
Section 3.10 |
Illegality | 24 | ||||
|
ARTICLE IV CONDITIONS PRECEDENT |
25 | |||||
|
Section 4.01 |
Conditions Precedent to Effectiveness of Section 2.01 | 25 | ||||
|
Section 4.02 |
Conditions Precedent to Borrowing | 27 | ||||
|
Section 4.03 |
Representations and Warranties | 27 | ||||
|
ARTICLE V COVENANTS |
27 | |||||
|
Section 5.01 |
Affirmative Covenants of the Borrower | 27 | ||||
|
Section 5.02 |
Negative Covenants of the Borrower | 28 | ||||
|
ARTICLE VI LIQUIDITY EVENTS OF DEFAULT AND SPECIAL TERMINATION |
28 | |||||
|
Section 6.01 |
Liquidity Events of Default | 28 | ||||
|
ARTICLE VII MISCELLANEOUS |
29 | |||||
|
Section 7.01 |
No Oral Modifications or Continuing Waivers | 29 | ||||
|
Section 7.02 |
Notices | 29 | ||||
|
Section 7.03 |
No Waiver; Remedies | 30 | ||||
|
Section 7.04 |
Further Assurances | 30 | ||||
|
Section 7.05 |
Indemnification; Survival of Certain Provisions | 30 | ||||
|
Section 7.06 |
Liability of the Liquidity Provider | 30 | ||||
|
Section 7.07 |
Certain Costs and Expenses | 31 | ||||
|
Section 7.08 |
Binding Effect; Participations | 31 | ||||
|
Section 7.09 |
Severability | 33 | ||||
|
Section 7.10 |
Governing Law | 33 | ||||
| ii | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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|
Section 7.11 |
Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity | 34 | ||||
|
Section 7.12 |
Counterparts | 35 | ||||
|
Section 7.13 |
Entirety | 35 | ||||
|
Section 7.14 |
Headings | 35 | ||||
|
Section 7.15 |
Liquidity Provider’s Obligation to Make Advances | 35 | ||||
|
Section 7.16 |
Patriot Act | 35 | ||||
|
Section 7.17 |
Acknowledgment and Consent to Bail-In of EEA Financial Institutions | 35 | ||||
|
Section 7.18 |
Head Office Obligations | 36 | ||||
| Annex I | - Form of Interest Advance Notice of Borrowing | |
| Annex II | - Form of Non-Extension Advance Notice of Borrowing | |
| Annex III | - Form of Downgrade Advance Notice of Borrowing | |
| Annex IV | - Form of Final Advance Notice of Borrowing | |
| Annex V | - Form of Special Termination Advance Notice of Borrowing | |
| Annex VI | - Form of Notice of Termination | |
| Annex VII | - Form of Notice of Special Termination | |
| Annex VIII | - Form of Notice of Replacement Subordination Agent |
| iii | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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REVOLVING CREDIT AGREEMENT
(2020-1AA)
This REVOLVING CREDIT AGREEMENT (2020-1AA), dated as of March 12, 2020, is made by and between U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as Subordination Agent (such term and other capitalized terms used herein without definition being defined as provided in Article I) under the Intercreditor Agreement (as defined below), as agent and trustee for the Class AA Trustee (in such capacity, together with its successors in such capacity, the “Borrower”), and NATIONAL AUSTRALIA BANK LIMITED, an Australian corporation, acting through its New York branch (the “Liquidity Provider”).
W I T N E S S E T H:
WHEREAS, pursuant to the Class AA Trust Agreement, the Class AA Trust is issuing the Class AA Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a portion of the interest on the Class AA Certificates in accordance with their terms, has requested the Liquidity Provider to enter into this Agreement, providing in part for the Borrower to request in specified circumstances that Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) The definitions stated herein apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections”, “Annexes” and other subdivisions are to the designated Article, Section, Annex or other subdivision of this Agreement, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Annex or other subdivision.
| 1 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, it shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
(f) For the purposes of this Agreement, unless the context otherwise requires, the following capitalized terms shall have the following meanings:
“Advance” means an Interest Advance, a Final Advance, a Provider Advance, an Unapplied Provider Advance, an Applied Provider Advance, a Special Termination Advance, an Unapplied Special Termination Advance, an Applied Special Termination Advance or an Unpaid Advance, as the case may be.
“Agreement” means this Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Applicable Liquidity Rate” has the meaning specified in Section 3.07(h).
“Applicable Margin” means (a) with respect to any Interest Advance, Final Advance, Applied Provider Advance or Applied Special Termination Advance, 3.25% per annum, (b) with respect to any Unapplied Provider Advance, the rate per annum specified in the Fee Letter or (c) with respect to any Unapplied Special Termination Advance, the rate per annum specified in the Fee Letter.
“Applied Downgrade Advance” has the meaning specified in Section 2.06(a).
“Applied Non-Extension Advance” has the meaning specified in Section 2.06(a).
“Applied Provider Advance” means an Applied Downgrade Advance or an Applied Non-Extension Advance.
“Applied Special Termination Advance” has the meaning specified in Section 2.05.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
| 2 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the sum of (a) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for each day in the period for which the Base Rate is to be determined (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Liquidity Provider from three Federal funds brokers of recognized standing selected by it (and reasonably satisfactory to Delta) plus (b) one-quarter of one percent (0.25%).
“Base Rate Advance” means an Advance that bears interest at a rate based upon the Base Rate.
“Benchmark Replacement Event” means, in respect of the London Interbank Offered Rate or any successor Benchmark Replacement Rate, an event where the applicable administrator (or other applicable source) for such rate permanently or indefinitely ceases to provide such rate, without any successor administrator (or other applicable source) continuing to provide such rate.
“Benchmark Replacement Rate” means, following the occurrence of a Benchmark Replacement Event (with respect to the London Interbank Offered Rate or any then applicable successor Benchmark Replacement Rate (the “Terminating Rate”)), or at the request of Delta or the Liquidity Provider in anticipation thereof following any applicable public statement from the administrator or regulatory supervisor (or other applicable authority or source) identifying a specific date for occurrence of such Benchmark Replacement Event, an applicable alternate rate of interest (including any relevant adjusting spread) to such Terminating Rate that gives due consideration to (i) the then prevailing market convention for determining a rate of interest for U.S. dollar-denominated credit facilities at such time (as the applicable market replacement for such Terminating Rate) and (ii) the requirements under proposed U.S. Treasury regulations section 1.1001-6 and any successor regulations or guidance relating thereto, to the extent applicable, for the replacement of such Terminating Rate with such alternate rate of interest and any associated alteration not to be treated as a taxable exchange for U.S. federal income tax purposes, as determined pursuant to mutual written agreement of Delta and the Liquidity Provider, each acting reasonably.
“Borrower” has the meaning specified in the introductory paragraph to this Agreement.
| 3 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“Borrowing” means the making of Advances requested by delivery of a Notice of Borrowing.
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to close in New York, New York, Atlanta, Georgia, Wilmington, Delaware, or, so long as any Class AA Certificate is outstanding, the city and state in which the Class AA Trustee, the Borrower or any related Loan Trustee maintains its Corporate Trust Office or receives or disburses funds, and, if the applicable Business Day relates to any Advance or other amount bearing interest based on the LIBOR Rate, on which dealings are carried on in the London interbank market.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Covered Taxes” means any Taxes imposed by the United States, or any political subdivision or taxing authority thereof or therein, that are required by law to be deducted or withheld from any amounts payable to the Liquidity Provider under this Agreement other than (i) any such Tax on, based on or measured by net income, franchises or conduct of business, (ii) any such Tax imposed, levied, withheld or assessed as a result of any connection between the Liquidity Provider and the United States or such political subdivision or taxing authority, other than a connection arising solely from the Liquidity Provider’s having executed, delivered, performed its obligations or received a payment under, or enforced, any Operative Agreement, (iii) any such Tax attributable to the inaccuracy in or breach by the Liquidity Provider of any of its representations, warranties or covenants contained in any Operative Agreement to which it is a party or the inaccuracy of any form, certificate or document furnished pursuant thereto, (iv) any such withholding Taxes imposed by the United States except to the extent such withholding Taxes would not have been required to be deducted or withheld from payments hereunder but for a change after the date hereof in the Code or the Treasury Regulations thereunder that affects the exemption for income that is effectively connected with the conduct of a trade or business within the United States, (v) any withholding Taxes imposed by the United States which are imposed or increased as a result of the Liquidity Provider failing to deliver to the Borrower any form, certificate or document (which form, certificate or document, in the good faith judgment of the Liquidity Provider, it is legally entitled to provide) which is reasonably requested by the Borrower to establish that payments under this Agreement are exempt from (or entitled to a reduced rate of) withholding Tax, (vi) any such Taxes that would not have been imposed but for any change in the Lending Office without the prior written consent of Delta (such consent not to be unreasonably withheld), or (vii) any Taxes imposed under FATCA.
“Downgrade Advance” means an Advance made pursuant to Section 2.02(b)(ii).
“Downgrade Event” means any downgrading of, or any suspension or withdrawal of any applicable rating of, the Liquidity Provider by any Rating Agency such that after such downgrading, suspension or withdrawal the Liquidity Provider does not have the minimum Long-Term Rating specified for such Rating Agency in the definition of “Threshold Rating”. The occurrence of a Downgrade Event shall be determined separately for each Rating Agency. For the avoidance of doubt, a Downgrade Event shall not occur with respect to a Rating Agency so long as the Liquidity Provider has either of the applicable Threshold Ratings specified for such Rating Agency.
| 4 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country that is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” has the meaning specified in Section 4.01. The delivery of the certificate of the Liquidity Provider contemplated by Section 4.01(e) shall be conclusive evidence that the Effective Date has occurred.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Excluded Taxes” means (a) Taxes imposed on the overall net income of the Liquidity Provider, (b) Taxes imposed on the “effectively connected income” of its Lending Office, (c) Covered Taxes that are indemnified pursuant to Section 3.03 hereof, and (d) Taxes described in clauses (i) through (vii) in the definition of “Covered Taxes”.
“Expenses” means liabilities, losses, damages, costs and expenses (including, without limitation, reasonable fees and disbursements of legal counsel), provided that Expenses shall not include any Taxes other than sales, use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section 7.07.
“Expiry Date” means the earlier of (a) the anniversary date of the Closing Date immediately following the date on which the Liquidity Provider has provided a Non-Extension Notice to the Borrower pursuant to Section 2.10 and (b) the 15th day after the Final Legal Distribution Date of the Class AA Certificates.
| 5 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor provisions that are substantively comparable and not materially more onerous to comply with); any current or future regulations or official interpretations thereof; any agreements entered into pursuant to Section 1471(b)(1) of the Code; any intergovernmental agreement entered into in connection with any of the foregoing; and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement.
“Final Advance” means an Advance made pursuant to Section 2.02(c).
“Head Office” has the meaning specified in Section 7.18.
“Increased Cost” has the meaning specified in Section 3.01.
“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Trustees, the Liquidity Provider, the liquidity provider under each Liquidity Facility (other than this Agreement), and the Subordination Agent, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Interest Advance” means an Advance made pursuant to Section 2.02(a).
“Interest Period” means, with respect to any LIBOR Advance, each of the following periods:
(i) the period beginning on the third Business Day following either (A) the Liquidity Provider’s receipt of the Notice of Borrowing for such LIBOR Advance or (B) the date of the withdrawal of funds from the Class AA Cash Collateral Account for the purpose of paying interest on the Class AA Certificates as contemplated by Section 2.06(a) hereof and, in each case, ending on the next succeeding Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the next succeeding Regular Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant to Section 2.02(c) or (y) other outstanding Advances shall have been converted into the Final Advance pursuant to Section 6.01(a), then the Interest Periods shall be successive periods of one month beginning on (A) the third Business Day following the Liquidity Provider’s receipt of the Notice of Borrowing for such Final Advance (in the case of clause (x) above) or (B) the Regular Distribution Date following such conversion (in the case of clause (y) above).
| 6 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“Lending Office” means the lending office of the Liquidity Provider through which it acts for purposes of this Agreement, which is presently located at 245 Park Avenue, New York, NY 10167, or such other lending office as the Liquidity Provider from time to time shall notify the Borrower as its lending office hereunder; provided that the Liquidity Provider shall not change its Lending Office without the prior written consent of Delta (such consent not to be unreasonably withheld).
“LIBOR Advance” means an Advance bearing interest at a rate based upon the LIBOR Rate.
“LIBOR Rate” means, with respect to any Interest Period, (a) the interest rate per annum equal to the London Interbank Offered Rate per annum administered by ICE Benchmark Administration Limited (or any other successor person which takes over administration of that rate) for Dollar deposits, which rate is displayed on the Reuters Screen LIBOR01 (or such other page or screen as may replace such Reuters Screen) at approximately 11:00 a.m. (London time) on the day that is two Business Days prior to the first day of such Interest Period, for a period comparable to such Interest Period, or (b) if no such rate appears on such Reuters Screen (or otherwise as aforesaid), the interest rate per annum equal to the average (rounded up, if necessary, to the nearest 1/100th of 1%) of the rates per annum at which deposits in Dollars are offered by the Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate for deposits in Dollars for the applicable period and amount, such fewer number of Reference Banks) at approximately 11:00 a.m. (London time) on the day that is two Business Days prior to the first day of such Interest Period to prime banks in the London interbank market for a period comparable to such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Advance to be outstanding during such Interest Period, or (c) if none of the Reference Banks is quoting a rate for deposits in Dollars in the London interbank market for such a period and amount, the interest rate per annum equal to the average (rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which deposits in Dollars are offered by the principal New York offices of the Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate for deposits in Dollars in the New York interbank market for the applicable period and amount, such fewer number of Reference Banks) at approximately 11:00 a.m. (New York time) on the day that is two Business Days prior to the first day of such Interest Period to prime banks in the New York interbank market for a period comparable to such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Advance to be outstanding during such Interest Period, or (d) if none of the principal New York offices of the Reference Banks is quoting a rate for deposits in Dollars in the New York interbank market for the applicable period and amount, the Base Rate; provided that, if a Benchmark Replacement Event has occurred (or an applicable Benchmark Replacement Rate has otherwise been established with agreed effectiveness prior to such Benchmark Replacement Event), the LIBOR Rate shall be the lower of (i) the Base Rate and (ii) the Benchmark Replacement Rate (if then established and effective); provider, further, that, if the LIBOR Rate determined as provided above with respect to any LIBOR Advance for any Interest Period would be less than zero, then the LIBOR Rate with respect to such LIBOR Advance shall be deemed to be zero.
| 7 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“Liquidity Event of Default” means the occurrence of either (a) the Acceleration of all of the Equipment Notes or (b) a Delta Bankruptcy Event.
“Liquidity Indemnitee” means the Liquidity Provider, its directors, officers, employees and agents, and its successors and permitted assigns.
“Liquidity Provider” has the meaning specified in the introductory paragraph to this Agreement.
“Maximum Available Commitment” means, subject to the proviso contained in the third sentence of Section 2.02(a), at any time of determination, (a) the Maximum Commitment at such time less (b) the aggregate amount of each Interest Advance outstanding at such time; provided that, subject to Section 2.06(d), following a Provider Advance, a Special Termination Advance or a Final Advance, the Maximum Available Commitment shall be zero.
“Maximum Commitment” means $23,876,820, as the same may be reduced from time to time in accordance with Section 2.04(a).
“Non-Extension Advance” means an Advance made pursuant to Section 2.02(b)(i).
“Non-Extension Notice” has the meaning specified in Section 2.10.
“Notice of Borrowing” has the meaning specified in Section 2.02(e).
“Notice of Replacement Subordination Agent” has the meaning specified in Section 3.08.
“Participation” has the meaning specified in Section 7.08(b).
“Performing Note Deficiency” means any time that less than 65% of the then aggregate outstanding principal amount of all Series AA Equipment Notes and Series A Equipment Notes are Performing Equipment Notes.
“Permitted Transferee” means any Person that:
(a) is not a commercial air carrier, Delta or any affiliate of Delta; and
| 8 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(b) is any one of:
(1) a commercial banking institution organized under the laws of the United States or any state thereof or the District of Columbia;
(2) a commercial banking institution that (x) is organized under the laws of France, Germany, The Netherlands, Switzerland or the United Kingdom, (y) is entitled on the date it acquires any Participation to a complete exemption from United States federal income taxes for all income derived by it from the transactions contemplated by the Operative Agreements under an income tax treaty, as in effect on such date, between the United States and such jurisdiction of its organization and (z) is engaged in the active conduct of a banking business in such jurisdiction of its organization, holds its Participation in connection with such banking business in such jurisdiction and is regulated as a commercial banking institution by the appropriate regulatory authorities in such jurisdiction; or
(3) a commercial banking institution that (x) is organized under the laws of Australia, Canada, France, Germany, Ireland, Japan, Luxembourg, The Netherlands, Sweden, Switzerland or the United Kingdom and (y) is entitled on the date it acquires any Participation to a complete exemption from withholding of United States federal income taxes for all income derived by it from the transactions contemplated by the Operative Agreements under laws as in effect on such date by reason of such income being effectively connected with the conduct of a trade or business within the United States.
“Prospectus Supplement” means the Prospectus Supplement, dated March 4, 2020, relating to the Class AA Certificates and the Class A Certificates, as such Prospectus Supplement may be amended or supplemented.
“Provider Advance” means a Downgrade Advance or a Non-Extension Advance.
“Rate Determination Notice” has the meaning specified in Section 3.07(g).
“Reference Banks” means the principal London offices of: Deutsche Bank AG; Citibank, N.A. and JPMorgan Chase Bank; and/or such other or additional banking institutions as may be designated from time to time by mutual agreement of Delta and the Liquidity Provider.
“Regulatory Change” means (x) the enactment, adoption or promulgation, after the date of this Agreement, of any law or regulation by a United States federal or state government or by any government having jurisdiction over the Liquidity Provider, or any change, after the date of this Agreement, in any such law or regulation, or in the interpretation thereof by any governmental authority, central bank or comparable agency of the United States or any
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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government having jurisdiction over the Liquidity Provider charged with responsibility for the administration or application thereof, that shall impose, modify or deem applicable, or (y) the compliance by the Liquidity Provider (or its Head Office) with any applicable direction or requirement (whether or not having the force of law) of any central bank or competent governmental or other authority, after the date of this Agreement, with respect to: (a) any reserve, special deposit or similar requirement against extensions of credit or other assets of, or deposits with or other liabilities of, the Liquidity Provider including, or by reason of, the Advances, or (b) any capital adequacy requirement requiring the maintenance by the Liquidity Provider of additional capital in respect of any Advances or the Liquidity Provider’s obligation to make any such Advances, or (c) any requirement to maintain liquidity or liquid assets in respect of the Liquidity Provider’s obligation to make any such Advances, or (d) any Taxes (other than Excluded Taxes) with respect to the amounts payable or paid hereunder to the Liquidity Provider or any change in the basis of taxation of any amounts payable hereunder to the Liquidity Provider (other than in respect of Excluded Taxes).
“Replenishment Amount” has the meaning specified in Section 2.06(b).
“Required Amount” means, for any day, the sum of the aggregate amount of interest, calculated at the rate per annum equal to the Stated Interest Rate for the Class AA Certificates on the basis of a 360-day year comprised of twelve 30-day months, that would be distributable on the Class AA Certificates on each of the three successive semiannual Regular Distribution Dates immediately following such day or, if such day is a Regular Distribution Date, on such day and the succeeding two semiannual Regular Distribution Dates, in each case calculated on the basis of the Pool Balance of the Class AA Certificates on such day and without regard to expected future distributions of principal on the Class AA Certificates.
“Special Termination Advance” means an Advance made pursuant to Section 2.02(d).
“Special Termination Notice” means the Notice of Special Termination substantially in the form of Annex VII to this Agreement.
“Termination Date” means the earliest to occur of the following: (i) the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity Provider a certificate, signed by a Responsible Officer of the Borrower, certifying that all of the Class AA Certificates have been paid in full (or provision has been made for such payment in accordance with the Intercreditor Agreement and the Class AA Trust Agreement) or are otherwise no longer entitled to the benefits of this Agreement; (iii) the date on which the Borrower delivers to the Liquidity Provider a certificate, signed by a Responsible Officer of the Borrower, certifying that a Replacement Liquidity Facility has been substituted for this Agreement in full pursuant to Section 3.05(e) of the Intercreditor Agreement; (iv) the fifth Business Day following the receipt by the Borrower of a Termination Notice or a Special Termination Notice from the Liquidity Provider pursuant to Section 6.01(a) or 6.01(b), as applicable; and (v) the date on which no Advance is or may (including by reason of reinstatement as herein provided) become available for a Borrowing hereunder.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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“Termination Notice” means the Notice of Termination substantially in the form of Annex VI to this Agreement.
“Unapplied Advance” has the meaning specified in Section 3.07(e).
“Unapplied Downgrade Advance” means the portion of any Downgrade Advance that is not an Applied Downgrade Advance.
“Unapplied Non-Extension Advance” means the portion of any Non-Extension Advance that is not an Applied Non-Extension Advance.
“Unapplied Provider Advance” means the portion of any Provider Advance that is not an Applied Provider Advance.
“Unapplied Special Termination Advance” means the portion of any Special Termination Advance that is not an Applied Special Termination Advance.
“Unpaid Advance” has the meaning specified in Section 2.05.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
For the purposes of this Agreement, the following terms shall have the respective meanings specified in the Intercreditor Agreement:
“Acceleration”, “Additional Certificates”, “Aircraft”, “Certificate”, “Class AA Cash Collateral Account” “Class AA Certificates”, “Class AA Certificateholders”, “Class AA Trust”, “Class AA Trust Agreement”, “Class AA Trustee”, “Class A Certificates”, “Closing Date”, “Collection Account”, “Corporate Trust Office”, “Delta”, “Delta Bankruptcy Event” , “Distribution Date”, “Dollars”, “Downgrade Drawing”, “Downgraded Facility”, “Equipment Notes”, “Fee Letter”, “Final Legal Distribution Date”, “Indenture”, “Interest Payment Date”, “Investment Earnings”, “Liquidity Facility”, “Loan Trustee”, “Long-Term Rating”, “Non-Extended Facility”, “Operative Agreements”, “Participation Agreements”, “Performing Equipment Note”, “Person”, “Pool Balance”, “Rating Agencies”, “Regular Distribution Date”, “Replacement Liquidity Facility”, “Responsible Officer”, “Scheduled Payment”, “Series AA Equipment Notes”, “Series A Equipment Notes”, “Special Payment”, “Stated Interest Rate”, “Subordination Agent”, “Taxes”, “Threshold Rating”, “Treasury Regulations”, “Trust Agreement”, “Trustee”, “Underwriters”, “Underwriting Agreement”, and “United States”.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby irrevocably agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless the obligations of the Liquidity Provider shall be earlier terminated in accordance with the terms of Section 2.04(b)) in an aggregate amount at any time outstanding not to exceed the Maximum Commitment.
Section 2.02 Making of Advances. (a) Each Interest Advance shall be made by the Liquidity Provider upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex I, signed by a Responsible Officer of the Borrower, such Interest Advance to be in an amount not exceeding the Maximum Available Commitment at such time and used solely for the payment when due of interest with respect to the Class AA Certificates at the Stated Interest Rate therefor in accordance with Section 3.05(a) and 3.05(b) of the Intercreditor Agreement. Each Interest Advance made hereunder shall automatically reduce the Maximum Available Commitment and the amount available to be borrowed hereunder by subsequent Advances by the amount of such Interest Advance (subject to reinstatement as provided in the next sentence). Upon repayment to the Liquidity Provider in full or in part of the amount of any Interest Advance made pursuant to this Section 2.02(a), together with accrued interest thereon (as provided herein), the Maximum Available Commitment shall be reinstated by an amount equal to the amount of such Interest Advance so repaid, but not to exceed the Maximum Commitment; provided, however, that the Maximum Available Commitment shall not be so reinstated at any time if (x) both a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing or (y) a Final Advance, a Downgrade Advance, a Non-Extension Advance or a Special Termination Advance shall have occurred, except as provided in Section 2.06(d) with respect to a Downgrade Drawing.
(b) (i) A Non-Extension Advance shall be made by the Liquidity Provider in a single Borrowing if this Agreement is not extended in accordance with Section 3.05(d) of the Intercreditor Agreement unless a Replacement Liquidity Facility to replace this Agreement shall have been previously delivered to the Borrower in accordance with said Section 3.05(d), upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex II, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class AA Cash Collateral Account in accordance with Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(ii) A Downgrade Advance shall be made by the Liquidity Provider in a single Borrowing upon this Liquidity Facility becoming a Downgraded Facility (as provided for in Section 3.05(c) of the Intercreditor Agreement) unless a Replacement Liquidity Facility to replace this Agreement shall have been previously delivered to the Borrower in accordance with said Section 3.05(c), upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex III, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class AA Cash Collateral Account in accordance with Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement.
(c) A Final Advance shall be made by the Liquidity Provider in a single Borrowing following the receipt by the Borrower of a Termination Notice from the Liquidity Provider pursuant to Section 6.01(a) upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex IV, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class AA Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement.
(d) A Special Termination Advance shall be made in a single Borrowing upon the receipt by the Borrower of a Special Termination Notice from the Liquidity Provider pursuant to Section 6.01(b), by delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex V, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class AA Cash Collateral Account in accordance with Section 3.05(f) and Section 3.05(k) of the Intercreditor Agreement.
(e) Each Borrowing shall be made by notice in writing (a “Notice of Borrowing”) in substantially the form required by Section 2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity Provider. If a Notice of Borrowing is delivered by the Borrower in respect of any Borrowing no later than 12:30 p.m. (New York City time) on a Business Day, upon satisfaction of the conditions precedent set forth in Section 4.02 with respect to such requested Borrowing, the Liquidity Provider shall make available to the Borrower, in accordance with its payment instructions, the amount of such Borrowing in Dollars and immediately available funds, before 4:00 p.m. (New York City time) on such Business Day or before 12:30 p.m. (New York City time) on such later Business Day specified in such Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in respect of any Borrowing after 12:30 p.m. (New York City time) on a Business Day, upon satisfaction of the conditions precedent set forth in Section 4.02 with respect to such requested Borrowing, the Liquidity Provider shall make available to the Borrower, in accordance with its payment instructions, the amount of such Borrowing in Dollars and immediately available funds, before 1:00 p.m. (New York City time) on the first Business Day next following the day of receipt of
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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such Notice of Borrowing or on such later Business Day specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a Borrowing shall be made by wire transfer of immediately available funds to the Borrower in accordance with such wire transfer instructions as the Borrower shall furnish from time to time to the Liquidity Provider for such purpose. Each Notice of Borrowing shall be irrevocable and binding on the Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy thereof to the Liquidity Provider at the address and in the manner specified in Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of Borrowing in accordance with the Borrower’s payment instructions, the Liquidity Provider shall be fully discharged of its obligation hereunder with respect to such Notice of Borrowing, and the Liquidity Provider shall not thereafter be obligated to make any further Advances hereunder in respect of such Notice of Borrowing to the Borrower or to any other Person (including the Class AA Trustee or any Class AA Certificateholder). If the Liquidity Provider makes an Advance requested pursuant to a Notice of Borrowing before 12:00 noon (New York City time) on the second Business Day after the date of payment specified in Section 2.02(e), the Liquidity Provider shall have fully discharged its obligations hereunder with respect to such Advance and an event of default shall not have occurred hereunder. Following the making of any Advance pursuant to Section 2.02(b), 2.02(c) or 2.02(d) to fund the Class AA Cash Collateral Account, the Liquidity Provider shall have no interest in or rights to the Class AA Cash Collateral Account, such Advance or any other amounts from time to time on deposit in the Class AA Cash Collateral Account; provided that the foregoing shall not affect or impair the obligations of the Subordination Agent to make the distributions contemplated by Section 3.05(c)(v), 3.05(e) or 3.05(f) of the Intercreditor Agreement and provided, further, that the foregoing shall not affect or impair the rights of the Liquidity Provider to provide written instructions with respect to the investment and reinvestment of amounts in the Class AA Cash Collateral Account to the extent the Liquidity Provider is entitled to do so pursuant to Section 2.2(b) of the Intercreditor Agreement. By paying to the Borrower proceeds of Advances requested by the Borrower in accordance with the provisions of this Agreement, the Liquidity Provider makes no representation as to, and assumes no responsibility for, the correctness or sufficiency for any purpose of the amount of the Advances so made and requested.
Section 2.03 Fees. The Borrower agrees to pay to the Liquidity Provider the fees set forth in the Fee Letter.
Section 2.04 Reduction or Termination of the Maximum Commitment. (a) Automatic Reduction. Promptly following each date on which the Required Amount is reduced as a result of a reduction in the Pool Balance of the Class AA Certificates, the Maximum Commitment shall automatically be reduced to an amount equal to such reduced Required Amount (as calculated by the Borrower). The Borrower shall give notice of any such automatic reduction of the Maximum Commitment to the Liquidity Provider and Delta within two Business Days thereof. The failure by the Borrower to furnish any such notice shall not affect any such automatic reduction of the Maximum Commitment.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(b) Termination. Upon the making of any Provider Advance or Special Termination Advance or the making of or conversion to a Final Advance hereunder or the occurrence of the Termination Date, the obligation of the Liquidity Provider to make further Advances hereunder shall automatically and irrevocably terminate, and the Borrower shall not be entitled to request any further Borrowing hereunder, except in the case of a Downgrade Advance, as provided in Section 2.06(d).
Section 2.05 Repayments of Interest Advances, the Special Termination Advance or the Final Advance. Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees, without notice of an Advance or demand for repayment from the Liquidity Provider (which notice and demand are hereby waived by the Borrower), to pay, or to cause to be paid, to the Liquidity Provider (a) on each date on which the Liquidity Provider shall make an Interest Advance, the Special Termination Advance or the Final Advance, an amount equal to the amount of such Advance (any such Advance, until repaid, is referred to herein as an “Unpaid Advance”), plus (b) interest on the amount of each such Unpaid Advance in the amounts and on the dates determined as provided in Section 3.07; provided that if (i) the Liquidity Provider shall make a Provider Advance at any time after making one or more Interest Advances which shall not have been repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility or Non-Extended Facility at any time when unreimbursed Interest Advances have reduced the Maximum Available Commitment to zero, then such Interest Advances shall cease to constitute Unpaid Advances and shall be deemed to have been changed into an Applied Downgrade Advance or an Applied Non-Extension Advance, as the case may be, for all purposes of this Agreement (including, without limitation, for the purpose of determining when such Interest Advance is required to be repaid to the Liquidity Provider in accordance with Section 2.06 and for the purposes of Section 2.06(b)); provided, further, that amounts in respect of a Special Termination Advance withdrawn from the Class AA Cash Collateral Account for the purpose of paying interest on the Class AA Certificates in accordance with Section 3.05(f) of the Intercreditor Agreement (the portion of the outstanding Special Termination Advance equal to the amount of any such withdrawal, but not in excess of the outstanding Special Termination Advance, being an “Applied Special Termination Advance”) shall thereafter (subject to Section 2.06(b)) be treated as an Interest Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; provided, further, that if, following the making of a Special Termination Advance, the Liquidity Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01(a), such Special Termination Advance (including any portion thereof that is an Applied Special Termination Advance) shall thereafter be treated as a Final Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; and, provided, further, that if, after making a Provider Advance, the Liquidity Provider delivers a Special Termination Notice to the Borrower pursuant to Section 6.01(b), any Unapplied Provider Advance shall be converted to and treated as a Special Termination Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon and the obligation for repayment thereof under the Intercreditor Agreement. The Borrower and the Liquidity Provider agree that the repayment in full of each Interest Advance, Special Termination Advance and Final Advance on the date such Advance is made is intended to be a contemporaneous exchange for new value given to the Borrower by the Liquidity Provider. For the avoidance of doubt, interest payable on an Interest Advance, Special Termination Advance or the Final Advance shall not be regarded as overdue unless such interest is not paid when due under Section 3.07.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 2.06 Repayments of Provider Advances. (a) Amounts advanced hereunder in respect of a Provider Advance shall be deposited in the Class AA Cash Collateral Account and invested and withdrawn from the Class AA Cash Collateral Account as set forth in Sections 3.05(c), 3.05(d), 3.05(e) and 3.05(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution Date, commencing on the first Regular Distribution Date after the making of a Provider Advance, interest on the principal amount of any such Provider Advance, in the amounts determined as provided in Section 3.07; provided, however, that amounts in respect of a Provider Advance withdrawn from the Class AA Cash Collateral Account for the purpose of paying interest on the Class AA Certificates in accordance with Section 3.05(f) of the Intercreditor Agreement (the amount of any such withdrawal being (y), in the case of a Downgrade Advance, an “Applied Downgrade Advance” and (z) in the case of a Non-Extension Advance, an “Applied Non-Extension Advance” and together with an Applied Downgrade Advance, an “Applied Provider Advance”) shall thereafter (subject to Section 2.06(b)) be treated as an Interest Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; provided, further, however, that if, following the making of a Provider Advance, the Liquidity Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01(a), such Provider Advance shall thereafter be treated as a Final Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon. Subject to Sections 2.07 and 2.09, immediately upon the withdrawal of any amounts from the Class AA Cash Collateral Account on account of a reduction in the Required Amount, the Borrower shall repay to the Liquidity Provider a portion of the Provider Advances in a principal amount equal to such reduction, plus interest on the principal amount so repaid as provided in Section 3.07.
(b) At any time when an Applied Provider Advance or Applied Special Termination Advance (or any portion thereof) is outstanding, upon the deposit in the Class AA Cash Collateral Account of any amount pursuant to clause “fourth” of Section 3.02 of the Intercreditor Agreement (any such amount being a “Replenishment Amount”) for the purpose of replenishing or increasing the balance thereof up to the Required Amount at such time, (i) the aggregate outstanding principal amount of all Applied Provider Advances and Applied Special Termination Advances (and of Provider Advances and Special Termination Advances treated as Interest Advances for purposes of determining the Applicable Liquidity Rate for interest payable thereon) shall be automatically reduced by the amount of such Replenishment Amount, and (ii) the aggregate outstanding principal amount of all Unapplied Provider Advances shall be automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in replacement of this Agreement in accordance with Section 3.05(e) of the Intercreditor Agreement, as provided in Section 3.05(f) of the Intercreditor Agreement, amounts remaining on deposit in the Class AA Cash Collateral Account after giving effect to any Applied Provider Advance or Applied Special Termination Advance on the date of such replacement shall be reimbursed to the Liquidity Provider, but only to the extent such amounts are necessary to repay in full to the Liquidity Provider all amounts owing to it hereunder.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(d) If, at any time after making a Downgrade Advance, the Liquidity Provider satisfies the Threshold Rating and delivers written notice to that effect to the Borrower and Delta, as of the second Business Day following receipt of such notice, (i) this Liquidity Facility shall cease to be a Downgraded Facility, (ii) any Unapplied Downgrade Advance shall be withdrawn from the Class AA Cash Collateral Account and reimbursed to the Liquidity Provider, (iii) any Applied Downgrade Advance shall be converted to an Interest Advance, (iv) the Maximum Available Commitment shall be reinstated by an amount equal to the amount of such Unapplied Downgrade Advance so reimbursed, but not to exceed the Maximum Commitment, and the obligation of the Liquidity Provider to make Advances shall be reinstated in an equal amount, (v) the Borrower shall be entitled to request Borrowings and (vi) the proviso in the definition of Maximum Available Commitment and clause (y) of the proviso in the final sentence of Section 2.02(a) shall, in each case, no longer apply to such Downgrade Advance.
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement. In order to provide for payment or repayment to the Liquidity Provider of any amounts hereunder, the Intercreditor Agreement provides that amounts available and referred to in Articles II and III of the Intercreditor Agreement, to the extent payable to the Liquidity Provider pursuant to the terms of the Intercreditor Agreement (including, without limitation, Section 3.05(f) of the Intercreditor Agreement), shall be paid to the Liquidity Provider in accordance with the terms thereof (but, for the avoidance of doubt, without duplication of or increase in any amounts payable hereunder). Amounts so paid to the Liquidity Provider shall be applied by the Liquidity Provider in the order of priority required by the applicable provisions of Articles II and III of the Intercreditor Agreement and shall discharge in full the corresponding obligations of the Borrower hereunder.
Section 2.08 Book Entries. The Liquidity Provider shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower resulting from Advances made from time to time and the amounts of principal and interest payable hereunder and paid from time to time in respect thereof; provided, however, that the failure by the Liquidity Provider to maintain such account or accounts shall not affect the obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to be made by the Borrower under this Agreement shall be made only from the amounts that constitute Scheduled Payments, Special Payments and other payments under the Operative Agreements, including payment under Section 4.02 of the Participation Agreements and payments under Section 2.14 of the Indentures, and only to the extent that the Borrower shall have sufficient income or proceeds therefrom to enable the Borrower to make payments in accordance with the terms hereof after giving effect to the priority of payments provisions set forth in the Intercreditor Agreement. The Liquidity Provider agrees that it will look solely to such amounts to the extent available for distribution to it as provided in the Intercreditor Agreement and this Agreement and that the
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Borrower, in its individual capacity, is not personally liable to it for any amounts payable or liability under this Agreement except as expressly provided in this Agreement, the Intercreditor Agreement or any Participation Agreement. Amounts on deposit in the Class AA Cash Collateral Account shall be available to the Borrower to make payments under this Agreement only to the extent and for the purposes expressly contemplated in Section 3.05(f) of the Intercreditor Agreement.
Section 2.10 Extension of the Expiry Date; Non-Extension Advance. If the Liquidity Provider notifies the Borrower and Delta in writing before the 60th day prior to any anniversary date of the Closing Date that occurs prior to the 15th day after the Final Legal Distribution Date for the Class AA Certificates (such notice, a “Non-Extension Notice”) that its obligations to make Advances hereunder shall not be extended beyond the immediately following anniversary date of the Closing Date (and if the Liquidity Provider shall not have been replaced in accordance with Section 3.05(e) of the Intercreditor Agreement), the Borrower shall be entitled on and after the 25th day prior to such anniversary date (but prior to such anniversary date and in any event prior to the then applicable Expiry Date) to request a Non-Extension Advance in accordance with Section 2.02(b)(i) hereof and Section 3.05(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. Without duplication of any rights created by Section 3.03, if as a result of any Regulatory Change there shall be any increase by an amount reasonably deemed by the Liquidity Provider to be material in the actual cost to the Liquidity Provider of making, funding or maintaining any Advances or its obligation to make any such Advances or there shall be any reduction by an amount reasonably deemed by the Liquidity Provider to be material in the amount receivable by the Liquidity Provider under this Agreement or the Intercreditor Agreement in respect thereof, and in case of either such an increase or reduction, such event does not arise from the gross negligence or willful misconduct of the Liquidity Provider, from its breach of any of its representations, warranties, covenants or agreements contained herein or in the Intercreditor Agreement or from its failure to comply with any such Regulatory Change (any such increase or reduction being referred to herein as an “Increased Cost”), then, subject to Sections 2.07 and 2.09, the Borrower shall from time to time pay to the Liquidity Provider an amount equal to such Increased Cost within 10 Business Days after delivery to the Borrower and Delta of a certificate of an officer of the Liquidity Provider describing in reasonable detail the event by reason of which it claims such Increased Cost and the basis for the determination of the amount of such Increased Cost; provided that the Borrower shall be obligated to pay amounts only with respect to any Increased Costs accruing from the date 120 days prior to the date of delivery of such certificate. Such certificate, in the absence of manifest error, shall be considered prima facie evidence of the amount of the Increased Costs for purposes of this Agreement; provided that any determinations and allocations by the Liquidity Provider of the effect of any Regulatory Change on the costs of maintaining the Advances or the obligation to make Advances are made on a reasonable basis. For the avoidance of doubt, the
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Liquidity Provider shall not be entitled to assert any claim under this Section 3.01 in respect of or attributable to Excluded Taxes. The Liquidity Provider will notify the Borrower and Delta as promptly as practicable of any event occurring after the date of this Agreement that will entitle the Liquidity Provider to compensation under this Section 3.01. The Liquidity Provider agrees to investigate all commercially reasonable alternatives for reducing any Increased Costs and to use all commercially reasonable efforts to avoid or minimize, to the greatest extent possible, any claim in respect of Increased Costs, including, without limitation, by designating a different Lending Office, if such designation or other action would avoid the need for, or reduce the amount of, any such claim; provided that the foregoing shall not obligate the Liquidity Provider to take any action that would, in its reasonable judgment, cause the Liquidity Provider to take any action that is not materially consistent with its internal policies or is otherwise materially disadvantageous to the Liquidity Provider or that would cause the Liquidity Provider to incur any material loss or cost, unless the Borrower or Delta agrees to reimburse or indemnify the Liquidity Provider therefor. If no such designation or other action is effected, or, if effected, such notice fails to avoid the need for any claim in respect of Increased Costs, Delta may arrange for a Replacement Liquidity Facility in accordance with Section 3.05(e) of the Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the Borrower be required to make payments under this Section 3.01: (a) in respect of any Regulatory Change proposed by any applicable governmental authority (including any branch of a legislature), central bank or comparable agency of the United States or the Liquidity Provider’s jurisdiction of organization or in which its Lending Office is located and pending as of the date of this Agreement (it being agreed that the Regulatory Changes contemplated by (i) the frameworks published by the Basel Committee on Banking Supervision entitled “Basel III: A global regulatory framework for more resilient banks and banking systems” dated December 2010 (revised June 2011), “Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools,” dated January 2013 and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, shall not be considered to have been proposed or pending as of the date of this Agreement); (b) if a claim hereunder in respect of an Increased Cost arises through circumstances peculiar to the Liquidity Provider and that do not affect similarly organized commercial banking institutions in the same jurisdiction generally that are in compliance with the law, rule, regulation or interpretation giving rise to the Regulatory Change relating to such Increased Cost; (c) if the Liquidity Provider shall fail to comply with its obligations under this Section 3.01 or (d) if the Liquidity Provider is not also seeking payment for similar increased costs in other similarly situated transactions related to the airline industry.
Section 3.02 Reserved.
Section 3.03 Withholding Taxes. (a) All payments made by the Borrower under this Agreement shall be made without deduction or withholding for or on account of any Taxes, unless such deduction or withholding is required by law. If any Taxes are so required to be withheld or deducted from any amounts payable to the Liquidity Provider under this Agreement, then, subject to Sections 2.07 and 2.09, the Borrower shall pay to the relevant authorities the full
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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amount so required to be deducted or withheld and, without duplication of any rights created by Section 3.01, if such Taxes are Covered Taxes, pay to the Liquidity Provider such additional amounts as shall be necessary to ensure that the net amount actually received by the Liquidity Provider (after deduction or withholding of all Covered Taxes) shall be equal to the full amount that would have been received by the Liquidity Provider had no withholding or deduction of Covered Taxes been required. The Liquidity Provider agrees to use commercially reasonable efforts (consistent with applicable legal and regulatory restrictions) to change the jurisdiction of its Lending Office if making such change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of the Liquidity Provider, be otherwise materially disadvantageous to the Liquidity Provider.
If the Liquidity Provider receives a refund of, or realizes a net Tax benefit not otherwise available to it as a result of, any Taxes for which additional amounts were paid by the Borrower pursuant to this Section 3.03, the Liquidity Provider shall pay to the Borrower (for deposit into the Collection Account) the amount of such refund (and any interest thereon) or net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf of any participant holding a Participation pursuant to Section 7.08) to the Borrower (x) on or prior to the Effective Date two valid completed and executed copies of Internal Revenue Service Form W-9, W-8BEN-E or W-8ECI (whichever is applicable), including thereon a valid U.S. taxpayer identification number (or, with respect to any such participant, such other form or documentation as may be applicable) covering all amounts receivable by it in connection with the transactions contemplated by the Operative Agreements and (y) thereafter from time to time such additional forms or documentation as may be necessary to establish an available exemption from withholding of United States Tax on payments hereunder so that such forms or documentation are effective for all periods during which it is the Liquidity Provider and (ii) provide timely notice to the Borrower if any such form or documentation is or becomes inaccurate. The Liquidity Provider shall deliver to the Borrower such other forms or documents as may be reasonably requested by the Borrower or required by applicable law to establish that payments hereunder are exempt from or entitled to a reduced rate of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the Liquidity Provider under this Agreement shall be made free and clear of, and without reduction for or on account of, any Taxes. If any Taxes are required to be withheld or deducted from any amounts payable to the Borrower under this Agreement, the Liquidity Provider shall (i) within the time prescribed therefor by applicable law pay to the appropriate governmental or taxing authority the full amount of any such Taxes (and any additional Taxes in respect of the additional amounts payable under clause (ii) hereof) and make such reports or returns in connection therewith at the time or times and in the manner prescribed by applicable law, and (ii) pay to the Borrower an additional amount which (after deduction of all such Taxes) will be sufficient to yield to the Borrower the full amount which would have been received by it had no such withholding or deduction been made. Within 30 days after the date of each payment hereunder, the Liquidity Provider shall furnish to the Borrower the original or a certified copy of (or other documentary evidence of) the payment of the Taxes applicable to such payment.
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On or before the Closing Date, the Borrower shall provide the Liquidity Provider with its fully executed Internal Revenue Service Form W-9, evidencing a complete exemption from U.S. federal withholding tax and backup withholding. If any exemption from, or reduction in the rate of, any Taxes required to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably available to the Borrower without providing any information regarding the holders or beneficial owners of the Certificates, the Borrower shall deliver the Liquidity Provider such form or forms and such other evidence of the eligibility of the Borrower for such exemption or reductions (but without any requirement to provide any information regarding the holders or beneficial owners of the Certificates) as the Liquidity Provider may reasonably identify to the Borrower as being required as a condition to exemption from, or reduction in the rate of, such Taxes.
(c) If a payment made hereunder to the Liquidity Provider would be subject to U.S. federal withholding Tax imposed by FATCA if the Liquidity Provider were to fail to comply with the applicable reporting requirement of FATCA (including without limitation those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Liquidity Provider shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with the Borrower’s obligations under FATCA and to determine whether the Liquidity Provider has complied with the Liquidity Provider’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Section 3.04 Payments. Subject to Sections 2.07 and 2.09, the Borrower shall make or cause to be made each payment to the Liquidity Provider under this Agreement so as to cause the same to be received by the Liquidity Provider not later than 1:00 p.m. (New York City time) on the day when due. The Borrower shall make all such payments in Dollars, to the Liquidity Provider in immediately available funds, by wire transfer to the account of National Australia Bank Limited, acting through its New York branch, set forth below, or to such other U.S. bank account as the Liquidity Provider may from time to time direct the Subordination Agent:
Name of Bank: Citibank, New York
ABA Number: 021000089
Account Name: NAB NY Lending Administration
Account Number: 362-44-437
Reference: Delta 2020-1 EETC
Section 3.05 Computations. All computations of interest based on the Base Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the LIBOR Rate shall be made on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.
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Section 3.06 Payment on Non-Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and no additional interest shall be due as a result (and if so made, shall be deemed to have been made when due). If any payment in respect of interest on an Advance is so deferred to the next succeeding Business Day, such deferral shall not delay the commencement of the next Interest Period for such Advance (if such Advance is a LIBOR Advance) or reduce the number of days for which interest will be payable on such Advance on the next Interest Payment Date for such Advance.
Section 3.07 Interest. (a) Subject to Sections 2.07 and 2.09, the Borrower shall pay, or shall cause to be paid, without duplication, interest on (i) the unpaid principal amount of each Advance from and including the date of such Advance (or, in the case of an Applied Provider Advance or Applied Special Termination Advance, from and including the date on which the amount thereof was withdrawn from the Class AA Cash Collateral Account to pay interest on the Class AA Certificates) to but excluding the date such principal amount shall be paid in full (or, in the case of an Applied Provider Advance or Applied Special Termination Advance, the date on which the Class AA Cash Collateral Account is fully replenished in respect of such Advance) and (ii), to the extent permitted by law, any other amount due hereunder (whether fees, commissions, expenses or other amounts or installments of interest on Advances or any such other amount) that is not paid when due (whether at stated maturity, by acceleration or otherwise) from and including the due date thereof to but excluding the date such amount is paid in full, in each such case, at the interest rate per annum for each day that such amount remains overdue and unpaid equal to the Applicable Liquidity Rate for such Advance or such other amount, as the case may be, as in effect for such day, but in no event in any case referred to in clause (i) or (ii) above at a rate per annum greater than the maximum rate permitted by applicable law; provided, however, that, if at any time the otherwise applicable interest rate as set forth in this Section 3.07 shall exceed the maximum rate permitted by applicable law, then to the maximum extent permitted by applicable law any subsequent reduction in such interest rate will not reduce the rate of interest payable pursuant to this Section 3.07 below the maximum rate permitted by applicable law until the total amount of interest accrued equals the absolute amount of interest that would have accrued (without additional interest thereon) if such otherwise applicable interest rate as set forth in this Section 3.07 had at all relevant times been in effect.
(b) Each Advance (other than a Provider Advance or a Special Termination Advance) will be a Base Rate Advance for the period from the date of its Borrowing to (but excluding) the third Business Day following the Liquidity Provider’s receipt of the Notice of Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR Advance, and an Applied Provider Advance and an Applied Special Termination Advance shall be a LIBOR Advance from the date of its withdrawal from the Class AA Cash Collateral Account unless the Borrower elects otherwise.
(c) Each LIBOR Advance shall bear interest during each Interest Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus the Applicable Margin for such LIBOR Advance, payable in arrears on the last day of such Interest Period and, in the event of the payment of principal of such LIBOR Advance on a day other than such last day, on the date of such payment (to the extent of interest accrued on the amount of principal repaid).
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(d) Each Base Rate Advance shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin for such Base Rate Advance, payable in arrears on each Regular Distribution Date and, in the event of the payment of principal of such Base Rate Advance on a day other than a Regular Distribution Date, on the date of such payment (to the extent of interest accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Non-Extension Advance, Unapplied Downgrade Advance or Unapplied Special Termination Advance (each, an “Unapplied Advance”), as the case may be, shall bear interest, payable in arrears on each Regular Distribution Date, in an amount equal to (i) the Investment Earnings on the amounts on deposit in the Class AA Cash Collateral Account on account of such Unapplied Advance during the period beginning on the later of the date of deposit of such Unapplied Advance and the preceding Regular Distribution Date and ending on the last day prior to such Regular Distribution Date, plus (ii) an amount equal to interest at the Applicable Margin on the amount of such Unapplied Advance during such period.
(f) Each amount not paid when due hereunder (whether fees, commissions, expenses or other amounts or installments of interest on Advances but excluding Advances) shall bear interest, to the extent permitted by applicable law, at a rate per annum equal to the Base Rate plus 2.0% per annum until paid.
(g) If at any time, the Liquidity Provider shall have determined (which determination shall be conclusive and binding upon the Borrower, absent manifest error) that, by reason of circumstances affecting the relevant interbank lending market generally (other than a Benchmark Replacement Event), the LIBOR Rate determined or to be determined for the next succeeding Interest Period will not adequately and fairly reflect the cost to the Liquidity Provider (as conclusively certified by the Liquidity Provider, absent manifest error) of making or maintaining Advances, the Liquidity Provider shall give facsimile or telephonic notice thereof (a “Rate Determination Notice”) to the Borrower and Delta. If such notice is given, then the outstanding principal amount of the LIBOR Advances shall be converted to Base Rate Advances effective from the date of the Rate Determination Notice; provided that the Applicable Liquidity Rate in respect of such Base Rate Advances shall be increased by one percent (1.00%). The Liquidity Provider shall withdraw a Rate Determination Notice given hereunder when the Liquidity Provider determines that the circumstances giving rise to such Rate Determination Notice no longer apply to the Liquidity Provider, and the Base Rate Advances shall be converted to LIBOR Advances effective as of the first day of the next succeeding Interest Period after the date of such withdrawal.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(h) Each change in the Base Rate shall become effective immediately. The rates of interest specified in this Section 3.07 with respect to any Advance or other amount shall be referred to as the “Applicable Liquidity Rate”.
Section 3.08 Replacement of Borrower. Subject to Section 5.02, from time to time and subject to the successor Borrower’s meeting the eligibility requirements set forth in Section 6.09 of the Intercreditor Agreement applicable to the Subordination Agent, upon the effective date and time specified in a written and completed Notice of Replacement Subordination Agent in substantially the form of Annex VIII (a “Notice of Replacement Subordination Agent”) delivered to the Liquidity Provider by the then Borrower, the successor Borrower designated therein shall become the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall pay to the Liquidity Provider, upon the request of the Liquidity Provider, such amount or amounts as shall be sufficient (in the reasonable opinion of the Liquidity Provider) to compensate it for any loss, cost or expense incurred by reason of the liquidation or redeployment of deposits or other funds acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of the Applicable Margin or anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date for borrowing specified in the relevant notice under Section 2.02.
Section 3.10 Illegality. Notwithstanding any other provision in this Agreement, if any change in any law, rule or regulation applicable to or binding on the Liquidity Provider, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Liquidity Provider with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Liquidity Provider to maintain or fund its LIBOR Advances, then upon notice to the Borrower and Delta by the Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon demand of the Liquidity Provider, if such change or compliance with such request, in the reasonable judgment of the Liquidity Provider, requires immediate conversion; or (b) at the expiration of the last Interest Period to expire before the effective date of any such change or request. The Liquidity Provider will notify the Borrower and Delta as promptly as practicable of any event that will or to its knowledge is reasonably likely to lead to the conversion of LIBOR Advances to Base Rate Advances under this Section 3.10; provided that a failure by the Liquidity Provider to notify the Borrower or Delta of an event that is reasonably likely to lead to such a conversion prior to the time that it is determined that such event will lead to such a conversion shall not prejudice the rights of the Liquidity Provider under this Section 3.10. The Liquidity Provider
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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agrees to investigate all commercially reasonable alternatives for avoiding the need for such conversion, including, without limitation, designating a different Lending Office, if such designation or other action would avoid the need to convert such LIBOR Advances to Base Rate Advances; provided that the foregoing shall not obligate the Liquidity Provider to take any action that would, in its reasonable judgment, cause the Liquidity Provider to incur any material loss or cost, unless the Borrower or Delta agrees to reimburse or indemnify the Liquidity Provider therefor. If no such designation or other action is effected, or, if effected, fails to avoid the need for conversion of the LIBOR Advances to Base Rate Advances, Delta may arrange for a Replacement Liquidity Facility in accordance with Section 3.05(e) of the Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of this Agreement shall become effective on and as of the first date (the “Effective Date”) on which the following conditions precedent have been satisfied (or waived by the appropriate party or parties):
(a) The Liquidity Provider shall have received on or before the Closing Date each of the following, and in the case of each document delivered pursuant to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to the Liquidity Provider:
(i) This Agreement and the Fee Letter duly executed on behalf of the Borrower and, in the case of the Fee Letter, Delta;
(ii) The Intercreditor Agreement duly executed on behalf of each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative Agreements executed and delivered on or before the Closing Date (other than this Agreement, the Fee Letter and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of the Class AA Certificates;
(v) An executed copy of each opinion (other than the negative assurance letters of internal counsel of Delta and of Kilpatrick Townsend & Stockton LLP, special counsel to Delta, and the opinion and the negative assurance letter of Milbank LLP, special counsel to the Underwriters) delivered on the Closing Date
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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pursuant to the Underwriting Agreement (in the case of each such opinion, either addressed to the Liquidity Provider or accompanied by a letter from the counsel rendering such opinion to the effect that the Liquidity Provider is entitled to rely on such opinion as of its date as if it were addressed to the Liquidity Provider);
(vi) An executed copy of each document, instrument, certificate and opinion delivered on or before the Closing Date pursuant to the Class AA Trust Agreement, the Intercreditor Agreement and the other Operative Agreements (in the case of each such opinion, either addressed to the Liquidity Provider or accompanied by a letter from the counsel rendering such opinion to the effect that the Liquidity Provider is entitled to rely on such opinion as of its date as if it were addressed to the Liquidity Provider); and
(vii) An agreement from Delta, pursuant to which (x) Delta agrees to provide copies of quarterly financial statements and audited annual financial statements to the Liquidity Provider (which Delta may provide in an electronic format by electronic mail or making such available over the internet) and (y) Delta agrees to allow the Liquidity Provider to discuss the transactions contemplated by the Operative Agreements with officers and employees of Delta.
(b) On and as of the Effective Date no event shall have occurred and be continuing, or would result from the entering into of this Agreement or the making of any Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of the fees and other sums required to be paid to or for the account of the Liquidity Provider on or prior to the Effective Date pursuant to the Fee Letter.
(d) All conditions precedent to the issuance of the Certificates under the Trust Agreements shall have been satisfied or waived, all conditions precedent to the effectiveness of the other Liquidity Facilities shall have been satisfied or waived, and all conditions precedent to the purchase of the Class AA Certificates and the Class A Certificates by the Underwriters under the Underwriting Agreement shall have been satisfied (unless any of such conditions precedent under the Underwriting Agreement shall have been waived by the Underwriters).
(e) The Borrower and Delta shall have received a certificate, dated the Effective Date signed by a duly authorized representative of the Liquidity Provider, certifying that all conditions precedent specified in this Section 4.01 have been satisfied or waived by the Liquidity Provider.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 4.02 Conditions Precedent to Borrowing. The obligation of the Liquidity Provider to make an Advance on the occasion of each Borrowing shall be subject to the conditions precedent that the Effective Date shall have occurred and, prior to the time of such Borrowing, the Borrower shall have delivered a Notice of Borrowing which conforms to the terms and conditions of this Agreement.
Section 4.03 Representations and Warranties. The representations and warranties of the Borrower as Subordination Agent in Sections 5.01(a), (b), (c), and (d) of the Participation Agreements shall be deemed to be incorporated into this Agreement as if set out in full herein and as if such representations and warranties were made by the Borrower to the Liquidity Provider.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Available Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity Provider shall otherwise consent in writing:
(a) Performance of Agreements. Subject to Sections 2.07 and 2.09, punctually pay or cause to be paid all amounts payable by it under this Agreement and the Intercreditor Agreement and observe and perform in all material respects the conditions, covenants and requirements applicable to it contained in this Agreement and the Intercreditor Agreement;
(b) Reporting Requirements. Furnish to the Liquidity Provider with reasonable promptness, such other information and data with respect to the transactions contemplated by the Operative Agreements as from time to time may be reasonably requested by the Liquidity Provider; and permit the Liquidity Provider, upon reasonable notice, to inspect the Borrower’s books and records with respect to such transactions and to meet with officers and employees of the Borrower to discuss such transactions; and
(c) Certain Operative Agreements. Furnish to the Liquidity Provider, with reasonable promptness, copies of such Operative Agreements entered into after the date hereof as from time to time may be reasonably requested by the Liquidity Provider.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 5.02 Negative Covenants of the Borrower. Subject to the first and fourth paragraphs of Section 7.01(a) of the Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Available Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will not appoint or permit or suffer to be appointed any successor Borrower without the prior written consent of the Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT AND SPECIAL TERMINATION
Section 6.01 Liquidity Events of Default. (a) If any Liquidity Event of Default has occurred and is continuing and there is a Performing Note Deficiency, the Liquidity Provider may, in its discretion, deliver to the Borrower and Delta a Termination Notice, the effect of which shall be to cause (i) the Termination Date to occur at the close of business on the fifth Business Day after the date on which such Termination Notice is received by the Borrower and Delta, (ii) the Borrower to promptly request, and the Liquidity Provider to promptly make, a Final Advance in accordance with Section 2.02(c) hereof and Section 3.05(i) of the Intercreditor Agreement, (iii) all other outstanding Advances to be automatically converted into Final Advances for purposes of determining the Applicable Liquidity Rate for interest payable thereon and (iv) subject to Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any other amounts outstanding hereunder to become immediately due and payable to the Liquidity Provider.
(b) If the aggregate Pool Balance of the Class AA Certificates is greater than the aggregate outstanding principal amount of the Series AA Equipment Notes (other than any Series AA Equipment Notes previously sold by the Borrower or with respect to which the Aircraft related to such Series AA Equipment Notes has been disposed of by the Loan Trustee) at any time during the 18-month period ending on June 10, 2028, the Liquidity Provider may, in its discretion, deliver to the Borrower and Delta a Special Termination Notice, the effect of which shall be to cause (i) the Termination Date to occur at the close of business on the fifth Business Day after the date on which such Special Termination Notice is received by the Borrower and Delta, (ii) the Borrower to promptly request, and the Liquidity Provider to promptly make, a Special Termination Advance in accordance with Section 2.02(d) hereof and Section 3.05(k) of the Intercreditor Agreement, and (iii) subject to Sections 2.07 and 2.09, all Advances (including, without limitation, any Unapplied Provider Advance), to be automatically treated as Special Termination Advances, subject to Section 6.01(a).
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modifications or Continuing Waivers. No terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Borrower and the Liquidity Provider and any other Person whose consent is required pursuant to this Agreement; provided that no such change or other action shall affect the payment obligations of Delta or the rights of Delta without Delta’s prior written consent; and any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
Section 7.02 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and given by United States registered or certified mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
If to the Borrower, to:
U.S. BANK TRUST NATIONAL ASSOCIATION
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref: Delta 2020-1AA EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
E-mail: alison.nadeau@usbank.com
If to the Liquidity Provider, to:
NATIONAL AUSTRALIA BANK LIMITED, NEW YORK BRANCH
245 Park Avenue, 28th Floor
New York, NY 10167
Attention: Lending Administration
Telephone: 212-916-9593
Facsimile: 212-490-8087
Email: ny_lending_administration@nabny.com
with a copy to:
National Australia Bank Limited, New York Branch
245 Park Avenue
New York, NY 10167
Attention: Director, Asset Finance & Leasing
Telephone: (212) 916-9500
Facsimile: (212) 490-8087
Any party, by notice to the other party hereto, may designate additional or different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 7.02.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 7.03 No Waiver; Remedies. No failure on the part of the Liquidity Provider to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04 Further Assurances. The Borrower agrees to do such further acts and things and to execute and deliver to the Liquidity Provider such additional assignments, agreements, powers and instruments as the Liquidity Provider may reasonably require or deem advisable to carry into effect the purposes of this Agreement and the other Operative Agreements or to better assure and confirm unto the Liquidity Provider its rights, powers and remedies hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions. The Liquidity Provider shall be indemnified hereunder to the extent and in the manner described in Section 4.02 of the Participation Agreements. In addition, the Borrower agrees to indemnify, protect, defend and hold harmless each Liquidity Indemnitee from and against all Expenses of any kind or nature whatsoever (other than any Expenses of the nature described in Sections 3.01, 3.03, 3.09 or 7.07 or in the Fee Letter (regardless of whether indemnified against pursuant to said Sections or in such Fee Letter)), that may be imposed on or incurred by such Liquidity Indemnitee, in any way relating to, resulting from, or arising out of or in connection with, any action, suit or proceeding by any third party against such Liquidity Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor Agreement or any Participation Agreement; provided, however, that the Borrower shall not be required to indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect of any Expense of such Liquidity Indemnitee to the extent such Expense is (i) attributable to the gross negligence or willful misconduct of such Liquidity Indemnitee or any other Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense, (iii) attributable to the failure by such Liquidity Indemnitee or any other Liquidity Indemnitee to perform or observe any agreement, covenant or condition on its part to be performed or observed in this Agreement, the Intercreditor Agreement, the Fee Letter or any other Operative Agreement to which it is a party or (iv) otherwise excluded from the indemnification provisions contained in Section 4.02 of the Participation Agreements. The provisions of Sections 3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02 of the Participation Agreements shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither the Liquidity Provider nor any of its officers, employees or directors shall be liable or responsible for: (i) the use which may be made of the Advances or any acts or omissions of the Borrower or any beneficiary or transferee in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; or (iii) the making of Advances by the Liquidity
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Provider against delivery of a Notice of Borrowing and other documents which do not comply with the terms hereof; provided, however, that the Borrower shall have a claim against the Liquidity Provider, and the Liquidity Provider shall be liable to the Borrower, to the extent of any damages suffered by the Borrower that were the result of (A) the Liquidity Provider’s willful misconduct or gross negligence in determining whether documents presented hereunder comply with the terms hereof or (B) any breach by the Liquidity Provider of any of the terms of this Agreement or the Intercreditor Agreement, including, but not limited to, the Liquidity Provider’s failure to make lawful payment hereunder after the delivery to it by the Borrower of a Notice of Borrowing complying with the terms and conditions hereof. In no event, however, shall the Liquidity Provider be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, loss of profits, business or anticipated savings).
(b) Neither the Liquidity Provider nor any of its officers, employees or directors or affiliates shall be liable or responsible in any respect for (i) any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with this Agreement or any Notice of Borrowing delivered hereunder or (ii) any action, inaction or omission which may be taken by it in good faith, absent willful misconduct or gross negligence (in which event the extent of the Liquidity Provider’s potential liability to the Borrower shall be limited as set forth in the immediately preceding paragraph), in connection with this Agreement or any Notice of Borrowing.
Section 7.07 Certain Costs and Expenses. The Borrower agrees promptly to pay, or cause to be paid, (a) the reasonable fees, expenses and disbursements of Pillsbury Winthrop Shaw Pittman LLP, special counsel for the Liquidity Provider, in connection with the preparation, negotiation, execution, delivery, filing and recording of the Operative Agreements, any waiver or consent thereunder or any amendment thereof and (b) if a Liquidity Event of Default occurs, all out-of-pocket expenses incurred by the Liquidity Provider, including reasonable fees and disbursements of counsel, in connection with such Liquidity Event of Default and any collection, bankruptcy, insolvency and other enforcement proceedings in connection therewith. In addition, the Borrower shall pay any and all recording, stamp and other similar Taxes and fees payable or determined to be payable in the United States in connection with the execution, delivery, filing and recording of this Agreement, any other Operative Agreement and such other documents, and agrees to save the Liquidity Provider harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower and the Liquidity Provider and their respective successors and permitted assigns, except that neither the Liquidity Provider (except as otherwise provided in this Section 7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the right to assign, pledge or otherwise transfer its rights or obligations hereunder or any interest herein, subject to the Liquidity Provider’s right to grant Participations pursuant to Section 7.08(b), and the Liquidity Provider shall have the right to assign its rights and transfer its obligations hereunder in connection with the arranging of a Replacement Liquidity Facility pursuant to Section 3.05(e) of the Intercreditor Agreement; provided that any such assignment and transfer is consented to by Delta.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(b) The Liquidity Provider agrees that it will not grant any participation (including, without limitation, a “risk participation”) (any such participation, a “Participation”) in or to all or a portion of its rights and obligations hereunder or under the other Operative Agreements, unless all of the following conditions are satisfied: (i) such Participation is to a Permitted Transferee, (ii) such Participation is made in accordance with all applicable laws, including, without limitation, the Securities Act of 1933, as amended, the Trust Indenture Act of 1939, as amended, any laws or regulations imposing U.S. economic sanctions measures or any orders or licenses issued thereunder and any other applicable laws relating to the transfer of similar interests and (iii) such Participation shall not be made under circumstances that require registration under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended. Notwithstanding any such Participation, the Liquidity Provider agrees that (1) the Liquidity Provider’s obligations under the Operative Agreements shall remain unchanged, and such participant shall have no rights or benefits as against Delta or the Borrower or under any Operative Agreement, (2) the Liquidity Provider shall remain solely responsible to the other parties to the Operative Agreements for the performance of such obligations, (3) the Liquidity Provider shall remain the maker of any Advances, and the other parties to the Operative Agreements shall continue to deal solely and directly with the Liquidity Provider in connection with the Advances and the Liquidity Provider’s rights and obligations under the Operative Agreements, (4) the Liquidity Provider shall be solely responsible for any withholding Taxes or any filing or reporting requirements relating to such Participation and shall hold the Borrower and Delta and their respective successors, permitted assigns, affiliates, agents and servants harmless against the same and (5) neither Delta nor the Borrower shall be required to pay to the Liquidity Provider any amount under Section 3.01 or Section 3.03 greater than it would have been required to pay had there not been any grant of a Participation by the Liquidity Provider. The Liquidity Provider may, in connection with any Participation or proposed Participation pursuant to this Section 7.08(b), disclose to the participant or proposed participant any information relating to the Operative Agreements or to the parties thereto furnished to the Liquidity Provider thereunder or in connection therewith and permitted to be disclosed by the Liquidity Provider; provided, however, that prior to any such disclosure, the participant or proposed participant shall agree in writing for the express benefit of the Borrower and Delta to preserve the confidentiality of any confidential information included therein (subject to customary exceptions).
The Borrower acknowledges and agrees that the Liquidity Provider’s source of funds may derive in part from its participants. Accordingly, in determining amounts due by the Borrower to the Liquidity Provider pursuant to Section 3.01 and Section 3.03 of this Agreement, references in this Agreement to determinations, reserve, liquidity and capital adequacy requirements, increased costs, reduced receipts, additional amounts due pursuant to Section 3.03 as they pertain to the Liquidity Provider shall be deemed also to include those of each of its participants that are commercial banking institutions and of whose participation the Borrower has been notified, in each case up to the maximum amount that would have been incurred by or attributable to the Liquidity Provider directly had there not been any grant of a Participation by
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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the Liquidity Provider, and references to the Liquidity Provider therein and in related definitions shall be treated as references to such participants where applicable; provided that in any event, neither Delta nor the Borrower shall be required to pay any amount under Section 3.01 or Section 3.03 greater than it would have been required to pay had there not been any grant of a Participation by the Liquidity Provider.
The Liquidity Provider shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest under this Agreement (the “Participant Register”); provided that the Liquidity Provider shall not have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and the Liquidity Provider shall treat each Person whose name is recorded in the Participant Register as the owner of such Participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(c) Notwithstanding the other provisions of this Section 7.08, the Liquidity Provider may assign and pledge all or any portion of the Advances owing to it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that any payment in respect of such assigned Advances made by the Borrower to the Liquidity Provider in accordance with the terms of this Agreement shall satisfy the Borrower’s obligations hereunder in respect of such assigned Advance to the extent of such payment. No such assignment shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.10 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity. (a) Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns, (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts, (iii) agrees that service of process in any such suit, action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to each party hereto at its address set forth in Section 7.02 hereof, or at such other address of which each party shall have been notified pursuant thereto and (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The Borrower and the Liquidity Provider each warrant and represent that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) To the extent that the Liquidity Provider or any of its properties has or may hereafter acquire any right of immunity, whether characterized as sovereign immunity or otherwise, and whether under the United States Foreign Sovereign Immunities Act of 1976 (or any successor legislation) or otherwise, from any legal proceedings, whether in the United States or elsewhere, to enforce or collect upon this Agreement, including, without limitation, immunity from suit or service of process, immunity from jurisdiction or judgment of any court or tribunal or execution of a judgment, or immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, the Liquidity Provider hereby irrevocably and expressly waives any such immunity, and agrees not to assert any such right or claim in any such proceeding, whether in the United States or elsewhere.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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Section 7.12 Counterparts. This Agreement may be executed in any number of counterparts (and each party shall not be required to execute the same counterpart). Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts together shall constitute one instrument.
Section 7.13 Entirety. This Agreement and the Intercreditor Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior understandings and agreements of such parties.
Section 7.14 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 7.15 Liquidity Provider’s Obligation to Make Advances. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER’S RIGHTS TO DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
Section 7.16 Patriot Act. The Liquidity Provider hereby notifies the Borrower that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Liquidity Provider to identify the Borrower in accordance with such Act.
Section 7.17 Acknowledgment and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in this Agreement or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under this Agreement, to the extent such liability is unsecured, may be subject to Write-Down and Conversion Powers and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement; or
(iii) the variation of the terms of such liability in connection with the exercise of Write-Down and Conversion Powers.
Section 7.18 Head Office Obligations. The Liquidity Provider is National Australia Bank Limited, acting through its New York branch. The Liquidity Provider hereby agrees that, notwithstanding the place of booking or its jurisdiction of incorporation or organization, the obligations of the Liquidity Provider hereunder are also the obligations of the head office of National Australia Bank Limited in Melbourne, Australia (the “Head Office”). Accordingly, any beneficiary of this Agreement will be able to proceed directly against the Head Office, if the Liquidity Provider defaults in its obligations to such beneficiary under this Agreement.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first set forth above.
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U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Subordination Agent, as agent and trustee for the Class AA Trust, as Borrower |
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| By: |
/s/ Georgina Nassar |
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| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
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NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, as Liquidity Provider |
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| By: |
/s/ Daniel Carr |
|
| Name: Daniel Carr | ||
| Title: Director | ||
[Signature Page – Delta 2020-1 EETC – Revolving Credit Agreement (Class AA)]
ANNEX I to
REVOLVING CREDIT AGREEMENT
FORM OF INTEREST ADVANCE NOTICE OF BORROWING
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of an Interest Advance by the Liquidity Provider to be used for the payment of the interest on the Class AA Certificates which is payable on __________, ____ (the “Distribution Date”) in accordance with the terms and provisions of the Class AA Trust Agreement and the Class AA Certificates, which Advance is requested to be made on __________, ____. The Interest Advance should be remitted to [insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is $___________, to be applied in respect of the payment of the interest which is due and payable on the Class AA Certificates on the Distribution Date, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class AA Certificates, or principal of, or interest or premium on the Class A Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class AA Certificates, the Class AA Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I), (iv) does not exceed the Maximum Available Commitment on the date hereof and (v) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will apply the same in accordance with the terms of Section 3.05(b) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, the making of the Interest Advance as requested by this Notice of Borrowing shall automatically reduce, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Maximum Available Commitment by an amount equal to the amount of the Interest Advance requested to be made hereby as set forth in clause (i) of paragraph (3) of this Notice of Borrowing and such reduction shall automatically result in corresponding reductions in the amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of __________, ____.
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U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
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| By: |
|
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| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of Borrowing]
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX II to
REVOLVING CREDIT AGREEMENT
FORM OF NON-EXTENSION ADVANCE NOTICE OF BORROWING
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned subordination agent (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Non-Extension Advance by the Liquidity Provider to be used for the funding of the Class AA Cash Collateral Account in accordance with Section 3.05(d) of the Intercreditor Agreement, which Advance is requested to be made on __________, ____. The Non-Extension Advance should be remitted to [insert wire and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class AA Cash Collateral Account in accordance with Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of the principal of, or premium on, the Class AA Certificates, or principal of, or interest or premium on, the Class A Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class AA Certificates, the Liquidity Agreement, the Class AA Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class AA Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Non-Extension Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement and (B) following the making by the Liquidity Provider of the Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ____________, ____.
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U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX III to
REVOLVING CREDIT AGREEMENT
FORM OF DOWNGRADE ADVANCE NOTICE OF BORROWING
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned subordination agent (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Downgrade Advance by the Liquidity Provider to be used for the funding of the Class AA Cash Collateral Account in accordance with Section 3.05(c)(iii) of the Intercreditor Agreement by reason of the Liquidity Facility provided under the Liquidity Agreement becoming a Downgraded Facility which has not been replaced by a Replacement Liquidity Facility, which Advance is requested to be made on __________, ____. The Downgrade Advance should be remitted to [insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class AA Cash Collateral Account in accordance with Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of the principal of, or premium on, the Class AA Certificates, or principal of, or interest or premium on, the Class A Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class AA Certificates, the Class AA Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class AA Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Downgrade Advance as requested by this Notice of Borrowing shall automatically reduce, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Maximum Available Commitment to zero and (B) following the making by the Liquidity Provider of the Downgrade Advance requested by this Notice of Borrowing, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ____________, ____.
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FORM OF FINAL ADVANCE NOTICE OF BORROWING
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Final Advance by the Liquidity Provider to be used for the funding of the Class AA Cash Collateral Account in accordance with Section 3.05(i) of the Intercreditor Agreement by reason of the receipt by the Borrower of a Termination Notice from the Liquidity Provider with respect to the Liquidity Agreement, which Advance is requested to be made on __________, ____. The Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class AA Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class AA Certificates, or principal of, or interest or premium on, the Class A Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class AA Certificates, the Class AA Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class AA Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
| 1 | ||||
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Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
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The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Final Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement and (B) following the making by the Liquidity Provider of the Final Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ___________, ___.
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
||
| By: |
|
|
| Name: | ||
| Title: | ||
[* Bracketed language may be included at Borrower’s option.]
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
SCHEDULE 1 TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX V to
REVOLVING CREDIT AGREEMENT
FORM OF SPECIAL TERMINATION
ADVANCE NOTICE OF BORROWING
SPECIAL TERMINATION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Special Termination Advance by the Liquidity Provider to be used for the funding of the Class AA Cash Collateral Account in accordance with Section 3.05(k) of the Intercreditor Agreement by reason of the receipt by the Borrower of a Special Termination Notice from the Liquidity Provider with respect to the Liquidity Agreement, which Advance is requested to be made on _______________.
(3) The amount of the Special Termination Advance requested hereby (i) is $_____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class AA Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(k) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class AA Certificates, or principal of, or interest or premium on, the Class A Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class AA Certificates, the Class AA Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower shall deposit such amount in the Class AA Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(f) and 3.05(k) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
| 1 | ||||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
||||
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Special Termination Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement; and (B) following the making by the Liquidity Provider of the Special Termination Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ___________, ___.
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
SCHEDULE 1 TO SPECIAL TERMINATION ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Special Termination Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX VI to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF TERMINATION
NOTICE OF TERMINATION
[Date]
U.S. Bank Trust National Association,
as Subordination Agent,
as Borrower
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref: Delta 2020-1AA EETC
| Re: |
Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1AA, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01(a) of the Liquidity Agreement, by reason of the occurrence and continuance of a Liquidity Event of Default and the existence of a Performing Note Deficiency (each as defined in the Liquidity Agreement), we are giving this notice to you in order to cause (i) our obligations to make Advances (as defined in the Liquidity Agreement) under such Liquidity Agreement to terminate at the close of business on the fifth Business Day after the date on which you receive this notice and (ii) you to request a Final Advance under the Liquidity Agreement pursuant to Section 2.02(c) of the Liquidity Agreement and Section 3.05(i) of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a consequence of your receipt of this notice.
| 1 | ||||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
||||
THIS NOTICE IS THE “NOTICE OF TERMINATION” PROVIDED FOR UNDER THE LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
| Very truly yours, | ||
| NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, | ||
| as Liquidity Provider | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| cc: |
U.S. Bank Trust National Association, as Class AA Trustee |
|
Delta Air Lines, Inc. |
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX VII to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF SPECIAL TERMINATION
NOTICE OF SPECIAL TERMINATION
[Date]
U.S. Bank Trust National Association,
as Subordination Agent,
as Borrower
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref: Delta 2020-1AA EETC
| Re: |
Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1AA, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01(b) of the Liquidity Agreement, by reason of the aggregate Pool Balance of the Class AA Certificates exceeding the aggregate outstanding principal amount of the Series AA Equipment Notes (other than any Series AA Equipment Notes previously sold or with respect to which the Aircraft related to such Series AA Equipment Notes has been disposed of) during the 18-month period prior to June 10, 2028, we are giving this notice to you in order to cause (i) our obligations to make Advances (as defined in the Liquidity Agreement) under such Liquidity Agreement to terminate at the close of business on the fifth Business Day after the date on which you receive this notice and (ii) you to request a Special Termination Advance under the Liquidity Agreement pursuant to Section 2.02(d) of the Liquidity Agreement and Section 3.05(k) of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a consequence of your receipt of this notice.
| 1 | ||||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
||||
THIS NOTICE IS THE “NOTICE OF SPECIAL TERMINATION” PROVIDED FOR UNDER THE LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
| Very truly yours, | ||
| NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, | ||
| as Liquidity Provider | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| cc: |
U.S. Bank Trust National Association, as Class AA Trustee |
|
Delta Air Lines, Inc. |
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
ANNEX VIII to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF REPLACEMENT SUBORDINATION AGENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
| Re: |
Revolving Credit Agreement (2020-1AA), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1AA, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
[Name of Transferee]
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity Agreement referred to above. The transferee has succeeded the undersigned as Subordination Agent under the Intercreditor Agreement referred to in the first paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the Liquidity Agreement are transferred to the transferee and the transferee shall hereafter have the sole rights and obligations as Borrower thereunder. The undersigned shall pay any costs and expenses of such transfer, including, but not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower |
||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class AA) (Delta 2020-1 EETC) |
Exhibit 4.7
EXECUTION VERSION
REVOLVING CREDIT AGREEMENT
(2020-1A)
Dated as of March 12, 2020
between
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent,
as agent and trustee for the trustee of
Delta Air Lines Pass Through Trust 2020-1A,
as Borrower
and
NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH,
as Liquidity Provider
Delta Air Lines Pass Through Trust 2020-1A
Delta Air Lines
Pass Through Certificates,
Series 2020-1A
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
Table of Contents
|
Page |
||||||
|
ARTICLE I DEFINITIONS |
1 | |||||
|
Section 1.01 |
Definitions | 1 | ||||
|
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT |
12 | |||||
|
Section 2.01 |
The Advances | 12 | ||||
|
Section 2.02 |
Making of Advances | 12 | ||||
|
Section 2.03 |
Fees | 14 | ||||
|
Section 2.04 |
Reduction or Termination of the Maximum Commitment | 14 | ||||
|
Section 2.05 |
Repayments of Interest Advances, the Special Termination Advance or the Final Advance | 15 | ||||
|
Section 2.06 |
Repayments of Provider Advances | 16 | ||||
|
Section 2.07 |
Payments to the Liquidity Provider Under the Intercreditor Agreement | 17 | ||||
|
Section 2.08 |
Book Entries | 17 | ||||
|
Section 2.09 |
Payments from Available Funds Only | 17 | ||||
|
Section 2.10 |
Extension of the Expiry Date; Non-Extension Advance | 18 | ||||
|
ARTICLE III OBLIGATIONS OF THE BORROWER |
18 | |||||
|
Section 3.01 |
Increased Costs | 18 | ||||
|
Section 3.02 |
Reserved | 19 | ||||
|
Section 3.03 |
Withholding Taxes | 19 | ||||
|
Section 3.04 |
Payments | 21 | ||||
|
Section 3.05 |
Computations | 21 | ||||
|
Section 3.06 |
Payment on Non-Business Days | 22 | ||||
|
Section 3.07 |
Interest | 22 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
|
Section 3.08 |
Replacement of Borrower | 24 | ||||
|
Section 3.09 |
Funding Loss Indemnification | 24 | ||||
|
Section 3.10 |
Illegality | 24 | ||||
|
ARTICLE IV CONDITIONS PRECEDENT |
25 | |||||
|
Section 4.01 |
Conditions Precedent to Effectiveness of Section 2.01 | 25 | ||||
|
Section 4.02 |
Conditions Precedent to Borrowing | 27 | ||||
|
Section 4.03 |
Representations and Warranties | 27 | ||||
|
ARTICLE V COVENANTS |
27 | |||||
|
Section 5.01 |
Affirmative Covenants of the Borrower | 27 | ||||
|
Section 5.02 |
Negative Covenants of the Borrower | 28 | ||||
|
ARTICLE VI LIQUIDITY EVENTS OF DEFAULT AND SPECIAL TERMINATION |
28 | |||||
|
Section 6.01 |
Liquidity Events of Default | 28 | ||||
|
ARTICLE VII MISCELLANEOUS |
29 | |||||
|
Section 7.01 |
No Oral Modifications or Continuing Waivers | 29 | ||||
|
Section 7.02 |
Notices | 29 | ||||
|
Section 7.03 |
No Waiver; Remedies | 30 | ||||
|
Section 7.04 |
Further Assurances | 30 | ||||
|
Section 7.05 |
Indemnification; Survival of Certain Provisions | 30 | ||||
|
Section 7.06 |
Liability of the Liquidity Provider | 30 | ||||
|
Section 7.07 |
Certain Costs and Expenses | 31 | ||||
|
Section 7.08 |
Binding Effect; Participations | 31 | ||||
|
Section 7.09 |
Severability | 33 | ||||
|
Section 7.10 |
Governing Law | 33 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
|
Section 7.11 |
Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity | 34 | ||||
|
Section 7.12 |
Counterparts | 35 | ||||
|
Section 7.13 |
Entirety | 35 | ||||
|
Section 7.14 |
Headings | 35 | ||||
|
Section 7.15 |
Liquidity Provider’s Obligation to Make Advances | 35 | ||||
|
Section 7.16 |
Patriot Act | 35 | ||||
|
Section 7.17 |
Acknowledgment and Consent to Bail-In of EEA Financial Institutions | 35 | ||||
|
Section 7.18 |
Head Office Obligations | 36 | ||||
| Annex I | - Form of Interest Advance Notice of Borrowing | |
| Annex II | - Form of Non-Extension Advance Notice of Borrowing | |
| Annex III | - Form of Downgrade Advance Notice of Borrowing | |
| Annex IV | - Form of Final Advance Notice of Borrowing | |
| Annex V | - Form of Special Termination Advance Notice of Borrowing | |
| Annex VI | - Form of Notice of Termination | |
| Annex VII | - Form of Notice of Special Termination | |
| Annex VIII | - Form of Notice of Replacement Subordination Agent |
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
REVOLVING CREDIT AGREEMENT
(2020-1A)
This REVOLVING CREDIT AGREEMENT (2020-1A), dated as of March 12, 2020, is made by and between U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as Subordination Agent (such term and other capitalized terms used herein without definition being defined as provided in Article I) under the Intercreditor Agreement (as defined below), as agent and trustee for the Class A Trustee (in such capacity, together with its successors in such capacity, the “Borrower”), and NATIONAL AUSTRALIA BANK LIMITED, an Australian corporation, acting through its New York branch (the “Liquidity Provider”).
W I T N E S S E T H:
WHEREAS, pursuant to the Class A Trust Agreement, the Class A Trust is issuing the Class A Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a portion of the interest on the Class A Certificates in accordance with their terms, has requested the Liquidity Provider to enter into this Agreement, providing in part for the Borrower to request in specified circumstances that Advances be made hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) The definitions stated herein apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections”, “Annexes” and other subdivisions are to the designated Article, Section, Annex or other subdivision of this Agreement, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Annex or other subdivision.
| 1 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, it shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
(f) For the purposes of this Agreement, unless the context otherwise requires, the following capitalized terms shall have the following meanings:
“Advance” means an Interest Advance, a Final Advance, a Provider Advance, an Unapplied Provider Advance, an Applied Provider Advance, a Special Termination Advance, an Unapplied Special Termination Advance, an Applied Special Termination Advance or an Unpaid Advance, as the case may be.
“Agreement” means this Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Applicable Liquidity Rate” has the meaning specified in Section 3.07(h).
“Applicable Margin” means (a) with respect to any Interest Advance, Final Advance, Applied Provider Advance or Applied Special Termination Advance, 3.25% per annum, (b) with respect to any Unapplied Provider Advance, the rate per annum specified in the Fee Letter or (c) with respect to any Unapplied Special Termination Advance, the rate per annum specified in the Fee Letter.
“Applied Downgrade Advance” has the meaning specified in Section 2.06(a).
“Applied Non-Extension Advance” has the meaning specified in Section 2.06(a).
“Applied Provider Advance” means an Applied Downgrade Advance or an Applied Non-Extension Advance.
“Applied Special Termination Advance” has the meaning specified in Section 2.05.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
| 2 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
||||
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Base Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the sum of (a) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for each day in the period for which the Base Rate is to be determined (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Liquidity Provider from three Federal funds brokers of recognized standing selected by it (and reasonably satisfactory to Delta) plus (b) one-quarter of one percent (0.25%).
“Base Rate Advance” means an Advance that bears interest at a rate based upon the Base Rate.
“Benchmark Replacement Event” means, in respect of the London Interbank Offered Rate or any successor Benchmark Replacement Rate, an event where the applicable administrator (or other applicable source) for such rate permanently or indefinitely ceases to provide such rate, without any successor administrator (or other applicable source) continuing to provide such rate.
“Benchmark Replacement Rate” means, following the occurrence of a Benchmark Replacement Event (with respect to the London Interbank Offered Rate or any then applicable successor Benchmark Replacement Rate (the “Terminating Rate”)), or at the request of Delta or the Liquidity Provider in anticipation thereof following any applicable public statement from the administrator or regulatory supervisor (or other applicable authority or source) identifying a specific date for occurrence of such Benchmark Replacement Event, an applicable alternate rate of interest (including any relevant adjusting spread) to such Terminating Rate that gives due consideration to (i) the then prevailing market convention for determining a rate of interest for U.S. dollar-denominated credit facilities at such time (as the applicable market replacement for such Terminating Rate) and (ii) the requirements under proposed U.S. Treasury regulations section 1.1001-6 and any successor regulations or guidance relating thereto, to the extent applicable, for the replacement of such Terminating Rate with such alternate rate of interest and any associated alteration not to be treated as a taxable exchange for U.S. federal income tax purposes, as determined pursuant to mutual written agreement of Delta and the Liquidity Provider, each acting reasonably.
“Borrower” has the meaning specified in the introductory paragraph to this Agreement.
| 3 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
||||
“Borrowing” means the making of Advances requested by delivery of a Notice of Borrowing.
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to close in New York, New York, Atlanta, Georgia, Wilmington, Delaware, or, so long as any Class A Certificate is outstanding, the city and state in which the Class A Trustee, the Borrower or any related Loan Trustee maintains its Corporate Trust Office or receives or disburses funds, and, if the applicable Business Day relates to any Advance or other amount bearing interest based on the LIBOR Rate, on which dealings are carried on in the London interbank market.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Covered Taxes” means any Taxes imposed by the United States, or any political subdivision or taxing authority thereof or therein, that are required by law to be deducted or withheld from any amounts payable to the Liquidity Provider under this Agreement other than (i) any such Tax on, based on or measured by net income, franchises or conduct of business, (ii) any such Tax imposed, levied, withheld or assessed as a result of any connection between the Liquidity Provider and the United States or such political subdivision or taxing authority, other than a connection arising solely from the Liquidity Provider’s having executed, delivered, performed its obligations or received a payment under, or enforced, any Operative Agreement, (iii) any such Tax attributable to the inaccuracy in or breach by the Liquidity Provider of any of its representations, warranties or covenants contained in any Operative Agreement to which it is a party or the inaccuracy of any form, certificate or document furnished pursuant thereto, (iv) any such withholding Taxes imposed by the United States except to the extent such withholding Taxes would not have been required to be deducted or withheld from payments hereunder but for a change after the date hereof in the Code or the Treasury Regulations thereunder that affects the exemption for income that is effectively connected with the conduct of a trade or business within the United States, (v) any withholding Taxes imposed by the United States which are imposed or increased as a result of the Liquidity Provider failing to deliver to the Borrower any form, certificate or document (which form, certificate or document, in the good faith judgment of the Liquidity Provider, it is legally entitled to provide) which is reasonably requested by the Borrower to establish that payments under this Agreement are exempt from (or entitled to a reduced rate of) withholding Tax, (vi) any such Taxes that would not have been imposed but for any change in the Lending Office without the prior written consent of Delta (such consent not to be unreasonably withheld), or (vii) any Taxes imposed under FATCA.
“Downgrade Advance” means an Advance made pursuant to Section 2.02(b)(ii).
“Downgrade Event” means any downgrading of, or any suspension or withdrawal of any applicable rating of, the Liquidity Provider by any Rating Agency such that after such downgrading, suspension or withdrawal the Liquidity Provider does not have the minimum Long-Term Rating specified for such Rating Agency in the definition of “Threshold Rating”. The occurrence of a Downgrade Event shall be determined separately for each Rating Agency. For the avoidance of doubt, a Downgrade Event shall not occur with respect to a Rating Agency so long as the Liquidity Provider has either of the applicable Threshold Ratings specified for such Rating Agency.
| 4 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
||||
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country that is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” has the meaning specified in Section 4.01. The delivery of the certificate of the Liquidity Provider contemplated by Section 4.01(e) shall be conclusive evidence that the Effective Date has occurred.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Excluded Taxes” means (a) Taxes imposed on the overall net income of the Liquidity Provider, (b) Taxes imposed on the “effectively connected income” of its Lending Office, (c) Covered Taxes that are indemnified pursuant to Section 3.03 hereof, and (d) Taxes described in clauses (i) through (vii) in the definition of “Covered Taxes”.
“Expenses” means liabilities, losses, damages, costs and expenses (including, without limitation, reasonable fees and disbursements of legal counsel), provided that Expenses shall not include any Taxes other than sales, use and V.A.T. taxes imposed on fees and expenses payable pursuant to Section 7.07.
“Expiry Date” means the earlier of (a) the anniversary date of the Closing Date immediately following the date on which the Liquidity Provider has provided a Non-Extension Notice to the Borrower pursuant to Section 2.10 and (b) the 15th day after the Final Legal Distribution Date of the Class A Certificates.
| 5 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
||||
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor provisions that are substantively comparable and not materially more onerous to comply with); any current or future regulations or official interpretations thereof; any agreements entered into pursuant to Section 1471(b)(1) of the Code; any intergovernmental agreement entered into in connection with any of the foregoing; and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement.
“Final Advance” means an Advance made pursuant to Section 2.02(c).
“Head Office” has the meaning specified in Section 7.18.
“Increased Cost” has the meaning specified in Section 3.01.
“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Trustees, the Liquidity Provider, the liquidity provider under each Liquidity Facility (other than this Agreement), and the Subordination Agent, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Interest Advance” means an Advance made pursuant to Section 2.02(a).
“Interest Period” means, with respect to any LIBOR Advance, each of the following periods:
(i) the period beginning on the third Business Day following either (A) the Liquidity Provider’s receipt of the Notice of Borrowing for such LIBOR Advance or (B) the date of the withdrawal of funds from the Class A Cash Collateral Account for the purpose of paying interest on the Class A Certificates as contemplated by Section 2.06(a) hereof and, in each case, ending on the next succeeding Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the next succeeding Regular Distribution Date;
provided, however, that if (x) the Final Advance shall have been made pursuant to Section 2.02(c) or (y) other outstanding Advances shall have been converted into the Final Advance pursuant to Section 6.01(a), then the Interest Periods shall be successive periods of one month beginning on (A) the third Business Day following the Liquidity Provider’s receipt of the Notice of Borrowing for such Final Advance (in the case of clause (x) above) or (B) the Regular Distribution Date following such conversion (in the case of clause (y) above).
| 6 | ||||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
||||
“Lending Office” means the lending office of the Liquidity Provider through which it acts for purposes of this Agreement, which is presently located at 245 Park Avenue, New York, NY 10167, or such other lending office as the Liquidity Provider from time to time shall notify the Borrower as its lending office hereunder; provided that the Liquidity Provider shall not change its Lending Office without the prior written consent of Delta (such consent not to be unreasonably withheld).
“LIBOR Advance” means an Advance bearing interest at a rate based upon the LIBOR Rate.
“LIBOR Rate” means, with respect to any Interest Period, (a) the interest rate per annum equal to the London Interbank Offered Rate per annum administered by ICE Benchmark Administration Limited (or any other successor person which takes over administration of that rate) for Dollar deposits, which rate is displayed on the Reuters Screen LIBOR01 (or such other page or screen as may replace such Reuters Screen) at approximately 11:00 a.m. (London time) on the day that is two Business Days prior to the first day of such Interest Period, for a period comparable to such Interest Period, or (b) if no such rate appears on such Reuters Screen (or otherwise as aforesaid), the interest rate per annum equal to the average (rounded up, if necessary, to the nearest 1/100th of 1%) of the rates per annum at which deposits in Dollars are offered by the Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate for deposits in Dollars for the applicable period and amount, such fewer number of Reference Banks) at approximately 11:00 a.m. (London time) on the day that is two Business Days prior to the first day of such Interest Period to prime banks in the London interbank market for a period comparable to such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Advance to be outstanding during such Interest Period, or (c) if none of the Reference Banks is quoting a rate for deposits in Dollars in the London interbank market for such a period and amount, the interest rate per annum equal to the average (rounded up, if necessary, to the nearest 1/100th of 1%) of the rates at which deposits in Dollars are offered by the principal New York offices of the Reference Banks (or, if fewer than all of the Reference Banks are quoting a rate for deposits in Dollars in the New York interbank market for the applicable period and amount, such fewer number of Reference Banks) at approximately 11:00 a.m. (New York time) on the day that is two Business Days prior to the first day of such Interest Period to prime banks in the New York interbank market for a period comparable to such Interest Period and in an amount approximately equal to the principal amount of the LIBOR Advance to be outstanding during such Interest Period, or (d) if none of the principal New York offices of the Reference Banks is quoting a rate for deposits in Dollars in the New York interbank market for the applicable period and amount, the Base Rate; provided that, if a Benchmark Replacement Event has occurred (or an applicable Benchmark Replacement Rate has otherwise been established with agreed effectiveness prior to such Benchmark Replacement Event), the LIBOR Rate shall be the lower of (i) the Base Rate and (ii) the Benchmark Replacement Rate (if then established and effective); provider, further, that, if the LIBOR Rate determined as provided above with respect to any LIBOR Advance for any Interest Period would be less than zero, then the LIBOR Rate with respect to such LIBOR Advance shall be deemed to be zero.
| 7 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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“Liquidity Event of Default” means the occurrence of either (a) the Acceleration of all of the Equipment Notes or (b) a Delta Bankruptcy Event.
“Liquidity Indemnitee” means the Liquidity Provider, its directors, officers, employees and agents, and its successors and permitted assigns.
“Liquidity Provider” has the meaning specified in the introductory paragraph to this Agreement.
“Maximum Available Commitment” means, subject to the proviso contained in the third sentence of Section 2.02(a), at any time of determination, (a) the Maximum Commitment at such time less (b) the aggregate amount of each Interest Advance outstanding at such time; provided that, subject to Section 2.06(d), following a Provider Advance, a Special Termination Advance or a Final Advance, the Maximum Available Commitment shall be zero.
“Maximum Commitment” means $7,653,975, as the same may be reduced from time to time in accordance with Section 2.04(a).
“Non-Extension Advance” means an Advance made pursuant to Section 2.02(b)(i).
“Non-Extension Notice” has the meaning specified in Section 2.10.
“Notice of Borrowing” has the meaning specified in Section 2.02(e).
“Notice of Replacement Subordination Agent” has the meaning specified in Section 3.08.
“Participation” has the meaning specified in Section 7.08(b).
“Performing Note Deficiency” means any time that less than 65% of the then aggregate outstanding principal amount of all Series AA Equipment Notes and Series A Equipment Notes are Performing Equipment Notes.
“Permitted Transferee” means any Person that:
(a) is not a commercial air carrier, Delta or any affiliate of Delta; and
| 8 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(b) is any one of:
(1) a commercial banking institution organized under the laws of the United States or any state thereof or the District of Columbia;
(2) a commercial banking institution that (x) is organized under the laws of France, Germany, The Netherlands, Switzerland or the United Kingdom, (y) is entitled on the date it acquires any Participation to a complete exemption from United States federal income taxes for all income derived by it from the transactions contemplated by the Operative Agreements under an income tax treaty, as in effect on such date, between the United States and such jurisdiction of its organization and (z) is engaged in the active conduct of a banking business in such jurisdiction of its organization, holds its Participation in connection with such banking business in such jurisdiction and is regulated as a commercial banking institution by the appropriate regulatory authorities in such jurisdiction; or
(3) a commercial banking institution that (x) is organized under the laws of Australia, Canada, France, Germany, Ireland, Japan, Luxembourg, The Netherlands, Sweden, Switzerland or the United Kingdom and (y) is entitled on the date it acquires any Participation to a complete exemption from withholding of United States federal income taxes for all income derived by it from the transactions contemplated by the Operative Agreements under laws as in effect on such date by reason of such income being effectively connected with the conduct of a trade or business within the United States.
“Prospectus Supplement” means the Prospectus Supplement, dated March 4, 2020, relating to the Class AA Certificates and the Class A Certificates, as such Prospectus Supplement may be amended or supplemented.
“Provider Advance” means a Downgrade Advance or a Non-Extension Advance.
“Rate Determination Notice” has the meaning specified in Section 3.07(g).
“Reference Banks” means the principal London offices of: Deutsche Bank AG; Citibank, N.A. and JPMorgan Chase Bank; and/or such other or additional banking institutions as may be designated from time to time by mutual agreement of Delta and the Liquidity Provider.
“Regulatory Change” means (x) the enactment, adoption or promulgation, after the date of this Agreement, of any law or regulation by a United States federal or state government or by any government having jurisdiction over the Liquidity Provider, or any change, after the date of this Agreement, in any such law or regulation, or in the interpretation thereof by any governmental authority, central bank or comparable agency of the United States or any
| 9 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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government having jurisdiction over the Liquidity Provider charged with responsibility for the administration or application thereof, that shall impose, modify or deem applicable, or (y) the compliance by the Liquidity Provider (or its Head Office) with any applicable direction or requirement (whether or not having the force of law) of any central bank or competent governmental or other authority, after the date of this Agreement, with respect to: (a) any reserve, special deposit or similar requirement against extensions of credit or other assets of, or deposits with or other liabilities of, the Liquidity Provider including, or by reason of, the Advances, or (b) any capital adequacy requirement requiring the maintenance by the Liquidity Provider of additional capital in respect of any Advances or the Liquidity Provider’s obligation to make any such Advances, or (c) any requirement to maintain liquidity or liquid assets in respect of the Liquidity Provider’s obligation to make any such Advances, or (d) any Taxes (other than Excluded Taxes) with respect to the amounts payable or paid hereunder to the Liquidity Provider or any change in the basis of taxation of any amounts payable hereunder to the Liquidity Provider (other than in respect of Excluded Taxes).
“Replenishment Amount” has the meaning specified in Section 2.06(b).
“Required Amount” means, for any day, the sum of the aggregate amount of interest, calculated at the rate per annum equal to the Stated Interest Rate for the Class A Certificates on the basis of a 360-day year comprised of twelve 30-day months, that would be distributable on the Class A Certificates on each of the three successive semiannual Regular Distribution Dates immediately following such day or, if such day is a Regular Distribution Date, on such day and the succeeding two semiannual Regular Distribution Dates, in each case calculated on the basis of the Pool Balance of the Class A Certificates on such day and without regard to expected future distributions of principal on the Class A Certificates.
“Special Termination Advance” means an Advance made pursuant to Section 2.02(d).
“Special Termination Notice” means the Notice of Special Termination substantially in the form of Annex VII to this Agreement.
“Termination Date” means the earliest to occur of the following: (i) the Expiry Date; (ii) the date on which the Borrower delivers to the Liquidity Provider a certificate, signed by a Responsible Officer of the Borrower, certifying that all of the Class A Certificates have been paid in full (or provision has been made for such payment in accordance with the Intercreditor Agreement and the Class A Trust Agreement) or are otherwise no longer entitled to the benefits of this Agreement; (iii) the date on which the Borrower delivers to the Liquidity Provider a certificate, signed by a Responsible Officer of the Borrower, certifying that a Replacement Liquidity Facility has been substituted for this Agreement in full pursuant to Section 3.05(e) of the Intercreditor Agreement; (iv) the fifth Business Day following the receipt by the Borrower of a Termination Notice or a Special Termination Notice from the Liquidity Provider pursuant to Section 6.01(a) or 6.01(b), as applicable; and (v) the date on which no Advance is or may (including by reason of reinstatement as herein provided) become available for a Borrowing hereunder.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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“Termination Notice” means the Notice of Termination substantially in the form of Annex VI to this Agreement.
“Unapplied Advance” has the meaning specified in Section 3.07(e).
“Unapplied Downgrade Advance” means the portion of any Downgrade Advance that is not an Applied Downgrade Advance.
“Unapplied Non-Extension Advance” means the portion of any Non-Extension Advance that is not an Applied Non-Extension Advance.
“Unapplied Provider Advance” means the portion of any Provider Advance that is not an Applied Provider Advance.
“Unapplied Special Termination Advance” means the portion of any Special Termination Advance that is not an Applied Special Termination Advance.
“Unpaid Advance” has the meaning specified in Section 2.05.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
For the purposes of this Agreement, the following terms shall have the respective meanings specified in the Intercreditor Agreement:
“Acceleration”, “Additional Certificates”, “Aircraft”, “Certificate”, “Class AA Certificates”, “Class A Cash Collateral Account” “Class A Certificates”, “Class A Certificateholders”, “Class A Trust”, “Class A Trust Agreement”, “Class A Trustee”, “Closing Date”, “Collection Account”, “Corporate Trust Office”, “Delta”, “Delta Bankruptcy Event” , “Distribution Date”, “Dollars”, “Downgrade Drawing”, “Downgraded Facility”, “Equipment Notes”, “Fee Letter”, “Final Legal Distribution Date”, “Indenture”, “Interest Payment Date”, “Investment Earnings”, “Liquidity Facility”, “Loan Trustee”, “Long-Term Rating”, “Non-Extended Facility”, “Operative Agreements”, “Participation Agreements”, “Performing Equipment Note”, “Person”, “Pool Balance”, “Rating Agencies”, “Regular Distribution Date”, “Replacement Liquidity Facility”, “Responsible Officer”, “Scheduled Payment”, “Series AA Equipment Notes”, “Series A Equipment Notes”, “Special Payment”, “Stated Interest Rate”, “Subordination Agent”, “Taxes”, “Threshold Rating”, “Treasury Regulations”, “Trust Agreement”, “Trustee”, “Underwriters”, “Underwriting Agreement”, and “United States”.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby irrevocably agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until 12:00 noon (New York City time) on the Expiry Date (unless the obligations of the Liquidity Provider shall be earlier terminated in accordance with the terms of Section 2.04(b)) in an aggregate amount at any time outstanding not to exceed the Maximum Commitment.
Section 2.02 Making of Advances. (a) Each Interest Advance shall be made by the Liquidity Provider upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex I, signed by a Responsible Officer of the Borrower, such Interest Advance to be in an amount not exceeding the Maximum Available Commitment at such time and used solely for the payment when due of interest with respect to the Class A Certificates at the Stated Interest Rate therefor in accordance with Section 3.05(a) and 3.05(b) of the Intercreditor Agreement. Each Interest Advance made hereunder shall automatically reduce the Maximum Available Commitment and the amount available to be borrowed hereunder by subsequent Advances by the amount of such Interest Advance (subject to reinstatement as provided in the next sentence). Upon repayment to the Liquidity Provider in full or in part of the amount of any Interest Advance made pursuant to this Section 2.02(a), together with accrued interest thereon (as provided herein), the Maximum Available Commitment shall be reinstated by an amount equal to the amount of such Interest Advance so repaid, but not to exceed the Maximum Commitment; provided, however, that the Maximum Available Commitment shall not be so reinstated at any time if (x) both a Performing Note Deficiency exists and a Liquidity Event of Default shall have occurred and be continuing or (y) a Final Advance, a Downgrade Advance, a Non-Extension Advance or a Special Termination Advance shall have occurred, except as provided in Section 2.06(d) with respect to a Downgrade Drawing.
(b) (i) A Non-Extension Advance shall be made by the Liquidity Provider in a single Borrowing if this Agreement is not extended in accordance with Section 3.05(d) of the Intercreditor Agreement unless a Replacement Liquidity Facility to replace this Agreement shall have been previously delivered to the Borrower in accordance with said Section 3.05(d), upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex II, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class A Cash Collateral Account in accordance with Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(ii) A Downgrade Advance shall be made by the Liquidity Provider in a single Borrowing upon this Liquidity Facility becoming a Downgraded Facility (as provided for in Section 3.05(c) of the Intercreditor Agreement) unless a Replacement Liquidity Facility to replace this Agreement shall have been previously delivered to the Borrower in accordance with said Section 3.05(c), upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex III, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class A Cash Collateral Account in accordance with Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement.
(c) A Final Advance shall be made by the Liquidity Provider in a single Borrowing following the receipt by the Borrower of a Termination Notice from the Liquidity Provider pursuant to Section 6.01(a) upon delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex IV, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class A Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement.
(d) A Special Termination Advance shall be made in a single Borrowing upon the receipt by the Borrower of a Special Termination Notice from the Liquidity Provider pursuant to Section 6.01(b), by delivery to the Liquidity Provider of a written and completed Notice of Borrowing in substantially the form of Annex V, signed by a Responsible Officer of the Borrower, in an amount equal to the Maximum Available Commitment at such time, and shall be used to fund the Class A Cash Collateral Account in accordance with Section 3.05(f) and Section 3.05(k) of the Intercreditor Agreement.
(e) Each Borrowing shall be made by notice in writing (a “Notice of Borrowing”) in substantially the form required by Section 2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity Provider. If a Notice of Borrowing is delivered by the Borrower in respect of any Borrowing no later than 12:30 p.m. (New York City time) on a Business Day, upon satisfaction of the conditions precedent set forth in Section 4.02 with respect to such requested Borrowing, the Liquidity Provider shall make available to the Borrower, in accordance with its payment instructions, the amount of such Borrowing in Dollars and immediately available funds, before 4:00 p.m. (New York City time) on such Business Day or before 12:30 p.m. (New York City time) on such later Business Day specified in such Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in respect of any Borrowing after 12:30 p.m. (New York City time) on a Business Day, upon satisfaction of the conditions precedent set forth in Section 4.02 with respect to such requested Borrowing, the Liquidity Provider shall make available to the Borrower, in accordance with its payment instructions, the amount of such Borrowing in Dollars and immediately available funds, before 1:00 p.m. (New York City time) on the first Business Day next following the day of receipt of
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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such Notice of Borrowing or on such later Business Day specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a Borrowing shall be made by wire transfer of immediately available funds to the Borrower in accordance with such wire transfer instructions as the Borrower shall furnish from time to time to the Liquidity Provider for such purpose. Each Notice of Borrowing shall be irrevocable and binding on the Borrower. Each Notice of Borrowing shall be effective upon delivery of a copy thereof to the Liquidity Provider at the address and in the manner specified in Section 7.02 hereof.
(f) Upon the making of any Advance requested pursuant to a Notice of Borrowing in accordance with the Borrower’s payment instructions, the Liquidity Provider shall be fully discharged of its obligation hereunder with respect to such Notice of Borrowing, and the Liquidity Provider shall not thereafter be obligated to make any further Advances hereunder in respect of such Notice of Borrowing to the Borrower or to any other Person (including the Class A Trustee or any Class A Certificateholder). If the Liquidity Provider makes an Advance requested pursuant to a Notice of Borrowing before 12:00 noon (New York City time) on the second Business Day after the date of payment specified in Section 2.02(e), the Liquidity Provider shall have fully discharged its obligations hereunder with respect to such Advance and an event of default shall not have occurred hereunder. Following the making of any Advance pursuant to Section 2.02(b), 2.02(c) or 2.02(d) to fund the Class A Cash Collateral Account, the Liquidity Provider shall have no interest in or rights to the Class A Cash Collateral Account, such Advance or any other amounts from time to time on deposit in the Class A Cash Collateral Account; provided that the foregoing shall not affect or impair the obligations of the Subordination Agent to make the distributions contemplated by Section 3.05(c)(v), 3.05(e) or 3.05(f) of the Intercreditor Agreement and provided, further, that the foregoing shall not affect or impair the rights of the Liquidity Provider to provide written instructions with respect to the investment and reinvestment of amounts in the Class A Cash Collateral Account to the extent the Liquidity Provider is entitled to do so pursuant to Section 2.2(b) of the Intercreditor Agreement. By paying to the Borrower proceeds of Advances requested by the Borrower in accordance with the provisions of this Agreement, the Liquidity Provider makes no representation as to, and assumes no responsibility for, the correctness or sufficiency for any purpose of the amount of the Advances so made and requested.
Section 2.03 Fees. The Borrower agrees to pay to the Liquidity Provider the fees set forth in the Fee Letter.
Section 2.04 Reduction or Termination of the Maximum Commitment. (a) Automatic Reduction. Promptly following each date on which the Required Amount is reduced as a result of a reduction in the Pool Balance of the Class A Certificates, the Maximum Commitment shall automatically be reduced to an amount equal to such reduced Required Amount (as calculated by the Borrower). The Borrower shall give notice of any such automatic reduction of the Maximum Commitment to the Liquidity Provider and Delta within two Business Days thereof. The failure by the Borrower to furnish any such notice shall not affect any such automatic reduction of the Maximum Commitment.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(b) Termination. Upon the making of any Provider Advance or Special Termination Advance or the making of or conversion to a Final Advance hereunder or the occurrence of the Termination Date, the obligation of the Liquidity Provider to make further Advances hereunder shall automatically and irrevocably terminate, and the Borrower shall not be entitled to request any further Borrowing hereunder, except in the case of a Downgrade Advance, as provided in Section 2.06(d).
Section 2.05 Repayments of Interest Advances, the Special Termination Advance or the Final Advance. Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees, without notice of an Advance or demand for repayment from the Liquidity Provider (which notice and demand are hereby waived by the Borrower), to pay, or to cause to be paid, to the Liquidity Provider (a) on each date on which the Liquidity Provider shall make an Interest Advance, the Special Termination Advance or the Final Advance, an amount equal to the amount of such Advance (any such Advance, until repaid, is referred to herein as an “Unpaid Advance”), plus (b) interest on the amount of each such Unpaid Advance in the amounts and on the dates determined as provided in Section 3.07; provided that if (i) the Liquidity Provider shall make a Provider Advance at any time after making one or more Interest Advances which shall not have been repaid in accordance with this Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility or Non-Extended Facility at any time when unreimbursed Interest Advances have reduced the Maximum Available Commitment to zero, then such Interest Advances shall cease to constitute Unpaid Advances and shall be deemed to have been changed into an Applied Downgrade Advance or an Applied Non-Extension Advance, as the case may be, for all purposes of this Agreement (including, without limitation, for the purpose of determining when such Interest Advance is required to be repaid to the Liquidity Provider in accordance with Section 2.06 and for the purposes of Section 2.06(b)); provided, further, that amounts in respect of a Special Termination Advance withdrawn from the Class A Cash Collateral Account for the purpose of paying interest on the Class A Certificates in accordance with Section 3.05(f) of the Intercreditor Agreement (the portion of the outstanding Special Termination Advance equal to the amount of any such withdrawal, but not in excess of the outstanding Special Termination Advance, being an “Applied Special Termination Advance”) shall thereafter (subject to Section 2.06(b)) be treated as an Interest Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; provided, further, that if, following the making of a Special Termination Advance, the Liquidity Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01(a), such Special Termination Advance (including any portion thereof that is an Applied Special Termination Advance) shall thereafter be treated as a Final Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; and, provided, further, that if, after making a Provider Advance, the Liquidity Provider delivers a Special Termination Notice to the Borrower pursuant to Section 6.01(b), any Unapplied Provider Advance shall be converted to and treated as a Special Termination Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon and the obligation for repayment thereof under the Intercreditor Agreement. The Borrower and the Liquidity Provider agree that the repayment in full of each Interest Advance, Special Termination Advance and Final Advance on the date such Advance is made is intended to be a contemporaneous exchange for new value given to the Borrower by the Liquidity Provider. For the avoidance of doubt, interest payable on an Interest Advance, Special Termination Advance or the Final Advance shall not be regarded as overdue unless such interest is not paid when due under Section 3.07.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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Section 2.06 Repayments of Provider Advances. (a) Amounts advanced hereunder in respect of a Provider Advance shall be deposited in the Class A Cash Collateral Account and invested and withdrawn from the Class A Cash Collateral Account as set forth in Sections 3.05(c), 3.05(d), 3.05(e) and 3.05(f) of the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, the Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution Date, commencing on the first Regular Distribution Date after the making of a Provider Advance, interest on the principal amount of any such Provider Advance, in the amounts determined as provided in Section 3.07; provided, however, that amounts in respect of a Provider Advance withdrawn from the Class A Cash Collateral Account for the purpose of paying interest on the Class A Certificates in accordance with Section 3.05(f) of the Intercreditor Agreement (the amount of any such withdrawal being (y), in the case of a Downgrade Advance, an “Applied Downgrade Advance” and (z) in the case of a Non-Extension Advance, an “Applied Non-Extension Advance” and together with an Applied Downgrade Advance, an “Applied Provider Advance”) shall thereafter (subject to Section 2.06(b)) be treated as an Interest Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon; provided, further, however, that if, following the making of a Provider Advance, the Liquidity Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01(a), such Provider Advance shall thereafter be treated as a Final Advance under this Agreement for purposes of determining the Applicable Liquidity Rate for interest payable thereon. Subject to Sections 2.07 and 2.09, immediately upon the withdrawal of any amounts from the Class A Cash Collateral Account on account of a reduction in the Required Amount, the Borrower shall repay to the Liquidity Provider a portion of the Provider Advances in a principal amount equal to such reduction, plus interest on the principal amount so repaid as provided in Section 3.07.
(b) At any time when an Applied Provider Advance or Applied Special Termination Advance (or any portion thereof) is outstanding, upon the deposit in the Class A Cash Collateral Account of any amount pursuant to clause “fourth” of Section 3.02 of the Intercreditor Agreement (any such amount being a “Replenishment Amount”) for the purpose of replenishing or increasing the balance thereof up to the Required Amount at such time, (i) the aggregate outstanding principal amount of all Applied Provider Advances and Applied Special Termination Advances (and of Provider Advances and Special Termination Advances treated as Interest Advances for purposes of determining the Applicable Liquidity Rate for interest payable thereon) shall be automatically reduced by the amount of such Replenishment Amount, and (ii) the aggregate outstanding principal amount of all Unapplied Provider Advances shall be automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in replacement of this Agreement in accordance with Section 3.05(e) of the Intercreditor Agreement, as provided in Section 3.05(f) of the Intercreditor Agreement, amounts remaining on deposit in the Class A Cash Collateral Account after giving effect to any Applied Provider Advance or Applied Special Termination Advance on the date of such replacement shall be reimbursed to the Liquidity Provider, but only to the extent such amounts are necessary to repay in full to the Liquidity Provider all amounts owing to it hereunder.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(d) If, at any time after making a Downgrade Advance, the Liquidity Provider satisfies the Threshold Rating and delivers written notice to that effect to the Borrower and Delta, as of the second Business Day following receipt of such notice, (i) this Liquidity Facility shall cease to be a Downgraded Facility, (ii) any Unapplied Downgrade Advance shall be withdrawn from the Class A Cash Collateral Account and reimbursed to the Liquidity Provider, (iii) any Applied Downgrade Advance shall be converted to an Interest Advance, (iv) the Maximum Available Commitment shall be reinstated by an amount equal to the amount of such Unapplied Downgrade Advance so reimbursed, but not to exceed the Maximum Commitment, and the obligation of the Liquidity Provider to make Advances shall be reinstated in an equal amount, (v) the Borrower shall be entitled to request Borrowings and (vi) the proviso in the definition of Maximum Available Commitment and clause (y) of the proviso in the final sentence of Section 2.02(a) shall, in each case, no longer apply to such Downgrade Advance.
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor Agreement. In order to provide for payment or repayment to the Liquidity Provider of any amounts hereunder, the Intercreditor Agreement provides that amounts available and referred to in Articles II and III of the Intercreditor Agreement, to the extent payable to the Liquidity Provider pursuant to the terms of the Intercreditor Agreement (including, without limitation, Section 3.05(f) of the Intercreditor Agreement), shall be paid to the Liquidity Provider in accordance with the terms thereof (but, for the avoidance of doubt, without duplication of or increase in any amounts payable hereunder). Amounts so paid to the Liquidity Provider shall be applied by the Liquidity Provider in the order of priority required by the applicable provisions of Articles II and III of the Intercreditor Agreement and shall discharge in full the corresponding obligations of the Borrower hereunder.
Section 2.08 Book Entries. The Liquidity Provider shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower resulting from Advances made from time to time and the amounts of principal and interest payable hereunder and paid from time to time in respect thereof; provided, however, that the failure by the Liquidity Provider to maintain such account or accounts shall not affect the obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to be made by the Borrower under this Agreement shall be made only from the amounts that constitute Scheduled Payments, Special Payments and other payments under the Operative Agreements, including payment under Section 4.02 of the Participation Agreements and payments under Section 2.14 of the Indentures, and only to the extent that the Borrower shall have sufficient income or proceeds therefrom to enable the Borrower to make payments in accordance with the terms hereof after giving effect to the priority of payments provisions set forth in the Intercreditor Agreement. The Liquidity Provider agrees that it will look solely to such amounts to the extent available for distribution to it as provided in the Intercreditor Agreement and this Agreement and that the
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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Borrower, in its individual capacity, is not personally liable to it for any amounts payable or liability under this Agreement except as expressly provided in this Agreement, the Intercreditor Agreement or any Participation Agreement. Amounts on deposit in the Class A Cash Collateral Account shall be available to the Borrower to make payments under this Agreement only to the extent and for the purposes expressly contemplated in Section 3.05(f) of the Intercreditor Agreement.
Section 2.10 Extension of the Expiry Date; Non-Extension Advance. If the Liquidity Provider notifies the Borrower and Delta in writing before the 60th day prior to any anniversary date of the Closing Date that occurs prior to the 15th day after the Final Legal Distribution Date for the Class A Certificates (such notice, a “Non-Extension Notice”) that its obligations to make Advances hereunder shall not be extended beyond the immediately following anniversary date of the Closing Date (and if the Liquidity Provider shall not have been replaced in accordance with Section 3.05(e) of the Intercreditor Agreement), the Borrower shall be entitled on and after the 25th day prior to such anniversary date (but prior to such anniversary date and in any event prior to the then applicable Expiry Date) to request a Non-Extension Advance in accordance with Section 2.02(b)(i) hereof and Section 3.05(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. Without duplication of any rights created by Section 3.03, if as a result of any Regulatory Change there shall be any increase by an amount reasonably deemed by the Liquidity Provider to be material in the actual cost to the Liquidity Provider of making, funding or maintaining any Advances or its obligation to make any such Advances or there shall be any reduction by an amount reasonably deemed by the Liquidity Provider to be material in the amount receivable by the Liquidity Provider under this Agreement or the Intercreditor Agreement in respect thereof, and in case of either such an increase or reduction, such event does not arise from the gross negligence or willful misconduct of the Liquidity Provider, from its breach of any of its representations, warranties, covenants or agreements contained herein or in the Intercreditor Agreement or from its failure to comply with any such Regulatory Change (any such increase or reduction being referred to herein as an “Increased Cost”), then, subject to Sections 2.07 and 2.09, the Borrower shall from time to time pay to the Liquidity Provider an amount equal to such Increased Cost within 10 Business Days after delivery to the Borrower and Delta of a certificate of an officer of the Liquidity Provider describing in reasonable detail the event by reason of which it claims such Increased Cost and the basis for the determination of the amount of such Increased Cost; provided that the Borrower shall be obligated to pay amounts only with respect to any Increased Costs accruing from the date 120 days prior to the date of delivery of such certificate. Such certificate, in the absence of manifest error, shall be considered prima facie evidence of the amount of the Increased Costs for purposes of this Agreement; provided that any determinations and allocations by the Liquidity Provider of the effect of any Regulatory Change on the costs of maintaining the Advances or the obligation to make Advances are made on a reasonable basis. For the avoidance of doubt, the
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Liquidity Provider shall not be entitled to assert any claim under this Section 3.01 in respect of or attributable to Excluded Taxes. The Liquidity Provider will notify the Borrower and Delta as promptly as practicable of any event occurring after the date of this Agreement that will entitle the Liquidity Provider to compensation under this Section 3.01. The Liquidity Provider agrees to investigate all commercially reasonable alternatives for reducing any Increased Costs and to use all commercially reasonable efforts to avoid or minimize, to the greatest extent possible, any claim in respect of Increased Costs, including, without limitation, by designating a different Lending Office, if such designation or other action would avoid the need for, or reduce the amount of, any such claim; provided that the foregoing shall not obligate the Liquidity Provider to take any action that would, in its reasonable judgment, cause the Liquidity Provider to take any action that is not materially consistent with its internal policies or is otherwise materially disadvantageous to the Liquidity Provider or that would cause the Liquidity Provider to incur any material loss or cost, unless the Borrower or Delta agrees to reimburse or indemnify the Liquidity Provider therefor. If no such designation or other action is effected, or, if effected, such notice fails to avoid the need for any claim in respect of Increased Costs, Delta may arrange for a Replacement Liquidity Facility in accordance with Section 3.05(e) of the Intercreditor Agreement.
Notwithstanding the foregoing provisions, in no event shall the Borrower be required to make payments under this Section 3.01: (a) in respect of any Regulatory Change proposed by any applicable governmental authority (including any branch of a legislature), central bank or comparable agency of the United States or the Liquidity Provider’s jurisdiction of organization or in which its Lending Office is located and pending as of the date of this Agreement (it being agreed that the Regulatory Changes contemplated by (i) the frameworks published by the Basel Committee on Banking Supervision entitled “Basel III: A global regulatory framework for more resilient banks and banking systems” dated December 2010 (revised June 2011), “Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools,” dated January 2013 and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, shall not be considered to have been proposed or pending as of the date of this Agreement); (b) if a claim hereunder in respect of an Increased Cost arises through circumstances peculiar to the Liquidity Provider and that do not affect similarly organized commercial banking institutions in the same jurisdiction generally that are in compliance with the law, rule, regulation or interpretation giving rise to the Regulatory Change relating to such Increased Cost; (c) if the Liquidity Provider shall fail to comply with its obligations under this Section 3.01 or (d) if the Liquidity Provider is not also seeking payment for similar increased costs in other similarly situated transactions related to the airline industry.
Section 3.02 Reserved.
Section 3.03 Withholding Taxes. (a) All payments made by the Borrower under this Agreement shall be made without deduction or withholding for or on account of any Taxes, unless such deduction or withholding is required by law. If any Taxes are so required to be withheld or deducted from any amounts payable to the Liquidity Provider under this Agreement, then, subject to Sections 2.07 and 2.09, the Borrower shall pay to the relevant authorities the full
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amount so required to be deducted or withheld and, without duplication of any rights created by Section 3.01, if such Taxes are Covered Taxes, pay to the Liquidity Provider such additional amounts as shall be necessary to ensure that the net amount actually received by the Liquidity Provider (after deduction or withholding of all Covered Taxes) shall be equal to the full amount that would have been received by the Liquidity Provider had no withholding or deduction of Covered Taxes been required. The Liquidity Provider agrees to use commercially reasonable efforts (consistent with applicable legal and regulatory restrictions) to change the jurisdiction of its Lending Office if making such change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of the Liquidity Provider, be otherwise materially disadvantageous to the Liquidity Provider.
If the Liquidity Provider receives a refund of, or realizes a net Tax benefit not otherwise available to it as a result of, any Taxes for which additional amounts were paid by the Borrower pursuant to this Section 3.03, the Liquidity Provider shall pay to the Borrower (for deposit into the Collection Account) the amount of such refund (and any interest thereon) or net benefit.
The Liquidity Provider will (i) provide (on its behalf and on behalf of any participant holding a Participation pursuant to Section 7.08) to the Borrower (x) on or prior to the Effective Date two valid completed and executed copies of Internal Revenue Service Form W-9, W-8BEN-E or W-8ECI (whichever is applicable), including thereon a valid U.S. taxpayer identification number (or, with respect to any such participant, such other form or documentation as may be applicable) covering all amounts receivable by it in connection with the transactions contemplated by the Operative Agreements and (y) thereafter from time to time such additional forms or documentation as may be necessary to establish an available exemption from withholding of United States Tax on payments hereunder so that such forms or documentation are effective for all periods during which it is the Liquidity Provider and (ii) provide timely notice to the Borrower if any such form or documentation is or becomes inaccurate. The Liquidity Provider shall deliver to the Borrower such other forms or documents as may be reasonably requested by the Borrower or required by applicable law to establish that payments hereunder are exempt from or entitled to a reduced rate of Covered Taxes.
(b) All payments (including, without limitation, Advances) made by the Liquidity Provider under this Agreement shall be made free and clear of, and without reduction for or on account of, any Taxes. If any Taxes are required to be withheld or deducted from any amounts payable to the Borrower under this Agreement, the Liquidity Provider shall (i) within the time prescribed therefor by applicable law pay to the appropriate governmental or taxing authority the full amount of any such Taxes (and any additional Taxes in respect of the additional amounts payable under clause (ii) hereof) and make such reports or returns in connection therewith at the time or times and in the manner prescribed by applicable law, and (ii) pay to the Borrower an additional amount which (after deduction of all such Taxes) will be sufficient to yield to the Borrower the full amount which would have been received by it had no such withholding or deduction been made. Within 30 days after the date of each payment hereunder, the Liquidity Provider shall furnish to the Borrower the original or a certified copy of (or other documentary evidence of) the payment of the Taxes applicable to such payment.
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On or before the Closing Date, the Borrower shall provide the Liquidity Provider with its fully executed Internal Revenue Service Form W-9, evidencing a complete exemption from U.S. federal withholding tax and backup withholding. If any exemption from, or reduction in the rate of, any Taxes required to be borne by the Liquidity Provider under this Section 3.03(b) is reasonably available to the Borrower without providing any information regarding the holders or beneficial owners of the Certificates, the Borrower shall deliver the Liquidity Provider such form or forms and such other evidence of the eligibility of the Borrower for such exemption or reductions (but without any requirement to provide any information regarding the holders or beneficial owners of the Certificates) as the Liquidity Provider may reasonably identify to the Borrower as being required as a condition to exemption from, or reduction in the rate of, such Taxes.
(c) If a payment made hereunder to the Liquidity Provider would be subject to U.S. federal withholding Tax imposed by FATCA if the Liquidity Provider were to fail to comply with the applicable reporting requirement of FATCA (including without limitation those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Liquidity Provider shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with the Borrower’s obligations under FATCA and to determine whether the Liquidity Provider has complied with the Liquidity Provider’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Section 3.04 Payments. Subject to Sections 2.07 and 2.09, the Borrower shall make or cause to be made each payment to the Liquidity Provider under this Agreement so as to cause the same to be received by the Liquidity Provider not later than 1:00 p.m. (New York City time) on the day when due. The Borrower shall make all such payments in Dollars, to the Liquidity Provider in immediately available funds, by wire transfer to the account of National Australia Bank Limited, acting through its New York branch, set forth below, or to such other U.S. bank account as the Liquidity Provider may from time to time direct the Subordination Agent:
Name of Bank: Citibank, New York
ABA Number: 021000089
Account Name: NAB NY Lending Administration
Account Number: 362-44-437
Reference: Delta 2020-1 EETC
Section 3.05 Computations. All computations of interest based on the Base Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the LIBOR Rate shall be made on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.
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Section 3.06 Payment on Non-Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and no additional interest shall be due as a result (and if so made, shall be deemed to have been made when due). If any payment in respect of interest on an Advance is so deferred to the next succeeding Business Day, such deferral shall not delay the commencement of the next Interest Period for such Advance (if such Advance is a LIBOR Advance) or reduce the number of days for which interest will be payable on such Advance on the next Interest Payment Date for such Advance.
Section 3.07 Interest. (a) Subject to Sections 2.07 and 2.09, the Borrower shall pay, or shall cause to be paid, without duplication, interest on (i) the unpaid principal amount of each Advance from and including the date of such Advance (or, in the case of an Applied Provider Advance or Applied Special Termination Advance, from and including the date on which the amount thereof was withdrawn from the Class A Cash Collateral Account to pay interest on the Class A Certificates) to but excluding the date such principal amount shall be paid in full (or, in the case of an Applied Provider Advance or Applied Special Termination Advance, the date on which the Class A Cash Collateral Account is fully replenished in respect of such Advance) and (ii), to the extent permitted by law, any other amount due hereunder (whether fees, commissions, expenses or other amounts or installments of interest on Advances or any such other amount) that is not paid when due (whether at stated maturity, by acceleration or otherwise) from and including the due date thereof to but excluding the date such amount is paid in full, in each such case, at the interest rate per annum for each day that such amount remains overdue and unpaid equal to the Applicable Liquidity Rate for such Advance or such other amount, as the case may be, as in effect for such day, but in no event in any case referred to in clause (i) or (ii) above at a rate per annum greater than the maximum rate permitted by applicable law; provided, however, that, if at any time the otherwise applicable interest rate as set forth in this Section 3.07 shall exceed the maximum rate permitted by applicable law, then to the maximum extent permitted by applicable law any subsequent reduction in such interest rate will not reduce the rate of interest payable pursuant to this Section 3.07 below the maximum rate permitted by applicable law until the total amount of interest accrued equals the absolute amount of interest that would have accrued (without additional interest thereon) if such otherwise applicable interest rate as set forth in this Section 3.07 had at all relevant times been in effect.
(b) Each Advance (other than a Provider Advance or a Special Termination Advance) will be a Base Rate Advance for the period from the date of its Borrowing to (but excluding) the third Business Day following the Liquidity Provider’s receipt of the Notice of Borrowing for such Advance. Thereafter, such Advance shall be a LIBOR Advance, and an Applied Provider Advance and an Applied Special Termination Advance shall be a LIBOR Advance from the date of its withdrawal from the Class A Cash Collateral Account unless the Borrower elects otherwise.
(c) Each LIBOR Advance shall bear interest during each Interest Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus the Applicable Margin for such LIBOR Advance, payable in arrears on the last day of such Interest Period and, in the event of the payment of principal of such LIBOR Advance on a day other than such last day, on the date of such payment (to the extent of interest accrued on the amount of principal repaid).
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(d) Each Base Rate Advance shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin for such Base Rate Advance, payable in arrears on each Regular Distribution Date and, in the event of the payment of principal of such Base Rate Advance on a day other than a Regular Distribution Date, on the date of such payment (to the extent of interest accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Non-Extension Advance, Unapplied Downgrade Advance or Unapplied Special Termination Advance (each, an “Unapplied Advance”), as the case may be, shall bear interest, payable in arrears on each Regular Distribution Date, in an amount equal to (i) the Investment Earnings on the amounts on deposit in the Class A Cash Collateral Account on account of such Unapplied Advance during the period beginning on the later of the date of deposit of such Unapplied Advance and the preceding Regular Distribution Date and ending on the last day prior to such Regular Distribution Date, plus (ii) an amount equal to interest at the Applicable Margin on the amount of such Unapplied Advance during such period.
(f) Each amount not paid when due hereunder (whether fees, commissions, expenses or other amounts or installments of interest on Advances but excluding Advances) shall bear interest, to the extent permitted by applicable law, at a rate per annum equal to the Base Rate plus 2.0% per annum until paid.
(g) If at any time, the Liquidity Provider shall have determined (which determination shall be conclusive and binding upon the Borrower, absent manifest error) that, by reason of circumstances affecting the relevant interbank lending market generally (other than a Benchmark Replacement Event), the LIBOR Rate determined or to be determined for the next succeeding Interest Period will not adequately and fairly reflect the cost to the Liquidity Provider (as conclusively certified by the Liquidity Provider, absent manifest error) of making or maintaining Advances, the Liquidity Provider shall give facsimile or telephonic notice thereof (a “Rate Determination Notice”) to the Borrower and Delta. If such notice is given, then the outstanding principal amount of the LIBOR Advances shall be converted to Base Rate Advances effective from the date of the Rate Determination Notice; provided that the Applicable Liquidity Rate in respect of such Base Rate Advances shall be increased by one percent (1.00%). The Liquidity Provider shall withdraw a Rate Determination Notice given hereunder when the Liquidity Provider determines that the circumstances giving rise to such Rate Determination Notice no longer apply to the Liquidity Provider, and the Base Rate Advances shall be converted to LIBOR Advances effective as of the first day of the next succeeding Interest Period after the date of such withdrawal.
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(h) Each change in the Base Rate shall become effective immediately. The rates of interest specified in this Section 3.07 with respect to any Advance or other amount shall be referred to as the “Applicable Liquidity Rate”.
Section 3.08 Replacement of Borrower. Subject to Section 5.02, from time to time and subject to the successor Borrower’s meeting the eligibility requirements set forth in Section 6.09 of the Intercreditor Agreement applicable to the Subordination Agent, upon the effective date and time specified in a written and completed Notice of Replacement Subordination Agent in substantially the form of Annex VIII (a “Notice of Replacement Subordination Agent”) delivered to the Liquidity Provider by the then Borrower, the successor Borrower designated therein shall become the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall pay to the Liquidity Provider, upon the request of the Liquidity Provider, such amount or amounts as shall be sufficient (in the reasonable opinion of the Liquidity Provider) to compensate it for any loss, cost or expense incurred by reason of the liquidation or redeployment of deposits or other funds acquired by the Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of the Applicable Margin or anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date for borrowing specified in the relevant notice under Section 2.02.
Section 3.10 Illegality. Notwithstanding any other provision in this Agreement, if any change in any law, rule or regulation applicable to or binding on the Liquidity Provider, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Liquidity Provider with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Liquidity Provider to maintain or fund its LIBOR Advances, then upon notice to the Borrower and Delta by the Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall be converted to Base Rate Advances (a) immediately upon demand of the Liquidity Provider, if such change or compliance with such request, in the reasonable judgment of the Liquidity Provider, requires immediate conversion; or (b) at the expiration of the last Interest Period to expire before the effective date of any such change or request. The Liquidity Provider will notify the Borrower and Delta as promptly as practicable of any event that will or to its knowledge is reasonably likely to lead to the conversion of LIBOR Advances to Base Rate Advances under this Section 3.10; provided that a failure by the Liquidity Provider to notify the Borrower or Delta of an event that is reasonably likely to lead to such a conversion prior to the time that it is determined that such event will lead to such a conversion shall not prejudice the rights of the Liquidity Provider under this Section 3.10. The Liquidity Provider
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agrees to investigate all commercially reasonable alternatives for avoiding the need for such conversion, including, without limitation, designating a different Lending Office, if such designation or other action would avoid the need to convert such LIBOR Advances to Base Rate Advances; provided that the foregoing shall not obligate the Liquidity Provider to take any action that would, in its reasonable judgment, cause the Liquidity Provider to incur any material loss or cost, unless the Borrower or Delta agrees to reimburse or indemnify the Liquidity Provider therefor. If no such designation or other action is effected, or, if effected, fails to avoid the need for conversion of the LIBOR Advances to Base Rate Advances, Delta may arrange for a Replacement Liquidity Facility in accordance with Section 3.05(e) of the Intercreditor Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of this Agreement shall become effective on and as of the first date (the “Effective Date”) on which the following conditions precedent have been satisfied (or waived by the appropriate party or parties):
(a) The Liquidity Provider shall have received on or before the Closing Date each of the following, and in the case of each document delivered pursuant to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to the Liquidity Provider:
(i) This Agreement and the Fee Letter duly executed on behalf of the Borrower and, in the case of the Fee Letter, Delta;
(ii) The Intercreditor Agreement duly executed on behalf of each of the parties thereto (other than the Liquidity Provider);
(iii) Fully executed copies of each of the Operative Agreements executed and delivered on or before the Closing Date (other than this Agreement, the Fee Letter and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of the Class A Certificates;
(v) An executed copy of each opinion (other than the negative assurance letters of internal counsel of Delta and of Kilpatrick Townsend & Stockton LLP, special counsel to Delta, and the opinion and the negative assurance letter of Milbank LLP, special counsel to the Underwriters) delivered on the Closing Date
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pursuant to the Underwriting Agreement (in the case of each such opinion, either addressed to the Liquidity Provider or accompanied by a letter from the counsel rendering such opinion to the effect that the Liquidity Provider is entitled to rely on such opinion as of its date as if it were addressed to the Liquidity Provider);
(vi) An executed copy of each document, instrument, certificate and opinion delivered on or before the Closing Date pursuant to the Class A Trust Agreement, the Intercreditor Agreement and the other Operative Agreements (in the case of each such opinion, either addressed to the Liquidity Provider or accompanied by a letter from the counsel rendering such opinion to the effect that the Liquidity Provider is entitled to rely on such opinion as of its date as if it were addressed to the Liquidity Provider); and
(vii) An agreement from Delta, pursuant to which (x) Delta agrees to provide copies of quarterly financial statements and audited annual financial statements to the Liquidity Provider (which Delta may provide in an electronic format by electronic mail or making such available over the internet) and (y) Delta agrees to allow the Liquidity Provider to discuss the transactions contemplated by the Operative Agreements with officers and employees of Delta.
(b) On and as of the Effective Date no event shall have occurred and be continuing, or would result from the entering into of this Agreement or the making of any Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of the fees and other sums required to be paid to or for the account of the Liquidity Provider on or prior to the Effective Date pursuant to the Fee Letter.
(d) All conditions precedent to the issuance of the Certificates under the Trust Agreements shall have been satisfied or waived, all conditions precedent to the effectiveness of the other Liquidity Facilities shall have been satisfied or waived, and all conditions precedent to the purchase of the Class AA Certificates and the Class A Certificates by the Underwriters under the Underwriting Agreement shall have been satisfied (unless any of such conditions precedent under the Underwriting Agreement shall have been waived by the Underwriters).
(e) The Borrower and Delta shall have received a certificate, dated the Effective Date signed by a duly authorized representative of the Liquidity Provider, certifying that all conditions precedent specified in this Section 4.01 have been satisfied or waived by the Liquidity Provider.
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Section 4.02 Conditions Precedent to Borrowing. The obligation of the Liquidity Provider to make an Advance on the occasion of each Borrowing shall be subject to the conditions precedent that the Effective Date shall have occurred and, prior to the time of such Borrowing, the Borrower shall have delivered a Notice of Borrowing which conforms to the terms and conditions of this Agreement.
Section 4.03 Representations and Warranties. The representations and warranties of the Borrower as Subordination Agent in Sections 5.01(a), (b), (c), and (d) of the Participation Agreements shall be deemed to be incorporated into this Agreement as if set out in full herein and as if such representations and warranties were made by the Borrower to the Liquidity Provider.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Available Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity Provider shall otherwise consent in writing:
(a) Performance of Agreements. Subject to Sections 2.07 and 2.09, punctually pay or cause to be paid all amounts payable by it under this Agreement and the Intercreditor Agreement and observe and perform in all material respects the conditions, covenants and requirements applicable to it contained in this Agreement and the Intercreditor Agreement;
(b) Reporting Requirements. Furnish to the Liquidity Provider with reasonable promptness, such other information and data with respect to the transactions contemplated by the Operative Agreements as from time to time may be reasonably requested by the Liquidity Provider; and permit the Liquidity Provider, upon reasonable notice, to inspect the Borrower’s books and records with respect to such transactions and to meet with officers and employees of the Borrower to discuss such transactions; and
(c) Certain Operative Agreements. Furnish to the Liquidity Provider, with reasonable promptness, copies of such Operative Agreements entered into after the date hereof as from time to time may be reasonably requested by the Liquidity Provider.
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Section 5.02 Negative Covenants of the Borrower. Subject to the first and fourth paragraphs of Section 7.01(a) of the Intercreditor Agreement and Section 7.01(b) of the Intercreditor Agreement, so long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Available Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will not appoint or permit or suffer to be appointed any successor Borrower without the prior written consent of the Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT AND SPECIAL TERMINATION
Section 6.01 Liquidity Events of Default. (a) If any Liquidity Event of Default has occurred and is continuing and there is a Performing Note Deficiency, the Liquidity Provider may, in its discretion, deliver to the Borrower and Delta a Termination Notice, the effect of which shall be to cause (i) the Termination Date to occur at the close of business on the fifth Business Day after the date on which such Termination Notice is received by the Borrower and Delta, (ii) the Borrower to promptly request, and the Liquidity Provider to promptly make, a Final Advance in accordance with Section 2.02(c) hereof and Section 3.05(i) of the Intercreditor Agreement, (iii) all other outstanding Advances to be automatically converted into Final Advances for purposes of determining the Applicable Liquidity Rate for interest payable thereon and (iv) subject to Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any other amounts outstanding hereunder to become immediately due and payable to the Liquidity Provider.
(b) If the aggregate Pool Balance of the Class A Certificates is greater than the aggregate outstanding principal amount of the Series A Equipment Notes (other than any Series A Equipment Notes previously sold by the Borrower or with respect to which the Aircraft related to such Series A Equipment Notes has been disposed of by the Loan Trustee) at any time during the 18-month period ending on June 10, 2028, the Liquidity Provider may, in its discretion, deliver to the Borrower and Delta a Special Termination Notice, the effect of which shall be to cause (i) the Termination Date to occur at the close of business on the fifth Business Day after the date on which such Special Termination Notice is received by the Borrower and Delta, (ii) the Borrower to promptly request, and the Liquidity Provider to promptly make, a Special Termination Advance in accordance with Section 2.02(d) hereof and Section 3.05(k) of the Intercreditor Agreement, and (iii) subject to Sections 2.07 and 2.09, all Advances (including, without limitation, any Unapplied Provider Advance), to be automatically treated as Special Termination Advances, subject to Section 6.01(a).
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ARTICLE VII
MISCELLANEOUS
Section 7.01 No Oral Modifications or Continuing Waivers. No terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Borrower and the Liquidity Provider and any other Person whose consent is required pursuant to this Agreement; provided that no such change or other action shall affect the payment obligations of Delta or the rights of Delta without Delta’s prior written consent; and any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
Section 7.02 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and given by United States registered or certified mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
If to the Borrower, to:
U.S. BANK TRUST NATIONAL ASSOCIATION
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref: Delta 2020-1A EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
E-mail: alison.nadeau@usbank.com
If to the Liquidity Provider, to:
NATIONAL AUSTRALIA BANK LIMITED, NEW YORK BRANCH
245 Park Avenue, 28th Floor
New York, NY 10167
Attention: Lending Administration
Telephone: 212-916-9593
Facsimile: 212-490-8087
Email: ny_lending_administration@nabny.com
with a copy to:
National Australia Bank Limited, New York Branch
245 Park Avenue
New York, NY 10167
Attention: Director, Asset Finance & Leasing
Telephone: (212) 916-9500
Facsimile: (212) 490-8087
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Any party, by notice to the other party hereto, may designate additional or different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 7.02.
Section 7.03 No Waiver; Remedies. No failure on the part of the Liquidity Provider to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04 Further Assurances. The Borrower agrees to do such further acts and things and to execute and deliver to the Liquidity Provider such additional assignments, agreements, powers and instruments as the Liquidity Provider may reasonably require or deem advisable to carry into effect the purposes of this Agreement and the other Operative Agreements or to better assure and confirm unto the Liquidity Provider its rights, powers and remedies hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions. The Liquidity Provider shall be indemnified hereunder to the extent and in the manner described in Section 4.02 of the Participation Agreements. In addition, the Borrower agrees to indemnify, protect, defend and hold harmless each Liquidity Indemnitee from and against all Expenses of any kind or nature whatsoever (other than any Expenses of the nature described in Sections 3.01, 3.03, 3.09 or 7.07 or in the Fee Letter (regardless of whether indemnified against pursuant to said Sections or in such Fee Letter)), that may be imposed on or incurred by such Liquidity Indemnitee, in any way relating to, resulting from, or arising out of or in connection with, any action, suit or proceeding by any third party against such Liquidity Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor Agreement or any Participation Agreement; provided, however, that the Borrower shall not be required to indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect of any Expense of such Liquidity Indemnitee to the extent such Expense is (i) attributable to the gross negligence or willful misconduct of such Liquidity Indemnitee or any other Liquidity Indemnitee, (ii) an ordinary and usual operating overhead expense, (iii) attributable to the failure by such Liquidity Indemnitee or any other Liquidity Indemnitee to perform or observe any agreement, covenant or condition on its part to be performed or observed in this Agreement, the Intercreditor Agreement, the Fee Letter or any other Operative Agreement to which it is a party or (iv) otherwise excluded from the indemnification provisions contained in Section 4.02 of the Participation Agreements. The provisions of Sections 3.01, 3.03, 3.09, 7.05 and 7.07 and the indemnities contained in Section 4.02 of the Participation Agreements shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither the Liquidity Provider nor any of its officers, employees or directors shall be liable or responsible for: (i) the use which may be made of the Advances or any acts or omissions of the Borrower or any beneficiary or transferee in connection therewith; (ii) the validity, sufficiency or genuineness of documents, or
| 30 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; or (iii) the making of Advances by the Liquidity Provider against delivery of a Notice of Borrowing and other documents which do not comply with the terms hereof; provided, however, that the Borrower shall have a claim against the Liquidity Provider, and the Liquidity Provider shall be liable to the Borrower, to the extent of any damages suffered by the Borrower that were the result of (A) the Liquidity Provider’s willful misconduct or gross negligence in determining whether documents presented hereunder comply with the terms hereof or (B) any breach by the Liquidity Provider of any of the terms of this Agreement or the Intercreditor Agreement, including, but not limited to, the Liquidity Provider’s failure to make lawful payment hereunder after the delivery to it by the Borrower of a Notice of Borrowing complying with the terms and conditions hereof. In no event, however, shall the Liquidity Provider be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, loss of profits, business or anticipated savings).
(b) Neither the Liquidity Provider nor any of its officers, employees or directors or affiliates shall be liable or responsible in any respect for (i) any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with this Agreement or any Notice of Borrowing delivered hereunder or (ii) any action, inaction or omission which may be taken by it in good faith, absent willful misconduct or gross negligence (in which event the extent of the Liquidity Provider’s potential liability to the Borrower shall be limited as set forth in the immediately preceding paragraph), in connection with this Agreement or any Notice of Borrowing.
Section 7.07 Certain Costs and Expenses. The Borrower agrees promptly to pay, or cause to be paid, (a) the reasonable fees, expenses and disbursements of Pillsbury Winthrop Shaw Pittman LLP, special counsel for the Liquidity Provider, in connection with the preparation, negotiation, execution, delivery, filing and recording of the Operative Agreements, any waiver or consent thereunder or any amendment thereof and (b) if a Liquidity Event of Default occurs, all out-of-pocket expenses incurred by the Liquidity Provider, including reasonable fees and disbursements of counsel, in connection with such Liquidity Event of Default and any collection, bankruptcy, insolvency and other enforcement proceedings in connection therewith. In addition, the Borrower shall pay any and all recording, stamp and other similar Taxes and fees payable or determined to be payable in the United States in connection with the execution, delivery, filing and recording of this Agreement, any other Operative Agreement and such other documents, and agrees to save the Liquidity Provider harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such Taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower and the Liquidity Provider and their respective successors and permitted assigns, except that neither the Liquidity Provider (except as otherwise provided in this Section 7.08) nor (except as contemplated by Section 3.08) the Borrower shall have the right to assign, pledge or otherwise transfer its rights or obligations hereunder or any interest herein, subject to the Liquidity Provider’s right to grant Participations pursuant to
| 31 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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Section 7.08(b), and the Liquidity Provider shall have the right to assign its rights and transfer its obligations hereunder in connection with the arranging of a Replacement Liquidity Facility pursuant to Section 3.05(e) of the Intercreditor Agreement; provided that any such assignment and transfer is consented to by Delta.
(b) The Liquidity Provider agrees that it will not grant any participation (including, without limitation, a “risk participation”) (any such participation, a “Participation”) in or to all or a portion of its rights and obligations hereunder or under the other Operative Agreements, unless all of the following conditions are satisfied: (i) such Participation is to a Permitted Transferee, (ii) such Participation is made in accordance with all applicable laws, including, without limitation, the Securities Act of 1933, as amended, the Trust Indenture Act of 1939, as amended, any laws or regulations imposing U.S. economic sanctions measures or any orders or licenses issued thereunder and any other applicable laws relating to the transfer of similar interests and (iii) such Participation shall not be made under circumstances that require registration under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended. Notwithstanding any such Participation, the Liquidity Provider agrees that (1) the Liquidity Provider’s obligations under the Operative Agreements shall remain unchanged, and such participant shall have no rights or benefits as against Delta or the Borrower or under any Operative Agreement, (2) the Liquidity Provider shall remain solely responsible to the other parties to the Operative Agreements for the performance of such obligations, (3) the Liquidity Provider shall remain the maker of any Advances, and the other parties to the Operative Agreements shall continue to deal solely and directly with the Liquidity Provider in connection with the Advances and the Liquidity Provider’s rights and obligations under the Operative Agreements, (4) the Liquidity Provider shall be solely responsible for any withholding Taxes or any filing or reporting requirements relating to such Participation and shall hold the Borrower and Delta and their respective successors, permitted assigns, affiliates, agents and servants harmless against the same and (5) neither Delta nor the Borrower shall be required to pay to the Liquidity Provider any amount under Section 3.01 or Section 3.03 greater than it would have been required to pay had there not been any grant of a Participation by the Liquidity Provider. The Liquidity Provider may, in connection with any Participation or proposed Participation pursuant to this Section 7.08(b), disclose to the participant or proposed participant any information relating to the Operative Agreements or to the parties thereto furnished to the Liquidity Provider thereunder or in connection therewith and permitted to be disclosed by the Liquidity Provider; provided, however, that prior to any such disclosure, the participant or proposed participant shall agree in writing for the express benefit of the Borrower and Delta to preserve the confidentiality of any confidential information included therein (subject to customary exceptions).
The Borrower acknowledges and agrees that the Liquidity Provider’s source of funds may derive in part from its participants. Accordingly, in determining amounts due by the Borrower to the Liquidity Provider pursuant to Section 3.01 and Section 3.03 of this Agreement, references in this Agreement to determinations, reserve, liquidity and capital adequacy requirements, increased costs, reduced receipts, additional amounts due pursuant to Section 3.03 as they pertain to the Liquidity Provider shall be deemed also to include those of each of its participants that are commercial banking institutions and of whose participation the Borrower
| 32 | ||||
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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has been notified, in each case up to the maximum amount that would have been incurred by or attributable to the Liquidity Provider directly had there not been any grant of a Participation by the Liquidity Provider, and references to the Liquidity Provider therein and in related definitions shall be treated as references to such participants where applicable; provided that in any event, neither Delta nor the Borrower shall be required to pay any amount under Section 3.01 or Section 3.03 greater than it would have been required to pay had there not been any grant of a Participation by the Liquidity Provider.
The Liquidity Provider shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest under this Agreement (the “Participant Register”); provided that the Liquidity Provider shall not have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and the Liquidity Provider shall treat each Person whose name is recorded in the Participant Register as the owner of such Participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(c) Notwithstanding the other provisions of this Section 7.08, the Liquidity Provider may assign and pledge all or any portion of the Advances owing to it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that any payment in respect of such assigned Advances made by the Borrower to the Liquidity Provider in accordance with the terms of this Agreement shall satisfy the Borrower’s obligations hereunder in respect of such assigned Advance to the extent of such payment. No such assignment shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.10 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity. (a) Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns, (ii) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts, (iii) agrees that service of process in any such suit, action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to each party hereto at its address set forth in Section 7.02 hereof, or at such other address of which each party shall have been notified pursuant thereto and (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The Borrower and the Liquidity Provider each warrant and represent that it has reviewed this waiver with its legal counsel, and that it knowingly and voluntarily waives its jury trial rights following consultation with such legal counsel. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) To the extent that the Liquidity Provider or any of its properties has or may hereafter acquire any right of immunity, whether characterized as sovereign immunity or otherwise, and whether under the United States Foreign Sovereign Immunities Act of 1976 (or any successor legislation) or otherwise, from any legal proceedings, whether in the United States or elsewhere, to enforce or collect upon this Agreement, including, without limitation, immunity from suit or service of process, immunity from jurisdiction or judgment of any court or tribunal or execution of a judgment, or immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, the Liquidity Provider hereby irrevocably and expressly waives any such immunity, and agrees not to assert any such right or claim in any such proceeding, whether in the United States or elsewhere.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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Section 7.12 Counterparts. This Agreement may be executed in any number of counterparts (and each party shall not be required to execute the same counterpart). Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts together shall constitute one instrument.
Section 7.13 Entirety. This Agreement and the Intercreditor Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior understandings and agreements of such parties.
Section 7.14 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 7.15 Liquidity Provider’s Obligation to Make Advances. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER’S RIGHTS TO DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
Section 7.16 Patriot Act. The Liquidity Provider hereby notifies the Borrower that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Liquidity Provider to identify the Borrower in accordance with such Act.
Section 7.17 Acknowledgment and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in this Agreement or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under this Agreement, to the extent such liability is unsecured, may be subject to Write-Down and Conversion Powers and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement; or
(iii) the variation of the terms of such liability in connection with the exercise of Write-Down and Conversion Powers.
Section 7.18 Head Office Obligations. The Liquidity Provider is National Australia Bank Limited, acting through its New York branch. The Liquidity Provider hereby agrees that, notwithstanding the place of booking or its jurisdiction of incorporation or organization, the obligations of the Liquidity Provider hereunder are also the obligations of the head office of National Australia Bank Limited in Melbourne, Australia (the “Head Office”). Accordingly, any beneficiary of this Agreement will be able to proceed directly against the Head Office, if the Liquidity Provider defaults in its obligations to such beneficiary under this Agreement.
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Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first set forth above.
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Subordination Agent, as agent and trustee for the Class A Trust, as Borrower | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, as Liquidity Provider | ||
| By: |
/s/ Daniel Carr |
|
| Name: Daniel Carr | ||
| Title: Director | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX I to
REVOLVING CREDIT AGREEMENT
FORM OF INTEREST ADVANCE NOTICE OF BORROWING
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of an Interest Advance by the Liquidity Provider to be used for the payment of the interest on the Class A Certificates which is payable on __________, ____ (the “Distribution Date”) in accordance with the terms and provisions of the Class A Trust Agreement and the Class A Certificates, which Advance is requested to be made on __________, ____. The Interest Advance should be remitted to [insert wire and account details].
(3) The amount of the Interest Advance requested hereby (i) is $___________, to be applied in respect of the payment of the interest which is due and payable on the Class A Certificates on the Distribution Date, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class A Certificates, or principal of, or interest or premium on the Class AA Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class A Certificates, the Class A Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I), (iv) does not exceed the Maximum Available Commitment on the date hereof and (v) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will apply the same in accordance with the terms of Section 3.05(b) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, the making of the Interest Advance as requested by this Notice of Borrowing shall automatically reduce, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Maximum Available Commitment by an amount equal to the amount of the Interest Advance requested to be made hereby as set forth in clause (i) of paragraph (3) of this Notice of Borrowing and such reduction shall automatically result in corresponding reductions in the amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of __________, ____.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX II to
REVOLVING CREDIT AGREEMENT
FORM OF NON-EXTENSION ADVANCE NOTICE OF BORROWING
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned subordination agent (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Non-Extension Advance by the Liquidity Provider to be used for the funding of the Class A Cash Collateral Account in accordance with Section 3.05(d) of the Intercreditor Agreement, which Advance is requested to be made on __________, ____. The Non-Extension Advance should be remitted to [insert wire and account details].
(3) The amount of the Non-Extension Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class A Cash Collateral Account in accordance with Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of the principal of, or premium on, the Class A Certificates, or principal of, or interest or premium on, the Class AA Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class A Certificates, the Liquidity Agreement, the Class A Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class A Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(d) and 3.05(f) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Non-Extension Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement and (B) following the making by the Liquidity Provider of the Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ____________, ____.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX III to
REVOLVING CREDIT AGREEMENT
FORM OF DOWNGRADE ADVANCE NOTICE OF BORROWING
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned subordination agent (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Downgrade Advance by the Liquidity Provider to be used for the funding of the Class A Cash Collateral Account in accordance with Section 3.05(c)(iii) of the Intercreditor Agreement by reason of the Liquidity Facility provided under the Liquidity Agreement becoming a Downgraded Facility which has not been replaced by a Replacement Liquidity Facility, which Advance is requested to be made on __________, ____. The Downgrade Advance should be remitted to [insert wire and account details].
(3) The amount of the Downgrade Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class A Cash Collateral Account in accordance with Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of the principal of, or premium on, the Class A Certificates, or principal of, or interest or premium on, the Class AA Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class A Certificates, the Class A Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class A Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(c) and 3.05(f) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Downgrade Advance as requested by this Notice of Borrowing shall automatically reduce, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Maximum Available Commitment to zero and (B) following the making by the Liquidity Provider of the Downgrade Advance requested by this Notice of Borrowing, subject to reinstatement in accordance with the terms of the Liquidity Agreement, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ____________, ____.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX IV to
REVOLVING CREDIT AGREEMENT
FORM OF FINAL ADVANCE NOTICE OF BORROWING
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Final Advance by the Liquidity Provider to be used for the funding of the Class A Cash Collateral Account in accordance with Section 3.05(i) of the Intercreditor Agreement by reason of the receipt by the Borrower of a Termination Notice from the Liquidity Provider with respect to the Liquidity Agreement, which Advance is requested to be made on __________, ____. The Final Advance should be remitted to [insert wire and account details].
(3) The amount of the Final Advance requested hereby (i) is $____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class A Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class A Certificates, or principal of, or interest or premium on, the Class AA Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class A Certificates, the Class A Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower will deposit such amount in the Class A Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(f) and 3.05(i) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Final Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement and (B) following the making by the Liquidity Provider of the Final Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ___________, ___.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
[* Bracketed language may be included at Borrower’s option.]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
SCHEDULE 1 TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX V to
REVOLVING CREDIT AGREEMENT
FORM OF SPECIAL TERMINATION
ADVANCE NOTICE OF BORROWING
SPECIAL TERMINATION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned borrower (the “Borrower”), hereby certifies to National Australia Bank Limited, acting through its New York branch (the “Liquidity Provider”), with reference to the Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between the Borrower and the Liquidity Provider (the “Liquidity Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making of the Special Termination Advance by the Liquidity Provider to be used for the funding of the Class A Cash Collateral Account in accordance with Section 3.05(k) of the Intercreditor Agreement by reason of the receipt by the Borrower of a Special Termination Notice from the Liquidity Provider with respect to the Liquidity Agreement, which Advance is requested to be made on _______________.
(3) The amount of the Special Termination Advance requested hereby (i) is $_____________, which equals the Maximum Available Commitment on the date hereof and is to be applied in respect of the funding of the Class A Cash Collateral Account in accordance with Sections 3.05(f) and 3.05(k) of the Intercreditor Agreement, (ii) does not include any amount with respect to the payment of principal of, or premium on, the Class A Certificates, or principal of, or interest or premium on, the Class AA Certificates or any Additional Certificates, if issued, (iii) was computed in accordance with the provisions of the Class A Certificates, the Class A Trust Agreement and the Intercreditor Agreement (a copy of which computation is attached hereto as Schedule I) and (iv) has not been and is not the subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount requested hereby, (a) the Borrower shall deposit such amount in the Class A Cash Collateral Account and apply the same in accordance with the terms of Sections 3.05(f) and 3.05(k) of the Intercreditor Agreement, (b) no portion of such amount shall be applied by the Borrower for any other purpose and (c) no portion of such amount until so applied shall be commingled with other funds held by the Borrower.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
The Borrower hereby acknowledges that, pursuant to the Liquidity Agreement, (A) the making of the Special Termination Advance as requested by this Notice of Borrowing shall automatically and irrevocably terminate the obligation of the Liquidity Provider to make further Advances under the Liquidity Agreement; and (B) following the making by the Liquidity Provider of the Special Termination Advance requested by this Notice of Borrowing, the Borrower shall not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice of Borrowing as of the ____ day of ___________, ___.
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
SCHEDULE 1 TO SPECIAL TERMINATION ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Special Termination Advance Notice of Borrowing]
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX VI to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF TERMINATION
NOTICE OF TERMINATION
[Date]
U.S. Bank Trust National Association,
as Subordination Agent,
as Borrower One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref: Delta 2020-1A EETC
| Re: |
Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1A, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01(a) of the Liquidity Agreement, by reason of the occurrence and continuance of a Liquidity Event of Default and the existence of a Performing Note Deficiency (each as defined in the Liquidity Agreement), we are giving this notice to you in order to cause (i) our obligations to make Advances (as defined in the Liquidity Agreement) under such Liquidity Agreement to terminate at the close of business on the fifth Business Day after the date on which you receive this notice and (ii) you to request a Final Advance under the Liquidity Agreement pursuant to Section 2.02(c) of the Liquidity Agreement and Section 3.05(i) of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a consequence of your receipt of this notice.
| Revolving Credit Agreement (Class A) | ||||
| (Delta 2020-1 EETC) |
THIS NOTICE IS THE “NOTICE OF TERMINATION” PROVIDED FOR UNDER THE LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
| Very truly yours, | ||
| NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, | ||
| as Liquidity Provider | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| cc: |
U.S. Bank Trust National Association, as Class A Trustee |
|
Delta Air Lines, Inc. |
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX VII to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF SPECIAL TERMINATION
NOTICE OF SPECIAL TERMINATION
[Date]
U.S. Bank Trust National Association, as Subordination Agent, as Borrower One Federal Street, 3rd Floor Boston, Massachusetts 02110 Attention: Corporate Trust Administration Ref: Delta 2020-1A EETC
| Re: |
Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1A, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01(b) of the Liquidity Agreement, by reason of the aggregate Pool Balance of the Class A Certificates exceeding the aggregate outstanding principal amount of the Series A Equipment Notes (other than any Series A Equipment Notes previously sold or with respect to which the Aircraft related to such Series A Equipment Notes has been disposed of) during the 18-month period prior to June 10, 2028, we are giving this notice to you in order to cause (i) our obligations to make Advances (as defined in the Liquidity Agreement) under such Liquidity Agreement to terminate at the close of business on the fifth Business Day after the date on which you receive this notice and (ii) you to request a Special Termination Advance under the Liquidity Agreement pursuant to Section 2.02(d) of the Liquidity Agreement and Section 3.05(k) of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a consequence of your receipt of this notice.
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
THIS NOTICE IS THE “NOTICE OF SPECIAL TERMINATION” PROVIDED FOR UNDER THE LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY AGREEMENT WILL TERMINATE AT THE CLOSE OF BUSINESS ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU RECEIVE THIS NOTICE.
| Very truly yours, | ||
| NATIONAL AUSTRALIA BANK LIMITED, ACTING THROUGH ITS NEW YORK BRANCH, | ||
| as Liquidity Provider | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| cc: |
U.S. Bank Trust National Association, as Class A Trustee |
|
Delta Air Lines, Inc. |
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
ANNEX VIII to
REVOLVING CREDIT AGREEMENT
FORM OF NOTICE OF REPLACEMENT SUBORDINATION AGENT
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
| Re: |
Revolving Credit Agreement (2020-1A), dated as of March 12, 2020, between U.S. Bank Trust National Association, as Subordination Agent, as agent and trustee for the Delta Air Lines Pass Through Trust 2020-1A, as Borrower, and National Australia Bank Limited, acting through its New York branch (the “Liquidity Agreement”) |
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
[Name of Transferee]
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity Agreement referred to above. The transferee has succeeded the undersigned as Subordination Agent under the Intercreditor Agreement referred to in the first paragraph of the Liquidity Agreement, pursuant to the terms of Section 7.01 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the Liquidity Agreement are transferred to the transferee and the transferee shall hereafter have the sole rights and obligations as Borrower thereunder. The undersigned shall pay any costs and expenses of such transfer, including, but not limited to, transfer taxes or governmental charges.
This transfer shall be effective as of [specify time and date].
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent, as Borrower | ||
| By: |
|
|
| Name: | ||
| Title: | ||
|
Revolving Credit Agreement (Class A) (Delta 2020-1 EETC) |
Exhibit 4.8
Execution Version
PARTICIPATION AGREEMENT
(N301DV)
Dated as of March 12, 2020
among
DELTA AIR LINES, INC.,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the
Pass Through Trust Agreements,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
*
One Airbus A321-211
(Generic Manufacturer and Model Airbus A321) Aircraft
U.S. Registration No. N301DV
Participation Agreement (2020-1 EETC)
N301DV
TABLE OF CONTENTS
| Page | ||||||
|
Article 1 DEFINITIONS |
1 | |||||
|
Section 1.01. |
Definitions | 1 | ||||
|
Section 1.02. |
Other Definitional Provisions | 2 | ||||
|
Article 2 THE LOANS |
2 | |||||
|
Section 2.01. |
The Loans | 2 | ||||
|
Section 2.02. |
Issuance of Equipment Notes | 2 | ||||
|
Section 2.03. |
The Closing | 4 | ||||
|
Article 3 CONDITIONS PRECEDENT |
4 | |||||
|
Section 3.01. |
Conditions Precedent to Obligations of Pass Through Trustees | 4 | ||||
|
Section 3.02. |
Conditions Precedent to Obligations of Company | 7 | ||||
|
Article 4 REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY |
9 | |||||
|
Section 4.01. |
Representations and Warranties of Company | 9 | ||||
|
Section 4.02. |
General Indemnity | 11 | ||||
|
Article 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK |
17 | |||||
|
Section 5.01. |
Representations, Warranties and Covenants of U.S. Bank | 17 | ||||
|
Article 6 OTHER COVENANTS AND AGREEMENTS |
19 | |||||
|
Section 6.01. |
Other Agreements | 19 | ||||
|
Section 6.02. |
Certain Covenants of Company | 22 | ||||
|
Article 7 MISCELLANEOUS |
24 | |||||
|
Section 7.01. |
Notices | 24 | ||||
|
Section 7.02. |
Survival of Representations, Warranties, Indemnities, Covenants and Agreements | 25 | ||||
|
Section 7.03. |
Governing Law | 25 | ||||
|
Section 7.04. |
Severability | 26 | ||||
|
Section 7.05. |
No Oral Modifications or Continuing Waivers; Consents | 26 | ||||
|
Section 7.06. |
Effect of Headings and Table of Contents | 26 | ||||
|
Section 7.07. |
Successors and Assigns | 26 | ||||
|
Section 7.08. |
Benefits of Agreement | 26 | ||||
|
Section 7.09. |
Counterparts | 26 | ||||
|
Section 7.10. |
Submission to Jurisdiction | 27 | ||||
|
Section 7.11. |
Further Assurances | 27 | ||||
|
Section 7.12. |
Section 1110 | 27 | ||||
Participation Agreement (2020-1 EETC)
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i
| Schedule I | - | Equipment Notes, Purchasers and Original Principal Amounts | ||
| Schedule II | - | Trust Supplements | ||
| Exhibit A-1 | - | Form of Opinion of Counsel for Company | ||
| Exhibit A-2 | - | Form of Opinion of Hughes Hubbard & Reed LLP, special counsel for Company | ||
| Exhibit B | - | Form of Opinion of Special Counsel for Loan Trustee, Pass Through Trustees, Subordination Agent and U.S. Bank | ||
| Exhibit C | - | Form of Opinion of Special FAA Counsel | ||
| Exhibit D | - | Form of Airframe Warranties Agreement | ||
| Exhibit E-1 | - | Form of Opinion of Special Delaware Tax Counsel for Pass Through Trustees | ||
| Exhibit E-2 | - | Form of Opinion of Special Delaware UCC Counsel for Company | ||
| Annex A | - | Definitions | ||
Participation Agreement (2020-1 EETC)
N301DV
ii
PARTICIPATION AGREEMENT
(N301DV)
This PARTICIPATION AGREEMENT (N301DV), dated as of March 12, 2020, is made by and among DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association (in its individual capacity, together with its successors and permitted assigns, “U.S. Bank”), not in its individual capacity except as otherwise expressly provided in any of the Operative Documents or the Pass Through Documents, but solely as Pass Through Trustee under each of the Pass Through Trust Agreements (such terms and other capitalized terms used herein without definition being defined as provided in Section 1.01), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as subordination agent and trustee (in such capacity, together with any successor trustee in such capacity, “Subordination Agent”) under the Intercreditor Agreement, and U.S. BANK TRUST NATIONAL ASSOCIATION, as loan trustee (in such capacity, together with any successor trustee in such capacity, “Loan Trustee”) under the Indenture.
WITNESSETH:
WHEREAS, Company is the owner of that certain Airbus Model A321-211 aircraft more particularly described in the Indenture Supplement originally executed and delivered under the Indenture;
WHEREAS, concurrently with the execution and delivery of this Agreement, Company and Loan Trustee are entering into the Indenture, pursuant to which, among other things, Company will issue two separate series of Equipment Notes, which Equipment Notes are to be secured by a security interest in all right, title and interest of Company in and to the Aircraft and certain other property described in the Indenture;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each of the Trust Supplements set forth in Schedule II, the Pass Through Trusts were created and the Pass Through Certificates issued and sold;
WHEREAS, pursuant to the Intercreditor Agreement, Subordination Agent will hold the Equipment Notes on behalf of the Pass Through Trusts;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. For the purposes of this Agreement, unless the context otherwise requires, capitalized terms used but not defined herein shall have the respective meanings set forth or incorporated by reference in Annex A.
Participation Agreement (2020-1 EETC)
N301DV
Section 1.02. Other Definitional Provisions. (a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Agreement, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) All references in this Agreement to a “government” are to such government and any instrumentality or agency thereof.
(e) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(f) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
ARTICLE 2
THE LOANS
Section 2.01. The Loans. Subject to the terms and conditions of this Agreement and the Indenture, on the Closing Date, Pass Through Trustee for each Pass Through Trust shall make a loan to Company by paying to Company the aggregate original principal amounts of the Equipment Notes being issued to such Pass Through Trust as set forth on Schedule I opposite the name of such Pass Through Trust. Pass Through Trustees, on behalf of the Pass Through Trusts, shall make such loans to Company no later than 11:00 a.m. (New York City time) on the Closing Date by transferring such amount in immediately available funds to Company at its account at JP Morgan Chase Bank, 28 Liberty Street, New York, New York, 10005, SWIFT: CHASUS33, ABA Number 021000021, Account No. 730131026, with the request that the bank advise Company by telephone at (404) 715-2046 upon transfer of the funds.
Section 2.02. Issuance of Equipment Notes. Upon the occurrence of the above payments by Pass Through Trustee for each Pass Through Trust to Company, Company shall issue, pursuant to and in accordance with Article II of the Indenture, to Subordination Agent as agent and trustee for Pass Through Trustee for each Pass Through Trust, one or more Equipment Notes of the maturity and aggregate original principal amount and bearing the interest rate set forth in Schedule I opposite the name of such Pass Through Trust. Each such Equipment Note shall be duly authenticated by Loan Trustee pursuant to the Indenture, registered in the name of Subordination Agent and dated the Closing Date and shall be delivered by Loan Trustee to Subordination Agent. In addition, subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and
Participation Agreement (2020-1 EETC)
N301DV
2
from time to time, (i) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) and to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, (ii) to issue one or more Series of Additional Series Equipment Notes under the Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time) and (iii) at any time following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes are so issued after the Closing Date, each Noteholder of such Equipment Notes shall be deemed to be a party hereto without further act, and shall be entitled to execute, and at the request of Company shall execute, a counterpart to this Agreement. Subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, each of the parties hereto agrees, at the Company’s request, to enter into any amendments to (or any amendment and restatement of) this Agreement, any of the other Operative Documents and the Pass Through Documents as may be necessary or desirable (A) to give effect to (x) any redemption and issuance, any issuance or any payment and issuance of any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, and the issuance of pass through certificates by any pass through trust that acquires any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, or (y) any redemption and issuance, any issuance or any payment and issuance of any new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under any Related Indenture, and the issuance of pass through certificates by any pass through trust that acquires any such new “Series A Equipment Notes” or “Additional Series Equipment Notes” or new “Additional Series Equipment Notes”, as applicable, and (B) to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith) and to provide for any credit support for any pass through certificates relating to any such new Series A Equipment Notes, Additional Series Equipment Notes or new Additional Series Equipment Notes or new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series (including, without limitation, to provide for payment of fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)). For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under the Indenture.
Participation Agreement (2020-1 EETC)
N301DV
3
Section 2.03. The Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take place at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004 at 9:30 a.m. (New York City time) on March 12, 2020, or at such other time or place as the parties shall agree.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Obligations of Pass Through Trustees. The obligation of each Pass Through Trustee to make the loan contemplated by Article 2 is subject to the fulfillment (or the waiver by such Pass Through Trustee) prior to or on the Closing Date of the following conditions precedent:
(a) Authentication. Company shall have tendered the Equipment Notes being issued on the Closing Date to Loan Trustee for authentication, and Loan Trustee shall have authenticated such Equipment Notes and shall have tendered such Equipment Notes to Subordination Agent on behalf of the applicable Pass Through Trustee, against receipt of the loan proceeds, in accordance with Section 2.02.
(b) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Pass Through Trustees to make the loans contemplated by Section 2.01 or to acquire the Equipment Notes.
(c) Documentation. This Agreement and the following documents shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Pass Through Trustees or Loan Trustee), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to each Pass Through Trustee:
(i) the Intercreditor Agreement;
(ii) the Liquidity Facilities;
(iii) the Pass Through Trust Agreements;
(iv) the Indenture and the Indenture Supplement covering the Aircraft and dated the Closing Date;
(v) the Airframe Warranties Agreement;
(vi) a copy of the FAA Bill of Sale; and
(vii) a copy of the Warranty Bill of Sale.
Participation Agreement (2020-1 EETC)
N301DV
4
(d) Financing Statement. A Uniform Commercial Code financing statement or statements covering the security interest created by the Indenture naming Company, as debtor, and Loan Trustee, as secured party, shall have been (or shall be in the process of being) duly filed in all places necessary or desirable within the State of Delaware.
(e) Certain Closing Certificates. Each Pass Through Trustee shall have received the following:
(i) a certificate dated the Closing Date of the Secretary or an Assistant Secretary of Company, certifying as to (A) a copy of the resolutions of the Board of Directors of Company or the executive or any other applicable committee thereof duly authorizing the transactions contemplated hereby and the execution, delivery and performance by Company of this Agreement and the Indenture and each other document required to be executed and delivered by Company in accordance with the provisions hereof or thereof and (B) a copy of the certificate of incorporation and by-laws of Company, as in effect on the Closing Date;
(ii) a certificate or other evidence from the Secretary of State of the State of Delaware, dated as of a date reasonably near the Closing Date, as to the due incorporation and good standing of Company in such state;
(iii) an incumbency certificate of Company as to the person or persons authorized to execute and deliver this Agreement, the Indenture and each other document to be executed by Company in connection with the transactions contemplated hereby and thereby, and the specimen signatures of such person or persons; and
(iv) one or more certificates of Loan Trustee and Subordination Agent certifying to the reasonable satisfaction of Pass Through Trustees as to the due authorization, execution, delivery and performance by Loan Trustee and Subordination Agent of each of the Operative Documents to which Loan Trustee or Subordination Agent is or will be a party and any other documents to be executed by or on behalf of Loan Trustee or Subordination Agent in connection with the transactions contemplated hereby or thereby.
(f) Representations; No Event of Default or Event of Loss. On the Closing Date, the following statements shall be correct: (i) the representations and warranties of Company herein are correct in all material respects as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties are correct on and as of such earlier date) and (ii) no event has occurred and is continuing that constitutes an Event of Default or an Event of Loss with respect to the Aircraft or would constitute an Event of Default or such an Event of Loss but for the requirement that notice be given or time elapse or both.
Participation Agreement (2020-1 EETC)
N301DV
5
(g) Opinion of Counsel to Company. Each Pass Through Trustee and Loan Trustee shall have received (i) an opinion addressed to it from the General Counsel, an Associate General Counsel or an Assistant General Counsel of Company (or from such other internal counsel to Company as shall be reasonably satisfactory to Pass Through Trustees) substantially in the form set forth in Exhibit A-1 and (ii) an opinion addressed to it from Hughes Hubbard & Reed LLP substantially in the form set forth in Exhibit A-2.
(h) Opinion of Counsel to U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Shipman & Goodwin LLP, special counsel for U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent, substantially in the form set forth in Exhibit B.
(i) Opinion of FAA Counsel. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, substantially in the form set forth in Exhibit C.
(j) Certification from Company. Each Pass Through Trustee and Loan Trustee shall have received a certificate or certificates signed by the chief financial or accounting officer, any Senior Vice President, the Treasurer, any Vice President or any Assistant Treasurer (or any other Responsible Officer) of Company, dated the Closing Date, certifying as to the correctness of each of the matters stated in Section 3.01(f).
(k) Certification from U.S. Bank, Loan Trustee and Subordination Agent. Each Pass Through Trustee shall have received a certificate from U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, dated the Closing Date, signed by an authorized officer of U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, certifying for each such entity that no Loan Trustee Liens or Other Party Liens attributable to it, as applicable, exist, and further certifying as to the correctness of each of the matters stated in Section 5.01.
(l) [Reserved.]
(m) Insurance Matters. Loan Trustee shall have received an insurance report of an independent insurance broker and the related certificates of insurance, each in form and substance reasonably satisfactory to Loan Trustee, as to the compliance with the terms of Section 7.06 of the Indenture relating to insurance with respect to the Aircraft.
(n) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
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(o) Funding of Pass Through Trusts. Each Pass Through Trustee shall have received in immediately available funds an amount at least equal to the aggregate purchase price of the Equipment Notes to be purchased from Company by such Pass Through Trustee.
(p) Airframe Warranties Agreement. Loan Trustee shall have received an executed copy of the Airframe Warranties Agreement substantially in the form set forth in Exhibit D, together with the “Initial Notice” substantially in the form of Schedule 3 thereunder.
(q) Governmental Approvals. All appropriate action required to have been taken prior to the Closing Date by the FAA or any governmental or political agency, subdivision or instrumentality of the United States in connection with the transactions contemplated by this Agreement has been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be in effect on the Closing Date in connection with the transactions contemplated by this Agreement have been issued.
Promptly upon the recording of the Indenture (with the Indenture Supplement covering the Aircraft attached) pursuant to the Transportation Code and the receipt of appropriate and correct recording information from the FAA, Company will cause Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma to deliver to Subordination Agent, to Pass Through Trustees, to Loan Trustee and to Company an opinion as to the due recording of such instrument and the lack of filing of any intervening documents with respect to the Aircraft.
Section 3.02. Conditions Precedent to Obligations of Company. The obligation of Company to issue and sell the Equipment Notes is subject to the fulfillment (or waiver by Company) prior to or on the Closing Date of the following conditions precedent:
(a) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Company to enter into any transaction contemplated by the Operative Documents or the Pass Through Documents.
(b) Documentation. The documents referred to in Section 3.01(c) shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Company), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to Company, and Company shall have received such documents and evidence with respect to U.S. Bank, each Liquidity Provider, Loan Trustee, Subordination Agent and each Pass Through Trustee as Company reasonably requests in order to establish the consummation of the transactions contemplated by this Agreement, the taking of all corporate and other proceedings in connection therewith and compliance with the conditions herein set forth.
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(c) FAA Filing. The Indenture (with the Indenture Supplement covering the Aircraft attached) shall have been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code. The registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
(d) Representations and Warranties. On the Closing Date, the representations and warranties herein of U.S. Bank, Loan Trustee, Subordination Agent and Pass Through Trustees shall be correct as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall have been correct on and as of such earlier date), and, insofar as such representations and warranties concern U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee, such party shall have so certified to Company.
(e) Certain Opinions and Certificates. Company shall have received each opinion referred to in Sections 3.01(h) and 3.01(i), each such opinion addressed to Company or accompanied by a letter from the counsel rendering such opinion authorizing Company to rely on such opinion as if it were addressed to Company, and the certificates referred to in Sections 3.01(e)(iv) and 3.01(k).
(f) Certain Opinion of Special Delaware Counsel. Company shall have received an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Pass Through Trustees as to tax matters, substantially in the form set forth in Exhibit E-1, and an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Company as to UCC matters, substantially in the form set forth in Exhibit E-2.
(g) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
(h) No Other Party Liens, etc. Company shall have received a certificate from U.S. Bank dated the Closing Date, signed by an authorized officer of U.S. Bank, certifying for each Pass Through Trustee that no Other Party Liens attributable to it exist and further certifying as to the correctness of each of the matters stated in Section 5.01.
(i) Payment for Equipment Notes. Company shall have been paid by each Pass Through Trustee the aggregate original principal amount of the Equipment Notes being issued to such Pass Through Trustee as set forth on Schedule I opposite the name of such Pass Through Trust.
(j) Tax Forms of the Pass Through Trustees. Each Pass Through Trustee shall have provided a completed and executed copy of IRS Form W-9 to each of the Company, the Subordination Agent and the Liquidity Providers.
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ARTICLE 4
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY
Section 4.01. Representations and Warranties of Company. Company represents and warrants that:
(a) Organization; Authority; Qualification. Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, is a Certificated Air Carrier, is a Citizen of the United States, has the corporate power and authority to own its properties or hold them under lease and to enter into and perform its obligations under the Operative Documents to which it is a party and is duly qualified to do business as a foreign corporation in good standing in each other jurisdiction in which the failure to so qualify would have a material adverse effect on the consolidated financial condition of Company and its subsidiaries, considered as a whole, and its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) is Delaware.
(b) Corporate Action and Authorization; No Violations. The execution, delivery and performance by Company of this Agreement and the other Operative Documents to which Company is a party have been duly authorized by all necessary corporate action on the part of Company, do not require any stockholder approval or approval or consent of any trustee or holder of any indebtedness or obligations of Company, except such as have been duly obtained and are in full force and effect, and do not contravene any law, governmental rule, regulation, judgment or order binding on Company or the certificate of incorporation or by-laws of Company or contravene or result in a breach of, or constitute a default under, or result in the creation of any Lien (other than as permitted under the Indenture) upon the property of Company under, any material indenture, mortgage, contract or other agreement to which Company is a party or by which it or any of its properties may be bound or affected.
(c) Governmental Approvals. Neither the execution and delivery by Company of this Agreement and the other Operative Documents to which it is a party, nor the consummation by Company of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with or the taking of any other action in respect of, the Department of Transportation, the FAA or any other federal or state governmental authority or agency, or the International Registry, except for (i) the registration of the issuance and sale of the Pass Through Certificates under the Securities Act and under the securities laws of any state or other jurisdiction in which the Pass Through Certificates may be offered for sale if the laws of such state or other jurisdiction require such action, (ii) the qualification of the Pass Through Trust Agreements under the Trust Indenture Act, (iii)
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the orders, permits, waivers, exemptions, authorizations and approvals of the regulatory authorities having jurisdiction over Company’s ownership or operation of the Aircraft required to be obtained on or prior to the Closing Date, which orders, permits, waivers, exemptions, authorizations and approvals have been duly obtained and are, or on the Closing Date will be, in full force and effect, (iv) the filings and registrations referred to in Section 4.01(e), (v) authorizations, consents, approvals, notices and filings required to be obtained, taken, given or made under securities or Blue Sky or similar laws of the various states and foreign jurisdictions and (vi) consents, approvals, notices, registrations and other actions required to be obtained, given, made or taken only after the date hereof.
(d) Valid and Binding Agreements. This Agreement and each other Operative Document to which Company is a party have been duly executed and delivered by Company and constitute the legal, valid and binding obligations of Company enforceable against Company in accordance with their terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity and except, in the case of the Indenture, as limited by applicable laws that may affect the remedies provided in the Indenture, which laws, however, do not make the remedies provided in the Indenture inadequate for the practical realization of the rights and benefits intended to be provided thereby.
(e) Filings and Recordation. Except for (i) the filing for recordation pursuant to the Transportation Code of the Indenture (with the Indenture Supplement covering the Aircraft attached), (ii) with respect to the security interests created by such documents, the filing of financing statements (and continuation statements at periodic intervals) under the Uniform Commercial Code of Delaware, and (iii) the registration on the International Registry of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement covering the Aircraft), no further filing or recording of any document is necessary under the laws of the United States or any state thereof as of the Closing Date in order to establish and perfect the security interest in the Aircraft created under the Indenture in favor of Loan Trustee as against Company and any third parties in any applicable jurisdiction in the United States.
(f) Investment Company Act. Company is not required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(g) Title. As of the Closing Date, (i) Company has good title to the Aircraft, free and clear of Liens other than Permitted Liens, (ii) the Aircraft has been duly certificated by the FAA as to type and airworthiness in accordance with the terms of the Indenture, (iii) the Indenture (with the Indenture Supplement covering the Aircraft attached) has been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code, (iv) the Aircraft is duly registered (or shall be in the process of being so duly registered) with the FAA in the name of Company, and (v) the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
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(h) Section 1110. Loan Trustee is entitled to the benefits of Section 1110 with respect to the Aircraft being subjected to the Lien of the Indenture on the Closing Date.
(i) Security Interest. The Indenture creates in favor of Loan Trustee, for the benefit of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, a valid and (subject to the filings and registrations referred to in Section 4.01(e)) perfected Lien on the Aircraft purported to be subjected to the Lien of the Indenture on the Closing Date, subject to no equal or prior Lien, except Permitted Liens.
(j) Licenses, Permits and Franchises. Company holds all licenses, permits and franchises from the appropriate government entities necessary to authorize Company lawfully to engage in air transportation and to carry on scheduled commercial passenger service as currently conducted, except where the failure to so hold any such license, permit or franchise would not have a material adverse effect on the financial condition or operations of Company and its consolidated subsidiaries, taken as a whole.
Section 4.02. General Indemnity. (a) Claims Defined. For the purposes of this Section 4.02, “Claims” means any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs or expenses of whatsoever kind and nature (whether or not on the basis of negligence, strict or absolute liability or liability in tort) that may be imposed on, incurred by, suffered by or asserted against an Indemnitee, as defined below, and, except as otherwise expressly provided in this Section 4.02, includes all reasonable out-of-pocket costs, disbursements and expenses (including reasonable out-of-pocket legal fees and expenses) actually incurred by an Indemnitee in connection therewith or related thereto.
(b) Indemnitee Defined. For the purposes of this Section 4.02, “Indemnitee” means (i) U.S. Bank and Loan Trustee, (ii) each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture, (iii) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee, Subordination Agent (iv) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, (v) each Liquidity Provider, (vi) any Related Noteholder, and (vii) each of their respective successors and permitted assigns in such capacities, agents, servants, officers, employees and directors (the respective agents, servants, officers, employees and directors of each of the foregoing Indemnitees, as applicable, together with such Indemnitee, collectively the “Related Indemnitee Group” of such Indemnitee); provided that such Persons, to the extent they are not signatories to this Agreement, have expressly agreed in writing to be bound by the terms of this Section 4.02 prior to, or concurrently with, the making of a Claim. If any Indemnitee fails to comply with any duty or obligation under this Section 4.02 with respect to any Claim, such Indemnitee shall not be entitled to any indemnity with respect to such Claim under this Section 4.02 to the extent such failure was prejudicial to Company. No holder of a Pass Through Certificate in its capacity as such holder shall be an Indemnitee.
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(c) Claims Indemnified. Subject to the exclusions stated in Section 4.02(d), Company agrees to indemnify, protect, defend and hold harmless on an After-Tax Basis each Indemnitee against Claims resulting from or arising out of the sale, purchase, acceptance, non-acceptance or rejection of the Aircraft under the Purchase Agreement or the ownership, possession, use, non-use, substitution, airworthiness, control, maintenance, repair, operation, registration, re-registration, condition, sale, lease, sublease, storage, modification, alteration, return, transfer or other disposition of the Aircraft, the Airframe, any Engine or any Part (including, without limitation, latent or other defects, whether or not discoverable, and any claim for patent, trademark or copyright infringement) by Company, any Permitted Lessee or any other Person. Without limiting the foregoing and subject to, and without duplication of, the provisions of Section 6.01(a), Company agrees to pay the reasonable ongoing fees, and the reasonable out-of-pocket costs and expenses actually incurred (including, without limitation, reasonable attorney’s fees and disbursements actually incurred and, to the extent payable as provided in the Indenture, reasonable compensation and expenses of Loan Trustee’s agents actually incurred), of Loan Trustee in connection with the transactions contemplated hereby.
(d) Claims Excluded. The following are excluded from Company’s agreement to indemnify an Indemnitee under this Section 4.02:
(i) any Claim to the extent such Claim is attributable to acts or events occurring after (A) the Lien of the Indenture has been discharged, or (B) the transfer of possession of the Aircraft pursuant to Article IV of the Indenture except to the extent that such Claim is attributable to acts occurring in connection with the exercise of remedies pursuant to Section 4.02 of the Indenture following the occurrence and continuance of an Event of Default;
(ii) any Claim to the extent such Claim is, or is attributable to, a Tax (or loss of any Tax benefit), except with respect to paying indemnity amounts on an After-Tax Basis;
(iii) any Claim to the extent such Claim is attributable to the negligence or willful misconduct of such Indemnitee or such Indemnitee’s Related Indemnitee Group;
(iv) any Claim to the extent such Claim is attributable to the noncompliance by such Indemnitee or such Indemnitee’s Related Indemnitee Group with any of the terms of, or any misrepresentation by an Indemnitee or its Related Indemnitee Group contained in, this Agreement, any other Operative Document or any Pass Through Document to which such Indemnitee or any of such Related Indemnitee Group is a party or any agreement relating hereto or thereto;
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(v) any Claim to the extent such Claim constitutes a Lien attributable to such Indemnitee;
(vi) any Claim to the extent such Claim is attributable to the offer, sale, assignment, transfer, participation or other disposition (whether voluntary or involuntary) by or on behalf of such Indemnitee or its Related Indemnitee Group (other than during the occurrence and continuance of an Event of Default; provided that any such offer, sale, assignment, transfer, participation or other disposition during the occurrence and continuation of an Event of Default shall not be subject to indemnification unless it is made in accordance with the Indenture and applicable law) of any Equipment Note or interest therein or Pass Through Certificate, all or any part of such Indemnitee’s interest in the Operative Documents or the Pass Through Documents, or any interest in the Collateral or any similar security;
(vii) any Claim to the extent such Claim is attributable to (A) a failure on the part of Loan Trustee to distribute in accordance with this Agreement or any other Operative Document any amounts received and distributable by it hereunder or thereunder, (B) a failure on the part of Subordination Agent to distribute in accordance with the Intercreditor Agreement any amounts received and distributable by it thereunder or (C) a failure on the part of any Pass Through Trustee to distribute in accordance with the Pass Through Trust Agreement to which it is a party any amounts received and distributable by it thereunder;
(viii) any Claim to the extent such Claim is attributable to the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any Operative Document or any Pass Through Document, other than such as have been requested by Company or that occur as the result of an Event of Default, or such as are expressly required or contemplated by the provisions of the Operative Documents or the Pass Through Documents;
(ix) any Claim to the extent such Claim is payable or borne by (A) Company pursuant to any indemnification, compensation or reimbursement provision of any other Operative Document or any Pass Through Document or (B) a Person other than Company pursuant to any provision of any Operative Document or any Pass Through Document;
(x) any Claim to the extent such Claim is an ordinary and usual operating or overhead expense or not an out-of-pocket expense actually incurred;
(xi) any Claim to the extent such Claim is incurred on account of or asserted as a result of (A) any “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code or any foreign, federal, state or local law which is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code (“Similar Law”) or (B) any breach of fiduciary duty under ERISA;
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(xii) any Claim to the extent such Claim is attributable to one or more of the other aircraft financed through the offering of Pass Through Certificates (in the event of doubt, any Claim shall be allocated between the Aircraft and such other aircraft in the same proportion that the then outstanding Equipment Notes bear to the then outstanding equipment notes issued with respect to the other aircraft and held by Pass Through Trustees);
(xiii) any Claim to the extent such Claim is attributable to any amount which any Indemnitee expressly agrees shall not be paid by, borne by, or reimbursed by Company;
(xiv) any Claim by an Indemnitee related to the status of such Indemnitee as a passenger or shipper on any of Company’s aircraft or as a party to a marketing or promotional or other commercial agreement with Company unrelated to the transactions contemplated by the Operative Documents; and
(xv) any Claim to the extent such Claim is attributable to the offer or sale by an Indemnitee (or any member of such Indemnitee’s Related Indemnitee Group) of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or any similar interest, in violation of the Securities Act or other applicable federal, state or foreign securities laws (other than any thereof caused by acts or omissions of Company or any of its affiliates).
(e) Insured Claims. In the case of any Claim indemnified by Company hereunder that is covered by a policy of insurance maintained by Company, each Indemnitee agrees to cooperate, at Company’s expense, with the insurers in the exercise of their rights to investigate, defend and compromise such Claim.
(f) Claims Procedure. An Indemnitee shall promptly notify Company of any Claim as to which indemnification is sought. The failure to provide such prompt notice shall not release Company from any of its obligations to indemnify hereunder except to the extent that Company is prejudiced by such failure or Company’s indemnification obligations are increased as a result of such failure (in which event Company shall not be responsible for such additional indemnification obligations). Such Indemnitee shall promptly submit to Company all additional information in such Indemnitee’s possession to substantiate such Claim as Company reasonably requests. Subject to the rights of Company’s insurers, Company may, at its sole cost and expense, investigate any Claim, and may in its sole discretion defend or compromise any Claim. At Company’s expense, any Indemnitee shall cooperate with all reasonable requests of Company in connection therewith. Such Indemnitee shall not enter into a settlement or other compromise with respect to any Claim without the prior written consent of Company, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Claim. Where Company or its insurers undertake the
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defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the written request of Company or such insurers. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense in any judicial proceeding controlled by Company pursuant to the preceding provisions; provided that such party’s participation does not, in the opinion of outside counsel appointed by Company or its insurers to conduct such proceedings, interfere with such control. Such participation shall not constitute a waiver of the indemnification provided in this Section 4.02. Notwithstanding anything to the contrary contained herein, Company shall not under any circumstances be liable for the fees and expenses of more than one counsel for all Indemnitees with respect to any one Claim. Notwithstanding anything to the contrary contained herein, an Indemnitee shall not under any circumstances be required or deemed to be required to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto. Company will provide the relevant Indemnitee with such information not within the control of such Indemnitee, as is in Company’s control or is reasonably available to Company, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its obligations under this Section. If an Indemnitee is not a party to this Agreement, Company may require such Indemnitee to agree in writing to the terms of this Section 4.02 and Section 7.10 of this Agreement prior to making any payment to such Indemnitee under this Section 4.02.
(g) Subrogation. To the extent that a Claim is in fact paid in full by Company or its insurer, Company or such insurer (as the case may be) shall, without any further action, be subrogated to the rights and remedies of the Indemnitee on whose behalf such Claim was paid with respect to the transaction or event giving rise to such Claim. Such Indemnitee shall give such further assurances or agreements and shall cooperate with Company or such insurer, as the case may be, to permit Company or such insurer to pursue such rights and remedies, if any, to the extent reasonably requested by Company. So long as no Event of Default has occurred and is continuing, if an Indemnitee receives any payment, in whole or in part, from any party other than Company or its insurers with respect to any Claim paid by Company or its insurers, it shall promptly pay over to Company the amount received (but not an amount in excess of the amount Company or any of its insurers has paid in respect of such Claim). Any amount referred to in the preceding sentence that is payable to Company shall not be paid to Company, or, if it has been previously paid directly to Company, shall not be retained by Company, if at the time of such payment an Event of Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under the Operative Documents. If Company agrees, such amount payable shall be applied against Company’s obligations thereunder when and as they become due and payable. At such time as such Event of Default is no longer continuing, such amount, to the extent not previously so applied against Company’s obligations, shall be paid to Company.
(h) No Guaranty. Nothing set forth in this Section 4.02 constitutes a guarantee by Company that the Aircraft at any time will have any particular value, useful life or residual value.
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(i) Payments; Interest. Any amount payable to any Indemnitee on account of a Claim shall be paid within 30 days after receipt by Company of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the Claims that are the subject of and basis for such indemnity and the computation of the amount payable. Any payments made pursuant to this Section 4.02 directly to an Indemnitee or to Company, as the case may be, shall be made in immediately available funds at such bank or to such account as is specified by the payee in written directions to the payor or, if no such directions are given, by check of the payor payable to the order of the payee and mailed to the payee by certified mail, return receipt requested, postage prepaid to its address referred to in Section 7.01. To the extent permitted by applicable law, interest at the Past Due Rate shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 4.02 until the same is paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due.
(j) Tax Deduction or Credit. If, by reason of any payment made to or for the account of any Indemnitee by Company, or by reason of any Claim of any Indemnitee paid or indemnified against by Company, in each case pursuant to Section 4.02, such Indemnitee realizes a Tax deduction or credit not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Company an amount equal to the sum of (i) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (ii) the actual reduction in Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided that the amount payable by such Indemnitee pursuant to this sentence shall not exceed the sum of all amounts previously paid by Company to such Indemnitee pursuant to this Section 4.02; provided, further, that any such excess shall be carried forward and applied to reduce pro tanto any subsequent obligations of Company to make payments to such Indemnitee pursuant to Section 4.02. If such Tax deduction or credit is subsequently disallowed or lost, upon written notice from the Indemnitee Company shall promptly repay all amounts paid to it pursuant to this Section 4.02(j) in respect of such disallowed or lost deduction or credit. If, at the time an amount would otherwise be payable to Company under this Section 4.02(j), any Event of Default shall have occurred and be continuing, such amount shall be held by the relevant Indemnitee as security for the obligations of Company under the Operative Documents. At such time as no Event of Default is continuing, such amount or portion thereof shall be applied to offset Company’s outstanding obligations under the Operative Documents and any remaining amount after such application shall be paid to Company.
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ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK
Section 5.01. Representations, Warranties and Covenants of U.S. Bank. U.S. Bank, generally, and as each of Loan Trustee, Subordination Agent and Pass Through Trustee as it relates to it, represents, warrants and covenants that:
(a) Organization; Authority. U.S. Bank is a national banking association duly organized and validly existing in good standing under the laws of the United States, is eligible to be Loan Trustee under Section 8.01(a) of the Indenture, will promptly comply with Section 8.01(a) of the Indenture and has full power, authority and legal right to enter into and perform its obligations under each of the Operative Documents and the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party and, in its capacity as Loan Trustee and Pass Through Trustee, respectively, to authenticate the Equipment Notes and the Pass Through Certificates, respectively. U.S. Bank is qualified to act as Loan Trustee under Section 8.01(c) of the Indenture. U.S. Bank is a Citizen of the United States (without the use of a voting trust agreement), and will resign as Loan Trustee under the Indenture promptly after it obtains actual knowledge that it has ceased to be such a Citizen of the United States.
(b) Due Authorization; No Violations. The execution, delivery and performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, each of the other Operative Documents and each of the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, the performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of its obligations thereunder and the consummation on the Closing Date or the Issuance Date, as the case may be, of the transactions contemplated thereby, and the authentication of the Equipment Notes and the Pass Through Certificates, respectively, to be delivered on the Closing Date or the Issuance Date, as the case may be: (i) have been duly authorized by all necessary action on the part of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee, as the case may be, (ii) do not violate any law or regulation of the United States or of the state of the United States in which U.S. Bank is located and which governs the banking and trust powers of U.S. Bank or any order, writ, judgment or decree of any court, arbitrator or governmental authority applicable to U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee or any of their assets, (iii) will not violate any provision of the articles of association or by-laws of U.S. Bank and (iv) will not violate any provision of, or constitute a default under, any mortgage, indenture, contract, agreement or undertaking to which any of U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party or by which any of them or their respective properties may be bound or affected.
(c) Approvals. Neither the execution and delivery by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, any other Operative Document or any Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, nor the consummation by U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, (i) any governmental authority or agency of the United States or the state of the United States where U.S. Bank is located and regulating the banking and trust powers of U.S. Bank or (ii) any trustee or other holder of any debt of U.S. Bank.
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(d) Valid and Binding Agreements. This Agreement, each other Operative Document and each Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party have been duly executed and delivered by U.S. Bank, individually and in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, and constitute the legal, valid and binding obligations of U.S. Bank, Loan Trustee, Subordination Agent and such Pass Through Trustee, as the case may be, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity.
(e) No Loan Trustee Liens or Other Party Liens. It unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Loan Trustee Lien or Other Party Lien attributable to it, and it agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Lien.
(f) Intercreditor Agreement. The Equipment Notes to be issued to Subordination Agent pursuant hereto are being acquired by it to be held under the Intercreditor Agreement.
(g) Funds Transfer Fees. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees that it will not impose any lifting charge, cable charge, remittance charge or any other charge or fee on any transfer by Company of funds to, through or by U.S. Bank, Loan Trustee, Subordination Agent or such Pass Through Trustee pursuant to this Agreement, any other Operative Document or any Pass Through Document, except as may be otherwise agreed to in writing by Company.
(h) Confidentiality. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees to be bound by the terms of Section 10.16 of the Indenture.
(i) Certain Tax Matters. There are no Taxes payable by (i) U.S. Bank, Loan Trustee or Subordination Agent imposed by the Commonwealth of Massachusetts or any political subdivision or taxing authority thereof, or (ii) U.S. Bank or Pass Through Trustees imposed by the State of Delaware or any political subdivision or taxing authority thereof, in connection with the execution, delivery or performance by U.S. Bank, Loan Trustee or Subordination Agent on the one hand, or U.S. Bank or any Pass Through Trustee, on the other, of any Operative Document or any Pass Through Document (other than franchise or other Taxes based on or measured by any fees or compensation received by any such Person for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents), and there are no Taxes payable by any Pass Through Trustee imposed by the State of
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Delaware or any political subdivision thereof in connection with the acquisition, possession or ownership by such Pass Through Trustee of any of the Equipment Notes (other than franchise or other Taxes based on or measured by any fees or compensation received by such Pass Through Trustee for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents) and, assuming that the Pass Through Trusts will not be taxable for Federal income tax purposes as corporations, but, rather, will be characterized for such purposes as grantor trusts or partnerships, the Pass Through Trusts will not be subject to any Taxes imposed by the State of Delaware or any political subdivision thereof.
(j) Limitation on Situs of Activities. Except with the consent of Company, which shall not be unreasonably withheld: (i) U.S. Bank will act as Pass Through Trustee solely through its offices within the State of Delaware, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states; and (ii) U.S. Bank will act as Subordination Agent and Loan Trustee solely through its offices within the Commonwealth of Massachusetts, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states.
(k) No Proceedings. There are no pending or, to its knowledge, threatened actions or proceedings against U.S. Bank, Loan Trustee, Subordination Agent or any 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 U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee to perform its obligations under any Operative Document or any Pass Through Document.
(l) Other Representations. The representations and warranties contained in Section 7.15 of the Basic Pass Through Trust Agreement and Section 7.04 of each Trust Supplement are true, complete and correct as of the Closing Date.
ARTICLE 6
OTHER COVENANTS AND AGREEMENTS
Section 6.01. Other Agreements. (a) Fees and Expenses. Company agrees promptly to pay (without duplication of any other obligation Company may have to pay such amounts) (1) the initial and annual fees and (to the extent Loan Trustee is entitled to be reimbursed for its reasonable expenses) the reasonable expenses of Loan Trustee in connection with the transactions contemplated hereby and (2) the following expenses incurred by Loan Trustee, Subordination Agent and Pass Through Trustees in connection with the negotiation, preparation, execution and delivery of this Agreement, the other Operative Documents and the other documents or instruments referred to herein or therein:
(i) the reasonable fees, expenses and disbursements of (A) Shipman & Goodwin LLP, special counsel for Loan Trustee, Subordination Agent and Pass Through Trustees, (B) Richards, Layton & Finger, P.A., special Delaware counsel for Pass Through Trustees and Company, and (C) Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, in each case to the extent actually incurred; and
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(ii) all reasonable expenses actually incurred in connection with printing and document production or reproduction expenses, and in connection with the filing of Uniform Commercial Code financing statements.
(b) Continuing Registration and Re-Registration. Loan Trustee, Noteholders, Subordination Agent and each Pass Through Trustee agree to execute and deliver, at Company’s expense, all such documents and consents as Company reasonably requests for the purpose of continuing the registration of the Aircraft at the FAA in Company’s name or for the purpose of registering or maintaining any registration on the International Registry in respect of the Aircraft. In addition, each of Loan Trustee, Subordination Agent, each Pass Through Trustee and any other Noteholder agrees, for the benefit of Company, to cooperate with Company in effecting any foreign registration of the Aircraft pursuant to Section 7.02(e) of the Indenture; provided that prior to any such change in the country of registry of the Aircraft the conditions set forth in Section 7.02(e) of the Indenture are met to the reasonable satisfaction of, or waived by, Loan Trustee.
(c) Quiet Enjoyment. Each of U.S. Bank, Loan Trustee, Subordination Agent, each Pass Through Trustee, any other Noteholder, Class AA Liquidity Provider (by having entered into the Class AA Liquidity Facility) and Class A Liquidity Provider (by having entered into the Class A Liquidity Facility) agrees that, unless an Event of Default shall have occurred and be continuing, it shall not (and shall not permit any Affiliate or other Person claiming by, through or under it to) take any action contrary to, or otherwise in any way interfere with or disturb (and then only in accordance with the Indenture), the quiet enjoyment of the use and possession of the Aircraft, the Airframe, any Engine or any Part by Company or any transferee of any interest in any thereof permitted under the Indenture.
(d) No Noteholder Liens. Each Noteholder, including, without limitation, Subordination Agent and each Pass Through Trustee, unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Noteholder Liens, and such Noteholder agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Noteholder Lien; and each Noteholder hereby agrees to indemnify, protect, defend and hold harmless each Indemnitee and Company against claims in any way resulting from or arising out of a breach by it of its obligations under this Section 6.01(d).
(e) Agreement to be Bound; Transfer. By its acceptance of its Equipment Notes, each Noteholder unconditionally agrees for the benefit of Company and Loan Trustee: (i) to be bound by and to perform and comply with all of the terms of such Equipment Notes, the Indenture and this Agreement applicable to such Noteholder and (ii) that it will not transfer any Equipment Note (or any part thereof) to any entity unless
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such transfer complies with and does not violate the Transportation Code, the Securities Act (or require registration under such Act) or any other law (including, without limitation, ERISA, the Code and Similar Law), and does not create a relationship that would be in violation thereof, or result in a “prohibited transaction” under Section 406 of ERISA, Section 4975 of the Code or Similar Law or require qualification of an indenture under the Trust Indenture Act.
(f) Tax Returns. Each Pass Through Trustee shall file any Tax returns required to be filed by the related Pass Through Trust and the Company shall pay the Applicable Portion of any expenses relating thereto. The Company shall be responsible for the Applicable Portion of any interest or penalties related to any Pass Through Trustee’s failure to file any such Tax returns required to be filed by the relevant Pass Through Trust, except to the extent that such failure is attributable to the gross negligence or willful misconduct of such Pass Through Trustee. For purposes of this Section 6.01(f), the “Applicable Portion” of any amount shall equal such amount multiplied by a fraction, the numerator of which shall be the sum of the then outstanding aggregate principal amount of the Equipment Notes held by the relevant Pass Through Trustee, and the denominator of which shall be the sum of the outstanding aggregate principal amount of all “Equipment Notes” issued under each of the “Indentures” (in each case as defined in the Intercreditor Agreement) held by such Pass Through Trustee.
(g) No Petition. Each of Company, Loan Trustee, each Pass Through Trustee, Subordination Agent and any other Noteholder covenants that (i) until one year and one day after the Series AA Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class AA Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class AA Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class AA Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class AA Pass Through Trust, (ii) until one year and one day after the Series A Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class A Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class A Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class A Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class A Pass Through Trust, and (iii) if any Additional Series Equipment Notes of any Series shall have been issued, until one year and one day after such Additional Series Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the related Additional Series Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against such Additional Series Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Additional Series Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of such Additional Series Pass Through Trust.
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Section 6.02. Certain Covenants of Company. Company covenants and agrees with Loan Trustee as follows:
(a) Further Assurances. On and after the Closing, Company will cause to be done, executed, acknowledged and delivered such further acts, conveyances and assurances as Loan Trustee reasonably requests for accomplishing the purposes of this Agreement and the other Operative Documents; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
(b) Filing and Recordation of the Indenture; Registration of International Interests. Company, at its expense, will cause the Indenture (with the Indenture Supplement covering the Aircraft attached) to be promptly filed and recorded, or filed for recording, with the FAA to the extent permitted under the Transportation Code and the rules and regulations of the FAA thereunder. In addition, on or prior to the Closing Date, Company will cause the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) to be effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty, and shall, as and to the extent applicable, consent to such registration upon the issuance of a request for such consent by the International Registry.
(c) Maintenance of Filings. Company, at its expense, will take, or cause to be taken, such action with respect to the recording, filing, re-recording and refiling of the Indenture and any financing statements or other instruments as are necessary to maintain, so long as the Indenture is in effect, the perfection of the security interests created by the Indenture or will furnish Loan 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 Loan Trustee to take such action. In addition, Company will pay any and all recording, stamp and other similar Taxes payable in the United States, and in any other jurisdiction where the Aircraft is registered, in connection with the execution, delivery, recording, filing, re-recording and refiling of the Indenture or any such financing statements or other instruments. Company will notify Loan Trustee of any change in its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) promptly after making such change or in any event within the period of time necessary under applicable law to prevent the lapse of perfection (absent refiling) of financing statements filed under the Operative Documents.
(d) Maintenance of Corporate Existence. Company shall at all times maintain its corporate existence except as permitted by Section 6.02(e).
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(e) Merger; Consolidation; Transfer of Substantially All Assets. Company shall not consolidate with or merge into any other Person or convey, transfer or lease substantially all of its assets as an entirety to any Person, unless:
(i) the successor or transferee entity shall, if and to the extent required under Section 1110 in order that Loan Trustee continues to be entitled to any benefits of Section 1110 with respect to the Aircraft, be a Citizen of the United States and a Certificated Air Carrier and shall execute and deliver to Loan Trustee an agreement containing the express assumption by such successor or transferee entity of the due and punctual performance and observance of each covenant and condition of the Operative Documents to which Company is a party to be performed or observed by Company;
(ii) if the Aircraft is, at the time, registered with the FAA or such Person is located in a “Contracting State” (as such term is used in the Cape Town Treaty), such Person makes such filings and recordings with the FAA pursuant to the Transportation Code and registration under the Cape Town Treaty, or if the Aircraft is, at the time, not registered with the FAA, such Person makes such filings and recordings with the applicable aviation authority, as are necessary to evidence such consolidation, merger, conveyance, transfer or lease;
(iii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing; and
(iv) Company shall deliver to Loan Trustee and each Liquidity Provider a certificate signed by a Responsible Officer of Company stating that such consolidation, merger, conveyance, transfer or lease and the assumption agreement mentioned in clause (i) above comply with this Section 6.02(e) and that all conditions precedent herein relating to such transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease of substantially all of the assets of Company as an entirety in accordance with this Section 6.02(e), the successor Person formed by such consolidation or into which Company 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, Company under this Agreement and the other Operative Documents with the same effect as if such successor Person had been named as Company herein.
(f) Section 1110. Company shall remain a Certificated Air Carrier for as long as and to the extent required under Section 1110 in order that Loan Trustee shall be entitled to any of the benefits of Section 1110 with respect to the Aircraft.
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(g) Additional Information. Promptly after the occurrence of a Triggering Event or an Indenture Event of Default resulting from the failure of Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Event of Default shall be continuing, Company will, at the Subordination Agent’s request from time to time but in any event no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the following information with respect to the Aircraft if then subject to the lien of the Indenture: (A) whether the Aircraft is currently in service or parked in storage, (B) the maintenance status of the Aircraft, and (C) the location of the Engines. As used in this Section 6.02(g), the terms “Triggering Event”, “Indenture Event of Default” and “Regular Distribution Date” shall have the respective meanings set forth in the Intercreditor Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and any such notice may be given by United States mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class United States mail, and if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233
if to any Pass Through Trustee, addressed to:
U.S. Bank Trust National Association
300 Delaware Avenue, 9th Floor
Mail Code EX-DE-WDAW
Wilmington, Delaware 19801
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (302) 576-3703
Facsimile: (302) 576-3717
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with a copy to:
U.S. Bank Trust National Association
One Federal Street
EX-MA-FED, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
if to U.S. Bank, Loan Trustee or Subordination Agent, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
or if to any subsequent Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07 of the Indenture.
Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 7.01.
Section 7.02. Survival of Representations, Warranties, Indemnities, Covenants and Agreements. The indemnities set forth in Section 4.02 of this Agreement and the confidentiality obligations set forth in Section 5.01(h) of this Agreement shall survive the making of the loans, the transfer of any interest by any Noteholder of its Equipment Note and the expiration or termination of any Operative Documents (in the case of the indemnities, to the extent arising out of acts or events occurring prior to such expiration or termination).
Section 7.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
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Section 7.04. Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.05. No Oral Modifications or Continuing Waivers; Consents. Subject to Section 9.03 of the Indenture, no terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge or termination is sought. No such change, waiver, discharge or termination shall be effective unless a signed copy thereof is delivered to Loan Trustee.
Section 7.06. Effect of Headings and Table of Contents. The headings of the various Articles and Sections herein and in the Table of Contents are for convenience of reference only and do not define or limit any of the terms or provisions hereof.
Section 7.07. Successors and Assigns. All covenants, agreements, representations and warranties in this Agreement by Company, by U.S. Bank, individually or as Loan Trustee, Subordination Agent or Pass Through Trustee, or by any Noteholder, shall bind and inure to the benefit of and be enforceable by Company, and subject to the terms of Section 6.02(e), its successors and permitted assigns, each Pass Through Trustee and any successor or other trustee under the Pass Through Trust Agreement to which it is a party, Subordination Agent and its successor under the Intercreditor Agreement and Loan Trustee and its successor under the Indenture, whether so expressed or not.
Section 7.08. Benefits of Agreement. Subject to the next sentence, nothing in this Agreement, express or implied, gives to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement, except as expressly provided herein. Company agrees and acknowledges that each Liquidity Provider, and each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture shall be third party beneficiaries of the covenants and agreements of Company with respect to the indemnities contained in Section 4.02 and may rely on the covenants and agreements of Company with respect to such indemnities to the same extent as if the covenants and agreements of Company with respect to such indemnities were made to such Liquidity Provider or such trustee, as the case may be, directly. U.S. Bank generally, and each of the Loan Trustee, the Subordination Agent and each Pass Through Trustee, insofar as relating to each such Person, agrees and acknowledges that each Liquidity Provider is a third party beneficiary of the representations and warranties set forth in Section 5.01, and that such Liquidity Provider may rely on such representations and warranties to the same extent as if such representations and warranties were made to such Liquidity Provider directly.
Section 7.09. Counterparts. This Agreement may be executed in any number of counterparts. Each of the parties hereto shall not be required to execute the same counterpart. Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts shall together constitute one instrument.
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Section 7.10. Submission to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
Section 7.11. Further Assurances. Each party hereto shall execute, acknowledge and deliver or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, including, without limitation, making or consenting to registrations (or discharges thereof, as appropriate) with respect to the Indenture on the International Registry and appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to make or consent to any registrations (or discharges thereof, as appropriate) on the International Registry with respect to the Airframe or any Engine, in any case, as any other party hereto shall reasonably request in connection with the administration of, or to carry out more effectively the purposes of, or to better assure and confirm into such other party the rights and benefits to be provided under this Agreement, the other Operative Documents and the Pass Through Documents.
Section 7.12. Section 1110. It is the intention of each of Company, Noteholders (such intention being evidenced by each of their acceptance of an Equipment Note), Loan Trustee and other parties hereto that the security interest created by the Indenture, to the fullest extent available under applicable law, entitles the Loan Trustee, on behalf of the Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft, Airframe, Engines and Parts.
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IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Pass Through Trustee under each of the Pass Through Trust Agreements |
||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent |
||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
|
U.S. BANK TRUST NATIONAL ASSOCIATION, as Loan Trustee |
||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
|
U.S. BANK TRUST NATIONAL ASSOCIATION, in its individual capacity as set forth herein |
||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page for Participation Agreement (N301DV)
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SCHEDULE I to
PARTICIPATION AGREEMENT
EQUIPMENT NOTES,
PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS
|
Purchaser |
Description of Equipment Notes |
Maturity |
Interest
Rate |
Original Principal
Amount |
||||||||
|
Delta Air Lines Pass Through Trust 2020-1AA |
Series 2020-1AA-N301DV Equipment Note | June 10, 2028 | 2.000 | % | $ | 22,203,000.00 | ||||||
|
Delta Air Lines Pass Through Trust 2020-1A |
Series 2020-1A-N301DV Equipment Note | June 10, 2028 | 2.500 | % | $ | 5,694,000.00 | ||||||
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SCHEDULE II to
PARTICIPATION AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1AA.
Trust Supplement No. 2020-1A, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1A.
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EXHIBIT A-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
COUNSEL FOR COMPANY
[Attached.]
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EXHIBIT A-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR COMPANY
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
EXHIBIT B to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR LOAN TRUSTEE, PASS THROUGH TRUSTEES,
SUBORDINATION AGENT AND U.S. BANK
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
EXHIBIT C to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL FAA COUNSEL
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
EXHIBIT D to
PARTICIPATION AGREEMENT
FORM OF AIRFRAME WARRANTIES AGREEMENT
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
EXHIBIT E-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF SPECIAL DELAWARE TAX COUNSEL FOR PASS THROUGH TRUSTEES
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
EXHIBIT E-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF SPECIAL DELAWARE UCC COUNSEL FOR COMPANY
[Attached.]
Participation Agreement (2020-1 EETC)
N301DV
Exhibit 4.9
Execution Version
INDENTURE AND SECURITY AGREEMENT
(N301DV)
Dated as of March 12, 2020
between
DELTA AIR LINES, INC.,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee
One Airbus A321-211
(Generic Manufacturer and Model Airbus A321) Aircraft
U.S. Registration No. N301DV
Indenture and Security Agreement (2020-1 EETC)
N301DV
Table of Contents
| Page | ||||||
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ARTICLE I DEFINITIONS |
7 | |||||
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Section 1.01 |
Definitions |
7 | ||||
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Section 1.02 |
Other Definitional Provisions |
7 | ||||
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ARTICLE II THE EQUIPMENT NOTES |
8 | |||||
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Section 2.01 |
Form of Equipment Notes |
8 | ||||
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Section 2.02 |
Issuance and Terms of Equipment Notes |
14 | ||||
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Section 2.03 |
Method of Payment |
16 | ||||
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Section 2.04 |
Withholding Taxes |
17 | ||||
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Section 2.05 |
Application of Payments |
17 | ||||
|
Section 2.06 |
Termination of Interest in Collateral |
18 | ||||
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Section 2.07 |
Registration, Transfer and Exchange of Equipment Notes |
18 | ||||
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Section 2.08 |
Mutilated, Destroyed, Lost or Stolen Equipment Notes |
20 | ||||
|
Section 2.09 |
Payment of Expenses on Transfer; Cancellation |
20 | ||||
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Section 2.10 |
Mandatory Redemption of Equipment Notes |
20 | ||||
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Section 2.11 |
Voluntary Redemption of Equipment Notes |
20 | ||||
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Section 2.12 |
Redemptions; Notice of Redemptions; Repurchases |
22 | ||||
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Section 2.13 |
Subordination |
22 | ||||
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Section 2.14 |
Certain Payments |
24 | ||||
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Section 2.15 |
Repayment of Monies for Equipment Note Payments Held by Loan Trustee |
26 | ||||
|
Section 2.16 |
Directions by Subordination Agent |
26 | ||||
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ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE COLLATERAL |
27 | |||||
|
Section 3.01 |
Basic Distributions |
27 | ||||
|
Section 3.02 |
Event of Loss; Optional Redemption |
28 | ||||
|
Section 3.03 |
Payments After Event of Default |
29 | ||||
|
Section 3.04 |
Certain Payments |
34 | ||||
|
Section 3.05 |
Payments to Company |
34 | ||||
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Section 3.06 |
Cooperation |
35 | ||||
|
Section 3.07 |
Securities Account |
35 | ||||
|
ARTICLE IV EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE |
36 | |||||
|
Section 4.01 |
Events of Default |
36 | ||||
|
Section 4.02 |
Remedies |
38 | ||||
|
Section 4.03 |
Remedies Cumulative |
42 | ||||
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Table of Contents
(Continued)
| Page | ||||||
|
Section 4.04 |
Discontinuance of Proceedings |
42 | ||||
|
Section 4.05 |
Waiver of Past Defaults |
42 | ||||
|
Section 4.06 |
Noteholders May Not Bring Suit Except Under Certain Conditions |
43 | ||||
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Section 4.07 |
Appointment of a Receiver |
43 | ||||
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ARTICLE V DUTIES OF LOAN TRUSTEE |
44 | |||||
|
Section 5.01 |
Notice of Event of Default |
44 | ||||
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Section 5.02 |
Action upon Instructions; Certain Rights and Limitations |
44 | ||||
|
Section 5.03 |
Indemnification |
45 | ||||
|
Section 5.04 |
No Duties Except as Specified in Indenture or Instructions |
45 | ||||
|
Section 5.05 |
No Action Except under Indenture or Instructions |
45 | ||||
|
Section 5.06 |
Investment of Amounts Held by Loan Trustee |
45 | ||||
|
ARTICLE VI LOAN TRUSTEE |
47 | |||||
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Section 6.01 |
Acceptance of Trusts and Duties |
47 | ||||
|
Section 6.02 |
Absence of Certain Duties |
47 | ||||
|
Section 6.03 |
No Representations or Warranties as to the Documents |
47 | ||||
|
Section 6.04 |
No Segregation of Monies; No Interest |
47 | ||||
|
Section 6.05 |
Reliance; Agents; Advice of Counsel |
48 | ||||
|
Section 6.06 |
Instructions from Noteholders |
48 | ||||
|
ARTICLE VII OPERATING COVENANTS OF COMPANY |
48 | |||||
|
Section 7.01 |
Liens |
48 | ||||
|
Section 7.02 |
Possession, Operation and Use, Maintenance and Registration |
50 | ||||
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Section 7.03 |
Inspection; Financial Information |
57 | ||||
|
Section 7.04 |
Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines |
58 | ||||
|
Section 7.05 |
Loss, Destruction or Requisition |
64 | ||||
|
Section 7.06 |
Insurance |
70 | ||||
|
ARTICLE VIII SUCCESSOR AND ADDITIONAL TRUSTEES |
78 | |||||
|
Section 8.01 |
Resignation or Removal; Appointment of Successor |
78 | ||||
|
Section 8.02 |
Appointment of Additional and Separate Trustees |
80 | ||||
|
ARTICLE IX AMENDMENTS AND WAIVERS |
82 | |||||
|
Section 9.01 |
Amendments to this Indenture without Consent of Holders |
82 | ||||
|
Section 9.02 |
Amendments to this Indenture with Consent of Holders |
83 | ||||
|
Section 9.03 |
Amendments, Waivers, Etc. of the Participation Agreement |
85 | ||||
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Table of Contents
(Continued)
| Page | ||||||
|
Section 9.04 |
Revocation and Effect of Consents |
85 | ||||
|
Section 9.05 |
Notation on or Exchange of Equipment Notes |
85 | ||||
|
Section 9.06 |
Trustee Protected |
85 | ||||
|
Section 9.07 |
No Consent of Individual Indenture Indemnitees Required |
86 | ||||
|
ARTICLE X MISCELLANEOUS |
86 | |||||
|
Section 10.01 |
Termination of Indenture |
86 | ||||
|
Section 10.02 |
No Legal Title to Collateral in Noteholders |
86 | ||||
|
Section 10.03 |
Sale of Aircraft by Loan Trustee is Binding |
87 | ||||
|
Section 10.04 |
Indenture for Benefit of Company, Loan Trustee and Noteholders |
87 | ||||
|
Section 10.05 |
Notices |
87 | ||||
|
Section 10.06 |
Severability |
88 | ||||
|
Section 10.07 |
No Oral Modification or Continuing Waivers |
88 | ||||
|
Section 10.08 |
Successors and Assigns |
89 | ||||
|
Section 10.09 |
Headings |
89 | ||||
|
Section 10.10 |
Normal Commercial Relations |
89 | ||||
|
Section 10.11 |
Voting by Noteholders |
89 | ||||
|
Section 10.12 |
Section 1110 |
89 | ||||
|
Section 10.13 |
Company’s Performance and Rights |
89 | ||||
|
Section 10.14 |
Counterparts |
90 | ||||
|
Section 10.15 |
Governing Law |
90 | ||||
|
Section 10.16 |
Confidential Information |
90 | ||||
|
Section 10.17 |
Submission to Jurisdiction |
90 | ||||
| Exhibit A |
Form of Indenture Supplement |
|
| Exhibit B |
List of Permitted Countries |
|
| Exhibit C |
Certain Terms |
|
| Schedule I |
Description of Equipment Notes |
|
| Schedule II |
Pass Through Trust Agreement and Pass Through Trust Supplements |
|
| Annex A |
Definitions |
|
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INDENTURE AND SECURITY AGREEMENT
(N301DV)
This INDENTURE AND SECURITY AGREEMENT (N301DV), dated as of March 12, 2020, is made by and between DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly stated herein, but solely as Loan Trustee hereunder (together with its permitted successors hereunder, “Loan Trustee”).
W I T N E S S E T H:
WHEREAS, the parties desire by this Indenture (such term and other capitalized terms used herein without definition being defined as provided in Article I), among other things, to provide for (i) the issuance by Company of the Equipment Notes specified on Schedule I hereto and one or more Additional Series and (ii) the assignment, mortgage and pledge by Company to Loan Trustee, as part of the Collateral hereunder, among other things, of all of Company’s estate, right, title and interest in and to the Aircraft, as security for, among other things, Company’s obligations to Loan Trustee, for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, subject to Section 2.13 and Article III;
WHEREAS, all things have been done to make the Equipment Notes of the Series listed on Schedule I hereto, when executed by Company and authenticated and delivered by Loan Trustee hereunder, the valid, binding and enforceable obligations of Company; and
WHEREAS, all things necessary to make this Indenture a legal, valid and binding obligation of Company for the uses and purposes herein set forth, in accordance with its terms, have been done and performed and have occurred;
GRANTING CLAUSE
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and the Related
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Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under, all and singular, the following described properties, rights, interests and privileges, whether now owned or hereafter acquired (which, collectively, together with all property hereafter specifically subject to the Lien of this Indenture by the terms hereof or any supplement hereto, are included within, and are referred to as, the “Collateral”):
(1) the Aircraft, including the Airframe and the Engines, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided herein, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto (such Airframe and Engines as more particularly described in the Indenture Supplement executed and delivered with respect to the Aircraft on the Closing Date or with respect to any substitutions or replacements therefor) and together with all logs, manuals, modification and maintenance records at any time required to be maintained with respect to the Aircraft in accordance with the rules and regulations of the FAA if the Aircraft is registered under the laws of the United States or the rules and regulations of the government of the country of registry if the Aircraft is registered under the laws of a jurisdiction other than the United States;
(2) all requisition proceeds with respect to the Aircraft or any Part thereof, and all insurance proceeds with respect to the Aircraft or any Part thereof, but excluding all proceeds of, and rights under, any insurance maintained by Company and not required, or in excess of that required, under Section 7.06(c);
(3) all moneys and securities held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03, all rents, revenues and other proceeds collected by Loan Trustee pursuant to Section 4.02(a), all moneys and securities from time to time paid or deposited or required to be paid or deposited to or with Loan Trustee by or for the account of Company pursuant to any term of any Operative Document and held or required to be held by Loan Trustee hereunder or thereunder, including the Securities Account and all monies and securities deposited into the Securities Account; and
(4) all proceeds of the foregoing;
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PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so long as no Event of Default shall have occurred and be continuing, Company or, if a lease to a Permitted Lessee is then in effect, such Permitted Lessee, shall have the right, to the exclusion of Loan Trustee, (i) to quiet enjoyment of the Aircraft, the Airframe, the Parts and the Engines, and to possess, use, retain and control the Aircraft, the Airframe, the Parts and the Engines and all revenues, income and profits derived therefrom and (ii) with respect to the Airframe Warranties Agreement, to exercise in Company’s name all rights and powers of Company in its capacity as “Entitled Party” under the Airframe Warranties Agreement and to retain any recovery or benefit resulting from the enforcement of any warranty or indemnity or other obligation under the Airframe Warranties Agreement;
TO HAVE AND TO HOLD all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in this Indenture, including Section 2.13 and Article III, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other, by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and in all cases and as to all property specified in paragraphs (1) through (4) inclusive above, subject to the terms and provisions set forth in this Indenture.
It is expressly agreed that notwithstanding anything herein to the contrary, Company shall remain liable under the Purchase Agreement to perform all of its obligations thereunder, and, except to the extent expressly provided in any Operative Document, none of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee shall be required or obligated in any manner to perform or fulfill any obligations of Company under or pursuant to any Operative Document, or have any obligation or liability under the Purchase Agreement by reason of or arising out of the assignment hereunder, or to make any inquiry as to the nature or sufficiency of any payment received by it, or present or file any claim or take any action to collect or enforce the payment of any amount that may have been assigned to it or to which it may be entitled at any time or times.
Subject to the terms and conditions hereof, Company does hereby irrevocably constitute Loan Trustee the true and lawful attorney of Company (which appointment is coupled with an interest) with full power (in the name of Company or otherwise) to ask for, require, demand and receive any and all monies and claims for monies (in each case including insurance and requisition proceeds) due and to become due to Company under or arising out of the Purchase Agreement (to the extent assigned hereby), and all other property which now or hereafter constitutes part of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or to take
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6
any action or to institute any proceedings which Loan Trustee may deem to be necessary or advisable in the premises; provided that Loan Trustee shall not exercise any such rights except during the continuance of an Event of Default. Company agrees that, promptly upon receipt thereof, to the extent required by the Operative Documents, it will transfer to Loan Trustee any and all monies from time to time received by Company constituting part of the Collateral, for distribution by Loan Trustee pursuant to this Indenture.
Company does hereby warrant and represent that it has not sold, assigned or pledged, and hereby covenants and agrees that it will not sell, assign or pledge, so long as this Indenture shall remain in effect and the Lien hereof shall not have been released pursuant to the provisions hereof, any of its estate, right, title or interest hereby assigned, to any Person other than Loan Trustee, except as otherwise provided in or permitted by any Operative Document.
Company agrees that at any time and from time to time, upon the written request of Loan Trustee, Company shall promptly and duly execute and deliver or cause to be duly executed and delivered any and all such further instruments and documents as Loan Trustee may reasonably deem necessary to perfect, preserve or protect the mortgage, security interests and assignments created or intended to be created hereby or to obtain for Loan Trustee the full benefit of the assignment hereunder and of the rights and powers herein granted; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, unless the context otherwise requires, capitalized terms used but not defined herein have the respective meanings set forth or incorporated by reference in Annex A.
Section 1.02 Other Definitional Provisions.
(a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
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(b) All references in this Indenture to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Indenture, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Indenture to a “government” are to such government and any instrumentality or agency thereof.
(f) All references in this Indenture to a Person shall include successors and permitted assigns of such Person.
ARTICLE II
The Equipment Notes
Section 2.01 Form of Equipment Notes. The Equipment Notes shall be substantially in the form set forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE OR OTHER LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. IN ADDITION, THIS EQUIPMENT NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.
Indenture and Security Agreement (2020-1 EETC)
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DELTA AIR LINES, INC.
SERIES 2020-1[ ]-[ ]
EQUIPMENT NOTE DUE [MATURITY DATE]
ISSUED IN CONNECTION WITH THE AIRBUS MODEL A321-211 (GENERIC MANUFACTURER AND MODEL AIRBUS MODEL A321 AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N301DV
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No. |
Date: | |||
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DEBT RATE |
MATURITY DATE | |||
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DELTA AIR LINES, INC. (together with its successors and permitted assigns, “Company”) hereby promises to pay to , or the registered assignee thereof, the principal amount of Dollars ($ ) in installments on the Payment Dates set forth in Schedule I hereto, each such installment to be in an amount computed by multiplying the original principal amount of this Equipment Note by the percentage set forth in Schedule I hereto opposite the Payment Date on which such installment is due, and to pay interest in arrears on each Payment Date at the Debt Rate shown above on the principal amount remaining unpaid from time to time (calculated on the basis of a year of 360 days comprised of twelve 30-day months) from the date hereof, or from the most recent date to which interest hereon has been paid or duly provided for, until paid in full. Notwithstanding the foregoing, the final payment made on this Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, this Equipment Note. Notwithstanding anything to the contrary contained herein, if any date on which a payment under this Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
For purposes hereof, the term “Indenture” means the Indenture and Security Agreement (N301DV), dated as of March 12, 2020, between Company and U.S. Bank Trust National Association, as Loan Trustee (“Loan Trustee”), as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms. All capitalized terms used in this Equipment Note and not defined herein, unless the context otherwise requires, shall have the respective meanings set forth or incorporated by reference, and shall be construed and interpreted in the manner described, in the Indenture.
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This Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest, and any other amounts payable hereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue if not paid in the manner provided herein or in the Indenture when due (whether at stated maturity, by acceleration or otherwise).
There shall be maintained an Equipment Note Register for the purpose of registering transfers and exchanges of Equipment Notes at the Corporate Trust Office of Loan Trustee, or at the office of any successor trustee, in the manner provided in Section 2.07 of the Indenture.
The principal amount and interest and other amounts due hereunder shall be payable in Dollars in immediately available funds at the Corporate Trust Office of Loan Trustee, or as otherwise provided in the Indenture. Company shall not have any responsibility for the distribution of any such payment to Noteholder of this Equipment Note. Each such payment shall be made on the date such payment is due and without any presentment or surrender of this Equipment Note, except that in the case of any final payment with respect to this Equipment Note, this Equipment Note shall be surrendered to Loan Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees that, except as provided in the Indenture, including the subordination provisions referred to below, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest received by it hereunder shall be applied: first, to the payment of accrued interest on this Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts hereunder) to the date of such payment; second, to the payment of Make-Whole Amount, if any, with respect to this Equipment Note; third, to the payment of the principal amount of this Equipment Note (or portion thereof) then due hereunder, if any; and fourth, the balance, if any, remaining thereafter to the payment of installments of the principal amount of this Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the Indenture which have been or are to be issued by Company pursuant to the terms of the Indenture. The Collateral is held by Loan Trustee as security, in part, for the Equipment Notes. The provisions of this Equipment Note are subject to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through
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Documents. Reference is hereby made to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents for a complete statement of the rights and obligations of the holder of, and the nature and extent of the security for, this Equipment Note (including as a “Related Equipment Note” under each Related Indenture) and the rights and obligations of the holders of, and the nature and extent of the security for, any other Equipment Notes executed and delivered under the Indenture, to all of which terms and conditions in the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents each holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain limitations therein set forth, this Equipment Note is exchangeable for an equal aggregate principal amount of Equipment Notes of the same Series of different authorized denominations, as requested by the holder surrendering the same. Prior to the due presentment for registration of transfer of this Equipment Note, Company and Loan Trustee shall deem and treat the Person in whose name this Equipment Note is registered on the Equipment Note Register as the absolute owner and holder hereof for the purpose of receiving all amounts payable with respect to this Equipment Note and for all purposes, and neither Company nor Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise. In addition, this Equipment Note may be accelerated as provided in Section 4.02 of the Indenture.
This Equipment Note is subject to certain restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, as further specified in Section 2.07 of the Indenture, to all of which terms and conditions in the Intercreditor Agreement each holder hereof agrees by its acceptance of this Equipment Note.
The holder hereof, by its acceptance of this Equipment Note, agrees that no payment or distribution shall be made on or in respect of the Secured Obligations (as defined in the Indenture) or the Secured Obligations (as defined in any Related Indenture) owed to such holder, including, without limitation, any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) of the Indenture or after the commencement of any proceedings of the type referred to in Sections 4.01 (g), (h) or (i) of the Indenture, except, in each case, as expressly provided in Article III of the Indenture or Article III of the applicable Related Indenture, as appropriate.
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The indebtedness evidenced by this Equipment Note is[,]1 [(i) to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of [Series AA Equipment Notes]2 [Series AA Equipment Notes and Series A Equipment Notes]3 [Series AA Equipment Notes, Series A Equipment Notes and [ ]4]5, and certain other Secured Obligations, and (ii)]6 to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes” issued under such Related Indenture, and this Equipment Note is issued subject to such provisions. The Noteholder of this Equipment Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in the Indenture or the applicable Related Indenture and (c) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
Without limiting the foregoing, the holder hereof, by its acceptance of this Equipment Note, agrees that if such holder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligation in respect of this Equipment Note that it is not entitled to receive under Section 2.13 or Article III of the Indenture, it shall hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III of the Indenture.
Unless the certificate of authentication hereon has been executed by or on behalf of Loan Trustee by manual signature, this Equipment Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
| 1 |
To be inserted in the case of a Series AA Equipment Note. |
| 2 |
To be inserted in the case of a Series A Equipment Note. |
| 3 |
To be inserted in the case of the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 4 |
To insert each Series of Additional Series Equipment Notes that rank senior in priority of payment to the Series of Additional Series Equipment Notes being issued. |
| 5 |
To be inserted in the case of each Series of Additional Series Equipment Notes other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 6 |
To be inserted in the case of a Series A Equipment Note or an Additional Series Equipment Note. |
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THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
IN WITNESS WHEREOF, Company has caused this Equipment Note to be executed in its corporate name by its officer thereunto duly authorized on the date hereof.
| DELTA AIR LINES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
LOAN TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned Indenture.
| U.S. BANK TRUST NATIONAL ASSOCIATION, | ||
| not in its individual capacity but solely as Loan Trustee | ||
| By: |
|
|
| Authorized Signatory | ||
SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
|
Payment Date |
Percentage of Original
|
[SEE “EQUIPMENT NOTES AMORTIZATION” ON SCHEDULE I TO
INDENTURE]
* * *
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Section 2.02 Issuance and Terms of Equipment Notes. The Equipment Notes shall be dated the date of issuance thereof, shall be issued in (a) separate Series consisting of Series AA Equipment Notes, Series A Equipment Notes and one or more Additional Series Equipment Notes (if issued) and (b) the maturities and principal amounts and shall bear interest at the applicable Debt Rates specified in Schedule I. On the Closing Date, each Series AA Equipment Note and Series A Equipment Note shall be issued to Subordination Agent on behalf of Pass Through Trustee for the applicable Pass Through Trust created under the Pass Through Trust Agreements referred to in Schedule II. Subject to compliance with the conditions set forth in Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and from time to time (i) to issue one or more Series of Additional Series Equipment Notes under this Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time), (ii) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) pursuant to, and in accordance with, the provisions of Section 2.11(b) and to issue under this Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, and (iii) following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes of any Series or new Additional Series Equipment Notes of any Series are issued after the Closing Date in accordance with the immediately preceding sentence, such Equipment Notes shall be dated the date of original issuance thereof and shall have such maturities, principal amounts and interest rate as specified in an amendment to this Indenture. The Equipment Notes shall be issued in registered form only. The Equipment Notes shall be issued in denominations of $1,000 and integral multiples thereof, except that one Equipment Note of each Series may be in an amount that is not an integral multiple of $1,000. For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Note” of any series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under this Indenture.
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Each Equipment Note shall bear interest at the Debt Rate specified for the applicable Series (calculated on the basis of a year of 360 days comprised of twelve 30-day months), payable in arrears on each Payment Date on the unpaid principal amount thereof from time to time outstanding from the most recent Payment Date to which interest has been paid or duly provided for (or, if no interest has been so paid or provided for, from the date of issuance of such Equipment Note) until such principal amount is paid in full, as further provided in the form of Equipment Note set forth in Section 2.01. The principal amount of each Series AA Equipment Note and each Series A Equipment Note shall be payable in installments or in a single payment on the Payment Dates set forth in such Equipment Note, each such installment, if any, to be in an amount computed by multiplying the original principal amount of such Equipment Note by the corresponding percentage set forth in Schedule I hereto applicable to such Series, the applicable portion of which shall be attached as Schedule I to such Equipment Note, opposite the Payment Date on which such installment is due. Each Additional Series Equipment Note, if issued, shall be payable in installments or in a single payment as set forth in an amendment to this Indenture, and if payable in installments, such installments shall be calculated as set forth in the preceding sentence. Notwithstanding the foregoing, the final payment made under each Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, such Equipment Note. Each Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not at the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest and any other amounts payable thereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue under an Equipment Note if not paid in the manner provided therein or in this Indenture when due (whether at stated maturity, by acceleration or otherwise). Notwithstanding anything to the contrary contained herein, if any date on which a payment hereunder or under any Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if such payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
The Equipment Notes shall be executed on behalf of Company by the manual or facsimile signature of one of its authorized officers. Equipment Notes bearing the signatures of individuals who were at the time of execution the proper officers of Company shall bind Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Equipment Notes or did not hold such offices at the respective dates of such Equipment Notes. No Equipment Note shall be secured by or entitled to any benefit under this Indenture or be valid or obligatory for any purposes unless there appears on such Equipment Note a certificate of authentication in the form provided herein executed by Loan Trustee by the manual signature of one of its authorized officers, and such certificate upon any Equipment Notes shall be conclusive evidence, and the only evidence, that such Equipment Note has been duly authenticated and delivered hereunder.
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Section 2.03 Method of Payment. The principal amount of, interest on, Make-Whole Amount, if any, and, except to the extent expressly provided herein, all other amounts due under each Equipment Note or otherwise payable hereunder shall be payable by Company in Dollars by wire transfer of immediately available funds not later than 10:00 a.m. (New York City time) on the due date of payment to Loan Trustee at the Corporate Trust Office for distribution among Noteholders in the manner provided herein, and payment of such amount by Company to Loan Trustee shall be deemed to satisfy Company’s obligation to make such payment. Company shall not have any responsibility for the distribution of such payment to any Noteholder. Notwithstanding the foregoing or any provision in any Equipment Note to the contrary, Loan Trustee will use reasonable efforts to pay or cause to be paid, if so directed in writing by any Noteholder (with a copy to Company), all amounts paid by Company hereunder and under such Noteholder’s Equipment Note or Equipment Notes to such Noteholder or a nominee therefor (including all amounts distributed pursuant to Article III) by transferring, or causing to be transferred, by wire transfer of immediately available funds in Dollars, prior to 12:00 noon (New York City time) on the due date of payment, to an account maintained by such Noteholder with a bank located in the continental United States the amount to be distributed to such Noteholder, for credit to the account of such Noteholder maintained at such bank; provided that, in the event the Equipment Notes are not held by Subordination Agent on behalf of Pass Through Trustees, Loan Trustee shall, unless instructed by Company to use another method, pay such amounts by check mailed to Noteholder’s address as it appears on the Equipment Note Register. If, after its receipt of funds at the place and prior to the time specified above in the immediately preceding sentence, Loan Trustee fails (other than as a result of a failure of Noteholder to provide it with wire transfer instructions) to make any such payment required to be paid by wire transfer as provided in the immediately preceding sentence on the Business Day it receives such funds, Loan Trustee, in its individual capacity and not as trustee, agrees to compensate such Noteholders for loss of use of funds at the Federal Funds Rate until such payment is made and Loan Trustee shall be entitled to any interest earned on such funds until such payment is made. Any payment made hereunder shall be made without any presentment or surrender of any Equipment Note, except that, in the case of the final payment in respect of any Equipment Note, such Equipment Note shall be surrendered to Loan Trustee for cancellation. Notwithstanding any other provision of this Indenture to the contrary, Loan Trustee shall not be required to make, or cause to be made, wire transfers as aforesaid prior to the first Business Day on which it is practicable for Loan Trustee to do so in view of the time of day when the funds to be so transferred were received by it if such funds were received after 1:00 p.m. (New York City time) at the place of payment, in which case Loan Trustee shall make such required payment on the
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next succeeding Business Day. So long as any signatory to the Participation Agreement or nominee thereof shall be a registered Noteholder, all payments to it shall be made to the account of such Noteholder specified in Schedule I to the Participation Agreement or otherwise in the manner provided in or pursuant to the Participation Agreement unless it shall have specified some other account or manner of payment by notice to Loan Trustee consistent with this Section 2.03.
Section 2.04 Withholding Taxes. Loan Trustee shall exclude and withhold at the appropriate rate from each payment of principal, interest, Make-Whole Amount, if any, and other amounts due hereunder or under each Equipment Note (which exclusion and withholding shall constitute payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) any and all withholding Taxes applicable thereto as required by applicable law. Loan Trustee agrees to act as such withholding agent and whenever any present or future Taxes or similar charges are required to be withheld with respect to any amounts payable hereunder or in respect of the Equipment Notes, to withhold such amounts (which withholding shall constitute payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) and timely pay the same to the appropriate authority in the name of and on behalf of Noteholders, that it will file any necessary withholding Tax returns or statements when due, and that as promptly as possible after the payment thereof it will deliver to each Noteholder (with a copy to Company) appropriate documentation showing the payment thereof, together with such additional documentary evidence as any such Noteholder may reasonably request from time to time. Loan Trustee agrees to file any other information reports it is required to file under United States law.
Section 2.05 Application of Payments. Subject always to Section 2.13 and except as otherwise provided in Article III, in the case of each Equipment Note, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest paid thereon shall be applied:
first, to the payment of accrued interest on such Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts thereunder) to the date of such payment;
second, to the payment of Make-Whole Amount, if any, with respect to such Equipment Note;
third, to the payment of the principal amount of such Equipment Note (or portion thereof) then due thereunder, if any; and
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fourth, the balance, if any, remaining thereafter, to the payment of installments of the principal amount of such Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
Section 2.06 Termination of Interest in Collateral. No Noteholder or Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if the principal amount of, Make-Whole Amount, if any, and interest (including, to the extent permitted by applicable law, post-petition interest and interest on any overdue amounts) on and all other amounts due under all Equipment Notes held by such Noteholder and all other sums then due and payable to such Noteholder or Indenture Indemnitee, as the case may be, hereunder (including, without limitation, under Section 2.14) and under the Participation Agreement by Company (the “Secured Obligations”) have been paid in full.
Subject to Section 10.01 hereof, no Related Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if all Related Secured Obligations have been paid in full.
Section 2.07 Registration, Transfer and Exchange of Equipment Notes. Loan Trustee shall keep a register or registers (the “Equipment Note Register”) in which Loan Trustee shall provide for the registration of Equipment Notes, the registration of transfers of Equipment Notes and a record of the dates and payments made with respect to the Equipment Notes. No such transfer shall be given effect unless and until registration hereunder shall have occurred. The Equipment Note Register shall be kept at the Corporate Trust Office of Loan Trustee. Loan Trustee is hereby appointed “Equipment Note Registrar” for the purpose of registering Equipment Notes and transfers of Equipment Notes as herein provided. A holder of any Equipment Note intending to exchange or transfer such Equipment Note shall surrender such Equipment Note to Loan Trustee at the Corporate Trust Office, together with a written request from the registered holder thereof for the issuance of a new Equipment Note of the same Series, specifying, in the case of a surrender for transfer, the name and address of the new holder or holders. Upon surrender for registration of transfer of any Equipment Note and subject to satisfaction of Section 2.09, Company shall execute, and Loan Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Equipment Notes of an equal aggregate principal amount and of the same Series. At the option of Noteholder, Equipment Notes may be exchanged for other Equipment Notes of the same Series of any authorized denominations of an equal aggregate principal amount, upon surrender of the Equipment Notes to be exchanged to Loan Trustee at the Corporate Trust Office. Whenever any Equipment Notes are so surrendered for exchange, Company shall execute, and Loan Trustee shall authenticate and deliver, the Equipment Notes which Noteholder making the exchange is entitled to receive. All Equipment Notes issued upon any registration of transfer or exchange of Equipment Notes (whether under this Section 2.07 or under Section 2.08 or otherwise under this Indenture) shall be
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the valid obligations of Company evidencing the same respective obligations, and entitled to the same security and benefits under this Indenture, as the Equipment Notes surrendered upon such registration of transfer or exchange. Every Equipment Note presented or surrendered for registration of transfer shall (if so required by Company or Loan Trustee) be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to Loan Trustee, duly executed by Noteholder or such Noteholder’s attorney duly authorized in writing, and Company and Loan Trustee shall require evidence satisfactory to Company as to the compliance of any such transfer with the Securities Act and the securities laws of any applicable state or jurisdiction. Loan Trustee shall make a notation on each new Equipment Note of the amount of all payments of principal amount previously made on the old Equipment Note or Equipment Notes with respect to which such new Equipment Note is issued and the date to which interest on such old Equipment Note or Equipment Notes has been paid. Principal, interest and all other amounts shall be deemed to have been paid on such new Equipment Note to the date on which such amounts have been paid on such old Equipment Note. Company and Equipment Note Registrar shall not be required to exchange any surrendered Equipment Notes as provided above (a) during the ten-day period preceding the due date of any payment on such Equipment Note or (b) that has been called for redemption. Company and Loan Trustee shall in all cases deem and treat the Person in whose name any Equipment Note has been issued and registered on the Equipment Note Register as the absolute owner and Noteholder of such Equipment Note for the purpose of receiving payment of all amounts payable with respect to such Equipment Note and for all other purposes, and neither Company nor Loan Trustee shall be affected by any notice to the contrary. Loan Trustee will promptly notify Company of each registration of a transfer of an Equipment Note. Any such transferee of an Equipment Note, by its acceptance of an Equipment Note, agrees to the provisions of this Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to Noteholders or, in the case of each Related Indenture, Related Noteholders, and, without limiting the generality of the foregoing, any such transferee of an Equipment Note, by its acceptance of an Equipment Note: (i) agrees to the applicable provisions of Sections 6.01, 7.10 and 7.11 of the Participation Agreement, and shall be deemed to have represented, warranted and covenanted to the parties to the Participation Agreement as to the matters represented, warranted and covenanted by Noteholders, including Pass Through Trustees, in the Participation Agreement and (ii) agrees to the restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, and shall be deemed to have covenanted to the parties to the Intercreditor Agreement not to give any direction to, or otherwise authorize, Loan Trustee to take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement. Subject to compliance by Noteholder and any transferee of the requirements set forth in this Section 2.07 and in Section 2.09, Loan Trustee and Company shall use all reasonable efforts to issue new Equipment Notes upon transfer or exchange within ten Business Days of the date an Equipment Note is surrendered for transfer or exchange.
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Section 2.08 Mutilated, Destroyed, Lost or Stolen Equipment Notes. If any Equipment Note becomes mutilated, destroyed, lost or stolen, Company shall, upon the written request of the holder of such Equipment Note and subject to satisfaction of this Section 2.08 and of Section 2.09, execute and Loan Trustee shall authenticate and deliver in replacement thereof a new Equipment Note of the same Series, payable in the same principal amount, dated the same date and captioned as issued in connection with the Aircraft. If the Equipment Note being replaced has become mutilated, such Equipment Note shall be surrendered to Loan Trustee, and a photocopy thereof shall be furnished to Company. If the Equipment Note being replaced has been destroyed, lost or stolen, the holder of such Equipment Note shall furnish to Company and Loan Trustee such security or indemnity as may be required by them to save Company and Loan Trustee harmless and evidence satisfactory to Company and Loan Trustee of the destruction, loss or theft of such Equipment Note and of the ownership thereof.
Section 2.09 Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Noteholder for any registration of transfer or exchange of Equipment Notes, but Loan Trustee, as Equipment Note Registrar, may require payment of a sum sufficient to cover any Tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Equipment Notes.
(b) Loan Trustee shall cancel all Equipment Notes surrendered for replacement, redemption, transfer, exchange, payment or cancellation, shall keep a copy of such canceled Equipment Notes, and shall send the original canceled Equipment Notes marked “canceled” to Company.
Section 2.10 Mandatory Redemption of Equipment Notes. Company shall redeem the Equipment Notes in whole in connection with an Event of Loss in respect of the Airframe or the Airframe and the Engines installed thereon (unless Company has performed the option set forth in Section 7.05(a)(i) with respect thereto) on or before the Loss Payment Date at a redemption price equal to 100% of the unpaid principal amount thereof, together with all accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, but without any Make-Whole Amount.
Section 2.11 Voluntary Redemption of Equipment Notes.
(a) Except as provided in Section 2.11(b), all (but not less than all) of the Equipment Notes may be redeemed by Company at any time upon at least 30 days’ revocable prior written notice to Loan Trustee and Noteholders, and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, plus Make-Whole Amount, if any; provided that no redemption shall be permitted under this Section 2.11(a) unless, simultaneously with such redemption, the Related Equipment Notes shall also be redeemed.
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(b) All of the Series A Equipment Notes or all of any Series of Additional Series Equipment Notes (or any combination of the foregoing) may be redeemed by Company upon at least 15 days’ revocable prior written notice to Loan Trustee and Noteholders of each Series to be redeemed, and such Series of Equipment Notes being redeemed pursuant to this Section 2.11(b) shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders of such Series, plus Make-Whole Amount, if any; provided that:
(i) no redemption shall be permitted under this Section 2.11(b) unless, simultaneously with such redemption, the Related Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or the Related Additional Series Equipment Notes in respect of the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of any Series of Additional Series Equipment Notes), as the case may be, shall also be redeemed; and
(ii) if, simultaneously with such redemption or at any time thereafter, new Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or new Additional Series Equipment Notes of the same Series designation as the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of a Series of Additional Series Equipment Notes), in any such case, having terms that may be the same as or different from those of the redeemed Equipment Notes, are being issued, such new Equipment Notes shall be issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary in Section 2.11(a) or (b), so long as Company or any of its Affiliates beneficially owns 100% of the Pass Through Certificates issued by any Pass Through Trustee, the redemption price shall not include, and no Noteholder shall have any right to otherwise claim, any Make-Whole Amount with respect to the Series of Equipment Notes issued to Subordination Agent for the benefit of such Pass Through Trustee.
(d) For the avoidance of doubt, any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not constitute or be deemed to constitute a redemption of such Equipment Note.
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Section 2.12 Redemptions; Notice of Redemptions; Repurchases.
(a) No redemption of any Equipment Note may be made except to the extent and in the manner expressly permitted by this Indenture. Company may at any time repurchase any of the Equipment Notes not held by Subordination Agent at any price and may hold or resell such Equipment Notes or surrender such Equipment Notes to Loan Trustee for cancellation.
(b) Notice of redemption with respect to the Equipment Notes shall be given by Loan Trustee by first-class mail, postage prepaid, or by hand delivery, mailed or delivered not less than 15 nor more than 60 days prior to the applicable redemption date, to each Noteholder of such Equipment Notes to be redeemed, at such Noteholder’s address appearing in the Equipment Note Register; provided that such notice shall be revocable by written notice from Company to Loan Trustee given no later than three days prior to the redemption date. All notices of redemption shall state: (1) the redemption date, (2) the applicable basis for determining the redemption price, (3) that on the redemption date, the redemption price will become due and payable upon each such Equipment Note, and that, if any such Equipment Notes are then outstanding, interest on such Equipment Notes shall cease to accrue on and after such redemption date and (4) the place or places where such Equipment Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, Company (or any person on behalf of Company) shall, to the extent an amount equal to the redemption price for the Equipment Notes to be redeemed on the redemption date shall not then be held by Loan Trustee, deposit or cause to be deposited with Loan Trustee by 10:00 a.m. (New York City time) on the redemption date in immediately available funds the redemption price of the Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid (and not revoked as permitted by this Section 2.12), the Equipment Notes to be redeemed shall, on the redemption date, become due and payable at the Corporate Trust Office of Loan Trustee, and from and after such redemption date (unless there is a default in the deposit of the redemption price pursuant to Section 2.12(c)) any such Equipment Notes then outstanding shall cease to bear interest. Upon surrender of any such Equipment Note for redemption in accordance with said notice, such Equipment Note shall be redeemed at the redemption price.
Section 2.13 Subordination.
(a) The indebtedness evidenced by the Series A Equipment Notes is, to the extent and in the manner provided in this Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, and the Series A Equipment Notes are issued subject to such
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provisions. The indebtedness evidenced by the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such most senior Series of Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes and the Series A Equipment Notes, and any such most senior Series of Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by any Additional Series Equipment Notes (other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes), if issued, will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, the Series A Equipment Notes and each Series of Additional Series Equipment Notes that rank senior in priority of payment to such Additional Series Equipment Notes, and any such Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by the Series AA Equipment Notes and the Series A Equipment Notes is, and the indebtedness evidenced by any Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes” issued under such Related Indenture, and the Series AA Equipment Notes and the Series A Equipment Notes are, and any Series of Additional Series Equipment Notes shall be, issued subject to such provisions. By acceptance of its Equipment Notes of any Series, each Noteholder of such Series (i) agrees to and shall be bound by such provisions, (ii) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in this Indenture and the applicable Related Indenture and (iii) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
(b) Company, Loan Trustee and, by acceptance of its Equipment Notes of any Series, each Noteholder of such Series, hereby agree that no payment or distribution shall be made on or in respect of the Secured Obligations, or the “Secured Obligations” under any Related Indenture, owed to such Noteholder of such Series, including any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) or after the commencement of any proceedings of the type referred to in Section 4.01(g), (h) or (i), except, in each case, as expressly provided in Article III of this Indenture or Article III of the applicable Related Indenture, as appropriate.
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(c) By the acceptance of its Equipment Notes of any Series, each Noteholder of such Series agrees that (i) if such Noteholder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligations in respect of such Series that it is not entitled to receive under this Section 2.13 or Article III, it will hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III and (ii) if such Noteholder, in its capacity as a “Noteholder” under any Related Indenture, receives any payment or distribution on any “Secured Obligations” in respect of “Equipment Notes” of any “Series” issued under such Related Indenture that it is not entitled to receive under Section 2.13 or Article III of such Related Indenture, it will hold any amount so received in trust for the Related Loan Trustee under such Related Indenture and forthwith turn over such amount to such Related Loan Trustee under such Related Indenture in the form received to be applied as provided in Article III of such Related Indenture.
Section 2.14 Certain Payments. Company agrees to pay to Loan Trustee for distribution in accordance with Section 3.04:
(a) an amount or amounts equal to the fees payable to Liquidity Providers under Section 2.03 of each Liquidity Facility and the Fee Letter (as defined in the Intercreditor Agreement) related thereto (or similar provisions of any Replacement Liquidity Facility therefor and any related fee letter), multiplied by a fraction, the numerator of which is the sum of the then outstanding aggregate principal amount of the Series AA Equipment Notes and the Series A Equipment Notes and the denominator of which is the sum of the then outstanding aggregate principal amount of all “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement);
(b) an amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Special Termination Advance multiplied by the fraction specified in the foregoing clause (a);
(c) an amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Downgrade Advance multiplied by the fraction specified in the foregoing clause (a);
(d) an amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Non-Extension Advance multiplied by the fraction specified in the foregoing clause (a);
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(e) if any payment default shall have occurred and be continuing with respect to interest on any “Series AA Equipment Notes” or “Series A Equipment Notes” (each as defined in the Intercreditor Agreement), (x) the excess, if any, of (1) the amount equal to the sum of interest on any Unpaid Advance (other than a Special Termination Advance), Applied Provider Advance or Applied Special Termination Advance payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) plus any other amounts payable in respect of such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance under Section 3.01, 3.03 or 3.09 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) under which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made over (2) the sum of (A) Investment Earnings from any Final Advance plus (B) any amount of interest at the Past Due Rate actually payable (whether or not in fact paid) by Company in respect of the overdue scheduled interest on the “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) in respect of which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made, multiplied by (y) a fraction, the numerator of which is the then aggregate overdue amounts of interest on the then outstanding Series AA Equipment Notes and Series A Equipment Notes (other than interest becoming due and payable solely as a result of acceleration of any such Equipment Notes) and the denominator of which is the then aggregate overdue amounts of interest on all then outstanding “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement) (other than interest becoming due and payable solely as a result of acceleration of any such “Equipment Notes”);
(f) any amounts owed to Liquidity Providers by Subordination Agent as borrower under Sections 3.01 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 3.03 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 7.05 and 7.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) multiplied by the fraction specified in the foregoing clause (a); and
(g) an amount or amounts equal to the compensation, including reasonable expenses and disbursements actually incurred, payable to Subordination Agent under Section 6.07 of the Intercreditor Agreement, multiplied by the fraction specified in the foregoing clause (a) (but in any event without duplication of any amount or amounts payable by Company in respect of such compensation under any other Operative Document or Pass Through Document).
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For purposes of this paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Applied Provider Advance”, “Applied Special Termination Advance”, “Downgrade Advance”, “Final Advance”, “Investment Earnings”, “Non-Extension Advance”, “Special Termination Advance” and “Unpaid Advance” have the meanings specified in each Liquidity Facility or the Intercreditor Agreement, as applicable.
Section 2.15 Repayment of Monies for Equipment Note Payments Held by Loan Trustee. Any money or property held by Loan Trustee in trust for any payment of the principal of, Make-Whole Amount, if any, or interest or any other amounts due on, any Equipment Note, including, without limitation, any money or property deposited pursuant to Section 2.12(c) or 10.01, and remaining unclaimed for a 730-day period (for purposes of calculating this 730-day period, all days on which the payment of such money or property shall not have been made because of operation of law shall be excluded) after the due date for such payment (or such lesser time as Loan Trustee is satisfied, after 60 days’ notice from Company, is one month prior to the escheat period provided under applicable state law) shall be paid to Company. Noteholders of any outstanding Equipment Notes shall thereafter, as unsecured general creditors, look only to Company for payment thereof, and all liability of Loan Trustee with respect to such trust money shall thereupon cease. Loan Trustee, before being required to make any such repayment, may at the expense of Company cause to be mailed to each such Noteholder notice that such money or property remains unclaimed. After a date specified in such notice, which may not be less than 30 days from the date of mailing, any unclaimed balance of such money or property then remaining will be repaid to Company as provided herein.
Section 2.16 Directions by Subordination Agent. So long as Subordination Agent is a Noteholder, notwithstanding anything contained herein or in any other Operative Document to the contrary, in exercising its right to vote the Equipment Notes held by it, or in giving or taking any direction, consent, request, demand, instruction, authorization, notice, waiver or other action provided by this Indenture or in respect of the Equipment Notes to be given or taken by a Noteholder (each such vote or other action, a “Direction”) in respect of such Equipment Notes, Subordination Agent may act in accordance with any votes, directions, consents, requests, demands, instructions, authorizations, notices, waivers or other actions given or taken by any applicable Pass Through Trustee or the Controlling Party pursuant to the Intercreditor Agreement, including without limitation pursuant to Section 2.06, Article IV or Section 8.01(b) thereof. Subordination Agent shall be permitted (x) to give a Direction with respect to less than the entire principal amount of any single Equipment Note held by it, and (y) to
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give different Directions with respect to different portions of the principal amount of any single Equipment Note held by it. Any Direction given by Subordination Agent at any time with respect to more than a majority in aggregate unpaid principal amount of all of the Equipment Notes issued and then outstanding hereunder shall be deemed to have been given by a Majority in Interest of Noteholders.
ARTICLE III
Receipt, Distribution and Application of Income
From the Collateral
Section 3.01 Basic Distributions. Except as otherwise provided in Sections 3.02, 3.03 and 3.04, each periodic payment by Company of regularly scheduled installments of principal or interest on the Equipment Notes received by Loan Trustee shall be promptly distributed in the following order of priority:
first, so much of such payment as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series AA Equipment Notes shall be distributed to Noteholders of Series AA Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series AA Equipment Note bears to the aggregate amount of the payments then due under all Series AA Equipment Notes;
second, after giving effect to clause “first” above, so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series A Equipment Notes shall be distributed to Noteholders of Series A Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series A Equipment Note bears to the aggregate amount of the payments then due under all Series A Equipment Notes;
third, after giving effect to clause “second” above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01) so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue
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amounts) then due under all Additional Series Equipment Notes of a specified Series shall be distributed to Noteholders of Additional Series Equipment Notes of such Series ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Additional Series Equipment Note of such Series bears to the aggregate amount of the payments then due under all Additional Series Equipment Notes of such Series, provided that this clause “third” shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
fourth¸ the balance, if any, of such installment remaining thereafter shall be distributed to Company.
Section 3.02 Event of Loss; Optional Redemption.
Except as otherwise provided in Sections 3.03 and 3.04 and subject to the following provisos, any payments received by Loan Trustee (i) with respect to the Airframe or the Airframe and one or more Engines as the result of an Event of Loss pursuant to Section 2.10 or (ii) pursuant to an optional redemption of the Equipment Notes pursuant to Section 2.11 shall be applied to the redemption of the Equipment Notes and to all other Secured Obligations and Related Secured Obligations then due by applying such payments in the following order of priority:
first, so much of such payment as is required (i) to reimburse Loan Trustee and Noteholders for any reasonable costs or expenses actually incurred in connection with such redemption for which they are entitled to reimbursement, or indemnity by Company, under the Operative Documents and then (ii) to pay any other Secured Obligations then due to Loan Trustee, Noteholders and other Indenture Indemnitees under this Indenture, the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below);
second, after giving effect to clause “first” above:
(i) so much of such payment remaining as is required to pay the amounts specified in paragraph (i) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series AA Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such payment remaining as is required to pay the amounts specified in paragraph (ii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series A Equipment Notes; and
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(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payment remaining as is required to pay the amounts specified in paragraph (iii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of Additional Series Equipment Notes of a specified Series, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
third, after giving effect to clause “second” above, so much of such payment remaining as is required to pay the amounts as provided in clause “third” of Section 3.03 in respect of Related Secured Obligations under each Defaulted Operative Indenture other than paragraph (ix) of clause “third” of Section 3.03; and
fourth, the balance, if any, of such payment, shall be distributed as provided in clause “fourth” of Section 3.03;
provided that any insurance, condemnation or similar proceeds resulting from an Event of Loss that are received by Loan Trustee shall be held and distributed by Loan Trustee as provided in Sections 7.05(c) and 7.06(f), and any such proceeds that are held by Loan Trustee shall be invested as provided in Section 5.06; and provided, further, that in the case of a redemption of Equipment Notes pursuant to Section 2.11(b), if a particular Series is not being redeemed pursuant thereto, no application of funds shall be made pursuant to the paragraphs in clause “second” above that refer to such Series in connection with such redemption. No Make-Whole Amount shall be due and payable on the Equipment Notes as a consequence of the redemption of the Equipment Notes as a result of an Event of Loss with respect to the Airframe or the Airframe and one or more Engines.
Section 3.03 Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments received and amounts held or realized by Loan Trustee (including any amounts realized by Loan Trustee from the exercise of any remedies pursuant to Article IV) after both an Event of Default shall have occurred and be continuing and the Equipment Notes shall have become due and payable pursuant to Section 4.02(a), as well as all payments or amounts then held by Loan Trustee as part of the Collateral, shall be promptly distributed by Loan Trustee in the following order of priority:
first, so much of such payments or amounts as is required to (i) reimburse Loan Trustee or U.S. Bank, to the extent Loan Trustee or U.S. Bank is entitled to be reimbursed or indemnified under the Operative Documents, for any Tax,
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expense or other loss (including, without limitation, all amounts to be expended at the expense of, or charged upon the tolls, rents, revenues, issues, products and profits of, the property included in the Collateral pursuant to Section 4.02(a)) actually incurred by Loan Trustee or U.S. Bank (to the extent not previously reimbursed), the expenses of any sale, taking or other proceeding, reasonable attorneys’ fees and expenses, court costs, and any other expenditures actually incurred or expenditures or advances made by Loan Trustee, U.S. Bank or Noteholders in the protection, exercise or enforcement of any right, power or remedy or any damages sustained by Loan Trustee, U.S. Bank or any Noteholder, liquidated or otherwise, upon such Event of Default shall be applied by Loan Trustee as between itself, U.S. Bank and Noteholders in reimbursement of such expenses and any other expenses for which Loan Trustee, U.S. Bank or Noteholders are entitled to reimbursement under any Operative Document and (ii) pay all Secured Obligations payable to other Indenture Indemnitees hereunder and under the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below); and in case the aggregate amount so to be distributed shall be insufficient to pay as aforesaid in clauses (i) and (ii), then ratably, without priority of one over the other, in proportion to the amounts owed each hereunder;
second, after giving effect to clause “first” above, so much of such payments or amounts remaining as is required to reimburse the then existing or prior Noteholders for payments made pursuant to Section 5.03 (to the extent not previously reimbursed) shall be distributed to such then existing or prior Noteholders ratably, without priority of one over the other, in accordance with the amount of the payment or payments made by each such then existing or prior Noteholder pursuant to Section 5.03;
third, after giving effect to clause “second” above:
(i) so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series AA Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series AA Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series AA Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series AA Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series AA Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
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(ii) after giving effect to paragraph (i) above, so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series A Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series A Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series A Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series A Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series A Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Additional Series Equipment Notes of a specified Series, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Additional Series Equipment Notes of such Series to the date of distribution, shall be distributed to Noteholders of Additional Series Equipment Notes of such Series, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
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(iv) after giving effect to paragraph (iii) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “first” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “first”;
(v) after giving effect to paragraph (iv) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “second” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “second”;
(vi) after giving effect to paragraph (v) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series AA Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series AA Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series AA Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series AA Equipment Notes issued under all Defaulted Operative Indentures;
(vii) after giving effect to paragraph (vi) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series A Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series A Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one
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over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series A Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series A Equipment Notes issued under all Defaulted Operative Indentures;
(viii) after giving effect to paragraph (vii) above (and except as otherwise provided in amendments to the applicable Related Indentures pursuant to paragraph (xiii) or (xiv) of Section 9.01 thereof), so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Additional Series Equipment Notes of a specified Series, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Additional Series Equipment Notes of such Series are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Additional Series Equipment Notes of such Series issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Additional Series Equipment Notes of such Series issued under all Defaulted Operative Indentures, provided that this paragraph (viii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
(ix) after giving effect to paragraph (viii) above, if any Related Equipment Note is outstanding, any of such payments or amounts remaining and any invested Permitted Investments shall be held by Loan Trustee in an Eligible Account in accordance with the provisions of Section 3.07 (and invested as provided in Section 5.06) as additional security for the Related Secured Obligations, and such amounts (and any investment earnings thereon) shall be distributed from time to time in accordance with the foregoing provisions of this clause “third” as and to the extent any such Related Secured Obligation shall at any time and from time to time become due and remain unpaid after the giving of any required notice and the expiration of any applicable grace period; and, upon the payment in full of all such Related Secured Obligations the balance, if any, of any such remaining amounts and investment earnings thereon shall be applied as provided in clause “fourth” of this Section 3.03; and
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fourth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Company.
No Make-Whole Amount shall be payable on the Equipment Notes as a consequence of or in connection with an Event of Default or the acceleration of the Equipment Notes.
Section 3.04 Certain Payments.
(a) Any payments received by Loan Trustee for which provision as to the application thereof is made in this Indenture other than in this Article III shall be applied as provided in those provisions. Without limiting the foregoing, any payments received by Loan Trustee which are payable to Company pursuant to any of the provisions of this Indenture other than those set forth in this Article III (including Sections 5.06, 7.05 and 7.06) shall be so paid to Company. Any payments received by Loan Trustee for which no provision as to the application thereof is made in this Indenture and for which such provision is made in any other Operative Document shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of such other Operative Document.
(b) Notwithstanding anything to the contrary contained in this Article III, Loan Trustee will distribute promptly upon receipt any indemnity payment received by it from Company pursuant to Section 4.02 of the Participation Agreement payable to (i) U.S. Bank and Loan Trustee, (ii) Subordination Agent, (iii) any separate or additional trustee appointed pursuant to Section 8.02, (iv) Pass Through Trustees, (v) any Liquidity Provider or (vi) any other Indenture Indemnitee, in each case, directly to the Person entitled thereto. Any payment received by Loan Trustee from Company under Section 2.14 shall be distributed to Subordination Agent to be distributed in accordance with Section 2.04(c) of the Intercreditor Agreement.
(c) Any payments received by Loan Trustee not constituting part of the Collateral or otherwise for which no provision as to the application thereof is made in any Operative Document shall be distributed by Loan Trustee to Company. Further, and except as otherwise provided in Sections 3.02 and 3.03, all payments received and amounts realized by Loan Trustee with respect to the Aircraft, to the extent received or realized at any time after payment in full of all Secured Obligations, as well as any amounts remaining as part of the Collateral after the occurrence of such payment in full, shall be distributed by Loan Trustee to Company.
Section 3.05 Payments to Company. Any amounts distributed hereunder by Loan Trustee to Company shall be paid to Company (within the time limits contemplated by Section 2.03) by wire transfer of funds of the type received by Loan Trustee at such office and to such account or accounts of such entity or entities as shall be designated by notice from Company to Loan Trustee from time to time.
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Section 3.06 Cooperation. Prior to making any distribution under this Article III, Loan Trustee shall consult with Related Loan Trustees to determine amounts payable with respect to the Related Secured Obligations. Loan Trustee shall cooperate with Related Loan Trustees and shall provide such information as shall be reasonably requested by each Related Loan Trustee to enable such Related Loan Trustee to determine amounts distributable under Article III of its Related Indenture.
Section 3.07 Securities Account. In furtherance of the provisions of Section 3.03, U.S. Bank agrees to act as an Eligible Institution under this Indenture in accordance with the provisions of this Indenture (in such capacity, the “Securities Intermediary”). Except in its capacity as Loan Trustee, U.S. Bank waives any claim or lien against any Eligible Account it may have, by operation of law or otherwise, for any amount owed to it by Company. The Securities Intermediary hereby agrees that, notwithstanding anything to the contrary in this Indenture, (i) any amounts to be held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03 and any investment earnings thereon or other Permitted Investments in which such amounts are invested will be credited to an Eligible Account (the “Securities Account”) for which it is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC) and Loan Trustee is the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) of the “security entitlement” (as defined in Section 8-102(a)(17) of the NY UCC) with respect to each “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible Account, (ii) all such amounts, Permitted Investments and all other property acquired with cash credited to the Securities Account will be credited to the Securities Account, (iii) all items of property (whether cash, investment property, Permitted Investments, other investments, securities, instruments or other property) credited to the Securities Account will be treated as a “financial asset” under Article 8 of the NY UCC, (iv) its “securities intermediary’s jurisdiction” (as defined in Section 8-110(e) of the NY UCC) with respect to the Securities Account is the State of New York, and (v) all securities, instruments and other property in order or registered form and credited to the Securities Account shall be payable to or to the order of, or registered in the name of, the Securities Intermediary or shall be indorsed to the Securities Intermediary or in blank, and in no case whatsoever shall any financial asset credited to the Securities Account be registered in the name of Company, payable to or to the order of Company or specially indorsed to Company except to the extent the foregoing have been specially endorsed by Company to the Securities Intermediary or in blank. Loan Trustee agrees that it will hold (and will indicate clearly in its books and records that it holds) its “security entitlements” to the “financial assets” credited to the Securities Account in trust for the benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee as set forth in this Indenture. Company acknowledges that, by reason of Loan Trustee being the “entitlement holder” in respect of the Securities Account as provided above, Loan Trustee shall have the sole right and discretion, subject only to the terms of this Indenture, to give all “entitlement orders” (as defined in Section 8-102(a)(8) of the NY UCC) with respect to the Securities Account and any and all financial assets and other
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property credited thereto to the exclusion of Company. If any Person asserts any Lien (including, without limitation, any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or any financial asset carried therein, the Securities Intermediary will promptly notify Loan Trustee and Company thereof.
ARTICLE IV
Events of Default; Remedies of Loan Trustee
Section 4.01 Events of Default. Each of the following events constitutes an “Event of Default” whether such event is voluntary or involuntary or comes about or is effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body and each such Event of Default is deemed to exist and continue so long as, but only as long as, it has not been remedied or explicitly waived:
(a) Company fails to make any payment of principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note within 15 days after such payment is due;
(b) Company fails to make payment when the same is due of any amount (other than amounts referred to in Section 4.01(a)) due hereunder, under any Equipment Note or under any other Operative Document, and such failure continues unremedied for 30 days after the receipt by Company of written notice thereof from Loan Trustee or any Noteholder;
(c) Company fails to carry and maintain (or cause to be maintained) insurance or indemnity on or with respect to the Aircraft in accordance with the provisions of Section 7.06; provided that no such failure to carry and maintain insurance shall constitute an Event of Default until the earlier of (i) the date such failure has continued unremedied for a period of 30 days after receipt by Loan Trustee of the notice of cancellation referred to in Section 7.06 or (ii) the date such insurance is not in effect as to Loan Trustee;
(d) Company fails to perform or observe in any material respect any other covenant, condition or agreement to be performed or observed by it under any Operative Document, and such failure continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee or any Noteholder; provided that, if such failure is capable of being remedied, no such failure shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such failure;
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(e) any representation or warranty made by Company in any Operative Document was incorrect in any material respect at the time made, and such incorrectness continues to be material to the transactions contemplated hereby and continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee; provided that, if such incorrectness is capable of being remedied, no such incorrectness shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such incorrectness;
(f) Company consents to the appointment of or the taking of possession by a receiver, trustee or liquidator in respect of a substantial part of its property, admits in writing its inability to pay its debts generally as they come due or makes a general assignment for the benefit of its creditors;
(g) Company files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief as a debtor in a case under any bankruptcy laws or insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against Company as a debtor in any such case, or Company as a debtor seeks relief by voluntary petition, answer or consent under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time), or Company seeks an agreement, composition, extension or adjustment with its creditors under such laws;
(h) an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of Company, a receiver, trustee or liquidator of Company or sequestering any substantial part of its property, or granting any other relief in respect of Company as a debtor under any bankruptcy laws or insolvency laws (as in effect at such time), and any such order, judgment or decree of appointment or sequestration remains in force undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof;
(i) a petition against Company as a debtor in a case under the federal bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations that may apply to Company, any court of competent jurisdiction assumes jurisdiction, custody or control of Company or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of 90 days; or
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(j) an “Event of Default” (as defined in any Related Indenture) shall have occurred and be continuing;
provided that notwithstanding anything to the contrary contained in this Section 4.01, any failure of Company to perform or observe any covenant, condition or agreement shall not constitute an Event of Default if such failure arises by reason of an event referred to in the definition of “Event of Loss” so long as Company is continuing to comply with all of the terms of Section 7.05.
Section 4.02 Remedies.
(a) If an Event of Default has occurred and is continuing and so long as the same shall continue unremedied, then and in every such case Loan Trustee may, and upon the written instructions of a Majority in Interest of Noteholders, Loan Trustee shall (subject to Section 5.03), do one or more of the following to the extent permitted by, and subject to compliance with the requirements of, applicable law then in effect (provided that during any period the Airframe or any Engine is subject to the CRAF Program and is in possession of or being operated under the direction of the United States government or an agency or instrumentality of the United States, Loan Trustee shall not, on account of any Event of Default, be entitled to exercise or pursue any of the powers, rights or remedies described in this Section 4.02 in such manner as to limit Company’s control under this Indenture (or any Permitted Lessee’s control under any Lease) of the Airframe or such Engine, unless at least 60 days’ (or such lesser period as may then be applicable under the CRAF Program of the United States government) prior written notice of default hereunder has been given by Loan Trustee by registered or certified mail to Company (and any such Permitted Lessee) with a copy addressed to the Contracting Office Representative or other appropriate person for the Air Mobility Command of the United States Air Force under any contract with Company (or such Permitted Lessee) relating to the Aircraft):
(i) declare by written notice to Company all the Equipment Notes to be due and payable, whereupon the aggregate unpaid principal amount of all Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and other amounts due thereunder (but without Make-Whole Amount), shall immediately become due and payable without presentment, demand, protest or other notice, all of which are hereby waived; provided that if an Event of Default referred to in Section 4.01(f), (g), (h) or (i) has occurred and is continuing, then and in every such case the unpaid principal amount of the Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and all other amounts due thereunder (but without Make-Whole Amount) shall immediately and without further act become due and payable without presentment, demand, protest or notice, all of which are hereby waived; and, following such declaration or deemed declaration:
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(ii) (A) cause Company, upon the demand by notice of Loan Trustee, at Company’s expense, to deliver promptly, and Company shall deliver promptly, all or such part of the Airframe or any Engine as Loan Trustee so demands to Loan Trustee or its order, or, if Company has failed to so deliver the Airframe or any Engine after such demand, Loan Trustee, at its option, may enter upon the premises where all or any part of the Airframe or any Engine are located and take immediate possession of and remove the same together with any engine which is not an Engine but which is installed on the Airframe, subject to all of the rights of the owner, lessor, lienor or secured party of such engine; provided that the Airframe with an engine (which is not an Engine) installed thereon may be flown or returned only to a location within the continental United States, and such engine shall be held at the expense of Company for the account of any such owner, lessor, lienor, secured party or, if such engine is owned by Company, may at the option of Company with the consent of Loan Trustee (which will not be unreasonably withheld) or at the option of Loan Trustee with the consent of Company (which will not be unreasonably withheld), be exchanged with Company for an Engine in accordance with the provisions of Section 7.05(b); (B) sell all or any part of the Airframe and any Engine at public or private sale, whether or not Loan Trustee at the time has possession thereof, as Loan Trustee may determine, or otherwise dispose of, hold, use, operate, lease to others or keep idle all or any part of the Airframe or such Engine as Loan Trustee, in its sole discretion, determines, all free and clear of any rights or claims of Company, and the proceeds of such sale or disposition shall be applied as set forth in Section 3.03; or (C) exercise any other remedy of a secured party under the NY UCC (whether or not in effect in the jurisdiction in which enforcement is sought); provided that, notwithstanding anything to the contrary set forth herein or in any other Operative Document, (i) as permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for those provisions of such Chapter III that cannot be derogated from; and (ii) as permitted by Article IV(3) of the Aircraft Protocol, the provisions of Chapter II of the Aircraft Protocol are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for (x) Article XVI of the Aircraft Protocol and (y) those provisions of such Chapter II that cannot be derogated from. In furtherance of the foregoing, the parties hereto agree that the exercise of remedies hereunder and the other Operative Documents is subject to other applicable law, including without limitation, the NY UCC and the Bankruptcy Code, and that nothing herein derogates from the rights of Company or Loan Trustee under or pursuant to such other applicable law, including without limitation, the NY UCC or the Bankruptcy Code.
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Upon every such taking of possession of Collateral under this Section 4.02, Loan Trustee may, from time to time, at the expense of the Collateral, make all such expenditures for maintenance, insurance, repairs, alterations, additions and improvements to and of the Collateral as it deems necessary to cause the Collateral to be in such condition as required by the provisions of this Indenture. In each such case, Loan Trustee may maintain, use, operate, store, insure, lease, control, manage or dispose of the Collateral and may exercise all rights and powers of Company relating to the Collateral as Loan Trustee reasonably deems best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, insurance, leasing, control, management or disposition of the Collateral or any part thereof as Loan Trustee may reasonably determine; and Loan Trustee shall be entitled to collect and receive directly all tolls, rents, revenues, issues, income, products and profits of the Collateral and every part thereof without prejudice, however, to the rights of Loan Trustee under any provision of this Indenture to collect and receive all cash held by, or required to be deposited with Loan Trustee hereunder. Such tolls, rents, revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, insurance, leasing, control, management or disposition of the Collateral, and of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments that Loan Trustee is required or elects to make, if any, for Taxes, insurance or other proper charges assessed against or otherwise imposed upon the Collateral or any part thereof, and all other payments which Loan Trustee is required or expressly authorized to make under any provision of this Indenture, as well as just and reasonable compensation for the services of Loan Trustee, and shall otherwise be applied in accordance with Article III. If an Event of Default has occurred and is continuing and the Equipment Notes either have been accelerated pursuant to this Section 4.02 or have become due at maturity and Loan Trustee is entitled to exercise rights hereunder, at the request of Loan Trustee, Company shall promptly execute and deliver to Loan Trustee such instruments of title and other documents as Loan Trustee reasonably deems necessary or advisable to enable Loan Trustee or an agent or representative designated by Loan Trustee, at such time or times and place or places as Loan Trustee specifies, to obtain possession of all or any part of the Collateral to which Loan Trustee at the time is entitled hereunder. If Company for any reason fails to execute and deliver such instruments and documents after such request by Loan Trustee, Loan Trustee may seek a judgment conferring on Loan Trustee the right to immediate possession and requiring Company to execute and deliver such instruments and documents to Loan Trustee, to the entry of which judgment Company hereby specifically consents to the fullest extent it may lawfully do so. All actual and reasonable expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Indenture.
(b) Loan Trustee shall give Company at least 30 days’ prior written notice of any public sale or of the date on or after which any private sale will be held, which notice Company hereby agrees to the extent permitted by applicable law is reasonable notice. Any Noteholder or Noteholders shall be entitled to bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02 and to credit against the
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purchase price bid at such sale by such Noteholders all or any part of the unpaid amounts owing to such Noteholders under the Operative Documents and secured by the Lien of this Indenture (but only to the extent that such purchase price would have been paid to such Noteholders pursuant to Article III if such purchase price were paid in cash and the foregoing provision of this Section 4.02(b) were not given effect). Loan Trustee may exercise such right without possession or production of the Equipment Notes or proof of ownership thereof, and as a representative of Noteholders may exercise such right without notice to Noteholders as party to any suit or proceeding relating to the foreclosure of any Collateral. Company may also bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02.
(c) To the extent permitted by applicable law, while an Event of Default has occurred and is continuing, Company irrevocably appoints Loan Trustee the true and lawful attorney-in-fact of Company (which appointment is coupled with an interest) in its name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or delivery for the enforcement of the Lien of this Indenture, whether pursuant to foreclosure or power of sale, or otherwise, to execute and deliver all such bills of sale, assignments and other instruments as may be necessary or appropriate, with full power of substitution, Company hereby ratifying and confirming all that such attorney or any substitute does by virtue hereof in accordance with applicable law; provided that if so requested by Loan Trustee or any purchaser, Company shall ratify and confirm any such sale, assignment or transfer of delivery, by executing and delivering to Loan Trustee or such purchaser all bills of sale, assignments, releases and other proper instruments to effect such ratification and confirmation as may reasonably be designated in any such request.
(d) At any time after Loan Trustee has declared the unpaid principal amount of all Equipment Notes then outstanding to be due and payable, or all Equipment Notes shall have become due and payable as provided in the proviso to Section 4.02(a)(i), and, in either case, prior to the sale of any part of the Collateral pursuant to this Article IV, a Majority in Interest of Noteholders, by written notice to Company and Loan Trustee, may rescind and annul such declaration, whether made by Loan Trustee on its own accord or as directed or deemed declaration, and its consequences if: (i) there has been paid to or deposited with Loan Trustee an amount sufficient to pay all overdue installments of principal amount of, and interest on, the Equipment Notes, and all other amounts owing under the Operative Documents, that have become due otherwise than by such declaration of acceleration and (ii) all other Events of Default, other than nonpayment of principal amount or interest on the Equipment Notes that have become due solely because of such acceleration, have been either cured or waived; provided that no such rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair any right consequent thereon.
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(e) Notwithstanding anything contained herein, (i) so long as Pass Through Trustee under any Pass Through Trust Agreement or Subordination Agent on its behalf is a Noteholder, Loan Trustee will not be authorized or empowered to acquire title to any Collateral or take any action with respect to any Collateral so acquired by it if such acquisition or action would cause any Pass Through Trust to fail to qualify as a “grantor trust” for U.S. federal income tax purposes, and (ii) Loan Trustee will not take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement.
Section 4.03 Remedies Cumulative. To the extent permitted under applicable law, each and every right, power and remedy specifically given to Loan Trustee herein or otherwise in this Indenture shall be cumulative and shall be in addition to every other right, power and remedy specifically given herein or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically given herein or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by Loan Trustee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by Loan Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall, to the extent permitted by applicable law, impair any such right, power or remedy or be construed to be a waiver of any default on the part of Company or to be an acquiescence therein.
Section 4.04 Discontinuance of Proceedings. In case Loan Trustee has instituted any proceedings to enforce any right, power or remedy under this Indenture by foreclosure, entry or otherwise, and such proceedings have been discontinued or abandoned for any reason or have been determined adversely to Loan Trustee, then and in every such case Company and Loan Trustee shall, subject to any determination in such proceedings, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Loan Trustee shall continue as if no such proceedings had been undertaken (but otherwise without prejudice).
Section 4.05 Waiver of Past Defaults. Subject to Section 5.03, upon written instruction from a Majority in Interest of Noteholders, Loan Trustee shall waive any past default hereunder and its consequences, and upon any such waiver such default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture and the other Operative Documents, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon; provided that in the absence of written instructions from each of the affected Noteholders, Loan Trustee shall not waive any default (i) in the payment of the principal amount, Make-Whole Amount, if any, or interest due under any Equipment Note then outstanding (other than with the consent of the holder thereof), or (ii) in respect of a covenant or provision hereof which, under Article IX, cannot be modified or amended without the consent of each such affected Noteholder.
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Section 4.06 Noteholders May Not Bring Suit Except Under Certain Conditions. A Noteholder of any Series shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Indenture or the Equipment Notes or otherwise, or for the appointment of a receiver or for the enforcement of any other remedy under this Indenture or the Equipment Notes or otherwise, unless:
(1) such Noteholder previously shall have given written notice to Loan Trustee of a continuing Event of Default;
(2) a Majority in Interest of Noteholders shall have requested Loan Trustee in writing to institute such action, suit or proceeding and shall have offered to Loan Trustee indemnity as provided in Section 5.03;
(3) Loan Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have been given to Loan Trustee during such 60-day period by a Majority in Interest of Noteholders.
Except to the extent provided in the Intercreditor Agreement or herein, it is understood and intended that no one or more of Noteholders of any Series shall have any right in any manner whatsoever hereunder or under the Equipment Notes of such Series to (i) surrender, impair, waive, affect, disturb or prejudice any Collateral, or the Lien of this Indenture on any Collateral, or the rights of Noteholders of such Series, (ii) obtain or seek to obtain priority over or preference with respect to any other such Noteholder of such Series or (iii) enforce any right under this Indenture or the Equipment Notes of such Series, except in the manner provided in this Indenture and for the equal, ratable and common benefit of all Noteholders of such Series subject to the provisions of this Indenture.
Section 4.07 Appointment of a Receiver. To the extent permitted by applicable law, if an Event of Default shall have occurred and be continuing, and the Equipment Notes either shall have been accelerated pursuant to Section 4.02 or have become due at maturity, Loan Trustee shall, as a matter of right, be entitled to the appointment of a receiver (who may be Loan Trustee or any successor or nominee thereof) for all or any part of the Collateral, whether such receivership be incidental to a proposed sale of the Collateral or the taking of possession thereof or otherwise, and, to the extent permitted by applicable law, Company hereby consents to the appointment of such a receiver and will not oppose any such appointment. Any receiver appointed for all or any part of the Collateral shall be entitled to exercise all the rights and powers of Loan Trustee with respect to the Collateral.
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ARTICLE V
Duties of Loan Trustee
Section 5.01 Notice of Event of Default. If Loan Trustee has actual knowledge of an Event of Default or of a default arising from a failure by Company to pay when due any payment of principal amount, interest on, or Make-Whole Amount, if any, due and payable under any Equipment Note, Loan Trustee shall promptly give notice thereof to Company, each Liquidity Provider and each Noteholder. Subject to the terms of Sections 4.02, 4.05, 5.02 and 5.03, Loan Trustee shall take such action, or refrain from taking such action, with respect to such default or Event of Default (including with respect to the exercise of any rights or remedies hereunder) as Loan Trustee is instructed in writing by a Majority in Interest of Noteholders. Subject to the provisions of Section 5.03, if Loan Trustee does not receive instructions as above provided within 20 Business Days after giving notice of such default or Event of Default to Noteholders, Loan Trustee may, subject to instructions thereafter received pursuant to the preceding provisions of this Section 5.01, take such action, or refrain from taking such action with respect to such default or Event of Default as it reasonably determines to be advisable in the best interests of Noteholders, but shall be under no duty to take or refrain from taking any action. In acting pursuant to the immediately preceding sentence, Loan Trustee shall use the same degree of care and skill in connection therewith as a prudent person would use under the circumstances in the conduct of his or her own affairs. Loan Trustee may not sell the Airframe or any Engine without the consent of a Majority in Interest of Noteholders.
For all purposes of this Indenture, in the absence of actual knowledge, Loan Trustee shall not be deemed to have knowledge of a default or an Event of Default unless notified in writing by Company or one or more Noteholders; and “actual knowledge” (as used in the foregoing clause) of Loan Trustee shall mean actual knowledge of a Trust Officer of Loan Trustee; provided that Loan Trustee is deemed to have actual knowledge of (i) the failure of Company to pay any principal amount of, or interest on, the Equipment Notes directly to Loan Trustee when the same shall become due or (ii) the failure of Company to maintain insurance as required under Section 7.06 if Loan Trustee receives written notice thereof from an insurer or insurance broker.
Section 5.02 Action upon Instructions; Certain Rights and Limitations. Subject to the terms of Article IV and this Article V, upon the written instructions at any time of a Majority in Interest of Noteholders, Loan Trustee shall promptly (i) give such notice, direction, consent, waiver or approval or exercise such right, remedy or power hereunder in respect of all or any part of the Collateral or (ii) take such other action permitted hereunder, in each case, as is specified in such instructions.
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Loan Trustee will cooperate with Company in connection with the recording, filing, re-recording and refiling of this Indenture and any supplements to it and any financing statements or other documents as is necessary to maintain the perfection hereof or otherwise protect the security interests created hereby. Loan Trustee shall furnish to Company upon request such information and copies of such documents as Loan Trustee may have and as are necessary for Company to perform its duties under Article II.
Section 5.03 Indemnification. Loan Trustee shall not be required to take any action or refrain from taking any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV unless it shall have received indemnification against any risks incurred in connection therewith in form and substance reasonably satisfactory to it, including, without limitation, adequate advances against costs that may be actually incurred by it in connection therewith. Loan Trustee shall not be required to take any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV, nor shall any other provision of any Operative Document be deemed to impose a duty on Loan Trustee to take any action, if Loan Trustee shall have been advised by outside counsel that such action is contrary to the terms hereof or is otherwise contrary to applicable law.
Section 5.04 No Duties Except as Specified in Indenture or Instructions. Loan Trustee shall not have any duty or obligation to manage, control, lease, use, sell, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral, or to otherwise take or refrain from taking any action under, or in connection with, this Indenture, except as expressly provided by the terms of this Indenture or the Participation Agreement or as expressly provided in written instructions received pursuant to the terms of Section 5.01 or 5.02; and no implied duties or obligations shall be read into this Indenture against Loan Trustee.
Section 5.05 No Action Except under Indenture or Instructions. Loan Trustee will not manage, control, use, sell, lease, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral except in accordance with the powers granted to, or the authority conferred upon, Loan Trustee pursuant to this Indenture and in accordance with the express terms hereof.
Section 5.06 Investment of Amounts Held by Loan Trustee. Any monies (including for the purpose of this Section 5.06 any amounts held by Loan Trustee pursuant to Section 3.02, 3.03 or 3.07 or pursuant to any provision of any other Operative Document providing for amounts to be held by Loan Trustee which are not distributed pursuant to the other provisions of Article III, or any cash received by Loan Trustee pursuant to Section 7.05(c) or 7.06(f) or otherwise, or Permitted Investments purchased by the use of such cash pursuant to this Section 5.06 or any cash constituting the proceeds of the maturity, sale or other disposition of any Permitted Investments) held by Loan Trustee hereunder as part of the Collateral, until paid out by Loan Trustee as herein provided, (i) subject to clause (ii) below and Section 3.07, may be carried by Loan
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Trustee on deposit with itself or on deposit to its account with any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the states thereof having combined capital and surplus and retained earnings of at least $100,000,000, and Loan Trustee shall not have any liability for interest upon any such monies except as otherwise agreed in writing with Company, or (ii) at any time and from time to time, so long as no Event of Default shall have occurred and be continuing, at the request of Company, shall be invested and reinvested in Permitted Investments as specified in such request (if such investments are reasonably available for purchase) and sold, in any case at such prices, including accrued interest or its equivalent, as are set forth in such request, and, as provided in Section 3.07, such Permitted Investments shall be held by Loan Trustee in trust as part of the Collateral until so sold; provided that Company shall upon demand pay to Loan Trustee the amount of any loss realized upon maturity, sale or other disposition of any such Permitted Investment and, so long as no Event of Default or Payment Default shall have occurred and be continuing, Company shall be entitled to receive from Loan Trustee, and Loan Trustee shall promptly pay to Company, any profit, income, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment. All Permitted Investments held by Loan Trustee pursuant to this Section 5.06 shall be held pursuant to Section 3.07. If an Event of Default or Payment Default shall have occurred and be continuing, any net income, profit, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment shall be held as part of the Collateral and shall be applied by Loan Trustee at the same time, on the same conditions and in the same manner as the amounts in respect of which such income, profit, interest, dividend or gain was realized are required to be distributed in accordance with the provisions hereof pursuant to which such amounts were required to be held. Subject to Section 3.03, at such time as there shall not be continuing any such Event of Default or Payment Default, such income, profit, interest, dividend or gain shall be paid to Company. In addition, subject to Section 3.03, if any moneys or investments are held by Loan Trustee solely because an Event of Default or Payment Default has occurred and is continuing, at such time as there shall not be continuing any such Event of Default or Payment Default, such moneys and investments shall be paid to Company. Loan Trustee shall not be responsible for any losses on any investments or sales of Permitted Investments made pursuant to the procedure specified in this Section 5.06 other than by reason of its willful misconduct or negligence.
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ARTICLE VI
Loan Trustee
Section 6.01 Acceptance of Trusts and Duties. U.S. Bank accepts the trusts and duties hereby created and applicable to it and agrees to perform such duties, but only upon the terms of this Indenture and agrees to receive, handle and disburse all monies received by it as Loan Trustee constituting part of the Collateral in accordance with the terms. U.S. Bank shall have no liability hereunder except (a) for its own willful misconduct or negligence, (b) as provided in the fourth sentence of Section 2.03 and the last sentence of Section 5.06, (c) for liabilities that may result from the inaccuracy of any representation or warranty of U.S. Bank in the Participation Agreement or expressly made hereunder and (d) as otherwise expressly provided in the Operative Documents.
For the avoidance of doubt, Loan Trustee shall also be accountable in its capacity as Securities Intermediary with respect to the Security Account, as set forth in Section 3.07.
Section 6.02 Absence of Certain Duties. Except in accordance with written instructions furnished pursuant to Section 5.01, 5.02 or 6.06, and except as provided in, and without limiting the generality of, Sections 5.02, 5.03 and 5.04, Loan Trustee shall have no duty (a) to see to any registration of the Aircraft or any recording or filing of this Indenture or any other document, or to see to the maintenance of any such registration, recording or filing, (b) to see to any insurance on the Aircraft or to effect or maintain any such insurance, whether or not Company is in default with respect thereto, (c) to confirm, verify or inquire into the failure to receive any financial statements of Company or (d) to inspect the Aircraft at any time or ascertain or inquire as to the performance or observance of any of Company’s covenants hereunder with respect to the Aircraft.
Section 6.03 No Representations or Warranties as to the Documents. Except as provided in Article V of the Participation Agreement, Loan Trustee shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of any Operative Document or any other document or instrument, or as to the correctness of any statement (other than a statement by Loan Trustee) contained herein or therein, except that Loan Trustee hereby represents and warrants that each of said specified documents to which it is a party has been or will be duly executed and delivered by one of its officers who is and will be duly authorized to execute and deliver such document on its behalf.
Section 6.04 No Segregation of Monies; No Interest. Subject to Section 5.06 and except as provided in Section 3.07, all moneys received by Loan Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of applicable law, and neither Loan Trustee nor any agent of Loan Trustee shall be under any liability for interest on any moneys received by it hereunder; provided that any payments received, or applied hereunder, by Loan Trustee shall be accounted for by Loan Trustee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.
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Section 6.05 Reliance; Agents; Advice of Counsel. Loan Trustee shall not incur any liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the proper party or parties. Loan Trustee may accept a copy of a resolution of the Board of Directors of any party to the Participation Agreement, certified by the Secretary or an Assistant Secretary of such party as duly adopted and in full force and effect, as conclusive evidence that such resolution has been duly adopted and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically described herein, Loan Trustee may for all purposes hereof rely on a certificate, signed by a duly authorized officer of Company, as to such fact or matter, and such certificate shall constitute full protection to Loan Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. In the administration of the trusts hereunder, Loan Trustee may (a) execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents (including paying agents or registrars) or attorneys, and (b) at the expense of the Collateral, consult with counsel, accountants and other skilled Persons to be selected and retained by it; provided that, prior to retaining agents (including paying agents or registrars), counsel, accountants or other skilled Persons, so long as no Event of Default exists, Loan Trustee shall obtain Company’s consent (such consent not to be unreasonably withheld). Loan Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled Persons acting within such counsel’s, accountants’ or Person’s area of competence (so long as Loan Trustee shall have exercised reasonable care and judgment in selecting such Persons).
Section 6.06 Instructions from Noteholders. In the administration of the trusts created hereunder, Loan Trustee shall have the right to seek instructions from a Majority in Interest of Noteholders should any provision of this Indenture appear to conflict with any other provision herein or any other Operative Document or Pass Through Document or should Loan Trustee’s duties or obligations hereunder be unclear, and Loan Trustee shall incur no liability in refraining from acting until it receives such instructions. Loan Trustee shall be fully protected for acting in accordance with any instructions received under this Section 6.06.
ARTICLE VII
Operating Covenants of Company
Section 7.01 Liens. Company will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Aircraft, its title thereto or any of its interest therein, except:
(a) the respective rights of Loan Trustee and Company as provided in the Operative Documents, the Lien of this Indenture, the rights of any Permitted Lessee under a Lease permitted hereunder and the rights of any Person existing pursuant to the Operative Documents or the Pass Through Documents;
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(b) the rights of others under agreements or arrangements to the extent expressly permitted by this Indenture;
(c) Loan Trustee Liens, Noteholder Liens and Other Party Liens;
(d) Liens for Taxes either not yet overdue or being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or impair the Lien of this Indenture;
(e) materialmen’s, mechanics’, workers’, repairmen’s, hangerkeeper’s, landlords’, employees’ or other like Liens arising in the ordinary course of business (including those arising under maintenance agreements entered into in the ordinary course of business) securing obligations that either are not yet overdue for a period of more than 60 days or are being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or materially impair the Lien of this Indenture;
(f) Liens arising out of any judgment or award, so long as such judgment or award is, within 60 days after the entry thereof, discharged, vacated or reversed, or execution thereof stayed pending appeal or other judicial review or is discharged, vacated or reversed within 60 days after the expiration of such stay;
(g) any other Lien with respect to which Company or any Permitted Lessee provides a bond, cash collateral or other security adequate in the reasonable opinion of Loan Trustee;
(h) salvage or similar rights of insurers under insurance policies maintained by Company or any Permitted Lessee; and
(i) Liens approved in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders.
Liens described in clauses (a) through (i) above are referred to herein as “Permitted Liens”. Company shall promptly, at its own expense, take (or cause to be taken) such action as may be necessary duly to discharge (by bonding or otherwise) any Lien other than a Permitted Lien arising at any time with respect to the Aircraft, its title thereto or any of its interest therein.
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Section 7.02 Possession, Operation and Use, Maintenance and Registration.
(a) Possession. Without the prior written consent of Loan Trustee, Company shall not lease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install any Engine, or permit any Engine to be installed, on any airframe other than the Airframe; provided that Company (or, except with respect to clauses (viii) and (ix) below, any Permitted Lessee) may without the prior written consent of Loan Trustee:
(i) subject the Airframe to interchange agreements or subject any Engine to interchange, pooling, borrowing or other similar agreements or arrangements, in each case entered into by Company (or any Permitted Lessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe and (B) if Company’s title to any such Engine is divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine, and Company shall (or shall cause any Permitted Lessee to) comply with Section 7.05(b) in respect thereof;
(ii) deliver possession of the Airframe or any Engine to (x) any Person for testing, service, repair, restoration, storage, maintenance or other similar purposes or for alterations, modifications or additions to the Airframe or such Engine to the extent required or permitted by the terms hereof or (y) to any Person for purposes of transport to a Person referred to in the preceding clause (x);
(iii) transfer or permit the transfer of possession of the Airframe or any Engine to any Government pursuant to a lease, contract or other instrument;
(iv) subject the Airframe or any Engine to the CRAF Program or transfer possession of the Airframe or any Engine to the United States government in accordance with applicable laws, rulings, regulations or orders (including, without limitation, any transfer of possession pursuant to the CRAF Program); provided that Company (or any Permitted Lessee) (A) shall promptly notify Loan Trustee upon transferring possession of the Airframe or any Engine pursuant to this clause (iv) and (B) in the case of a transfer of possession pursuant to the CRAF Program, shall notify Loan Trustee of the name and address of the responsible Contracting Office Representative for the Air Mobility Command of the United States Air Force or other appropriate Person to whom notices must be given and to whom requests or claims must be made to the extent applicable under the CRAF Program;
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(v) install an Engine on an airframe owned by Company (or any Permitted Lessee) free and clear of all Liens, except (A) Permitted Liens and Liens that apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety) and (B) the rights of third parties under interchange, pooling, borrowing or other similar agreements or arrangements that would be permitted under clause (i) above;
(vi) install an Engine on an airframe leased to Company (or any Permitted Lessee) or purchased or owned by Company (or any Permitted Lessee) subject to a lease, conditional sale or other security agreement; provided that: (A) such airframe is free and clear of all Liens except (1) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their successors and assigns, and (2) Liens of the type permitted by clause (v) of this Section 7.02(a); and (B) either: (1) Company has obtained from the lessor, conditional vendor or secured party of such airframe a written agreement (which may be a copy of the lease, conditional sale or other security agreement covering such airframe), in form satisfactory to Loan Trustee (an agreement from such lessor, conditional vendor or secured party substantially in the form of the penultimate paragraph of this Section 7.02(a) being deemed to be satisfactory to Loan Trustee), whereby such lessor, conditional vendor or secured party expressly agrees that neither it nor its successors or assigns will acquire or claim any right, title or interest in any Engine by reason of such Engine being installed on such airframe at any time while such Engine is subject to the Lien of this Indenture, or (2) such lease, conditional sale or other security agreement provides that such Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement at any time while such Engine is subject to the Lien of this Indenture, notwithstanding its installation on such airframe;
(vii) install an Engine on an airframe owned by Company (or any Permitted Lessee), leased to Company (or any Permitted Lessee) or purchased by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither clause (v) nor clause (vi) of this Section 7.02(a) is applicable; provided that such installation shall be deemed an Event of Loss with respect to such Engine, and Company shall comply with Section 7.05(b) in respect thereof, if such installation adversely affects Loan Trustee’s security interest in such Engine, Loan Trustee not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Company with Section 7.05(b);
(viii) lease any Engine, the Airframe or the Airframe and Engines to any United States air carrier as to which there is in force a certificate issued pursuant to the Transportation Code (49 U.S.C. Sections 41101-41112) or successor provision that gives like authority; provided that no Event of Default exists at the time such lease is entered into; and
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(ix) lease any Engine, the Airframe or the Airframe and Engines to (A) any foreign air carrier that is at the inception of the lease based in and a domiciliary of a country listed in Exhibit B hereto, (B) the manufacturer of the Airframe or any Engine (either directly or through an affiliate) and (C) any foreign air carrier consented to in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders; provided that (w) no Event of Default exists at the time such lease is entered into, (x) in the case of a lease to any foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains normal diplomatic relations with the country in which such foreign air carrier is based at the time such lease is entered into and in the case of a lease to a foreign air carrier principally based in Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date, (y) in the case of a lease to any foreign air carrier, Company furnishes Loan Trustee with a certificate from a Responsible Officer of Company certifying that there exist no possessory rights in favor of such lessee under the laws of such lessee’s country which would, upon bankruptcy or insolvency of or other default by Company, and assuming at such time such lessee is not insolvent or bankrupt, prevent the taking of possession of any such Engine or the Airframe and any such Engine by Loan Trustee in accordance with and when permitted by the terms of Section 4.02 upon the exercise by Loan Trustee of its remedies under Section 4.02, and (z) in the case of any lease to a foreign air carrier, such carrier is not then subject to any bankruptcy, insolvency, liquidation, reorganization, dissolution or similar proceeding and shall not have substantially all of its property in the possession of any liquidator, trustee, receiver or similar person;
provided that the rights of any lessee or other transferee who receives possession of the Aircraft, the Airframe or any Engine by reason of a transfer permitted by this Section 7.02(a) (other than the transfer of an Engine which is deemed an Event of Loss) shall be subject and subordinate to, and any permitted lease shall be made expressly subject and subordinate to, all the terms of this Indenture, including Loan Trustee’s rights to repossess pursuant to Section 4.02 and to avoid such lease upon such repossession, and Company shall remain primarily liable hereunder for the performance and observance of all of the terms and conditions of this Indenture to the same extent as if such lease or transfer had not occurred, any such lease shall include appropriate provisions for the maintenance and insurance of the Aircraft, the Airframe or such Engine, and no lease or transfer of possession otherwise in compliance with this Section shall (x) result in any registration or re-registration of the Aircraft except to the extent permitted in Section 7.02(e) or the maintenance, operation or use thereof that does not comply with Sections 7.02(b) and (c) or (y) permit any action not permitted to be taken by Company with respect to the Aircraft hereunder. Company shall promptly notify Loan Trustee and the Rating Agencies of the existence of any such lease with a term in excess of one year.
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Loan Trustee, each Noteholder by acceptance of an Equipment Note, and each Related Noteholder by acceptance of a Related Equipment Note agrees, for the benefit of Company (and any Permitted Lessee) and for the benefit of the lessor, conditional vendor or secured party of any airframe or engine leased to Company (or any Permitted Lessee) or leased to or purchased or owned by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement, that Loan Trustee, Noteholders and Related Noteholders will not acquire or claim, as against Company (or any Permitted Lessee) or such lessor, conditional vendor or secured party, any right, title or interest in: (A) any engine or engines owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of such engine or engines being installed on the Airframe at any time while such engine or engines are subject to such lease or conditional sale or other security agreement, or (B) any airframe owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of any Engine being installed on such airframe at any time while such airframe is subject to such lease or conditional sale or other security agreement.
Loan Trustee acknowledges that any “wet lease” or other similar arrangement under which Company (or any Permitted Lessee) maintains operational control of the Aircraft does not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 7.02(a).
(b) Operation and Use. Company agrees that the Aircraft will not be used or operated in violation of any law, rule or regulation of any government of any country having jurisdiction over the Aircraft or in violation of any airworthiness certificate, license or registration relating to the Aircraft issued by any such government, except (i) immaterial or non-recurring violations with respect to which corrective measures are taken promptly by Company or a Permitted Lessee, as the case may be, upon discovery thereof or (ii) to the extent Company (or, if a Lease is then in effect, any Permitted Lessee) is contesting in good faith the validity or application of any such law, rule or regulation or airworthiness certificate, license or registration in any manner that does not involve any material risk of sale, forfeiture or loss of the Aircraft or impair the Lien of this Indenture; provided that Company shall not be in default under, or required to take any action set forth in, this sentence if it is not possible for it (or any Permitted Lessee) to comply with the laws of a jurisdiction other than the United States (or other than any jurisdiction in which the Aircraft is then registered) because of a conflict with the applicable laws of the United States (or such jurisdiction in which the Aircraft is then registered). Company shall also have the right to operate the Aircraft without having on
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board the original registration certificate or airworthiness certificate in the event that either or both such certificates disappear from the Aircraft, but only to the extent permitted by Exemption No. 5318 of the regulations of the FAA or other similar exemption. Company will not operate the Aircraft, or permit the Aircraft to be operated or located, (i) in any area excluded from coverage by any insurance required by the terms of Section 7.06 or (ii) in any war zone or recognized or, in Company’s judgment, threatened areas of hostilities unless covered by war risk insurance in accordance with Section 7.06, unless in the case of either clause (i) or (ii), (x) government indemnification complying with Sections 7.06(a) and (b) has been provided or (y) the Aircraft is only temporarily located in such area as a result of an isolated occurrence or isolated series of occurrences attributable to a hijacking, medical emergency, equipment malfunction, weather conditions, navigational error or other similar circumstances or any other circumstances beyond the reasonable control of Company (or any Permitted Lessee) and Company (or any Permitted Lessee) is using its good faith efforts to remove the Aircraft from such area as promptly as practicable.
(c) Maintenance. Company shall maintain, service, repair and overhaul the Aircraft (or cause the same to be done) (i) so as to keep the Aircraft in good operating condition and in such condition as may be necessary to enable the airworthiness certification of the Aircraft to be maintained in good standing at all times (other than (v) during temporary periods of storage, during maintenance, testing or modification permitted hereunder, (w) during periods of grounding by applicable governmental authorities, (x) during periods when the FAA or such other aviation authority has revoked or suspended the airworthiness certificates for aircraft of the same manufacturer and model as the Aircraft, (y) with respect to minor or non-recurring violations with respect to which corrective measures are taken promptly upon discovery thereof and (z) to the extent Company or any Permitted Lessee is promptly contesting in good faith the validity or application of any law or requirement relating to any such certification in any manner which does not create a material risk of sale, loss or forfeiture of the Aircraft, the Airframe or any Engine or the interest of Loan Trustee therein or any material risk of criminal liability or material civil penalty against Loan Trustee) under the Transportation Code, during such periods in which the Aircraft is registered under the laws of the United States, or, if the Aircraft is registered under the laws of any other jurisdiction, the applicable laws of such jurisdiction and (ii) using the same standards as Company (or a Permitted Lessee, if a Lease is in effect) uses with respect to similar aircraft operated by Company (or such Permitted Lessee) in similar circumstances (it being understood that the obligations pursuant to this clause (ii) do not limit Company’s obligations under the preceding clause (i)). In any case, the Aircraft will be maintained in accordance with the maintenance standards required by the FAA (while operated under an FAA-approved maintenance program) or, while operated under the maintenance program of another jurisdiction, standards substantially equivalent to those required by the central aviation authority of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland or the United Kingdom. Company shall maintain or cause to be maintained all records, logs and other documents required to be maintained in respect of the Aircraft by appropriate authorities in the jurisdiction in which the Aircraft is registered.
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(d) Identification of Loan Trustee’s Interest. If not prevented by applicable law or regulations or by any government, Company agrees to affix as promptly as practicable after the Closing Date and thereafter to maintain in the cockpit of the Aircraft, in a clearly visible location, and on each Engine, a nameplate bearing the inscription “MORTGAGED TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS LOAN TRUSTEE” (such nameplate to be replaced, if necessary, with a nameplate reflecting the name of any successor Loan Trustee). Such placards may be removed temporarily, if necessary, in the course of maintenance of the Airframe or Engines.
(e) Registration. Company shall cause the Aircraft to remain duly registered, under the laws of the United States, in the name of Company except as otherwise required by the Transportation Code; provided that Loan Trustee shall, at Company’s expense, execute and deliver all such documents as Company may reasonably request for the purpose of continuing such registration. Notwithstanding the preceding sentence, Company, at its own expense, may cause or allow the Aircraft to be duly registered under the laws of any foreign jurisdiction in which a Permitted Lessee could be principally based, in the name of Company or of any nominee of Company, or, if required by applicable law, in the name of any other Person (and, following any such foreign registration, may cause the Aircraft to be re-registered under the laws of the United States); provided that in the case of jurisdictions other than those approved by Loan Trustee with the consent of a Majority in Interest of Noteholders (i) if such jurisdiction is at the time of registration listed on Exhibit B, Loan Trustee shall have received at the time of such registration an opinion of counsel to Company to the effect that (A) this Indenture and Loan Trustee’s right to repossession hereunder is valid and enforceable under the laws of such country, (B) after giving effect to such change in registration, the Lien of this Indenture shall continue as a valid Lien and shall be duly perfected in the new jurisdiction of registration and that all filing, recording or other action necessary to perfect and protect the Lien of this Indenture has been accomplished (or if such opinion cannot be given at such time, (x) the opinion shall detail what filing, recording or other action is necessary and (y) Loan Trustee shall have received a certificate from a Responsible Officer of Company 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 promptly delivered to Loan Trustee subsequent to the effective date of such change in registration), (C) the obligations of Company under this Indenture 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), (D) all approvals or consents of any government
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in such jurisdiction having jurisdiction required for such change in registration shall have been duly obtained and shall be in full force and effect and (E) (unless Company shall have agreed to provide insurance covering the risk of requisition of use or title of the Aircraft by the government of such jurisdiction so long as the Aircraft is registered under the laws of such jurisdiction) the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use or title of the Aircraft in the event of requisition by such government of such use or title, and (ii) if such jurisdiction is at the time of registration not listed on Exhibit B, Loan Trustee shall have received (in addition to the opinions set forth in clause (i) above) at the time of such registration an opinion of counsel to Company to the effect that (A) the terms of this Indenture are legal, valid, binding and enforceable in such jurisdiction (subject to exceptions customary in such jurisdiction; provided that, subject to exceptions relating to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and exceptions relating to general principles of equity, such counsel shall opine that any applicable laws limiting the remedies provided in Section 4.02 do not in the opinion of such counsel make the remedies provided in Section 4.02 inadequate for the practical realization of the rights and benefits provided thereby), (B) it is not necessary for Loan Trustee to register or qualify to do business in such jurisdiction and (C) there is no tort liability of the lender of an aircraft not in possession thereof under the laws of such jurisdiction other than tort liability that might have been imposed on such lender under the laws of the United States or any state thereof (it being understood that such opinion shall be waived if insurance reasonably satisfactory to Loan Trustee is provided, at Company’s expense, to cover such risk). Loan Trustee will cooperate with Company in effecting such foreign registration. Notwithstanding the foregoing, prior to any such change in the country of registry of the Aircraft, the following conditions shall be met (or waived as provided in Section 6.01(b) of the Participation Agreement):
(i) no Event of Default shall have occurred and be continuing at the effective date of the change in registration; provided that it shall not be necessary to comply with this condition if the change in registration results in the registration of the Aircraft under the laws of the United States or if a Majority in Interest of Noteholders consents to such change in registration;
(ii) Loan Trustee shall have received evidence of compliance with the insurance provisions contained herein after giving effect to such change in registration;
(iii) other than in the case of a change in registration to Taiwan, the proposed change in registration is made to a country with which the United States then maintains normal diplomatic relations, and in the case of a change in registration to Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date; and
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(iv) Company shall have paid or made provision reasonably satisfactory to Loan Trustee for the payment of all reasonable expenses (including reasonable attorneys’ fees) of Loan Trustee and Noteholders in connection with such change in registration.
Company shall (i) from time to time, take such actions as may be required to be taken by Company so that any International Interest arising in relation to this Indenture, the Aircraft, any Replacement Aircraft, any Engine or Replacement Engine may be duly registered (and any such registration may be assigned, amended, extended or discharged) at the International Registry, and (ii) obtain from the International Registry all approvals as may be required duly and timely to perform Company’s obligations under this Indenture with respect to the registration of any such International Interest. Loan Trustee shall take all actions necessary with respect to the International Registry to consent to Company’s initiation of any registrations required under this Indenture to enable Company to complete such registrations, including, without limitation, appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to consent to any registrations on the International Registry with respect to the Airframe or any Engine.
Section 7.03 Inspection; Financial Information.
(a) Inspection. At all reasonable times, but upon at least 15 Business Days’ prior written notice to Company, Loan Trustee or its authorized representatives may, subject to the other conditions of this Section 7.03(a), inspect the Aircraft and may inspect the books and records of Company relating to the maintenance of the Aircraft required to be maintained by the FAA or the government of another jurisdiction in which the Aircraft is then registered; provided that (i) Loan Trustee or its representatives, as the case may be, shall be fully insured at no cost to Company or any Permitted Lessee in a manner satisfactory to Company and such Permitted Lessee with respect to any risks incurred in connection with any such inspection or shall provide to Company and such Permitted Lessee a written release satisfactory to Company and such Permitted Lessee with respect to such risks, (ii) any such inspection shall be during Company’s or Permitted Lessee’s, as the case may be, normal business hours and subject to the safety, security and workplace rules applicable at the location where such inspection is conducted and any applicable governmental rules or regulations, (iii) any such inspection of the Aircraft shall be a visual, walk-around inspection of the interior and exterior of the Aircraft and shall not include opening any panels, bays or the like without Company’s express consent, which consent Company may in its sole discretion withhold, and (iv) no exercise of such inspection right shall interfere with the use, operation or maintenance of the Aircraft by, or the business of, Company or any Permitted Lessee and Company and any Permitted Lessee shall not be required to undertake or incur any additional liabilities in connection therewith. All information obtained in connection with any such inspection
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of the Aircraft and of such books and records shall be Confidential Information and shall be treated by Loan Trustee and its representatives in accordance with the provisions of Section 10.16. Any inspection pursuant to this Section 7.03(a) shall be at the sole risk (including, without limitation, any risk of personal injury or death) and expense of Loan Trustee (or its representatives) making such inspection. Except during the continuance of an Event of Default, all inspections by Loan Trustee and its representatives provided for under this Section 7.03(a) shall be limited to one inspection of any kind contemplated by this Section 7.03(a) during any consecutive twelve month period.
(b) Financial Information. So long as any of the Secured Obligations remain unpaid, Company agrees to furnish to Loan Trustee: (i) within 60 days after the end of each of the first three quarterly periods in each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries prepared by it as of the close of such period, together with the related consolidated statements of income for such period or (y) a report of Company on Form 10-Q in respect of such period in the form filed with the Securities and Exchange Commission and (ii) within 120 days after the close of each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries as of the close of such fiscal year, together with the related consolidated statements of income for such fiscal year, certified by independent public accountants, or (y) a report of Company on Form 10-K in respect of such year in the form filed with the Securities and Exchange Commission. The items required to be furnished pursuant to clause (i) and clause (ii) above shall be deemed to have been furnished on the date on which such item is posted on the Securities and Exchange Commission’s website at www.sec.gov, and such posting shall be deemed to satisfy the requirements of clause (i) and clause (ii); provided that Company will deliver a paper copy of any item referred to in clause (i) and clause (ii) above if Loan Trustee so requests.
Section 7.04 Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines.
(a) Replacement of Parts. Company shall (or shall cause a Permitted Lessee to) promptly replace or cause to be replaced all Parts incorporated or installed in or attached to the Airframe or any Engine and that become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use for any reason, except as otherwise provided in Section 7.04(c) or if the Airframe or an Engine to which a Part relates has suffered an Event of Loss. In addition, Company (or any Permitted Lessee) may remove (or cause to be removed) in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use; provided that Company (or any Permitted Lessee), except as otherwise provided in Section 7.04(c), will replace such Parts as promptly as practicable. All replacement Parts shall be free and clear of all Liens (except for Permitted Liens and
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except in the case of replacement property temporarily installed on an emergency basis) and shall be in the condition and repair required to be maintained by the terms hereof. Except as otherwise provided in Section 7.04(c), any Part removed from the Airframe or any Engine shall remain subject to the Lien of this Indenture no matter where located until it is replaced by a part incorporated or installed in or attached to the Airframe or such Engine that meets the requirements for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated or installed in or attached to the Airframe or any Engine as above provided (except in the case of replacement property temporarily installed on an emergency basis), without further act, (i) the replaced Part shall thereupon be free and clear of all rights of Loan Trustee and of the Lien of this Indenture and shall no longer be deemed a Part hereunder, and (ii) such replacement Part shall become subject to the Lien of this Indenture and be deemed a Part of the Airframe or such Engine for all purposes to the same extent as the Parts originally incorporated or installed in or attached to the Airframe or such Engine. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such replaced Part from the Lien of this Indenture.
(b) Pooling of Parts. Any Part removed from the Airframe or any Engine as provided in Section 7.04(a) may be subjected by Company or a Person permitted to be in possession of the Airframe or such Engine to a pooling arrangement entered into in the ordinary course of Company’s or such Person’s business; provided that the part replacing such removed Part shall be incorporated or installed in or attached to the Airframe or such Engine in accordance with Section 7.04(a) as promptly as practicable after the removal of such removed Part. In addition, any replacement Part when incorporated or installed in or attached to the Airframe or any Engine may be owned by any third party subject to such a pooling arrangement; provided that Company, at its expense, as promptly thereafter as practicable either (i) causes title to such replacement Part to vest in Company free and clear of all Liens (except Permitted Liens), or (ii) replaces (or causes to be replaced) such replacement Part by incorporating or installing in or attaching to the Airframe or such Engine a further replacement Part in the manner contemplated by Section 7.04(a).
(c) Alterations, Modifications and Additions. Company will, or will cause a Permitted Lessee to, make (or cause to be made) such alterations and modifications in and additions to the Airframe and the Engines as are required from time to time to meet the applicable requirements of the FAA or any applicable government of any other jurisdiction in which the Aircraft is then registered; except for (i) immaterial and non-recurring violations with respect to which corrective measures are being taken promptly by Company (or, if a Lease is then in effect, any Permitted Lessee) upon discovery thereof and (ii) any law, rule, regulation or order the validity or application of which is being contested in good faith by Company (or, if a Lease is then in effect, any Permitted Lessee) in any manner which does not involve any material risk of sale, loss or forfeiture
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of the Aircraft and does not materially adversely affect Loan Trustee’s interest in the Aircraft. In addition, Company (or any Permitted Lessee), at its own expense, may from time to time add further parts or accessories and make or cause to be made such alterations and modifications in and additions to the Airframe or any Engine as Company (or any Permitted Lessee) deems desirable in the proper conduct of its business, including, without limitation, removal (without replacement) of Parts; provided that no such alteration, modification or addition shall materially diminish the value or utility of the Airframe or such Engine below its value or utility immediately prior to such alteration, modification or addition, assuming that the Airframe or such Engine was then in the condition required to be maintained by the terms of this Indenture, except that the value (but not the utility) of the Airframe or any Engine may be reduced by the value of any such Parts that are removed that Company (or such Permitted Lessee) deems obsolete or no longer suitable or appropriate for use on the Airframe or any Engine. For the avoidance of doubt, Company may make alterations in the passenger configuration of the Aircraft and such alterations shall not be subject to the immediately preceding sentence. All Parts incorporated or installed in or attached or added to the Airframe or any Engine as the result of such alteration, modification or addition shall, without further act, be subject to the Lien of this Indenture. Notwithstanding the foregoing, Company (or any Permitted Lessee) may, at any time, remove any Part from the Airframe or any Engine if such Part: (i) is in addition to, and not in replacement of or substitution for, any Part originally incorporated or installed in or attached to the Airframe or such Engine at the time of delivery thereof to Company or any Part in replacement of, or substitution for, any such Part, (ii) is not required to be incorporated or installed in or attached or added to the Airframe or such Engine pursuant to the first sentence of this Section 7.04(c) and (iii) can be removed from the Airframe or such Engine without materially diminishing the value or utility required to be maintained by the terms of this Indenture that the Airframe or such Engine would have had had such Part never been installed on the Airframe or such Engine. Upon the removal by Company (or any Permitted Lessee) of any Part as permitted by this Section 7.04(c), such removed Part shall, without further act, be free and clear of all rights and interests of Loan Trustee and the Lien of this Indenture and shall no longer be deemed a Part hereunder. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such removed Part from the Lien of this Indenture. Loan Trustee acknowledges that it has no interest in the Excluded Equipment. Notwithstanding the provisions of this Section 7.04(c) or any other term or condition of this Indenture, Company (or any Permitted Lessee) may from time to time install on, and remove from, the Aircraft equipment that is owned by, leased to or conditionally sold to Company (or any Permitted Lessee) (and title to such equipment shall remain vested in Company, such Permitted Lessee, or the lessor or the conditional vendor thereof) if (1) such equipment is Excluded Equipment and (2) the location affected by any such removal, if damaged, is repaired prior to return, in a workmanlike manner, to a condition suitable for commercial passenger service; provided that all costs of installation, removal and replacement shall be the responsibility of Company.
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(d) Substitution of Engines. Company shall have the right at its option at any time and from time to time, on at least 30 days’ prior written notice to Loan Trustee, to substitute a Replacement Engine for any Engine. In such event, and prior to the date of such substitution, Company shall replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine.
(e) Substitution of Airframe. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute a Substitute Airframe, free and clear of all Liens (other than Permitted Liens), for the Airframe so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) the Substitute Airframe has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the Manufacturer) and (iii) the Substitute Airframe has a MCMV (as defined below) at least equal to the MCMV of the Airframe being replaced by the Substitute Airframe (assuming that the Airframe had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV” is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Substitute Airframe and the Airframe being replaced by the Substitute Airframe, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Substitute Airframe and such Airframe as of the same date within the 60-day period prior to the substitution for both the Substitute Airframe and such Airframe.
Prior to or at the time of any substitution under this Section 7.04(e), Company will (A) cause an Indenture Supplement covering such Substitute Airframe to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft may then be registered, (B) cause the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Substitute Airframe to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Substitute Airframe is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or statements with respect to such Substitute Airframe or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan
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Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft may then be registered, (D) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such substitution, such Substitute Airframe will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Substitute Airframe, (F) furnish Loan Trustee with a copy of the original bill of sale in respect of such Substitute Airframe, (G) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Substitute Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the opinion of counsel to Company delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as shall at the time be customary in opinions rendered in comparable circumstances and (H) cause Loan Trustee to be named as “Controlling Party” under an airframe warranties agreement with respect to such Substitute Airframe substantially similar to the Airframe Warranties Agreement.
In the case of the Substitute Airframe subjected to the Lien of this Indenture under this Section 7.04(e), promptly upon the recordation of the Indenture Supplement covering such Substitute Airframe pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Substitute Airframe is registered), Company will cause to be delivered to Loan Trustee a favorable opinion of aviation law counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee as to the due registration of the aircraft to which the Substitute Airframe is part and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Substitute Airframe and the validity and perfection of the security interest in the Substitute Airframe granted to Loan Trustee under this Indenture.
For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Substitute Airframe shall become part of the Collateral and shall be deemed an “Airframe” as defined herein. Upon compliance with clauses (A) through (H) of the second preceding paragraph, Loan Trustee shall execute and deliver to Company an appropriate instrument releasing the replaced Airframe, all proceeds (including, without
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limitation, insurance proceeds, if any), and all rights relating to the foregoing, from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to such replaced Airframe.
(f) Substitution of Aircraft. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute one or more Substitute Aircraft, free and clear of all Liens (other than Permitted Liens), for the Aircraft so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) Company shall have obtained a written confirmation from each of the Rating Agencies to the effect that such substitution would not result in (x) a reduction of the rating for any class of Pass Through Certificates then rated by such Rating Agency below the then current rating for such class of Pass Through Certificates or (y) a withdrawal or suspension of the rating of any class of Pass Through Certificates then rated by such Rating Agency, (iii) with respect to each Substitute Aircraft, the airframe constituting a part of such Substitute Aircraft has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the applicable airframe manufacturer) and (iv) such Substitute Aircraft has (or, in the case of more than one Substitute Aircraft, collectively have) an aggregate MCMV (as defined below) at least equal to the MCMV of the Aircraft being replaced by such Substitute Aircraft (assuming that the Aircraft had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV”, with respect to the Aircraft and any Substitute Aircraft, is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Aircraft and such Substitute Aircraft, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Aircraft and such Substitute Aircraft as of the same date within the 60-day period prior to the substitution for each of the Aircraft and such Substitute Aircraft.
Prior to the effectiveness of any such substitution pursuant to this Section 7.04(f), (A) if a single Substitute Aircraft is being substituted for the Aircraft, Company shall prepare amendments to this Indenture in order to make the reasonably necessary changes arising from such substitution and (B) if more than one Substitute Aircraft is being substituted for the Aircraft, Company shall (1) prepare amendments to this Indenture in order to make the reasonably necessary changes to substitute the Aircraft with one of such Substitute Aircraft, (2) prepare separate financing agreements substantially in the form of the Operative Documents with respect to each other Substitute Aircraft and (3) reallocate the principal amount of the Equipment Notes relating to the Aircraft among the Substitute Aircraft pro rata based on the MCMV of each Substitute Aircraft or on such other basis among each Substitute Aircraft determined in a manner consistent with, and as would preserve the aggregate amortization profile of, the Equipment Notes relating to the Aircraft.
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Prior to or at the time of any substitution under this Section 7.04(f), with respect to the airframe and each engine constituting any Substitute Aircraft, Company shall comply with the terms of Section 7.04(d) or Section 7.04(e), as applicable, of this Indenture (or the other financing agreements substantially in the form of the Operative Documents to which such Substitute Aircraft shall be subject) with respect thereto; provided, however, notwithstanding anything to the contrary in any such Section 7.04(d) or Section 7.04(e), except as provided in the first paragraph of this Section 7.04(f), there shall be no requirement (or requirement to provide any certificate) that any airframe or any engine have a certain value or utility.
Section 7.05 Loss, Destruction or Requisition.
(a) Event of Loss with Respect to the Airframe. Upon the occurrence of an Event of Loss with respect to the Airframe or the Airframe and the Engines then installed thereon, Company shall as soon as practicable (and, in any event, within 30 days after an Event of Loss has occurred) notify Loan Trustee of such Event of Loss, and, within 90 days after such Event of Loss, Company shall give Loan Trustee written notice of its election to perform one of the following options (it being agreed that if Company has not given such notice of election within such 90-day period, Company shall be deemed to have elected to perform the option set forth in the following clause (ii)). Company may elect either to:
(i) substitute, on or before the Loss Payment Date (as defined below), as replacement for the Airframe or Airframe and Engines with respect to which an Event of Loss has occurred, a Replacement Airframe (together with a number of Replacement Engines equal to the number of Engines, if any, with respect to which the Event of Loss occurred), such Replacement Airframe and Replacement Engines to be owned by Company free and clear of all Liens (other than Permitted Liens); provided that if Company has not performed such obligation on or prior to the Loss Payment Date, then Company shall on the Loss Payment Date redeem the Equipment Notes in full in accordance with Section 2.10; or
(ii) redeem, on or before the Loss Payment Date, the Equipment Notes in full in accordance with Section 2.10. Company shall give Loan Trustee 20 days’ prior written notice if it elects to redeem the Equipment Notes on any day prior to the Loss Payment Date.
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The “Loss Payment Date” with respect to an Event of Loss means the Business Day next succeeding the 120th day following the date of occurrence of such Event of Loss.
If Company elects to substitute a Replacement Airframe (or a Replacement Airframe and one or more Replacement Engines, as the case may be) Company shall, at its sole expense, not later than the Loss Payment Date, (A) cause an Indenture Supplement for such Replacement Airframe and Replacement Engines, if any, to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of such other jurisdiction in which the Aircraft is then registered, (B) cause the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Airframe and Replacement Engines, if any, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Airframe and Replacement Engines, if any, is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or statements with respect to the Replacement Airframe and Replacement Engines, if any, or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft is then registered, (D) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such replacement, such Replacement Airframe and Replacement Engines, if any, will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with a certificate of an independent aircraft engineer or appraiser, certifying that the Replacement Airframe and Replacement Engines, if any, have a value and utility at least equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Airframe and Engines, if any, so replaced, assuming the Airframe and such Engines were in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss, (F) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Airframe and Replacement Engines, if any, (G) furnish Loan Trustee with a copy of the original bill of sale in respect of such Replacement Airframe and a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engines, if any, (H) furnish Loan Trustee with an opinion of Company’s
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counsel (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Replacement Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the Section 1110 opinion of Company’s counsel delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as are at the time customary in opinions rendered in comparable circumstances and (I) cause Loan Trustee to be named as “Controlling Party” under an airframe warranties agreement with respect to such Replacement Airframe substantially similar to the Airframe Warranties Agreement.
In the case of each Replacement Airframe or Replacement Airframe and one or more Replacement Engines subjected to the Lien of this Indenture under this Section 7.05(a), promptly upon the recordation of the Indenture Supplement covering any such Replacement Airframe and Replacement Engines, if any, pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Replacement Airframe and Replacement Engines, if any, are registered), Company will cause to be delivered to Loan Trustee a favorable opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due registration of such Replacement Aircraft and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Replacement Airframe and Replacement Engines, if any, and the validity and perfection of the security interest in the Replacement Aircraft granted to Loan Trustee under this Indenture.
For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Aircraft and Replacement Engines, if any, shall become part of the Collateral, the Replacement Airframe shall be deemed an “Airframe” as defined herein, and each such Replacement Engine shall be deemed an “Engine” as defined herein. Upon compliance with clauses (A) through (I) of the third paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Airframe and Engines (if any) installed
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thereon at the time such Event of Loss occurred, all proceeds (including, without limitation, insurance proceeds) and all rights relating to the foregoing, from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement and assigning to Company all claims against third Persons for damage to or loss of the Airframe and Engines arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the replaced Airframe and replaced Engines, if any.
If, after an Event of Loss, Company performs the option set forth in clause (ii) of the first paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing the Aircraft, all proceeds (including, without limitation, insurance proceeds) and all rights relating to the foregoing from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement and assigning to Company all claims against third Persons for damage to or loss of the Aircraft arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Airframe and Engines, if any, with respect to which such Event of Loss occurred.
(b) Event of Loss with Respect to an Engine. As soon as practicable following the occurrence of an Event of Loss with respect to an Engine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, Company shall give Loan Trustee prompt written notice thereof and shall, within 120 days after the occurrence of such Event of Loss, cause to be subjected to the Lien of this Indenture, as replacement for the Engine with respect to which such Event of Loss occurred, a Replacement Engine free and clear of all Liens (other than Permitted Liens).
Prior to or at the time of any replacement under this Section 7.05(b), Company will (i) cause an Indenture Supplement covering such Replacement Engine to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (ii) furnish Loan Trustee with a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engine, which in the case of any such conveyance to which the Cape Town Convention is applicable shall be in such form as will qualify as “contract of sale” pursuant to Article V of the Aircraft Protocol, and all documents required under the Operative Documents to establish, continue, confirm, register and/or perfect the interests of Loan Trustee in such Replacement Engine, (iii) cause the sale of such Replacement Engine to Company (if occurring after February 28,
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2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Engine, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Engine is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (iv) cause a financing statement or statements with respect to such Replacement Engine or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in such other jurisdiction in which the Engine is then registered, (v) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that, upon such replacement, the Replacement Engine will be subject to the Lien of this Indenture, (vi) furnish Loan Trustee with a certificate of an aircraft engineer or appraiser (who may be an employee of Company) certifying that such Replacement Engine has a value and utility at least equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Engine so replaced assuming such Engine was in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss and (vii) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Engine. In the case of each Replacement Engine subjected to the Lien of this Indenture under this Section 7.05(b), promptly upon the recordation of the Indenture Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Company will cause to be delivered to Loan Trustee an opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and of the International Interest created pursuant to the Indenture Supplement with respect to such Replacement Engine and the validity and perfection of the security interest in the Replacement Engine granted to Loan Trustee under this Indenture. For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Engine shall become part of the Collateral and shall be deemed an “Engine” as defined herein. Upon compliance with clauses (i) through (vii) of the first sentence of this paragraph, Loan Trustee shall execute and deliver to Company
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instruments reasonably requested by Company releasing such replaced Engine, any proceeds (including, without limitation, insurance proceeds), the Warranty Rights in respect of such replaced Engine and all rights relating to any of the foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of such Engine arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Engines with respect to which such Event of Loss occurred.
(c) Application of Payments for Event of Loss from Requisition of Title or Use. Any payments other than insurance proceeds (the application of which is provided for in Section 7.06) received at any time by Company or by Loan Trustee from any government or other Person with respect to an Event of Loss to the Airframe or any Engine, will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced pursuant to Section 7.05(a), so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses that shall not exceed the amounts required to be paid by Company to Noteholders pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amount and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
(iii) if such payments are received with respect to an Engine with regard to which an Event of Loss has occurred, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
(d) Requisition for Use by the Government of the Airframe and the Engines Installed Thereon. In the event of the requisition for use or hire by any government (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition or hire) of the Airframe and the Engines or engines installed on the Airframe that does not constitute an Event of Loss, all of
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Company’s rights and obligations under this Indenture with respect to the Airframe and such Engines shall continue to the same extent as if such requisition or hire had not occurred; provided that, notwithstanding the foregoing, Company’s obligations other than payment obligations shall only continue to the extent feasible. All payments received by Company or Loan Trustee from such government for such requisition of the Airframe and Engines or engines shall be paid over to, or retained by, Company.
(e) Requisition for Use by the Government of an Engine not Installed on the Airframe. If any government requisitions the use or hire (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition), for a period in excess of sixty (60) days, of any Engine not then installed on the Airframe, Company will replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine. Upon such replacement, any payments received by Company or Loan Trustee from such government with respect to such requisition shall be paid over to, or retained by, Company.
(f) Application of Payments During Existence of Event of Default. Any amount referred to in Section 7.05 that is payable to or retainable by Company shall not be paid to or retained by Company if at the time of such payment or retention an Event of Default or Payment Default has occurred and is continuing, but shall be held by or paid over to Loan Trustee as security for the obligations of Company under this Indenture and the Participation Agreement. When any such Event of Default or Payment Default ceases, such amount shall be paid to Company.
Section 7.06 Insurance.
(a) Aircraft Liability Insurance.
(i) Except as provided in clause (ii) of this Section 7.06(a), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d), Company will carry, or cause to be carried, at no expense to Loan Trustee, aircraft liability insurance (including, but not limited to, passenger, contractual, bodily injury, personal injury, property damage, and products liability (exclusive of manufacturer’s product liability insurance and war risk, hijacking and allied perils insurance)) with respect to the Aircraft that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease in respect of the Aircraft is then in effect, by Permitted Lessee) of the same type as the Aircraft (A) in amounts that are not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s (or Permitted Lessee’s) fleet on which Company (or Permitted Lessee) carries insurance and operated by Company (or Permitted Lessee) on the same or similar routes as operated by the Aircraft; provided that such liability insurance shall not be less than the amount (the “Minimum
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Insurance Amount”) certified in the insurance report delivered to Loan Trustee and each Liquidity Provider on the Closing Date, and (B) that is maintained in effect with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(a) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests (defined below in this Section 7.06) may appear, as additional insureds (the “Additional Insureds”), (2) subject to the conditions of clause (3) below, provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report delivered on the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for 30 days after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. “Interests” as used in this Section 7.06(a), in Section 7.06(b), and in Section 7.06(c) with respect to any Person means the interests of such Person in the transactions contemplated by the Operative Documents.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of
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said clause (i) except that: (A) the amounts of coverage shall not be required to exceed the amounts of airline liability insurance from time to time applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown and (B) the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown.
(b) War Risk, Hijacking and Allied Perils Liability Insurance. If the Aircraft, the Airframe or any Engine is being operated in any war zone or area of recognized or, in Company’s (or Permitted Lessee’s) judgment, threatened hostilities, then Company shall maintain or cause to be maintained war risk, hijacking and allied perils liability insurance (x) in an amount that is not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s fleet on which Company carries insurance and operated by Company (or, if a Lease is then in effect, in the Permitted Lessee’s fleet on which such Permitted Lessee carries insurance and operated by such Permitted Lessee) on the same or similar routes as the Aircraft, the Airframe or such Engine; provided that such liability insurance shall not be less than the Minimum Insurance Amount, (y) that is maintained in effect with insurers of recognized responsibility, and (z) which shall cover the perils set forth in the insurance policies maintained in connection with the CRAF Program (as such insurance policies maintained in connection with the CRAF Program may be amended from time to time). Except with respect to any war risk, hijacking or allied perils liability insurance maintained on any aircraft operated by Company in connection with the CRAF Program (or, if a Lease is then in effect, by the Permitted Lessee), if war risk, hijacking or allied perils liability insurance is maintained by Company (or if a Lease is then in effect, by the Permitted Lessee) with respect to any aircraft owned or operated by Company (or such Permitted Lessee, as the case may be) of the same or similar type operated by Company (or such Permitted Lessee, as the case may be) on the same or similar routes as operated by the Aircraft, the Airframe or an Engine, then Company shall maintain or cause to be maintained with respect to the Aircraft war risk, hijacking and allied perils liability insurance in scope and coverage no less comprehensive, in an amount not less than the insurance maintained by Company (or such Permitted Lessee, as the case may be) with respect to such other aircraft, and with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(b) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests may appear, as Additional Insureds, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall
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insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee, or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report delivered on or prior to the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for seven days (or such other period as is then generally available in the industry) after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. To the extent that Company’s war risk, hijacking and allied perils insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(c) Insurance Against Loss or Damage to Aircraft.
(i) Except as provided in clause (ii) of this Section 7.06(c), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d) below, Company shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to Loan Trustee, all-risk aircraft hull insurance covering the Aircraft and all-risk coverage with respect to any Engines or Parts while removed from the Aircraft (including, but not limited to, war risk, hijacking and allied perils insurance, if and to the extent the same is maintained by Company (or, if a Lease is then in effect, by the Permitted Lessee) with respect to other similar aircraft operated by Company or such Permitted Lessee, as the case may be, on the same or similar routes) that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease is then in effect, by the
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Permitted Lessee) of the same type as the Aircraft; provided that (A) such insurance (including the permitted self-insurance) shall at all times while the Aircraft is subject to this Indenture be for an amount not less than 110% of the aggregate principal amount of the Equipment Notes outstanding from time to time, (B) such insurance need not cover an Engine while attached to an airframe not owned, leased or operated by Company, and (C) such insurance covering Engines and Parts removed from an Airframe or an airframe or (in the case of Parts) an Engine need be obtained only to the extent available at reasonable cost (as reasonably determined by Company (or Permitted Lessee)). Any policies carried in accordance with this Section 7.06(c) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds up to an amount equal to the outstanding principal amount of the Equipment Notes, together with accrued but unpaid interest thereon, plus an amount equal to the interest that would accrue on the outstanding principal amount of the Equipment Notes at the Debt Rate in effect on the date of payment of such insurance proceeds to Loan Trustee (as provided for in this sentence) during the period commencing on the day following the date of such payment to Loan Trustee and ending on the Loss Payment Date (the sum of such three amounts being the “Loan Amount”), payable for any loss or damage constituting an Event of Loss with respect to the Aircraft and any insurance proceeds in excess of the Insurance Threshold up to an amount equal to the Loan Amount for any loss or damage to the Aircraft (or Engines) not constituting an Event of Loss with respect to the Aircraft (or Engines), shall be paid to Loan Trustee as long as this Indenture has not been discharged, and that all other amounts shall be paid to Company or its designee, unless the insurer has received notice that an Event of Default exists, in which case all insurance proceeds for any loss or damage to the Aircraft (or Engines) up to an amount equal to the Loan Amount shall be payable to Loan Trustee, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s (or any Permitted Lessee’s) hull war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount) certified in the insurance report delivered on the Closing Date to Loan Trustee, and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to the Additional Insureds for 30 days (seven days, or such other period as is then customary in the industry, in the case of war risk,
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hijacking, or allied perils coverage) after issuance to the Additional Insureds of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent Company has waived its rights by its agreement to indemnify the Additional Insureds pursuant to the Operative Documents and (6) include a 50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insurance. To the extent that Company’s war risk, hijacking, and allied perils insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company (or Permitted Lessee) may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes and engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 7.06(d) below, Company shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe or Engine in an amount at least equal to 110% of the aggregate outstanding principal amount of the Equipment Notes for the Aircraft or, with respect to a non-flown Engine, the replacement value of such Engine.
(d) Self-Insurance. Company may from time to time self-insure, by way of deductible, self-insured retention, premium adjustment or franchise or otherwise (including, with respect to insurance maintained pursuant to Sections 7.06(a), (b) or (c), insuring for a maximum amount that is less than the amounts set forth in Sections 7.06(a), (b) and (c) above), the risks required to be insured against pursuant to Sections 7.06(a), (b) and (c) above, but in no case shall the self-insurance with respect to all of the aircraft and engines in the combined fleet of Company and its Affiliates (including, without limitation, the Aircraft) exceed for any 12-month policy year 1.0% of the average
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aggregate insurable value (during the preceding policy year) of all aircraft (including, without limitation, the Aircraft) on which Company and its Affiliates carry insurance, unless an insurance broker of national standing certifies that the standard among other major United States airlines is a higher level of self-insurance, in which case Company may self-insure the Aircraft to such higher level; provided that (1) any deductible per occurrence that, in the case of the Aircraft, is not in excess of the amount customarily allowed as a deductible in the industry or is required to facilitate claims handling or (2) any applicable mandatory minimum per aircraft (or if applicable per annum or other period) hull or liability insurance deductibles imposed by the aircraft hull or liability insurers shall be permitted in addition to the above-mentioned self-insurance.
(e) Indemnification by United States Government in Lieu of Insurance. Notwithstanding any provision of this Section 7.06 requiring insurance, in lieu of insurance against any risk with respect to the Aircraft, indemnification from, or insurance provided by, the United States government, or any agency or instrumentality thereof, against such risk in an amount which, when added to the amount of insurance maintained against such risk by Company (or, if a Lease is then in effect, by the Permitted Lessee), shall be at least equal to the amount of insurance against such risk otherwise required by this Section 7.06 (taking into account self-insurance permitted by Section 7.06(d)) shall be considered adequate insurance for purposes of this Section 7.06.
(f) Application of Insurance Payments. All losses will be adjusted by Company with the insurers. As between Loan Trustee and Company it is agreed that all insurance payments received under policies required to be maintained by Company hereunder, exclusive of any payments received in excess of the Loan Amount for the Aircraft from such policies, as the result of the occurrence of an Event of Loss with respect to the Airframe or an Engine will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced as contemplated by Section 7.05(a), so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses, as do not exceed the amounts required to be paid by Company pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amounts, and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
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(iii) if such payments are received with respect to an Engine, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
In all events, the insurance payment of any property damage or loss received under policies maintained by Company in excess of the Loan Amount for the Aircraft shall be paid to Company.
The insurance payments for any loss or damage to the Airframe or an Engine not constituting an Event of Loss with respect to the Airframe or such Engine will be applied in payment (or to reimburse Company) for repairs or for replacement property in accordance with the terms of Sections 7.02 and 7.04, and any balance remaining after compliance with such Sections with respect to such loss or damage shall be paid to Company. Any amount referred to in the preceding sentence or in clause (i) or (ii) of the first paragraph of this Section 7.06(f) that is payable to Company shall not be paid to Company (or, if it has been previously paid directly to Company, shall not be retained by Company) if at the time of such payment an Event of Default or Payment Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under this Indenture and the other Operative Documents and shall be invested pursuant to Section 5.06 unless and until such amount is applied, at the option of Loan Trustee, to Company’s obligations under this Indenture and the other Operative Documents as and when due, it being understood that any such application shall be made to such obligations of Company as Loan Trustee may determine in its sole discretion. Loan Trustee shall give Company prompt written notice of any such application, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder. At such time as there shall be continuing no Event of Default or Payment Default, such amount shall be paid to Company to the extent not previously applied in accordance with this Section 7.06(f).
(g) Reports, Etc. On or before the Closing Date and annually following renewal of Company’s insurance coverage, Company will furnish to Loan Trustee and each Liquidity Provider current certificates of insurance and a report signed by a firm of independent aircraft insurance brokers appointed by Company (which brokers may be in the regular employ of Company), stating the opinion of such firm that the commercial hull and liability insurance then carried and maintained on the Aircraft complies with the terms hereof. All information contained in such report shall be Confidential Information and shall be treated by Loan Trustee and each Liquidity Provider and each of their Affiliates and their respective officers, directors, agents and employees in accordance with the provisions of Section 10.16. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider of any act or
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omission on the part of Company of which such firm has knowledge that might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider as promptly as practicable after such firm acquires knowledge that a cancellation of any insurance carried and maintained on the Aircraft pursuant to this Section 7.06 will occur. Such information may only be provided to other Persons in accordance with Section 10.16.
In the event that Company shall fail to maintain or to cause to be maintained insurance as herein provided, Loan Trustee may at its option obtain such insurance (giving Company prompt written notice thereof, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder) and, in such event, Company shall, upon demand, reimburse Loan Trustee for the cost to Loan Trustee of such insurance, together with interest thereon at the Past Due Rate for the period commencing with the date such cost was paid to the date of reimbursement; provided, however, that no exercise by Loan Trustee of said option shall affect the provisions of this Indenture, including the provisions that failure by Company to maintain the prescribed insurance shall constitute an Event of Default.
(h) Salvage Rights; Other. All salvage rights to the Airframe and each Engine shall remain with Company’s insurers at all times, and any insurance policies of Loan Trustee insuring the Airframe or any Engine shall provide for a release to Company of any and all salvage rights in and to the Airframe or any Engine except if such insurance policies of Loan Trustee are obtained pursuant to the last paragraph of Section 7.06(g). Neither Loan Trustee nor any Noteholder may, directly or indirectly, obtain insurance for its own account with respect to the Airframe or any Engine if such insurance would limit or otherwise adversely affect the coverage or amounts payable under, or increase the premiums for, any insurance required to be maintained pursuant to this Section 7.06 or any other insurance maintained with respect to the Aircraft or any other aircraft in Company’s (or Permitted Lessee’s) fleet.
ARTICLE VIII
Successor and Additional Trustees
Section 8.01 Resignation or Removal; Appointment of Successor.
(a) The resignation or removal of Loan Trustee and the appointment of a successor Loan Trustee shall become effective only upon the successor Loan Trustee’s acceptance of appointment as provided in this Section 8.01. Loan Trustee or any successor thereto must resign if at any time it ceases to be eligible in accordance with the provisions of Section 8.01(c) and may resign at any time without cause by giving at least
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60 days’ prior written notice to Company and each Noteholder. In addition, either Company (so long as no Event of Default or Payment Default shall have occurred and be continuing) or a Majority in Interest of Noteholders (but only with the consent of Company so long as no Event of Default or Payment Default shall have occurred and be continuing), may at any time remove Loan Trustee without cause by an instrument in writing delivered to Loan Trustee and each Noteholder, and, in case of a removal by a Majority in Interest of Noteholders, to Company. In the case of the resignation or removal of Loan Trustee, Company shall promptly appoint a successor Loan Trustee. If a successor Loan Trustee has not been appointed within 60 days after such notice of resignation or removal, Loan Trustee, Company or any Noteholder may apply to any court of competent jurisdiction to appoint a successor Loan Trustee to act until such time, if any, as a successor is appointed as above provided. The successor Loan Trustee so appointed by such court shall immediately and without further act be superseded by any successor Loan Trustee appointed as above provided.
(b) Any successor Loan Trustee, however appointed, shall execute and deliver to the predecessor Loan Trustee and Company an instrument accepting such appointment and assuming the obligations of Loan Trustee arising from and after the time of such appointment, and thereupon such successor Loan Trustee, without further act, shall become vested with all the estates, properties, rights, powers and duties of the predecessor Loan Trustee in the trust hereunder applicable to it with like effect as if originally named Loan Trustee herein; but nevertheless upon the written request of such successor Loan Trustee, such predecessor Loan Trustee shall execute and deliver an instrument transferring to such successor Loan Trustee all the estates, properties, rights and powers of such predecessor Loan Trustee, and such predecessor Loan Trustee shall duly assign, transfer, deliver and pay over to such successor Loan Trustee all monies or other property and all other books and records, or true, correct and complete copies thereof, then held by such predecessor Loan Trustee.
(c) This Indenture shall at all times have a Loan Trustee, however appointed, that is a Citizen of the United States (without the use of a voting trust) and a bank or trust company having a combined capital and surplus of at least $100,000,000 (or a combined capital and surplus in excess of $5,000,000 and the obligations of which, whether now in existence or hereafter incurred, are fully and unconditionally guaranteed by a corporation organized and doing business under the laws of the United States or any state or territory thereof or the District of Columbia and having a combined capital and surplus of at least $100,000,000) or a corporation with a net worth of at least $100,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Loan Trustee upon reasonable or customary terms. If such bank, trust company or corporation publishes reports of conditions at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 8.01(c) the combined capital and surplus of such bank, trust company or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. In case at any time Loan Trustee ceases to be eligible in accordance with the provisions of this Section 8.01(c), Loan Trustee shall resign immediately in the manner and with the effect specified in Section 8.01(a).
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(d) Any bank, trust company or corporation into which Loan Trustee may be merged or converted or with which it may be consolidated, or any bank, trust company or corporation resulting from any merger, conversion or consolidation to which Loan Trustee is a party, or any bank, trust company or corporation to which substantially all the corporate trust business of Loan Trustee may be transferred, shall, subject to the terms of Section 8.01(c), be a successor Loan Trustee under this Indenture without further act.
Section 8.02 Appointment of Additional and Separate Trustees.
(a) Whenever (i) Company or Loan Trustee deems it necessary or desirable in order to conform to any law of any jurisdiction in which all or any part of the Collateral is situated or to make any claim or bring any suit with respect to or in connection with the Collateral, any Operative Document or any of the transactions contemplated by the Operative Documents, (ii) Loan Trustee shall be advised by counsel satisfactory to it that it is necessary or prudent in the interests of Noteholders (and Loan Trustee shall so advise Company) or (iii) Loan Trustee has been requested to do so by a Majority in Interest of Noteholders, then in any such case, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and such other, instruments as from time to time are necessary or advisable either (1) to constitute one or more banks or trust companies or corporations meeting the requirements of Section 8.01(c) and approved by Loan Trustee, either to act jointly with Loan Trustee as additional trustee or trustees of all or any part of the Collateral or to act as separate trustee or trustees of all or any part of the Collateral, in each case with such rights, powers, duties and obligations consistent with this Indenture as is provided in such supplemental indenture or other instruments as Loan Trustee or a Majority in Interest of Noteholders deems necessary or advisable, or (2) to clarify, add to or subtract from the rights, powers, duties and obligations theretofore granted any such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. If no Event of Default has occurred and is continuing, no additional or supplemental trustee shall be appointed without Company’s consent. If an Event of Default shall have occurred and be continuing, Loan Trustee may act under the foregoing provisions of this Section 8.02(a) without the concurrence of Company, and, to the extent permitted by applicable law, Company hereby irrevocably appoints (which appointment is coupled with an interest) Loan Trustee as its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 8.02(a). Loan Trustee may, in such capacity, execute, deliver and perform any such supplemental indenture, or any such instrument, as may be required for the appointment of any such additional or separate trustee or for the clarification of, addition to or subtraction from the rights, powers, duties or obligations theretofore granted to any
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such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. In case any additional or separate trustee appointed under this Section 8.02(a) becomes incapable of acting, resigns or is removed, all the assets, property, rights, powers, trusts, duties and obligations of such additional or separate trustee shall revert to Loan Trustee until a successor additional or separate trustee is appointed as provided in this Section 8.02(a).
(b) No additional or separate trustee shall be entitled to exercise any of the rights, powers, duties and obligations conferred upon Loan Trustee in respect of the custody, investment and payment of monies and all monies received by any such additional or separate trustee from or constituting part of the Collateral or otherwise payable under any Operative Documents to Loan Trustee shall be promptly paid over by it to Loan Trustee. All other rights, powers, duties and obligations conferred or imposed upon any additional or separate trustee shall be exercised or performed by Loan Trustee and such additional or separate trustee jointly except to the extent that applicable law of any jurisdiction in which any particular act is to be performed renders Loan Trustee incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title to all or part of the Collateral in any such jurisdiction) shall be exercised and performed by such additional or separate trustee. No additional or separate trustee shall take any discretionary action except on the instructions of Loan Trustee or a Majority in Interest of Noteholders. No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, except that Loan Trustee shall be liable for the consequences of its lack of reasonable care in selecting, and Loan Trustee’s own actions in acting with, any additional or separate trustee. Each additional or separate trustee appointed pursuant to this Section 8.02 shall be subject to, and shall have the benefit of Articles IV, V, VI, VIII, IX and X insofar as they apply to Loan Trustee. The powers of any additional or separate trustee appointed pursuant to this Section 8.02 shall not in any case exceed those of Loan Trustee.
(c) If at any time Loan Trustee deems it no longer necessary or desirable or in the event that Loan Trustee has been requested to do so in writing by a Majority in Interest of Noteholders, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any additional or separate trustee. Loan Trustee may act on behalf of Company under this Section 8.02(c) when and to the extent it could so act under Section 8.02(a). In any case, Company may remove an additional or separate trustee in the manner set forth in Section 8.01.
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ARTICLE IX
Amendments and Waivers
Section 9.01 Amendments to this Indenture without Consent of Holders. At any time after the date hereof, Company may and Loan Trustee shall, at Company’s request, enter into one or more agreements supplemental hereto and amend the Equipment Notes without notice to or consent of any Noteholder, Indenture Indemnitee or Related Indenture Indemnitee for any of the following purposes: (i) to evidence the succession of another Person to Company and the assumption by any such successor of the covenants of Company contained in any Operative Documents pursuant to Section 6.02(e) of the Participation Agreement; (ii) to cure any defect or inconsistency herein or in the Equipment Notes, or to make any change not inconsistent with the provisions hereof (provided that such change does not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be); (iii) to cure any ambiguity or correct any mistake; (iv) to evidence the succession of a new trustee hereunder pursuant hereto or the removal of the trustee hereunder or to provide for or facilitate the appointment of an additional or separate trustee pursuant to Section 8.02; (v) to convey, transfer, assign, mortgage or pledge any property to or with Loan Trustee; (vi) to make any other provisions or amendments with respect to matters or questions arising hereunder or under the Equipment Notes, or to amend, modify or supplement any provision hereof or thereof, so long as such action shall not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be; (vii) to correct, supplement or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto Loan Trustee any property subject or required to be subject to the Lien of this Indenture or to subject to the Lien of this Indenture the Airframe or Engines or any Substitute Airframe, Replacement Airframe or Replacement Engine; (viii) to add to the covenants of Company for the benefit of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees or to surrender any rights or power herein conferred upon Company; (ix) to add to the rights of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees; (x) to include on the Equipment Notes any legend as may be required by law or as otherwise necessary or advisable; (xi) to comply with any applicable requirements of the Trust Indenture Act, or any other requirements of applicable law or of any regulatory body; (xii) to give effect to the replacement of a Liquidity Provider with a Replacement Liquidity Provider and the replacement of a Liquidity Facility with a Replacement Liquidity Facility therefor, and, if a Replacement Liquidity Facility is to be comprised of more than one instrument as contemplated by the definition of the term “Replacement Liquidity Facility” in the Intercreditor Agreement, to incorporate appropriate mechanics for multiple instruments
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for such Replacement Liquidity Facility for a single Pass Through Trust (including, without limitation, amendments to Section 2.14 with respect to the Replacement Liquidity Provider of such Replacement Liquidity Facility); (xiii) to provide for the original issuance of Additional Series Equipment Notes of one or more Series (and Related Additional Series Equipment Notes relating thereto) pursuant to clause (i) of the third sentence of Section 2.02 or the issuance of new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes of any one or more Series (and new Related Additional Series Equipment Notes relating thereto) pursuant to clause (ii) or (iii), as the case may be, of the third sentence of Section 2.02, and for the issuance of pass through certificates by any pass through trust that acquires any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) and to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith or to provide for the priority in payment among different Series of Additional Series Equipment Notes) and to provide for any credit support for any pass through certificates relating to any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) (including, without limitation, to secure claims for fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)); provided that any such Additional Series Equipment Notes, new Series A Equipment Notes or new Additional Series Equipment Notes, as the case may be, are issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable; (xiv) to provide for the issuance of “Additional Series Equipment Notes” of one or more series or new “Series A Equipment Notes” or new “Additional Series Equipment Notes” in each case under any or all Related Indentures and other matters incidental or relating thereto; and (xv) to give effect to the substitution of the Aircraft pursuant to Section 7.04(f).
Section 9.02 Amendments to this Indenture with Consent of Holders.
(a) With the written consent of a Majority in Interest of Noteholders, Company may, and Loan Trustee shall, subject to Section 9.06, at any time and from time to time, enter into such supplemental agreements to add any provisions to or to change or eliminate any provisions of this Indenture or of any such supplemental agreements or to modify in any manner the rights and obligations of Company, Loan Trustee and
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Noteholders under this Indenture; provided that, without the consent of each Noteholder affected thereby, an amendment under this Section 9.02 may not:
(1) reduce the principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note; provided that any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not require the consent of any Noteholder;
(2) change the date on which any principal amount of, Make-Whole Amount, if any, or interest on any Equipment Note, is due or payable;
(3) create any Lien with respect to the Collateral prior to or pari passu with the Lien thereon under this Indenture except such as are permitted by this Indenture, or deprive any Noteholder of the benefit of the Lien on the Collateral created by this Indenture, except as provided in connection with the exercise of remedies under Article IV; provided that, without the consent of each holder of an affected Related Equipment Note then outstanding, no such amendment, waiver or modification of terms of, or consent under, any thereof shall modify Section 3.03 or this clause (3) or deprive any Related Noteholder of the benefit of the Lien of this Indenture on the Collateral, except as provided in connection with the exercise of remedies under Article IV;
(4) reduce the percentage of the outstanding principal amount of the Equipment Notes the consent of whose holders is required for any such supplemental agreement, or the consent of whose holders is required for any waiver of compliance with certain provisions of this Indenture or of certain defaults hereunder or their consequences provided for in this Indenture; or
(5) make any change in Section 4.05 or this Section 9.02, except to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of each Noteholder affected thereby.
Notwithstanding the foregoing, neither Company nor Loan Trustee shall enter into any amendment, waiver or modification of, or supplement or consent to, this Indenture or any other Operative Document other than the Participation Agreement (which is addressed in Section 9.03) which shall reduce, modify or amend any indemnities in favor of any Liquidity Provider without the consent of such Liquidity Provider that is subject to such reduction, modification or amendment.
(b) It is not necessary under this Section 9.02 for Noteholders to consent to the particular form of any proposed supplemental agreement, but it is sufficient if they consent to the substance thereof.
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(c) Promptly after the execution by Company and Loan Trustee of any supplemental agreement pursuant to the provisions of this Section 9.02, Loan Trustee shall transmit by first-class mail or by hand delivery a notice, setting forth in general terms the substance of such supplemental agreement, to all Noteholders, as the names and addresses of such Noteholders appear on the Equipment Note Register. Any failure of Loan Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental agreement.
Section 9.03 Amendments, Waivers, Etc. of the Participation Agreement. Without the consent of a Majority in Interest of Noteholders, the respective parties to the Participation Agreement may not modify, amend or supplement such agreement, or give any consent, waiver, authorization or approval thereunder, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the respective parties thereunder; provided that, without the consent of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee, the Participation Agreement may be modified, amended or supplemented in order (i) to cure any defect or inconsistency therein or to cure any ambiguity or correct any mistake, (ii) to amend, modify or supplement any provision thereof or make any other provision with respect to matters or questions arising thereunder or under this Indenture (provided that the making of any such other provision shall not materially adversely affect the interests of Noteholders) or (iii) to make any other change, or reflect any other matter, of the kind referred to in clauses (i) through (xiv) of Section 9.01. Notwithstanding the foregoing, without the consent of any Liquidity Provider, Company shall not enter into any amendment, waiver or modification of or supplement or consent to the Participation Agreement which shall reduce, modify or amend any indemnities in favor of such Liquidity Provider contained therein.
Section 9.04 Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Noteholder is a continuing consent by Noteholder and every subsequent Noteholder, even if notation of the consent is not made on any Equipment Note.
Section 9.05 Notation on or Exchange of Equipment Notes. Loan Trustee may place an appropriate notation about an amendment or waiver on any Equipment Note thereafter executed. Loan Trustee in exchange for such Equipment Notes may execute new Equipment Notes that reflect the amendment or waiver.
Section 9.06 Trustee Protected. If, in the reasonable opinion of the institution acting as Loan Trustee, any document required to be executed by it pursuant to the terms of Section 9.01 or 9.02 adversely affects any right, duty, immunity or indemnity with respect to such institution under this Indenture, such institution may in its discretion decline to execute such document.
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Section 9.07 No Consent of Individual Indenture Indemnitees Required. Notwithstanding anything in this Indenture or any other Operative Document to the contrary, when any provision hereof or thereof would otherwise require a consent of an Indenture Indemnitee, such provision shall always be construed to require only the consent of an Indenture Indemnitee other than any Indenture Indemnitee covered by clause (vii) of the definition of “Indenture Indemnitees”.
ARTICLE X
Miscellaneous
Section 10.01 Termination of Indenture. Subject to Sections 7.04 and 7.05, upon (or at any time after) payment in full of the principal amount of, Make-Whole Amount, if any, and interest on and all other amounts then due under all Equipment Notes and provided that there shall then be (x) no other Secured Obligations due and unpaid to Noteholders, Loan Trustee and other Indenture Indemnitees hereunder, under the Participation Agreement or any other Operative Document, and (y) no Related Secured Obligations due and unpaid under any Related Indenture or any other “Operative Document” (as defined in any Related Indenture), Company shall direct Loan Trustee to execute and deliver to or as directed in writing by Company an appropriate instrument releasing the Aircraft and the Engines and (subject to paragraph (ix) of clause “third” of Section 3.03, if applicable) all other Collateral from the Lien of this Indenture and Loan Trustee shall execute and deliver such instrument as aforesaid; provided that this Indenture and the trusts created hereby shall earlier terminate and this Indenture shall be of no further force or effect upon any sale or other final disposition by Loan Trustee of all property constituting part of the Collateral and the final distribution by Loan Trustee of all monies or other property or proceeds constituting part of the Collateral in accordance with the terms hereof. Except as aforesaid otherwise provided, this Indenture and the trusts created hereby shall continue in full force and effect in accordance with the terms hereof.
Section 10.02 No Legal Title to Collateral in Noteholders. No holder of an Equipment Note or a Related Equipment Note shall have legal title to any part of the Collateral. No transfer, by operation of law or otherwise, of any Equipment Note, Related Equipment Note or other right, title and interest of any Noteholder or Related Noteholder in and to the Collateral or hereunder shall operate to terminate this Indenture or entitle such holder or any successor or transferee of such holder to an accounting or to the transfer to it of any legal title to any part of the Collateral.
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Section 10.03 Sale of Aircraft by Loan Trustee is Binding. Any sale or other conveyance of the Aircraft, the Airframe, any Engine or any interest therein by Loan Trustee made pursuant to the terms of this Indenture shall bind Noteholders and Company and shall be effective to transfer or convey all right, title and interest of Loan Trustee, Company and such Noteholders in and to such Aircraft, Airframe, Engine or interest therein. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such sale or conveyance or as to the application of any sale or other proceeds with respect thereto by Loan Trustee or Noteholders.
Section 10.04 Indenture for Benefit of Company, Loan Trustee and Noteholders. Nothing in this Indenture, whether express or implied, shall be construed to give any Person other than Company, Noteholders, Loan Trustee, other Indenture Indemnitees, Related Loan Trustees and Related Indenture Indemnitees any legal or equitable right, remedy or claim under or in respect of this Indenture, except that the Persons referred to in the second to last full paragraph of Section 7.02(a) shall be third party beneficiaries of such paragraph.
Section 10.05 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents required or permitted under the terms and provisions of this Indenture shall be in English and in writing, and any such notice may be given by United States mail, courier service, facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class U.S. mail and, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233;
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if to Loan Trustee, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683;
if to any Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07;
if to any Indenture Indemnitee other than Loan Trustee, addressed to the address of such party (if any) set forth in Section 7.01 of the Participation Agreement or to such other address as such Indenture Indemnitee shall have furnished by notice to Company and Loan Trustee; and
if to any Related Indenture Indemnitee, addressed to such Related Indenture Indemnitee at its address set forth in the Equipment Note Register (defined in the applicable Related Indenture) maintained pursuant to Section 2.07 of the applicable Related Indenture.
Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 10.05.
Section 10.06 Severability. To the extent permitted by applicable law, any provision of this Indenture that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.07 No Oral Modification or Continuing Waivers. No terms or provisions of this Indenture or of the Equipment Notes may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by Company and Loan Trustee, in compliance with Article IX. Any waiver of the terms hereof or of any Equipment Note shall be effective only in the specific instance and for the specific purpose given.
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Section 10.08 Successors and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of, and be enforceable by, each of the parties hereto and the successors and permitted assigns of each, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by any Noteholder shall bind the successors and permitted assigns of such Noteholder. Each Noteholder by its acceptance of an Equipment Note agrees to be bound by (i) this Indenture and all provisions of the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to a Noteholder and (ii) all provisions of each Related Indenture applicable to a Related Noteholder to the extent such Noteholder is such Related Noteholder.
Section 10.09 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 10.10 Normal Commercial Relations. Anything contained in this Indenture to the contrary notwithstanding, Loan Trustee, any Noteholder or any other party to any of the Operative Documents or the Pass Through Documents or any of their affiliates may conduct any banking or other financial transactions, and have banking or other commercial relationships, with Company, fully to the same extent as if this Indenture were not in effect, including without limitation the making of loans or other extensions of credit to Company for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.
Section 10.11 Voting by Noteholders. All votes of Noteholders shall be governed by a vote of a Majority in Interest of Noteholders, except as otherwise provided herein.
Section 10.12 Section 1110. It is the intention of the parties hereto that the security interest created hereby, to the fullest extent available under applicable law, entitles Loan Trustee, on behalf of Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft.
Section 10.13 Company’s Performance and Rights. Any obligation imposed on Company herein shall require only that Company perform or cause to be performed such obligation, even if stated as a direct obligation, and the performance of any such obligation by any permitted assignee, lessee or transferee under an assignment, lease or transfer agreement then in effect and in accordance with the provisions of the Operative Documents shall constitute performance by Company and, to the extent of such performance, discharge such obligation by Company. Except as otherwise expressly provided herein, any right granted to Company in this Indenture shall grant Company the right to permit such right to be exercised by any such assignee, lessee or transferee, and, in the case of a lessee, as if the terms hereof were applicable to such lessee were such lessee Company hereunder. The inclusion of specific references to obligations or rights of any such assignee, lessee or transferee in certain provisions of this Indenture shall not in any way prevent or diminish the application of the provisions of the two sentences immediately preceding with respect to obligations or rights in respect of which specific reference to any such assignee, lessee or transferee has not been made in this Indenture.
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Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts (and each of the parties hereto shall not be required to execute the same counterpart). Each counterpart of this Indenture including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Indenture, but all of such counterparts together shall constitute one instrument.
Section 10.15 Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS INDENTURE, ANY INDENTURE SUPPLEMENT AND THE EQUIPMENT NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.16 Confidential Information. The term “Confidential Information” means: (a) the existence and terms of any lease of the Airframe or Engines pursuant to Section 7.02(a) and the identity of the Permitted Lessee thereunder; (b) all information obtained in connection with any inspection conducted by Loan Trustee or its authorized representatives pursuant to Section 7.03(a); (c) each certification furnished to Loan Trustee or any Liquidity Provider pursuant to Sections 7.06(a) and 7.06(b); (d) all information contained in each report furnished to Loan Trustee or any Liquidity Provider pursuant to Section 7.06(g); and (e) all information designated by Company as non-public information. All Confidential Information shall be held confidential by Loan Trustee, each Liquidity Provider and each Noteholder and each affiliate, agent, officer, director, or employee of any thereof and shall not be furnished or disclosed by any of them to anyone other than (i) Loan Trustee or any Noteholder and (ii) their respective bank examiners, auditors, accountants, agents and legal counsel, and except as may be required by an order of any court or administrative agency or by any statute, rule, regulation or order of any governmental authority.
Section 10.17 Submission to Jurisdiction. Each of the parties hereto, and by acceptance of Equipment Notes, each Noteholder, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Indenture, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 Indenture or the Equipment Notes or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
[Signature Pages Follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereof duly authorized, as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page
Indenture and Security Agreement (2020-1 EETC)
N301DV
Exhibit A
to Indenture and Security Agreement
(N301DV)
FORM OF INDENTURE SUPPLEMENT
INDENTURE SUPPLEMENT NO. _____
INDENTURE SUPPLEMENT NO. ____, dated _______________ ____, 20__ (“Indenture Supplement”), between DELTA AIR LINES, INC. (“Company”) and U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Loan Trustee under the Indenture (each as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement (N301DV), dated as of March 12, 2020 (the “Indenture”; capitalized terms used herein without definition shall have the meanings specified therefor in Annex A to the Indenture), between Company and U.S. Bank Trust National Association, not in its individual capacity, except as expressly provided therein, but solely as Loan Trustee (“Loan Trustee”), provides for the execution and delivery of supplements thereto substantially in the form hereof which shall particularly describe the Aircraft, and shall specifically grant a security interest in the Aircraft to Loan Trustee; and
[WHEREAS, the Indenture relates to the Airframe and Engines described in Annex A attached hereto and made a part hereof, and a counterpart of the Indenture is attached to and made a part of this Indenture Supplement;]7
[WHEREAS, Company has, as provided in the Indenture, heretofore executed and delivered to Loan Trustee Indenture Supplement(s) for the purpose of specifically subjecting to the Lien of the Indenture certain airframes and/or engines therein described, which Indenture Supplement(s) is/are dated and has/have been duly recorded with the FAA as set forth below, to wit:
Date Recordation Date FAA Document Number]8
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by
| 7 |
Use for Indenture Supplement No. 1 only. |
| 8 |
Use for all Indenture Supplements other than Indenture Supplement No. 1. |
Indenture Supplement No ____ (2020-1 EETC)
N301DV
A-1
Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under the Aircraft, including the Airframe and Engines described in Annex A attached hereto, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided in the Indenture, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto;
To have and to hold all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in the Indenture, including Section 2.13 and Article III of the Indenture, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and subject to the terms and provisions set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the Indenture and shall form a part thereof, and the Indenture is hereby incorporated by reference herein and is hereby ratified, approved and confirmed.
THIS INDENTURE SUPPLEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
[Signature Pages Follow.]
Indenture Supplement No ____ (2020-1 EETC)
N301DV
A-2
IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement No. _____ to be duly executed by their respective duly authorized officers, on the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: |
|
|
| Name: | ||
| Title: | ||
Signature Page
Indenture Supplement No ____ (2020-1 EETC)
N301DV
Annex A
to Indenture Supplement No. ___
(N301DV)
DESCRIPTION OF AIRFRAME AND ENGINES
AIRFRAME
|
Manufacturer |
Model |
Generic Manufacturer Model |
FAA Registration No. |
Manufacturer’s Serial No. |
||||
| Airbus | A321-211 | Airbus A321 | N301DV | 6923 |
ENGINES
|
Manufacturer |
Model |
Generic Manufacturer Model |
Manufacturer’s Serial Nos. |
|||
| CFM International, Inc. | CFM56-5B3/3 | CFM CFM56-5B |
573251 573252 |
Each Engine has 550 or more rated take-off horsepower or the equivalent of such horsepower and is a jet propulsion aircraft engine having at least 1750 pounds of thrust or the equivalent of such thrust.
Indenture Supplement No ____ (2020-1 EETC)
N301DV
Exhibit B
to Indenture and Security Agreement
(N301DV)
LIST OF PERMITTED COUNTRIES
| Argentina | Guatemala | Norway | ||
| Australia | Hong Kong | Panama | ||
| Austria | Hungary | Peoples’ Republic of China | ||
| Bahamas | Iceland | Philippines | ||
| Barbados | India | Poland | ||
| Belgium | Indonesia | Portugal | ||
| Bermuda Islands | Ireland | Republic of China (Taiwan) | ||
| Bolivia | Italy | Russia | ||
| Brazil | Jamaica | Singapore | ||
| British Virgin Islands | Japan | South Africa | ||
| Canada | Jordan | South Korea | ||
| Cayman Islands | Kuwait | Spain | ||
| Chile | Liechtenstein | Sweden | ||
| Colombia | Luxembourg | Switzerland | ||
| Czech Republic | Malaysia | Thailand | ||
| Denmark | Malta | Trinidad and Tobago | ||
| Ecuador | Mexico | Turkey | ||
| Egypt | Monaco | United Kingdom | ||
| Finland | Morocco | Uruguay | ||
| France | Netherlands Antilles | Venezuela | ||
| Germany | Netherlands, the | |||
| Greece | New Zealand | |||
Indenture and Security Agreement (2020-1 EETC)
N301DV
B-1
Exhibit C
to Indenture and
Security Agreement
(N301DV)
CERTAIN TERMS
|
Insurance Threshold: |
$ | 10,000,000 |
Indenture and Security Agreement (2020-1 EETC)
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C-1
Schedule I
to Indenture and
Security Agreement
DESCRIPTION OF EQUIPMENT NOTES
|
Original Principal
Amount |
Maturity Date | |||||||
|
Series AA |
$ | 22,203,000.00 | June 10, 2028 | |||||
|
Equipment Notes: |
||||||||
|
Series A |
$ | 5,694,000.00 | June 10, 2028 | |||||
|
Equipment Notes: |
||||||||
CERTAIN DEFINED TERMS
|
Defined Term |
Definition | |
|
Debt Rate for Series AA Equipment Notes |
2.000% per annum | |
|
Make-Whole Spread for Series AA Equipment Notes |
0.200% | |
|
Debt Rate for Series A Equipment Notes |
2.500% per annum | |
|
Make-Whole Spread for Series A Equipment Notes |
0.300% |
Indenture and Security Agreement (2020-1 EETC)
N301DV
I-1
Schedule I
to Indenture and
Security Agreement
(Cont’d)
DESCRIPTION OF EQUIPMENT NOTES9
The information set forth below this text in this Schedule has been intentionally omitted from the FAA filing copy as the parties hereto deem it to contain confidential information.
| 9 |
This page to be included only in the FAA filing package in the place of the completed amortization schedules. |
Indenture and Security Agreement (2020-1 EETC)
N301DV
Schedule I
to Indenture and
Security Agreement
(Cont’d)
EQUIPMENT NOTES AMORTIZATION
SERIES AA EQUIPMENT NOTES
Airbus model A321-211
N301DV
Indenture and Security Agreement (2020-1 EETC)
N301DV
Schedule I
to Indenture and
Security Agreement
(Cont’d)
SERIES A EQUIPMENT NOTES
Airbus model A321-211
N301DV
Indenture and Security Agreement (2020-1 EETC)
N301DV
Schedule II
to Indenture and
Security Agreement
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date.
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1A, dated as of the Issuance Date.
Indenture and Security Agreement (2020-1 EETC)
N301DV
II-1
Exhibit 4.10
Execution Version
PARTICIPATION AGREEMENT
(N826DN)
Dated as of March 12, 2020
among
DELTA AIR LINES, INC.,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the
Pass Through Trust Agreements,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
*
One Boeing 737-932ER
(Generic Manufacturer and Model Boeing 737-900) Aircraft
U.S. Registration No. N826DN
Participation Agreement (2020-1 EETC)
N826DN
TABLE OF CONTENTS
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ARTICLE 1 |
DEFINITIONS | 2 | ||||
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Section 1.01. |
Definitions | 2 | ||||
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Section 1.02. |
Other Definitional Provisions | 2 | ||||
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ARTICLE 2 |
THE LOANS | 2 | ||||
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Section 2.01. |
The Loans | 2 | ||||
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Section 2.02. |
Issuance of Equipment Notes | 3 | ||||
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Section 2.03. |
The Closing | 4 | ||||
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ARTICLE 3 |
CONDITIONS PRECEDENT | 4 | ||||
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Section 3.01. |
Conditions Precedent to Obligations of Pass Through Trustees | 4 | ||||
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Section 3.02. |
Conditions Precedent to Obligations of Company | 8 | ||||
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ARTICLE 4 |
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY | 10 | ||||
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Section 4.01. |
Representations and Warranties of Company | 10 | ||||
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Section 4.02. |
General Indemnity | 12 | ||||
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ARTICLE 5 |
REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK | 19 | ||||
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Section 5.01. |
Representations, Warranties and Covenants of U.S. Bank | 19 | ||||
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ARTICLE 6 |
OTHER COVENANTS AND AGREEMENTS | 22 | ||||
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Section 6.01. |
Other Agreements | 22 | ||||
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Section 6.02. |
Certain Covenants of Company | 25 | ||||
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ARTICLE 7 |
MISCELLANEOUS | 27 | ||||
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Section 7.01. |
Notices | 27 | ||||
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Section 7.02. |
Survival of Representations, Warranties, Indemnities, Covenants and Agreements | 29 | ||||
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Section 7.03. |
Governing Law | 29 | ||||
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Section 7.04. |
Severability | 29 | ||||
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Section 7.05. |
No Oral Modifications or Continuing Waivers; Consents | 29 | ||||
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Section 7.06. |
Effect of Headings and Table of Contents | 29 | ||||
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Section 7.07. |
Successors and Assigns | 29 | ||||
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Section 7.08. |
Benefits of Agreement | 29 | ||||
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Section 7.09. |
Counterparts | 30 | ||||
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Section 7.10. |
Submission to Jurisdiction | 30 | ||||
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Section 7.11. |
Further Assurances | 30 | ||||
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Section 7.12. |
Section 1110 | 31 | ||||
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| Schedule I | - | Equipment Notes, Purchasers and Original Principal Amounts | ||
| Schedule II | - | Trust Supplements | ||
| Exhibit A-1 | - | Form of Opinion of Counsel for Company | ||
| Exhibit A-2 | - | Form of Opinion of Hughes Hubbard & Reed LLP, special counsel for Company | ||
| Exhibit B | - | Form of Opinion of Special Counsel for Loan Trustee, Pass Through Trustees, Subordination Agent and U.S. Bank | ||
| Exhibit C | - | Form of Opinion of Special FAA Counsel | ||
| Exhibit D | - | Form of Manufacturer’s Consent | ||
| Exhibit E-1 | - | Form of Opinion of Special Delaware Tax Counsel for Pass Through Trustees | ||
| Exhibit E-2 | - | Form of Opinion of Special Delaware UCC Counsel for Company | ||
| Annex A | - | Definitions | ||
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PARTICIPATION AGREEMENT
(N826DN)
This PARTICIPATION AGREEMENT (N826DN), dated as of March 12, 2020, is made by and among DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association (in its individual capacity, together with its successors and permitted assigns, “U.S. Bank”), not in its individual capacity except as otherwise expressly provided in any of the Operative Documents or the Pass Through Documents, but solely as Pass Through Trustee under each of the Pass Through Trust Agreements (such terms and other capitalized terms used herein without definition being defined as provided in Section 1.01), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as subordination agent and trustee (in such capacity, together with any successor trustee in such capacity, “Subordination Agent”) under the Intercreditor Agreement, and U.S. BANK TRUST NATIONAL ASSOCIATION, as loan trustee (in such capacity, together with any successor trustee in such capacity, “Loan Trustee”) under the Indenture.
WITNESSETH:
WHEREAS, Company is the owner of that certain Boeing Model 737-932ER aircraft more particularly described in the Indenture Supplement originally executed and delivered under the Indenture;
WHEREAS, concurrently with the execution and delivery of this Agreement, Company and Loan Trustee are entering into the Indenture, pursuant to which, among other things, Company will issue two separate series of Equipment Notes, which Equipment Notes are to be secured by a security interest in all right, title and interest of Company in and to the Aircraft and certain other property described in the Indenture;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each of the Trust Supplements set forth in Schedule II, the Pass Through Trusts were created and the Pass Through Certificates issued and sold;
WHEREAS, pursuant to the Intercreditor Agreement, Subordination Agent will hold the Equipment Notes on behalf of the Pass Through Trusts;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. For the purposes of this Agreement, unless the context otherwise requires, capitalized terms used but not defined herein shall have the respective meanings set forth or incorporated by reference in Annex A.
Section 1.02. Other Definitional Provisions. (a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Agreement, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) All references in this Agreement to a “government” are to such government and any instrumentality or agency thereof.
(e) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(f) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
ARTICLE 2
THE LOANS
Section 2.01. The Loans. Subject to the terms and conditions of this Agreement and the Indenture, on the Closing Date, Pass Through Trustee for each Pass Through Trust shall make a loan to Company by paying to Company the aggregate original principal amounts of the Equipment Notes being issued to such Pass Through Trust as set forth on Schedule I opposite the name of such Pass Through Trust. Pass Through Trustees, on behalf of the Pass Through Trusts, shall make such loans to Company no later than 11:00 a.m. (New York City time) on the Closing Date by transferring such amount in immediately available funds to Company at its account at JP Morgan Chase Bank, 28 Liberty Street, New York, New York, 10005, SWIFT: CHASUS33, ABA Number 021000021, Account No. 730131026, with the request that the bank advise Company by telephone at (404) 715-2046 upon transfer of the funds.
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Section 2.02. Issuance of Equipment Notes. Upon the occurrence of the above payments by Pass Through Trustee for each Pass Through Trust to Company, Company shall issue, pursuant to and in accordance with Article II of the Indenture, to Subordination Agent as agent and trustee for Pass Through Trustee for each Pass Through Trust, one or more Equipment Notes of the maturity and aggregate original principal amount and bearing the interest rate set forth in Schedule I opposite the name of such Pass Through Trust. Each such Equipment Note shall be duly authenticated by Loan Trustee pursuant to the Indenture, registered in the name of Subordination Agent and dated the Closing Date and shall be delivered by Loan Trustee to Subordination Agent. In addition, subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and from time to time, (i) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) and to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, (ii) to issue one or more Series of Additional Series Equipment Notes under the Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time) and (iii) at any time following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes are so issued after the Closing Date, each Noteholder of such Equipment Notes shall be deemed to be a party hereto without further act, and shall be entitled to execute, and at the request of Company shall execute, a counterpart to this Agreement. Subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, each of the parties hereto agrees, at the Company’s request, to enter into any amendments to (or any amendment and restatement of) this Agreement, any of the other Operative Documents and the Pass Through Documents as may be necessary or desirable (A) to give effect to (x) any redemption and issuance, any issuance or any payment and issuance of any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, and the issuance of pass through certificates by any pass through trust that acquires any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, or (y) any redemption and issuance, any issuance or any payment and issuance of any new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any
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Series, in each case under any Related Indenture, and the issuance of pass through certificates by any pass through trust that acquires any such new “Series A Equipment Notes” or “Additional Series Equipment Notes” or new “Additional Series Equipment Notes”, as applicable, and (B) to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith) and to provide for any credit support for any pass through certificates relating to any such new Series A Equipment Notes, Additional Series Equipment Notes or new Additional Series Equipment Notes or new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series (including, without limitation, to provide for payment of fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)). For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under the Indenture.
Section 2.03. The Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take place at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004 at 9:30 a.m. (New York City time) on March 12, 2020, or at such other time or place as the parties shall agree.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Obligations of Pass Through Trustees. The obligation of each Pass Through Trustee to make the loan contemplated by Article 2 is subject to the fulfillment (or the waiver by such Pass Through Trustee) prior to or on the Closing Date of the following conditions precedent:
(a) Authentication. Company shall have tendered the Equipment Notes being issued on the Closing Date to Loan Trustee for authentication, and Loan Trustee shall have authenticated such Equipment Notes and shall have tendered such Equipment Notes to Subordination Agent on behalf of the applicable Pass Through Trustee, against receipt of the loan proceeds, in accordance with Section 2.02.
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(b) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Pass Through Trustees to make the loans contemplated by Section 2.01 or to acquire the Equipment Notes.
(c) Documentation. This Agreement and the following documents shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Pass Through Trustees or Loan Trustee), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to each Pass Through Trustee:
(i) the Intercreditor Agreement;
(ii) the Liquidity Facilities;
(iii) the Pass Through Trust Agreements;
(iv) the Indenture and the Indenture Supplement covering the Aircraft and dated the Closing Date;
(v) the Manufacturer’s Consent;
(vi) a copy of the FAA Bill of Sale; and
(vii) a copy of the Warranty Bill of Sale.
(d) Financing Statement. A Uniform Commercial Code financing statement or statements covering the security interest created by the Indenture naming Company, as debtor, and Loan Trustee, as secured party, shall have been (or shall be in the process of being) duly filed in all places necessary or desirable within the State of Delaware.
(e) Certain Closing Certificates. Each Pass Through Trustee shall have received the following:
(i) a certificate dated the Closing Date of the Secretary or an Assistant Secretary of Company, certifying as to (A) a copy of the resolutions of the Board of Directors of Company or the executive or any other applicable committee thereof duly authorizing the transactions contemplated hereby and the execution, delivery and performance by Company of this Agreement and the Indenture and each other document required to be executed and delivered by Company in accordance with the provisions hereof or thereof and (B) a copy of the certificate of incorporation and by-laws of Company, as in effect on the Closing Date;
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(ii) a certificate or other evidence from the Secretary of State of the State of Delaware, dated as of a date reasonably near the Closing Date, as to the due incorporation and good standing of Company in such state;
(iii) an incumbency certificate of Company as to the person or persons authorized to execute and deliver this Agreement, the Indenture and each other document to be executed by Company in connection with the transactions contemplated hereby and thereby, and the specimen signatures of such person or persons; and
(iv) one or more certificates of Loan Trustee and Subordination Agent certifying to the reasonable satisfaction of Pass Through Trustees as to the due authorization, execution, delivery and performance by Loan Trustee and Subordination Agent of each of the Operative Documents to which Loan Trustee or Subordination Agent is or will be a party and any other documents to be executed by or on behalf of Loan Trustee or Subordination Agent in connection with the transactions contemplated hereby or thereby.
(f) Representations; No Event of Default or Event of Loss. On the Closing Date, the following statements shall be correct: (i) the representations and warranties of Company herein are correct in all material respects as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties are correct on and as of such earlier date) and (ii) no event has occurred and is continuing that constitutes an Event of Default or an Event of Loss with respect to the Aircraft or would constitute an Event of Default or such an Event of Loss but for the requirement that notice be given or time elapse or both.
(g) Opinion of Counsel to Company. Each Pass Through Trustee and Loan Trustee shall have received (i) an opinion addressed to it from the General Counsel, an Associate General Counsel or an Assistant General Counsel of Company (or from such other internal counsel to Company as shall be reasonably satisfactory to Pass Through Trustees) substantially in the form set forth in Exhibit A-1 and (ii) an opinion addressed to it from Hughes Hubbard & Reed LLP substantially in the form set forth in Exhibit A-2.
(h) Opinion of Counsel to U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Shipman & Goodwin LLP, special counsel for U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent, substantially in the form set forth in Exhibit B.
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(i) Opinion of FAA Counsel. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, substantially in the form set forth in Exhibit C.
(j) Certification from Company. Each Pass Through Trustee and Loan Trustee shall have received a certificate or certificates signed by the chief financial or accounting officer, any Senior Vice President, the Treasurer, any Vice President or any Assistant Treasurer (or any other Responsible Officer) of Company, dated the Closing Date, certifying as to the correctness of each of the matters stated in Section 3.01(f).
(k) Certification from U.S. Bank, Loan Trustee and Subordination Agent. Each Pass Through Trustee shall have received a certificate from U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, dated the Closing Date, signed by an authorized officer of U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, certifying for each such entity that no Loan Trustee Liens or Other Party Liens attributable to it, as applicable, exist, and further certifying as to the correctness of each of the matters stated in Section 5.01.
(l) [Reserved.]
(m) Insurance Matters. Loan Trustee shall have received an insurance report of an independent insurance broker and the related certificates of insurance, each in form and substance reasonably satisfactory to Loan Trustee, as to the compliance with the terms of Section 7.06 of the Indenture relating to insurance with respect to the Aircraft.
(n) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
(o) Funding of Pass Through Trusts. Each Pass Through Trustee shall have received in immediately available funds an amount at least equal to the aggregate purchase price of the Equipment Notes to be purchased from Company by such Pass Through Trustee.
(p) Manufacturer’s Consent. Loan Trustee shall have received an executed copy of the Manufacturer’s Consent substantially in the form set forth in Exhibit D.
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(q) Governmental Approvals. All appropriate action required to have been taken prior to the Closing Date by the FAA or any governmental or political agency, subdivision or instrumentality of the United States in connection with the transactions contemplated by this Agreement has been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be in effect on the Closing Date in connection with the transactions contemplated by this Agreement have been issued.
Promptly upon the recording of the Indenture (with the Indenture Supplement covering the Aircraft attached) pursuant to the Transportation Code and the receipt of appropriate and correct recording information from the FAA, Company will cause Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma to deliver to Subordination Agent, to Pass Through Trustees, to Loan Trustee and to Company an opinion as to the due recording of such instrument and the lack of filing of any intervening documents with respect to the Aircraft.
Section 3.02. Conditions Precedent to Obligations of Company. The obligation of Company to issue and sell the Equipment Notes is subject to the fulfillment (or waiver by Company) prior to or on the Closing Date of the following conditions precedent:
(a) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Company to enter into any transaction contemplated by the Operative Documents or the Pass Through Documents.
(b) Documentation. The documents referred to in Section 3.01(c) shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Company), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to Company, and Company shall have received such documents and evidence with respect to U.S. Bank, each Liquidity Provider, Loan Trustee, Subordination Agent and each Pass Through Trustee as Company reasonably requests in order to establish the consummation of the transactions contemplated by this Agreement, the taking of all corporate and other proceedings in connection therewith and compliance with the conditions herein set forth.
(c) FAA Filing. The Indenture (with the Indenture Supplement covering the Aircraft attached) shall have been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code. The registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
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(d) Representations and Warranties. On the Closing Date, the representations and warranties herein of U.S. Bank, Loan Trustee, Subordination Agent and Pass Through Trustees shall be correct as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall have been correct on and as of such earlier date), and, insofar as such representations and warranties concern U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee, such party shall have so certified to Company.
(e) Certain Opinions and Certificates. Company shall have received each opinion referred to in Sections 3.01(h) and 3.01(i), each such opinion addressed to Company or accompanied by a letter from the counsel rendering such opinion authorizing Company to rely on such opinion as if it were addressed to Company, and the certificates referred to in Sections 3.01(e)(iv) and 3.01(k).
(f) Certain Opinion of Special Delaware Counsel. Company shall have received an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Pass Through Trustees as to tax matters, substantially in the form set forth in Exhibit E-1, and an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Company as to UCC matters, substantially in the form set forth in Exhibit E-2.
(g) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
(h) No Other Party Liens, etc. Company shall have received a certificate from U.S. Bank dated the Closing Date, signed by an authorized officer of U.S. Bank, certifying for each Pass Through Trustee that no Other Party Liens attributable to it exist and further certifying as to the correctness of each of the matters stated in Section 5.01.
(i) Payment for Equipment Notes. Company shall have been paid by each Pass Through Trustee the aggregate original principal amount of the Equipment Notes being issued to such Pass Through Trustee as set forth on Schedule I opposite the name of such Pass Through Trust.
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(j) Tax Forms of the Pass Through Trustees. Each Pass Through Trustee shall have provided a completed and executed copy of IRS Form W-9 to each of the Company, the Subordination Agent and the Liquidity Providers.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY
Section 4.01. Representations and Warranties of Company. Company represents and warrants that:
(a) Organization; Authority; Qualification. Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, is a Certificated Air Carrier, is a Citizen of the United States, has the corporate power and authority to own its properties or hold them under lease and to enter into and perform its obligations under the Operative Documents to which it is a party and is duly qualified to do business as a foreign corporation in good standing in each other jurisdiction in which the failure to so qualify would have a material adverse effect on the consolidated financial condition of Company and its subsidiaries, considered as a whole, and its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) is Delaware.
(b) Corporate Action and Authorization; No Violations. The execution, delivery and performance by Company of this Agreement and the other Operative Documents to which Company is a party have been duly authorized by all necessary corporate action on the part of Company, do not require any stockholder approval or approval or consent of any trustee or holder of any indebtedness or obligations of Company, except such as have been duly obtained and are in full force and effect, and do not contravene any law, governmental rule, regulation, judgment or order binding on Company or the certificate of incorporation or by-laws of Company or contravene or result in a breach of, or constitute a default under, or result in the creation of any Lien (other than as permitted under the Indenture) upon the property of Company under, any material indenture, mortgage, contract or other agreement to which Company is a party or by which it or any of its properties may be bound or affected.
(c) Governmental Approvals. Neither the execution and delivery by Company of this Agreement and the other Operative Documents to which it is a party, nor the consummation by Company of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with or the taking of any other action in respect of, the Department of Transportation, the FAA or any other federal or state governmental authority or agency, or the International Registry, except for (i) the
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registration of the issuance and sale of the Pass Through Certificates under the Securities Act and under the securities laws of any state or other jurisdiction in which the Pass Through Certificates may be offered for sale if the laws of such state or other jurisdiction require such action, (ii) the qualification of the Pass Through Trust Agreements under the Trust Indenture Act, (iii) the orders, permits, waivers, exemptions, authorizations and approvals of the regulatory authorities having jurisdiction over Company’s ownership or operation of the Aircraft required to be obtained on or prior to the Closing Date, which orders, permits, waivers, exemptions, authorizations and approvals have been duly obtained and are, or on the Closing Date will be, in full force and effect, (iv) the filings and registrations referred to in Section 4.01(e), (v) authorizations, consents, approvals, notices and filings required to be obtained, taken, given or made under securities or Blue Sky or similar laws of the various states and foreign jurisdictions and (vi) consents, approvals, notices, registrations and other actions required to be obtained, given, made or taken only after the date hereof.
(d) Valid and Binding Agreements. This Agreement and each other Operative Document to which Company is a party have been duly executed and delivered by Company and constitute the legal, valid and binding obligations of Company enforceable against Company in accordance with their terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity and except, in the case of the Indenture, as limited by applicable laws that may affect the remedies provided in the Indenture, which laws, however, do not make the remedies provided in the Indenture inadequate for the practical realization of the rights and benefits intended to be provided thereby.
(e) Filings and Recordation. Except for (i) the filing for recordation pursuant to the Transportation Code of the Indenture (with the Indenture Supplement covering the Aircraft attached), (ii) with respect to the security interests created by such documents, the filing of financing statements (and continuation statements at periodic intervals) under the Uniform Commercial Code of Delaware, and (iii) the registration on the International Registry of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement covering the Aircraft), no further filing or recording of any document is necessary under the laws of the United States or any state thereof as of the Closing Date in order to establish and perfect the security interest in the Aircraft created under the Indenture in favor of Loan Trustee as against Company and any third parties in any applicable jurisdiction in the United States.
(f) Investment Company Act. Company is not required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
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(g) Title. As of the Closing Date, (i) Company has good title to the Aircraft, free and clear of Liens other than Permitted Liens, (ii) the Aircraft has been duly certificated by the FAA as to type and airworthiness in accordance with the terms of the Indenture, (iii) the Indenture (with the Indenture Supplement covering the Aircraft attached) has been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code, (iv) the Aircraft is duly registered (or shall be in the process of being so duly registered) with the FAA in the name of Company, and (v) the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
(h) Section 1110. Loan Trustee is entitled to the benefits of Section 1110 with respect to the Aircraft being subjected to the Lien of the Indenture on the Closing Date.
(i) Security Interest. The Indenture creates in favor of Loan Trustee, for the benefit of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, a valid and (subject to the filings and registrations referred to in Section 4.01(e)) perfected Lien on the Aircraft purported to be subjected to the Lien of the Indenture on the Closing Date, subject to no equal or prior Lien, except Permitted Liens.
(j) Licenses, Permits and Franchises. Company holds all licenses, permits and franchises from the appropriate government entities necessary to authorize Company lawfully to engage in air transportation and to carry on scheduled commercial passenger service as currently conducted, except where the failure to so hold any such license, permit or franchise would not have a material adverse effect on the financial condition or operations of Company and its consolidated subsidiaries, taken as a whole.
Section 4.02. General Indemnity. (a) Claims Defined. For the purposes of this Section 4.02, “Claims” means any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs or expenses of whatsoever kind and nature (whether or not on the basis of negligence, strict or absolute liability or liability in tort) that may be imposed on, incurred by, suffered by or asserted against an Indemnitee, as defined below, and, except as otherwise expressly provided in this Section 4.02, includes all reasonable out-of-pocket costs, disbursements and expenses (including reasonable out-of-pocket legal fees and expenses) actually incurred by an Indemnitee in connection therewith or related thereto.
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(b) Indemnitee Defined. For the purposes of this Section 4.02, “Indemnitee” means (i) U.S. Bank and Loan Trustee, (ii) each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture, (iii) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee, Subordination Agent (iv) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, (v) each Liquidity Provider, (vi) any Related Noteholder, and (vii) each of their respective successors and permitted assigns in such capacities, agents, servants, officers, employees and directors (the respective agents, servants, officers, employees and directors of each of the foregoing Indemnitees, as applicable, together with such Indemnitee, collectively the “Related Indemnitee Group” of such Indemnitee); provided that such Persons, to the extent they are not signatories to this Agreement, have expressly agreed in writing to be bound by the terms of this Section 4.02 prior to, or concurrently with, the making of a Claim. If any Indemnitee fails to comply with any duty or obligation under this Section 4.02 with respect to any Claim, such Indemnitee shall not be entitled to any indemnity with respect to such Claim under this Section 4.02 to the extent such failure was prejudicial to Company. No holder of a Pass Through Certificate in its capacity as such holder shall be an Indemnitee.
(c) Claims Indemnified. Subject to the exclusions stated in Section 4.02(d), Company agrees to indemnify, protect, defend and hold harmless on an After-Tax Basis each Indemnitee against Claims resulting from or arising out of the sale, purchase, acceptance, non-acceptance or rejection of the Aircraft under the Purchase Agreement or the ownership, possession, use, non-use, substitution, airworthiness, control, maintenance, repair, operation, registration, re-registration, condition, sale, lease, sublease, storage, modification, alteration, return, transfer or other disposition of the Aircraft, the Airframe, any Engine or any Part (including, without limitation, latent or other defects, whether or not discoverable, and any claim for patent, trademark or copyright infringement) by Company, any Permitted Lessee or any other Person. Without limiting the foregoing and subject to, and without duplication of, the provisions of Section 6.01(a), Company agrees to pay the reasonable ongoing fees, and the reasonable out-of-pocket costs and expenses actually incurred (including, without limitation, reasonable attorney’s fees and disbursements actually incurred and, to the extent payable as provided in the Indenture, reasonable compensation and expenses of Loan Trustee’s agents actually incurred), of Loan Trustee in connection with the transactions contemplated hereby.
(d) Claims Excluded. The following are excluded from Company’s agreement to indemnify an Indemnitee under this Section 4.02:
(i) any Claim to the extent such Claim is attributable to acts or events occurring after (A) the Lien of the Indenture has been discharged, or (B) the transfer of possession of the Aircraft pursuant to Article IV of the Indenture except to the extent that such Claim is attributable to acts occurring in connection with the exercise of remedies pursuant to Section 4.02 of the Indenture following the occurrence and continuance of an Event of Default;
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(ii) any Claim to the extent such Claim is, or is attributable to, a Tax (or loss of any Tax benefit), except with respect to paying indemnity amounts on an After-Tax Basis;
(iii) any Claim to the extent such Claim is attributable to the negligence or willful misconduct of such Indemnitee or such Indemnitee’s Related Indemnitee Group;
(iv) any Claim to the extent such Claim is attributable to the noncompliance by such Indemnitee or such Indemnitee’s Related Indemnitee Group with any of the terms of, or any misrepresentation by an Indemnitee or its Related Indemnitee Group contained in, this Agreement, any other Operative Document or any Pass Through Document to which such Indemnitee or any of such Related Indemnitee Group is a party or any agreement relating hereto or thereto;
(v) any Claim to the extent such Claim constitutes a Lien attributable to such Indemnitee;
(vi) any Claim to the extent such Claim is attributable to the offer, sale, assignment, transfer, participation or other disposition (whether voluntary or involuntary) by or on behalf of such Indemnitee or its Related Indemnitee Group (other than during the occurrence and continuance of an Event of Default; provided that any such offer, sale, assignment, transfer, participation or other disposition during the occurrence and continuation of an Event of Default shall not be subject to indemnification unless it is made in accordance with the Indenture and applicable law) of any Equipment Note or interest therein or Pass Through Certificate, all or any part of such Indemnitee’s interest in the Operative Documents or the Pass Through Documents, or any interest in the Collateral or any similar security;
(vii) any Claim to the extent such Claim is attributable to (A) a failure on the part of Loan Trustee to distribute in accordance with this Agreement or any other Operative Document any amounts received and distributable by it hereunder or thereunder, (B) a failure on the part of Subordination Agent to distribute in accordance with the Intercreditor Agreement any amounts received and distributable by it thereunder or (C) a failure on the part of any Pass Through Trustee to distribute in accordance with the Pass Through Trust Agreement to which it is a party any amounts received and distributable by it thereunder;
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(viii) any Claim to the extent such Claim is attributable to the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any Operative Document or any Pass Through Document, other than such as have been requested by Company or that occur as the result of an Event of Default, or such as are expressly required or contemplated by the provisions of the Operative Documents or the Pass Through Documents;
(ix) any Claim to the extent such Claim is payable or borne by (A) Company pursuant to any indemnification, compensation or reimbursement provision of any other Operative Document or any Pass Through Document or (B) a Person other than Company pursuant to any provision of any Operative Document or any Pass Through Document;
(x) any Claim to the extent such Claim is an ordinary and usual operating or overhead expense or not an out-of-pocket expense actually incurred;
(xi) any Claim to the extent such Claim is incurred on account of or asserted as a result of (A) any “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code or any foreign, federal, state or local law which is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code (“Similar Law”) or (B) any breach of fiduciary duty under ERISA;
(xii) any Claim to the extent such Claim is attributable to one or more of the other aircraft financed through the offering of Pass Through Certificates (in the event of doubt, any Claim shall be allocated between the Aircraft and such other aircraft in the same proportion that the then outstanding Equipment Notes bear to the then outstanding equipment notes issued with respect to the other aircraft and held by Pass Through Trustees);
(xiii) any Claim to the extent such Claim is attributable to any amount which any Indemnitee expressly agrees shall not be paid by, borne by, or reimbursed by Company;
(xiv) any Claim by an Indemnitee related to the status of such Indemnitee as a passenger or shipper on any of Company’s aircraft or as a party to a marketing or promotional or other commercial agreement with Company unrelated to the transactions contemplated by the Operative Documents; and
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(xv) any Claim to the extent such Claim is attributable to the offer or sale by an Indemnitee (or any member of such Indemnitee’s Related Indemnitee Group) of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or any similar interest, in violation of the Securities Act or other applicable federal, state or foreign securities laws (other than any thereof caused by acts or omissions of Company or any of its affiliates).
(e) Insured Claims. In the case of any Claim indemnified by Company hereunder that is covered by a policy of insurance maintained by Company, each Indemnitee agrees to cooperate, at Company’s expense, with the insurers in the exercise of their rights to investigate, defend and compromise such Claim.
(f) Claims Procedure. An Indemnitee shall promptly notify Company of any Claim as to which indemnification is sought. The failure to provide such prompt notice shall not release Company from any of its obligations to indemnify hereunder except to the extent that Company is prejudiced by such failure or Company’s indemnification obligations are increased as a result of such failure (in which event Company shall not be responsible for such additional indemnification obligations). Such Indemnitee shall promptly submit to Company all additional information in such Indemnitee’s possession to substantiate such Claim as Company reasonably requests. Subject to the rights of Company’s insurers, Company may, at its sole cost and expense, investigate any Claim, and may in its sole discretion defend or compromise any Claim. At Company’s expense, any Indemnitee shall cooperate with all reasonable requests of Company in connection therewith. Such Indemnitee shall not enter into a settlement or other compromise with respect to any Claim without the prior written consent of Company, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Claim. Where Company or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the written request of Company or such insurers. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense in any judicial proceeding controlled by Company pursuant to the preceding provisions; provided that such party’s participation does not, in the opinion of outside counsel appointed by Company or its insurers to conduct such proceedings, interfere with such control. Such participation shall not constitute a waiver of the indemnification provided in this Section 4.02. Notwithstanding anything to the contrary contained herein,
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Company shall not under any circumstances be liable for the fees and expenses of more than one counsel for all Indemnitees with respect to any one Claim. Notwithstanding anything to the contrary contained herein, an Indemnitee shall not under any circumstances be required or deemed to be required to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto. Company will provide the relevant Indemnitee with such information not within the control of such Indemnitee, as is in Company’s control or is reasonably available to Company, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its obligations under this Section. If an Indemnitee is not a party to this Agreement, Company may require such Indemnitee to agree in writing to the terms of this Section 4.02 and Section 7.10 of this Agreement prior to making any payment to such Indemnitee under this Section 4.02.
(g) Subrogation. To the extent that a Claim is in fact paid in full by Company or its insurer, Company or such insurer (as the case may be) shall, without any further action, be subrogated to the rights and remedies of the Indemnitee on whose behalf such Claim was paid with respect to the transaction or event giving rise to such Claim. Such Indemnitee shall give such further assurances or agreements and shall cooperate with Company or such insurer, as the case may be, to permit Company or such insurer to pursue such rights and remedies, if any, to the extent reasonably requested by Company. So long as no Event of Default has occurred and is continuing, if an Indemnitee receives any payment, in whole or in part, from any party other than Company or its insurers with respect to any Claim paid by Company or its insurers, it shall promptly pay over to Company the amount received (but not an amount in excess of the amount Company or any of its insurers has paid in respect of such Claim). Any amount referred to in the preceding sentence that is payable to Company shall not be paid to Company, or, if it has been previously paid directly to Company, shall not be retained by Company, if at the time of such payment an Event of Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under the Operative Documents. If Company agrees, such amount payable shall be applied against Company’s obligations thereunder when and as they become due and payable. At such time as such Event of Default is no longer continuing, such amount, to the extent not previously so applied against Company’s obligations, shall be paid to Company.
(h) No Guaranty. Nothing set forth in this Section 4.02 constitutes a guarantee by Company that the Aircraft at any time will have any particular value, useful life or residual value.
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(i) Payments; Interest. Any amount payable to any Indemnitee on account of a Claim shall be paid within 30 days after receipt by Company of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the Claims that are the subject of and basis for such indemnity and the computation of the amount payable. Any payments made pursuant to this Section 4.02 directly to an Indemnitee or to Company, as the case may be, shall be made in immediately available funds at such bank or to such account as is specified by the payee in written directions to the payor or, if no such directions are given, by check of the payor payable to the order of the payee and mailed to the payee by certified mail, return receipt requested, postage prepaid to its address referred to in Section 7.01. To the extent permitted by applicable law, interest at the Past Due Rate shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 4.02 until the same is paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due.
(j) Tax Deduction or Credit. If, by reason of any payment made to or for the account of any Indemnitee by Company, or by reason of any Claim of any Indemnitee paid or indemnified against by Company, in each case pursuant to Section 4.02, such Indemnitee realizes a Tax deduction or credit not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Company an amount equal to the sum of (i) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (ii) the actual reduction in Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided that the amount payable by such Indemnitee pursuant to this sentence shall not exceed the sum of all amounts previously paid by Company to such Indemnitee pursuant to this Section 4.02; provided, further, that any such excess shall be carried forward and applied to reduce pro tanto any subsequent obligations of Company to make payments to such Indemnitee pursuant to Section 4.02. If such Tax deduction or credit is subsequently disallowed or lost, upon written notice from the Indemnitee Company shall promptly repay all amounts paid to it pursuant to this Section 4.02(j) in respect of such disallowed or lost deduction or credit. If, at the time an amount would otherwise be payable to Company under this Section 4.02(j), any Event of Default shall have occurred and be continuing, such amount shall be held by the relevant Indemnitee as security for the obligations of Company under the Operative Documents. At such time as no Event of Default is continuing, such amount or portion thereof shall be applied to offset Company’s outstanding obligations under the Operative Documents and any remaining amount after such application shall be paid to Company.
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ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK
Section 5.01. Representations, Warranties and Covenants of U.S. Bank. U.S. Bank, generally, and as each of Loan Trustee, Subordination Agent and Pass Through Trustee as it relates to it, represents, warrants and covenants that:
(a) Organization; Authority. U.S. Bank is a national banking association duly organized and validly existing in good standing under the laws of the United States, is eligible to be Loan Trustee under Section 8.01(a) of the Indenture, will promptly comply with Section 8.01(a) of the Indenture and has full power, authority and legal right to enter into and perform its obligations under each of the Operative Documents and the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party and, in its capacity as Loan Trustee and Pass Through Trustee, respectively, to authenticate the Equipment Notes and the Pass Through Certificates, respectively. U.S. Bank is qualified to act as Loan Trustee under Section 8.01(c) of the Indenture. U.S. Bank is a Citizen of the United States (without the use of a voting trust agreement), and will resign as Loan Trustee under the Indenture promptly after it obtains actual knowledge that it has ceased to be such a Citizen of the United States.
(b) Due Authorization; No Violations. The execution, delivery and performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, each of the other Operative Documents and each of the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, the performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of its obligations thereunder and the consummation on the Closing Date or the Issuance Date, as the case may be, of the transactions contemplated thereby, and the authentication of the Equipment Notes and the Pass Through Certificates, respectively, to be delivered on the Closing Date or the Issuance Date, as the case may be: (i) have been duly authorized by all necessary action on the part of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee, as the case may be, (ii) do not violate any law or regulation of the United States or of the state of the United States in which U.S. Bank is located and which governs the banking and trust powers of U.S. Bank or any order, writ, judgment or decree of any court, arbitrator or governmental authority applicable to U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee or any of their assets, (iii) will not violate any provision of the articles of association or by-laws of U.S. Bank and (iv) will not violate any provision of, or constitute a default under, any mortgage, indenture, contract, agreement or undertaking to which any of U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party or by which any of them or their respective properties may be bound or affected.
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(c) Approvals. Neither the execution and delivery by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, any other Operative Document or any Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, nor the consummation by U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, (i) any governmental authority or agency of the United States or the state of the United States where U.S. Bank is located and regulating the banking and trust powers of U.S. Bank or (ii) any trustee or other holder of any debt of U.S. Bank.
(d) Valid and Binding Agreements. This Agreement, each other Operative Document and each Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party have been duly executed and delivered by U.S. Bank, individually and in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, and constitute the legal, valid and binding obligations of U.S. Bank, Loan Trustee, Subordination Agent and such Pass Through Trustee, as the case may be, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity.
(e) No Loan Trustee Liens or Other Party Liens. It unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Loan Trustee Lien or Other Party Lien attributable to it, and it agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Lien.
(f) Intercreditor Agreement. The Equipment Notes to be issued to Subordination Agent pursuant hereto are being acquired by it to be held under the Intercreditor Agreement.
(g) Funds Transfer Fees. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees that it will not impose any lifting charge, cable charge, remittance charge or any other charge or fee on any transfer by Company of funds to, through or by U.S. Bank, Loan Trustee, Subordination Agent or such Pass Through Trustee pursuant to this Agreement, any other Operative Document or any Pass Through Document, except as may be otherwise agreed to in writing by Company.
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(h) Confidentiality. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees to be bound by the terms of Section 10.16 of the Indenture.
(i) Certain Tax Matters. There are no Taxes payable by (i) U.S. Bank, Loan Trustee or Subordination Agent imposed by the Commonwealth of Massachusetts or any political subdivision or taxing authority thereof, or (ii) U.S. Bank or Pass Through Trustees imposed by the State of Delaware or any political subdivision or taxing authority thereof, in connection with the execution, delivery or performance by U.S. Bank, Loan Trustee or Subordination Agent on the one hand, or U.S. Bank or any Pass Through Trustee, on the other, of any Operative Document or any Pass Through Document (other than franchise or other Taxes based on or measured by any fees or compensation received by any such Person for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents), and there are no Taxes payable by any Pass Through Trustee imposed by the State of Delaware or any political subdivision thereof in connection with the acquisition, possession or ownership by such Pass Through Trustee of any of the Equipment Notes (other than franchise or other Taxes based on or measured by any fees or compensation received by such Pass Through Trustee for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents) and, assuming that the Pass Through Trusts will not be taxable for Federal income tax purposes as corporations, but, rather, will be characterized for such purposes as grantor trusts or partnerships, the Pass Through Trusts will not be subject to any Taxes imposed by the State of Delaware or any political subdivision thereof.
(j) Limitation on Situs of Activities. Except with the consent of Company, which shall not be unreasonably withheld: (i) U.S. Bank will act as Pass Through Trustee solely through its offices within the State of Delaware, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states; and (ii) U.S. Bank will act as Subordination Agent and Loan Trustee solely through its offices within the Commonwealth of Massachusetts, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states.
(k) No Proceedings. There are no pending or, to its knowledge, threatened actions or proceedings against U.S. Bank, Loan Trustee, Subordination Agent or any 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 U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee to perform its obligations under any Operative Document or any Pass Through Document.
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(l) Other Representations. The representations and warranties contained in Section 7.15 of the Basic Pass Through Trust Agreement and Section 7.04 of each Trust Supplement are true, complete and correct as of the Closing Date.
ARTICLE 6
OTHER COVENANTS AND AGREEMENTS
Section 6.01. Other Agreements. (a) Fees and Expenses. Company agrees promptly to pay (without duplication of any other obligation Company may have to pay such amounts) (1) the initial and annual fees and (to the extent Loan Trustee is entitled to be reimbursed for its reasonable expenses) the reasonable expenses of Loan Trustee in connection with the transactions contemplated hereby and (2) the following expenses incurred by Loan Trustee, Subordination Agent and Pass Through Trustees in connection with the negotiation, preparation, execution and delivery of this Agreement, the other Operative Documents and the other documents or instruments referred to herein or therein:
(i) the reasonable fees, expenses and disbursements of (A) Shipman & Goodwin LLP, special counsel for Loan Trustee, Subordination Agent and Pass Through Trustees, (B) Richards, Layton & Finger, P.A., special Delaware counsel for Pass Through Trustees and Company, and (C) Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, in each case to the extent actually incurred; and
(ii) all reasonable expenses actually incurred in connection with printing and document production or reproduction expenses, and in connection with the filing of Uniform Commercial Code financing statements.
(b) Continuing Registration and Re-Registration. Loan Trustee, Noteholders, Subordination Agent and each Pass Through Trustee agree to execute and deliver, at Company’s expense, all such documents and consents as Company reasonably requests for the purpose of continuing the registration of the Aircraft at the FAA in Company’s name or for the purpose of registering or maintaining any registration on the International Registry in respect of the Aircraft. In addition, each of Loan Trustee, Subordination Agent, each Pass Through Trustee and any other Noteholder agrees, for the benefit of Company, to cooperate with Company in effecting any foreign registration of the Aircraft pursuant to Section 7.02(e) of the Indenture; provided that prior to any such change in the country of registry of the Aircraft the conditions set forth in Section 7.02(e) of the Indenture are met to the reasonable satisfaction of, or waived by, Loan Trustee.
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(c) Quiet Enjoyment. Each of U.S. Bank, Loan Trustee, Subordination Agent, each Pass Through Trustee, any other Noteholder, Class AA Liquidity Provider (by having entered into the Class AA Liquidity Facility) and Class A Liquidity Provider (by having entered into the Class A Liquidity Facility) agrees that, unless an Event of Default shall have occurred and be continuing, it shall not (and shall not permit any Affiliate or other Person claiming by, through or under it to) take any action contrary to, or otherwise in any way interfere with or disturb (and then only in accordance with the Indenture), the quiet enjoyment of the use and possession of the Aircraft, the Airframe, any Engine or any Part by Company or any transferee of any interest in any thereof permitted under the Indenture.
(d) No Noteholder Liens. Each Noteholder, including, without limitation, Subordination Agent and each Pass Through Trustee, unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Noteholder Liens, and such Noteholder agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Noteholder Lien; and each Noteholder hereby agrees to indemnify, protect, defend and hold harmless each Indemnitee and Company against claims in any way resulting from or arising out of a breach by it of its obligations under this Section 6.01(d).
(e) Agreement to be Bound; Transfer. By its acceptance of its Equipment Notes, each Noteholder unconditionally agrees for the benefit of Company and Loan Trustee: (i) to be bound by and to perform and comply with all of the terms of such Equipment Notes, the Indenture and this Agreement applicable to such Noteholder and (ii) that it will not transfer any Equipment Note (or any part thereof) to any entity unless such transfer complies with and does not violate the Transportation Code, the Securities Act (or require registration under such Act) or any other law (including, without limitation, ERISA, the Code and Similar Law), and does not create a relationship that would be in violation thereof, or result in a “prohibited transaction” under Section 406 of ERISA, Section 4975 of the Code or Similar Law or require qualification of an indenture under the Trust Indenture Act.
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(f) Tax Returns. Each Pass Through Trustee shall file any Tax returns required to be filed by the related Pass Through Trust and the Company shall pay the Applicable Portion of any expenses relating thereto. The Company shall be responsible for the Applicable Portion of any interest or penalties related to any Pass Through Trustee’s failure to file any such Tax returns required to be filed by the relevant Pass Through Trust, except to the extent that such failure is attributable to the gross negligence or willful misconduct of such Pass Through Trustee. For purposes of this Section 6.01(f), the “Applicable Portion” of any amount shall equal such amount multiplied by a fraction, the numerator of which shall be the sum of the then outstanding aggregate principal amount of the Equipment Notes held by the relevant Pass Through Trustee, and the denominator of which shall be the sum of the outstanding aggregate principal amount of all “Equipment Notes” issued under each of the “Indentures” (in each case as defined in the Intercreditor Agreement) held by such Pass Through Trustee.
(g) No Petition. Each of Company, Loan Trustee, each Pass Through Trustee, Subordination Agent and any other Noteholder covenants that (i) until one year and one day after the Series AA Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class AA Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class AA Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class AA Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class AA Pass Through Trust, (ii) until one year and one day after the Series A Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class A Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class A Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class A Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class A Pass Through Trust, and (iii) if any Additional Series Equipment Notes of any Series shall have been issued, until one year and one day after such Additional Series Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the related Additional Series Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against such Additional Series Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Additional Series Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of such Additional Series Pass Through Trust.
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Section 6.02. Certain Covenants of Company. Company covenants and agrees with Loan Trustee as follows:
(a) Further Assurances. On and after the Closing, Company will cause to be done, executed, acknowledged and delivered such further acts, conveyances and assurances as Loan Trustee reasonably requests for accomplishing the purposes of this Agreement and the other Operative Documents; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
(b) Filing and Recordation of the Indenture; Registration of International Interests. Company, at its expense, will cause the Indenture (with the Indenture Supplement covering the Aircraft attached) to be promptly filed and recorded, or filed for recording, with the FAA to the extent permitted under the Transportation Code and the rules and regulations of the FAA thereunder. In addition, on or prior to the Closing Date, Company will cause the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) to be effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty, and shall, as and to the extent applicable, consent to such registration upon the issuance of a request for such consent by the International Registry.
(c) Maintenance of Filings. Company, at its expense, will take, or cause to be taken, such action with respect to the recording, filing, re-recording and refiling of the Indenture and any financing statements or other instruments as are necessary to maintain, so long as the Indenture is in effect, the perfection of the security interests created by the Indenture or will furnish Loan 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 Loan Trustee to take such action. In addition, Company will pay any and all recording, stamp and other similar Taxes payable in the United States, and in any other jurisdiction where the Aircraft is registered, in connection with the execution, delivery, recording, filing, re-recording and refiling of the Indenture or any such financing statements or other instruments. Company will notify Loan Trustee of any change in its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) promptly after making such change or in any event within the period of time necessary under applicable law to prevent the lapse of perfection (absent refiling) of financing statements filed under the Operative Documents.
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(d) Maintenance of Corporate Existence. Company shall at all times maintain its corporate existence except as permitted by Section 6.02(e).
(e) Merger; Consolidation; Transfer of Substantially All Assets. Company shall not consolidate with or merge into any other Person or convey, transfer or lease substantially all of its assets as an entirety to any Person, unless:
(i) the successor or transferee entity shall, if and to the extent required under Section 1110 in order that Loan Trustee continues to be entitled to any benefits of Section 1110 with respect to the Aircraft, be a Citizen of the United States and a Certificated Air Carrier and shall execute and deliver to Loan Trustee an agreement containing the express assumption by such successor or transferee entity of the due and punctual performance and observance of each covenant and condition of the Operative Documents to which Company is a party to be performed or observed by Company;
(ii) if the Aircraft is, at the time, registered with the FAA or such Person is located in a “Contracting State” (as such term is used in the Cape Town Treaty), such Person makes such filings and recordings with the FAA pursuant to the Transportation Code and registration under the Cape Town Treaty, or if the Aircraft is, at the time, not registered with the FAA, such Person makes such filings and recordings with the applicable aviation authority, as are necessary to evidence such consolidation, merger, conveyance, transfer or lease;
(iii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing; and
(iv) Company shall deliver to Loan Trustee and each Liquidity Provider a certificate signed by a Responsible Officer of Company stating that such consolidation, merger, conveyance, transfer or lease and the assumption agreement mentioned in clause (i) above comply with this Section 6.02(e) and that all conditions precedent herein relating to such transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease of substantially all of the assets of Company as an entirety in accordance with this Section 6.02(e), the successor Person formed by such consolidation or into which Company 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, Company under this Agreement and the other Operative Documents with the same effect as if such successor Person had been named as Company herein.
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(f) Section 1110. Company shall remain a Certificated Air Carrier for as long as and to the extent required under Section 1110 in order that Loan Trustee shall be entitled to any of the benefits of Section 1110 with respect to the Aircraft.
(g) Additional Information. Promptly after the occurrence of a Triggering Event or an Indenture Event of Default resulting from the failure of Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Event of Default shall be continuing, Company will, at the Subordination Agent’s request from time to time but in any event no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the following information with respect to the Aircraft if then subject to the lien of the Indenture: (A) whether the Aircraft is currently in service or parked in storage, (B) the maintenance status of the Aircraft, and (C) the location of the Engines. As used in this Section 6.02(g), the terms “Triggering Event”, “Indenture Event of Default” and “Regular Distribution Date” shall have the respective meanings set forth in the Intercreditor Agreement.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and any such notice may be given by United States mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class United States mail, and if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
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with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233
if to any Pass Through Trustee, addressed to:
U.S. Bank Trust National Association
300 Delaware Avenue, 9th Floor
Mail Code EX-DE-WDAW
Wilmington, Delaware 19801
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (302) 576-3703
Facsimile: (302) 576-3717
with a copy to:
U.S. Bank Trust National Association
One Federal Street
EX-MA-FED, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
if to U.S. Bank, Loan Trustee or Subordination Agent, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
or if to any subsequent Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07 of the Indenture.
Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 7.01.
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Section 7.02. Survival of Representations, Warranties, Indemnities, Covenants and Agreements. The indemnities set forth in Section 4.02 of this Agreement and the confidentiality obligations set forth in Section 5.01(h) of this Agreement shall survive the making of the loans, the transfer of any interest by any Noteholder of its Equipment Note and the expiration or termination of any Operative Documents (in the case of the indemnities, to the extent arising out of acts or events occurring prior to such expiration or termination).
Section 7.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 7.04. Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.05. No Oral Modifications or Continuing Waivers; Consents. Subject to Section 9.03 of the Indenture, no terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge or termination is sought. No such change, waiver, discharge or termination shall be effective unless a signed copy thereof is delivered to Loan Trustee.
Section 7.06. Effect of Headings and Table of Contents. The headings of the various Articles and Sections herein and in the Table of Contents are for convenience of reference only and do not define or limit any of the terms or provisions hereof.
Section 7.07. Successors and Assigns. All covenants, agreements, representations and warranties in this Agreement by Company, by U.S. Bank, individually or as Loan Trustee, Subordination Agent or Pass Through Trustee, or by any Noteholder, shall bind and inure to the benefit of and be enforceable by Company, and subject to the terms of Section 6.02(e), its successors and permitted assigns, each Pass Through Trustee and any successor or other trustee under the Pass Through Trust Agreement to which it is a party, Subordination Agent and its successor under the Intercreditor Agreement and Loan Trustee and its successor under the Indenture, whether so expressed or not.
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Section 7.08. Benefits of Agreement. Subject to the next sentence, nothing in this Agreement, express or implied, gives to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement, except as expressly provided herein. Company agrees and acknowledges that each Liquidity Provider, and each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture shall be third party beneficiaries of the covenants and agreements of Company with respect to the indemnities contained in Section 4.02 and may rely on the covenants and agreements of Company with respect to such indemnities to the same extent as if the covenants and agreements of Company with respect to such indemnities were made to such Liquidity Provider or such trustee, as the case may be, directly. U.S. Bank generally, and each of the Loan Trustee, the Subordination Agent and each Pass Through Trustee, insofar as relating to each such Person, agrees and acknowledges that each Liquidity Provider is a third party beneficiary of the representations and warranties set forth in Section 5.01, and that such Liquidity Provider may rely on such representations and warranties to the same extent as if such representations and warranties were made to such Liquidity Provider directly.
Section 7.09. Counterparts. This Agreement may be executed in any number of counterparts. Each of the parties hereto shall not be required to execute the same counterpart. Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts shall together constitute one instrument.
Section 7.10. Submission to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
Section 7.11. Further Assurances. Each party hereto shall execute, acknowledge and deliver or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, including, without limitation, making or consenting to registrations (or discharges thereof, as appropriate) with respect to the Indenture on the International Registry and appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to make or consent to any registrations (or discharges thereof, as appropriate) on the International Registry with respect to the Airframe or any Engine, in any case, as any other party hereto shall reasonably request in connection with the administration of, or to carry out more effectively the purposes of, or to better assure and confirm into such other party the rights and benefits to be provided under this Agreement, the other Operative Documents and the Pass Through Documents.
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Section 7.12. Section 1110. It is the intention of each of Company, Noteholders (such intention being evidenced by each of their acceptance of an Equipment Note), Loan Trustee and other parties hereto that the security interest created by the Indenture, to the fullest extent available under applicable law, entitles the Loan Trustee, on behalf of the Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft, Airframe, Engines and Parts.
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IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Pass Through Trustee under each of the Pass Through Trust Agreements | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Loan Trustee | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, in its individual capacity as set forth herein | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Participation Agreement (2020-1 EETC)
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SCHEDULE I to
PARTICIPATION AGREEMENT
EQUIPMENT NOTES,
PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS
|
Purchaser |
Description of Equipment Notes |
Maturity |
Interest
Rate |
Original
Principal Amount |
||||||||
|
Delta Air Lines Pass Through Trust 2020-1AA |
Series 2020-1AA-N826DN Equipment Note | June 10, 2027 | 2.000 | % | $ | 17,552,000.00 | ||||||
|
Delta Air Lines Pass Through Trust 2020-1A |
Series 2020-1A-N826DN Equipment Note | June 10, 2027 | 2.500 | % | $ | 4,501,000.00 | ||||||
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SCHEDULE II to
PARTICIPATION AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1AA.
Trust Supplement No. 2020-1A, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1A.
Participation Agreement (2020-1 EETC)
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EXHIBIT A-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
COUNSEL FOR COMPANY
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
EXHIBIT A-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR COMPANY
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
EXHIBIT B to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR LOAN TRUSTEE, PASS THROUGH TRUSTEES,
SUBORDINATION AGENT AND U.S. BANK
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
EXHIBIT C to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL FAA COUNSEL
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
EXHIBIT D to
PARTICIPATION AGREEMENT
FORM OF MANUFACTURER’S CONSENT
[Attached.]
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N826DN
EXHIBIT E-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF SPECIAL DELAWARE TAX COUNSEL FOR PASS THROUGH TRUSTEES
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
EXHIBIT E-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF SPECIAL DELAWARE UCC COUNSEL FOR COMPANY
[Attached.]
Participation Agreement (2020-1 EETC)
N826DN
Exhibit 4.11
Execution Version
INDENTURE AND SECURITY AGREEMENT
(N826DN)
Dated as of March 12, 2020
between
DELTA AIR LINES, INC.,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee
One Boeing 737-932ER
(Generic Manufacturer and Model Boeing 737-900) Aircraft
U.S. Registration No. N826DN
Indenture and Security Agreement (2020-1 EETC)
N826DN
Table of Contents
| Page | ||||||
|
ARTICLE I DEFINITIONS |
8 | |||||
|
Section 1.01 |
Definitions | 8 | ||||
|
Section 1.02 |
Other Definitional Provisions | 8 | ||||
|
ARTICLE II THE EQUIPMENT NOTES |
9 | |||||
|
Section 2.01 |
Form of Equipment Notes | 9 | ||||
|
Section 2.02 |
Issuance and Terms of Equipment Notes | 15 | ||||
|
Section 2.03 |
Method of Payment | 17 | ||||
|
Section 2.04 |
Withholding Taxes | 18 | ||||
|
Section 2.05 |
Application of Payments | 19 | ||||
|
Section 2.06 |
Termination of Interest in Collateral | 19 | ||||
|
Section 2.07 |
Registration, Transfer and Exchange of Equipment Notes | 19 | ||||
|
Section 2.08 |
Mutilated, Destroyed, Lost or Stolen Equipment Notes | 21 | ||||
|
Section 2.09 |
Payment of Expenses on Transfer; Cancellation | 21 | ||||
|
Section 2.10 |
Mandatory Redemption of Equipment Notes | 22 | ||||
|
Section 2.11 |
Voluntary Redemption of Equipment Notes | 22 | ||||
|
Section 2.12 |
Redemptions; Notice of Redemptions; Repurchases | 23 | ||||
|
Section 2.13 |
Subordination | 24 | ||||
|
Section 2.14 |
Certain Payments | 26 | ||||
|
Section 2.15 |
Repayment of Monies for Equipment Note Payments Held by Loan Trustee | 28 | ||||
|
Section 2.16 |
Directions by Subordination Agent | 28 | ||||
|
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE COLLATERAL |
29 | |||||
|
Section 3.01 |
Basic Distributions | 29 | ||||
|
Section 3.02 |
Event of Loss; Optional Redemption | 30 | ||||
|
Section 3.03 |
Payments After Event of Default | 32 | ||||
|
Section 3.04 |
Certain Payments | 36 | ||||
|
Section 3.05 |
Payments to Company | 37 | ||||
|
Section 3.06 |
Cooperation | 37 | ||||
|
Section 3.07 |
Securities Account | 38 | ||||
|
ARTICLE IV EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE |
39 | |||||
|
Section 4.01 |
Events of Default | 39 | ||||
|
Section 4.02 |
Remedies | 41 | ||||
|
Section 4.03 |
Remedies Cumulative | 45 | ||||
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Table of Contents
(Continued)
| Page | ||||||
|
Section 4.04 |
Discontinuance of Proceedings | 45 | ||||
|
Section 4.05 |
Waiver of Past Defaults | 45 | ||||
|
Section 4.06 |
Noteholders May Not Bring Suit Except Under Certain Conditions | 46 | ||||
|
Section 4.07 |
Appointment of a Receiver | 47 | ||||
|
ARTICLE V DUTIES OF LOAN TRUSTEE |
47 | |||||
|
Section 5.01 |
Notice of Event of Default | 47 | ||||
|
Section 5.02 |
Action upon Instructions; Certain Rights and Limitations | 48 | ||||
|
Section 5.03 |
Indemnification | 48 | ||||
|
Section 5.04 |
No Duties Except as Specified in Indenture or Instructions | 48 | ||||
|
Section 5.05 |
No Action Except under Indenture or Instructions | 49 | ||||
|
Section 5.06 |
Investment of Amounts Held by Loan Trustee | 49 | ||||
|
ARTICLE VI LOAN TRUSTEE |
50 | |||||
|
Section 6.01 |
Acceptance of Trusts and Duties | 50 | ||||
|
Section 6.02 |
Absence of Certain Duties | 50 | ||||
|
Section 6.03 |
No Representations or Warranties as to the Documents | 51 | ||||
|
Section 6.04 |
No Segregation of Monies; No Interest | 51 | ||||
|
Section 6.05 |
Reliance; Agents; Advice of Counsel | 51 | ||||
|
Section 6.06 |
Instructions from Noteholders | 52 | ||||
|
ARTICLE VII OPERATING COVENANTS OF COMPANY |
52 | |||||
|
Section 7.01 |
Liens | 52 | ||||
|
Section 7.02 |
Possession, Operation and Use, Maintenance and Registration | 54 | ||||
|
Section 7.03 |
Inspection; Financial Information | 61 | ||||
|
Section 7.04 |
Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines | 63 | ||||
|
Section 7.05 |
Loss, Destruction or Requisition | 68 | ||||
|
Section 7.06 |
Insurance | 75 | ||||
|
ARTICLE VIII SUCCESSOR AND ADDITIONAL TRUSTEES |
84 | |||||
|
Section 8.01 |
Resignation or Removal; Appointment of Successor | 84 | ||||
|
Section 8.02 |
Appointment of Additional and Separate Trustees | 85 | ||||
|
ARTICLE IX AMENDMENTS AND WAIVERS |
87 | |||||
|
Section 9.01 |
Amendments to this Indenture without Consent of Holders | 87 | ||||
|
Section 9.02 |
Amendments to this Indenture with Consent of Holders | 89 | ||||
|
Section 9.03 |
Amendments, Waivers, Etc. of the Participation Agreement | 90 | ||||
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Table of Contents
(Continued)
| Page | ||||||
|
Section 9.04 |
Revocation and Effect of Consents | 90 | ||||
|
Section 9.05 |
Notation on or Exchange of Equipment Notes | 91 | ||||
|
Section 9.06 |
Trustee Protected | 91 | ||||
|
Section 9.07 |
No Consent of Individual Indenture Indemnitees Required | 91 | ||||
|
ARTICLE X MISCELLANEOUS |
91 | |||||
|
Section 10.01 |
Termination of Indenture | 91 | ||||
|
Section 10.02 |
No Legal Title to Collateral in Noteholders | 92 | ||||
|
Section 10.03 |
Sale of Aircraft by Loan Trustee is Binding | 92 | ||||
|
Section 10.04 |
Indenture for Benefit of Company, Loan Trustee and Noteholders | 92 | ||||
|
Section 10.05 |
Notices | 92 | ||||
|
Section 10.06 |
Severability | 94 | ||||
|
Section 10.07 |
No Oral Modification or Continuing Waivers | 94 | ||||
|
Section 10.08 |
Successors and Assigns | 94 | ||||
|
Section 10.09 |
Headings | 94 | ||||
|
Section 10.10 |
Normal Commercial Relations | 95 | ||||
|
Section 10.11 |
Voting by Noteholders | 95 | ||||
|
Section 10.12 |
Section 1110 | 95 | ||||
|
Section 10.13 |
Company’s Performance and Rights | 95 | ||||
|
Section 10.14 |
Counterparts | 95 | ||||
|
Section 10.15 |
Governing Law | 96 | ||||
|
Section 10.16 |
Confidential Information | 96 | ||||
|
Section 10.17 |
Submission to Jurisdiction | 96 | ||||
| Exhibit A | Form of Indenture Supplement | |
| Exhibit B | List of Permitted Countries | |
| Exhibit C | Certain Terms | |
| Schedule I | Description of Equipment Notes | |
| Schedule II | Pass Through Trust Agreement and Pass Through Trust Supplements | |
| Annex A | Definitions | |
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iii
INDENTURE AND SECURITY AGREEMENT
(N826DN)
This INDENTURE AND SECURITY AGREEMENT (N826DN), dated as of March 12, 2020, is made by and between DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly stated herein, but solely as Loan Trustee hereunder (together with its permitted successors hereunder, “Loan Trustee”).
W I T N E S S E T H
:
WHEREAS, the parties desire by this Indenture (such term and other capitalized terms used herein without definition being defined as provided in Article I), among other things, to provide for (i) the issuance by Company of the Equipment Notes specified on Schedule I hereto and one or more Additional Series and (ii) the assignment, mortgage and pledge by Company to Loan Trustee, as part of the Collateral hereunder, among other things, of all of Company’s estate, right, title and interest in and to the Aircraft, as security for, among other things, Company’s obligations to Loan Trustee, for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, subject to Section 2.13 and Article III;
WHEREAS, all things have been done to make the Equipment Notes of the Series listed on Schedule I hereto, when executed by Company and authenticated and delivered by Loan Trustee hereunder, the valid, binding and enforceable obligations of Company; and
WHEREAS, all things necessary to make this Indenture a legal, valid and binding obligation of Company for the uses and purposes herein set forth, in accordance with its terms, have been done and performed and have occurred;
GRANTING CLAUSE
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the
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premises and of the covenants contained in the Operative Documents and the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under, all and singular, the following described properties, rights, interests and privileges, whether now owned or hereafter acquired (which, collectively, together with all property hereafter specifically subject to the Lien of this Indenture by the terms hereof or any supplement hereto, are included within, and are referred to as, the “Collateral”):
(1) the Aircraft, including the Airframe and the Engines, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided herein, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto (such Airframe and Engines as more particularly described in the Indenture Supplement executed and delivered with respect to the Aircraft on the Closing Date or with respect to any substitutions or replacements therefor) and together with all logs, manuals, modification and maintenance records at any time required to be maintained with respect to the Aircraft in accordance with the rules and regulations of the FAA if the Aircraft is registered under the laws of the United States or the rules and regulations of the government of the country of registry if the Aircraft is registered under the laws of a jurisdiction other than the United States;
(2) the Warranty Rights, together with all rights, powers, privileges, options and other benefits of Company under the same;
(3) all requisition proceeds with respect to the Aircraft or any Part thereof, and all insurance proceeds with respect to the Aircraft or any Part thereof, but excluding all proceeds of, and rights under, any insurance maintained by Company and not required, or in excess of that required, under Section 7.06(c);
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(4) all moneys and securities held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03, all rents, revenues and other proceeds collected by Loan Trustee pursuant to Section 4.02(a), all moneys and securities from time to time paid or deposited or required to be paid or deposited to or with Loan Trustee by or for the account of Company pursuant to any term of any Operative Document and held or required to be held by Loan Trustee hereunder or thereunder, including the Securities Account and all monies and securities deposited into the Securities Account; and
(5) all proceeds of the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so long as no Event of Default shall have occurred and be continuing, Company or, if a lease to a Permitted Lessee is then in effect, such Permitted Lessee, shall have the right, to the exclusion of Loan Trustee, (i) to quiet enjoyment of the Aircraft, the Airframe, the Parts and the Engines, and to possess, use, retain and control the Aircraft, the Airframe, the Parts and the Engines and all revenues, income and profits derived therefrom and (ii) with respect to the Warranty Rights, to exercise in Company’s name all rights and powers of Company under the Warranty Rights and to retain any recovery or benefit resulting from the enforcement of any warranty or indemnity or other obligation under the Warranty Rights; provided, further, that notwithstanding the occurrence and continuation of an Event of Default, Loan Trustee shall not enter into any amendment or modification of the Purchase Agreement that would alter the rights, benefits or obligations of Company thereunder;
TO HAVE AND TO HOLD all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in this Indenture, including Section 2.13 and Article III, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other, by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and in all cases and as to all property specified in paragraphs (1) through (5) inclusive above, subject to the terms and provisions set forth in this Indenture.
It is expressly agreed that notwithstanding anything herein to the contrary, Company shall remain liable under the Purchase Agreement to perform all of its obligations thereunder, and, except to the extent expressly provided in any Operative Document, none of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee shall be required or obligated in any manner to perform or fulfill any obligations of Company under or pursuant to any Operative Document, or have any obligation or liability under the Purchase Agreement by reason of or arising out of the assignment hereunder, or to make any inquiry as to the nature or sufficiency of any payment received by it, or present or file any claim or take any action to collect or enforce the payment of any amount that may have been assigned to it or to which it may be entitled at any time or times.
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Notwithstanding anything herein to the contrary (but without in any way releasing Company from any of its duties or obligations under the Purchase Agreement), Loan Trustee, Noteholders, other Indenture Indemnitees and Related Indenture Indemnitees confirm for the benefit of Manufacturer that in exercising any rights under the Warranty Rights, or in making any claim with respect to the Aircraft or other goods and services delivered or to be delivered pursuant to the Purchase Agreement, the terms and conditions of the Purchase Agreement relating to the Warranty Rights, including, without limitation, the warranty disclaimer provisions for the benefit of Manufacturer, shall apply to and be binding upon Loan Trustee, Noteholders, other Indenture Indemnitees and Related Indenture Indemnitees to the same extent as Company. Company hereby directs Manufacturer, so long as an Event of Default shall have occurred and be continuing, to pay all amounts, if any, payable to Company pursuant to the Warranty Rights directly to Loan Trustee to be held and applied as provided herein. Nothing contained herein shall subject Manufacturer to any liability to which it would not otherwise be subject under the Purchase Agreement or modify in any respect the contract rights of Manufacturer thereunder except as provided in the Manufacturer’s Consent.
Subject to the terms and conditions hereof, Company does hereby irrevocably constitute Loan Trustee the true and lawful attorney of Company (which appointment is coupled with an interest) with full power (in the name of Company or otherwise) to ask for, require, demand and receive any and all monies and claims for monies (in each case including insurance and requisition proceeds) due and to become due to Company under or arising out of the Purchase Agreement (to the extent assigned hereby), and all other property which now or hereafter constitutes part of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or to take any action or to institute any proceedings which Loan Trustee may deem to be necessary or advisable in the premises; provided that Loan Trustee shall not exercise any such rights except during the continuance of an Event of Default. Company agrees that, promptly upon receipt thereof, to the extent required by the Operative Documents, it will transfer to Loan Trustee any and all monies from time to time received by Company constituting part of the Collateral, for distribution by Loan Trustee pursuant to this Indenture.
Company does hereby warrant and represent that it has not sold, assigned or pledged, and hereby covenants and agrees that it will not sell, assign or pledge, so long as this Indenture shall remain in effect and the Lien hereof shall not have been released pursuant to the provisions hereof, any of its estate, right, title or interest hereby assigned, to any Person other than Loan Trustee, except as otherwise provided in or permitted by any Operative Document.
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Company agrees that at any time and from time to time, upon the written request of Loan Trustee, Company shall promptly and duly execute and deliver or cause to be duly executed and delivered any and all such further instruments and documents as Loan Trustee may reasonably deem necessary to perfect, preserve or protect the mortgage, security interests and assignments created or intended to be created hereby or to obtain for Loan Trustee the full benefit of the assignment hereunder and of the rights and powers herein granted; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, unless the context otherwise requires, capitalized terms used but not defined herein have the respective meanings set forth or incorporated by reference in Annex A.
Section 1.02 Other Definitional Provisions.
(a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Indenture to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Indenture, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
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(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Indenture to a “government” are to such government and any instrumentality or agency thereof.
(f) All references in this Indenture to a Person shall include successors and permitted assigns of such Person.
ARTICLE II
The Equipment Notes
Section 2.01 Form of Equipment Notes. The Equipment Notes shall be substantially in the form set forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE OR OTHER LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. IN ADDITION, THIS EQUIPMENT NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.
DELTA AIR LINES, INC.
SERIES 2020-1[__]-[___]
EQUIPMENT NOTE DUE [MATURITY DATE]
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ISSUED IN CONNECTION WITH THE BOEING MODEL 737-932ER (GENERIC
MANUFACTURER AND MODEL BOEING MODEL 737-900) AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N826DN
| No. __________ | Date: ________ | |
| DEBT RATE | MATURITY DATE | |
DELTA AIR LINES, INC. (together with its successors and permitted assigns, “Company”) hereby promises to pay to , or the registered assignee thereof, the principal amount of __________________________ Dollars ($___________) in installments on the Payment Dates set forth in Schedule I hereto, each such installment to be in an amount computed by multiplying the original principal amount of this Equipment Note by the percentage set forth in Schedule I hereto opposite the Payment Date on which such installment is due, and to pay interest in arrears on each Payment Date at the Debt Rate shown above on the principal amount remaining unpaid from time to time (calculated on the basis of a year of 360 days comprised of twelve 30-day months) from the date hereof, or from the most recent date to which interest hereon has been paid or duly provided for, until paid in full. Notwithstanding the foregoing, the final payment made on this Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, this Equipment Note. Notwithstanding anything to the contrary contained herein, if any date on which a payment under this Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
For purposes hereof, the term “Indenture” means the Indenture and Security Agreement (N826DN), dated as of March 12, 2020, between Company and U.S. Bank Trust National Association, as Loan Trustee (“Loan Trustee”), as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms. All capitalized terms used in this Equipment Note and not defined herein, unless the context otherwise requires, shall have the respective meanings set forth or incorporated by reference, and shall be construed and interpreted in the manner described, in the Indenture.
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This Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest, and any other amounts payable hereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue if not paid in the manner provided herein or in the Indenture when due (whether at stated maturity, by acceleration or otherwise).
There shall be maintained an Equipment Note Register for the purpose of registering transfers and exchanges of Equipment Notes at the Corporate Trust Office of Loan Trustee, or at the office of any successor trustee, in the manner provided in Section 2.07 of the Indenture.
The principal amount and interest and other amounts due hereunder shall be payable in Dollars in immediately available funds at the Corporate Trust Office of Loan Trustee, or as otherwise provided in the Indenture. Company shall not have any responsibility for the distribution of any such payment to Noteholder of this Equipment Note. Each such payment shall be made on the date such payment is due and without any presentment or surrender of this Equipment Note, except that in the case of any final payment with respect to this Equipment Note, this Equipment Note shall be surrendered to Loan Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees that, except as provided in the Indenture, including the subordination provisions referred to below, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest received by it hereunder shall be applied: first, to the payment of accrued interest on this Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts hereunder) to the date of such payment; second, to the payment of Make-Whole Amount, if any, with respect to this Equipment Note; third, to the payment of the principal amount of this Equipment Note (or portion thereof) then due hereunder, if any; and fourth, the balance, if any, remaining thereafter to the payment of installments of the principal amount of this Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the Indenture which have been or are to be issued by Company pursuant to the terms of the Indenture. The Collateral is held by Loan Trustee as security, in part, for the Equipment Notes. The provisions of this Equipment Note are subject to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents. Reference is hereby made to the Indenture, the Related Indentures, the
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Participation Agreement, the other Operative Documents and the Pass Through Documents for a complete statement of the rights and obligations of the holder of, and the nature and extent of the security for, this Equipment Note (including as a “Related Equipment Note” under each Related Indenture) and the rights and obligations of the holders of, and the nature and extent of the security for, any other Equipment Notes executed and delivered under the Indenture, to all of which terms and conditions in the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents each holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain limitations therein set forth, this Equipment Note is exchangeable for an equal aggregate principal amount of Equipment Notes of the same Series of different authorized denominations, as requested by the holder surrendering the same. Prior to the due presentment for registration of transfer of this Equipment Note, Company and Loan Trustee shall deem and treat the Person in whose name this Equipment Note is registered on the Equipment Note Register as the absolute owner and holder hereof for the purpose of receiving all amounts payable with respect to this Equipment Note and for all purposes, and neither Company nor Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise. In addition, this Equipment Note may be accelerated as provided in Section 4.02 of the Indenture.
This Equipment Note is subject to certain restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, as further specified in Section 2.07 of the Indenture, to all of which terms and conditions in the Intercreditor Agreement each holder hereof agrees by its acceptance of this Equipment Note.
The holder hereof, by its acceptance of this Equipment Note, agrees that no payment or distribution shall be made on or in respect of the Secured Obligations (as defined in the Indenture) or the Secured Obligations (as defined in any Related Indenture) owed to such holder, including, without limitation, any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) of the Indenture or after the commencement of any proceedings of the type referred to in Sections 4.01 (g), (h) or (i) of the Indenture, except, in each case, as expressly provided in Article III of the Indenture or Article III of the applicable Related Indenture, as appropriate.
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The indebtedness evidenced by this Equipment Note is[,]1 [(i) to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of [Series AA Equipment Notes]2 [Series AA Equipment Notes and Series A Equipment Notes]3 [Series AA Equipment Notes, Series A Equipment Notes and [ ]4]5, and certain other Secured Obligations, and (ii)]6 to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes” issued under such Related Indenture, and this Equipment Note is issued subject to such provisions. The Noteholder of this Equipment Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in the Indenture or the applicable Related Indenture and (c) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
Without limiting the foregoing, the holder hereof, by its acceptance of this Equipment Note, agrees that if such holder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligation in respect of this Equipment Note that it is not entitled to receive under Section 2.13 or Article III of the Indenture, it shall hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III of the Indenture.
| 1 |
To be inserted in the case of a Series AA Equipment Note. |
| 2 |
To be inserted in the case of a Series A Equipment Note. |
| 3 |
To be inserted in the case of the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 4 |
To insert each Series of Additional Series Equipment Notes that rank senior in priority of payment to the Series of Additional Series Equipment Notes being issued. |
| 5 |
To be inserted in the case of each Series of Additional Series Equipment Notes other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 6 |
To be inserted in the case of a Series A Equipment Note or an Additional Series Equipment Note. |
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Unless the certificate of authentication hereon has been executed by or on behalf of Loan Trustee by manual signature, this Equipment Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
IN WITNESS WHEREOF, Company has caused this Equipment Note to be executed in its corporate name by its officer thereunto duly authorized on the date hereof.
| DELTA AIR LINES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
LOAN TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned Indenture.
| U.S. BANK TRUST NATIONAL ASSOCIATION, | ||
| not in its individual capacity but solely as Loan Trustee | ||
| By: |
|
|
| Authorized Signatory | ||
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SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
| Payment Date |
Percentage of Original Principal Amount to be Paid |
[SEE “EQUIPMENT NOTES AMORTIZATION” ON SCHEDULE I TO
INDENTURE]
* * *
Section 2.02 Issuance and Terms of Equipment Notes. The Equipment Notes shall be dated the date of issuance thereof, shall be issued in (a) separate Series consisting of Series AA Equipment Notes, Series A Equipment Notes and one or more Additional Series Equipment Notes (if issued) and (b) the maturities and principal amounts and shall bear interest at the applicable Debt Rates specified in Schedule I. On the Closing Date, each Series AA Equipment Note and Series A Equipment Note shall be issued to Subordination Agent on behalf of Pass Through Trustee for the applicable Pass Through Trust created under the Pass Through Trust Agreements referred to in Schedule II. Subject to compliance with the conditions set forth in Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and from time to time (i) to issue one or more Series of Additional Series Equipment Notes under this Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time), (ii) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) pursuant to, and in accordance with, the provisions of Section 2.11(b) and to issue under this Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, and (iii) following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes of any Series or new Additional Series Equipment Notes of any Series are issued after the Closing Date in accordance with the immediately preceding sentence, such Equipment Notes shall be dated the date of original issuance thereof and shall have such maturities, principal amounts and interest rate as specified in an amendment to this Indenture. The Equipment Notes shall be issued in registered form only. The Equipment Notes shall be issued in denominations of $1,000 and integral
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multiples thereof, except that one Equipment Note of each Series may be in an amount that is not an integral multiple of $1,000. For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Note” of any series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under this Indenture.
Each Equipment Note shall bear interest at the Debt Rate specified for the applicable Series (calculated on the basis of a year of 360 days comprised of twelve 30-day months), payable in arrears on each Payment Date on the unpaid principal amount thereof from time to time outstanding from the most recent Payment Date to which interest has been paid or duly provided for (or, if no interest has been so paid or provided for, from the date of issuance of such Equipment Note) until such principal amount is paid in full, as further provided in the form of Equipment Note set forth in Section 2.01. The principal amount of each Series AA Equipment Note and each Series A Equipment Note shall be payable in installments or in a single payment on the Payment Dates set forth in such Equipment Note, each such installment, if any, to be in an amount computed by multiplying the original principal amount of such Equipment Note by the corresponding percentage set forth in Schedule I hereto applicable to such Series, the applicable portion of which shall be attached as Schedule I to such Equipment Note, opposite the Payment Date on which such installment is due. Each Additional Series Equipment Note, if issued, shall be payable in installments or in a single payment as set forth in an amendment to this Indenture, and if payable in installments, such installments shall be calculated as set forth in the preceding sentence. Notwithstanding the foregoing, the final payment made under each Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, such Equipment Note. Each Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not at the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest and any other amounts payable thereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue under an Equipment Note if not paid in the manner provided therein or in this Indenture when due (whether at stated maturity, by acceleration or otherwise). Notwithstanding anything to the contrary contained herein, if any date on which a payment hereunder or under any Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if such payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
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The Equipment Notes shall be executed on behalf of Company by the manual or facsimile signature of one of its authorized officers. Equipment Notes bearing the signatures of individuals who were at the time of execution the proper officers of Company shall bind Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Equipment Notes or did not hold such offices at the respective dates of such Equipment Notes. No Equipment Note shall be secured by or entitled to any benefit under this Indenture or be valid or obligatory for any purposes unless there appears on such Equipment Note a certificate of authentication in the form provided herein executed by Loan Trustee by the manual signature of one of its authorized officers, and such certificate upon any Equipment Notes shall be conclusive evidence, and the only evidence, that such Equipment Note has been duly authenticated and delivered hereunder.
Section 2.03 Method of Payment. The principal amount of, interest on, Make-Whole Amount, if any, and, except to the extent expressly provided herein, all other amounts due under each Equipment Note or otherwise payable hereunder shall be payable by Company in Dollars by wire transfer of immediately available funds not later than 10:00 a.m. (New York City time) on the due date of payment to Loan Trustee at the Corporate Trust Office for distribution among Noteholders in the manner provided herein, and payment of such amount by Company to Loan Trustee shall be deemed to satisfy Company’s obligation to make such payment. Company shall not have any responsibility for the distribution of such payment to any Noteholder. Notwithstanding the foregoing or any provision in any Equipment Note to the contrary, Loan Trustee will use reasonable efforts to pay or cause to be paid, if so directed in writing by any Noteholder (with a copy to Company), all amounts paid by Company hereunder and under such Noteholder’s Equipment Note or Equipment Notes to such Noteholder or a nominee therefor (including all amounts distributed pursuant to Article III) by transferring, or causing to be transferred, by wire transfer of immediately available funds in Dollars, prior to 12:00 noon (New York City time) on the due date of payment, to an account maintained by such Noteholder with a bank located in the continental United States the amount to be distributed to such Noteholder, for credit to the account of such Noteholder maintained at such bank; provided that, in the event the Equipment Notes are not held by Subordination Agent on behalf of Pass Through Trustees, Loan Trustee shall, unless instructed by Company to use another method, pay such amounts by check mailed to Noteholder’s address as it appears on the Equipment Note Register. If, after its receipt of funds at the place and prior to the time specified above in the immediately preceding sentence, Loan Trustee fails (other than as a result of a failure of Noteholder to provide it with wire transfer instructions) to make any such payment required to be paid by wire transfer as provided in the immediately preceding sentence on the Business Day it
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receives such funds, Loan Trustee, in its individual capacity and not as trustee, agrees to compensate such Noteholders for loss of use of funds at the Federal Funds Rate until such payment is made and Loan Trustee shall be entitled to any interest earned on such funds until such payment is made. Any payment made hereunder shall be made without any presentment or surrender of any Equipment Note, except that, in the case of the final payment in respect of any Equipment Note, such Equipment Note shall be surrendered to Loan Trustee for cancellation. Notwithstanding any other provision of this Indenture to the contrary, Loan Trustee shall not be required to make, or cause to be made, wire transfers as aforesaid prior to the first Business Day on which it is practicable for Loan Trustee to do so in view of the time of day when the funds to be so transferred were received by it if such funds were received after 1:00 p.m. (New York City time) at the place of payment, in which case Loan Trustee shall make such required payment on the next succeeding Business Day. So long as any signatory to the Participation Agreement or nominee thereof shall be a registered Noteholder, all payments to it shall be made to the account of such Noteholder specified in Schedule I to the Participation Agreement or otherwise in the manner provided in or pursuant to the Participation Agreement unless it shall have specified some other account or manner of payment by notice to Loan Trustee consistent with this Section 2.03.
Section 2.04 Withholding Taxes. Loan Trustee shall exclude and withhold at the appropriate rate from each payment of principal, interest, Make-Whole Amount, if any, and other amounts due hereunder or under each Equipment Note (which exclusion and withholding shall constitute payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) any and all withholding Taxes applicable thereto as required by applicable law. Loan Trustee agrees to act as such withholding agent and whenever any present or future Taxes or similar charges are required to be withheld with respect to any amounts payable hereunder or in respect of the Equipment Notes, to withhold such amounts (which withholding shall constitute payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) and timely pay the same to the appropriate authority in the name of and on behalf of Noteholders, that it will file any necessary withholding Tax returns or statements when due, and that as promptly as possible after the payment thereof it will deliver to each Noteholder (with a copy to Company) appropriate documentation showing the payment thereof, together with such additional documentary evidence as any such Noteholder may reasonably request from time to time. Loan Trustee agrees to file any other information reports it is required to file under United States law.
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Section 2.05 Application of Payments. Subject always to Section 2.13 and except as otherwise provided in Article III, in the case of each Equipment Note, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest paid thereon shall be applied:
first, to the payment of accrued interest on such Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts thereunder) to the date of such payment;
second, to the payment of Make-Whole Amount, if any, with respect to such Equipment Note;
third, to the payment of the principal amount of such Equipment Note (or portion thereof) then due thereunder, if any; and
fourth, the balance, if any, remaining thereafter, to the payment of installments of the principal amount of such Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
Section 2.06 Termination of Interest in Collateral. No Noteholder or Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if the principal amount of, Make-Whole Amount, if any, and interest (including, to the extent permitted by applicable law, post-petition interest and interest on any overdue amounts) on and all other amounts due under all Equipment Notes held by such Noteholder and all other sums then due and payable to such Noteholder or Indenture Indemnitee, as the case may be, hereunder (including, without limitation, under Section 2.14) and under the Participation Agreement by Company (the “Secured Obligations”) have been paid in full.
Subject to Section 10.01 hereof, no Related Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if all Related Secured Obligations have been paid in full.
Section 2.07 Registration, Transfer and Exchange of Equipment Notes. Loan Trustee shall keep a register or registers (the “Equipment Note Register”) in which Loan Trustee shall provide for the registration of Equipment Notes, the registration of transfers of Equipment Notes and a record of the dates and payments made with respect to the Equipment Notes. No such transfer shall be given effect unless and until registration hereunder shall have occurred. The Equipment Note Register shall be kept at the Corporate Trust Office of Loan Trustee. Loan Trustee is hereby appointed “Equipment Note Registrar” for the purpose of registering Equipment Notes and transfers of Equipment Notes as herein provided. A holder of any Equipment Note intending to
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exchange or transfer such Equipment Note shall surrender such Equipment Note to Loan Trustee at the Corporate Trust Office, together with a written request from the registered holder thereof for the issuance of a new Equipment Note of the same Series, specifying, in the case of a surrender for transfer, the name and address of the new holder or holders. Upon surrender for registration of transfer of any Equipment Note and subject to satisfaction of Section 2.09, Company shall execute, and Loan Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Equipment Notes of an equal aggregate principal amount and of the same Series. At the option of Noteholder, Equipment Notes may be exchanged for other Equipment Notes of the same Series of any authorized denominations of an equal aggregate principal amount, upon surrender of the Equipment Notes to be exchanged to Loan Trustee at the Corporate Trust Office. Whenever any Equipment Notes are so surrendered for exchange, Company shall execute, and Loan Trustee shall authenticate and deliver, the Equipment Notes which Noteholder making the exchange is entitled to receive. All Equipment Notes issued upon any registration of transfer or exchange of Equipment Notes (whether under this Section 2.07 or under Section 2.08 or otherwise under this Indenture) shall be the valid obligations of Company evidencing the same respective obligations, and entitled to the same security and benefits under this Indenture, as the Equipment Notes surrendered upon such registration of transfer or exchange. Every Equipment Note presented or surrendered for registration of transfer shall (if so required by Company or Loan Trustee) be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to Loan Trustee, duly executed by Noteholder or such Noteholder’s attorney duly authorized in writing, and Company and Loan Trustee shall require evidence satisfactory to Company as to the compliance of any such transfer with the Securities Act and the securities laws of any applicable state or jurisdiction. Loan Trustee shall make a notation on each new Equipment Note of the amount of all payments of principal amount previously made on the old Equipment Note or Equipment Notes with respect to which such new Equipment Note is issued and the date to which interest on such old Equipment Note or Equipment Notes has been paid. Principal, interest and all other amounts shall be deemed to have been paid on such new Equipment Note to the date on which such amounts have been paid on such old Equipment Note. Company and Equipment Note Registrar shall not be required to exchange any surrendered Equipment Notes as provided above (a) during the ten-day period preceding the due date of any payment on such Equipment Note or (b) that has been called for redemption. Company and Loan Trustee shall in all cases deem and treat the Person in whose name any Equipment Note has been issued and registered on the Equipment Note Register as the absolute owner and Noteholder of such Equipment Note for the purpose of receiving payment of all amounts payable with respect to such Equipment Note and for all other purposes, and neither Company nor Loan Trustee shall be affected by any notice to the contrary. Loan Trustee will promptly notify Company of each registration of a transfer of an Equipment Note. Any such transferee of an Equipment Note, by its acceptance of an Equipment Note, agrees to the provisions of this Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass
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Through Documents applicable to Noteholders or, in the case of each Related Indenture, Related Noteholders, and, without limiting the generality of the foregoing, any such transferee of an Equipment Note, by its acceptance of an Equipment Note: (i) agrees to the applicable provisions of Sections 6.01, 7.10 and 7.11 of the Participation Agreement, and shall be deemed to have represented, warranted and covenanted to the parties to the Participation Agreement as to the matters represented, warranted and covenanted by Noteholders, including Pass Through Trustees, in the Participation Agreement and (ii) agrees to the restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, and shall be deemed to have covenanted to the parties to the Intercreditor Agreement not to give any direction to, or otherwise authorize, Loan Trustee to take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement. Subject to compliance by Noteholder and any transferee of the requirements set forth in this Section 2.07 and in Section 2.09, Loan Trustee and Company shall use all reasonable efforts to issue new Equipment Notes upon transfer or exchange within ten Business Days of the date an Equipment Note is surrendered for transfer or exchange.
Section 2.08 Mutilated, Destroyed, Lost or Stolen Equipment Notes. If any Equipment Note becomes mutilated, destroyed, lost or stolen, Company shall, upon the written request of the holder of such Equipment Note and subject to satisfaction of this Section 2.08 and of Section 2.09, execute and Loan Trustee shall authenticate and deliver in replacement thereof a new Equipment Note of the same Series, payable in the same principal amount, dated the same date and captioned as issued in connection with the Aircraft. If the Equipment Note being replaced has become mutilated, such Equipment Note shall be surrendered to Loan Trustee, and a photocopy thereof shall be furnished to Company. If the Equipment Note being replaced has been destroyed, lost or stolen, the holder of such Equipment Note shall furnish to Company and Loan Trustee such security or indemnity as may be required by them to save Company and Loan Trustee harmless and evidence satisfactory to Company and Loan Trustee of the destruction, loss or theft of such Equipment Note and of the ownership thereof.
Section 2.09 Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Noteholder for any registration of transfer or exchange of Equipment Notes, but Loan Trustee, as Equipment Note Registrar, may require payment of a sum sufficient to cover any Tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Equipment Notes.
(b) Loan Trustee shall cancel all Equipment Notes surrendered for replacement, redemption, transfer, exchange, payment or cancellation, shall keep a copy of such canceled Equipment Notes, and shall send the original canceled Equipment Notes marked “canceled” to Company.
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Section 2.10 Mandatory Redemption of Equipment Notes. Company shall redeem the Equipment Notes in whole in connection with an Event of Loss in respect of the Airframe or the Airframe and the Engines installed thereon (unless Company has performed the option set forth in Section 7.05(a)(i) with respect thereto) on or before the Loss Payment Date at a redemption price equal to 100% of the unpaid principal amount thereof, together with all accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, but without any Make-Whole Amount.
Section 2.11 Voluntary Redemption of Equipment Notes.
(a) Except as provided in Section 2.11(b), all (but not less than all) of the Equipment Notes may be redeemed by Company at any time upon at least 30 days’ revocable prior written notice to Loan Trustee and Noteholders, and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, plus Make-Whole Amount, if any; provided that no redemption shall be permitted under this Section 2.11(a) unless, simultaneously with such redemption, the Related Equipment Notes shall also be redeemed.
(b) All of the Series A Equipment Notes or all of any Series of Additional Series Equipment Notes (or any combination of the foregoing) may be redeemed by Company upon at least 15 days’ revocable prior written notice to Loan Trustee and Noteholders of each Series to be redeemed, and such Series of Equipment Notes being redeemed pursuant to this Section 2.11(b) shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders of such Series, plus Make-Whole Amount, if any; provided that:
(i) no redemption shall be permitted under this Section 2.11(b) unless, simultaneously with such redemption, the Related Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or the Related Additional Series Equipment Notes in respect of the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of any Series of Additional Series Equipment Notes), as the case may be, shall also be redeemed; and
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(ii) if, simultaneously with such redemption or at any time thereafter, new Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or new Additional Series Equipment Notes of the same Series designation as the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of a Series of Additional Series Equipment Notes), in any such case, having terms that may be the same as or different from those of the redeemed Equipment Notes, are being issued, such new Equipment Notes shall be issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary in Section 2.11(a) or (b), so long as Company or any of its Affiliates beneficially owns 100% of the Pass Through Certificates issued by any Pass Through Trustee, the redemption price shall not include, and no Noteholder shall have any right to otherwise claim, any Make-Whole Amount with respect to the Series of Equipment Notes issued to Subordination Agent for the benefit of such Pass Through Trustee.
(d) For the avoidance of doubt, any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not constitute or be deemed to constitute a redemption of such Equipment Note.
Section 2.12 Redemptions; Notice of Redemptions; Repurchases.
(a) No redemption of any Equipment Note may be made except to the extent and in the manner expressly permitted by this Indenture. Company may at any time repurchase any of the Equipment Notes not held by Subordination Agent at any price and may hold or resell such Equipment Notes or surrender such Equipment Notes to Loan Trustee for cancellation.
(b) Notice of redemption with respect to the Equipment Notes shall be given by Loan Trustee by first-class mail, postage prepaid, or by hand delivery, mailed or delivered not less than 15 nor more than 60 days prior to the applicable redemption date, to each Noteholder of such Equipment Notes to be redeemed, at such Noteholder’s address appearing in the Equipment Note Register; provided that such notice shall be revocable by written notice from Company to Loan Trustee given no later than three days prior to the redemption date. All notices of redemption shall state: (1) the redemption
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date, (2) the applicable basis for determining the redemption price, (3) that on the redemption date, the redemption price will become due and payable upon each such Equipment Note, and that, if any such Equipment Notes are then outstanding, interest on such Equipment Notes shall cease to accrue on and after such redemption date and (4) the place or places where such Equipment Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, Company (or any person on behalf of Company) shall, to the extent an amount equal to the redemption price for the Equipment Notes to be redeemed on the redemption date shall not then be held by Loan Trustee, deposit or cause to be deposited with Loan Trustee by 10:00 a.m. (New York City time) on the redemption date in immediately available funds the redemption price of the Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid (and not revoked as permitted by this Section 2.12), the Equipment Notes to be redeemed shall, on the redemption date, become due and payable at the Corporate Trust Office of Loan Trustee, and from and after such redemption date (unless there is a default in the deposit of the redemption price pursuant to Section 2.12(c)) any such Equipment Notes then outstanding shall cease to bear interest. Upon surrender of any such Equipment Note for redemption in accordance with said notice, such Equipment Note shall be redeemed at the redemption price.
Section 2.13 Subordination.
(a) The indebtedness evidenced by the Series A Equipment Notes is, to the extent and in the manner provided in this Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, and the Series A Equipment Notes are issued subject to such provisions. The indebtedness evidenced by the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such most senior Series of Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes and the Series A Equipment Notes, and any such most senior Series of Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by any Additional Series Equipment Notes (other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes), if issued,
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will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, the Series A Equipment Notes and each Series of Additional Series Equipment Notes that rank senior in priority of payment to such Additional Series Equipment Notes, and any such Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by the Series AA Equipment Notes and the Series A Equipment Notes is, and the indebtedness evidenced by any Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes” issued under such Related Indenture, and the Series AA Equipment Notes and the Series A Equipment Notes are, and any Series of Additional Series Equipment Notes shall be, issued subject to such provisions. By acceptance of its Equipment Notes of any Series, each Noteholder of such Series (i) agrees to and shall be bound by such provisions, (ii) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in this Indenture and the applicable Related Indenture and (iii) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
(b) Company, Loan Trustee and, by acceptance of its Equipment Notes of any Series, each Noteholder of such Series, hereby agree that no payment or distribution shall be made on or in respect of the Secured Obligations, or the “Secured Obligations” under any Related Indenture, owed to such Noteholder of such Series, including any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) or after the commencement of any proceedings of the type referred to in Section 4.01(g), (h) or (i), except, in each case, as expressly provided in Article III of this Indenture or Article III of the applicable Related Indenture, as appropriate.
(c) By the acceptance of its Equipment Notes of any Series, each Noteholder of such Series agrees that (i) if such Noteholder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligations in respect of such Series that it is not entitled to receive under this Section 2.13 or Article III, it will hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III and (ii) if such Noteholder, in its capacity as a “Noteholder” under any Related Indenture, receives any payment or distribution on any “Secured Obligations” in respect of “Equipment Notes” of any “Series” issued under such Related Indenture that it is not entitled to receive under
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Section 2.13 or Article III of such Related Indenture, it will hold any amount so received in trust for the Related Loan Trustee under such Related Indenture and forthwith turn over such amount to such Related Loan Trustee under such Related Indenture in the form received to be applied as provided in Article III of such Related Indenture.
Section 2.14 Certain Payments. Company agrees to pay to Loan Trustee for distribution in accordance with Section 3.04:
(a) an amount or amounts equal to the fees payable to Liquidity Providers under Section 2.03 of each Liquidity Facility and the Fee Letter (as defined in the Intercreditor Agreement) related thereto (or similar provisions of any Replacement Liquidity Facility therefor and any related fee letter), multiplied by a fraction, the numerator of which is the sum of the then outstanding aggregate principal amount of the Series AA Equipment Notes and the Series A Equipment Notes and the denominator of which is the sum of the then outstanding aggregate principal amount of all “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement);
(b) an amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Special Termination Advance multiplied by the fraction specified in the foregoing clause (a);
(c) an amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Downgrade Advance multiplied by the fraction specified in the foregoing clause (a);
(d) an amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Non-Extension Advance multiplied by the fraction specified in the foregoing clause (a);
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(e) if any payment default shall have occurred and be continuing with respect to interest on any “Series AA Equipment Notes” or “Series A Equipment Notes” (each as defined in the Intercreditor Agreement), (x) the excess, if any, of (1) the amount equal to the sum of interest on any Unpaid Advance (other than a Special Termination Advance), Applied Provider Advance or Applied Special Termination Advance payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) plus any other amounts payable in respect of such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance under Section 3.01, 3.03 or 3.09 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) under which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made over (2) the sum of (A) Investment Earnings from any Final Advance plus (B) any amount of interest at the Past Due Rate actually payable (whether or not in fact paid) by Company in respect of the overdue scheduled interest on the “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) in respect of which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made, multiplied by (y) a fraction, the numerator of which is the then aggregate overdue amounts of interest on the then outstanding Series AA Equipment Notes and Series A Equipment Notes (other than interest becoming due and payable solely as a result of acceleration of any such Equipment Notes) and the denominator of which is the then aggregate overdue amounts of interest on all then outstanding “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement) (other than interest becoming due and payable solely as a result of acceleration of any such “Equipment Notes”);
(f) any amounts owed to Liquidity Providers by Subordination Agent as borrower under Sections 3.01 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 3.03 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 7.05 and 7.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) multiplied by the fraction specified in the foregoing clause (a); and
(g) an amount or amounts equal to the compensation, including reasonable expenses and disbursements actually incurred, payable to Subordination Agent under Section 6.07 of the Intercreditor Agreement, multiplied by the fraction specified in the foregoing clause (a) (but in any event without duplication of any amount or amounts payable by Company in respect of such compensation under any other Operative Document or Pass Through Document).
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For purposes of this paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Applied Provider Advance”, “Applied Special Termination Advance”, “Downgrade Advance”, “Final Advance”, “Investment Earnings”, “Non-Extension Advance”, “Special Termination Advance” and “Unpaid Advance” have the meanings specified in each Liquidity Facility or the Intercreditor Agreement, as applicable.
Section 2.15 Repayment of Monies for Equipment Note Payments Held by Loan Trustee. Any money or property held by Loan Trustee in trust for any payment of the principal of, Make-Whole Amount, if any, or interest or any other amounts due on, any Equipment Note, including, without limitation, any money or property deposited pursuant to Section 2.12(c) or 10.01, and remaining unclaimed for a 730-day period (for purposes of calculating this 730-day period, all days on which the payment of such money or property shall not have been made because of operation of law shall be excluded) after the due date for such payment (or such lesser time as Loan Trustee is satisfied, after 60 days’ notice from Company, is one month prior to the escheat period provided under applicable state law) shall be paid to Company. Noteholders of any outstanding Equipment Notes shall thereafter, as unsecured general creditors, look only to Company for payment thereof, and all liability of Loan Trustee with respect to such trust money shall thereupon cease. Loan Trustee, before being required to make any such repayment, may at the expense of Company cause to be mailed to each such Noteholder notice that such money or property remains unclaimed. After a date specified in such notice, which may not be less than 30 days from the date of mailing, any unclaimed balance of such money or property then remaining will be repaid to Company as provided herein.
Section 2.16 Directions by Subordination Agent. So long as Subordination Agent is a Noteholder, notwithstanding anything contained herein or in any other Operative Document to the contrary, in exercising its right to vote the Equipment Notes held by it, or in giving or taking any direction, consent, request, demand, instruction, authorization, notice, waiver or other action provided by this Indenture or in respect of the Equipment Notes to be given or taken by a Noteholder (each such vote or other action, a “Direction”) in respect of such Equipment Notes, Subordination Agent may act in accordance with any votes, directions, consents, requests, demands, instructions, authorizations, notices, waivers or other actions given or taken by any applicable Pass Through Trustee or the Controlling Party pursuant to the Intercreditor Agreement, including without limitation pursuant to Section 2.06, Article IV or Section 8.01(b) thereof. Subordination Agent shall be permitted (x) to give a Direction with respect to
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less than the entire principal amount of any single Equipment Note held by it, and (y) to give different Directions with respect to different portions of the principal amount of any single Equipment Note held by it. Any Direction given by Subordination Agent at any time with respect to more than a majority in aggregate unpaid principal amount of all of the Equipment Notes issued and then outstanding hereunder shall be deemed to have been given by a Majority in Interest of Noteholders.
ARTICLE III
Receipt, Distribution and Application of Income
From the Collateral
Section 3.01 Basic Distributions. Except as otherwise provided in Sections 3.02, 3.03 and 3.04, each periodic payment by Company of regularly scheduled installments of principal or interest on the Equipment Notes received by Loan Trustee shall be promptly distributed in the following order of priority:
first, so much of such payment as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series AA Equipment Notes shall be distributed to Noteholders of Series AA Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series AA Equipment Note bears to the aggregate amount of the payments then due under all Series AA Equipment Notes;
second, after giving effect to clause “first” above, so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series A Equipment Notes shall be distributed to Noteholders of Series A Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series A Equipment Note bears to the aggregate amount of the payments then due under all Series A Equipment Notes;
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third, after giving effect to clause “second” above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01) so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Additional Series Equipment Notes of a specified Series shall be distributed to Noteholders of Additional Series Equipment Notes of such Series ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Additional Series Equipment Note of such Series bears to the aggregate amount of the payments then due under all Additional Series Equipment Notes of such Series, provided that this clause “third” shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
fourth¸ the balance, if any, of such installment remaining thereafter shall be distributed to Company.
Section 3.02 Event of Loss; Optional Redemption.
Except as otherwise provided in Sections 3.03 and 3.04 and subject to the following provisos, any payments received by Loan Trustee (i) with respect to the Airframe or the Airframe and one or more Engines as the result of an Event of Loss pursuant to Section 2.10 or (ii) pursuant to an optional redemption of the Equipment Notes pursuant to Section 2.11 shall be applied to the redemption of the Equipment Notes and to all other Secured Obligations and Related Secured Obligations then due by applying such payments in the following order of priority:
first, so much of such payment as is required (i) to reimburse Loan Trustee and Noteholders for any reasonable costs or expenses actually incurred in connection with such redemption for which they are entitled to reimbursement, or indemnity by Company, under the Operative Documents and then (ii) to pay any other Secured Obligations then due to Loan Trustee, Noteholders and other Indenture Indemnitees under this Indenture, the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below);
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second, after giving effect to clause “first” above:
(i) so much of such payment remaining as is required to pay the amounts specified in paragraph (i) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series AA Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such payment remaining as is required to pay the amounts specified in paragraph (ii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series A Equipment Notes; and
(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payment remaining as is required to pay the amounts specified in paragraph (iii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of Additional Series Equipment Notes of a specified Series, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
third, after giving effect to clause “second” above, so much of such payment remaining as is required to pay the amounts as provided in clause “third” of Section 3.03 in respect of Related Secured Obligations under each Defaulted Operative Indenture other than paragraph (ix) of clause “third” of Section 3.03; and
fourth, the balance, if any, of such payment, shall be distributed as provided in clause “fourth” of Section 3.03;
provided that any insurance, condemnation or similar proceeds resulting from an Event of Loss that are received by Loan Trustee shall be held and distributed by Loan Trustee as provided in Sections 7.05(c) and 7.06(f), and any such proceeds that are held by Loan Trustee shall be invested as provided in Section 5.06; and provided, further, that in the case of a redemption of Equipment Notes pursuant to Section 2.11(b), if a particular Series is not being redeemed pursuant thereto, no application of funds shall be made pursuant to the paragraphs in clause “second” above that refer to such Series in connection with such redemption. No Make-Whole Amount shall be due and payable on the Equipment Notes as a consequence of the redemption of the Equipment Notes as a result of an Event of Loss with respect to the Airframe or the Airframe and one or more Engines.
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Section 3.03 Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments received and amounts held or realized by Loan Trustee (including any amounts realized by Loan Trustee from the exercise of any remedies pursuant to Article IV) after both an Event of Default shall have occurred and be continuing and the Equipment Notes shall have become due and payable pursuant to Section 4.02(a), as well as all payments or amounts then held by Loan Trustee as part of the Collateral, shall be promptly distributed by Loan Trustee in the following order of priority:
first, so much of such payments or amounts as is required to (i) reimburse Loan Trustee or U.S. Bank, to the extent Loan Trustee or U.S. Bank is entitled to be reimbursed or indemnified under the Operative Documents, for any Tax, expense or other loss (including, without limitation, all amounts to be expended at the expense of, or charged upon the tolls, rents, revenues, issues, products and profits of, the property included in the Collateral pursuant to Section 4.02(a)) actually incurred by Loan Trustee or U.S. Bank (to the extent not previously reimbursed), the expenses of any sale, taking or other proceeding, reasonable attorneys’ fees and expenses, court costs, and any other expenditures actually incurred or expenditures or advances made by Loan Trustee, U.S. Bank or Noteholders in the protection, exercise or enforcement of any right, power or remedy or any damages sustained by Loan Trustee, U.S. Bank or any Noteholder, liquidated or otherwise, upon such Event of Default shall be applied by Loan Trustee as between itself, U.S. Bank and Noteholders in reimbursement of such expenses and any other expenses for which Loan Trustee, U.S. Bank or Noteholders are entitled to reimbursement under any Operative Document and (ii) pay all Secured Obligations payable to other Indenture Indemnitees hereunder and under the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below); and in case the aggregate amount so to be distributed shall be insufficient to pay as aforesaid in clauses (i) and (ii), then ratably, without priority of one over the other, in proportion to the amounts owed each hereunder;
second, after giving effect to clause “first” above, so much of such payments or amounts remaining as is required to reimburse the then existing or prior Noteholders for payments made pursuant to Section 5.03 (to the extent not previously reimbursed) shall be distributed to such then existing or prior Noteholders ratably, without priority of one over the other, in accordance with the amount of the payment or payments made by each such then existing or prior Noteholder pursuant to Section 5.03;
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third, after giving effect to clause “second” above:
(i) so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series AA Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series AA Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series AA Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series AA Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series AA Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series A Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series A Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series A Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series A Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series A Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
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(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Additional Series Equipment Notes of a specified Series, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Additional Series Equipment Notes of such Series to the date of distribution, shall be distributed to Noteholders of Additional Series Equipment Notes of such Series, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
(iv) after giving effect to paragraph (iii) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “first” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “first”;
(v) after giving effect to paragraph (iv) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “second” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “second”;
(vi) after giving effect to paragraph (v) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other
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overdue amounts) then due under all Related Series AA Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series AA Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series AA Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series AA Equipment Notes issued under all Defaulted Operative Indentures;
(vii) after giving effect to paragraph (vi) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series A Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series A Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series A Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series A Equipment Notes issued under all Defaulted Operative Indentures;
(viii) after giving effect to paragraph (vii) above (and except as otherwise provided in amendments to the applicable Related Indentures pursuant to paragraph (xiii) or (xiv) of Section 9.01 thereof), so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Additional Series Equipment Notes of a specified Series, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Additional Series Equipment Notes of such Series are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay
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in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Additional Series Equipment Notes of such Series issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Additional Series Equipment Notes of such Series issued under all Defaulted Operative Indentures, provided that this paragraph (viii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
(ix) after giving effect to paragraph (viii) above, if any Related Equipment Note is outstanding, any of such payments or amounts remaining and any invested Permitted Investments shall be held by Loan Trustee in an Eligible Account in accordance with the provisions of Section 3.07 (and invested as provided in Section 5.06) as additional security for the Related Secured Obligations, and such amounts (and any investment earnings thereon) shall be distributed from time to time in accordance with the foregoing provisions of this clause “third” as and to the extent any such Related Secured Obligation shall at any time and from time to time become due and remain unpaid after the giving of any required notice and the expiration of any applicable grace period; and, upon the payment in full of all such Related Secured Obligations the balance, if any, of any such remaining amounts and investment earnings thereon shall be applied as provided in clause “fourth” of this Section 3.03; and
fourth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Company.
No Make-Whole Amount shall be payable on the Equipment Notes as a consequence of or in connection with an Event of Default or the acceleration of the Equipment Notes.
Section 3.04 Certain Payments.
(a) Any payments received by Loan Trustee for which provision as to the application thereof is made in this Indenture other than in this Article III shall be applied as provided in those provisions. Without limiting the foregoing, any payments received by Loan Trustee which are payable to Company pursuant to any of the provisions of this Indenture other than those set forth in this Article III (including Sections 5.06, 7.05 and
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7.06) shall be so paid to Company. Any payments received by Loan Trustee for which no provision as to the application thereof is made in this Indenture and for which such provision is made in any other Operative Document shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of such other Operative Document.
(b) Notwithstanding anything to the contrary contained in this Article III, Loan Trustee will distribute promptly upon receipt any indemnity payment received by it from Company pursuant to Section 4.02 of the Participation Agreement payable to (i) U.S. Bank and Loan Trustee, (ii) Subordination Agent, (iii) any separate or additional trustee appointed pursuant to Section 8.02, (iv) Pass Through Trustees, (v) any Liquidity Provider or (vi) any other Indenture Indemnitee, in each case, directly to the Person entitled thereto. Any payment received by Loan Trustee from Company under Section 2.14 shall be distributed to Subordination Agent to be distributed in accordance with Section 2.04(c) of the Intercreditor Agreement.
(c) Any payments received by Loan Trustee not constituting part of the Collateral or otherwise for which no provision as to the application thereof is made in any Operative Document shall be distributed by Loan Trustee to Company. Further, and except as otherwise provided in Sections 3.02 and 3.03, all payments received and amounts realized by Loan Trustee with respect to the Aircraft, to the extent received or realized at any time after payment in full of all Secured Obligations, as well as any amounts remaining as part of the Collateral after the occurrence of such payment in full, shall be distributed by Loan Trustee to Company.
Section 3.05 Payments to Company. Any amounts distributed hereunder by Loan Trustee to Company shall be paid to Company (within the time limits contemplated by Section 2.03) by wire transfer of funds of the type received by Loan Trustee at such office and to such account or accounts of such entity or entities as shall be designated by notice from Company to Loan Trustee from time to time.
Section 3.06 Cooperation. Prior to making any distribution under this Article III, Loan Trustee shall consult with Related Loan Trustees to determine amounts payable with respect to the Related Secured Obligations. Loan Trustee shall cooperate with Related Loan Trustees and shall provide such information as shall be reasonably requested by each Related Loan Trustee to enable such Related Loan Trustee to determine amounts distributable under Article III of its Related Indenture.
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Section 3.07 Securities Account. In furtherance of the provisions of Section 3.03, U.S. Bank agrees to act as an Eligible Institution under this Indenture in accordance with the provisions of this Indenture (in such capacity, the “Securities Intermediary”). Except in its capacity as Loan Trustee, U.S. Bank waives any claim or lien against any Eligible Account it may have, by operation of law or otherwise, for any amount owed to it by Company. The Securities Intermediary hereby agrees that, notwithstanding anything to the contrary in this Indenture, (i) any amounts to be held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03 and any investment earnings thereon or other Permitted Investments in which such amounts are invested will be credited to an Eligible Account (the “Securities Account”) for which it is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC) and Loan Trustee is the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) of the “security entitlement” (as defined in Section 8-102(a)(17) of the NY UCC) with respect to each “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible Account, (ii) all such amounts, Permitted Investments and all other property acquired with cash credited to the Securities Account will be credited to the Securities Account, (iii) all items of property (whether cash, investment property, Permitted Investments, other investments, securities, instruments or other property) credited to the Securities Account will be treated as a “financial asset” under Article 8 of the NY UCC, (iv) its “securities intermediary’s jurisdiction” (as defined in Section 8-110(e) of the NY UCC) with respect to the Securities Account is the State of New York, and (v) all securities, instruments and other property in order or registered form and credited to the Securities Account shall be payable to or to the order of, or registered in the name of, the Securities Intermediary or shall be indorsed to the Securities Intermediary or in blank, and in no case whatsoever shall any financial asset credited to the Securities Account be registered in the name of Company, payable to or to the order of Company or specially indorsed to Company except to the extent the foregoing have been specially endorsed by Company to the Securities Intermediary or in blank. Loan Trustee agrees that it will hold (and will indicate clearly in its books and records that it holds) its “security entitlements” to the “financial assets” credited to the Securities Account in trust for the benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee as set forth in this Indenture. Company acknowledges that, by reason of Loan Trustee being the “entitlement holder” in respect of the Securities Account as provided above, Loan Trustee shall have the sole right and discretion, subject only to the terms of this Indenture, to give all “entitlement orders” (as defined in Section 8-102(a)(8) of the NY UCC) with respect to the Securities Account and any and all financial assets and other property credited thereto to the exclusion of Company. If any Person asserts any Lien (including, without limitation, any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or any financial asset carried therein, the Securities Intermediary will promptly notify Loan Trustee and Company thereof.
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ARTICLE IV
Events of Default; Remedies of Loan Trustee
Section 4.01 Events of Default. Each of the following events constitutes an “Event of Default” whether such event is voluntary or involuntary or comes about or is effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body and each such Event of Default is deemed to exist and continue so long as, but only as long as, it has not been remedied or explicitly waived:
(a) Company fails to make any payment of principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note within 15 days after such payment is due;
(b) Company fails to make payment when the same is due of any amount (other than amounts referred to in Section 4.01(a)) due hereunder, under any Equipment Note or under any other Operative Document, and such failure continues unremedied for 30 days after the receipt by Company of written notice thereof from Loan Trustee or any Noteholder;
(c) Company fails to carry and maintain (or cause to be maintained) insurance or indemnity on or with respect to the Aircraft in accordance with the provisions of Section 7.06; provided that no such failure to carry and maintain insurance shall constitute an Event of Default until the earlier of (i) the date such failure has continued unremedied for a period of 30 days after receipt by Loan Trustee of the notice of cancellation referred to in Section 7.06 or (ii) the date such insurance is not in effect as to Loan Trustee;
(d) Company fails to perform or observe in any material respect any other covenant, condition or agreement to be performed or observed by it under any Operative Document, and such failure continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee or any Noteholder; provided that, if such failure is capable of being remedied, no such failure shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such failure;
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(e) any representation or warranty made by Company in any Operative Document was incorrect in any material respect at the time made, and such incorrectness continues to be material to the transactions contemplated hereby and continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee; provided that, if such incorrectness is capable of being remedied, no such incorrectness shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such incorrectness;
(f) Company consents to the appointment of or the taking of possession by a receiver, trustee or liquidator in respect of a substantial part of its property, admits in writing its inability to pay its debts generally as they come due or makes a general assignment for the benefit of its creditors;
(g) Company files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief as a debtor in a case under any bankruptcy laws or insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against Company as a debtor in any such case, or Company as a debtor seeks relief by voluntary petition, answer or consent under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time), or Company seeks an agreement, composition, extension or adjustment with its creditors under such laws;
(h) an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of Company, a receiver, trustee or liquidator of Company or sequestering any substantial part of its property, or granting any other relief in respect of Company as a debtor under any bankruptcy laws or insolvency laws (as in effect at such time), and any such order, judgment or decree of appointment or sequestration remains in force undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof;
(i) a petition against Company as a debtor in a case under the federal bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations that may apply to Company, any court of competent jurisdiction assumes jurisdiction, custody or control of Company or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of 90 days; or
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(j) an “Event of Default” (as defined in any Related Indenture) shall have occurred and be continuing;
provided that notwithstanding anything to the contrary contained in this Section 4.01, any failure of Company to perform or observe any covenant, condition or agreement shall not constitute an Event of Default if such failure arises by reason of an event referred to in the definition of “Event of Loss” so long as Company is continuing to comply with all of the terms of Section 7.05.
Section 4.02 Remedies.
(a) If an Event of Default has occurred and is continuing and so long as the same shall continue unremedied, then and in every such case Loan Trustee may, and upon the written instructions of a Majority in Interest of Noteholders, Loan Trustee shall (subject to Section 5.03), do one or more of the following to the extent permitted by, and subject to compliance with the requirements of, applicable law then in effect (provided that during any period the Airframe or any Engine is subject to the CRAF Program and is in possession of or being operated under the direction of the United States government or an agency or instrumentality of the United States, Loan Trustee shall not, on account of any Event of Default, be entitled to exercise or pursue any of the powers, rights or remedies described in this Section 4.02 in such manner as to limit Company’s control under this Indenture (or any Permitted Lessee’s control under any Lease) of the Airframe or such Engine, unless at least 60 days’ (or such lesser period as may then be applicable under the CRAF Program of the United States government) prior written notice of default hereunder has been given by Loan Trustee by registered or certified mail to Company (and any such Permitted Lessee) with a copy addressed to the Contracting Office Representative or other appropriate person for the Air Mobility Command of the United States Air Force under any contract with Company (or such Permitted Lessee) relating to the Aircraft):
(i) declare by written notice to Company all the Equipment Notes to be due and payable, whereupon the aggregate unpaid principal amount of all Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and other amounts due thereunder (but without Make-Whole Amount), shall immediately become due and payable without presentment, demand, protest or other notice, all of which are hereby waived; provided that if an Event of Default referred to in Section 4.01(f), (g), (h) or (i) has occurred and is continuing, then and in every such case the unpaid principal amount of the Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and all other amounts due thereunder (but without Make-Whole Amount) shall immediately and without further act become due and payable without presentment, demand, protest or notice, all of which are hereby waived; and, following such declaration or deemed declaration:
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(ii) (A) cause Company, upon the demand by notice of Loan Trustee, at Company’s expense, to deliver promptly, and Company shall deliver promptly, all or such part of the Airframe or any Engine as Loan Trustee so demands to Loan Trustee or its order, or, if Company has failed to so deliver the Airframe or any Engine after such demand, Loan Trustee, at its option, may enter upon the premises where all or any part of the Airframe or any Engine are located and take immediate possession of and remove the same together with any engine which is not an Engine but which is installed on the Airframe, subject to all of the rights of the owner, lessor, lienor or secured party of such engine; provided that the Airframe with an engine (which is not an Engine) installed thereon may be flown or returned only to a location within the continental United States, and such engine shall be held at the expense of Company for the account of any such owner, lessor, lienor, secured party or, if such engine is owned by Company, may at the option of Company with the consent of Loan Trustee (which will not be unreasonably withheld) or at the option of Loan Trustee with the consent of Company (which will not be unreasonably withheld), be exchanged with Company for an Engine in accordance with the provisions of Section 7.05(b); (B) sell all or any part of the Airframe and any Engine at public or private sale, whether or not Loan Trustee at the time has possession thereof, as Loan Trustee may determine, or otherwise dispose of, hold, use, operate, lease to others or keep idle all or any part of the Airframe or such Engine as Loan Trustee, in its sole discretion, determines, all free and clear of any rights or claims of Company, and the proceeds of such sale or disposition shall be applied as set forth in Section 3.03; or (C) exercise any other remedy of a secured party under the NY UCC (whether or not in effect in the jurisdiction in which enforcement is sought); provided that, notwithstanding anything to the contrary set forth herein or in any other Operative Document, (i) as permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for those provisions of such Chapter III that cannot be derogated from; and (ii) as permitted by Article IV(3) of the Aircraft Protocol, the provisions of Chapter II of the Aircraft Protocol are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for (x) Article XVI of the Aircraft Protocol and (y) those provisions of such Chapter II that cannot be derogated from. In furtherance of the foregoing, the parties hereto agree that the exercise of remedies hereunder and the other Operative Documents is subject to other applicable law, including without limitation, the NY UCC and the Bankruptcy Code, and that nothing herein derogates from the rights of Company or Loan Trustee under or pursuant to such other applicable law, including without limitation, the NY UCC or the Bankruptcy Code.
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Upon every such taking of possession of Collateral under this Section 4.02, Loan Trustee may, from time to time, at the expense of the Collateral, make all such expenditures for maintenance, insurance, repairs, alterations, additions and improvements to and of the Collateral as it deems necessary to cause the Collateral to be in such condition as required by the provisions of this Indenture. In each such case, Loan Trustee may maintain, use, operate, store, insure, lease, control, manage or dispose of the Collateral and may exercise all rights and powers of Company relating to the Collateral as Loan Trustee reasonably deems best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, insurance, leasing, control, management or disposition of the Collateral or any part thereof as Loan Trustee may reasonably determine; and Loan Trustee shall be entitled to collect and receive directly all tolls, rents, revenues, issues, income, products and profits of the Collateral and every part thereof without prejudice, however, to the rights of Loan Trustee under any provision of this Indenture to collect and receive all cash held by, or required to be deposited with Loan Trustee hereunder. Such tolls, rents, revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, insurance, leasing, control, management or disposition of the Collateral, and of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments that Loan Trustee is required or elects to make, if any, for Taxes, insurance or other proper charges assessed against or otherwise imposed upon the Collateral or any part thereof, and all other payments which Loan Trustee is required or expressly authorized to make under any provision of this Indenture, as well as just and reasonable compensation for the services of Loan Trustee, and shall otherwise be applied in accordance with Article III. If an Event of Default has occurred and is continuing and the Equipment Notes either have been accelerated pursuant to this Section 4.02 or have become due at maturity and Loan Trustee is entitled to exercise rights hereunder, at the request of Loan Trustee, Company shall promptly execute and deliver to Loan Trustee such instruments of title and other documents as Loan Trustee reasonably deems necessary or advisable to enable Loan Trustee or an agent or representative designated by Loan Trustee, at such time or times and place or places as Loan Trustee specifies, to obtain possession of all or any part of the Collateral to which Loan Trustee at the time is entitled hereunder. If Company for any reason fails to execute and deliver such instruments and documents after such request by Loan Trustee, Loan Trustee may seek a judgment conferring on Loan Trustee the right to immediate possession and requiring Company to execute and deliver such instruments and documents to Loan Trustee, to the entry of which judgment Company hereby specifically consents to the fullest extent it may lawfully do so. All actual and reasonable expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Indenture.
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(b) Loan Trustee shall give Company at least 30 days’ prior written notice of any public sale or of the date on or after which any private sale will be held, which notice Company hereby agrees to the extent permitted by applicable law is reasonable notice. Any Noteholder or Noteholders shall be entitled to bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02 and to credit against the purchase price bid at such sale by such Noteholders all or any part of the unpaid amounts owing to such Noteholders under the Operative Documents and secured by the Lien of this Indenture (but only to the extent that such purchase price would have been paid to such Noteholders pursuant to Article III if such purchase price were paid in cash and the foregoing provision of this Section 4.02(b) were not given effect). Loan Trustee may exercise such right without possession or production of the Equipment Notes or proof of ownership thereof, and as a representative of Noteholders may exercise such right without notice to Noteholders as party to any suit or proceeding relating to the foreclosure of any Collateral. Company may also bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02.
(c) To the extent permitted by applicable law, while an Event of Default has occurred and is continuing, Company irrevocably appoints Loan Trustee the true and lawful attorney-in-fact of Company (which appointment is coupled with an interest) in its name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or delivery for the enforcement of the Lien of this Indenture, whether pursuant to foreclosure or power of sale, or otherwise, to execute and deliver all such bills of sale, assignments and other instruments as may be necessary or appropriate, with full power of substitution, Company hereby ratifying and confirming all that such attorney or any substitute does by virtue hereof in accordance with applicable law; provided that if so requested by Loan Trustee or any purchaser, Company shall ratify and confirm any such sale, assignment or transfer of delivery, by executing and delivering to Loan Trustee or such purchaser all bills of sale, assignments, releases and other proper instruments to effect such ratification and confirmation as may reasonably be designated in any such request.
(d) At any time after Loan Trustee has declared the unpaid principal amount of all Equipment Notes then outstanding to be due and payable, or all Equipment Notes shall have become due and payable as provided in the proviso to Section 4.02(a)(i), and, in either case, prior to the sale of any part of the Collateral pursuant to this Article IV, a Majority in Interest of Noteholders, by written notice to Company and Loan Trustee, may rescind and annul such declaration, whether made by Loan Trustee on its own accord or as directed or deemed declaration, and its consequences if: (i) there has been paid to or deposited with Loan Trustee an amount sufficient to pay all overdue installments of principal amount of, and interest on, the Equipment Notes, and all other amounts owing under the Operative Documents, that have become due otherwise than by such declaration of acceleration and (ii) all other Events of Default, other than nonpayment of principal amount or interest on the Equipment Notes that have become due solely because of such acceleration, have been either cured or waived; provided that no such rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair any right consequent thereon.
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(e) Notwithstanding anything contained herein, (i) so long as Pass Through Trustee under any Pass Through Trust Agreement or Subordination Agent on its behalf is a Noteholder, Loan Trustee will not be authorized or empowered to acquire title to any Collateral or take any action with respect to any Collateral so acquired by it if such acquisition or action would cause any Pass Through Trust to fail to qualify as a “grantor trust” for U.S. federal income tax purposes, and (ii) Loan Trustee will not take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement.
Section 4.03 Remedies Cumulative. To the extent permitted under applicable law, each and every right, power and remedy specifically given to Loan Trustee herein or otherwise in this Indenture shall be cumulative and shall be in addition to every other right, power and remedy specifically given herein or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically given herein or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by Loan Trustee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by Loan Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall, to the extent permitted by applicable law, impair any such right, power or remedy or be construed to be a waiver of any default on the part of Company or to be an acquiescence therein.
Section 4.04 Discontinuance of Proceedings. In case Loan Trustee has instituted any proceedings to enforce any right, power or remedy under this Indenture by foreclosure, entry or otherwise, and such proceedings have been discontinued or abandoned for any reason or have been determined adversely to Loan Trustee, then and in every such case Company and Loan Trustee shall, subject to any determination in such proceedings, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Loan Trustee shall continue as if no such proceedings had been undertaken (but otherwise without prejudice).
Section 4.05 Waiver of Past Defaults. Subject to Section 5.03, upon written instruction from a Majority in Interest of Noteholders, Loan Trustee shall waive any past default hereunder and its consequences, and upon any such waiver such default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been
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cured for every purpose of this Indenture and the other Operative Documents, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon; provided that in the absence of written instructions from each of the affected Noteholders, Loan Trustee shall not waive any default (i) in the payment of the principal amount, Make-Whole Amount, if any, or interest due under any Equipment Note then outstanding (other than with the consent of the holder thereof), or (ii) in respect of a covenant or provision hereof which, under Article IX, cannot be modified or amended without the consent of each such affected Noteholder.
Section 4.06 Noteholders May Not Bring Suit Except Under Certain Conditions. A Noteholder of any Series shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Indenture or the Equipment Notes or otherwise, or for the appointment of a receiver or for the enforcement of any other remedy under this Indenture or the Equipment Notes or otherwise, unless:
(1) such Noteholder previously shall have given written notice to Loan Trustee of a continuing Event of Default;
(2) a Majority in Interest of Noteholders shall have requested Loan Trustee in writing to institute such action, suit or proceeding and shall have offered to Loan Trustee indemnity as provided in Section 5.03;
(3) Loan Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have been given to Loan Trustee during such 60-day period by a Majority in Interest of Noteholders.
Except to the extent provided in the Intercreditor Agreement or herein, it is understood and intended that no one or more of Noteholders of any Series shall have any right in any manner whatsoever hereunder or under the Equipment Notes of such Series to (i) surrender, impair, waive, affect, disturb or prejudice any Collateral, or the Lien of this Indenture on any Collateral, or the rights of Noteholders of such Series, (ii) obtain or seek to obtain priority over or preference with respect to any other such Noteholder of such Series or (iii) enforce any right under this Indenture or the Equipment Notes of such Series, except in the manner provided in this Indenture and for the equal, ratable and common benefit of all Noteholders of such Series subject to the provisions of this Indenture.
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Section 4.07 Appointment of a Receiver. To the extent permitted by applicable law, if an Event of Default shall have occurred and be continuing, and the Equipment Notes either shall have been accelerated pursuant to Section 4.02 or have become due at maturity, Loan Trustee shall, as a matter of right, be entitled to the appointment of a receiver (who may be Loan Trustee or any successor or nominee thereof) for all or any part of the Collateral, whether such receivership be incidental to a proposed sale of the Collateral or the taking of possession thereof or otherwise, and, to the extent permitted by applicable law, Company hereby consents to the appointment of such a receiver and will not oppose any such appointment. Any receiver appointed for all or any part of the Collateral shall be entitled to exercise all the rights and powers of Loan Trustee with respect to the Collateral.
ARTICLE V
Duties of Loan Trustee
Section 5.01 Notice of Event of Default. If Loan Trustee has actual knowledge of an Event of Default or of a default arising from a failure by Company to pay when due any payment of principal amount, interest on, or Make-Whole Amount, if any, due and payable under any Equipment Note, Loan Trustee shall promptly give notice thereof to Company, each Liquidity Provider and each Noteholder. Subject to the terms of Sections 4.02, 4.05, 5.02 and 5.03, Loan Trustee shall take such action, or refrain from taking such action, with respect to such default or Event of Default (including with respect to the exercise of any rights or remedies hereunder) as Loan Trustee is instructed in writing by a Majority in Interest of Noteholders. Subject to the provisions of Section 5.03, if Loan Trustee does not receive instructions as above provided within 20 Business Days after giving notice of such default or Event of Default to Noteholders, Loan Trustee may, subject to instructions thereafter received pursuant to the preceding provisions of this Section 5.01, take such action, or refrain from taking such action with respect to such default or Event of Default as it reasonably determines to be advisable in the best interests of Noteholders, but shall be under no duty to take or refrain from taking any action. In acting pursuant to the immediately preceding sentence, Loan Trustee shall use the same degree of care and skill in connection therewith as a prudent person would use under the circumstances in the conduct of his or her own affairs. Loan Trustee may not sell the Airframe or any Engine without the consent of a Majority in Interest of Noteholders.
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For all purposes of this Indenture, in the absence of actual knowledge, Loan Trustee shall not be deemed to have knowledge of a default or an Event of Default unless notified in writing by Company or one or more Noteholders; and “actual knowledge” (as used in the foregoing clause) of Loan Trustee shall mean actual knowledge of a Trust Officer of Loan Trustee; provided that Loan Trustee is deemed to have actual knowledge of (i) the failure of Company to pay any principal amount of, or interest on, the Equipment Notes directly to Loan Trustee when the same shall become due or (ii) the failure of Company to maintain insurance as required under Section 7.06 if Loan Trustee receives written notice thereof from an insurer or insurance broker.
Section 5.02 Action upon Instructions; Certain Rights and Limitations. Subject to the terms of Article IV and this Article V, upon the written instructions at any time of a Majority in Interest of Noteholders, Loan Trustee shall promptly (i) give such notice, direction, consent, waiver or approval or exercise such right, remedy or power hereunder in respect of all or any part of the Collateral or (ii) take such other action permitted hereunder, in each case, as is specified in such instructions.
Loan Trustee will cooperate with Company in connection with the recording, filing, re-recording and refiling of this Indenture and any supplements to it and any financing statements or other documents as is necessary to maintain the perfection hereof or otherwise protect the security interests created hereby. Loan Trustee shall furnish to Company upon request such information and copies of such documents as Loan Trustee may have and as are necessary for Company to perform its duties under Article II.
Section 5.03 Indemnification. Loan Trustee shall not be required to take any action or refrain from taking any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV unless it shall have received indemnification against any risks incurred in connection therewith in form and substance reasonably satisfactory to it, including, without limitation, adequate advances against costs that may be actually incurred by it in connection therewith. Loan Trustee shall not be required to take any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV, nor shall any other provision of any Operative Document be deemed to impose a duty on Loan Trustee to take any action, if Loan Trustee shall have been advised by outside counsel that such action is contrary to the terms hereof or is otherwise contrary to applicable law.
Section 5.04 No Duties Except as Specified in Indenture or Instructions. Loan Trustee shall not have any duty or obligation to manage, control, lease, use, sell, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral, or to otherwise take or refrain from taking any action under, or in connection with, this Indenture, except as expressly provided by the terms of this Indenture or the Participation Agreement or as expressly provided in written instructions received pursuant to the terms of Section 5.01 or 5.02; and no implied duties or obligations shall be read into this Indenture against Loan Trustee.
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Section 5.05 No Action Except under Indenture or Instructions. Loan Trustee will not manage, control, use, sell, lease, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral except in accordance with the powers granted to, or the authority conferred upon, Loan Trustee pursuant to this Indenture and in accordance with the express terms hereof.
Section 5.06 Investment of Amounts Held by Loan Trustee. Any monies (including for the purpose of this Section 5.06 any amounts held by Loan Trustee pursuant to Section 3.02, 3.03 or 3.07 or pursuant to any provision of any other Operative Document providing for amounts to be held by Loan Trustee which are not distributed pursuant to the other provisions of Article III, or any cash received by Loan Trustee pursuant to Section 7.05(c) or 7.06(f) or otherwise, or Permitted Investments purchased by the use of such cash pursuant to this Section 5.06 or any cash constituting the proceeds of the maturity, sale or other disposition of any Permitted Investments) held by Loan Trustee hereunder as part of the Collateral, until paid out by Loan Trustee as herein provided, (i) subject to clause (ii) below and Section 3.07, may be carried by Loan Trustee on deposit with itself or on deposit to its account with any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the states thereof having combined capital and surplus and retained earnings of at least $100,000,000, and Loan Trustee shall not have any liability for interest upon any such monies except as otherwise agreed in writing with Company, or (ii) at any time and from time to time, so long as no Event of Default shall have occurred and be continuing, at the request of Company, shall be invested and reinvested in Permitted Investments as specified in such request (if such investments are reasonably available for purchase) and sold, in any case at such prices, including accrued interest or its equivalent, as are set forth in such request, and, as provided in Section 3.07, such Permitted Investments shall be held by Loan Trustee in trust as part of the Collateral until so sold; provided that Company shall upon demand pay to Loan Trustee the amount of any loss realized upon maturity, sale or other disposition of any such Permitted Investment and, so long as no Event of Default or Payment Default shall have occurred and be continuing, Company shall be entitled to receive from Loan Trustee, and Loan Trustee shall promptly pay to Company, any profit, income, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment. All Permitted Investments held by Loan Trustee pursuant to this Section 5.06 shall be held pursuant to Section 3.07. If an Event of Default or Payment Default shall have occurred and be continuing, any net income, profit, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment shall be held as part of the
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Collateral and shall be applied by Loan Trustee at the same time, on the same conditions and in the same manner as the amounts in respect of which such income, profit, interest, dividend or gain was realized are required to be distributed in accordance with the provisions hereof pursuant to which such amounts were required to be held. Subject to Section 3.03, at such time as there shall not be continuing any such Event of Default or Payment Default, such income, profit, interest, dividend or gain shall be paid to Company. In addition, subject to Section 3.03, if any moneys or investments are held by Loan Trustee solely because an Event of Default or Payment Default has occurred and is continuing, at such time as there shall not be continuing any such Event of Default or Payment Default, such moneys and investments shall be paid to Company. Loan Trustee shall not be responsible for any losses on any investments or sales of Permitted Investments made pursuant to the procedure specified in this Section 5.06 other than by reason of its willful misconduct or negligence.
ARTICLE VI
Loan Trustee
Section 6.01 Acceptance of Trusts and Duties. U.S. Bank accepts the trusts and duties hereby created and applicable to it and agrees to perform such duties, but only upon the terms of this Indenture and agrees to receive, handle and disburse all monies received by it as Loan Trustee constituting part of the Collateral in accordance with the terms. U.S. Bank shall have no liability hereunder except (a) for its own willful misconduct or negligence, (b) as provided in the fourth sentence of Section 2.03 and the last sentence of Section 5.06, (c) for liabilities that may result from the inaccuracy of any representation or warranty of U.S. Bank in the Participation Agreement or expressly made hereunder and (d) as otherwise expressly provided in the Operative Documents.
For the avoidance of doubt, Loan Trustee shall also be accountable in its capacity as Securities Intermediary with respect to the Security Account, as set forth in Section 3.07.
Section 6.02 Absence of Certain Duties. Except in accordance with written instructions furnished pursuant to Section 5.01, 5.02 or 6.06, and except as provided in, and without limiting the generality of, Sections 5.02, 5.03 and 5.04, Loan Trustee shall have no duty (a) to see to any registration of the Aircraft or any recording or filing of this Indenture or any other document, or to see to the maintenance of any such registration, recording or filing, (b) to see to any insurance on the Aircraft or to effect or maintain any such insurance, whether or not Company is in default with respect thereto, (c) to confirm, verify or inquire into the failure to receive any financial statements of Company or (d) to inspect the Aircraft at any time or ascertain or inquire as to the performance or observance of any of Company’s covenants hereunder with respect to the Aircraft.
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Section 6.03 No Representations or Warranties as to the Documents. Except as provided in Article V of the Participation Agreement, Loan Trustee shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of any Operative Document or any other document or instrument, or as to the correctness of any statement (other than a statement by Loan Trustee) contained herein or therein, except that Loan Trustee hereby represents and warrants that each of said specified documents to which it is a party has been or will be duly executed and delivered by one of its officers who is and will be duly authorized to execute and deliver such document on its behalf.
Section 6.04 No Segregation of Monies; No Interest. Subject to Section 5.06 and except as provided in Section 3.07, all moneys received by Loan Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of applicable law, and neither Loan Trustee nor any agent of Loan Trustee shall be under any liability for interest on any moneys received by it hereunder; provided that any payments received, or applied hereunder, by Loan Trustee shall be accounted for by Loan Trustee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.
Section 6.05 Reliance; Agents; Advice of Counsel. Loan Trustee shall not incur any liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the proper party or parties. Loan Trustee may accept a copy of a resolution of the Board of Directors of any party to the Participation Agreement, certified by the Secretary or an Assistant Secretary of such party as duly adopted and in full force and effect, as conclusive evidence that such resolution has been duly adopted and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically described herein, Loan Trustee may for all purposes hereof rely on a certificate, signed by a duly authorized officer of Company, as to such fact or matter, and such certificate shall constitute full protection to Loan Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. In the administration of the trusts hereunder, Loan Trustee may (a) execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents (including paying agents or registrars) or attorneys, and (b) at the expense of the Collateral, consult with counsel, accountants and other skilled Persons to be selected and retained by it; provided
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that, prior to retaining agents (including paying agents or registrars), counsel, accountants or other skilled Persons, so long as no Event of Default exists, Loan Trustee shall obtain Company’s consent (such consent not to be unreasonably withheld). Loan Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled Persons acting within such counsel’s, accountants’ or Person’s area of competence (so long as Loan Trustee shall have exercised reasonable care and judgment in selecting such Persons).
Section 6.06 Instructions from Noteholders. In the administration of the trusts created hereunder, Loan Trustee shall have the right to seek instructions from a Majority in Interest of Noteholders should any provision of this Indenture appear to conflict with any other provision herein or any other Operative Document or Pass Through Document or should Loan Trustee’s duties or obligations hereunder be unclear, and Loan Trustee shall incur no liability in refraining from acting until it receives such instructions. Loan Trustee shall be fully protected for acting in accordance with any instructions received under this Section 6.06.
ARTICLE VII
Operating Covenants of Company
Section 7.01 Liens. Company will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Aircraft, its title thereto or any of its interest therein, except:
(a) the respective rights of Loan Trustee and Company as provided in the Operative Documents, the Lien of this Indenture, the rights of any Permitted Lessee under a Lease permitted hereunder and the rights of any Person existing pursuant to the Operative Documents or the Pass Through Documents;
(b) the rights of others under agreements or arrangements to the extent expressly permitted by this Indenture;
(c) Loan Trustee Liens, Noteholder Liens and Other Party Liens;
(d) Liens for Taxes either not yet overdue or being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or impair the Lien of this Indenture;
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(e) materialmen’s, mechanics’, workers’, repairmen’s, hangerkeeper’s, landlords’, employees’ or other like Liens arising in the ordinary course of business (including those arising under maintenance agreements entered into in the ordinary course of business) securing obligations that either are not yet overdue for a period of more than 60 days or are being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or materially impair the Lien of this Indenture;
(f) Liens arising out of any judgment or award, so long as such judgment or award is, within 60 days after the entry thereof, discharged, vacated or reversed, or execution thereof stayed pending appeal or other judicial review or is discharged, vacated or reversed within 60 days after the expiration of such stay;
(g) any other Lien with respect to which Company or any Permitted Lessee provides a bond, cash collateral or other security adequate in the reasonable opinion of Loan Trustee;
(h) salvage or similar rights of insurers under insurance policies maintained by Company or any Permitted Lessee; and
(i) Liens approved in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders.
Liens described in clauses (a) through (i) above are referred to herein as “Permitted Liens”. Company shall promptly, at its own expense, take (or cause to be taken) such action as may be necessary duly to discharge (by bonding or otherwise) any Lien other than a Permitted Lien arising at any time with respect to the Aircraft, its title thereto or any of its interest therein.
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Section 7.02 Possession, Operation and Use, Maintenance and Registration.
(a) Possession. Without the prior written consent of Loan Trustee, Company shall not lease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install any Engine, or permit any Engine to be installed, on any airframe other than the Airframe; provided that Company (or, except with respect to clauses (viii) and (ix) below, any Permitted Lessee) may without the prior written consent of Loan Trustee:
(i) subject the Airframe to interchange agreements or subject any Engine to interchange, pooling, borrowing or other similar agreements or arrangements, in each case entered into by Company (or any Permitted Lessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe and (B) if Company’s title to any such Engine is divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine, and Company shall (or shall cause any Permitted Lessee to) comply with Section 7.05(b) in respect thereof;
(ii) deliver possession of the Airframe or any Engine to (x) any Person for testing, service, repair, restoration, storage, maintenance or other similar purposes or for alterations, modifications or additions to the Airframe or such Engine to the extent required or permitted by the terms hereof or (y) to any Person for purposes of transport to a Person referred to in the preceding clause (x);
(iii) transfer or permit the transfer of possession of the Airframe or any Engine to any Government pursuant to a lease, contract or other instrument;
(iv) subject the Airframe or any Engine to the CRAF Program or transfer possession of the Airframe or any Engine to the United States government in accordance with applicable laws, rulings, regulations or orders (including, without limitation, any transfer of possession pursuant to the CRAF Program); provided that Company (or any Permitted Lessee) (A) shall promptly notify Loan Trustee upon transferring possession of the Airframe or any Engine pursuant to this clause (iv) and (B) in the case of a transfer of possession pursuant to the CRAF Program, shall notify Loan Trustee of the name and address of the responsible Contracting Office Representative for the Air Mobility Command of the United States Air Force or other appropriate Person to whom notices must be given and to whom requests or claims must be made to the extent applicable under the CRAF Program;
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(v) install an Engine on an airframe owned by Company (or any Permitted Lessee) free and clear of all Liens, except (A) Permitted Liens and Liens that apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety) and (B) the rights of third parties under interchange, pooling, borrowing or other similar agreements or arrangements that would be permitted under clause (i) above;
(vi) install an Engine on an airframe leased to Company (or any Permitted Lessee) or purchased or owned by Company (or any Permitted Lessee) subject to a lease, conditional sale or other security agreement; provided that: (A) such airframe is free and clear of all Liens except (1) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their successors and assigns, and (2) Liens of the type permitted by clause (v) of this Section 7.02(a); and (B) either: (1) Company has obtained from the lessor, conditional vendor or secured party of such airframe a written agreement (which may be a copy of the lease, conditional sale or other security agreement covering such airframe), in form satisfactory to Loan Trustee (an agreement from such lessor, conditional vendor or secured party substantially in the form of the penultimate paragraph of this Section 7.02(a) being deemed to be satisfactory to Loan Trustee), whereby such lessor, conditional vendor or secured party expressly agrees that neither it nor its successors or assigns will acquire or claim any right, title or interest in any Engine by reason of such Engine being installed on such airframe at any time while such Engine is subject to the Lien of this Indenture, or (2) such lease, conditional sale or other security agreement provides that such Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement at any time while such Engine is subject to the Lien of this Indenture, notwithstanding its installation on such airframe;
(vii) install an Engine on an airframe owned by Company (or any Permitted Lessee), leased to Company (or any Permitted Lessee) or purchased by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither clause (v) nor clause (vi) of this Section 7.02(a) is applicable; provided that such installation shall be deemed an Event of Loss with respect to such Engine, and Company shall comply with Section 7.05(b) in respect thereof, if such installation adversely affects Loan Trustee’s security interest in such Engine, Loan Trustee not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Company with Section 7.05(b);
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(viii) lease any Engine, the Airframe or the Airframe and Engines to any United States air carrier as to which there is in force a certificate issued pursuant to the Transportation Code (49 U.S.C. Sections 41101-41112) or successor provision that gives like authority; provided that no Event of Default exists at the time such lease is entered into; and
(ix) lease any Engine, the Airframe or the Airframe and Engines to (A) any foreign air carrier that is at the inception of the lease based in and a domiciliary of a country listed in Exhibit B hereto, (B) the manufacturer of the Airframe or any Engine (either directly or through an affiliate) and (C) any foreign air carrier consented to in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders; provided that (w) no Event of Default exists at the time such lease is entered into, (x) in the case of a lease to any foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains normal diplomatic relations with the country in which such foreign air carrier is based at the time such lease is entered into and in the case of a lease to a foreign air carrier principally based in Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date, (y) in the case of a lease to any foreign air carrier, Company furnishes Loan Trustee with a certificate from a Responsible Officer of Company certifying that there exist no possessory rights in favor of such lessee under the laws of such lessee’s country which would, upon bankruptcy or insolvency of or other default by Company, and assuming at such time such lessee is not insolvent or bankrupt, prevent the taking of possession of any such Engine or the Airframe and any such Engine by Loan Trustee in accordance with and when permitted by the terms of Section 4.02 upon the exercise by Loan Trustee of its remedies under Section 4.02, and (z) in the case of any lease to a foreign air carrier, such carrier is not then subject to any bankruptcy, insolvency, liquidation, reorganization, dissolution or similar proceeding and shall not have substantially all of its property in the possession of any liquidator, trustee, receiver or similar person;
provided that the rights of any lessee or other transferee who receives possession of the Aircraft, the Airframe or any Engine by reason of a transfer permitted by this Section 7.02(a) (other than the transfer of an Engine which is deemed an Event of Loss) shall be subject and subordinate to, and any permitted lease shall be made expressly subject and subordinate to, all the terms of this Indenture, including Loan Trustee’s rights to repossess pursuant to Section 4.02 and to avoid such lease upon such repossession, and Company shall remain primarily liable hereunder for the performance and observance of all of the terms and conditions of this Indenture to the same extent as if such lease or transfer had not occurred, any such lease shall include appropriate provisions for the maintenance and insurance of the Aircraft, the Airframe or such Engine, and no lease or transfer of possession otherwise in compliance with this Section shall (x) result in any
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registration or re-registration of the Aircraft except to the extent permitted in Section 7.02(e) or the maintenance, operation or use thereof that does not comply with Sections 7.02(b) and (c) or (y) permit any action not permitted to be taken by Company with respect to the Aircraft hereunder. Company shall promptly notify Loan Trustee and the Rating Agencies of the existence of any such lease with a term in excess of one year.
Loan Trustee, each Noteholder by acceptance of an Equipment Note, and each Related Noteholder by acceptance of a Related Equipment Note agrees, for the benefit of Company (and any Permitted Lessee) and for the benefit of the lessor, conditional vendor or secured party of any airframe or engine leased to Company (or any Permitted Lessee) or leased to or purchased or owned by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement, that Loan Trustee, Noteholders and Related Noteholders will not acquire or claim, as against Company (or any Permitted Lessee) or such lessor, conditional vendor or secured party, any right, title or interest in: (A) any engine or engines owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of such engine or engines being installed on the Airframe at any time while such engine or engines are subject to such lease or conditional sale or other security agreement, or (B) any airframe owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of any Engine being installed on such airframe at any time while such airframe is subject to such lease or conditional sale or other security agreement.
Loan Trustee acknowledges that any “wet lease” or other similar arrangement under which Company (or any Permitted Lessee) maintains operational control of the Aircraft does not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 7.02(a).
(b) Operation and Use. Company agrees that the Aircraft will not be used or operated in violation of any law, rule or regulation of any government of any country having jurisdiction over the Aircraft or in violation of any airworthiness certificate, license or registration relating to the Aircraft issued by any such government, except (i) immaterial or non-recurring violations with respect to which corrective measures are taken promptly by Company or a Permitted Lessee, as the case may be, upon discovery thereof or (ii) to the extent Company (or, if a Lease is then in effect, any Permitted Lessee) is contesting in good faith the validity or application of any such law, rule or regulation or airworthiness certificate, license or registration in any manner that does not involve any material risk of sale, forfeiture or loss of the Aircraft or impair the Lien of this Indenture; provided that Company shall not be in default under, or required to take
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any action set forth in, this sentence if it is not possible for it (or any Permitted Lessee) to comply with the laws of a jurisdiction other than the United States (or other than any jurisdiction in which the Aircraft is then registered) because of a conflict with the applicable laws of the United States (or such jurisdiction in which the Aircraft is then registered). Company shall also have the right to operate the Aircraft without having on board the original registration certificate or airworthiness certificate in the event that either or both such certificates disappear from the Aircraft, but only to the extent permitted by Exemption No. 5318 of the regulations of the FAA or other similar exemption. Company will not operate the Aircraft, or permit the Aircraft to be operated or located, (i) in any area excluded from coverage by any insurance required by the terms of Section 7.06 or (ii) in any war zone or recognized or, in Company’s judgment, threatened areas of hostilities unless covered by war risk insurance in accordance with Section 7.06, unless in the case of either clause (i) or (ii), (x) government indemnification complying with Sections 7.06(a) and (b) has been provided or (y) the Aircraft is only temporarily located in such area as a result of an isolated occurrence or isolated series of occurrences attributable to a hijacking, medical emergency, equipment malfunction, weather conditions, navigational error or other similar circumstances or any other circumstances beyond the reasonable control of Company (or any Permitted Lessee) and Company (or any Permitted Lessee) is using its good faith efforts to remove the Aircraft from such area as promptly as practicable.
(c) Maintenance. Company shall maintain, service, repair and overhaul the Aircraft (or cause the same to be done) (i) so as to keep the Aircraft in good operating condition and in such condition as may be necessary to enable the airworthiness certification of the Aircraft to be maintained in good standing at all times (other than (v) during temporary periods of storage, during maintenance, testing or modification permitted hereunder, (w) during periods of grounding by applicable governmental authorities, (x) during periods when the FAA or such other aviation authority has revoked or suspended the airworthiness certificates for aircraft of the same manufacturer and model as the Aircraft, (y) with respect to minor or non-recurring violations with respect to which corrective measures are taken promptly upon discovery thereof and (z) to the extent Company or any Permitted Lessee is promptly contesting in good faith the validity or application of any law or requirement relating to any such certification in any manner which does not create a material risk of sale, loss or forfeiture of the Aircraft, the Airframe or any Engine or the interest of Loan Trustee therein or any material risk of criminal liability or material civil penalty against Loan Trustee) under the Transportation Code, during such periods in which the Aircraft is registered under the laws of the United States, or, if the Aircraft is registered under the laws of any other jurisdiction, the applicable laws of such jurisdiction and (ii) using the same standards as Company (or a Permitted Lessee, if a Lease is in effect) uses with respect to similar aircraft operated by Company (or such Permitted Lessee) in similar circumstances (it being understood that the obligations pursuant to this clause (ii) do not limit Company’s obligations under the
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preceding clause (i)). In any case, the Aircraft will be maintained in accordance with the maintenance standards required by the FAA (while operated under an FAA-approved maintenance program) or, while operated under the maintenance program of another jurisdiction, standards substantially equivalent to those required by the central aviation authority of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland or the United Kingdom. Company shall maintain or cause to be maintained all records, logs and other documents required to be maintained in respect of the Aircraft by appropriate authorities in the jurisdiction in which the Aircraft is registered.
(d) Identification of Loan Trustee’s Interest. If not prevented by applicable law or regulations or by any government, Company agrees to affix as promptly as practicable after the Closing Date and thereafter to maintain in the cockpit of the Aircraft, in a clearly visible location, and on each Engine, a nameplate bearing the inscription “MORTGAGED TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS LOAN TRUSTEE” (such nameplate to be replaced, if necessary, with a nameplate reflecting the name of any successor Loan Trustee). Such placards may be removed temporarily, if necessary, in the course of maintenance of the Airframe or Engines.
(e) Registration. Company shall cause the Aircraft to remain duly registered, under the laws of the United States, in the name of Company except as otherwise required by the Transportation Code; provided that Loan Trustee shall, at Company’s expense, execute and deliver all such documents as Company may reasonably request for the purpose of continuing such registration. Notwithstanding the preceding sentence, Company, at its own expense, may cause or allow the Aircraft to be duly registered under the laws of any foreign jurisdiction in which a Permitted Lessee could be principally based, in the name of Company or of any nominee of Company, or, if required by applicable law, in the name of any other Person (and, following any such foreign registration, may cause the Aircraft to be re-registered under the laws of the United States); provided that in the case of jurisdictions other than those approved by Loan Trustee with the consent of a Majority in Interest of Noteholders (i) if such jurisdiction is at the time of registration listed on Exhibit B, Loan Trustee shall have received at the time of such registration an opinion of counsel to Company to the effect that (A) this Indenture and Loan Trustee’s right to repossession hereunder is valid and enforceable under the laws of such country, (B) after giving effect to such change in registration, the Lien of this Indenture shall continue as a valid Lien and shall be duly perfected in the new jurisdiction of registration and that all filing, recording or other action necessary to perfect and protect the Lien of this Indenture has been accomplished (or if such opinion cannot be given at such time, (x) the opinion shall detail what filing, recording or other action is necessary and (y) Loan Trustee shall have received a certificate from a Responsible Officer of Company that all possible preparations to accomplish such filing, recording and other action shall have been done, and such filing, recording and other
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action shall be accomplished and a supplemental opinion to that effect shall be promptly delivered to Loan Trustee subsequent to the effective date of such change in registration), (C) the obligations of Company under this Indenture 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), (D) all approvals or consents of any government in such jurisdiction having jurisdiction required for such change in registration shall have been duly obtained and shall be in full force and effect and (E) (unless Company shall have agreed to provide insurance covering the risk of requisition of use or title of the Aircraft by the government of such jurisdiction so long as the Aircraft is registered under the laws of such jurisdiction) the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use or title of the Aircraft in the event of requisition by such government of such use or title, and (ii) if such jurisdiction is at the time of registration not listed on Exhibit B, Loan Trustee shall have received (in addition to the opinions set forth in clause (i) above) at the time of such registration an opinion of counsel to Company to the effect that (A) the terms of this Indenture are legal, valid, binding and enforceable in such jurisdiction (subject to exceptions customary in such jurisdiction; provided that, subject to exceptions relating to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and exceptions relating to general principles of equity, such counsel shall opine that any applicable laws limiting the remedies provided in Section 4.02 do not in the opinion of such counsel make the remedies provided in Section 4.02 inadequate for the practical realization of the rights and benefits provided thereby), (B) it is not necessary for Loan Trustee to register or qualify to do business in such jurisdiction and (C) there is no tort liability of the lender of an aircraft not in possession thereof under the laws of such jurisdiction other than tort liability that might have been imposed on such lender under the laws of the United States or any state thereof (it being understood that such opinion shall be waived if insurance reasonably satisfactory to Loan Trustee is provided, at Company’s expense, to cover such risk). Loan Trustee will cooperate with Company in effecting such foreign registration. Notwithstanding the foregoing, prior to any such change in the country of registry of the Aircraft, the following conditions shall be met (or waived as provided in Section 6.01(b) of the Participation Agreement):
(i) no Event of Default shall have occurred and be continuing at the effective date of the change in registration; provided that it shall not be necessary to comply with this condition if the change in registration results in the registration of the Aircraft under the laws of the United States or if a Majority in Interest of Noteholders consents to such change in registration;
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(ii) Loan Trustee shall have received evidence of compliance with the insurance provisions contained herein after giving effect to such change in registration;
(iii) other than in the case of a change in registration to Taiwan, the proposed change in registration is made to a country with which the United States then maintains normal diplomatic relations, and in the case of a change in registration to Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date; and
(iv) Company shall have paid or made provision reasonably satisfactory to Loan Trustee for the payment of all reasonable expenses (including reasonable attorneys’ fees) of Loan Trustee and Noteholders in connection with such change in registration.
Company shall (i) from time to time, take such actions as may be required to be taken by Company so that any International Interest arising in relation to this Indenture, the Aircraft, any Replacement Aircraft, any Engine or Replacement Engine may be duly registered (and any such registration may be assigned, amended, extended or discharged) at the International Registry, and (ii) obtain from the International Registry all approvals as may be required duly and timely to perform Company’s obligations under this Indenture with respect to the registration of any such International Interest. Loan Trustee shall take all actions necessary with respect to the International Registry to consent to Company’s initiation of any registrations required under this Indenture to enable Company to complete such registrations, including, without limitation, appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to consent to any registrations on the International Registry with respect to the Airframe or any Engine.
Section 7.03 Inspection; Financial Information.
(a) Inspection. At all reasonable times, but upon at least 15 Business Days’ prior written notice to Company, Loan Trustee or its authorized representatives may, subject to the other conditions of this Section 7.03(a), inspect the Aircraft and may inspect the books and records of Company relating to the maintenance of the Aircraft required to be maintained by the FAA or the government of another jurisdiction in which the Aircraft is then registered; provided that (i) Loan Trustee or its representatives, as the case may be, shall be fully insured at no cost to Company or any Permitted Lessee in a
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manner satisfactory to Company and such Permitted Lessee with respect to any risks incurred in connection with any such inspection or shall provide to Company and such Permitted Lessee a written release satisfactory to Company and such Permitted Lessee with respect to such risks, (ii) any such inspection shall be during Company’s or Permitted Lessee’s, as the case may be, normal business hours and subject to the safety, security and workplace rules applicable at the location where such inspection is conducted and any applicable governmental rules or regulations, (iii) any such inspection of the Aircraft shall be a visual, walk-around inspection of the interior and exterior of the Aircraft and shall not include opening any panels, bays or the like without Company’s express consent, which consent Company may in its sole discretion withhold, and (iv) no exercise of such inspection right shall interfere with the use, operation or maintenance of the Aircraft by, or the business of, Company or any Permitted Lessee and Company and any Permitted Lessee shall not be required to undertake or incur any additional liabilities in connection therewith. All information obtained in connection with any such inspection of the Aircraft and of such books and records shall be Confidential Information and shall be treated by Loan Trustee and its representatives in accordance with the provisions of Section 10.16. Any inspection pursuant to this Section 7.03(a) shall be at the sole risk (including, without limitation, any risk of personal injury or death) and expense of Loan Trustee (or its representatives) making such inspection. Except during the continuance of an Event of Default, all inspections by Loan Trustee and its representatives provided for under this Section 7.03(a) shall be limited to one inspection of any kind contemplated by this Section 7.03(a) during any consecutive twelve month period.
(b) Financial Information. So long as any of the Secured Obligations remain unpaid, Company agrees to furnish to Loan Trustee: (i) within 60 days after the end of each of the first three quarterly periods in each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries prepared by it as of the close of such period, together with the related consolidated statements of income for such period or (y) a report of Company on Form 10-Q in respect of such period in the form filed with the Securities and Exchange Commission and (ii) within 120 days after the close of each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries as of the close of such fiscal year, together with the related consolidated statements of income for such fiscal year, certified by independent public accountants, or (y) a report of Company on Form 10-K in respect of such year in the form filed with the Securities and Exchange Commission. The items required to be furnished pursuant to clause (i) and clause (ii) above shall be deemed to have been furnished on the date on which such item is posted on the Securities and Exchange Commission’s website at www.sec.gov, and such posting shall be deemed to satisfy the requirements of clause (i) and clause (ii); provided that Company will deliver a paper copy of any item referred to in clause (i) and clause (ii) above if Loan Trustee so requests.
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Section 7.04 Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines.
(a) Replacement of Parts. Company shall (or shall cause a Permitted Lessee to) promptly replace or cause to be replaced all Parts incorporated or installed in or attached to the Airframe or any Engine and that become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use for any reason, except as otherwise provided in Section 7.04(c) or if the Airframe or an Engine to which a Part relates has suffered an Event of Loss. In addition, Company (or any Permitted Lessee) may remove (or cause to be removed) in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use; provided that Company (or any Permitted Lessee), except as otherwise provided in Section 7.04(c), will replace such Parts as promptly as practicable. All replacement Parts shall be free and clear of all Liens (except for Permitted Liens and except in the case of replacement property temporarily installed on an emergency basis) and shall be in the condition and repair required to be maintained by the terms hereof. Except as otherwise provided in Section 7.04(c), any Part removed from the Airframe or any Engine shall remain subject to the Lien of this Indenture no matter where located until it is replaced by a part incorporated or installed in or attached to the Airframe or such Engine that meets the requirements for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated or installed in or attached to the Airframe or any Engine as above provided (except in the case of replacement property temporarily installed on an emergency basis), without further act, (i) the replaced Part shall thereupon be free and clear of all rights of Loan Trustee and of the Lien of this Indenture and shall no longer be deemed a Part hereunder, and (ii) such replacement Part shall become subject to the Lien of this Indenture and be deemed a Part of the Airframe or such Engine for all purposes to the same extent as the Parts originally incorporated or installed in or attached to the Airframe or such Engine. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such replaced Part from the Lien of this Indenture.
(b) Pooling of Parts. Any Part removed from the Airframe or any Engine as provided in Section 7.04(a) may be subjected by Company or a Person permitted to be in possession of the Airframe or such Engine to a pooling arrangement entered into in the ordinary course of Company’s or such Person’s business; provided that the part replacing such removed Part shall be incorporated or installed in or attached to the Airframe or such Engine in accordance with Section 7.04(a) as promptly as practicable after the removal of such removed Part. In addition, any replacement Part when incorporated or installed in or attached to the Airframe or any Engine may be owned by any third party subject to such a pooling arrangement; provided that Company, at its expense, as
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promptly thereafter as practicable either (i) causes title to such replacement Part to vest in Company free and clear of all Liens (except Permitted Liens), or (ii) replaces (or causes to be replaced) such replacement Part by incorporating or installing in or attaching to the Airframe or such Engine a further replacement Part in the manner contemplated by Section 7.04(a).
(c) Alterations, Modifications and Additions. Company will, or will cause a Permitted Lessee to, make (or cause to be made) such alterations and modifications in and additions to the Airframe and the Engines as are required from time to time to meet the applicable requirements of the FAA or any applicable government of any other jurisdiction in which the Aircraft is then registered; except for (i) immaterial and non-recurring violations with respect to which corrective measures are being taken promptly by Company (or, if a Lease is then in effect, any Permitted Lessee) upon discovery thereof and (ii) any law, rule, regulation or order the validity or application of which is being contested in good faith by Company (or, if a Lease is then in effect, any Permitted Lessee) in any manner which does not involve any material risk of sale, loss or forfeiture of the Aircraft and does not materially adversely affect Loan Trustee’s interest in the Aircraft. In addition, Company (or any Permitted Lessee), at its own expense, may from time to time add further parts or accessories and make or cause to be made such alterations and modifications in and additions to the Airframe or any Engine as Company (or any Permitted Lessee) deems desirable in the proper conduct of its business, including, without limitation, removal (without replacement) of Parts; provided that no such alteration, modification or addition shall materially diminish the value or utility of the Airframe or such Engine below its value or utility immediately prior to such alteration, modification or addition, assuming that the Airframe or such Engine was then in the condition required to be maintained by the terms of this Indenture, except that the value (but not the utility) of the Airframe or any Engine may be reduced by the value of any such Parts that are removed that Company (or such Permitted Lessee) deems obsolete or no longer suitable or appropriate for use on the Airframe or any Engine. For the avoidance of doubt, Company may make alterations in the passenger configuration of the Aircraft and such alterations shall not be subject to the immediately preceding sentence. All Parts incorporated or installed in or attached or added to the Airframe or any Engine as the result of such alteration, modification or addition shall, without further act, be subject to the Lien of this Indenture. Notwithstanding the foregoing, Company (or any Permitted Lessee) may, at any time, remove any Part from the Airframe or any Engine if such Part: (i) is in addition to, and not in replacement of or substitution for, any Part originally incorporated or installed in or attached to the Airframe or such Engine at the time of delivery thereof to Company or any Part in replacement of, or substitution for, any such Part, (ii) is not required to be incorporated or installed in or attached or added to the Airframe or such Engine pursuant to the first sentence of this Section 7.04(c) and (iii) can be removed from the Airframe or such Engine without materially diminishing the value or utility required to be maintained by the terms of this Indenture that the
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Airframe or such Engine would have had had such Part never been installed on the Airframe or such Engine. Upon the removal by Company (or any Permitted Lessee) of any Part as permitted by this Section 7.04(c), such removed Part shall, without further act, be free and clear of all rights and interests of Loan Trustee and the Lien of this Indenture and shall no longer be deemed a Part hereunder. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such removed Part from the Lien of this Indenture. Loan Trustee acknowledges that it has no interest in the Excluded Equipment. Notwithstanding the provisions of this Section 7.04(c) or any other term or condition of this Indenture, Company (or any Permitted Lessee) may from time to time install on, and remove from, the Aircraft equipment that is owned by, leased to or conditionally sold to Company (or any Permitted Lessee) (and title to such equipment shall remain vested in Company, such Permitted Lessee, or the lessor or the conditional vendor thereof) if (1) such equipment is Excluded Equipment and (2) the location affected by any such removal, if damaged, is repaired prior to return, in a workmanlike manner, to a condition suitable for commercial passenger service; provided that all costs of installation, removal and replacement shall be the responsibility of Company.
(d) Substitution of Engines. Company shall have the right at its option at any time and from time to time, on at least 30 days’ prior written notice to Loan Trustee, to substitute a Replacement Engine for any Engine. In such event, and prior to the date of such substitution, Company shall replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine.
(e) Substitution of Airframe. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute a Substitute Airframe, free and clear of all Liens (other than Permitted Liens), for the Airframe so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) the Substitute Airframe has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the Manufacturer) and (iii) the Substitute Airframe has a MCMV (as defined below) at least equal to the MCMV of the Airframe being replaced by the Substitute Airframe (assuming that the Airframe had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV” is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Substitute Airframe and the Airframe being replaced by the Substitute Airframe, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Substitute Airframe and such Airframe as of the same date within the 60-day period prior to the substitution for both the Substitute Airframe and such Airframe.
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Prior to or at the time of any substitution under this Section 7.04(e), Company will (A) cause an Indenture Supplement covering such Substitute Airframe to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft may then be registered, (B) cause the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Substitute Airframe to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Substitute Airframe is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or statements with respect to such Substitute Airframe or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft may then be registered, (D) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such substitution, such Substitute Airframe will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Substitute Airframe, (F) furnish Loan Trustee with a copy of the original bill of sale in respect of such Substitute Airframe, and (G) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Substitute Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the opinion of counsel to Company delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as shall at the time be customary in opinions rendered in comparable circumstances.
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In the case of the Substitute Airframe subjected to the Lien of this Indenture under this Section 7.04(e), promptly upon the recordation of the Indenture Supplement covering such Substitute Airframe pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Substitute Airframe is registered), Company will cause to be delivered to Loan Trustee a favorable opinion of aviation law counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee as to the due registration of the aircraft to which the Substitute Airframe is part and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Substitute Airframe and the validity and perfection of the security interest in the Substitute Airframe granted to Loan Trustee under this Indenture.
For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Substitute Airframe shall become part of the Collateral and shall be deemed an “Airframe” as defined herein. Upon compliance with clauses (A) through (G) of the second preceding paragraph, Loan Trustee shall execute and deliver to Company an appropriate instrument releasing the replaced Airframe, all proceeds (including, without limitation, insurance proceeds, if any), the Warranty Rights in respect of such replaced Airframe and all rights relating to the foregoing, from the Lien of this Indenture, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to such replaced Airframe.
(f) Substitution of Aircraft. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute one or more Substitute Aircraft, free and clear of all Liens (other than Permitted Liens), for the Aircraft so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) Company shall have obtained a written confirmation from each of the Rating Agencies to the effect that such substitution would not result in (x) a reduction of the rating for any class of Pass Through Certificates then rated by such Rating Agency below the then current rating for such class of Pass Through Certificates or (y) a withdrawal or suspension of the rating of any class of Pass Through Certificates then rated by such Rating Agency, (iii) with respect to each Substitute Aircraft, the airframe constituting a part of such Substitute Aircraft has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the applicable airframe manufacturer) and (iv) such Substitute Aircraft has (or, in the case of more than one Substitute Aircraft, collectively have) an aggregate MCMV (as defined below) at least equal to the MCMV of the Aircraft being replaced by such Substitute Aircraft (assuming that the Aircraft had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date
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within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV”, with respect to the Aircraft and any Substitute Aircraft, is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Aircraft and such Substitute Aircraft, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Aircraft and such Substitute Aircraft as of the same date within the 60-day period prior to the substitution for each of the Aircraft and such Substitute Aircraft.
Prior to the effectiveness of any such substitution pursuant to this Section 7.04(f), (A) if a single Substitute Aircraft is being substituted for the Aircraft, Company shall prepare amendments to this Indenture in order to make the reasonably necessary changes arising from such substitution and (B) if more than one Substitute Aircraft is being substituted for the Aircraft, Company shall (1) prepare amendments to this Indenture in order to make the reasonably necessary changes to substitute the Aircraft with one of such Substitute Aircraft, (2) prepare separate financing agreements substantially in the form of the Operative Documents with respect to each other Substitute Aircraft and (3) reallocate the principal amount of the Equipment Notes relating to the Aircraft among the Substitute Aircraft pro rata based on the MCMV of each Substitute Aircraft or on such other basis among each Substitute Aircraft determined in a manner consistent with, and as would preserve the aggregate amortization profile of, the Equipment Notes relating to the Aircraft.
Prior to or at the time of any substitution under this Section 7.04(f), with respect to the airframe and each engine constituting any Substitute Aircraft, Company shall comply with the terms of Section 7.04(d) or Section 7.04(e), as applicable, of this Indenture (or the other financing agreements substantially in the form of the Operative Documents to which such Substitute Aircraft shall be subject) with respect thereto; provided, however, notwithstanding anything to the contrary in any such Section 7.04(d) or Section 7.04(e), except as provided in the first paragraph of this Section 7.04(f), there shall be no requirement (or requirement to provide any certificate) that any airframe or any engine have a certain value or utility.
Section 7.05 Loss, Destruction or Requisition.
(a) Event of Loss with Respect to the Airframe. Upon the occurrence of an Event of Loss with respect to the Airframe or the Airframe and the Engines then installed thereon, Company shall as soon as practicable (and, in any event, within 30 days after an Event of Loss has occurred) notify Loan Trustee of such Event of Loss, and, within 90 days after such Event of Loss, Company shall give Loan Trustee written notice of its election to perform one of the following options (it being agreed that if Company has not given such notice of election within such 90-day period, Company shall be deemed to have elected to perform the option set forth in the following clause (ii)). Company may elect either to:
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(i) substitute, on or before the Loss Payment Date (as defined below), as replacement for the Airframe or Airframe and Engines with respect to which an Event of Loss has occurred, a Replacement Airframe (together with a number of Replacement Engines equal to the number of Engines, if any, with respect to which the Event of Loss occurred), such Replacement Airframe and Replacement Engines to be owned by Company free and clear of all Liens (other than Permitted Liens); provided that if Company has not performed such obligation on or prior to the Loss Payment Date, then Company shall on the Loss Payment Date redeem the Equipment Notes in full in accordance with Section 2.10; or
(ii) redeem, on or before the Loss Payment Date, the Equipment Notes in full in accordance with Section 2.10. Company shall give Loan Trustee 20 days’ prior written notice if it elects to redeem the Equipment Notes on any day prior to the Loss Payment Date.
The “Loss Payment Date” with respect to an Event of Loss means the Business Day next succeeding the 120th day following the date of occurrence of such Event of Loss.
If Company elects to substitute a Replacement Airframe (or a Replacement Airframe and one or more Replacement Engines, as the case may be) Company shall, at its sole expense, not later than the Loss Payment Date, (A) cause an Indenture Supplement for such Replacement Airframe and Replacement Engines, if any, to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of such other jurisdiction in which the Aircraft is then registered, (B) cause the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Airframe and Replacement Engines, if any, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Airframe and Replacement Engines, if any, is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or
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statements with respect to the Replacement Airframe and Replacement Engines, if any, or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft is then registered, (D) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such replacement, such Replacement Airframe and Replacement Engines, if any, will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with a certificate of an independent aircraft engineer or appraiser, certifying that the Replacement Airframe and Replacement Engines, if any, have a value and utility at least equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Airframe and Engines, if any, so replaced, assuming the Airframe and such Engines were in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss, (F) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Airframe and Replacement Engines, if any, (G) furnish Loan Trustee with a copy of the original bill of sale in respect of such Replacement Airframe and a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engines, if any, and (H) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Replacement Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the Section 1110 opinion of Company’s counsel delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as are at the time customary in opinions rendered in comparable circumstances.
In the case of each Replacement Airframe or Replacement Airframe and one or more Replacement Engines subjected to the Lien of this Indenture under this Section 7.05(a), promptly upon the recordation of the Indenture Supplement covering any such Replacement Airframe and Replacement Engines, if any, pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Replacement Airframe and Replacement Engines, if any, are registered), Company will cause to be delivered to Loan Trustee a favorable opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of
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the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due registration of such Replacement Aircraft and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Replacement Airframe and Replacement Engines, if any, and the validity and perfection of the security interest in the Replacement Aircraft granted to Loan Trustee under this Indenture.
For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Aircraft and Replacement Engines, if any, shall become part of the Collateral, the Replacement Airframe shall be deemed an “Airframe” as defined herein, and each such Replacement Engine shall be deemed an “Engine” as defined herein. Upon compliance with clauses (A) through (H) of the third paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Airframe and Engines (if any) installed thereon at the time such Event of Loss occurred, all proceeds (including, without limitation, insurance proceeds), the Warranty Rights in respect of such replaced Airframe and Engines (if any) and all rights relating to the foregoing, from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of the Airframe and Engines arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the replaced Airframe and replaced Engines, if any.
If, after an Event of Loss, Company performs the option set forth in clause (ii) of the first paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing the Aircraft, all proceeds (including, without limitation, insurance proceeds), the Warranty Rights in respect of the Aircraft and all rights relating to the foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of the Aircraft arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Airframe and Engines, if any, with respect to which such Event of Loss occurred.
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(b) Event of Loss with Respect to an Engine. As soon as practicable following the occurrence of an Event of Loss with respect to an Engine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, Company shall give Loan Trustee prompt written notice thereof and shall, within 120 days after the occurrence of such Event of Loss, cause to be subjected to the Lien of this Indenture, as replacement for the Engine with respect to which such Event of Loss occurred, a Replacement Engine free and clear of all Liens (other than Permitted Liens).
Prior to or at the time of any replacement under this Section 7.05(b), Company will (i) cause an Indenture Supplement covering such Replacement Engine to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (ii) furnish Loan Trustee with a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engine, which in the case of any such conveyance to which the Cape Town Convention is applicable shall be in such form as will qualify as “contract of sale” pursuant to Article V of the Aircraft Protocol, and all documents required under the Operative Documents to establish, continue, confirm, register and/or perfect the interests of Loan Trustee in such Replacement Engine, (iii) cause the sale of such Replacement Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Engine, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Engine is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (iv) cause a financing statement or statements with respect to such Replacement Engine or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in such other jurisdiction in which the Engine is then registered, (v) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that, upon such replacement, the Replacement Engine will be subject to the Lien of this Indenture, (vi) furnish Loan Trustee with a certificate of an aircraft engineer or appraiser (who may be an employee of Company) certifying that such Replacement Engine has a value and utility at least equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Engine so replaced assuming such Engine was in the condition and repair required by the terms hereof
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immediately prior to the occurrence of such Event of Loss and (vii) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Engine. In the case of each Replacement Engine subjected to the Lien of this Indenture under this Section 7.05(b), promptly upon the recordation of the Indenture Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Company will cause to be delivered to Loan Trustee an opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and of the International Interest created pursuant to the Indenture Supplement with respect to such Replacement Engine and the validity and perfection of the security interest in the Replacement Engine granted to Loan Trustee under this Indenture. For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Engine shall become part of the Collateral and shall be deemed an “Engine” as defined herein. Upon compliance with clauses (i) through (vii) of the first sentence of this paragraph, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Engine, any proceeds (including, without limitation, insurance proceeds), the Warranty Rights in respect of such replaced Engine and all rights relating to any of the foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of such Engine arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Engines with respect to which such Event of Loss occurred.
(c) Application of Payments for Event of Loss from Requisition of Title or Use. Any payments other than insurance proceeds (the application of which is provided for in Section 7.06) received at any time by Company or by Loan Trustee from any government or other Person with respect to an Event of Loss to the Airframe or any Engine, will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
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(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced pursuant to Section 7.05(a), so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses that shall not exceed the amounts required to be paid by Company to Noteholders pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amount and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
(iii) if such payments are received with respect to an Engine with regard to which an Event of Loss has occurred, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
(d) Requisition for Use by the Government of the Airframe and the Engines Installed Thereon. In the event of the requisition for use or hire by any government (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition or hire) of the Airframe and the Engines or engines installed on the Airframe that does not constitute an Event of Loss, all of Company’s rights and obligations under this Indenture with respect to the Airframe and such Engines shall continue to the same extent as if such requisition or hire had not occurred; provided that, notwithstanding the foregoing, Company’s obligations other than payment obligations shall only continue to the extent feasible. All payments received by Company or Loan Trustee from such government for such requisition of the Airframe and Engines or engines shall be paid over to, or retained by, Company.
(e) Requisition for Use by the Government of an Engine not Installed on the Airframe. If any government requisitions the use or hire (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition), for a period in excess of sixty (60) days, of any Engine not then installed on the Airframe, Company will replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine. Upon such replacement, any payments received by Company or Loan Trustee from such government with respect to such requisition shall be paid over to, or retained by, Company.
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(f) Application of Payments During Existence of Event of Default. Any amount referred to in Section 7.05 that is payable to or retainable by Company shall not be paid to or retained by Company if at the time of such payment or retention an Event of Default or Payment Default has occurred and is continuing, but shall be held by or paid over to Loan Trustee as security for the obligations of Company under this Indenture and the Participation Agreement. When any such Event of Default or Payment Default ceases, such amount shall be paid to Company.
Section 7.06 Insurance.
(a) Aircraft Liability Insurance.
(i) Except as provided in clause (ii) of this Section 7.06(a), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d), Company will carry, or cause to be carried, at no expense to Loan Trustee, aircraft liability insurance (including, but not limited to, passenger, contractual, bodily injury, personal injury, property damage, and products liability (exclusive of manufacturer’s product liability insurance and war risk, hijacking and allied perils insurance)) with respect to the Aircraft that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease in respect of the Aircraft is then in effect, by Permitted Lessee) of the same type as the Aircraft (A) in amounts that are not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s (or Permitted Lessee’s) fleet on which Company (or Permitted Lessee) carries insurance and operated by Company (or Permitted Lessee) on the same or similar routes as operated by the Aircraft; provided that such liability insurance shall not be less than the amount (the “Minimum Insurance Amount”) certified in the insurance report delivered to Loan Trustee and each Liquidity Provider on the Closing Date, and (B) that is maintained in effect with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(a) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests (defined below in this Section 7.06) may appear, as additional insureds (the “Additional Insureds”), (2) subject to the conditions of clause (3) below, provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of
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Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report delivered on the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for 30 days after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. “Interests” as used in this Section 7.06(a), in Section 7.06(b), and in Section 7.06(c) with respect to any Person means the interests of such Person in the transactions contemplated by the Operative Documents.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of said clause (i) except that: (A) the amounts of coverage shall not be required to exceed the amounts of airline liability insurance from time to time applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown and (B) the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown.
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(b) War Risk, Hijacking and Allied Perils Liability Insurance. If the Aircraft, the Airframe or any Engine is being operated in any war zone or area of recognized or, in Company’s (or Permitted Lessee’s) judgment, threatened hostilities, then Company shall maintain or cause to be maintained war risk, hijacking and allied perils liability insurance (x) in an amount that is not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s fleet on which Company carries insurance and operated by Company (or, if a Lease is then in effect, in the Permitted Lessee’s fleet on which such Permitted Lessee carries insurance and operated by such Permitted Lessee) on the same or similar routes as the Aircraft, the Airframe or such Engine; provided that such liability insurance shall not be less than the Minimum Insurance Amount, (y) that is maintained in effect with insurers of recognized responsibility, and (z) which shall cover the perils set forth in the insurance policies maintained in connection with the CRAF Program (as such insurance policies maintained in connection with the CRAF Program may be amended from time to time). Except with respect to any war risk, hijacking or allied perils liability insurance maintained on any aircraft operated by Company in connection with the CRAF Program (or, if a Lease is then in effect, by the Permitted Lessee), if war risk, hijacking or allied perils liability insurance is maintained by Company (or if a Lease is then in effect, by the Permitted Lessee) with respect to any aircraft owned or operated by Company (or such Permitted Lessee, as the case may be) of the same or similar type operated by Company (or such Permitted Lessee, as the case may be) on the same or similar routes as operated by the Aircraft, the Airframe or an Engine, then Company shall maintain or cause to be maintained with respect to the Aircraft war risk, hijacking and allied perils liability insurance in scope and coverage no less comprehensive, in an amount not less than the insurance maintained by Company (or such Permitted Lessee, as the case may be) with respect to such other aircraft, and with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(b) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests may appear, as Additional Insureds, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee, or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report delivered on or prior to the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for seven days (or such other period as is then generally
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available in the industry) after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. To the extent that Company’s war risk, hijacking and allied perils insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(c) Insurance Against Loss or Damage to Aircraft.
(i) Except as provided in clause (ii) of this Section 7.06(c), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d) below, Company shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to Loan Trustee, all-risk aircraft hull insurance covering the Aircraft and all-risk coverage with respect to any Engines or Parts while removed from the Aircraft (including, but not limited to, war risk, hijacking and allied perils insurance, if and to the extent the same is maintained by Company (or, if a Lease is then in effect, by the Permitted Lessee) with respect to other similar aircraft operated by Company or such Permitted Lessee, as the case may be, on the same or similar routes) that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as the Aircraft; provided that (A) such insurance (including the permitted self-insurance) shall at all times while the Aircraft is subject to this Indenture be for an amount not less than 110% of the aggregate principal amount of the Equipment Notes outstanding from time to time, (B) such insurance need not cover an Engine while attached to an airframe not owned, leased or operated by Company, and (C) such insurance covering Engines and Parts removed from an Airframe or an airframe or (in the case of Parts) an Engine need be obtained only to the extent available at reasonable cost (as reasonably determined by Company (or Permitted Lessee)). Any policies
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carried in accordance with this Section 7.06(c) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds up to an amount equal to the outstanding principal amount of the Equipment Notes, together with accrued but unpaid interest thereon, plus an amount equal to the interest that would accrue on the outstanding principal amount of the Equipment Notes at the Debt Rate in effect on the date of payment of such insurance proceeds to Loan Trustee (as provided for in this sentence) during the period commencing on the day following the date of such payment to Loan Trustee and ending on the Loss Payment Date (the sum of such three amounts being the “Loan Amount”), payable for any loss or damage constituting an Event of Loss with respect to the Aircraft and any insurance proceeds in excess of the Insurance Threshold up to an amount equal to the Loan Amount for any loss or damage to the Aircraft (or Engines) not constituting an Event of Loss with respect to the Aircraft (or Engines), shall be paid to Loan Trustee as long as this Indenture has not been discharged, and that all other amounts shall be paid to Company or its designee, unless the insurer has received notice that an Event of Default exists, in which case all insurance proceeds for any loss or damage to the Aircraft (or Engines) up to an amount equal to the Loan Amount shall be payable to Loan Trustee, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s (or any Permitted Lessee’s) hull war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount) certified in the insurance report delivered on the Closing Date to Loan Trustee, and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to the Additional Insureds for 30 days (seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking, or allied perils coverage) after issuance to the Additional Insureds of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent Company has waived its rights by its agreement to indemnify the Additional
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Insureds pursuant to the Operative Documents and (6) include a 50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insurance. To the extent that Company’s war risk, hijacking, and allied perils insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company (or Permitted Lessee) may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes and engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 7.06(d) below, Company shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe or Engine in an amount at least equal to 110% of the aggregate outstanding principal amount of the Equipment Notes for the Aircraft or, with respect to a non-flown Engine, the replacement value of such Engine.
(d) Self-Insurance. Company may from time to time self-insure, by way of deductible, self-insured retention, premium adjustment or franchise or otherwise (including, with respect to insurance maintained pursuant to Sections 7.06(a), (b) or (c), insuring for a maximum amount that is less than the amounts set forth in Sections 7.06(a), (b) and (c) above), the risks required to be insured against pursuant to Sections 7.06(a), (b) and (c) above, but in no case shall the self-insurance with respect to all of the aircraft and engines in the combined fleet of Company and its Affiliates (including, without limitation, the Aircraft) exceed for any 12-month policy year 1.0% of the average aggregate insurable value (during the preceding policy year) of all aircraft (including, without limitation, the Aircraft) on which Company and its Affiliates carry insurance, unless an insurance broker of national standing certifies that the standard among other major United States airlines is a higher level of self-insurance, in which case Company may self-insure the Aircraft to such higher level; provided that (1) any deductible per occurrence that, in the case of the Aircraft, is not in excess of the amount customarily allowed as a deductible in the industry or is required to facilitate claims handling or (2) any applicable mandatory minimum per aircraft (or if applicable per annum or other period) hull or liability insurance deductibles imposed by the aircraft hull or liability insurers shall be permitted in addition to the above-mentioned self-insurance.
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(e) Indemnification by United States Government in Lieu of Insurance. Notwithstanding any provision of this Section 7.06 requiring insurance, in lieu of insurance against any risk with respect to the Aircraft, indemnification from, or insurance provided by, the United States government, or any agency or instrumentality thereof, against such risk in an amount which, when added to the amount of insurance maintained against such risk by Company (or, if a Lease is then in effect, by the Permitted Lessee), shall be at least equal to the amount of insurance against such risk otherwise required by this Section 7.06 (taking into account self-insurance permitted by Section 7.06(d)) shall be considered adequate insurance for purposes of this Section 7.06.
(f) Application of Insurance Payments. All losses will be adjusted by Company with the insurers. As between Loan Trustee and Company it is agreed that all insurance payments received under policies required to be maintained by Company hereunder, exclusive of any payments received in excess of the Loan Amount for the Aircraft from such policies, as the result of the occurrence of an Event of Loss with respect to the Airframe or an Engine will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced as contemplated by Section 7.05(a), so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses, as do not exceed the amounts required to be paid by Company pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amounts, and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
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(iii) if such payments are received with respect to an Engine, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
In all events, the insurance payment of any property damage or loss received under policies maintained by Company in excess of the Loan Amount for the Aircraft shall be paid to Company.
The insurance payments for any loss or damage to the Airframe or an Engine not constituting an Event of Loss with respect to the Airframe or such Engine will be applied in payment (or to reimburse Company) for repairs or for replacement property in accordance with the terms of Sections 7.02 and 7.04, and any balance remaining after compliance with such Sections with respect to such loss or damage shall be paid to Company. Any amount referred to in the preceding sentence or in clause (i) or (ii) of the first paragraph of this Section 7.06(f) that is payable to Company shall not be paid to Company (or, if it has been previously paid directly to Company, shall not be retained by Company) if at the time of such payment an Event of Default or Payment Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under this Indenture and the other Operative Documents and shall be invested pursuant to Section 5.06 unless and until such amount is applied, at the option of Loan Trustee, to Company’s obligations under this Indenture and the other Operative Documents as and when due, it being understood that any such application shall be made to such obligations of Company as Loan Trustee may determine in its sole discretion. Loan Trustee shall give Company prompt written notice of any such application, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder. At such time as there shall be continuing no Event of Default or Payment Default, such amount shall be paid to Company to the extent not previously applied in accordance with this Section 7.06(f).
(g) Reports, Etc. On or before the Closing Date and annually following renewal of Company’s insurance coverage, Company will furnish to Loan Trustee and each Liquidity Provider current certificates of insurance and a report signed by a firm of independent aircraft insurance brokers appointed by Company (which brokers may be in the regular employ of Company), stating the opinion of such firm that the commercial hull and liability insurance then carried and maintained on the Aircraft complies with the terms hereof. All information contained in such report shall be Confidential Information and shall be treated by Loan Trustee and each Liquidity Provider and each of their Affiliates and their respective officers, directors, agents and employees in accordance with the provisions of Section 10.16. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider of any act or
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omission on the part of Company of which such firm has knowledge that might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider as promptly as practicable after such firm acquires knowledge that a cancellation of any insurance carried and maintained on the Aircraft pursuant to this Section 7.06 will occur. Such information may only be provided to other Persons in accordance with Section 10.16.
In the event that Company shall fail to maintain or to cause to be maintained insurance as herein provided, Loan Trustee may at its option obtain such insurance (giving Company prompt written notice thereof, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder) and, in such event, Company shall, upon demand, reimburse Loan Trustee for the cost to Loan Trustee of such insurance, together with interest thereon at the Past Due Rate for the period commencing with the date such cost was paid to the date of reimbursement; provided, however, that no exercise by Loan Trustee of said option shall affect the provisions of this Indenture, including the provisions that failure by Company to maintain the prescribed insurance shall constitute an Event of Default.
(h) Salvage Rights; Other. All salvage rights to the Airframe and each Engine shall remain with Company’s insurers at all times, and any insurance policies of Loan Trustee insuring the Airframe or any Engine shall provide for a release to Company of any and all salvage rights in and to the Airframe or any Engine except if such insurance policies of Loan Trustee are obtained pursuant to the last paragraph of Section 7.06(g). Neither Loan Trustee nor any Noteholder may, directly or indirectly, obtain insurance for its own account with respect to the Airframe or any Engine if such insurance would limit or otherwise adversely affect the coverage or amounts payable under, or increase the premiums for, any insurance required to be maintained pursuant to this Section 7.06 or any other insurance maintained with respect to the Aircraft or any other aircraft in Company’s (or Permitted Lessee’s) fleet.
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ARTICLE VIII
Successor and Additional Trustees
Section 8.01 Resignation or Removal; Appointment of Successor.
(a) The resignation or removal of Loan Trustee and the appointment of a successor Loan Trustee shall become effective only upon the successor Loan Trustee’s acceptance of appointment as provided in this Section 8.01. Loan Trustee or any successor thereto must resign if at any time it ceases to be eligible in accordance with the provisions of Section 8.01(c) and may resign at any time without cause by giving at least 60 days’ prior written notice to Company and each Noteholder. In addition, either Company (so long as no Event of Default or Payment Default shall have occurred and be continuing) or a Majority in Interest of Noteholders (but only with the consent of Company so long as no Event of Default or Payment Default shall have occurred and be continuing), may at any time remove Loan Trustee without cause by an instrument in writing delivered to Loan Trustee and each Noteholder, and, in case of a removal by a Majority in Interest of Noteholders, to Company. In the case of the resignation or removal of Loan Trustee, Company shall promptly appoint a successor Loan Trustee. If a successor Loan Trustee has not been appointed within 60 days after such notice of resignation or removal, Loan Trustee, Company or any Noteholder may apply to any court of competent jurisdiction to appoint a successor Loan Trustee to act until such time, if any, as a successor is appointed as above provided. The successor Loan Trustee so appointed by such court shall immediately and without further act be superseded by any successor Loan Trustee appointed as above provided.
(b) Any successor Loan Trustee, however appointed, shall execute and deliver to the predecessor Loan Trustee and Company an instrument accepting such appointment and assuming the obligations of Loan Trustee arising from and after the time of such appointment, and thereupon such successor Loan Trustee, without further act, shall become vested with all the estates, properties, rights, powers and duties of the predecessor Loan Trustee in the trust hereunder applicable to it with like effect as if originally named Loan Trustee herein; but nevertheless upon the written request of such successor Loan Trustee, such predecessor Loan Trustee shall execute and deliver an instrument transferring to such successor Loan Trustee all the estates, properties, rights and powers of such predecessor Loan Trustee, and such predecessor Loan Trustee shall duly assign, transfer, deliver and pay over to such successor Loan Trustee all monies or other property and all other books and records, or true, correct and complete copies thereof, then held by such predecessor Loan Trustee.
(c) This Indenture shall at all times have a Loan Trustee, however appointed, that is a Citizen of the United States (without the use of a voting trust) and a bank or trust company having a combined capital and surplus of at least $100,000,000 (or a combined capital and surplus in excess of $5,000,000 and the obligations of which, whether now in existence or hereafter incurred, are fully and unconditionally guaranteed by a corporation organized and doing business under the laws of the United States or any state or territory thereof or the District of Columbia and having a combined capital and surplus of at least $100,000,000) or a corporation with a net worth of at least $100,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Loan Trustee upon reasonable or customary terms. If such bank, trust company or corporation
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publishes reports of conditions at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 8.01(c) the combined capital and surplus of such bank, trust company or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. In case at any time Loan Trustee ceases to be eligible in accordance with the provisions of this Section 8.01(c), Loan Trustee shall resign immediately in the manner and with the effect specified in Section 8.01(a).
(d) Any bank, trust company or corporation into which Loan Trustee may be merged or converted or with which it may be consolidated, or any bank, trust company or corporation resulting from any merger, conversion or consolidation to which Loan Trustee is a party, or any bank, trust company or corporation to which substantially all the corporate trust business of Loan Trustee may be transferred, shall, subject to the terms of Section 8.01(c), be a successor Loan Trustee under this Indenture without further act.
Section 8.02 Appointment of Additional and Separate Trustees.
(a) Whenever (i) Company or Loan Trustee deems it necessary or desirable in order to conform to any law of any jurisdiction in which all or any part of the Collateral is situated or to make any claim or bring any suit with respect to or in connection with the Collateral, any Operative Document or any of the transactions contemplated by the Operative Documents, (ii) Loan Trustee shall be advised by counsel satisfactory to it that it is necessary or prudent in the interests of Noteholders (and Loan Trustee shall so advise Company) or (iii) Loan Trustee has been requested to do so by a Majority in Interest of Noteholders, then in any such case, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and such other, instruments as from time to time are necessary or advisable either (1) to constitute one or more banks or trust companies or corporations meeting the requirements of Section 8.01(c) and approved by Loan Trustee, either to act jointly with Loan Trustee as additional trustee or trustees of all or any part of the Collateral or to act as separate trustee or trustees of all or any part of the Collateral, in each case with such rights, powers, duties and obligations consistent with this Indenture as is provided in such supplemental indenture or other instruments as Loan Trustee or a Majority in Interest of Noteholders deems necessary or advisable, or (2) to clarify, add to or subtract from the rights, powers, duties and obligations theretofore granted any such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. If no Event of Default has occurred and is continuing, no additional or supplemental trustee shall be appointed without Company’s consent. If an Event of Default shall have occurred and be continuing, Loan Trustee may act under the foregoing provisions of this Section 8.02(a) without the concurrence of Company, and, to the extent permitted by applicable law,
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Company hereby irrevocably appoints (which appointment is coupled with an interest) Loan Trustee as its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 8.02(a). Loan Trustee may, in such capacity, execute, deliver and perform any such supplemental indenture, or any such instrument, as may be required for the appointment of any such additional or separate trustee or for the clarification of, addition to or subtraction from the rights, powers, duties or obligations theretofore granted to any such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. In case any additional or separate trustee appointed under this Section 8.02(a) becomes incapable of acting, resigns or is removed, all the assets, property, rights, powers, trusts, duties and obligations of such additional or separate trustee shall revert to Loan Trustee until a successor additional or separate trustee is appointed as provided in this Section 8.02(a).
(b) No additional or separate trustee shall be entitled to exercise any of the rights, powers, duties and obligations conferred upon Loan Trustee in respect of the custody, investment and payment of monies and all monies received by any such additional or separate trustee from or constituting part of the Collateral or otherwise payable under any Operative Documents to Loan Trustee shall be promptly paid over by it to Loan Trustee. All other rights, powers, duties and obligations conferred or imposed upon any additional or separate trustee shall be exercised or performed by Loan Trustee and such additional or separate trustee jointly except to the extent that applicable law of any jurisdiction in which any particular act is to be performed renders Loan Trustee incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title to all or part of the Collateral in any such jurisdiction) shall be exercised and performed by such additional or separate trustee. No additional or separate trustee shall take any discretionary action except on the instructions of Loan Trustee or a Majority in Interest of Noteholders. No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, except that Loan Trustee shall be liable for the consequences of its lack of reasonable care in selecting, and Loan Trustee’s own actions in acting with, any additional or separate trustee. Each additional or separate trustee appointed pursuant to this Section 8.02 shall be subject to, and shall have the benefit of Articles IV, V, VI, VIII, IX and X insofar as they apply to Loan Trustee. The powers of any additional or separate trustee appointed pursuant to this Section 8.02 shall not in any case exceed those of Loan Trustee.
(c) If at any time Loan Trustee deems it no longer necessary or desirable or in the event that Loan Trustee has been requested to do so in writing by a Majority in Interest of Noteholders, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any additional or separate trustee. Loan Trustee may act on behalf of Company under this Section 8.02(c) when and to the extent it could so act under Section 8.02(a). In any case, Company may remove an additional or separate trustee in the manner set forth in Section 8.01.
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ARTICLE IX
Amendments and Waivers
Section 9.01 Amendments to this Indenture without Consent of Holders. At any time after the date hereof, Company may and Loan Trustee shall, at Company’s request, enter into one or more agreements supplemental hereto and amend the Equipment Notes without notice to or consent of any Noteholder, Indenture Indemnitee or Related Indenture Indemnitee for any of the following purposes: (i) to evidence the succession of another Person to Company and the assumption by any such successor of the covenants of Company contained in any Operative Documents pursuant to Section 6.02(e) of the Participation Agreement; (ii) to cure any defect or inconsistency herein or in the Equipment Notes, or to make any change not inconsistent with the provisions hereof (provided that such change does not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be); (iii) to cure any ambiguity or correct any mistake; (iv) to evidence the succession of a new trustee hereunder pursuant hereto or the removal of the trustee hereunder or to provide for or facilitate the appointment of an additional or separate trustee pursuant to Section 8.02; (v) to convey, transfer, assign, mortgage or pledge any property to or with Loan Trustee; (vi) to make any other provisions or amendments with respect to matters or questions arising hereunder or under the Equipment Notes, or to amend, modify or supplement any provision hereof or thereof, so long as such action shall not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be; (vii) to correct, supplement or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto Loan Trustee any property subject or required to be subject to the Lien of this Indenture or to subject to the Lien of this Indenture the Airframe or Engines or any Substitute Airframe, Replacement Airframe or Replacement Engine; (viii) to add to the covenants of Company for the benefit of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees or to surrender any rights or power herein conferred upon Company; (ix) to add to the rights of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees; (x) to include on the Equipment Notes any legend as may be required by law or as otherwise necessary or advisable; (xi) to comply with any applicable requirements of the Trust Indenture Act, or any other requirements of applicable law or of any regulatory body; (xii) to give effect to the replacement of a Liquidity Provider with a Replacement Liquidity Provider and the
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replacement of a Liquidity Facility with a Replacement Liquidity Facility therefor, and, if a Replacement Liquidity Facility is to be comprised of more than one instrument as contemplated by the definition of the term “Replacement Liquidity Facility” in the Intercreditor Agreement, to incorporate appropriate mechanics for multiple instruments for such Replacement Liquidity Facility for a single Pass Through Trust (including, without limitation, amendments to Section 2.14 with respect to the Replacement Liquidity Provider of such Replacement Liquidity Facility); (xiii) to provide for the original issuance of Additional Series Equipment Notes of one or more Series (and Related Additional Series Equipment Notes relating thereto) pursuant to clause (i) of the third sentence of Section 2.02 or the issuance of new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes of any one or more Series (and new Related Additional Series Equipment Notes relating thereto) pursuant to clause (ii) or (iii), as the case may be, of the third sentence of Section 2.02, and for the issuance of pass through certificates by any pass through trust that acquires any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) and to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith or to provide for the priority in payment among different Series of Additional Series Equipment Notes) and to provide for any credit support for any pass through certificates relating to any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) (including, without limitation, to secure claims for fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)); provided that any such Additional Series Equipment Notes, new Series A Equipment Notes or new Additional Series Equipment Notes, as the case may be, are issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable; (xiv) to provide for the issuance of “Additional Series Equipment Notes” of one or more series or new “Series A Equipment Notes” or new “Additional Series Equipment Notes” in each case under any or all Related Indentures and other matters incidental or relating thereto; and (xv) to give effect to the substitution of the Aircraft pursuant to Section 7.04(f).
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Section 9.02 Amendments to this Indenture with Consent of Holders.
(a) With the written consent of a Majority in Interest of Noteholders, Company may, and Loan Trustee shall, subject to Section 9.06, at any time and from time to time, enter into such supplemental agreements to add any provisions to or to change or eliminate any provisions of this Indenture or of any such supplemental agreements or to modify in any manner the rights and obligations of Company, Loan Trustee and Noteholders under this Indenture; provided that, without the consent of each Noteholder affected thereby, an amendment under this Section 9.02 may not:
(1) reduce the principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note; provided that any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not require the consent of any Noteholder;
(2) change the date on which any principal amount of, Make-Whole Amount, if any, or interest on any Equipment Note, is due or payable;
(3) create any Lien with respect to the Collateral prior to or pari passu with the Lien thereon under this Indenture except such as are permitted by this Indenture, or deprive any Noteholder of the benefit of the Lien on the Collateral created by this Indenture, except as provided in connection with the exercise of remedies under Article IV; provided that, without the consent of each holder of an affected Related Equipment Note then outstanding, no such amendment, waiver or modification of terms of, or consent under, any thereof shall modify Section 3.03 or this clause (3) or deprive any Related Noteholder of the benefit of the Lien of this Indenture on the Collateral, except as provided in connection with the exercise of remedies under Article IV;
(4) reduce the percentage of the outstanding principal amount of the Equipment Notes the consent of whose holders is required for any such supplemental agreement, or the consent of whose holders is required for any waiver of compliance with certain provisions of this Indenture or of certain defaults hereunder or their consequences provided for in this Indenture; or
(5) make any change in Section 4.05 or this Section 9.02, except to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of each Noteholder affected thereby.
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Notwithstanding the foregoing, neither Company nor Loan Trustee shall enter into any amendment, waiver or modification of, or supplement or consent to, this Indenture or any other Operative Document other than the Participation Agreement (which is addressed in Section 9.03) which shall reduce, modify or amend any indemnities in favor of any Liquidity Provider without the consent of such Liquidity Provider that is subject to such reduction, modification or amendment.
(b) It is not necessary under this Section 9.02 for Noteholders to consent to the particular form of any proposed supplemental agreement, but it is sufficient if they consent to the substance thereof.
(c) Promptly after the execution by Company and Loan Trustee of any supplemental agreement pursuant to the provisions of this Section 9.02, Loan Trustee shall transmit by first-class mail or by hand delivery a notice, setting forth in general terms the substance of such supplemental agreement, to all Noteholders, as the names and addresses of such Noteholders appear on the Equipment Note Register. Any failure of Loan Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental agreement.
Section 9.03 Amendments, Waivers, Etc. of the Participation Agreement. Without the consent of a Majority in Interest of Noteholders, the respective parties to the Participation Agreement may not modify, amend or supplement such agreement, or give any consent, waiver, authorization or approval thereunder, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the respective parties thereunder; provided that, without the consent of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee, the Participation Agreement may be modified, amended or supplemented in order (i) to cure any defect or inconsistency therein or to cure any ambiguity or correct any mistake, (ii) to amend, modify or supplement any provision thereof or make any other provision with respect to matters or questions arising thereunder or under this Indenture (provided that the making of any such other provision shall not materially adversely affect the interests of Noteholders) or (iii) to make any other change, or reflect any other matter, of the kind referred to in clauses (i) through (xiv) of Section 9.01. Notwithstanding the foregoing, without the consent of any Liquidity Provider, Company shall not enter into any amendment, waiver or modification of or supplement or consent to the Participation Agreement which shall reduce, modify or amend any indemnities in favor of such Liquidity Provider contained therein.
Section 9.04 Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Noteholder is a continuing consent by Noteholder and every subsequent Noteholder, even if notation of the consent is not made on any Equipment Note.
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Section 9.05 Notation on or Exchange of Equipment Notes. Loan Trustee may place an appropriate notation about an amendment or waiver on any Equipment Note thereafter executed. Loan Trustee in exchange for such Equipment Notes may execute new Equipment Notes that reflect the amendment or waiver.
Section 9.06 Trustee Protected. If, in the reasonable opinion of the institution acting as Loan Trustee, any document required to be executed by it pursuant to the terms of Section 9.01 or 9.02 adversely affects any right, duty, immunity or indemnity with respect to such institution under this Indenture, such institution may in its discretion decline to execute such document.
Section 9.07 No Consent of Individual Indenture Indemnitees Required. Notwithstanding anything in this Indenture or any other Operative Document to the contrary, when any provision hereof or thereof would otherwise require a consent of an Indenture Indemnitee, such provision shall always be construed to require only the consent of an Indenture Indemnitee other than any Indenture Indemnitee covered by clause (vii) of the definition of “Indenture Indemnitees”.
ARTICLE X
Miscellaneous
Section 10.01 Termination of Indenture. Subject to Sections 7.04 and 7.05, upon (or at any time after) payment in full of the principal amount of, Make-Whole Amount, if any, and interest on and all other amounts then due under all Equipment Notes and provided that there shall then be (x) no other Secured Obligations due and unpaid to Noteholders, Loan Trustee and other Indenture Indemnitees hereunder, under the Participation Agreement or any other Operative Document, and (y) no Related Secured Obligations due and unpaid under any Related Indenture or any other “Operative Document” (as defined in any Related Indenture), Company shall direct Loan Trustee to execute and deliver to or as directed in writing by Company an appropriate instrument releasing the Aircraft and the Engines and (subject to paragraph (ix) of clause “third” of Section 3.03, if applicable) all other Collateral from the Lien of this Indenture and Loan Trustee shall execute and deliver such instrument as aforesaid; provided that this Indenture and the trusts created hereby shall earlier terminate and this Indenture shall be of no further force or effect upon any sale or other final disposition by Loan Trustee of all property constituting part of the Collateral and the final distribution by Loan Trustee of all monies or other property or proceeds constituting part of the Collateral in accordance with the terms hereof. Except as aforesaid otherwise provided, this Indenture and the trusts created hereby shall continue in full force and effect in accordance with the terms hereof.
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Section 10.02 No Legal Title to Collateral in Noteholders. No holder of an Equipment Note or a Related Equipment Note shall have legal title to any part of the Collateral. No transfer, by operation of law or otherwise, of any Equipment Note, Related Equipment Note or other right, title and interest of any Noteholder or Related Noteholder in and to the Collateral or hereunder shall operate to terminate this Indenture or entitle such holder or any successor or transferee of such holder to an accounting or to the transfer to it of any legal title to any part of the Collateral.
Section 10.03 Sale of Aircraft by Loan Trustee is Binding. Any sale or other conveyance of the Aircraft, the Airframe, any Engine or any interest therein by Loan Trustee made pursuant to the terms of this Indenture shall bind Noteholders and Company and shall be effective to transfer or convey all right, title and interest of Loan Trustee, Company and such Noteholders in and to such Aircraft, Airframe, Engine or interest therein. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such sale or conveyance or as to the application of any sale or other proceeds with respect thereto by Loan Trustee or Noteholders.
Section 10.04 Indenture for Benefit of Company, Loan Trustee and Noteholders. Nothing in this Indenture, whether express or implied, shall be construed to give any Person other than Company, Noteholders, Loan Trustee, other Indenture Indemnitees, Related Loan Trustees and Related Indenture Indemnitees any legal or equitable right, remedy or claim under or in respect of this Indenture, except that the Persons referred to in the second to last full paragraph of Section 7.02(a) shall be third party beneficiaries of such paragraph.
Section 10.05 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents required or permitted under the terms and provisions of this Indenture shall be in English and in writing, and any such notice may be given by United States mail, courier service, facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class U.S. mail and, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
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if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233;
if to Loan Trustee, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2019-2 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683;
if to any Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07;
if to any Indenture Indemnitee other than Loan Trustee, addressed to the address of such party (if any) set forth in Section 7.01 of the Participation Agreement or to such other address as such Indenture Indemnitee shall have furnished by notice to Company and Loan Trustee; and
if to any Related Indenture Indemnitee, addressed to such Related Indenture Indemnitee at its address set forth in the Equipment Note Register (defined in the applicable Related Indenture) maintained pursuant to Section 2.07 of the applicable Related Indenture.
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Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 10.05.
Section 10.06 Severability. To the extent permitted by applicable law, any provision of this Indenture that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.07 No Oral Modification or Continuing Waivers. No terms or provisions of this Indenture or of the Equipment Notes may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by Company and Loan Trustee, in compliance with Article IX. Any waiver of the terms hereof or of any Equipment Note shall be effective only in the specific instance and for the specific purpose given.
Section 10.08 Successors and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of, and be enforceable by, each of the parties hereto and the successors and permitted assigns of each, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by any Noteholder shall bind the successors and permitted assigns of such Noteholder. Each Noteholder by its acceptance of an Equipment Note agrees to be bound by (i) this Indenture and all provisions of the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to a Noteholder and (ii) all provisions of each Related Indenture applicable to a Related Noteholder to the extent such Noteholder is such Related Noteholder.
Section 10.09 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
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Section 10.10 Normal Commercial Relations. Anything contained in this Indenture to the contrary notwithstanding, Loan Trustee, any Noteholder or any other party to any of the Operative Documents or the Pass Through Documents or any of their affiliates may conduct any banking or other financial transactions, and have banking or other commercial relationships, with Company, fully to the same extent as if this Indenture were not in effect, including without limitation the making of loans or other extensions of credit to Company for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.
Section 10.11 Voting by Noteholders. All votes of Noteholders shall be governed by a vote of a Majority in Interest of Noteholders, except as otherwise provided herein.
Section 10.12 Section 1110. It is the intention of the parties hereto that the security interest created hereby, to the fullest extent available under applicable law, entitles Loan Trustee, on behalf of Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft.
Section 10.13 Company’s Performance and Rights. Any obligation imposed on Company herein shall require only that Company perform or cause to be performed such obligation, even if stated as a direct obligation, and the performance of any such obligation by any permitted assignee, lessee or transferee under an assignment, lease or transfer agreement then in effect and in accordance with the provisions of the Operative Documents shall constitute performance by Company and, to the extent of such performance, discharge such obligation by Company. Except as otherwise expressly provided herein, any right granted to Company in this Indenture shall grant Company the right to permit such right to be exercised by any such assignee, lessee or transferee, and, in the case of a lessee, as if the terms hereof were applicable to such lessee were such lessee Company hereunder. The inclusion of specific references to obligations or rights of any such assignee, lessee or transferee in certain provisions of this Indenture shall not in any way prevent or diminish the application of the provisions of the two sentences immediately preceding with respect to obligations or rights in respect of which specific reference to any such assignee, lessee or transferee has not been made in this Indenture.
Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts (and each of the parties hereto shall not be required to execute the same counterpart). Each counterpart of this Indenture including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Indenture, but all of such counterparts together shall constitute one instrument.
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Section 10.15 Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS INDENTURE, ANY INDENTURE SUPPLEMENT AND THE EQUIPMENT NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 10.16 Confidential Information. The term “Confidential Information” means: (a) the existence and terms of any lease of the Airframe or Engines pursuant to Section 7.02(a) and the identity of the Permitted Lessee thereunder; (b) all information obtained in connection with any inspection conducted by Loan Trustee or its authorized representatives pursuant to Section 7.03(a); (c) each certification furnished to Loan Trustee or any Liquidity Provider pursuant to Sections 7.06(a) and 7.06(b); (d) all information contained in each report furnished to Loan Trustee or any Liquidity Provider pursuant to Section 7.06(g); and (e) all information regarding the Warranty Rights; and (f) all information designated by Company as non-public information. All Confidential Information shall be held confidential by Loan Trustee, each Liquidity Provider and each Noteholder and each affiliate, agent, officer, director, or employee of any thereof and shall not be furnished or disclosed by any of them to anyone other than (i) Loan Trustee or any Noteholder and (ii) their respective bank examiners, auditors, accountants, agents and legal counsel, and except as may be required by an order of any court or administrative agency or by any statute, rule, regulation or order of any governmental authority.
Section 10.17 Submission to Jurisdiction. Each of the parties hereto, and by acceptance of Equipment Notes, each Noteholder, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Indenture, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 Indenture or the Equipment Notes or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
[Signature Pages Follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereof duly authorized, as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page
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Exhibit A
to Indenture and Security Agreement
(N826DN)
FORM OF INDENTURE SUPPLEMENT
INDENTURE SUPPLEMENT NO. _____
INDENTURE SUPPLEMENT NO. ____, dated _______________ ____, 20__ (“Indenture Supplement”), between DELTA AIR LINES, INC. (“Company”) and U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Loan Trustee under the Indenture (each as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement (N826DN), dated as of March 12, 2020 (the “Indenture”; capitalized terms used herein without definition shall have the meanings specified therefor in Annex A to the Indenture), between Company and U.S. Bank Trust National Association, not in its individual capacity, except as expressly provided therein, but solely as Loan Trustee (“Loan Trustee”), provides for the execution and delivery of supplements thereto substantially in the form hereof which shall particularly describe the Aircraft, and shall specifically grant a security interest in the Aircraft to Loan Trustee; and
[WHEREAS, the Indenture relates to the Airframe and Engines described in Annex A attached hereto and made a part hereof, and a counterpart of the Indenture is attached to and made a part of this Indenture Supplement;]7
[WHEREAS, Company has, as provided in the Indenture, heretofore executed and delivered to Loan Trustee Indenture Supplement(s) for the purpose of specifically subjecting to the Lien of the Indenture certain airframes and/or engines therein described, which Indenture Supplement(s) is/are dated and has/have been duly recorded with the FAA as set forth below, to wit:
Date Recordation Date FAA Document Number]8
| 7 |
Use for Indenture Supplement No. 1 only. |
| 8 |
Use for all Indenture Supplements other than Indenture Supplement No. 1. |
Indenture Supplement No. ____ (2020-1 EETC)
N826DN
A-1
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under the Aircraft, including the Airframe and Engines described in Annex A attached hereto, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided in the Indenture, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto;
To have and to hold all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in the Indenture, including Section 2.13 and Article III of the Indenture, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and subject to the terms and provisions set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the Indenture and shall form a part thereof, and the Indenture is hereby incorporated by reference herein and is hereby ratified, approved and confirmed.
THIS INDENTURE SUPPLEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
[Signature Pages Follow.]
Indenture Supplement No. ____ (2020-1 EETC)
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A-2
IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement No. _____ to be duly executed by their respective duly authorized officers, on the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
|
|
| Name: | ||
| Title: | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: |
|
|
| Name: | ||
| Title: | ||
Signature Page
Indenture Supplement No. ____ (2020-1 EETC)
N826DN
Annex A
to Indenture Supplement No. ___
(N826DN)
DESCRIPTION OF AIRFRAME AND ENGINES
AIRFRAME
|
Manufacturer |
Model |
Generic Manufacturer Model |
FAA Registration No. |
Manufacturer’s Serial No. |
||||
| The Boeing Company | 737-932ER | Boeing 737-900 | N826DN | 31937 |
ENGINES
|
Manufacturer |
Model |
Generic Manufacturer Model |
Manufacturer’s Serial Nos. |
|||
| CFM International, Inc. | CFM56-7B26E | CFM CFM56-7 |
660215 660217 |
Each Engine has 550 or more rated take-off horsepower or the equivalent of such horsepower and is a jet propulsion aircraft engine having at least 1750 pounds of thrust or the equivalent of such thrust.
Indenture Supplement No. ____ (2020-1 EETC)
N826DN
Exhibit B
to Indenture and Security Agreement
(N826DN)
LIST OF PERMITTED COUNTRIES
| Argentina | Guatemala | Norway | ||
| Australia | Hong Kong | Panama | ||
| Austria | Hungary | Peoples’ Republic of China | ||
| Bahamas | Iceland | Philippines | ||
| Barbados | India | Poland | ||
| Belgium | Indonesia | Portugal | ||
| Bermuda Islands | Ireland | Republic of China (Taiwan) | ||
| Bolivia | Italy | Russia | ||
| Brazil | Jamaica | Singapore | ||
| British Virgin Islands | Japan | South Africa | ||
| Canada | Jordan | South Korea | ||
| Cayman Islands | Kuwait | Spain | ||
| Chile | Liechtenstein | Sweden | ||
| Colombia | Luxembourg | Switzerland | ||
| Czech Republic | Malaysia | Thailand | ||
| Denmark | Malta | Trinidad and Tobago | ||
| Ecuador | Mexico | Turkey | ||
| Egypt | Monaco | United Kingdom | ||
| Finland | Morocco | Uruguay | ||
| France | Netherlands Antilles | Venezuela | ||
| Germany | Netherlands, the | |||
| Greece | New Zealand | |||
Indenture and Security Agreement (2020-1 EETC)
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B-1
Exhibit C
to Indenture and
Security Agreement
(N826DN)
CERTAIN TERMS
|
Insurance Threshold: |
$ | 10,000,000 |
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C-1
Schedule I
to Indenture and
Security Agreement
DESCRIPTION OF EQUIPMENT NOTES
|
Original Principal
Amount |
Maturity Date | |||||||
|
Series AA Equipment Notes: |
$ | 17,552,000.00 | June 10, 2027 | |||||
|
Series A Equipment Notes: |
$ | 4,501,000.00 | June 10, 2027 | |||||
CERTAIN DEFINED TERMS
|
Defined Term |
Definition |
|
|
Debt Rate for Series AA Equipment Notes |
2.000% per annum | |
|
Make-Whole Spread for Series AA Equipment Notes |
0.200% | |
|
Debt Rate for Series A Equipment Notes |
2.500% per annum | |
|
Make-Whole Spread for Series A Equipment Notes |
0.300% |
Indenture and Security Agreement (2020-1 EETC)
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I-1
Schedule I
to Indenture and
Security Agreement
(Cont’d)
EQUIPMENT NOTES AMORTIZATION
SERIES AA EQUIPMENT NOTES
Boeing model 737-932ER
N826DN
Indenture and Security Agreement (2020-1 EETC)
N826DN
Schedule I
to Indenture and
Security Agreement
(Cont’d)
SERIES A EQUIPMENT NOTES
Boeing model 737-932ER
N826DN
Indenture and Security Agreement (2020-1 EETC)
N826DN
Schedule I
to Indenture and
Security Agreement
(Cont’d)
EQUIPMENT NOTES AMORTIZATION9
The portion of this Schedule appearing below this text is intentionally deleted from the FAA filing counterpart because the parties hereto deem it to contain confidential information.
| 9 |
This page to be included only in the FAA filing package in the place of the completed amortization schedule. |
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Schedule II
to Indenture and
Security Agreement
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date.
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1A, dated as of the Issuance Date.
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Exhibit 4.12
Execution Version
PARTICIPATION AGREEMENT
(N822NW)
Dated as of March 12, 2020
among
DELTA AIR LINES, INC.,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the
Pass Through Trust Agreements,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
*
One Airbus A330-302
(Generic Manufacturer and Model Airbus A330) Aircraft
U.S. Registration No. N822NW
Participation Agreement (2020-1 EETC)
N822NW
TABLE OF CONTENTS
|
Article 1 DEFINITIONS |
1 | |||||
|
Section 1.01. |
Definitions | 1 | ||||
|
Section 1.02. |
Other Definitional Provisions | 2 | ||||
|
Article 2 THE LOANS |
2 | |||||
|
Section 2.01. |
The Loans | 2 | ||||
|
Section 2.02. |
Issuance of Equipment Notes | 2 | ||||
|
Section 2.03. |
The Closing | 4 | ||||
|
Article 3 CONDITIONS PRECEDENT |
4 | |||||
|
Section 3.01. |
Conditions Precedent to Obligations of Pass Through Trustees | 4 | ||||
|
Section 3.02. |
Conditions Precedent to Obligations of Company | 7 | ||||
|
Article 4 REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY |
9 | |||||
|
Section 4.01. |
Representations and Warranties of Company | 9 | ||||
|
Section 4.02. |
General Indemnity | 11 | ||||
|
Article 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK |
16 | |||||
|
Section 5.01. |
Representations, Warranties and Covenants of U.S. Bank | 16 | ||||
|
Article 6 OTHER COVENANTS AND AGREEMENTS |
19 | |||||
|
Section 6.01. |
Other Agreements | 19 | ||||
|
Section 6.02. |
Certain Covenants of Company | 22 | ||||
|
Article 7 MISCELLANEOUS |
24 | |||||
|
Section 7.01. |
Notices | 24 | ||||
|
Section 7.02. |
Survival of Representations, Warranties, Indemnities, Covenants and Agreements | 25 | ||||
|
Section 7.03. |
Governing Law | 25 | ||||
|
Section 7.04. |
Severability | 25 | ||||
|
Section 7.05. |
No Oral Modifications or Continuing Waivers; Consents | 25 | ||||
|
Section 7.06. |
Effect of Headings and Table of Contents | 26 | ||||
|
Section 7.07. |
Successors and Assigns | 26 | ||||
|
Section 7.08. |
Benefits of Agreement | 26 | ||||
|
Section 7.09. |
Counterparts | 26 | ||||
|
Section 7.10. |
Submission to Jurisdiction | 26 | ||||
|
Section 7.11. |
Further Assurances | 27 | ||||
|
Section 7.12. |
Section 1110 | 27 | ||||
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| Schedule I | - | Equipment Notes, Purchasers and Original Principal Amounts | ||
| Schedule II | - | Trust Supplements | ||
| Exhibit A-1 | - | Form of Opinion of Counsel for Company | ||
| Exhibit A-2 | - | Form of Opinion of Hughes Hubbard & Reed LLP, special counsel for Company | ||
| Exhibit B | - | Form of Opinion of Special Counsel for Loan Trustee, Pass Through Trustees, Subordination Agent and U.S. Bank | ||
| Exhibit C | - | Form of Opinion of Special FAA Counsel | ||
| Exhibit D | - | Form of Airframe Warranties Agreement | ||
| Exhibit E-1 | - | Form of Opinion of Special Delaware Tax Counsel for Pass Through Trustees | ||
| Exhibit E-2 | - | Form of Opinion of Special Delaware UCC Counsel for Company | ||
| Annex A | - | Definitions | ||
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PARTICIPATION AGREEMENT
(N822NW)
This PARTICIPATION AGREEMENT (N822NW), dated as of March 12, 2020, is made by and among DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association (in its individual capacity, together with its successors and permitted assigns, “U.S. Bank”), not in its individual capacity except as otherwise expressly provided in any of the Operative Documents or the Pass Through Documents, but solely as Pass Through Trustee under each of the Pass Through Trust Agreements (such terms and other capitalized terms used herein without definition being defined as provided in Section 1.01), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as subordination agent and trustee (in such capacity, together with any successor trustee in such capacity, “Subordination Agent”) under the Intercreditor Agreement, and U.S. BANK TRUST NATIONAL ASSOCIATION, as loan trustee (in such capacity, together with any successor trustee in such capacity, “Loan Trustee”) under the Indenture.
WITNESSETH:
WHEREAS, Company is the owner of that certain Airbus Model A330-302 aircraft more particularly described in the Indenture Supplement originally executed and delivered under the Indenture;
WHEREAS, concurrently with the execution and delivery of this Agreement, Company and Loan Trustee are entering into the Indenture, pursuant to which, among other things, Company will issue two separate series of Equipment Notes, which Equipment Notes are to be secured by a security interest in all right, title and interest of Company in and to the Aircraft and certain other property described in the Indenture;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each of the Trust Supplements set forth in Schedule II, the Pass Through Trusts were created and the Pass Through Certificates issued and sold;
WHEREAS, pursuant to the Intercreditor Agreement, Subordination Agent will hold the Equipment Notes on behalf of the Pass Through Trusts;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained, and of other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. For the purposes of this Agreement, unless the context otherwise requires, capitalized terms used but not defined herein shall have the respective meanings set forth or incorporated by reference in Annex A.
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N822NW
Section 1.02. Other Definitional Provisions. (a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Agreement, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) All references in this Agreement to a “government” are to such government and any instrumentality or agency thereof.
(e) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(f) All references in this Agreement to a Person shall include successors and permitted assigns of such Person.
ARTICLE 2
THE LOANS
Section 2.01. The Loans. Subject to the terms and conditions of this Agreement and the Indenture, on the Closing Date, Pass Through Trustee for each Pass Through Trust shall make a loan to Company by paying to Company the aggregate original principal amounts of the Equipment Notes being issued to such Pass Through Trust as set forth on Schedule I opposite the name of such Pass Through Trust. Pass Through Trustees, on behalf of the Pass Through Trusts, shall make such loans to Company no later than 11:00 a.m. (New York City time) on the Closing Date by transferring such amount in immediately available funds to Company at its account at JP Morgan Chase Bank, 28 Liberty Street, New York, New York, 10005, SWIFT: CHASUS33, ABA Number 021000021, Account No. 730131026, with the request that the bank advise Company by telephone at (404) 715-2046 upon transfer of the funds.
Section 2.02. Issuance of Equipment Notes. Upon the occurrence of the above payments by Pass Through Trustee for each Pass Through Trust to Company, Company shall issue, pursuant to and in accordance with Article II of the Indenture, to Subordination Agent as agent and trustee for Pass Through Trustee for each Pass Through Trust, one or more Equipment Notes of the maturity and aggregate original principal amount and bearing the interest rate set forth in Schedule I opposite the name of such Pass Through Trust. Each such Equipment Note shall be duly authenticated by Loan Trustee pursuant to the Indenture, registered in the name of Subordination Agent and dated the Closing Date and shall be delivered by Loan Trustee to Subordination Agent. In addition, subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and
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from time to time, (i) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) and to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, (ii) to issue one or more Series of Additional Series Equipment Notes under the Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time) and (iii) at any time following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue under the Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes are so issued after the Closing Date, each Noteholder of such Equipment Notes shall be deemed to be a party hereto without further act, and shall be entitled to execute, and at the request of Company shall execute, a counterpart to this Agreement. Subject to Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, each of the parties hereto agrees, at the Company’s request, to enter into any amendments to (or any amendment and restatement of) this Agreement, any of the other Operative Documents and the Pass Through Documents as may be necessary or desirable (A) to give effect to (x) any redemption and issuance, any issuance or any payment and issuance of any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, and the issuance of pass through certificates by any pass through trust that acquires any such new Series A Equipment Notes or Additional Series Equipment Notes or new Additional Series Equipment Notes, as applicable, or (y) any redemption and issuance, any issuance or any payment and issuance of any new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under any Related Indenture, and the issuance of pass through certificates by any pass through trust that acquires any such new “Series A Equipment Notes” or “Additional Series Equipment Notes” or new “Additional Series Equipment Notes”, as applicable, and (B) to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith) and to provide for any credit support for any pass through certificates relating to any such new Series A Equipment Notes, Additional Series Equipment Notes or new Additional Series Equipment Notes or new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series (including, without limitation, to provide for payment of fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)). For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Notes” of any Series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under the Indenture.
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Section 2.03. The Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take place at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004 at 9:30 a.m. (New York City time) on March 12, 2020, or at such other time or place as the parties shall agree.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Obligations of Pass Through Trustees. The obligation of each Pass Through Trustee to make the loan contemplated by Article 2 is subject to the fulfillment (or the waiver by such Pass Through Trustee) prior to or on the Closing Date of the following conditions precedent:
(a) Authentication. Company shall have tendered the Equipment Notes being issued on the Closing Date to Loan Trustee for authentication, and Loan Trustee shall have authenticated such Equipment Notes and shall have tendered such Equipment Notes to Subordination Agent on behalf of the applicable Pass Through Trustee, against receipt of the loan proceeds, in accordance with Section 2.02.
(b) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Pass Through Trustees to make the loans contemplated by Section 2.01 or to acquire the Equipment Notes.
(c) Documentation. This Agreement and the following documents shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Pass Through Trustees or Loan Trustee), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to each Pass Through Trustee:
(i) the Intercreditor Agreement;
(ii) the Liquidity Facilities;
(iii) the Pass Through Trust Agreements;
(iv) the Indenture and the Indenture Supplement covering the Aircraft and dated the Closing Date;
(v) the Airframe Warranties Agreement;
(vi) a copy of the FAA Bill of Sale; and
(vii) a copy of the Warranty Bill of Sale.
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(d) Financing Statement. A Uniform Commercial Code financing statement or statements covering the security interest created by the Indenture naming Company, as debtor, and Loan Trustee, as secured party, shall have been (or shall be in the process of being) duly filed in all places necessary or desirable within the State of Delaware.
(e) Certain Closing Certificates. Each Pass Through Trustee shall have received the following:
(i) a certificate dated the Closing Date of the Secretary or an Assistant Secretary of Company, certifying as to (A) a copy of the resolutions of the Board of Directors of Company or the executive or any other applicable committee thereof duly authorizing the transactions contemplated hereby and the execution, delivery and performance by Company of this Agreement and the Indenture and each other document required to be executed and delivered by Company in accordance with the provisions hereof or thereof and (B) a copy of the certificate of incorporation and by-laws of Company, as in effect on the Closing Date;
(ii) a certificate or other evidence from the Secretary of State of the State of Delaware, dated as of a date reasonably near the Closing Date, as to the due incorporation and good standing of Company in such state;
(iii) an incumbency certificate of Company as to the person or persons authorized to execute and deliver this Agreement, the Indenture and each other document to be executed by Company in connection with the transactions contemplated hereby and thereby, and the specimen signatures of such person or persons; and
(iv) one or more certificates of Loan Trustee and Subordination Agent certifying to the reasonable satisfaction of Pass Through Trustees as to the due authorization, execution, delivery and performance by Loan Trustee and Subordination Agent of each of the Operative Documents to which Loan Trustee or Subordination Agent is or will be a party and any other documents to be executed by or on behalf of Loan Trustee or Subordination Agent in connection with the transactions contemplated hereby or thereby.
(f) Representations; No Event of Default or Event of Loss. On the Closing Date, the following statements shall be correct: (i) the representations and warranties of Company herein are correct in all material respects as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties are correct on and as of such earlier date) and (ii) no event has occurred and is continuing that constitutes an Event of Default or an Event of Loss with respect to the Aircraft or would constitute an Event of Default or such an Event of Loss but for the requirement that notice be given or time elapse or both.
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(g) Opinion of Counsel to Company. Each Pass Through Trustee and Loan Trustee shall have received (i) an opinion addressed to it from the General Counsel, an Associate General Counsel or an Assistant General Counsel of Company (or from such other internal counsel to Company as shall be reasonably satisfactory to Pass Through Trustees) substantially in the form set forth in Exhibit A-1 and (ii) an opinion addressed to it from Hughes Hubbard & Reed LLP substantially in the form set forth in Exhibit A-2.
(h) Opinion of Counsel to U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Shipman & Goodwin LLP, special counsel for U.S. Bank, Loan Trustee, Pass Through Trustees and Subordination Agent, substantially in the form set forth in Exhibit B.
(i) Opinion of FAA Counsel. Each Pass Through Trustee and Loan Trustee shall have received an opinion addressed to it from Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, substantially in the form set forth in Exhibit C.
(j) Certification from Company. Each Pass Through Trustee and Loan Trustee shall have received a certificate or certificates signed by the chief financial or accounting officer, any Senior Vice President, the Treasurer, any Vice President or any Assistant Treasurer (or any other Responsible Officer) of Company, dated the Closing Date, certifying as to the correctness of each of the matters stated in Section 3.01(f).
(k) Certification from U.S. Bank, Loan Trustee and Subordination Agent. Each Pass Through Trustee shall have received a certificate from U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, dated the Closing Date, signed by an authorized officer of U.S. Bank in its individual capacity and as Loan Trustee and Subordination Agent, as applicable, certifying for each such entity that no Loan Trustee Liens or Other Party Liens attributable to it, as applicable, exist, and further certifying as to the correctness of each of the matters stated in Section 5.01.
(l) [Reserved.]
(m) Insurance Matters. Loan Trustee shall have received an insurance report of an independent insurance broker and the related certificates of insurance, each in form and substance reasonably satisfactory to Loan Trustee, as to the compliance with the terms of Section 7.06 of the Indenture relating to insurance with respect to the Aircraft.
(n) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
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(o) Funding of Pass Through Trusts. Each Pass Through Trustee shall have received in immediately available funds an amount at least equal to the aggregate purchase price of the Equipment Notes to be purchased from Company by such Pass Through Trustee.
(p) Airframe Warranties Agreement. Loan Trustee shall have received an executed copy of the Airframe Warranties Agreement substantially in the form set forth in Exhibit D, together with the “Replacement Controlling Party Notice” substantially in the form of Schedule 5 thereunder.
(q) Governmental Approvals. All appropriate action required to have been taken prior to the Closing Date by the FAA or any governmental or political agency, subdivision or instrumentality of the United States in connection with the transactions contemplated by this Agreement has been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be in effect on the Closing Date in connection with the transactions contemplated by this Agreement have been issued.
Promptly upon the recording of the Indenture (with the Indenture Supplement covering the Aircraft attached) pursuant to the Transportation Code and the receipt of appropriate and correct recording information from the FAA, Company will cause Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma to deliver to Subordination Agent, to Pass Through Trustees, to Loan Trustee and to Company an opinion as to the due recording of such instrument and the lack of filing of any intervening documents with respect to the Aircraft.
Section 3.02. Conditions Precedent to Obligations of Company. The obligation of Company to issue and sell the Equipment Notes is subject to the fulfillment (or waiver by Company) prior to or on the Closing Date of the following conditions precedent:
(a) No Changes in Law. No change shall have occurred after the date of this Agreement in applicable law or regulations thereunder or interpretations thereof by appropriate regulatory authorities or any court that would make it a violation of law or governmental regulations for Company to enter into any transaction contemplated by the Operative Documents or the Pass Through Documents.
(b) Documentation. The documents referred to in Section 3.01(c) shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Company), shall be in full force and effect and executed counterparts (or copies thereof where indicated) thereof shall have been delivered to Company, and Company shall have received such documents and evidence with respect to U.S. Bank, each Liquidity Provider, Loan Trustee, Subordination Agent and each Pass Through Trustee as Company reasonably requests in order to establish the consummation of the transactions contemplated by this Agreement, the taking of all corporate and other proceedings in connection therewith and compliance with the conditions herein set forth.
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(c) FAA Filing. The Indenture (with the Indenture Supplement covering the Aircraft attached) shall have been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code. The registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
(d) Representations and Warranties. On the Closing Date, the representations and warranties herein of U.S. Bank, Loan Trustee, Subordination Agent and Pass Through Trustees shall be correct as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case such representations and warranties shall have been correct on and as of such earlier date), and, insofar as such representations and warranties concern U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee, such party shall have so certified to Company.
(e) Certain Opinions and Certificates. Company shall have received each opinion referred to in Sections 3.01(h) and 3.01(i), each such opinion addressed to Company or accompanied by a letter from the counsel rendering such opinion authorizing Company to rely on such opinion as if it were addressed to Company, and the certificates referred to in Sections 3.01(e)(iv) and 3.01(k).
(f) Certain Opinion of Special Delaware Counsel. Company shall have received an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Pass Through Trustees as to tax matters, substantially in the form set forth in Exhibit E-1, and an opinion addressed to it from Richards, Layton & Finger P.A., special Delaware counsel for Company as to UCC matters, substantially in the form set forth in Exhibit E-2.
(g) No Proceedings. 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 Closing to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or the transactions contemplated hereby.
(h) No Other Party Liens, etc. Company shall have received a certificate from U.S. Bank dated the Closing Date, signed by an authorized officer of U.S. Bank, certifying for each Pass Through Trustee that no Other Party Liens attributable to it exist and further certifying as to the correctness of each of the matters stated in Section 5.01.
(i) Payment for Equipment Notes. Company shall have been paid by each Pass Through Trustee the aggregate original principal amount of the Equipment Notes being issued to such Pass Through Trustee as set forth on Schedule I opposite the name of such Pass Through Trust.
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(j) Tax Forms of the Pass Through Trustees. Each Pass Through Trustee shall have provided a completed and executed copy of IRS Form W-9 to each of the Company, the Subordination Agent and the Liquidity Providers.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF COMPANY
Section 4.01. Representations and Warranties of Company. Company represents and warrants that:
(a) Organization; Authority; Qualification. Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, is a Certificated Air Carrier, is a Citizen of the United States, has the corporate power and authority to own its properties or hold them under lease and to enter into and perform its obligations under the Operative Documents to which it is a party and is duly qualified to do business as a foreign corporation in good standing in each other jurisdiction in which the failure to so qualify would have a material adverse effect on the consolidated financial condition of Company and its subsidiaries, considered as a whole, and its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) is Delaware.
(b) Corporate Action and Authorization; No Violations. The execution, delivery and performance by Company of this Agreement and the other Operative Documents to which Company is a party have been duly authorized by all necessary corporate action on the part of Company, do not require any stockholder approval or approval or consent of any trustee or holder of any indebtedness or obligations of Company, except such as have been duly obtained and are in full force and effect, and do not contravene any law, governmental rule, regulation, judgment or order binding on Company or the certificate of incorporation or by-laws of Company or contravene or result in a breach of, or constitute a default under, or result in the creation of any Lien (other than as permitted under the Indenture) upon the property of Company under, any material indenture, mortgage, contract or other agreement to which Company is a party or by which it or any of its properties may be bound or affected.
(c) Governmental Approvals. Neither the execution and delivery by Company of this Agreement and the other Operative Documents to which it is a party, nor the consummation by Company of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with or the taking of any other action in respect of, the Department of Transportation, the FAA or any other federal or state governmental authority or agency, or the International Registry, except for (i) the registration of the issuance and sale of the Pass Through Certificates under the Securities Act and under the securities laws of any state or other jurisdiction in which the Pass Through Certificates may be offered for sale if the laws of such state or other jurisdiction require such action, (ii) the qualification of the Pass Through Trust Agreements under the Trust Indenture Act, (iii) the orders, permits, waivers, exemptions, authorizations and approvals of the regulatory
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authorities having jurisdiction over Company’s ownership or operation of the Aircraft required to be obtained on or prior to the Closing Date, which orders, permits, waivers, exemptions, authorizations and approvals have been duly obtained and are, or on the Closing Date will be, in full force and effect, (iv) the filings and registrations referred to in Section 4.01(e), (v) authorizations, consents, approvals, notices and filings required to be obtained, taken, given or made under securities or Blue Sky or similar laws of the various states and foreign jurisdictions and (vi) consents, approvals, notices, registrations and other actions required to be obtained, given, made or taken only after the date hereof.
(d) Valid and Binding Agreements. This Agreement and each other Operative Document to which Company is a party have been duly executed and delivered by Company and constitute the legal, valid and binding obligations of Company enforceable against Company in accordance with their terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity and except, in the case of the Indenture, as limited by applicable laws that may affect the remedies provided in the Indenture, which laws, however, do not make the remedies provided in the Indenture inadequate for the practical realization of the rights and benefits intended to be provided thereby.
(e) Filings and Recordation. Except for (i) the filing for recordation pursuant to the Transportation Code of the Indenture (with the Indenture Supplement covering the Aircraft attached), (ii) with respect to the security interests created by such documents, the filing of financing statements (and continuation statements at periodic intervals) under the Uniform Commercial Code of Delaware, and (iii) the registration on the International Registry of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement covering the Aircraft), no further filing or recording of any document is necessary under the laws of the United States or any state thereof as of the Closing Date in order to establish and perfect the security interest in the Aircraft created under the Indenture in favor of Loan Trustee as against Company and any third parties in any applicable jurisdiction in the United States.
(f) Investment Company Act. Company is not required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(g) Title. As of the Closing Date, (i) Company has good title to the Aircraft, free and clear of Liens other than Permitted Liens, (ii) the Aircraft has been duly certificated by the FAA as to type and airworthiness in accordance with the terms of the Indenture, (iii) the Indenture (with the Indenture Supplement covering the Aircraft attached) has been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA pursuant to the Transportation Code, (iv) the Aircraft is duly registered (or shall be in the process of being so duly registered) with the FAA in the name of Company, and (v) the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) shall have been effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty.
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(h) Section 1110. Loan Trustee is entitled to the benefits of Section 1110 with respect to the Aircraft being subjected to the Lien of the Indenture on the Closing Date.
(i) Security Interest. The Indenture creates in favor of Loan Trustee, for the benefit of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, a valid and (subject to the filings and registrations referred to in Section 4.01(e)) perfected Lien on the Aircraft purported to be subjected to the Lien of the Indenture on the Closing Date, subject to no equal or prior Lien, except Permitted Liens.
(j) Licenses, Permits and Franchises. Company holds all licenses, permits and franchises from the appropriate government entities necessary to authorize Company lawfully to engage in air transportation and to carry on scheduled commercial passenger service as currently conducted, except where the failure to so hold any such license, permit or franchise would not have a material adverse effect on the financial condition or operations of Company and its consolidated subsidiaries, taken as a whole.
Section 4.02. General Indemnity. (a) Claims Defined. For the purposes of this Section 4.02, “Claims” means any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs or expenses of whatsoever kind and nature (whether or not on the basis of negligence, strict or absolute liability or liability in tort) that may be imposed on, incurred by, suffered by or asserted against an Indemnitee, as defined below, and, except as otherwise expressly provided in this Section 4.02, includes all reasonable out-of-pocket costs, disbursements and expenses (including reasonable out-of-pocket legal fees and expenses) actually incurred by an Indemnitee in connection therewith or related thereto.
(b) Indemnitee Defined. For the purposes of this Section 4.02, “Indemnitee” means (i) U.S. Bank and Loan Trustee, (ii) each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture, (iii) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee, Subordination Agent (iv) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, (v) each Liquidity Provider, (vi) any Related Noteholder, and (vii) each of their respective successors and permitted assigns in such capacities, agents, servants, officers, employees and directors (the respective agents, servants, officers, employees and directors of each of the foregoing Indemnitees, as applicable, together with such Indemnitee, collectively the “Related Indemnitee Group” of such Indemnitee); provided that such Persons, to the extent they are not signatories to this Agreement, have expressly agreed in writing to be bound by the terms of this Section 4.02 prior to, or concurrently with, the making of a Claim. If any Indemnitee fails to comply with any duty or obligation under this Section 4.02 with respect to any Claim, such Indemnitee shall not be entitled to any indemnity with respect to such Claim under this Section 4.02 to the extent such failure was prejudicial to Company. No holder of a Pass Through Certificate in its capacity as such holder shall be an Indemnitee.
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(c) Claims Indemnified. Subject to the exclusions stated in Section 4.02(d), Company agrees to indemnify, protect, defend and hold harmless on an After-Tax Basis each Indemnitee against Claims resulting from or arising out of the sale, purchase, acceptance, non-acceptance or rejection of the Aircraft under the Purchase Agreement or the ownership, possession, use, non-use, substitution, airworthiness, control, maintenance, repair, operation, registration, re-registration, condition, sale, lease, sublease, storage, modification, alteration, return, transfer or other disposition of the Aircraft, the Airframe, any Engine or any Part (including, without limitation, latent or other defects, whether or not discoverable, and any claim for patent, trademark or copyright infringement) by Company, any Permitted Lessee or any other Person. Without limiting the foregoing and subject to, and without duplication of, the provisions of Section 6.01(a), Company agrees to pay the reasonable ongoing fees, and the reasonable out-of-pocket costs and expenses actually incurred (including, without limitation, reasonable attorney’s fees and disbursements actually incurred and, to the extent payable as provided in the Indenture, reasonable compensation and expenses of Loan Trustee’s agents actually incurred), of Loan Trustee in connection with the transactions contemplated hereby.
(d) Claims Excluded. The following are excluded from Company’s agreement to indemnify an Indemnitee under this Section 4.02:
(i) any Claim to the extent such Claim is attributable to acts or events occurring after (A) the Lien of the Indenture has been discharged, or (B) the transfer of possession of the Aircraft pursuant to Article IV of the Indenture except to the extent that such Claim is attributable to acts occurring in connection with the exercise of remedies pursuant to Section 4.02 of the Indenture following the occurrence and continuance of an Event of Default;
(ii) any Claim to the extent such Claim is, or is attributable to, a Tax (or loss of any Tax benefit), except with respect to paying indemnity amounts on an After-Tax Basis;
(iii) any Claim to the extent such Claim is attributable to the negligence or willful misconduct of such Indemnitee or such Indemnitee’s Related Indemnitee Group;
(iv) any Claim to the extent such Claim is attributable to the noncompliance by such Indemnitee or such Indemnitee’s Related Indemnitee Group with any of the terms of, or any misrepresentation by an Indemnitee or its Related Indemnitee Group contained in, this Agreement, any other Operative Document or any Pass Through Document to which such Indemnitee or any of such Related Indemnitee Group is a party or any agreement relating hereto or thereto;
(v) any Claim to the extent such Claim constitutes a Lien attributable to such Indemnitee;
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(vi) any Claim to the extent such Claim is attributable to the offer, sale, assignment, transfer, participation or other disposition (whether voluntary or involuntary) by or on behalf of such Indemnitee or its Related Indemnitee Group (other than during the occurrence and continuance of an Event of Default; provided that any such offer, sale, assignment, transfer, participation or other disposition during the occurrence and continuation of an Event of Default shall not be subject to indemnification unless it is made in accordance with the Indenture and applicable law) of any Equipment Note or interest therein or Pass Through Certificate, all or any part of such Indemnitee’s interest in the Operative Documents or the Pass Through Documents, or any interest in the Collateral or any similar security;
(vii) any Claim to the extent such Claim is attributable to (A) a failure on the part of Loan Trustee to distribute in accordance with this Agreement or any other Operative Document any amounts received and distributable by it hereunder or thereunder, (B) a failure on the part of Subordination Agent to distribute in accordance with the Intercreditor Agreement any amounts received and distributable by it thereunder or (C) a failure on the part of any Pass Through Trustee to distribute in accordance with the Pass Through Trust Agreement to which it is a party any amounts received and distributable by it thereunder;
(viii) any Claim to the extent such Claim is attributable to the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any Operative Document or any Pass Through Document, other than such as have been requested by Company or that occur as the result of an Event of Default, or such as are expressly required or contemplated by the provisions of the Operative Documents or the Pass Through Documents;
(ix) any Claim to the extent such Claim is payable or borne by (A) Company pursuant to any indemnification, compensation or reimbursement provision of any other Operative Document or any Pass Through Document or (B) a Person other than Company pursuant to any provision of any Operative Document or any Pass Through Document;
(x) any Claim to the extent such Claim is an ordinary and usual operating or overhead expense or not an out-of-pocket expense actually incurred;
(xi) any Claim to the extent such Claim is incurred on account of or asserted as a result of (A) any “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code or any foreign, federal, state or local law which is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code (“Similar Law”) or (B) any breach of fiduciary duty under ERISA;
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(xii) any Claim to the extent such Claim is attributable to one or more of the other aircraft financed through the offering of Pass Through Certificates (in the event of doubt, any Claim shall be allocated between the Aircraft and such other aircraft in the same proportion that the then outstanding Equipment Notes bear to the then outstanding equipment notes issued with respect to the other aircraft and held by Pass Through Trustees);
(xiii) any Claim to the extent such Claim is attributable to any amount which any Indemnitee expressly agrees shall not be paid by, borne by, or reimbursed by Company;
(xiv) any Claim by an Indemnitee related to the status of such Indemnitee as a passenger or shipper on any of Company’s aircraft or as a party to a marketing or promotional or other commercial agreement with Company unrelated to the transactions contemplated by the Operative Documents; and
(xv) any Claim to the extent such Claim is attributable to the offer or sale by an Indemnitee (or any member of such Indemnitee’s Related Indemnitee Group) of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or any similar interest, in violation of the Securities Act or other applicable federal, state or foreign securities laws (other than any thereof caused by acts or omissions of Company or any of its affiliates).
(e) Insured Claims. In the case of any Claim indemnified by Company hereunder that is covered by a policy of insurance maintained by Company, each Indemnitee agrees to cooperate, at Company’s expense, with the insurers in the exercise of their rights to investigate, defend and compromise such Claim.
(f) Claims Procedure. An Indemnitee shall promptly notify Company of any Claim as to which indemnification is sought. The failure to provide such prompt notice shall not release Company from any of its obligations to indemnify hereunder except to the extent that Company is prejudiced by such failure or Company’s indemnification obligations are increased as a result of such failure (in which event Company shall not be responsible for such additional indemnification obligations). Such Indemnitee shall promptly submit to Company all additional information in such Indemnitee’s possession to substantiate such Claim as Company reasonably requests. Subject to the rights of Company’s insurers, Company may, at its sole cost and expense, investigate any Claim, and may in its sole discretion defend or compromise any Claim. At Company’s expense, any Indemnitee shall cooperate with all reasonable requests of Company in connection therewith. Such Indemnitee shall not enter into a settlement or other compromise with respect to any Claim without the prior written consent of Company, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Claim. Where Company or its insurers undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Claim shall be indemnified hereunder unless such fees or expenses were incurred at the written request of Company or such insurers. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense in any judicial proceeding controlled by Company pursuant to the preceding provisions; provided that such party’s participation does not, in
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the opinion of outside counsel appointed by Company or its insurers to conduct such proceedings, interfere with such control. Such participation shall not constitute a waiver of the indemnification provided in this Section 4.02. Notwithstanding anything to the contrary contained herein, Company shall not under any circumstances be liable for the fees and expenses of more than one counsel for all Indemnitees with respect to any one Claim. Notwithstanding anything to the contrary contained herein, an Indemnitee shall not under any circumstances be required or deemed to be required to contest any Claim or to assume responsibility for or control of any judicial proceeding with respect thereto. Company will provide the relevant Indemnitee with such information not within the control of such Indemnitee, as is in Company’s control or is reasonably available to Company, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its obligations under this Section. If an Indemnitee is not a party to this Agreement, Company may require such Indemnitee to agree in writing to the terms of this Section 4.02 and Section 7.10 of this Agreement prior to making any payment to such Indemnitee under this Section 4.02.
(g) Subrogation. To the extent that a Claim is in fact paid in full by Company or its insurer, Company or such insurer (as the case may be) shall, without any further action, be subrogated to the rights and remedies of the Indemnitee on whose behalf such Claim was paid with respect to the transaction or event giving rise to such Claim. Such Indemnitee shall give such further assurances or agreements and shall cooperate with Company or such insurer, as the case may be, to permit Company or such insurer to pursue such rights and remedies, if any, to the extent reasonably requested by Company. So long as no Event of Default has occurred and is continuing, if an Indemnitee receives any payment, in whole or in part, from any party other than Company or its insurers with respect to any Claim paid by Company or its insurers, it shall promptly pay over to Company the amount received (but not an amount in excess of the amount Company or any of its insurers has paid in respect of such Claim). Any amount referred to in the preceding sentence that is payable to Company shall not be paid to Company, or, if it has been previously paid directly to Company, shall not be retained by Company, if at the time of such payment an Event of Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under the Operative Documents. If Company agrees, such amount payable shall be applied against Company’s obligations thereunder when and as they become due and payable. At such time as such Event of Default is no longer continuing, such amount, to the extent not previously so applied against Company’s obligations, shall be paid to Company.
(h) No Guaranty. Nothing set forth in this Section 4.02 constitutes a guarantee by Company that the Aircraft at any time will have any particular value, useful life or residual value.
(i) Payments; Interest. Any amount payable to any Indemnitee on account of a Claim shall be paid within 30 days after receipt by Company of a written demand therefor from such Indemnitee accompanied by a written statement describing in reasonable detail the Claims that are the subject of and basis for such indemnity and the computation of the amount payable. Any payments made pursuant to this Section 4.02
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directly to an Indemnitee or to Company, as the case may be, shall be made in immediately available funds at such bank or to such account as is specified by the payee in written directions to the payor or, if no such directions are given, by check of the payor payable to the order of the payee and mailed to the payee by certified mail, return receipt requested, postage prepaid to its address referred to in Section 7.01. To the extent permitted by applicable law, interest at the Past Due Rate shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 4.02 until the same is paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due.
(j) Tax Deduction or Credit. If, by reason of any payment made to or for the account of any Indemnitee by Company, or by reason of any Claim of any Indemnitee paid or indemnified against by Company, in each case pursuant to Section 4.02, such Indemnitee realizes a Tax deduction or credit not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Company an amount equal to the sum of (i) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (ii) the actual reduction in Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided that the amount payable by such Indemnitee pursuant to this sentence shall not exceed the sum of all amounts previously paid by Company to such Indemnitee pursuant to this Section 4.02; provided, further, that any such excess shall be carried forward and applied to reduce pro tanto any subsequent obligations of Company to make payments to such Indemnitee pursuant to Section 4.02. If such Tax deduction or credit is subsequently disallowed or lost, upon written notice from the Indemnitee Company shall promptly repay all amounts paid to it pursuant to this Section 4.02(j) in respect of such disallowed or lost deduction or credit. If, at the time an amount would otherwise be payable to Company under this Section 4.02(j), any Event of Default shall have occurred and be continuing, such amount shall be held by the relevant Indemnitee as security for the obligations of Company under the Operative Documents. At such time as no Event of Default is continuing, such amount or portion thereof shall be applied to offset Company’s outstanding obligations under the Operative Documents and any remaining amount after such application shall be paid to Company.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF U.S. BANK
Section 5.01. Representations, Warranties and Covenants of U.S. Bank. U.S. Bank, generally, and as each of Loan Trustee, Subordination Agent and Pass Through Trustee as it relates to it, represents, warrants and covenants that:
(a) Organization; Authority. U.S. Bank is a national banking association duly organized and validly existing in good standing under the laws of the United States, is eligible to be Loan Trustee under Section 8.01(a) of the Indenture, will promptly comply with Section 8.01(a) of the Indenture and has full power, authority and legal right to enter into and perform its obligations under each of the Operative Documents and the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass
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Through Trustee is a party and, in its capacity as Loan Trustee and Pass Through Trustee, respectively, to authenticate the Equipment Notes and the Pass Through Certificates, respectively. U.S. Bank is qualified to act as Loan Trustee under Section 8.01(c) of the Indenture. U.S. Bank is a Citizen of the United States (without the use of a voting trust agreement), and will resign as Loan Trustee under the Indenture promptly after it obtains actual knowledge that it has ceased to be such a Citizen of the United States.
(b) Due Authorization; No Violations. The execution, delivery and performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, each of the other Operative Documents and each of the Pass Through Documents to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, the performance by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of its obligations thereunder and the consummation on the Closing Date or the Issuance Date, as the case may be, of the transactions contemplated thereby, and the authentication of the Equipment Notes and the Pass Through Certificates, respectively, to be delivered on the Closing Date or the Issuance Date, as the case may be: (i) have been duly authorized by all necessary action on the part of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee, as the case may be, (ii) do not violate any law or regulation of the United States or of the state of the United States in which U.S. Bank is located and which governs the banking and trust powers of U.S. Bank or any order, writ, judgment or decree of any court, arbitrator or governmental authority applicable to U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee or any of their assets, (iii) will not violate any provision of the articles of association or by-laws of U.S. Bank and (iv) will not violate any provision of, or constitute a default under, any mortgage, indenture, contract, agreement or undertaking to which any of U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party or by which any of them or their respective properties may be bound or affected.
(c) Approvals. Neither the execution and delivery by U.S. Bank, individually or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee, as the case may be, of this Agreement, any other Operative Document or any Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party, nor the consummation by U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee of any of the transactions contemplated hereby or thereby, requires the authorization, consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, (i) any governmental authority or agency of the United States or the state of the United States where U.S. Bank is located and regulating the banking and trust powers of U.S. Bank or (ii) any trustee or other holder of any debt of U.S. Bank.
(d) Valid and Binding Agreements. This Agreement, each other Operative Document and each Pass Through Document to which U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee is a party have been duly executed and delivered by U.S. Bank, individually and in its capacity as Loan Trustee, Subordination
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Agent or Pass Through Trustee, as the case may be, and constitute the legal, valid and binding obligations of U.S. Bank, Loan Trustee, Subordination Agent and such Pass Through Trustee, as the case may be, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and by general principles of equity.
(e) No Loan Trustee Liens or Other Party Liens. It unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Loan Trustee Lien or Other Party Lien attributable to it, and it agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Lien.
(f) Intercreditor Agreement. The Equipment Notes to be issued to Subordination Agent pursuant hereto are being acquired by it to be held under the Intercreditor Agreement.
(g) Funds Transfer Fees. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees that it will not impose any lifting charge, cable charge, remittance charge or any other charge or fee on any transfer by Company of funds to, through or by U.S. Bank, Loan Trustee, Subordination Agent or such Pass Through Trustee pursuant to this Agreement, any other Operative Document or any Pass Through Document, except as may be otherwise agreed to in writing by Company.
(h) Confidentiality. Each of U.S. Bank, Loan Trustee, Subordination Agent and each Pass Through Trustee agrees to be bound by the terms of Section 10.16 of the Indenture.
(i) Certain Tax Matters. There are no Taxes payable by (i) U.S. Bank, Loan Trustee or Subordination Agent imposed by the Commonwealth of Massachusetts or any political subdivision or taxing authority thereof, or (ii) U.S. Bank or Pass Through Trustees imposed by the State of Delaware or any political subdivision or taxing authority thereof, in connection with the execution, delivery or performance by U.S. Bank, Loan Trustee or Subordination Agent on the one hand, or U.S. Bank or any Pass Through Trustee, on the other, of any Operative Document or any Pass Through Document (other than franchise or other Taxes based on or measured by any fees or compensation received by any such Person for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents), and there are no Taxes payable by any Pass Through Trustee imposed by the State of Delaware or any political subdivision thereof in connection with the acquisition, possession or ownership by such Pass Through Trustee of any of the Equipment Notes (other than franchise or other Taxes based on or measured by any fees or compensation received by such Pass Through Trustee for services rendered in connection with the transactions contemplated by the Operative Documents or the Pass Through Documents) and, assuming that the Pass Through Trusts will not be taxable for Federal income tax purposes as corporations, but, rather, will be characterized for such purposes as grantor trusts or partnerships, the Pass Through Trusts will not be subject to any Taxes imposed by the State of Delaware or any political subdivision thereof.
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(j) Limitation on Situs of Activities. Except with the consent of Company, which shall not be unreasonably withheld: (i) U.S. Bank will act as Pass Through Trustee solely through its offices within the State of Delaware, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states; and (ii) U.S. Bank will act as Subordination Agent and Loan Trustee solely through its offices within the Commonwealth of Massachusetts, except for such services as may be performed for it by independent agents in the ordinary course of business, but not directly by it, in other states.
(k) No Proceedings. There are no pending or, to its knowledge, threatened actions or proceedings against U.S. Bank, Loan Trustee, Subordination Agent or any 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 U.S. Bank, Loan Trustee, Subordination Agent or any Pass Through Trustee to perform its obligations under any Operative Document or any Pass Through Document.
(l) Other Representations. The representations and warranties contained in Section 7.15 of the Basic Pass Through Trust Agreement and Section 7.04 of each Trust Supplement are true, complete and correct as of the Closing Date.
ARTICLE 6
OTHER COVENANTS AND AGREEMENTS
Section 6.01. Other Agreements. (a) Fees and Expenses. Company agrees promptly to pay (without duplication of any other obligation Company may have to pay such amounts) (1) the initial and annual fees and (to the extent Loan Trustee is entitled to be reimbursed for its reasonable expenses) the reasonable expenses of Loan Trustee in connection with the transactions contemplated hereby and (2) the following expenses incurred by Loan Trustee, Subordination Agent and Pass Through Trustees in connection with the negotiation, preparation, execution and delivery of this Agreement, the other Operative Documents and the other documents or instruments referred to herein or therein:
(i) the reasonable fees, expenses and disbursements of (A) Shipman & Goodwin LLP, special counsel for Loan Trustee, Subordination Agent and Pass Through Trustees, (B) Richards, Layton & Finger, P.A., special Delaware counsel for Pass Through Trustees and Company, and (C) Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma, in each case to the extent actually incurred; and
(ii) all reasonable expenses actually incurred in connection with printing and document production or reproduction expenses, and in connection with the filing of Uniform Commercial Code financing statements.
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(b) Continuing Registration and Re-Registration. Loan Trustee, Noteholders, Subordination Agent and each Pass Through Trustee agree to execute and deliver, at Company’s expense, all such documents and consents as Company reasonably requests for the purpose of continuing the registration of the Aircraft at the FAA in Company’s name or for the purpose of registering or maintaining any registration on the International Registry in respect of the Aircraft. In addition, each of Loan Trustee, Subordination Agent, each Pass Through Trustee and any other Noteholder agrees, for the benefit of Company, to cooperate with Company in effecting any foreign registration of the Aircraft pursuant to Section 7.02(e) of the Indenture; provided that prior to any such change in the country of registry of the Aircraft the conditions set forth in Section 7.02(e) of the Indenture are met to the reasonable satisfaction of, or waived by, Loan Trustee.
(c) Quiet Enjoyment. Each of U.S. Bank, Loan Trustee, Subordination Agent, each Pass Through Trustee, any other Noteholder, Class AA Liquidity Provider (by having entered into the Class AA Liquidity Facility) and Class A Liquidity Provider (by having entered into the Class A Liquidity Facility) agrees that, unless an Event of Default shall have occurred and be continuing, it shall not (and shall not permit any Affiliate or other Person claiming by, through or under it to) take any action contrary to, or otherwise in any way interfere with or disturb (and then only in accordance with the Indenture), the quiet enjoyment of the use and possession of the Aircraft, the Airframe, any Engine or any Part by Company or any transferee of any interest in any thereof permitted under the Indenture.
(d) No Noteholder Liens. Each Noteholder, including, without limitation, Subordination Agent and each Pass Through Trustee, unconditionally agrees with and for the benefit of the parties to this Agreement that it will not directly or indirectly create, incur, assume or suffer to exist any Noteholder Liens, and such Noteholder agrees that it will, at its own cost and expense, promptly take such action as may be necessary to discharge and satisfy in full any such Noteholder Lien; and each Noteholder hereby agrees to indemnify, protect, defend and hold harmless each Indemnitee and Company against claims in any way resulting from or arising out of a breach by it of its obligations under this Section 6.01(d).
(e) Agreement to be Bound; Transfer. By its acceptance of its Equipment Notes, each Noteholder unconditionally agrees for the benefit of Company and Loan Trustee: (i) to be bound by and to perform and comply with all of the terms of such Equipment Notes, the Indenture and this Agreement applicable to such Noteholder and (ii) that it will not transfer any Equipment Note (or any part thereof) to any entity unless such transfer complies with and does not violate the Transportation Code, the Securities Act (or require registration under such Act) or any other law (including, without limitation, ERISA, the Code and Similar Law), and does not create a relationship that would be in violation thereof, or result in a “prohibited transaction” under Section 406 of ERISA, Section 4975 of the Code or Similar Law or require qualification of an indenture under the Trust Indenture Act.
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(f) Tax Returns. Each Pass Through Trustee shall file any Tax returns required to be filed by the related Pass Through Trust and the Company shall pay the Applicable Portion of any expenses relating thereto. The Company shall be responsible for the Applicable Portion of any interest or penalties related to any Pass Through Trustee’s failure to file any such Tax returns required to be filed by the relevant Pass Through Trust, except to the extent that such failure is attributable to the gross negligence or willful misconduct of such Pass Through Trustee. For purposes of this Section 6.01(f), the “Applicable Portion” of any amount shall equal such amount multiplied by a fraction, the numerator of which shall be the sum of the then outstanding aggregate principal amount of the Equipment Notes held by the relevant Pass Through Trustee, and the denominator of which shall be the sum of the outstanding aggregate principal amount of all “Equipment Notes” issued under each of the “Indentures” (in each case as defined in the Intercreditor Agreement) held by such Pass Through Trustee.
(g) No Petition. Each of Company, Loan Trustee, each Pass Through Trustee, Subordination Agent and any other Noteholder covenants that (i) until one year and one day after the Series AA Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class AA Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class AA Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class AA Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class AA Pass Through Trust, (ii) until one year and one day after the Series A Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the Class A Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against the Class A Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Class A Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Class A Pass Through Trust, and (iii) if any Additional Series Equipment Notes of any Series shall have been issued, until one year and one day after such Additional Series Equipment Notes have been paid in full, it shall not acquiesce, petition or otherwise invoke or cause or join in invoking or causing the related Additional Series Pass Through Trust or any other Person to invoke the process of any governmental authority for the purpose of commencing or sustaining a case (whether voluntary or not) against such Additional Series Pass Through Trust under any bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Additional Series Pass Through Trust or any substantial part of its property or ordering the winding-up or liquidation of the affairs of such Additional Series Pass Through Trust.
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Section 6.02. Certain Covenants of Company. Company covenants and agrees with Loan Trustee as follows:
(a) Further Assurances. On and after the Closing, Company will cause to be done, executed, acknowledged and delivered such further acts, conveyances and assurances as Loan Trustee reasonably requests for accomplishing the purposes of this Agreement and the other Operative Documents; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
(b) Filing and Recordation of the Indenture; Registration of International Interests. Company, at its expense, will cause the Indenture (with the Indenture Supplement covering the Aircraft attached) to be promptly filed and recorded, or filed for recording, with the FAA to the extent permitted under the Transportation Code and the rules and regulations of the FAA thereunder. In addition, on or prior to the Closing Date, Company will cause the registration of the International Interests (or Prospective International Interests) created under the Indenture (as supplemented by the Indenture Supplement with respect to the Aircraft) to be effected (or shall be in the process of being so effected) on the International Registry in accordance with the Cape Town Treaty, and shall, as and to the extent applicable, consent to such registration upon the issuance of a request for such consent by the International Registry.
(c) Maintenance of Filings. Company, at its expense, will take, or cause to be taken, such action with respect to the recording, filing, re-recording and refiling of the Indenture and any financing statements or other instruments as are necessary to maintain, so long as the Indenture is in effect, the perfection of the security interests created by the Indenture or will furnish Loan 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 Loan Trustee to take such action. In addition, Company will pay any and all recording, stamp and other similar Taxes payable in the United States, and in any other jurisdiction where the Aircraft is registered, in connection with the execution, delivery, recording, filing, re-recording and refiling of the Indenture or any such financing statements or other instruments. Company will notify Loan Trustee of any change in its jurisdiction of organization (as such term is used in Article 9 of the Uniform Commercial Code as in effect in the State of Delaware) promptly after making such change or in any event within the period of time necessary under applicable law to prevent the lapse of perfection (absent refiling) of financing statements filed under the Operative Documents.
(d) Maintenance of Corporate Existence. Company shall at all times maintain its corporate existence except as permitted by Section 6.02(e).
(e) Merger; Consolidation; Transfer of Substantially All Assets. Company shall not consolidate with or merge into any other Person or convey, transfer or lease substantially all of its assets as an entirety to any Person, unless:
(i) the successor or transferee entity shall, if and to the extent required under Section 1110 in order that Loan Trustee continues to be entitled to any benefits of Section 1110 with respect to the Aircraft, be a Citizen of the United States and a Certificated Air Carrier and shall execute and deliver to Loan Trustee an agreement containing the express assumption by such successor or transferee entity of the due and punctual performance and observance of each covenant and condition of the Operative Documents to which Company is a party to be performed or observed by Company;
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(ii) if the Aircraft is, at the time, registered with the FAA or such Person is located in a “Contracting State” (as such term is used in the Cape Town Treaty), such Person makes such filings and recordings with the FAA pursuant to the Transportation Code and registration under the Cape Town Treaty, or if the Aircraft is, at the time, not registered with the FAA, such Person makes such filings and recordings with the applicable aviation authority, as are necessary to evidence such consolidation, merger, conveyance, transfer or lease;
(iii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing; and
(iv) Company shall deliver to Loan Trustee and each Liquidity Provider a certificate signed by a Responsible Officer of Company stating that such consolidation, merger, conveyance, transfer or lease and the assumption agreement mentioned in clause (i) above comply with this Section 6.02(e) and that all conditions precedent herein relating to such transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease of substantially all of the assets of Company as an entirety in accordance with this Section 6.02(e), the successor Person formed by such consolidation or into which Company 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, Company under this Agreement and the other Operative Documents with the same effect as if such successor Person had been named as Company herein.
(f) Section 1110. Company shall remain a Certificated Air Carrier for as long as and to the extent required under Section 1110 in order that Loan Trustee shall be entitled to any of the benefits of Section 1110 with respect to the Aircraft.
(g) Additional Information. Promptly after the occurrence of a Triggering Event or an Indenture Event of Default resulting from the failure of Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Event of Default shall be continuing, Company will, at the Subordination Agent’s request from time to time but in any event no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the following information with respect to the Aircraft if then subject to the lien of the Indenture: (A) whether the Aircraft is currently in service or parked in storage, (B) the maintenance status of the Aircraft, and (C) the location of the Engines. As used in this Section 6.02(g), the terms “Triggering Event”, “Indenture Event of Default” and “Regular Distribution Date” shall have the respective meanings set forth in the Intercreditor Agreement.
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ARTICLE 7
MISCELLANEOUS
Section 7.01. Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices required or permitted under the terms and provisions of this Agreement shall be in English and in writing, and any such notice may be given by United States mail, courier service or facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class United States mail, and if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233
if to any Pass Through Trustee, addressed to:
U.S. Bank Trust National Association
300 Delaware Avenue, 9th Floor
Mail Code EX-DE-WDAW
Wilmington, Delaware 19801
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (302) 576-3703
Facsimile: (302) 576-3717
with a copy to:
U.S. Bank Trust National Association
One Federal Street
EX-MA-FED, 3rd Floor
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Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
if to U.S. Bank, Loan Trustee or Subordination Agent, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683
or if to any subsequent Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07 of the Indenture.
Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 7.01.
Section 7.02. Survival of Representations, Warranties, Indemnities, Covenants and Agreements. The indemnities set forth in Section 4.02 of this Agreement and the confidentiality obligations set forth in Section 5.01(h) of this Agreement shall survive the making of the loans, the transfer of any interest by any Noteholder of its Equipment Note and the expiration or termination of any Operative Documents (in the case of the indemnities, to the extent arising out of acts or events occurring prior to such expiration or termination).
Section 7.03. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 7.04. Severability. To the extent permitted by applicable law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.05. No Oral Modifications or Continuing Waivers; Consents. Subject to Section 9.03 of the Indenture, no terms or provisions of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge or termination is sought. No such change, waiver, discharge or termination shall be effective unless a signed copy thereof is delivered to Loan Trustee.
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Section 7.06. Effect of Headings and Table of Contents. The headings of the various Articles and Sections herein and in the Table of Contents are for convenience of reference only and do not define or limit any of the terms or provisions hereof.
Section 7.07. Successors and Assigns. All covenants, agreements, representations and warranties in this Agreement by Company, by U.S. Bank, individually or as Loan Trustee, Subordination Agent or Pass Through Trustee, or by any Noteholder, shall bind and inure to the benefit of and be enforceable by Company, and subject to the terms of Section 6.02(e), its successors and permitted assigns, each Pass Through Trustee and any successor or other trustee under the Pass Through Trust Agreement to which it is a party, Subordination Agent and its successor under the Intercreditor Agreement and Loan Trustee and its successor under the Indenture, whether so expressed or not.
Section 7.08. Benefits of Agreement. Subject to the next sentence, nothing in this Agreement, express or implied, gives to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement, except as expressly provided herein. Company agrees and acknowledges that each Liquidity Provider, and each separate or additional trustee appointed pursuant to Section 8.02 of the Indenture shall be third party beneficiaries of the covenants and agreements of Company with respect to the indemnities contained in Section 4.02 and may rely on the covenants and agreements of Company with respect to such indemnities to the same extent as if the covenants and agreements of Company with respect to such indemnities were made to such Liquidity Provider or such trustee, as the case may be, directly. U.S. Bank generally, and each of the Loan Trustee, the Subordination Agent and each Pass Through Trustee, insofar as relating to each such Person, agrees and acknowledges that each Liquidity Provider is a third party beneficiary of the representations and warranties set forth in Section 5.01, and that such Liquidity Provider may rely on such representations and warranties to the same extent as if such representations and warranties were made to such Liquidity Provider directly.
Section 7.09. Counterparts. This Agreement may be executed in any number of counterparts. Each of the parties hereto shall not be required to execute the same counterpart. Each counterpart of this Agreement including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Agreement, but all of such counterparts shall together constitute one instrument.
Section 7.10. Submission to Jurisdiction. Each of the parties hereto, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
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Section 7.11. Further Assurances. Each party hereto shall execute, acknowledge and deliver or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, including, without limitation, making or consenting to registrations (or discharges thereof, as appropriate) with respect to the Indenture on the International Registry and appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to make or consent to any registrations (or discharges thereof, as appropriate) on the International Registry with respect to the Airframe or any Engine, in any case, as any other party hereto shall reasonably request in connection with the administration of, or to carry out more effectively the purposes of, or to better assure and confirm into such other party the rights and benefits to be provided under this Agreement, the other Operative Documents and the Pass Through Documents.
Section 7.12. Section 1110. It is the intention of each of Company, Noteholders (such intention being evidenced by each of their acceptance of an Equipment Note), Loan Trustee and other parties hereto that the security interest created by the Indenture, to the fullest extent available under applicable law, entitles the Loan Trustee, on behalf of the Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft, Airframe, Engines and Parts.
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IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Pass Through Trustee under each of the Pass Through Trust Agreements | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Subordination Agent | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, as Loan Trustee | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, in its individual capacity as set forth herein | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page for Participation Agreement (N822NW)
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SCHEDULE I to
PARTICIPATION AGREEMENT
EQUIPMENT NOTES,
PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS
| Purchaser |
Description of Equipment Notes |
Maturity |
Interest Rate |
Original Principal
Amount |
||||||||||
|
Delta Air Lines Pass Through Trust 2020-1AA |
Series 2020-1AA - N822NW Equipment Note |
June 10, 2027 | 2.000 | % | $ | 41,175,000.00 | ||||||||
|
Delta Air Lines Pass Through Trust 2020-1A |
Series 2020-1A - N822NW Equipment Note |
June 10, 2027 | 2.500 | % | $ | 10,559,000.00 | ||||||||
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SCHEDULE II to
PARTICIPATION AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1AA.
Trust Supplement No. 2020-1A, dated as of the Issuance Date, between Company and Pass Through Trustee in respect of Delta Air Lines Pass Through Trust 2020-1A.
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EXHIBIT A-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
COUNSEL FOR COMPANY
[Attached.]
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EXHIBIT A-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR COMPANY
[Attached.]
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EXHIBIT B to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR LOAN TRUSTEE, PASS THROUGH TRUSTEES,
SUBORDINATION AGENT AND U.S. BANK
[Attached.]
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EXHIBIT C to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL FAA COUNSEL
[Attached.]
Participation Agreement (2020-1 EETC)
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EXHIBIT D to
PARTICIPATION AGREEMENT
FORM OF AIRFRAME WARRANTIES AGREEMENT
[Attached.]
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EXHIBIT E-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL DELAWARE TAX COUNSEL FOR PASS THROUGH TRUSTEES
[Attached.]
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EXHIBIT E-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL DELAWARE UCC COUNSEL FOR COMPANY
[Attached.]
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Annex A to
Participation Agreement and
Indenture and Security Agreement
(N822NW)
DEFINITIONS
(N822NW)
“Additional Insureds” has the meaning specified in Section 7.06(a) of the Indenture.
“Additional Series” or “Additional Series Equipment Notes” means Equipment Notes issued under the Indenture and designated as a Series (other than “Series AA” or “Series A”) thereunder in the principal amounts and maturities and bearing interest as specified in Schedule I to the Indenture amended at the time of original issuance of such Additional Series under the heading for such Series.
“Additional Series Pass Through Certificates” means the pass through certificates issued by any Additional Series Pass Through Trust.
“Additional Series Pass Through Trust” means a grantor trust created to facilitate the issuance and sale of pass through certificates in connection with the issuance of any Additional Series Equipment Notes.
“Additional Series Pass Through Trust Agreement” means a Trust Supplement entered into in connection with the creation of an Additional Series Pass Through Trust, together with the Basic Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Additional Series Pass Through Trustee” means, with respect to any Additional Series Pass Through Trust, the trustee under the Additional Series Pass Through Trust Agreement for such Additional Series Pass Through Trust.
“Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the purposes of this definition, “control” (including “controlled by” and “under common control with”) shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether through the ownership of voting securities or by contract or otherwise. In no event shall U.S. Bank be deemed to be an Affiliate of Loan Trustee or vice versa.
“After-Tax Basis” means that indemnity and compensation payments required to be made on such basis will be supplemented by the Person paying the base amount by that amount which, when added to such base amount, and after deduction of all Federal, state, local and foreign Taxes required to be paid by or on behalf of the payee with respect of the receipt or realization of the base amount and any such supplemental amounts, and after consideration of any current tax savings of such payee resulting by way of any deduction, credit or other tax benefit actually and currently realized that is attributable to such base amount or Tax, shall net such payee the full amount of such base amount.
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“Agreement” and “Participation Agreement” mean that certain Participation Agreement (N822NW), dated on or before the Closing Date, among Company, U.S. Bank, Pass Through Trustee under each Pass Through Trust Agreement, Subordination Agent and Loan Trustee, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Aircraft” means the Airframe (or any Substitute Airframe or Replacement Airframe substituted therefor pursuant to Section 7.04 or Section 7.05, respectively, of the Indenture) together with the two Engines described in the Indenture Supplement originally executed and delivered under the Indenture (or any Replacement Engine that may from time to time be substituted for any of such Engines pursuant to Section 7.04 or Section 7.05 of the Indenture), whether or not any of such initial or substituted Engines is from time to time installed on such Airframe or installed on any other airframe or on any other aircraft. The term “Aircraft” includes any Replacement Aircraft.
“Aircraft Protocol” means the official English language text of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements, and revisions thereto (and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Aircraft Protocol with respect to that country, the Aircraft Protocol as in effect in such country, unless otherwise indicated).
“Airframe” means (a) the Airbus A330-302 (generic manufacturer and model Airbus A330) aircraft (except (i) the Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (ii) Excluded Equipment) specified on Annex A to the Indenture Supplement originally executed and delivered under the Indenture and (b) any and all related Parts. The term “Airframe” includes any Substitute Airframe or Replacement Airframe that is substituted for the Airframe pursuant to Section 7.04 or Section 7.05, respectively, of the Indenture. At such time as any Substitute Airframe or Replacement Airframe is so substituted and the Airframe for which such substitution is made is released from the Lien of the Indenture, such replaced Airframe shall cease to be an Airframe under the Indenture.
“Airframe Warranties Agreement” means the Airframe Warranties Agreement, dated November 14, 2016, substantially in the form of Exhibit D to the Participation Agreement, executed by the Manufacturer and as supplemented, modified and amended by the Replacement Controlling Party Notice, substantially in the form of Schedule 5 thereunder, dated the Closing Date and executed by the Company as “Outgoing Controlling Party” and the Loan Trustee as “New Controlling Party” and acknowledged and agreed by the Manufacturer.
“Appraisers” has the meaning set forth in the Intercreditor Agreement.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 United States Code §§101 et seq., as amended from time to time, or any successor statutes thereto.
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“Basic Pass Through Trust Agreement” means that certain Pass Through Trust Agreement, dated as of November 16, 2000, between Company and U.S. Bank (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association), as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms (but does not include any Trust Supplement).
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to close in New York, New York, Atlanta, Georgia, Boston, Massachusetts, Wilmington, Delaware or, if different from the foregoing, the city and state in which Loan Trustee, any Pass Through Trustee or Subordination Agent maintains its Corporate Trust Office or receives and disburses funds.
“Cape Town Convention” means the official English language text of the Convention on International Interests in Mobile Equipment, adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements, and revisions thereto (and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape Town Convention with respect to that country, the Cape Town Convention as in effect in such country, unless otherwise indicated).
“Cape Town Treaty” means, collectively, the official English language text of (a) the Convention on International Interests in Mobile Equipment, and (b) the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, in each case adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape Town Treaty with respect to that country, the Cape Town Treaty as in effect in such country, unless otherwise indicated, and (c) all rules and regulations adopted pursuant thereto and, in the case of each of the foregoing described in clauses (a) through (c), all amendments, supplements, and revisions thereto.
“Certificated Air Carrier” means a Citizen of the United States holding an air carrier operating certificate issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United States Code for aircraft capable of carrying ten or more individuals or 6,000 pounds or more of cargo or that otherwise is certified or registered to the extent required to fall within the purview of Section 1110.
“Citizen of the United States” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“Claim” has the meaning specified in Section 4.02(a) of the Participation Agreement.
“Class AA Certificates” means Pass Through Certificates issued by the Class AA Pass Through Trust.
“Class AA Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Class AA Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
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“Class AA Pass Through Trust” means the Delta Air Lines Pass Through Trust 2020-1AA created pursuant to the Basic Pass Through Trust Agreement, as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and U.S. Bank, as Class AA Trustee.
“Class AA Trustee” means the trustee for the Class AA Pass Through Trust.
“Class A Certificates” means Pass Through Certificates issued by the Class A Pass Through Trust.
“Class A Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Class A Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
“Class A Pass Through Trust” means the Delta Air Lines Pass Through Trust 2020-1A created pursuant to the Basic Pass Through Trust Agreement, as supplemented by Trust Supplement No. 2020-1A, dated as of the Issuance Date, between Company and U.S. Bank, as Class A Trustee.
“Class A Trustee” means the trustee for the Class A Pass Through Trust.
“Closing” has the meaning specified in Section 2.03 of the Participation Agreement.
“Closing Date” means the Issuance Date.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” has the meaning specified in the granting clause of the Indenture.
“Company” means Delta Air Lines, Inc., and its successors and permitted assigns.
“Compulsory Acquisition” means requisition of title or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft, the Airframe or any Engine by any government that results in the loss of title or use of the Aircraft, the Airframe or any Engine by Company (or any Permitted Lessee) for a period in excess of 180 consecutive days, but shall exclude requisition for use or hire not involving requisition of title.
“Confidential Information” has the meaning specified in Section 10.16 of the Indenture.
“Controlling Party” has the meaning specified in Section 2.06 of the Intercreditor Agreement.
“Corporate Trust Office” has the meaning specified in Section 1.01 of the Intercreditor Agreement.
“CRAF Program” means the Civil Reserve Air Fleet Program authorized under 10 U.S.C. Section 9511 et seq. or any similar or substitute program under the laws of the United States.
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“Debt Rate” means (i) with respect to any Series of Equipment Notes, the rate per annum specified for the applicable Series as such in Schedule I to the Indenture (as amended, in the case of any Series of Additional Series Equipment Notes, new Series A Equipment Notes or new Additional Series Equipment Notes of any Series issued pursuant to Section 2.02 of the Indenture, at the time of issuance of such Series), and (ii) for any other purpose, with respect to any period, the weighted average interest rate per annum during such period borne by the outstanding Equipment Notes, excluding in each case any interest payable at the Past Due Rate.
“Defaulted Operative Indenture” means any Operative Indenture (the terms “Event of Default”, “Equipment Notes” and “Payment Default” used in this definition have the meanings specified therefor in such Operative Indenture) with respect to which (i) a Payment Default has occurred and is continuing or an Event of Default described in Section 4.01(a) of such Operative Indenture has occurred and is continuing or (ii) an Event of Default other than an Event of Default described in Section 4.01(a) of such Operative Indenture has occurred and is continuing and, in any such case, either (x) the Equipment Notes issued thereunder have been accelerated and such acceleration has not been rescinded and annulled in accordance therewith or (y) the loan trustee under such Operative Indenture has given Company a notice of its intention to exercise one or more of the remedies specified in Section 4.02(a) of such Operative Indenture; provided that in the event of a bankruptcy proceeding under the Bankruptcy Code under which Company is a debtor, if and so long as the trustee or the debtor agrees to perform and performs all obligations of Company under such Operative Indenture and the Equipment Notes issued thereunder in accordance with Section 1110(a)(2) of the Bankruptcy Code and cures defaults under such Operative Indenture and Equipment Notes to the extent required by Section 1110(a)(2) of the Bankruptcy Code, such Operative Indenture shall not be a Defaulted Operative Indenture.
“Department of Transportation” means the United States Department of Transportation and any agency or instrumentality of the United States government succeeding to its functions.
“Direction” has the meaning specified in Section 2.16 of the Indenture.
“Dollars” and “$” mean the lawful currency of the United States.
“Eligible Account” means an account established by and with an Eligible Institution at the request of Loan Trustee, which institution agrees, for all purposes of the NY UCC including Article 8 thereof, that (a) such account shall be a “securities account” (as defined in Section 8-501(a) of the NY UCC), (b) such institution is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC), (c) all property (other than cash) credited to such account shall be treated as a “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC), (d) Loan Trustee shall be the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) in respect of such account, (e) it will comply with all entitlement orders issued by Loan Trustee to the exclusion of Company, (f) it will waive or subordinate in favor of Loan Trustee all claims (including, without limitation, claims by way of security interest, lien or right of set-off or right of recoupment), and (g) the “securities intermediary jurisdiction” (under Section 8-110(e) of the NY UCC) shall be the State of New York.
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“Eligible Institution” means the corporate trust department of (a) U.S. Bank or any other Person that becomes a successor Loan Trustee under the Indenture, in each case, acting solely in its capacity as a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC), or (b) a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), which has a Long-Term Rating (or, in each case, if a Long-Term Rating is not available, its Short-Term Rating equivalent) from either Moody’s of at least A3 or its equivalent or S&P of at least A- or its equivalent.
“Engine” means (a) each of the two General Electric CF6-80E1A4 engines (generic manufacturer and model GE CF6-80E) listed by manufacturer’s serial number and further described on Annex A to the Indenture Supplement originally executed and delivered under the Indenture, whether or not from time to time installed on the Airframe or installed on any other airframe or on any other aircraft and (b) any Replacement Engine substituted for an Engine pursuant to Section 7.04 or 7.05 of the Indenture; together in each case with any and all related Parts but excluding Excluded Equipment. At such time as a Replacement Engine is so substituted and the Engine for which substitution is made is released from the Lien of the Indenture, such replaced Engine shall cease to be an Engine under the Indenture.
“Equipment Note” means and includes any equipment notes issued under the Indenture in the form specified in Section 2.01 thereof (as such form may be varied pursuant to the terms of the Indenture) and any Equipment Note issued in exchange therefor or replacement thereof pursuant to Section 2.07 or 2.08 of the Indenture.
“Equipment Note Register” has the meaning specified in Section 2.07 of the Indenture.
“Equipment Note Registrar” has the meaning specified in Section 2.07 of the Indenture.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date of the Participation Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“Event of Default” has the meaning specified in Section 4.01 of the Indenture.
“Event of Loss” means, with respect to the Aircraft, Airframe or any Engine, any of the following events with respect to such property:
(a) the loss of such property or of the use thereof due to destruction, damage beyond repair or rendition of such property permanently unfit for normal use for any reason whatsoever;
(b) any damage to such property which results in an insurance settlement with respect to such property on the basis of a total loss, a compromised total loss or a constructive total loss;
(c) the theft, hijacking or disappearance of such property for a period in excess of 180 consecutive days;
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(d) the requisition for use or hire of such property by any government (other than a requisition for use or hire by a Government or the government of the country of registry of the Aircraft) that results in the loss of possession of such property by Company (or any Permitted Lessee) for a period in excess of 12 consecutive months;
(e) the operation or location of the Aircraft, while under requisition for use by any government, in any area excluded from coverage by any insurance policy in effect with respect to the Aircraft required by the terms of Section 7.06 of the Indenture, unless Company shall have obtained indemnity or insurance in lieu thereof from such government;
(f) any Compulsory Acquisition;
(g) as a result of any law, rule, regulation, order or other action by the FAA or other government of the country of registry, the use of the Aircraft or Airframe in the normal business of air transportation is prohibited by virtue of a condition affecting all aircraft of the same type for a period of 18 consecutive months, unless Company is diligently carrying forward all steps that are necessary or desirable to permit the normal use of the Aircraft or Airframe or, in any event, if such use is prohibited for a period of three consecutive years; and
(h) with respect to an Engine only, any divestiture of title to or interest in an Engine or any event with respect to an Engine that is deemed to be an Event of Loss with respect to such Engine pursuant to Section 7.02(a)(vii) of the Indenture.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe unless Company elects to substitute a Replacement Airframe pursuant to Section 7.05(a)(i) of the Indenture.
“Excluded Equipment” means (i) defibrillators, enhanced emergency medical kits and other medical equipment, (ii) airphones and other components or systems installed on or affixed to the Airframe that are used to provide individual telecommunications or electronic entertainment to passengers aboard the Aircraft, (iii) galley carts, beverage carts, waste containers, liquor kits, food tray carriers, ice containers, oven inserts, galley inserts, and other branded passenger convenience or service items, (iv) any items, equipment or systems leased by Company or any Permitted Lessee (other than items, equipment, or systems that are leased from Company pursuant to the applicable Lease) or owned by Company or any Permitted Lessee subject to a conditional sales agreement or a security interest (other than the security interest granted under the Indenture), and (v) cargo containers.
“FAA” means the United States Federal Aviation Administration and any agency or instrumentality of the United States government succeeding to its functions.
“FAA Bill of Sale” means collectively, (a) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by Manufacturer or an affiliate of Manufacturer in favor of the Company and recorded with the FAA, (b) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by the Company in favor of U.S. Bank National Association, as Owner Trustee and recorded with the FAA and (c) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by U.S. Bank National Association, as Owner Trustee in favor of the Company and recorded with the FAA.
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“Federal Funds Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by U.S. Bank from three Federal funds brokers of recognized standing selected by it.
“Government” means the government of any of Canada, France, Germany, Japan, The Netherlands, Sweden, Switzerland, the United Kingdom or the United States and any instrumentality or agency thereof.
“Indemnitee” has the meaning specified in Section 4.02(b) of the Participation Agreement.
“Indenture” means that certain Indenture and Security Agreement (N822NW), dated as of the Closing Date, between Company and Loan Trustee, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, including supplementation by an Indenture Supplement pursuant to the Indenture.
“Indenture Indemnitee” means (i) Loan Trustee, (ii) U.S. Bank, (iii) each separate or successor or additional trustee appointed pursuant to Section 8.02 of the Indenture, (iv) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee, Subordination Agent, (v) each Liquidity Provider, (vi) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, and (vii) any of their respective successors and permitted assigns in such capacities, directors, officers, employees, agents and servants. No holder of a Pass Through Certificate in its capacity as such shall be an Indenture Indemnitee.
“Indenture Supplement” means a supplement to the Indenture, substantially in the form of Exhibit A to the Indenture, which particularly describes the Aircraft, and any Substitute Airframe, Replacement Airframe and/or Replacement Engine, included in the property subject to the Lien of the Indenture.
“Insurance Threshold” is the amount set forth as the Insurance Threshold in Exhibit C to the Indenture.
“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the Issuance Date, among Pass Through Trustees, Liquidity Providers and Subordination Agent, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms; provided that, for purposes of any obligations of Company, no amendment, modification or supplement to, or substitution or replacement of, such Intercreditor Agreement shall be effective unless consented to by Company.
“Interests” has the meaning specified in Section 7.06(a) of the Indenture.
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“International Interest” has the meaning ascribed to the defined term “international interest” under the Cape Town Treaty.
“International Registry” means the international registry established pursuant to the Cape Town Treaty.
“Issuance Date” means [ ], 2020.
“Lease” means any lease permitted by the terms of Section 7.02(a) of the Indenture.
“Lien” means any mortgage, pledge, lien, encumbrance, lease, sublease, sub-sublease or security interest.
“Liquidity Facilities” means, collectively, the Class AA Liquidity Facility and the Class A Liquidity Facility.
“Liquidity Providers” means, collectively, Class AA Liquidity Provider and Class A Liquidity Provider.
“Loan Amount” has the meaning specified in Section 7.06(c) of the Indenture.
“Loan Trustee” has the meaning specified in the introductory paragraph of the Indenture.
“Loan Trustee Liens” means any Lien attributable to U.S. Bank or Loan Trustee with respect to the Aircraft, any interest therein or any other portion of the Collateral arising as a result of (i) claims against U.S. Bank or Loan Trustee not related to its interest in the Aircraft or the administration of the Collateral pursuant to the Indenture, (ii) acts of U.S. Bank or Loan Trustee not permitted by, or the failure of U.S. Bank or Loan Trustee to take any action required by, the Operative Documents or the Pass Through Documents, (iii) claims against U.S. Bank or Loan Trustee relating to Taxes or Claims that are excluded from the indemnification provided by Section 4.02 of the Participation Agreement pursuant to said Section 4.02 or (iv) claims against U.S. Bank or Loan Trustee arising out of the transfer by any such party of all or any portion of its interest in the Aircraft, the Collateral, the Operative Documents or the Pass Through Documents, except while an Event of Default is continuing and prior to the time that Loan Trustee has received all amounts due to it pursuant to the Indenture.
“Long-Term Rating” has the meaning specified in the Intercreditor Agreement.
“Loss Payment Date” has the meaning specified in Section 7.05(a) of the Indenture.
“Majority in Interest of Noteholders” means, as of a particular date of determination and subject to Section 2.16 of the Indenture, the holders of at least a majority in aggregate unpaid principal amount of all Equipment Notes outstanding as of such date (excluding any Equipment Notes actually known by Loan Trustee to be held by Company or any Affiliate thereof, it being understood that a Pass Through Trustee shall be considered an Affiliate of Company as long as more than 50% in the aggregate face amount of Pass Through Certificates issued by the corresponding Pass Through Trust are held and able to be voted by Company or an Affiliate of Company or a Pass Through Trustee is otherwise under the control of Company or such Affiliate
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of Company (unless all Equipment Notes then outstanding are held by Company or any Affiliate thereof, including Pass Through Trustees which are considered Affiliates of Company pursuant hereto)); provided that for the purposes of directing any action or casting any vote or giving any consent, waiver or instruction hereunder, any Noteholder of an Equipment Note or Equipment Notes may allocate, in such Noteholder’s sole discretion, any fractional portion of the principal amount of such Equipment Note or Equipment Notes in favor of or in opposition to any such action, vote, consent, waiver or instruction.
“Make-Whole Amount” means, with respect to any Equipment Note, the amount (as determined by an independent investment banker selected by Company (and, following the occurrence and during the continuance of an Event of Default, reasonably acceptable to Loan Trustee)), if any, by which (i) the present value of the remaining scheduled payments of principal and interest from the redemption date to maturity of such Equipment Note computed by discounting each such payment on a semiannual basis from its respective Payment Date (assuming a 360-day year of twelve 30 day months) using a discount rate equal to the Treasury Yield plus the Make-Whole Spread exceeds (ii) the outstanding principal amount of such Equipment Note plus accrued but unpaid interest thereon to the date of redemption. For purposes of determining the Make-Whole Amount, “Treasury Yield” means, at the date of determination, the interest rate (expressed as a semiannual equivalent and as a decimal rounded to the number of decimal places as appears in the Debt Rate of such Equipment Note and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing on the Average Life Date and trading in the public securities market either as determined by interpolation between the most recent weekly average constant maturity, non-inflation-indexed series yield to maturity for two series of United States Treasury securities, trading in the public securities markets, (A) one maturing as close as possible to, but earlier than, the Average Life Date and (B) the other maturing as close as possible to, but later than, the Average Life Date, in each case as reported in the most recent H.15 Page or, if a weekly average constant maturity, non-inflation indexed series yield to maturity for United States Treasury securities maturing on the Average Life Date is reported in the most recent H.15 Page, such weekly average yield to maturity as reported in such H.15 Page. “H.15 Page” means the H.15 Page, published by the Board of Governors of the Federal Reserve System on its website (or successor publication of such information by such Board of Governors). The date of determination of a Make-Whole Amount shall be the third Business Day prior to the applicable redemption date and the “most recent H.15 Page” means the H.15 Page published prior to the close of business on the third Business Day prior to the applicable redemption date. “Average Life Date” means, for each Equipment Note to be redeemed, the date which follows the redemption date by a period equal to the Remaining Weighted Average Life at the redemption date of such Equipment Note. “Remaining Weighted Average Life” of an Equipment Note, at the redemption date of such Equipment Note, means the number of days equal to the quotient obtained by dividing: (i) the sum of the products obtained by multiplying (A) the amount of each then remaining installment of principal, including the payment due on the maturity date of such Equipment Note, by (B) the number of days from and including the redemption date to but excluding the scheduled Payment Date of such principal installment by (ii) the then unpaid principal amount of such Equipment Note. Loan Trustee shall have no obligation to calculate, or verify the calculation of, the Make-Whole Amount.
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“Make-Whole Spread” means, with respect to any Series of Equipment Notes, the percentage specified for the applicable Series as such in Schedule I to the Indenture (as amended, in the case of any Additional Series, new Series A Equipment Notes or new Additional Series issued pursuant to Section 2.02 of the Indenture, at the time of issuance of such Series).
“Manufacturer” means, as the context may require, Airbus S.A.S., a société par actions simplifiée organized and existing under the laws of the Republic of France, or Airbus Americas, Inc., a Delaware corporation, and its successors and assigns.
“MCMV” has the meaning (i) in the case of the Airframe and any Substitute Airframe, specified in Section 7.04(e) of the Indenture and (ii) in the case of the Aircraft and any Substitute Aircraft, specified in Section 7.04(f) of the Indenture.
“Minimum Insurance Amount” has the meaning specified in Section 7.06(a) of the Indenture.
“Moody’s” means Moody’s Investors Service, Inc.
“Noteholder” means any Person in whose name an Equipment Note is registered on the Equipment Note Register (including, for so long as it is the registered holder of any Equipment Notes, Subordination Agent on behalf of Pass Through Trustees pursuant to the provisions of the Intercreditor Agreement).
“Noteholder Liens” means any Lien attributable to any Noteholder on or against the Aircraft, any interest therein or any other portion of the Collateral, arising out of any claim against such Noteholder that is not related to the Operative Documents or Pass Through Documents, or out of any act or omission of such Noteholder that is not related to the transactions contemplated by, or that constitutes a breach by such Noteholder of its obligations under, the Operative Documents or the Pass Through Documents.
“NY UCC” means the UCC as in effect in the State of New York.
“Operative Documents” means, collectively, the Participation Agreement, the Indenture, each Indenture Supplement and the Equipment Notes.
“Operative Indentures” means, as of any date, each “Indenture” (as such term is defined in the Intercreditor Agreement), dated as of the date of the Indenture, including the Indenture, but only if as of such date all “Equipment Notes” (as defined in each such “Indenture”) are held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in each such “Indenture”.
“Other Party Liens” means any Lien attributable to any Pass Through Trustee (other than in its capacity as Noteholder), Subordination Agent (other than in its capacity as Noteholder) or any Liquidity Provider on or against the Aircraft, any interest therein, or any other portion of the Collateral arising out of any claim against such party that is not related to the Operative Documents or Pass Through Documents, or out of any act or omission of such party that is not related to the transactions contemplated by, or that constitutes a breach by such party of its obligations under, the Operative Documents or the Pass Through Documents.
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“Participation Agreement” has the meaning set forth under the definition of “Agreement”.
“Parts” means any and all appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature (other than (a) complete Engines or engines and (b) Excluded Equipment), so long as the same are incorporated or installed in or attached to the Airframe or any Engine or so long as the same are subject to the Lien of the Indenture in accordance with the terms of Section 7.04 thereof after removal from the Airframe or any Engine.
“Pass Through Certificates” means the pass through certificates issued by any Pass Through Trust (and any other pass through certificates for which such pass through certificates may be exchanged).
“Pass Through Documents” means each Pass Through Trust Agreement, the Intercreditor Agreement and each Liquidity Facility.
“Pass Through Trust” means each of the two separate grantor trusts that have been created pursuant to the Pass Through Trust Agreements to facilitate certain of the transactions contemplated by the Operative Documents.
“Pass Through Trust Agreement” means each of the two separate Trust Supplements relating to the Pass Through Trusts, together in each case with the Basic Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Pass Through Trustee” means the trustee under each Pass Through Trust Agreement, together with any successor in interest and any successor or other trustee appointed as provided in such Pass Through Trust Agreement.
“Past Due Rate” means the lesser of (a) with respect to (i) any payment made to a Noteholder under any Series of Equipment Notes, the Debt Rate then applicable to such Series plus 1% and (ii) any other payment made under any Operative Document to any other Person, the Debt Rate plus 1% (computed on the basis of a year of 360 days comprised of twelve 30-day months) and (b) the maximum rate permitted by applicable law.
“Payment Date” means, for any Equipment Note, each December 10 and June 10, commencing with June 10, 2020.
“Payment Default” means the occurrence of an event that would give rise to an Event of Default under Section 4.01(a) of the Indenture upon the giving of notice or the passing of time or both.
“Permitted Investments” means each of (a) direct obligations of the United States and agencies thereof; (b) obligations fully guaranteed by the United States; (c) certificates of deposit issued by, or bankers’ acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the states thereof having combined capital and surplus and retained earnings of at least
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$100,000,000 and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (d) commercial paper of any holding company of a bank, trust company or national banking association described in clause (c); (e) commercial paper of companies having a Short-Term Rating assigned to such commercial paper by either Moody’s or S&P (or, if neither such organization then rates such commercial paper, by any nationally recognized rating organization in the United States) equal to the highest rating assigned by such organization; (f) Dollar-denominated certificates of deposit issued by, or time deposits with, the European subsidiaries of (i) any bank, trust company or national banking association described in clause (c), or (ii) any other bank or financial institution described in clause (g), (h) or (j) below; (g) United States-issued Yankee certificates of deposit issued by, or bankers’ acceptances of, or commercial paper issued by, any bank having combined capital and surplus and retained earnings of at least $100,000,000 and headquartered in Canada, Japan, the United Kingdom, France, Germany, Switzerland or The Netherlands and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (h) Dollar-denominated time deposits with any Canadian bank having a combined capital and surplus and retained earnings of at least $100,000,000 and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (i) Canadian Treasury Bills fully hedged to Dollars; (j) repurchase agreements with any financial institution having combined capital and surplus and retained earnings of at least $100,000,000 collateralized by transfer of possession of any of the obligations described in clauses (a) through (i) above; (k) bonds, notes or other obligations of any state of the United States, or any political subdivision of any state, or any agencies or other instrumentalities of any such state, including, but not limited to, industrial development bonds, pollution control revenue bonds, public power bonds, housing bonds, other revenue bonds or any general obligation bonds, that, at the time of their purchase, such obligations have a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such obligations, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (1) bonds or other debt instruments of any company, if such bonds or other debt instruments, at the time of their purchase, have a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such obligations, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (m) mortgage backed securities (i) guaranteed by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Government National Mortgage Association or having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such securities, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States) or, if unrated, deemed to be of a comparable
Annex A (2020-1 EETC)
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quality by Loan Trustee and (ii) having an average life not to exceed one year as determined by standard industry pricing practices presently in effect; (n) asset-backed securities having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such securities, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States) or, if unrated, deemed to be of a comparable quality by Loan Trustee; and (o) such other investments approved in writing by Loan Trustee; provided that the instruments described in the foregoing clauses shall have a maturity no later than the earlier of (i) 365 days following the date of their purchase and (ii) the date when such investments may be required for distribution. The bank acting as Pass Through Trustee or Loan Trustee is hereby authorized, in making or disposing of any investment described herein, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of Pass Through Trustee or Loan Trustee or for any third person or dealing as principal for its own account.
“Permitted Lessee” means any Person to whom Company is permitted to lease the Airframe or any Engine pursuant to Section 7.02(a) of the Indenture and is a party to a Lease.
“Permitted Lien” has the meaning specified in Section 7.01 of the Indenture.
“Person” means any person, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.
“Prospective International Interest” has the meaning ascribed to the defined term “prospective international interest” under the Cape Town Treaty.
“Purchase Agreement” means Airbus A321 Aircraft and A330 Aircraft Purchase Agreement, dated as of September 3, 2013, between Manufacturer and Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Rating Agencies” has the meaning specified in the Intercreditor Agreement.
“Related Additional Series Equipment Note” means, with respect to any particular Series of Additional Series Equipment Notes and as of any date, an “Additional Series Equipment Note”, as defined in each Related Indenture, having the same designation (i.e., “Series B”, “Series C” or the like) as such Series of Additional Series Equipment Notes, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Equipment Note” means, as of any date, an “Equipment Note” as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Indemnitee Group” has the meaning specified in Section 4.02(b) of the Participation Agreement.
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“Related Indenture” means each Operative Indenture (other than the Indenture).
“Related Indenture Bankruptcy Default” means any “Event of Default” under Section 4.01(f), (g), (h) or (i) of any Related Indenture, determined without giving effect to any applicable grace period.
“Related Indenture Event of Default” means any “Event of Default” under any Related Indenture.
“Related Indenture Indemnitee” means each Related Noteholder.
“Related Loan Trustee” means “Loan Trustee” as defined in each Related Indenture.
“Related Make-Whole Amount” means the “Make-Whole Amount”, as defined in each Related Indenture.
“Related Noteholder” means a registered holder of a Related Equipment Note.
“Related Secured Obligations” means, as of any date, the outstanding principal amount of the Related Equipment Notes issued under each Related Indenture, the accrued and unpaid interest (including, to the extent permitted by applicable law, post-petition interest and interest on any overdue amounts) due thereon in accordance with such Related Indenture as of such date, the Related Make-Whole Amount, if any, with respect thereto due thereon in accordance with such Related Indenture as of such date, and any other amounts payable as of such date under the “Operative Documents” (as defined in each Related Indenture).
“Related Series AA Equipment Note” means, as of any date, a “Series AA Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Series A Equipment Note” means, as of any date, a “Series A Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Replacement Aircraft” means the Aircraft of which a Replacement Airframe is part.
“Replacement Airframe” means an Airbus A330 aircraft or a comparable or improved model of Manufacturer (except (a) Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded Equipment), that shall have been made subject to the Lien of the Indenture pursuant to Section 7.05 thereof, together with all Parts relating to such aircraft.
“Replacement Engine” means a General Electric CF6-80E1A4 engine (or an engine of the same or another manufacturer of a comparable or an improved model and suitable for installation and use on the Airframe with the other Engine (or any other Replacement Engine being substituted simultaneously therewith)) that is made subject to the Lien of the Indenture pursuant to Section 7.04 or Section 7.05 thereof, together with all Parts relating to such engine.
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“Replacement Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Replacement Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
“Responsible Officer” means, with respect to Company, its Chairman of the Board, its President, its Chief Operating Officer, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, any Vice President, the Treasurer, the Assistant Treasurer, the Controller or the Secretary.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.
“Section 1110” means Section 1110 of the Bankruptcy Code.
“Secured Obligations” has the meaning specified in Section 2.06 of the Indenture.
“Securities Account” has the meaning specified in Section 3.07 of the Indenture.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Securities and Exchange Commission” means the United States Securities and Exchange Commission and any agency or instrumentality of the United States government succeeding to its functions.
“Securities Intermediary” has the meaning specified in Section 3.07 of the Indenture.
“Series” means any series of Equipment Notes, including the Series AA Equipment Notes, the Series A Equipment Notes or, if issued, any Additional Series Equipment Notes.
“Series AA” or “Series AA Equipment Notes” means Equipment Notes issued and designated as “Series AA Equipment Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture under the heading “Series AA Equipment Notes” and bearing interest at the Debt Rate for Series AA Equipment Notes specified in Schedule I to the Indenture.
“Series A” or “Series A Equipment Notes” means Equipment Notes issued and designated as “Series A Equipment Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture under the heading “Series A Equipment Notes” and bearing interest at the Debt Rate for Series A Equipment Notes specified in Schedule I to the Indenture.
“Short-Term Rating” has the meaning specified in the Intercreditor Agreement.
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“Similar Law” has the meaning specified in Section 4.02(d)(xi) of the Participation Agreement.
“Subordination Agent” has the meaning specified in the introductory paragraph of the Participation Agreement.
“Substitute Aircraft” means an airframe of a different model of the same or different manufacturer as the Airframe, together with two engines suitable for installation and use on such airframe.
“Substitute Airframe” means an Airbus A330 aircraft or a comparable or improved model of Manufacturer (except (a) Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded Equipment), that shall have been made subject to the Lien of the Indenture pursuant to Section 7.04 thereof, together with all Parts relating to such aircraft.
“Tax” and “Taxes” mean all governmental fees (including, without limitation, license, filing and registration fees) and all taxes (including, without limitation, franchise, excise, stamp, value added, income, gross receipts, sales, use and property taxes), withholdings, assessments, levies, imposts, duties or charges, of any nature whatsoever, together with any related penalties, fines, additions to tax or interest thereon imposed, withheld, levied or assessed by any country, taxing authority or governmental subdivision thereof or therein or by any international authority, including any taxes imposed on any Person as a result of such Person being required to collect and pay over withholding taxes.
“Transportation Code” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time.
“Trust Officer” means any officer within the Corporate Trust Office of Loan Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer or any other officer of Loan Trustee who shall have direct responsibility for the administration of the Indenture, or any other officer of Loan Trustee to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Trust Supplements” means those agreements supplemental to the Basic Pass Through Trust Agreement referred to in Schedule II to the Participation Agreement.
“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.
“Underwriter” means each of the underwriters identified as such in the Underwriting Agreement.
“Underwriting Agreement” means that certain Underwriting Agreement, dated [ ], 2020, among Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representative of the Underwriters listed on Schedule I thereto, and the Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
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“United States” means the United States of America.
“U.S. Bank” has the meaning specified in the introductory paragraph of the Participation Agreement.
“Warranty Bill of Sale” means collectively, (a) the warranty (as to title) bill of sale covering the Aircraft executed by Manufacturer or an affiliate of Manufacturer in favor of the Company and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft, (b) the warranty (as to title) bill of sale covering the Aircraft executed by the Company in favor of U.S. Bank National Association, as Owner Trustee and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft and (c) the warranty (as to title) bill of sale covering the Aircraft executed by U.S. Bank National Association, as Owner Trustee in favor of the Company and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft.
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Exhibit 4.13
Execution Version
INDENTURE AND SECURITY AGREEMENT
(N822NW)
Dated as of March 12, 2020
between
DELTA AIR LINES, INC.,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Loan Trustee
One Airbus A330-302
(Generic Manufacturer and Model Airbus A330) Aircraft
U.S. Registration No. N822NW
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Indenture and Security Agreement (2020-1 EETC) N822NW |
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Table of Contents
| Page | ||||||
|
ARTICLE I DEFINITIONS |
7 | |||||
|
Section 1.01 |
Definitions | 7 | ||||
|
Section 1.02 |
Other Definitional Provisions | 8 | ||||
|
ARTICLE II THE EQUIPMENT NOTES |
8 | |||||
|
Section 2.01 |
Form of Equipment Notes | 8 | ||||
|
Section 2.02 |
Issuance and Terms of Equipment Notes | 14 | ||||
|
Section 2.03 |
Method of Payment | 16 | ||||
|
Section 2.04 |
Withholding Taxes | 17 | ||||
|
Section 2.05 |
Application of Payments | 18 | ||||
|
Section 2.06 |
Termination of Interest in Collateral | 18 | ||||
|
Section 2.07 |
Registration, Transfer and Exchange of Equipment Notes | 19 | ||||
|
Section 2.08 |
Mutilated, Destroyed, Lost or Stolen Equipment Notes | 20 | ||||
|
Section 2.09 |
Payment of Expenses on Transfer; Cancellation | 21 | ||||
|
Section 2.10 |
Mandatory Redemption of Equipment Notes | 21 | ||||
|
Section 2.11 |
Voluntary Redemption of Equipment Notes | 21 | ||||
|
Section 2.12 |
Redemptions; Notice of Redemptions; Repurchases | 23 | ||||
|
Section 2.13 |
Subordination | 24 | ||||
|
Section 2.14 |
Certain Payments | 25 | ||||
|
Section 2.15 |
Repayment of Monies for Equipment Note Payments Held by Loan Trustee | 27 | ||||
|
Section 2.16 |
Directions by Subordination Agent | 28 | ||||
|
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE COLLATERAL |
28 | |||||
|
Section 3.01 |
Basic Distributions | 28 | ||||
|
Section 3.02 |
Event of Loss; Optional Redemption | 30 | ||||
|
Section 3.03 |
Payments After Event of Default | 31 | ||||
|
Section 3.04 |
Certain Payments | 36 | ||||
|
Section 3.05 |
Payments to Company | 37 | ||||
|
Section 3.06 |
Cooperation | 37 | ||||
|
Section 3.07 |
Securities Account | 37 | ||||
|
ARTICLE IV EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE |
38 | |||||
|
Section 4.01 |
Events of Default | 38 | ||||
|
Section 4.02 |
Remedies | 40 | ||||
|
Section 4.03 |
Remedies Cumulative | 44 | ||||
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| i | ||||
Table of Contents
(Continued)
| Page | ||||||
|
Section 4.04 |
Discontinuance of Proceedings | 45 | ||||
|
Section 4.05 |
Waiver of Past Defaults | 45 | ||||
|
Section 4.06 |
Noteholders May Not Bring Suit Except Under Certain Conditions | 45 | ||||
|
Section 4.07 |
Appointment of a Receiver | 46 | ||||
|
ARTICLE V DUTIES OF LOAN TRUSTEE |
47 | |||||
|
Section 5.01 |
Notice of Event of Default | 47 | ||||
|
Section 5.02 |
Action upon Instructions; Certain Rights and Limitations | 47 | ||||
|
Section 5.03 |
Indemnification | 48 | ||||
|
Section 5.04 |
No Duties Except as Specified in Indenture or Instructions | 48 | ||||
|
Section 5.05 |
No Action Except under Indenture or Instructions | 48 | ||||
|
Section 5.06 |
Investment of Amounts Held by Loan Trustee | 48 | ||||
|
ARTICLE VI LOAN TRUSTEE |
50 | |||||
|
Section 6.01 |
Acceptance of Trusts and Duties | 50 | ||||
|
Section 6.02 |
Absence of Certain Duties | 50 | ||||
|
Section 6.03 |
No Representations or Warranties as to the Documents | 50 | ||||
|
Section 6.04 |
No Segregation of Monies; No Interest | 51 | ||||
|
Section 6.05 |
Reliance; Agents; Advice of Counsel | 51 | ||||
|
Section 6.06 |
Instructions from Noteholders | 51 | ||||
|
ARTICLE VII OPERATING COVENANTS OF COMPANY |
52 | |||||
|
Section 7.01 |
Liens | 52 | ||||
|
Section 7.02 |
Possession, Operation and Use, Maintenance and Registration | 53 | ||||
|
Section 7.03 |
Inspection; Financial Information | 61 | ||||
|
Section 7.04 |
Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines | 62 | ||||
|
Section 7.05 |
Loss, Destruction or Requisition | 68 | ||||
|
Section 7.06 |
Insurance | 75 | ||||
|
ARTICLE VIII SUCCESSOR AND ADDITIONAL TRUSTEES |
83 | |||||
|
Section 8.01 |
Resignation or Removal; Appointment of Successor | 83 | ||||
|
Section 8.02 |
Appointment of Additional and Separate Trustees | 85 | ||||
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ARTICLE IX AMENDMENTS AND WAIVERS |
87 | |||||
|
Section 9.01 |
Amendments to this Indenture without Consent of Holders | 87 | ||||
|
Section 9.02 |
Amendments to this Indenture with Consent of Holders | 88 | ||||
|
Section 9.03 |
Amendments, Waivers, Etc. of the Participation Agreement | 90 | ||||
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| ii | ||||
Table of Contents
(Continued)
| Page | ||||||
|
Section 9.04 |
Revocation and Effect of Consents | 90 | ||||
|
Section 9.05 |
Notation on or Exchange of Equipment Notes | 90 | ||||
|
Section 9.06 |
Trustee Protected | 91 | ||||
|
Section 9.07 |
No Consent of Individual Indenture Indemnitees Required | 91 | ||||
|
ARTICLE X MISCELLANEOUS |
91 | |||||
|
Section 10.01 |
Termination of Indenture | 91 | ||||
|
Section 10.02 |
No Legal Title to Collateral in Noteholders | 92 | ||||
|
Section 10.03 |
Sale of Aircraft by Loan Trustee is Binding | 92 | ||||
|
Section 10.04 |
Indenture for Benefit of Company, Loan Trustee and Noteholders | 92 | ||||
|
Section 10.05 |
Notices | 92 | ||||
|
Section 10.06 |
Severability | 94 | ||||
|
Section 10.07 |
No Oral Modification or Continuing Waivers | 94 | ||||
|
Section 10.08 |
Successors and Assigns | 94 | ||||
|
Section 10.09 |
Headings | 94 | ||||
|
Section 10.10 |
Normal Commercial Relations | 94 | ||||
|
Section 10.11 |
Voting by Noteholders | 95 | ||||
|
Section 10.12 |
Section 1110 | 95 | ||||
|
Section 10.13 |
Company’s Performance and Rights | 95 | ||||
|
Section 10.14 |
Counterparts | 95 | ||||
|
Section 10.15 |
Governing Law | 95 | ||||
|
Section 10.16 |
Confidential Information | 96 | ||||
|
Section 10.17 |
Submission to Jurisdiction | 96 | ||||
| Exhibit A | Form of Indenture Supplement | |
| Exhibit B | List of Permitted Countries | |
| Exhibit C | Certain Terms | |
| Schedule I | Description of Equipment Notes | |
| Schedule II | Pass Through Trust Agreement and Pass Through Trust Supplements | |
| Annex A | Definitions | |
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| iii | ||||
INDENTURE AND SECURITY AGREEMENT
(N822NW)
This INDENTURE AND SECURITY AGREEMENT (N822NW), dated as of March 12, 2020, is made by and between DELTA AIR LINES, INC., a Delaware corporation (together with its successors and permitted assigns, “Company”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly stated herein, but solely as Loan Trustee hereunder (together with its permitted successors hereunder, “Loan Trustee”).
W I T N E S S E T H:
WHEREAS, the parties desire by this Indenture (such term and other capitalized terms used herein without definition being defined as provided in Article I), among other things, to provide for (i) the issuance by Company of the Equipment Notes specified on Schedule I hereto and one or more Additional Series and (ii) the assignment, mortgage and pledge by Company to Loan Trustee, as part of the Collateral hereunder, among other things, of all of Company’s estate, right, title and interest in and to the Aircraft, as security for, among other things, Company’s obligations to Loan Trustee, for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, subject to Section 2.13 and Article III;
WHEREAS, all things have been done to make the Equipment Notes of the Series listed on Schedule I hereto, when executed by Company and authenticated and delivered by Loan Trustee hereunder, the valid, binding and enforceable obligations of Company; and
WHEREAS, all things necessary to make this Indenture a legal, valid and binding obligation of Company for the uses and purposes herein set forth, in accordance with its terms, have been done and performed and have occurred;
GRANTING CLAUSE
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the
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premises and of the covenants contained in the Operative Documents and the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under, all and singular, the following described properties, rights, interests and privileges, whether now owned or hereafter acquired (which, collectively, together with all property hereafter specifically subject to the Lien of this Indenture by the terms hereof or any supplement hereto, are included within, and are referred to as, the “Collateral”):
(1) the Aircraft, including the Airframe and the Engines, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided herein, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto (such Airframe and Engines as more particularly described in the Indenture Supplement executed and delivered with respect to the Aircraft on the Closing Date or with respect to any substitutions or replacements therefor) and together with all logs, manuals, modification and maintenance records at any time required to be maintained with respect to the Aircraft in accordance with the rules and regulations of the FAA if the Aircraft is registered under the laws of the United States or the rules and regulations of the government of the country of registry if the Aircraft is registered under the laws of a jurisdiction other than the United States;
(2) all requisition proceeds with respect to the Aircraft or any Part thereof, and all insurance proceeds with respect to the Aircraft or any Part thereof, but excluding all proceeds of, and rights under, any insurance maintained by Company and not required, or in excess of that required, under Section 7.06(c);
(3) all moneys and securities held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03, all rents, revenues and other proceeds collected by Loan Trustee pursuant to Section 4.02(a), all moneys and securities from time to time paid or deposited or required to be paid or deposited to or with Loan Trustee by or for the account of Company pursuant to any term of any Operative Document and held or required to be held by Loan Trustee hereunder or thereunder, including the Securities Account and all monies and securities deposited into the Securities Account; and
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(4) all proceeds of the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so long as no Event of Default shall have occurred and be continuing, Company or, if a lease to a Permitted Lessee is then in effect, such Permitted Lessee, shall have the right, to the exclusion of Loan Trustee, (i) to quiet enjoyment of the Aircraft, the Airframe, the Parts and the Engines, and to possess, use, retain and control the Aircraft, the Airframe, the Parts and the Engines and all revenues, income and profits derived therefrom and (ii) with respect to the Airframe Warranties Agreement, to exercise in Company’s name all rights and powers of Company in its capacity as “Entitled Party” under the Airframe Warranties Agreement and to retain any recovery or benefit resulting from the enforcement of any warranty or indemnity or other obligation under the Airframe Warranties Agreement;
TO HAVE AND TO HOLD all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in this Indenture, including Section 2.13 and Article III, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other, by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and in all cases and as to all property specified in paragraphs (1) through (4) inclusive above, subject to the terms and provisions set forth in this Indenture.
It is expressly agreed that notwithstanding anything herein to the contrary, Company shall remain liable under the Purchase Agreement to perform all of its obligations thereunder, and, except to the extent expressly provided in any Operative Document, none of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee shall be required or obligated in any manner to perform or fulfill any obligations of Company under or pursuant to any Operative Document, or have any obligation or liability under the Purchase Agreement by reason of or arising out of the assignment hereunder, or to make any inquiry as to the nature or sufficiency of any payment received by it, or present or file any claim or take any action to collect or enforce the payment of any amount that may have been assigned to it or to which it may be entitled at any time or times.
Subject to the terms and conditions hereof, Company does hereby irrevocably constitute Loan Trustee the true and lawful attorney of Company (which appointment is coupled with an interest) with full power (in the name of Company or otherwise) to ask for, require, demand and receive any and all monies and claims for monies (in each case including insurance and requisition proceeds) due and to become due to Company under
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or arising out of the Purchase Agreement (to the extent assigned hereby), and all other property which now or hereafter constitutes part of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or to take any action or to institute any proceedings which Loan Trustee may deem to be necessary or advisable in the premises; provided that Loan Trustee shall not exercise any such rights except during the continuance of an Event of Default. Company agrees that, promptly upon receipt thereof, to the extent required by the Operative Documents, it will transfer to Loan Trustee any and all monies from time to time received by Company constituting part of the Collateral, for distribution by Loan Trustee pursuant to this Indenture.
Company does hereby warrant and represent that it has not sold, assigned or pledged, and hereby covenants and agrees that it will not sell, assign or pledge, so long as this Indenture shall remain in effect and the Lien hereof shall not have been released pursuant to the provisions hereof, any of its estate, right, title or interest hereby assigned, to any Person other than Loan Trustee, except as otherwise provided in or permitted by any Operative Document.
Company agrees that at any time and from time to time, upon the written request of Loan Trustee, Company shall promptly and duly execute and deliver or cause to be duly executed and delivered any and all such further instruments and documents as Loan Trustee may reasonably deem necessary to perfect, preserve or protect the mortgage, security interests and assignments created or intended to be created hereby or to obtain for Loan Trustee the full benefit of the assignment hereunder and of the rights and powers herein granted; provided that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company in respect of the transactions contemplated by the Operative Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, unless the context otherwise requires, capitalized terms used but not defined herein have the respective meanings set forth or incorporated by reference in Annex A.
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Section 1.02 Other Definitional Provisions.
(a) The definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.
(b) All references in this Indenture to designated “Articles”, “Sections”, “Subsections”, “Schedules”, “Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision of this Indenture, unless otherwise specifically stated.
(c) The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) Unless the context otherwise requires, whenever the words “including”, “include” or “includes” are used herein, they shall be deemed to be followed by the phrase “without limitation”.
(e) All references in this Indenture to a “government” are to such government and any instrumentality or agency thereof.
(f) All references in this Indenture to a Person shall include successors and permitted assigns of such Person.
ARTICLE II
The Equipment Notes
Section 2.01 Form of Equipment Notes. The Equipment Notes shall be substantially in the form set forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE OR OTHER
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JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE OR OTHER LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. IN ADDITION, THIS EQUIPMENT NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.
DELTA AIR LINES, INC.
SERIES 2020-1[__]-[___]
EQUIPMENT NOTE DUE [MATURITY DATE]
ISSUED IN CONNECTION WITH THE AIRBUS MODEL A330-302 (GENERIC MANUFACTURER AND MODEL AIRBUS MODEL A330) AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N822NW
| No. __________ | Date: ________ | |
| DEBT RATE | MATURITY DATE | |
DELTA AIR LINES, INC. (together with its successors and permitted assigns, “Company”) hereby promises to pay to , or the registered assignee thereof, the principal amount of __________________________ Dollars ($ ) in installments on the Payment Dates set forth in Schedule I hereto, each such installment to be in an amount computed by multiplying the original principal amount of this Equipment Note by the percentage set forth in Schedule I hereto opposite the Payment Date on which such installment is due, and to pay interest in arrears on each Payment Date at the Debt Rate shown above on the principal amount remaining unpaid from time to time (calculated on the basis of a year of 360 days comprised of twelve 30-day months) from the date hereof, or from the most recent date to which interest hereon has been paid or duly provided for, until paid in full. Notwithstanding the foregoing, the final payment made on this Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, this Equipment Note. Notwithstanding anything to the contrary contained herein, if any date on which a payment under this Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
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For purposes hereof, the term “Indenture” means the Indenture and Security Agreement (N822NW), dated as of March 12, 2020, between Company and U.S. Bank Trust National Association, as Loan Trustee (“Loan Trustee”), as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms. All capitalized terms used in this Equipment Note and not defined herein, unless the context otherwise requires, shall have the respective meanings set forth or incorporated by reference, and shall be construed and interpreted in the manner described, in the Indenture.
This Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest, and any other amounts payable hereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue if not paid in the manner provided herein or in the Indenture when due (whether at stated maturity, by acceleration or otherwise).
There shall be maintained an Equipment Note Register for the purpose of registering transfers and exchanges of Equipment Notes at the Corporate Trust Office of Loan Trustee, or at the office of any successor trustee, in the manner provided in Section 2.07 of the Indenture.
The principal amount and interest and other amounts due hereunder shall be payable in Dollars in immediately available funds at the Corporate Trust Office of Loan Trustee, or as otherwise provided in the Indenture. Company shall not have any responsibility for the distribution of any such payment to Noteholder of this Equipment Note. Each such payment shall be made on the date such payment is due and without any presentment or surrender of this Equipment Note, except that in the case of any final payment with respect to this Equipment Note, this Equipment Note shall be surrendered to Loan Trustee for cancellation.
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The holder hereof, by its acceptance of this Equipment Note, agrees that, except as provided in the Indenture, including the subordination provisions referred to below, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest received by it hereunder shall be applied: first, to the payment of accrued interest on this Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts hereunder) to the date of such payment; second, to the payment of Make-Whole Amount, if any, with respect to this Equipment Note; third, to the payment of the principal amount of this Equipment Note (or portion thereof) then due hereunder, if any; and fourth, the balance, if any, remaining thereafter to the payment of installments of the principal amount of this Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the Indenture which have been or are to be issued by Company pursuant to the terms of the Indenture. The Collateral is held by Loan Trustee as security, in part, for the Equipment Notes. The provisions of this Equipment Note are subject to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents. Reference is hereby made to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents for a complete statement of the rights and obligations of the holder of, and the nature and extent of the security for, this Equipment Note (including as a “Related Equipment Note” under each Related Indenture) and the rights and obligations of the holders of, and the nature and extent of the security for, any other Equipment Notes executed and delivered under the Indenture, to all of which terms and conditions in the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents each holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain limitations therein set forth, this Equipment Note is exchangeable for an equal aggregate principal amount of Equipment Notes of the same Series of different authorized denominations, as requested by the holder surrendering the same. Prior to the due presentment for registration of transfer of this Equipment Note, Company and Loan Trustee shall deem and treat the Person in whose name this Equipment Note is registered on the Equipment Note Register as the absolute owner and holder hereof for the purpose of receiving all amounts payable with respect to this Equipment Note and for all purposes, and neither Company nor Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise. In addition, this Equipment Note may be accelerated as provided in Section 4.02 of the Indenture.
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This Equipment Note is subject to certain restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, as further specified in Section 2.07 of the Indenture, to all of which terms and conditions in the Intercreditor Agreement each holder hereof agrees by its acceptance of this Equipment Note.
The holder hereof, by its acceptance of this Equipment Note, agrees that no payment or distribution shall be made on or in respect of the Secured Obligations (as defined in the Indenture) or the Secured Obligations (as defined in any Related Indenture) owed to such holder, including, without limitation, any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) of the Indenture or after the commencement of any proceedings of the type referred to in Sections 4.01 (g), (h) or (i) of the Indenture, except, in each case, as expressly provided in Article III of the Indenture or Article III of the applicable Related Indenture, as appropriate.
The indebtedness evidenced by this Equipment Note is[,]1 [(i) to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of [Series AA Equipment Notes]2 [Series AA Equipment Notes and Series A Equipment Notes]3 [Series AA Equipment Notes, Series A Equipment Notes and [ ]4]5, and certain other Secured Obligations, and (ii)]6 to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes”
| 1 |
To be inserted in the case of a Series AA Equipment Note. |
| 2 |
To be inserted in the case of a Series A Equipment Note. |
| 3 |
To be inserted in the case of the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 4 |
To insert each Series of Additional Series Equipment Notes that rank senior in priority of payment to the Series of Additional Series Equipment Notes being issued. |
| 5 |
To be inserted in the case of each Series of Additional Series Equipment Notes other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes. |
| 6 |
To be inserted in the case of a Series A Equipment Note or an Additional Series Equipment Note. |
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issued under such Related Indenture, and this Equipment Note is issued subject to such provisions. The Noteholder of this Equipment Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in the Indenture or the applicable Related Indenture and (c) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
Without limiting the foregoing, the holder hereof, by its acceptance of this Equipment Note, agrees that if such holder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligation in respect of this Equipment Note that it is not entitled to receive under Section 2.13 or Article III of the Indenture, it shall hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III of the Indenture.
Unless the certificate of authentication hereon has been executed by or on behalf of Loan Trustee by manual signature, this Equipment Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
IN WITNESS WHEREOF, Company has caused this Equipment Note to be executed in its corporate name by its officer thereunto duly authorized on the date hereof.
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DELTA AIR LINES, INC. |
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By: |
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Name: |
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Title: |
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LOAN TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned Indenture.
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U.S. BANK TRUST NATIONAL ASSOCIATION, |
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not in its individual capacity but solely as Loan Trustee |
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By: |
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Authorized Signatory |
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SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
| Payment Date |
Percentage of Original
Principal Amount to be Paid |
[SEE “EQUIPMENT NOTES AMORTIZATION” ON SCHEDULE I TO
INDENTURE]
* * *
Section 2.02 Issuance and Terms of Equipment Notes. The Equipment Notes shall be dated the date of issuance thereof, shall be issued in (a) separate Series consisting of Series AA Equipment Notes, Series A Equipment Notes and one or more Additional Series Equipment Notes (if issued) and (b) the maturities and principal amounts and shall bear interest at the applicable Debt Rates specified in Schedule I. On the Closing Date, each Series AA Equipment Note and Series A Equipment Note shall be issued to Subordination Agent on behalf of Pass Through Trustee for the applicable Pass Through Trust created under the Pass Through Trust Agreements referred to in Schedule II. Subject to compliance with the conditions set forth in Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and from time to time
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(i) to issue one or more Series of Additional Series Equipment Notes under this Indenture (including, for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional Series Equipment Notes being outstanding at any time), (ii) to redeem all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes) pursuant to, and in accordance with, the provisions of Section 2.11(b) and to issue under this Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, the redeemed Equipment Notes, and (iii) following the payment in full at maturity or otherwise of all but not less than all of the Series A Equipment Notes (or all but not less than all of any Series of Additional Series Equipment Notes), to issue new Equipment Notes with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes that have been paid in full. If new Series A Equipment Notes or Additional Series Equipment Notes of any Series or new Additional Series Equipment Notes of any Series are issued after the Closing Date in accordance with the immediately preceding sentence, such Equipment Notes shall be dated the date of original issuance thereof and shall have such maturities, principal amounts and interest rate as specified in an amendment to this Indenture. The Equipment Notes shall be issued in registered form only. The Equipment Notes shall be issued in denominations of $1,000 and integral multiples thereof, except that one Equipment Note of each Series may be in an amount that is not an integral multiple of $1,000. For the avoidance of doubt, if Company shall issue new “Series A Equipment Notes” or “Additional Series Equipment Notes” of any Series or new “Additional Series Equipment Note” of any series, in each case under any Related Indenture, Company may, but shall not be required to, issue, as the case may be, new Series A Equipment Notes or Additional Series Equipment Notes of the same Series or new Additional Series Equipment Notes of the same Series, in each case under this Indenture.
Each Equipment Note shall bear interest at the Debt Rate specified for the applicable Series (calculated on the basis of a year of 360 days comprised of twelve 30-day months), payable in arrears on each Payment Date on the unpaid principal amount thereof from time to time outstanding from the most recent Payment Date to which interest has been paid or duly provided for (or, if no interest has been so paid or provided for, from the date of issuance of such Equipment Note) until such principal amount is paid in full, as further provided in the form of Equipment Note set forth in Section 2.01. The principal amount of each Series AA Equipment Note and each Series A Equipment Note shall be payable in installments or in a single payment on the Payment Dates set forth in such Equipment Note, each such installment, if any, to be in an amount computed by multiplying the original principal amount of such Equipment Note by the corresponding percentage set forth in Schedule I hereto applicable to such Series, the applicable portion of which shall be attached as Schedule I to such Equipment Note, opposite the Payment Date on which such installment is due. Each Additional Series
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Equipment Note, if issued, shall be payable in installments or in a single payment as set forth in an amendment to this Indenture, and if payable in installments, such installments shall be calculated as set forth in the preceding sentence. Notwithstanding the foregoing, the final payment made under each Equipment Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due under, such Equipment Note. Each Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not at the Debt Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount, if any, interest and any other amounts payable thereunder not paid when due for any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue under an Equipment Note if not paid in the manner provided therein or in this Indenture when due (whether at stated maturity, by acceleration or otherwise). Notwithstanding anything to the contrary contained herein, if any date on which a payment hereunder or under any Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if such payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled date.
The Equipment Notes shall be executed on behalf of Company by the manual or facsimile signature of one of its authorized officers. Equipment Notes bearing the signatures of individuals who were at the time of execution the proper officers of Company shall bind Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Equipment Notes or did not hold such offices at the respective dates of such Equipment Notes. No Equipment Note shall be secured by or entitled to any benefit under this Indenture or be valid or obligatory for any purposes unless there appears on such Equipment Note a certificate of authentication in the form provided herein executed by Loan Trustee by the manual signature of one of its authorized officers, and such certificate upon any Equipment Notes shall be conclusive evidence, and the only evidence, that such Equipment Note has been duly authenticated and delivered hereunder.
Section 2.03 Method of Payment. The principal amount of, interest on, Make-Whole Amount, if any, and, except to the extent expressly provided herein, all other amounts due under each Equipment Note or otherwise payable hereunder shall be payable by Company in Dollars by wire transfer of immediately available funds not later than 10:00 a.m. (New York City time) on the due date of payment to Loan Trustee at the Corporate Trust Office for distribution among Noteholders in the manner provided herein, and payment of such amount by Company to Loan Trustee shall be deemed to satisfy Company’s obligation to make such payment. Company shall not have any
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responsibility for the distribution of such payment to any Noteholder. Notwithstanding the foregoing or any provision in any Equipment Note to the contrary, Loan Trustee will use reasonable efforts to pay or cause to be paid, if so directed in writing by any Noteholder (with a copy to Company), all amounts paid by Company hereunder and under such Noteholder’s Equipment Note or Equipment Notes to such Noteholder or a nominee therefor (including all amounts distributed pursuant to Article III) by transferring, or causing to be transferred, by wire transfer of immediately available funds in Dollars, prior to 12:00 noon (New York City time) on the due date of payment, to an account maintained by such Noteholder with a bank located in the continental United States the amount to be distributed to such Noteholder, for credit to the account of such Noteholder maintained at such bank; provided that, in the event the Equipment Notes are not held by Subordination Agent on behalf of Pass Through Trustees, Loan Trustee shall, unless instructed by Company to use another method, pay such amounts by check mailed to Noteholder’s address as it appears on the Equipment Note Register. If, after its receipt of funds at the place and prior to the time specified above in the immediately preceding sentence, Loan Trustee fails (other than as a result of a failure of Noteholder to provide it with wire transfer instructions) to make any such payment required to be paid by wire transfer as provided in the immediately preceding sentence on the Business Day it receives such funds, Loan Trustee, in its individual capacity and not as trustee, agrees to compensate such Noteholders for loss of use of funds at the Federal Funds Rate until such payment is made and Loan Trustee shall be entitled to any interest earned on such funds until such payment is made. Any payment made hereunder shall be made without any presentment or surrender of any Equipment Note, except that, in the case of the final payment in respect of any Equipment Note, such Equipment Note shall be surrendered to Loan Trustee for cancellation. Notwithstanding any other provision of this Indenture to the contrary, Loan Trustee shall not be required to make, or cause to be made, wire transfers as aforesaid prior to the first Business Day on which it is practicable for Loan Trustee to do so in view of the time of day when the funds to be so transferred were received by it if such funds were received after 1:00 p.m. (New York City time) at the place of payment, in which case Loan Trustee shall make such required payment on the next succeeding Business Day. So long as any signatory to the Participation Agreement or nominee thereof shall be a registered Noteholder, all payments to it shall be made to the account of such Noteholder specified in Schedule I to the Participation Agreement or otherwise in the manner provided in or pursuant to the Participation Agreement unless it shall have specified some other account or manner of payment by notice to Loan Trustee consistent with this Section 2.03.
Section 2.04 Withholding Taxes. Loan Trustee shall exclude and withhold at the appropriate rate from each payment of principal, interest, Make-Whole Amount, if any, and other amounts due hereunder or under each Equipment Note (which exclusion and withholding shall constitute payment of such amounts payable hereunder or in
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respect of such Equipment Notes, as applicable) any and all withholding Taxes applicable thereto as required by applicable law. Loan Trustee agrees to act as such withholding agent and whenever any present or future Taxes or similar charges are required to be withheld with respect to any amounts payable hereunder or in respect of the Equipment Notes, to withhold such amounts (which withholding shall constitute payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) and timely pay the same to the appropriate authority in the name of and on behalf of Noteholders, that it will file any necessary withholding Tax returns or statements when due, and that as promptly as possible after the payment thereof it will deliver to each Noteholder (with a copy to Company) appropriate documentation showing the payment thereof, together with such additional documentary evidence as any such Noteholder may reasonably request from time to time. Loan Trustee agrees to file any other information reports it is required to file under United States law.
Section 2.05 Application of Payments. Subject always to Section 2.13 and except as otherwise provided in Article III, in the case of each Equipment Note, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest paid thereon shall be applied:
first, to the payment of accrued interest on such Equipment Note (as well as any interest on (i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and any other overdue amounts thereunder) to the date of such payment;
second, to the payment of Make-Whole Amount, if any, with respect to such Equipment Note;
third, to the payment of the principal amount of such Equipment Note (or portion thereof) then due thereunder, if any; and
fourth, the balance, if any, remaining thereafter, to the payment of installments of the principal amount of such Equipment Note (or portion thereof) remaining unpaid in the inverse order of their maturity.
Section 2.06 Termination of Interest in Collateral. No Noteholder or Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if the principal amount of, Make-Whole Amount, if any, and interest (including, to the extent permitted by applicable law, post-petition interest and interest on
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any overdue amounts) on and all other amounts due under all Equipment Notes held by such Noteholder and all other sums then due and payable to such Noteholder or Indenture Indemnitee, as the case may be, hereunder (including, without limitation, under Section 2.14) and under the Participation Agreement by Company (the “Secured Obligations”) have been paid in full.
Subject to Section 10.01 hereof, no Related Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if all Related Secured Obligations have been paid in full.
Section 2.07 Registration, Transfer and Exchange of Equipment Notes. Loan Trustee shall keep a register or registers (the “Equipment Note Register”) in which Loan Trustee shall provide for the registration of Equipment Notes, the registration of transfers of Equipment Notes and a record of the dates and payments made with respect to the Equipment Notes. No such transfer shall be given effect unless and until registration hereunder shall have occurred. The Equipment Note Register shall be kept at the Corporate Trust Office of Loan Trustee. Loan Trustee is hereby appointed “Equipment Note Registrar” for the purpose of registering Equipment Notes and transfers of Equipment Notes as herein provided. A holder of any Equipment Note intending to exchange or transfer such Equipment Note shall surrender such Equipment Note to Loan Trustee at the Corporate Trust Office, together with a written request from the registered holder thereof for the issuance of a new Equipment Note of the same Series, specifying, in the case of a surrender for transfer, the name and address of the new holder or holders. Upon surrender for registration of transfer of any Equipment Note and subject to satisfaction of Section 2.09, Company shall execute, and Loan Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Equipment Notes of an equal aggregate principal amount and of the same Series. At the option of Noteholder, Equipment Notes may be exchanged for other Equipment Notes of the same Series of any authorized denominations of an equal aggregate principal amount, upon surrender of the Equipment Notes to be exchanged to Loan Trustee at the Corporate Trust Office. Whenever any Equipment Notes are so surrendered for exchange, Company shall execute, and Loan Trustee shall authenticate and deliver, the Equipment Notes which Noteholder making the exchange is entitled to receive. All Equipment Notes issued upon any registration of transfer or exchange of Equipment Notes (whether under this Section 2.07 or under Section 2.08 or otherwise under this Indenture) shall be the valid obligations of Company evidencing the same respective obligations, and entitled to the same security and benefits under this Indenture, as the Equipment Notes surrendered upon such registration of transfer or exchange. Every Equipment Note presented or surrendered for registration of transfer shall (if so required by Company or Loan Trustee) be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to Loan Trustee, duly executed by Noteholder or such Noteholder’s
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attorney duly authorized in writing, and Company and Loan Trustee shall require evidence satisfactory to Company as to the compliance of any such transfer with the Securities Act and the securities laws of any applicable state or jurisdiction. Loan Trustee shall make a notation on each new Equipment Note of the amount of all payments of principal amount previously made on the old Equipment Note or Equipment Notes with respect to which such new Equipment Note is issued and the date to which interest on such old Equipment Note or Equipment Notes has been paid. Principal, interest and all other amounts shall be deemed to have been paid on such new Equipment Note to the date on which such amounts have been paid on such old Equipment Note. Company and Equipment Note Registrar shall not be required to exchange any surrendered Equipment Notes as provided above (a) during the ten-day period preceding the due date of any payment on such Equipment Note or (b) that has been called for redemption. Company and Loan Trustee shall in all cases deem and treat the Person in whose name any Equipment Note has been issued and registered on the Equipment Note Register as the absolute owner and Noteholder of such Equipment Note for the purpose of receiving payment of all amounts payable with respect to such Equipment Note and for all other purposes, and neither Company nor Loan Trustee shall be affected by any notice to the contrary. Loan Trustee will promptly notify Company of each registration of a transfer of an Equipment Note. Any such transferee of an Equipment Note, by its acceptance of an Equipment Note, agrees to the provisions of this Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to Noteholders or, in the case of each Related Indenture, Related Noteholders, and, without limiting the generality of the foregoing, any such transferee of an Equipment Note, by its acceptance of an Equipment Note: (i) agrees to the applicable provisions of Sections 6.01, 7.10 and 7.11 of the Participation Agreement, and shall be deemed to have represented, warranted and covenanted to the parties to the Participation Agreement as to the matters represented, warranted and covenanted by Noteholders, including Pass Through Trustees, in the Participation Agreement and (ii) agrees to the restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, and shall be deemed to have covenanted to the parties to the Intercreditor Agreement not to give any direction to, or otherwise authorize, Loan Trustee to take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement. Subject to compliance by Noteholder and any transferee of the requirements set forth in this Section 2.07 and in Section 2.09, Loan Trustee and Company shall use all reasonable efforts to issue new Equipment Notes upon transfer or exchange within ten Business Days of the date an Equipment Note is surrendered for transfer or exchange.
Section 2.08 Mutilated, Destroyed, Lost or Stolen Equipment Notes. If any Equipment Note becomes mutilated, destroyed, lost or stolen, Company shall, upon the written request of the holder of such Equipment Note and subject to satisfaction of this Section 2.08 and of Section 2.09, execute and Loan Trustee shall authenticate and deliver in replacement thereof a new Equipment Note of the same Series, payable in the same
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principal amount, dated the same date and captioned as issued in connection with the Aircraft. If the Equipment Note being replaced has become mutilated, such Equipment Note shall be surrendered to Loan Trustee, and a photocopy thereof shall be furnished to Company. If the Equipment Note being replaced has been destroyed, lost or stolen, the holder of such Equipment Note shall furnish to Company and Loan Trustee such security or indemnity as may be required by them to save Company and Loan Trustee harmless and evidence satisfactory to Company and Loan Trustee of the destruction, loss or theft of such Equipment Note and of the ownership thereof.
Section 2.09 Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Noteholder for any registration of transfer or exchange of Equipment Notes, but Loan Trustee, as Equipment Note Registrar, may require payment of a sum sufficient to cover any Tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Equipment Notes.
(b) Loan Trustee shall cancel all Equipment Notes surrendered for replacement, redemption, transfer, exchange, payment or cancellation, shall keep a copy of such canceled Equipment Notes, and shall send the original canceled Equipment Notes marked “canceled” to Company.
Section 2.10 Mandatory Redemption of Equipment Notes. Company shall redeem the Equipment Notes in whole in connection with an Event of Loss in respect of the Airframe or the Airframe and the Engines installed thereon (unless Company has performed the option set forth in Section 7.05(a)(i) with respect thereto) on or before the Loss Payment Date at a redemption price equal to 100% of the unpaid principal amount thereof, together with all accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, but without any Make-Whole Amount.
Section 2.11 Voluntary Redemption of Equipment Notes.
(a) Except as provided in Section 2.11(b), all (but not less than all) of the Equipment Notes may be redeemed by Company at any time upon at least 30 days’ revocable prior written notice to Loan Trustee and Noteholders, and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders, plus Make-Whole Amount, if any; provided that no redemption shall be permitted under this Section 2.11(a) unless, simultaneously with such redemption, the Related Equipment Notes shall also be redeemed.
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(b) All of the Series A Equipment Notes or all of any Series of Additional Series Equipment Notes (or any combination of the foregoing) may be redeemed by Company upon at least 15 days’ revocable prior written notice to Loan Trustee and Noteholders of each Series to be redeemed, and such Series of Equipment Notes being redeemed pursuant to this Section 2.11(b) shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders of such Series, plus Make-Whole Amount, if any; provided that:
(i) no redemption shall be permitted under this Section 2.11(b) unless, simultaneously with such redemption, the Related Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or the Related Additional Series Equipment Notes in respect of the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of any Series of Additional Series Equipment Notes), as the case may be, shall also be redeemed; and
(ii) if, simultaneously with such redemption or at any time thereafter, new Series A Equipment Notes (in the case of redemption hereunder of Series A Equipment Notes) or new Additional Series Equipment Notes of the same Series designation as the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of a Series of Additional Series Equipment Notes), in any such case, having terms that may be the same as or different from those of the redeemed Equipment Notes, are being issued, such new Equipment Notes shall be issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary in Section 2.11(a) or (b), so long as Company or any of its Affiliates beneficially owns 100% of the Pass Through Certificates issued by any Pass Through Trustee, the redemption price shall not include, and no Noteholder shall have any right to otherwise claim, any Make-Whole Amount with respect to the Series of Equipment Notes issued to Subordination Agent for the benefit of such Pass Through Trustee.
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(d) For the avoidance of doubt, any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not constitute or be deemed to constitute a redemption of such Equipment Note.
Section 2.12 Redemptions; Notice of Redemptions; Repurchases.
(a) No redemption of any Equipment Note may be made except to the extent and in the manner expressly permitted by this Indenture. Company may at any time repurchase any of the Equipment Notes not held by Subordination Agent at any price and may hold or resell such Equipment Notes or surrender such Equipment Notes to Loan Trustee for cancellation.
(b) Notice of redemption with respect to the Equipment Notes shall be given by Loan Trustee by first-class mail, postage prepaid, or by hand delivery, mailed or delivered not less than 15 nor more than 60 days prior to the applicable redemption date, to each Noteholder of such Equipment Notes to be redeemed, at such Noteholder’s address appearing in the Equipment Note Register; provided that such notice shall be revocable by written notice from Company to Loan Trustee given no later than three days prior to the redemption date. All notices of redemption shall state: (1) the redemption date, (2) the applicable basis for determining the redemption price, (3) that on the redemption date, the redemption price will become due and payable upon each such Equipment Note, and that, if any such Equipment Notes are then outstanding, interest on such Equipment Notes shall cease to accrue on and after such redemption date and (4) the place or places where such Equipment Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, Company (or any person on behalf of Company) shall, to the extent an amount equal to the redemption price for the Equipment Notes to be redeemed on the redemption date shall not then be held by Loan Trustee, deposit or cause to be deposited with Loan Trustee by 10:00 a.m. (New York City time) on the redemption date in immediately available funds the redemption price of the Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid (and not revoked as permitted by this Section 2.12), the Equipment Notes to be redeemed shall, on the redemption date, become due and payable at the Corporate Trust Office of Loan Trustee, and from and after such redemption date (unless there is a default in the deposit of the redemption price pursuant to Section 2.12(c)) any such Equipment Notes then outstanding shall cease to bear interest. Upon surrender of any such Equipment Note for redemption in accordance with said notice, such Equipment Note shall be redeemed at the redemption price.
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Section 2.13 Subordination.
(a) The indebtedness evidenced by the Series A Equipment Notes is, to the extent and in the manner provided in this Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, and the Series A Equipment Notes are issued subject to such provisions. The indebtedness evidenced by the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such most senior Series of Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes and the Series A Equipment Notes, and any such most senior Series of Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by any Additional Series Equipment Notes (other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes), if issued, will be, to the extent and in the manner provided in this Indenture (as this Indenture may be amended in connection with any such issuance of such Additional Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment Notes, the Series A Equipment Notes and each Series of Additional Series Equipment Notes that rank senior in priority of payment to such Additional Series Equipment Notes, and any such Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The indebtedness evidenced by the Series AA Equipment Notes and the Series A Equipment Notes is, and the indebtedness evidenced by any Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes” issued under such Related Indenture, and the Series AA Equipment Notes and the Series A Equipment Notes are, and any Series of Additional Series Equipment Notes shall be, issued subject to such provisions. By acceptance of its Equipment Notes of any Series, each Noteholder of such Series (i) agrees to and shall be bound by such provisions, (ii) authorizes and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf to take any action necessary or appropriate to effectuate the subordination as provided in this Indenture and the applicable Related Indenture and (iii) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, as such Noteholder’s attorney-in-fact for such purpose.
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(b) Company, Loan Trustee and, by acceptance of its Equipment Notes of any Series, each Noteholder of such Series, hereby agree that no payment or distribution shall be made on or in respect of the Secured Obligations, or the “Secured Obligations” under any Related Indenture, owed to such Noteholder of such Series, including any payment or distribution of cash, property or securities after the occurrence of any of the events referred to in Section 4.01(f) or after the commencement of any proceedings of the type referred to in Section 4.01(g), (h) or (i), except, in each case, as expressly provided in Article III of this Indenture or Article III of the applicable Related Indenture, as appropriate.
(c) By the acceptance of its Equipment Notes of any Series, each Noteholder of such Series agrees that (i) if such Noteholder, in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligations in respect of such Series that it is not entitled to receive under this Section 2.13 or Article III, it will hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form received to be applied as provided in Article III and (ii) if such Noteholder, in its capacity as a “Noteholder” under any Related Indenture, receives any payment or distribution on any “Secured Obligations” in respect of “Equipment Notes” of any “Series” issued under such Related Indenture that it is not entitled to receive under Section 2.13 or Article III of such Related Indenture, it will hold any amount so received in trust for the Related Loan Trustee under such Related Indenture and forthwith turn over such amount to such Related Loan Trustee under such Related Indenture in the form received to be applied as provided in Article III of such Related Indenture.
Section 2.14 Certain Payments. Company agrees to pay to Loan Trustee for distribution in accordance with Section 3.04:
(a) an amount or amounts equal to the fees payable to Liquidity Providers under Section 2.03 of each Liquidity Facility and the Fee Letter (as defined in the Intercreditor Agreement) related thereto (or similar provisions of any Replacement Liquidity Facility therefor and any related fee letter), multiplied by a fraction, the numerator of which is the sum of the then outstanding aggregate principal amount of the Series AA Equipment Notes and the Series A Equipment Notes and the denominator of which is the sum of the then outstanding aggregate principal amount of all “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement);
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(b) an amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Special Termination Advance multiplied by the fraction specified in the foregoing clause (a);
(c) an amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Downgrade Advance multiplied by the fraction specified in the foregoing clause (a);
(d) an amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such Non-Extension Advance multiplied by the fraction specified in the foregoing clause (a);
(e) if any payment default shall have occurred and be continuing with respect to interest on any “Series AA Equipment Notes” or “Series A Equipment Notes” (each as defined in the Intercreditor Agreement), (x) the excess, if any, of (1) the amount equal to the sum of interest on any Unpaid Advance (other than a Special Termination Advance), Applied Provider Advance or Applied Special Termination Advance payable under Section 3.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) plus any other amounts payable in respect of such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance under Section 3.01, 3.03 or 3.09 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) under which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made over (2) the sum of (A) Investment Earnings from any Final Advance plus (B) any amount of interest at the Past Due Rate actually payable (whether or not in fact paid) by Company in respect of the overdue scheduled interest on the “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) in respect of which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made, multiplied by (y) a fraction, the numerator of which is the then aggregate overdue amounts of interest on the then outstanding Series AA Equipment Notes and Series A Equipment Notes (other than interest becoming due and payable solely as a result of acceleration of any such Equipment Notes) and the denominator of which is the then aggregate
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overdue amounts of interest on all then outstanding “Series AA Equipment Notes” and “Series A Equipment Notes” (each as defined in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement) (other than interest becoming due and payable solely as a result of acceleration of any such “Equipment Notes”);
(f) any amounts owed to Liquidity Providers by Subordination Agent as borrower under Sections 3.01 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 3.03 (other than in respect of an Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), 7.05 and 7.07 of each Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) multiplied by the fraction specified in the foregoing clause (a); and
(g) an amount or amounts equal to the compensation, including reasonable expenses and disbursements actually incurred, payable to Subordination Agent under Section 6.07 of the Intercreditor Agreement, multiplied by the fraction specified in the foregoing clause (a) (but in any event without duplication of any amount or amounts payable by Company in respect of such compensation under any other Operative Document or Pass Through Document).
For purposes of this paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Applied Provider Advance”, “Applied Special Termination Advance”, “Downgrade Advance”, “Final Advance”, “Investment Earnings”, “Non-Extension Advance”, “Special Termination Advance” and “Unpaid Advance” have the meanings specified in each Liquidity Facility or the Intercreditor Agreement, as applicable.
Section 2.15 Repayment of Monies for Equipment Note Payments Held by Loan Trustee. Any money or property held by Loan Trustee in trust for any payment of the principal of, Make-Whole Amount, if any, or interest or any other amounts due on, any Equipment Note, including, without limitation, any money or property deposited pursuant to Section 2.12(c) or 10.01, and remaining unclaimed for a 730-day period (for purposes of calculating this 730-day period, all days on which the payment of such money or property shall not have been made because of operation of law shall be excluded) after the due date for such payment (or such lesser time as Loan Trustee is satisfied, after 60 days’ notice from Company, is one month prior to the escheat period provided under applicable state law) shall be paid to Company. Noteholders of any outstanding Equipment Notes shall thereafter, as unsecured general creditors, look only
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to Company for payment thereof, and all liability of Loan Trustee with respect to such trust money shall thereupon cease. Loan Trustee, before being required to make any such repayment, may at the expense of Company cause to be mailed to each such Noteholder notice that such money or property remains unclaimed. After a date specified in such notice, which may not be less than 30 days from the date of mailing, any unclaimed balance of such money or property then remaining will be repaid to Company as provided herein.
Section 2.16 Directions by Subordination Agent. So long as Subordination Agent is a Noteholder, notwithstanding anything contained herein or in any other Operative Document to the contrary, in exercising its right to vote the Equipment Notes held by it, or in giving or taking any direction, consent, request, demand, instruction, authorization, notice, waiver or other action provided by this Indenture or in respect of the Equipment Notes to be given or taken by a Noteholder (each such vote or other action, a “Direction”) in respect of such Equipment Notes, Subordination Agent may act in accordance with any votes, directions, consents, requests, demands, instructions, authorizations, notices, waivers or other actions given or taken by any applicable Pass Through Trustee or the Controlling Party pursuant to the Intercreditor Agreement, including without limitation pursuant to Section 2.06, Article IV or Section 8.01(b) thereof. Subordination Agent shall be permitted (x) to give a Direction with respect to less than the entire principal amount of any single Equipment Note held by it, and (y) to give different Directions with respect to different portions of the principal amount of any single Equipment Note held by it. Any Direction given by Subordination Agent at any time with respect to more than a majority in aggregate unpaid principal amount of all of the Equipment Notes issued and then outstanding hereunder shall be deemed to have been given by a Majority in Interest of Noteholders.
ARTICLE III
Receipt, Distribution and Application of Income
From the Collateral
Section 3.01 Basic Distributions. Except as otherwise provided in Sections 3.02, 3.03 and 3.04, each periodic payment by Company of regularly scheduled installments of principal or interest on the Equipment Notes received by Loan Trustee shall be promptly distributed in the following order of priority:
first, so much of such payment as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series AA Equipment Notes shall be distributed to Noteholders of Series AA Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series AA Equipment Note bears to the aggregate amount of the payments then due under all Series AA Equipment Notes;
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second, after giving effect to clause “first” above, so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Series A Equipment Notes shall be distributed to Noteholders of Series A Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series A Equipment Note bears to the aggregate amount of the payments then due under all Series A Equipment Notes;
third, after giving effect to clause “second” above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01) so much of such payment remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Additional Series Equipment Notes of a specified Series shall be distributed to Noteholders of Additional Series Equipment Notes of such Series ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Additional Series Equipment Note of such Series bears to the aggregate amount of the payments then due under all Additional Series Equipment Notes of such Series, provided that this clause “third” shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
fourth¸ the balance, if any, of such installment remaining thereafter shall be distributed to Company.
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Section 3.02 Event of Loss; Optional Redemption.
Except as otherwise provided in Sections 3.03 and 3.04 and subject to the following provisos, any payments received by Loan Trustee (i) with respect to the Airframe or the Airframe and one or more Engines as the result of an Event of Loss pursuant to Section 2.10 or (ii) pursuant to an optional redemption of the Equipment Notes pursuant to Section 2.11 shall be applied to the redemption of the Equipment Notes and to all other Secured Obligations and Related Secured Obligations then due by applying such payments in the following order of priority:
first, so much of such payment as is required (i) to reimburse Loan Trustee and Noteholders for any reasonable costs or expenses actually incurred in connection with such redemption for which they are entitled to reimbursement, or indemnity by Company, under the Operative Documents and then (ii) to pay any other Secured Obligations then due to Loan Trustee, Noteholders and other Indenture Indemnitees under this Indenture, the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below);
second, after giving effect to clause “first” above:
(i) so much of such payment remaining as is required to pay the amounts specified in paragraph (i) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series AA Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such payment remaining as is required to pay the amounts specified in paragraph (ii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the Series A Equipment Notes; and
(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payment remaining as is required to pay the amounts specified in paragraph (iii) of clause “third” of Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of Additional Series Equipment Notes of a specified Series, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
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third, after giving effect to clause “second” above, so much of such payment remaining as is required to pay the amounts as provided in clause “third” of Section 3.03 in respect of Related Secured Obligations under each Defaulted Operative Indenture other than paragraph (ix) of clause “third” of Section 3.03; and
fourth, the balance, if any, of such payment, shall be distributed as provided in clause “fourth” of Section 3.03;
provided that any insurance, condemnation or similar proceeds resulting from an Event of Loss that are received by Loan Trustee shall be held and distributed by Loan Trustee as provided in Sections 7.05(c) and 7.06(f), and any such proceeds that are held by Loan Trustee shall be invested as provided in Section 5.06; and provided, further, that in the case of a redemption of Equipment Notes pursuant to Section 2.11(b), if a particular Series is not being redeemed pursuant thereto, no application of funds shall be made pursuant to the paragraphs in clause “second” above that refer to such Series in connection with such redemption. No Make-Whole Amount shall be due and payable on the Equipment Notes as a consequence of the redemption of the Equipment Notes as a result of an Event of Loss with respect to the Airframe or the Airframe and one or more Engines.
Section 3.03 Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments received and amounts held or realized by Loan Trustee (including any amounts realized by Loan Trustee from the exercise of any remedies pursuant to Article IV) after both an Event of Default shall have occurred and be continuing and the Equipment Notes shall have become due and payable pursuant to Section 4.02(a), as well as all payments or amounts then held by Loan Trustee as part of the Collateral, shall be promptly distributed by Loan Trustee in the following order of priority:
first, so much of such payments or amounts as is required to (i) reimburse Loan Trustee or U.S. Bank, to the extent Loan Trustee or U.S. Bank is entitled to be reimbursed or indemnified under the Operative Documents, for any Tax, expense or other loss (including, without limitation, all amounts to be expended at the expense of, or charged upon the tolls, rents, revenues, issues, products and profits of, the property included in the Collateral pursuant to Section 4.02(a)) actually incurred by Loan Trustee or U.S. Bank (to the extent not previously reimbursed), the expenses of any sale, taking or other proceeding, reasonable attorneys’ fees and expenses, court costs, and any other expenditures actually incurred or expenditures or advances made by Loan Trustee, U.S. Bank or
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Noteholders in the protection, exercise or enforcement of any right, power or remedy or any damages sustained by Loan Trustee, U.S. Bank or any Noteholder, liquidated or otherwise, upon such Event of Default shall be applied by Loan Trustee as between itself, U.S. Bank and Noteholders in reimbursement of such expenses and any other expenses for which Loan Trustee, U.S. Bank or Noteholders are entitled to reimbursement under any Operative Document and (ii) pay all Secured Obligations payable to other Indenture Indemnitees hereunder and under the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “second” and “third” below); and in case the aggregate amount so to be distributed shall be insufficient to pay as aforesaid in clauses (i) and (ii), then ratably, without priority of one over the other, in proportion to the amounts owed each hereunder;
second, after giving effect to clause “first” above, so much of such payments or amounts remaining as is required to reimburse the then existing or prior Noteholders for payments made pursuant to Section 5.03 (to the extent not previously reimbursed) shall be distributed to such then existing or prior Noteholders ratably, without priority of one over the other, in accordance with the amount of the payment or payments made by each such then existing or prior Noteholder pursuant to Section 5.03;
third, after giving effect to clause “second” above:
(i) so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series AA Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series AA Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series AA Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series AA Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series AA Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
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(ii) after giving effect to paragraph (i) above, so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series A Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series A Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series A Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series A Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series A Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution;
(iii) after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph (xiii) or (xiv) of Section 9.01), so much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Additional Series Equipment Notes of a specified Series, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Additional Series Equipment Notes of such Series to the date of distribution, shall be distributed to Noteholders of Additional Series Equipment Notes of such Series, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution, provided that this paragraph (iii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment;
(iv) after giving effect to paragraph (iii) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “first” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under
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each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “first”;
(v) after giving effect to paragraph (iv) above, so much of such payments or amounts remaining as is required to pay in full the amounts then due and covered by clause “second” of Section 3.03 of each Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in accordance with the priorities and prorations in such clause “second”;
(vi) after giving effect to paragraph (v) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series AA Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series AA Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series AA Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series AA Equipment Notes issued under all Defaulted Operative Indentures;
(vii) after giving effect to paragraph (vi) above, so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series A Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Series A Equipment Notes are outstanding, and in case the aggregate amount so to be distributed shall be
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insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series A Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Series A Equipment Notes issued under all Defaulted Operative Indentures;
(viii) after giving effect to paragraph (vii) above (and except as otherwise provided in amendments to the applicable Related Indentures pursuant to paragraph (xiii) or (xiv) of Section 9.01 thereof), so much of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Additional Series Equipment Notes of a specified Series, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture under which any Related Additional Series Equipment Notes of such Series are outstanding, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Additional Series Equipment Notes of such Series issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments then due under all Related Additional Series Equipment Notes of such Series issued under all Defaulted Operative Indentures, provided that this paragraph (viii) shall apply to each Series of Additional Series Equipment Notes in order of priority of payment; and
(ix) after giving effect to paragraph (viii) above, if any Related Equipment Note is outstanding, any of such payments or amounts remaining and any invested Permitted Investments shall be held by Loan Trustee in an Eligible Account in accordance with the provisions of Section 3.07 (and invested as provided in Section 5.06) as additional security for the Related Secured Obligations, and such amounts (and any investment earnings thereon) shall be distributed from time to time in accordance with the foregoing provisions of this clause “third” as and to the extent any such Related Secured Obligation shall at any time and from time to time become due and remain unpaid after the giving of any required notice and the expiration of any applicable grace period; and, upon the payment in full of all such Related Secured Obligations the balance, if any, of any such remaining amounts and investment earnings thereon shall be applied as provided in clause “fourth” of this Section 3.03; and
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fourth, the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Company.
No Make-Whole Amount shall be payable on the Equipment Notes as a consequence of or in connection with an Event of Default or the acceleration of the Equipment Notes.
Section 3.04 Certain Payments.
(a) Any payments received by Loan Trustee for which provision as to the application thereof is made in this Indenture other than in this Article III shall be applied as provided in those provisions. Without limiting the foregoing, any payments received by Loan Trustee which are payable to Company pursuant to any of the provisions of this Indenture other than those set forth in this Article III (including Sections 5.06, 7.05 and 7.06) shall be so paid to Company. Any payments received by Loan Trustee for which no provision as to the application thereof is made in this Indenture and for which such provision is made in any other Operative Document shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of such other Operative Document.
(b) Notwithstanding anything to the contrary contained in this Article III, Loan Trustee will distribute promptly upon receipt any indemnity payment received by it from Company pursuant to Section 4.02 of the Participation Agreement payable to (i) U.S. Bank and Loan Trustee, (ii) Subordination Agent, (iii) any separate or additional trustee appointed pursuant to Section 8.02, (iv) Pass Through Trustees, (v) any Liquidity Provider or (vi) any other Indenture Indemnitee, in each case, directly to the Person entitled thereto. Any payment received by Loan Trustee from Company under Section 2.14 shall be distributed to Subordination Agent to be distributed in accordance with Section 2.04(c) of the Intercreditor Agreement.
(c) Any payments received by Loan Trustee not constituting part of the Collateral or otherwise for which no provision as to the application thereof is made in any Operative Document shall be distributed by Loan Trustee to Company. Further, and except as otherwise provided in Sections 3.02 and 3.03, all payments received and amounts realized by Loan Trustee with respect to the Aircraft, to the extent received or realized at any time after payment in full of all Secured Obligations, as well as any amounts remaining as part of the Collateral after the occurrence of such payment in full, shall be distributed by Loan Trustee to Company.
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Section 3.05 Payments to Company. Any amounts distributed hereunder by Loan Trustee to Company shall be paid to Company (within the time limits contemplated by Section 2.03) by wire transfer of funds of the type received by Loan Trustee at such office and to such account or accounts of such entity or entities as shall be designated by notice from Company to Loan Trustee from time to time.
Section 3.06 Cooperation. Prior to making any distribution under this Article III, Loan Trustee shall consult with Related Loan Trustees to determine amounts payable with respect to the Related Secured Obligations. Loan Trustee shall cooperate with Related Loan Trustees and shall provide such information as shall be reasonably requested by each Related Loan Trustee to enable such Related Loan Trustee to determine amounts distributable under Article III of its Related Indenture.
Section 3.07 Securities Account. In furtherance of the provisions of Section 3.03, U.S. Bank agrees to act as an Eligible Institution under this Indenture in accordance with the provisions of this Indenture (in such capacity, the “Securities Intermediary”). Except in its capacity as Loan Trustee, U.S. Bank waives any claim or lien against any Eligible Account it may have, by operation of law or otherwise, for any amount owed to it by Company. The Securities Intermediary hereby agrees that, notwithstanding anything to the contrary in this Indenture, (i) any amounts to be held by Loan Trustee pursuant to paragraph (ix) of clause “third” of Section 3.03 and any investment earnings thereon or other Permitted Investments in which such amounts are invested will be credited to an Eligible Account (the “Securities Account”) for which it is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC) and Loan Trustee is the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) of the “security entitlement” (as defined in Section 8-102(a)(17) of the NY UCC) with respect to each “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible Account, (ii) all such amounts, Permitted Investments and all other property acquired with cash credited to the Securities Account will be credited to the Securities Account, (iii) all items of property (whether cash, investment property, Permitted Investments, other investments, securities, instruments or other property) credited to the Securities Account will be treated as a “financial asset” under Article 8 of the NY UCC, (iv) its “securities intermediary’s jurisdiction” (as defined in Section 8-110(e) of the NY UCC) with respect to the Securities Account is the State of New York, and (v) all securities, instruments and other property in order or registered form and credited to the Securities Account shall be payable to or to the order of, or registered in the name of, the Securities Intermediary or shall be indorsed to the Securities Intermediary or in blank,
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and in no case whatsoever shall any financial asset credited to the Securities Account be registered in the name of Company, payable to or to the order of Company or specially indorsed to Company except to the extent the foregoing have been specially endorsed by Company to the Securities Intermediary or in blank. Loan Trustee agrees that it will hold (and will indicate clearly in its books and records that it holds) its “security entitlements” to the “financial assets” credited to the Securities Account in trust for the benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee as set forth in this Indenture. Company acknowledges that, by reason of Loan Trustee being the “entitlement holder” in respect of the Securities Account as provided above, Loan Trustee shall have the sole right and discretion, subject only to the terms of this Indenture, to give all “entitlement orders” (as defined in Section 8-102(a)(8) of the NY UCC) with respect to the Securities Account and any and all financial assets and other property credited thereto to the exclusion of Company. If any Person asserts any Lien (including, without limitation, any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or any financial asset carried therein, the Securities Intermediary will promptly notify Loan Trustee and Company thereof.
ARTICLE IV
Events of Default; Remedies of Loan Trustee
Section 4.01 Events of Default. Each of the following events constitutes an “Event of Default” whether such event is voluntary or involuntary or comes about or is effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body and each such Event of Default is deemed to exist and continue so long as, but only as long as, it has not been remedied or explicitly waived:
(a) Company fails to make any payment of principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note within 15 days after such payment is due;
(b) Company fails to make payment when the same is due of any amount (other than amounts referred to in Section 4.01(a)) due hereunder, under any Equipment Note or under any other Operative Document, and such failure continues unremedied for 30 days after the receipt by Company of written notice thereof from Loan Trustee or any Noteholder;
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(c) Company fails to carry and maintain (or cause to be maintained) insurance or indemnity on or with respect to the Aircraft in accordance with the provisions of Section 7.06; provided that no such failure to carry and maintain insurance shall constitute an Event of Default until the earlier of (i) the date such failure has continued unremedied for a period of 30 days after receipt by Loan Trustee of the notice of cancellation referred to in Section 7.06 or (ii) the date such insurance is not in effect as to Loan Trustee;
(d) Company fails to perform or observe in any material respect any other covenant, condition or agreement to be performed or observed by it under any Operative Document, and such failure continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee or any Noteholder; provided that, if such failure is capable of being remedied, no such failure shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such failure;
(e) any representation or warranty made by Company in any Operative Document was incorrect in any material respect at the time made, and such incorrectness continues to be material to the transactions contemplated hereby and continues unremedied for a period of 60 days after receipt by Company of written notice thereof from Loan Trustee; provided that, if such incorrectness is capable of being remedied, no such incorrectness shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company is diligently proceeding to remedy such incorrectness;
(f) Company consents to the appointment of or the taking of possession by a receiver, trustee or liquidator in respect of a substantial part of its property, admits in writing its inability to pay its debts generally as they come due or makes a general assignment for the benefit of its creditors;
(g) Company files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief as a debtor in a case under any bankruptcy laws or insolvency laws (as in effect at such time) or an answer admitting the material allegations of a petition filed against Company as a debtor in any such case, or Company as a debtor seeks relief by voluntary petition, answer or consent under the provisions of any other bankruptcy or other similar law providing for the reorganization or winding-up of corporations (as in effect at such time), or Company seeks an agreement, composition, extension or adjustment with its creditors under such laws;
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(h) an order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of Company, a receiver, trustee or liquidator of Company or sequestering any substantial part of its property, or granting any other relief in respect of Company as a debtor under any bankruptcy laws or insolvency laws (as in effect at such time), and any such order, judgment or decree of appointment or sequestration remains in force undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof;
(i) a petition against Company as a debtor in a case under the federal bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations that may apply to Company, any court of competent jurisdiction assumes jurisdiction, custody or control of Company or of any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of 90 days; or
(j) an “Event of Default” (as defined in any Related Indenture) shall have occurred and be continuing;
provided that notwithstanding anything to the contrary contained in this Section 4.01, any failure of Company to perform or observe any covenant, condition or agreement shall not constitute an Event of Default if such failure arises by reason of an event referred to in the definition of “Event of Loss” so long as Company is continuing to comply with all of the terms of Section 7.05.
Section 4.02 Remedies.
(a) If an Event of Default has occurred and is continuing and so long as the same shall continue unremedied, then and in every such case Loan Trustee may, and upon the written instructions of a Majority in Interest of Noteholders, Loan Trustee shall (subject to Section 5.03), do one or more of the following to the extent permitted by, and subject to compliance with the requirements of, applicable law then in effect (provided that during any period the Airframe or any Engine is subject to the CRAF Program and is in possession of or being operated under the direction of the United States government or an agency or instrumentality of the United States, Loan Trustee shall not, on account of any Event of Default, be entitled to exercise or pursue any of the powers, rights or remedies described in this Section 4.02 in such manner as to limit Company’s control under this Indenture (or any Permitted Lessee’s control under any Lease) of the Airframe
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or such Engine, unless at least 60 days’ (or such lesser period as may then be applicable under the CRAF Program of the United States government) prior written notice of default hereunder has been given by Loan Trustee by registered or certified mail to Company (and any such Permitted Lessee) with a copy addressed to the Contracting Office Representative or other appropriate person for the Air Mobility Command of the United States Air Force under any contract with Company (or such Permitted Lessee) relating to the Aircraft):
(i) declare by written notice to Company all the Equipment Notes to be due and payable, whereupon the aggregate unpaid principal amount of all Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and other amounts due thereunder (but without Make-Whole Amount), shall immediately become due and payable without presentment, demand, protest or other notice, all of which are hereby waived; provided that if an Event of Default referred to in Section 4.01(f), (g), (h) or (i) has occurred and is continuing, then and in every such case the unpaid principal amount of the Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and all other amounts due thereunder (but without Make-Whole Amount) shall immediately and without further act become due and payable without presentment, demand, protest or notice, all of which are hereby waived; and, following such declaration or deemed declaration:
(ii) (A) cause Company, upon the demand by notice of Loan Trustee, at Company’s expense, to deliver promptly, and Company shall deliver promptly, all or such part of the Airframe or any Engine as Loan Trustee so demands to Loan Trustee or its order, or, if Company has failed to so deliver the Airframe or any Engine after such demand, Loan Trustee, at its option, may enter upon the premises where all or any part of the Airframe or any Engine are located and take immediate possession of and remove the same together with any engine which is not an Engine but which is installed on the Airframe, subject to all of the rights of the owner, lessor, lienor or secured party of such engine; provided that the Airframe with an engine (which is not an Engine) installed thereon may be flown or returned only to a location within the continental United States, and such engine shall be held at the expense of Company for the account of any such owner, lessor, lienor, secured party or, if such engine is owned by Company, may at the option of Company with the consent of Loan Trustee (which will not be unreasonably withheld) or at the option of Loan Trustee with the consent of Company (which will not be unreasonably withheld), be exchanged with Company for an Engine in accordance with the provisions of Section 7.05(b); (B) sell all or any part of the Airframe and any Engine at public or private sale, whether or not Loan Trustee at the time has possession thereof, as Loan Trustee
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may determine, or otherwise dispose of, hold, use, operate, lease to others or keep idle all or any part of the Airframe or such Engine as Loan Trustee, in its sole discretion, determines, all free and clear of any rights or claims of Company, and the proceeds of such sale or disposition shall be applied as set forth in Section 3.03; or (C) exercise any other remedy of a secured party under the NY UCC (whether or not in effect in the jurisdiction in which enforcement is sought); provided that, notwithstanding anything to the contrary set forth herein or in any other Operative Document, (i) as permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III of the Cape Town Convention are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for those provisions of such Chapter III that cannot be derogated from; and (ii) as permitted by Article IV(3) of the Aircraft Protocol, the provisions of Chapter II of the Aircraft Protocol are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except for (x) Article XVI of the Aircraft Protocol and (y) those provisions of such Chapter II that cannot be derogated from. In furtherance of the foregoing, the parties hereto agree that the exercise of remedies hereunder and the other Operative Documents is subject to other applicable law, including without limitation, the NY UCC and the Bankruptcy Code, and that nothing herein derogates from the rights of Company or Loan Trustee under or pursuant to such other applicable law, including without limitation, the NY UCC or the Bankruptcy Code.
Upon every such taking of possession of Collateral under this Section 4.02, Loan Trustee may, from time to time, at the expense of the Collateral, make all such expenditures for maintenance, insurance, repairs, alterations, additions and improvements to and of the Collateral as it deems necessary to cause the Collateral to be in such condition as required by the provisions of this Indenture. In each such case, Loan Trustee may maintain, use, operate, store, insure, lease, control, manage or dispose of the Collateral and may exercise all rights and powers of Company relating to the Collateral as Loan Trustee reasonably deems best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, insurance, leasing, control, management or disposition of the Collateral or any part thereof as Loan Trustee may reasonably determine; and Loan Trustee shall be entitled to collect and receive directly all tolls, rents, revenues, issues, income, products and profits of the Collateral and every part thereof without prejudice, however, to the rights of Loan Trustee under any provision of this Indenture to collect and receive all cash held by, or required to be deposited with Loan Trustee hereunder. Such tolls, rents, revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, insurance, leasing, control, management or disposition of the Collateral, and of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments that Loan Trustee is required or elects to make, if any, for Taxes, insurance or other proper charges assessed against or otherwise imposed upon the Collateral or any
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part thereof, and all other payments which Loan Trustee is required or expressly authorized to make under any provision of this Indenture, as well as just and reasonable compensation for the services of Loan Trustee, and shall otherwise be applied in accordance with Article III. If an Event of Default has occurred and is continuing and the Equipment Notes either have been accelerated pursuant to this Section 4.02 or have become due at maturity and Loan Trustee is entitled to exercise rights hereunder, at the request of Loan Trustee, Company shall promptly execute and deliver to Loan Trustee such instruments of title and other documents as Loan Trustee reasonably deems necessary or advisable to enable Loan Trustee or an agent or representative designated by Loan Trustee, at such time or times and place or places as Loan Trustee specifies, to obtain possession of all or any part of the Collateral to which Loan Trustee at the time is entitled hereunder. If Company for any reason fails to execute and deliver such instruments and documents after such request by Loan Trustee, Loan Trustee may seek a judgment conferring on Loan Trustee the right to immediate possession and requiring Company to execute and deliver such instruments and documents to Loan Trustee, to the entry of which judgment Company hereby specifically consents to the fullest extent it may lawfully do so. All actual and reasonable expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Indenture.
(b) Loan Trustee shall give Company at least 30 days’ prior written notice of any public sale or of the date on or after which any private sale will be held, which notice Company hereby agrees to the extent permitted by applicable law is reasonable notice. Any Noteholder or Noteholders shall be entitled to bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02 and to credit against the purchase price bid at such sale by such Noteholders all or any part of the unpaid amounts owing to such Noteholders under the Operative Documents and secured by the Lien of this Indenture (but only to the extent that such purchase price would have been paid to such Noteholders pursuant to Article III if such purchase price were paid in cash and the foregoing provision of this Section 4.02(b) were not given effect). Loan Trustee may exercise such right without possession or production of the Equipment Notes or proof of ownership thereof, and as a representative of Noteholders may exercise such right without notice to Noteholders as party to any suit or proceeding relating to the foreclosure of any Collateral. Company may also bid for and become the purchaser of any Collateral offered for sale pursuant to this Section 4.02.
(c) To the extent permitted by applicable law, while an Event of Default has occurred and is continuing, Company irrevocably appoints Loan Trustee the true and lawful attorney-in-fact of Company (which appointment is coupled with an interest) in its name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or delivery for the enforcement of the Lien of this Indenture, whether pursuant to
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foreclosure or power of sale, or otherwise, to execute and deliver all such bills of sale, assignments and other instruments as may be necessary or appropriate, with full power of substitution, Company hereby ratifying and confirming all that such attorney or any substitute does by virtue hereof in accordance with applicable law; provided that if so requested by Loan Trustee or any purchaser, Company shall ratify and confirm any such sale, assignment or transfer of delivery, by executing and delivering to Loan Trustee or such purchaser all bills of sale, assignments, releases and other proper instruments to effect such ratification and confirmation as may reasonably be designated in any such request.
(d) At any time after Loan Trustee has declared the unpaid principal amount of all Equipment Notes then outstanding to be due and payable, or all Equipment Notes shall have become due and payable as provided in the proviso to Section 4.02(a)(i), and, in either case, prior to the sale of any part of the Collateral pursuant to this Article IV, a Majority in Interest of Noteholders, by written notice to Company and Loan Trustee, may rescind and annul such declaration, whether made by Loan Trustee on its own accord or as directed or deemed declaration, and its consequences if: (i) there has been paid to or deposited with Loan Trustee an amount sufficient to pay all overdue installments of principal amount of, and interest on, the Equipment Notes, and all other amounts owing under the Operative Documents, that have become due otherwise than by such declaration of acceleration and (ii) all other Events of Default, other than nonpayment of principal amount or interest on the Equipment Notes that have become due solely because of such acceleration, have been either cured or waived; provided that no such rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair any right consequent thereon.
(e) Notwithstanding anything contained herein, (i) so long as Pass Through Trustee under any Pass Through Trust Agreement or Subordination Agent on its behalf is a Noteholder, Loan Trustee will not be authorized or empowered to acquire title to any Collateral or take any action with respect to any Collateral so acquired by it if such acquisition or action would cause any Pass Through Trust to fail to qualify as a “grantor trust” for U.S. federal income tax purposes, and (ii) Loan Trustee will not take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement.
Section 4.03 Remedies Cumulative. To the extent permitted under applicable law, each and every right, power and remedy specifically given to Loan Trustee herein or otherwise in this Indenture shall be cumulative and shall be in addition to every other right, power and remedy specifically given herein or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically given herein or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by Loan Trustee, and the exercise or the
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beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by Loan Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall, to the extent permitted by applicable law, impair any such right, power or remedy or be construed to be a waiver of any default on the part of Company or to be an acquiescence therein.
Section 4.04 Discontinuance of Proceedings. In case Loan Trustee has instituted any proceedings to enforce any right, power or remedy under this Indenture by foreclosure, entry or otherwise, and such proceedings have been discontinued or abandoned for any reason or have been determined adversely to Loan Trustee, then and in every such case Company and Loan Trustee shall, subject to any determination in such proceedings, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Loan Trustee shall continue as if no such proceedings had been undertaken (but otherwise without prejudice).
Section 4.05 Waiver of Past Defaults. Subject to Section 5.03, upon written instruction from a Majority in Interest of Noteholders, Loan Trustee shall waive any past default hereunder and its consequences, and upon any such waiver such default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture and the other Operative Documents, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon; provided that in the absence of written instructions from each of the affected Noteholders, Loan Trustee shall not waive any default (i) in the payment of the principal amount, Make-Whole Amount, if any, or interest due under any Equipment Note then outstanding (other than with the consent of the holder thereof), or (ii) in respect of a covenant or provision hereof which, under Article IX, cannot be modified or amended without the consent of each such affected Noteholder.
Section 4.06 Noteholders May Not Bring Suit Except Under Certain Conditions. A Noteholder of any Series shall not have the right to institute any suit, action or proceeding at law or in equity or otherwise with respect to this Indenture or the Equipment Notes or otherwise, or for the appointment of a receiver or for the enforcement of any other remedy under this Indenture or the Equipment Notes or otherwise, unless:
(1) such Noteholder previously shall have given written notice to Loan Trustee of a continuing Event of Default;
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(2) a Majority in Interest of Noteholders shall have requested Loan Trustee in writing to institute such action, suit or proceeding and shall have offered to Loan Trustee indemnity as provided in Section 5.03;
(3) Loan Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have been given to Loan Trustee during such 60-day period by a Majority in Interest of Noteholders.
Except to the extent provided in the Intercreditor Agreement or herein, it is understood and intended that no one or more of Noteholders of any Series shall have any right in any manner whatsoever hereunder or under the Equipment Notes of such Series to (i) surrender, impair, waive, affect, disturb or prejudice any Collateral, or the Lien of this Indenture on any Collateral, or the rights of Noteholders of such Series, (ii) obtain or seek to obtain priority over or preference with respect to any other such Noteholder of such Series or (iii) enforce any right under this Indenture or the Equipment Notes of such Series, except in the manner provided in this Indenture and for the equal, ratable and common benefit of all Noteholders of such Series subject to the provisions of this Indenture.
Section 4.07 Appointment of a Receiver. To the extent permitted by applicable law, if an Event of Default shall have occurred and be continuing, and the Equipment Notes either shall have been accelerated pursuant to Section 4.02 or have become due at maturity, Loan Trustee shall, as a matter of right, be entitled to the appointment of a receiver (who may be Loan Trustee or any successor or nominee thereof) for all or any part of the Collateral, whether such receivership be incidental to a proposed sale of the Collateral or the taking of possession thereof or otherwise, and, to the extent permitted by applicable law, Company hereby consents to the appointment of such a receiver and will not oppose any such appointment. Any receiver appointed for all or any part of the Collateral shall be entitled to exercise all the rights and powers of Loan Trustee with respect to the Collateral.
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ARTICLE V
Duties of Loan Trustee
Section 5.01 Notice of Event of Default. If Loan Trustee has actual knowledge of an Event of Default or of a default arising from a failure by Company to pay when due any payment of principal amount, interest on, or Make-Whole Amount, if any, due and payable under any Equipment Note, Loan Trustee shall promptly give notice thereof to Company, each Liquidity Provider and each Noteholder. Subject to the terms of Sections 4.02, 4.05, 5.02 and 5.03, Loan Trustee shall take such action, or refrain from taking such action, with respect to such default or Event of Default (including with respect to the exercise of any rights or remedies hereunder) as Loan Trustee is instructed in writing by a Majority in Interest of Noteholders. Subject to the provisions of Section 5.03, if Loan Trustee does not receive instructions as above provided within 20 Business Days after giving notice of such default or Event of Default to Noteholders, Loan Trustee may, subject to instructions thereafter received pursuant to the preceding provisions of this Section 5.01, take such action, or refrain from taking such action with respect to such default or Event of Default as it reasonably determines to be advisable in the best interests of Noteholders, but shall be under no duty to take or refrain from taking any action. In acting pursuant to the immediately preceding sentence, Loan Trustee shall use the same degree of care and skill in connection therewith as a prudent person would use under the circumstances in the conduct of his or her own affairs. Loan Trustee may not sell the Airframe or any Engine without the consent of a Majority in Interest of Noteholders.
For all purposes of this Indenture, in the absence of actual knowledge, Loan Trustee shall not be deemed to have knowledge of a default or an Event of Default unless notified in writing by Company or one or more Noteholders; and “actual knowledge” (as used in the foregoing clause) of Loan Trustee shall mean actual knowledge of a Trust Officer of Loan Trustee; provided that Loan Trustee is deemed to have actual knowledge of (i) the failure of Company to pay any principal amount of, or interest on, the Equipment Notes directly to Loan Trustee when the same shall become due or (ii) the failure of Company to maintain insurance as required under Section 7.06 if Loan Trustee receives written notice thereof from an insurer or insurance broker.
Section 5.02 Action upon Instructions; Certain Rights and Limitations. Subject to the terms of Article IV and this Article V, upon the written instructions at any time of a Majority in Interest of Noteholders, Loan Trustee shall promptly (i) give such notice, direction, consent, waiver or approval or exercise such right, remedy or power hereunder in respect of all or any part of the Collateral or (ii) take such other action permitted hereunder, in each case, as is specified in such instructions.
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Loan Trustee will cooperate with Company in connection with the recording, filing, re-recording and refiling of this Indenture and any supplements to it and any financing statements or other documents as is necessary to maintain the perfection hereof or otherwise protect the security interests created hereby. Loan Trustee shall furnish to Company upon request such information and copies of such documents as Loan Trustee may have and as are necessary for Company to perform its duties under Article II.
Section 5.03 Indemnification. Loan Trustee shall not be required to take any action or refrain from taking any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV unless it shall have received indemnification against any risks incurred in connection therewith in form and substance reasonably satisfactory to it, including, without limitation, adequate advances against costs that may be actually incurred by it in connection therewith. Loan Trustee shall not be required to take any action under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV, nor shall any other provision of any Operative Document be deemed to impose a duty on Loan Trustee to take any action, if Loan Trustee shall have been advised by outside counsel that such action is contrary to the terms hereof or is otherwise contrary to applicable law.
Section 5.04 No Duties Except as Specified in Indenture or Instructions. Loan Trustee shall not have any duty or obligation to manage, control, lease, use, sell, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral, or to otherwise take or refrain from taking any action under, or in connection with, this Indenture, except as expressly provided by the terms of this Indenture or the Participation Agreement or as expressly provided in written instructions received pursuant to the terms of Section 5.01 or 5.02; and no implied duties or obligations shall be read into this Indenture against Loan Trustee.
Section 5.05 No Action Except under Indenture or Instructions. Loan Trustee will not manage, control, use, sell, lease, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral except in accordance with the powers granted to, or the authority conferred upon, Loan Trustee pursuant to this Indenture and in accordance with the express terms hereof.
Section 5.06 Investment of Amounts Held by Loan Trustee. Any monies (including for the purpose of this Section 5.06 any amounts held by Loan Trustee pursuant to Section 3.02, 3.03 or 3.07 or pursuant to any provision of any other Operative Document providing for amounts to be held by Loan Trustee which are not distributed pursuant to the other provisions of Article III, or any cash received by Loan Trustee pursuant to Section 7.05(c) or 7.06(f) or otherwise, or Permitted Investments purchased
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by the use of such cash pursuant to this Section 5.06 or any cash constituting the proceeds of the maturity, sale or other disposition of any Permitted Investments) held by Loan Trustee hereunder as part of the Collateral, until paid out by Loan Trustee as herein provided, (i) subject to clause (ii) below and Section 3.07, may be carried by Loan Trustee on deposit with itself or on deposit to its account with any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the states thereof having combined capital and surplus and retained earnings of at least $100,000,000, and Loan Trustee shall not have any liability for interest upon any such monies except as otherwise agreed in writing with Company, or (ii) at any time and from time to time, so long as no Event of Default shall have occurred and be continuing, at the request of Company, shall be invested and reinvested in Permitted Investments as specified in such request (if such investments are reasonably available for purchase) and sold, in any case at such prices, including accrued interest or its equivalent, as are set forth in such request, and, as provided in Section 3.07, such Permitted Investments shall be held by Loan Trustee in trust as part of the Collateral until so sold; provided that Company shall upon demand pay to Loan Trustee the amount of any loss realized upon maturity, sale or other disposition of any such Permitted Investment and, so long as no Event of Default or Payment Default shall have occurred and be continuing, Company shall be entitled to receive from Loan Trustee, and Loan Trustee shall promptly pay to Company, any profit, income, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment. All Permitted Investments held by Loan Trustee pursuant to this Section 5.06 shall be held pursuant to Section 3.07. If an Event of Default or Payment Default shall have occurred and be continuing, any net income, profit, interest, dividend or gain realized upon maturity, sale or other disposition of any Permitted Investment shall be held as part of the Collateral and shall be applied by Loan Trustee at the same time, on the same conditions and in the same manner as the amounts in respect of which such income, profit, interest, dividend or gain was realized are required to be distributed in accordance with the provisions hereof pursuant to which such amounts were required to be held. Subject to Section 3.03, at such time as there shall not be continuing any such Event of Default or Payment Default, such income, profit, interest, dividend or gain shall be paid to Company. In addition, subject to Section 3.03, if any moneys or investments are held by Loan Trustee solely because an Event of Default or Payment Default has occurred and is continuing, at such time as there shall not be continuing any such Event of Default or Payment Default, such moneys and investments shall be paid to Company. Loan Trustee shall not be responsible for any losses on any investments or sales of Permitted Investments made pursuant to the procedure specified in this Section 5.06 other than by reason of its willful misconduct or negligence.
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ARTICLE VI
Loan Trustee
Section 6.01 Acceptance of Trusts and Duties. U.S. Bank accepts the trusts and duties hereby created and applicable to it and agrees to perform such duties, but only upon the terms of this Indenture and agrees to receive, handle and disburse all monies received by it as Loan Trustee constituting part of the Collateral in accordance with the terms. U.S. Bank shall have no liability hereunder except (a) for its own willful misconduct or negligence, (b) as provided in the fourth sentence of Section 2.03 and the last sentence of Section 5.06, (c) for liabilities that may result from the inaccuracy of any representation or warranty of U.S. Bank in the Participation Agreement or expressly made hereunder and (d) as otherwise expressly provided in the Operative Documents.
For the avoidance of doubt, Loan Trustee shall also be accountable in its capacity as Securities Intermediary with respect to the Security Account, as set forth in Section 3.07.
Section 6.02 Absence of Certain Duties. Except in accordance with written instructions furnished pursuant to Section 5.01, 5.02 or 6.06, and except as provided in, and without limiting the generality of, Sections 5.02, 5.03 and 5.04, Loan Trustee shall have no duty (a) to see to any registration of the Aircraft or any recording or filing of this Indenture or any other document, or to see to the maintenance of any such registration, recording or filing, (b) to see to any insurance on the Aircraft or to effect or maintain any such insurance, whether or not Company is in default with respect thereto, (c) to confirm, verify or inquire into the failure to receive any financial statements of Company or (d) to inspect the Aircraft at any time or ascertain or inquire as to the performance or observance of any of Company’s covenants hereunder with respect to the Aircraft.
Section 6.03 No Representations or Warranties as to the Documents. Except as provided in Article V of the Participation Agreement, Loan Trustee shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of any Operative Document or any other document or instrument, or as to the correctness of any statement (other than a statement by Loan Trustee) contained herein or therein, except that Loan Trustee hereby represents and warrants that each of said specified documents to which it is a party has been or will be duly executed and delivered by one of its officers who is and will be duly authorized to execute and deliver such document on its behalf.
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Section 6.04 No Segregation of Monies; No Interest. Subject to Section 5.06 and except as provided in Section 3.07, all moneys received by Loan Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of applicable law, and neither Loan Trustee nor any agent of Loan Trustee shall be under any liability for interest on any moneys received by it hereunder; provided that any payments received, or applied hereunder, by Loan Trustee shall be accounted for by Loan Trustee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.
Section 6.05 Reliance; Agents; Advice of Counsel. Loan Trustee shall not incur any liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably believed by it to be signed by the proper party or parties. Loan Trustee may accept a copy of a resolution of the Board of Directors of any party to the Participation Agreement, certified by the Secretary or an Assistant Secretary of such party as duly adopted and in full force and effect, as conclusive evidence that such resolution has been duly adopted and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically described herein, Loan Trustee may for all purposes hereof rely on a certificate, signed by a duly authorized officer of Company, as to such fact or matter, and such certificate shall constitute full protection to Loan Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. In the administration of the trusts hereunder, Loan Trustee may (a) execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents (including paying agents or registrars) or attorneys, and (b) at the expense of the Collateral, consult with counsel, accountants and other skilled Persons to be selected and retained by it; provided that, prior to retaining agents (including paying agents or registrars), counsel, accountants or other skilled Persons, so long as no Event of Default exists, Loan Trustee shall obtain Company’s consent (such consent not to be unreasonably withheld). Loan Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled Persons acting within such counsel’s, accountants’ or Person’s area of competence (so long as Loan Trustee shall have exercised reasonable care and judgment in selecting such Persons).
Section 6.06 Instructions from Noteholders. In the administration of the trusts created hereunder, Loan Trustee shall have the right to seek instructions from a Majority in Interest of Noteholders should any provision of this Indenture appear to conflict with any other provision herein or any other Operative Document or Pass Through Document or should Loan Trustee’s duties or obligations hereunder be unclear, and Loan Trustee shall incur no liability in refraining from acting until it receives such instructions. Loan Trustee shall be fully protected for acting in accordance with any instructions received under this Section 6.06.
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ARTICLE VII
Operating Covenants of Company
Section 7.01 Liens. Company will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Aircraft, its title thereto or any of its interest therein, except:
(a) the respective rights of Loan Trustee and Company as provided in the Operative Documents, the Lien of this Indenture, the rights of any Permitted Lessee under a Lease permitted hereunder and the rights of any Person existing pursuant to the Operative Documents or the Pass Through Documents;
(b) the rights of others under agreements or arrangements to the extent expressly permitted by this Indenture;
(c) Loan Trustee Liens, Noteholder Liens and Other Party Liens;
(d) Liens for Taxes either not yet overdue or being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or impair the Lien of this Indenture;
(e) materialmen’s, mechanics’, workers’, repairmen’s, hangerkeeper’s, landlords’, employees’ or other like Liens arising in the ordinary course of business (including those arising under maintenance agreements entered into in the ordinary course of business) securing obligations that either are not yet overdue for a period of more than 60 days or are being contested in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein or materially impair the Lien of this Indenture;
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(f) Liens arising out of any judgment or award, so long as such judgment or award is, within 60 days after the entry thereof, discharged, vacated or reversed, or execution thereof stayed pending appeal or other judicial review or is discharged, vacated or reversed within 60 days after the expiration of such stay;
(g) any other Lien with respect to which Company or any Permitted Lessee provides a bond, cash collateral or other security adequate in the reasonable opinion of Loan Trustee;
(h) salvage or similar rights of insurers under insurance policies maintained by Company or any Permitted Lessee; and
(i) Liens approved in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders.
Liens described in clauses (a) through (i) above are referred to herein as “Permitted Liens”. Company shall promptly, at its own expense, take (or cause to be taken) such action as may be necessary duly to discharge (by bonding or otherwise) any Lien other than a Permitted Lien arising at any time with respect to the Aircraft, its title thereto or any of its interest therein.
Section 7.02 Possession, Operation and Use, Maintenance and Registration.
(a) Possession. Without the prior written consent of Loan Trustee, Company shall not lease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install any Engine, or permit any Engine to be installed, on any airframe other than the Airframe; provided that Company (or, except with respect to clauses (viii) and (ix) below, any Permitted Lessee) may without the prior written consent of Loan Trustee:
(i) subject the Airframe to interchange agreements or subject any Engine to interchange, pooling, borrowing or other similar agreements or arrangements, in each case entered into by Company (or any Permitted Lessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe and (B) if Company’s title to any such Engine is divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine, and Company shall (or shall cause any Permitted Lessee to) comply with Section 7.05(b) in respect thereof;
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(ii) deliver possession of the Airframe or any Engine to (x) any Person for testing, service, repair, restoration, storage, maintenance or other similar purposes or for alterations, modifications or additions to the Airframe or such Engine to the extent required or permitted by the terms hereof or (y) to any Person for purposes of transport to a Person referred to in the preceding clause (x);
(iii) transfer or permit the transfer of possession of the Airframe or any Engine to any Government pursuant to a lease, contract or other instrument;
(iv) subject the Airframe or any Engine to the CRAF Program or transfer possession of the Airframe or any Engine to the United States government in accordance with applicable laws, rulings, regulations or orders (including, without limitation, any transfer of possession pursuant to the CRAF Program); provided that Company (or any Permitted Lessee) (A) shall promptly notify Loan Trustee upon transferring possession of the Airframe or any Engine pursuant to this clause (iv) and (B) in the case of a transfer of possession pursuant to the CRAF Program, shall notify Loan Trustee of the name and address of the responsible Contracting Office Representative for the Air Mobility Command of the United States Air Force or other appropriate Person to whom notices must be given and to whom requests or claims must be made to the extent applicable under the CRAF Program;
(v) install an Engine on an airframe owned by Company (or any Permitted Lessee) free and clear of all Liens, except (A) Permitted Liens and Liens that apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety) and (B) the rights of third parties under interchange, pooling, borrowing or other similar agreements or arrangements that would be permitted under clause (i) above;
(vi) install an Engine on an airframe leased to Company (or any Permitted Lessee) or purchased or owned by Company (or any Permitted Lessee) subject to a lease, conditional sale or other security agreement; provided that: (A) such airframe is free and clear of all Liens except (1) the rights of the parties to the lease or conditional sale or other security agreement covering such
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airframe, or their successors and assigns, and (2) Liens of the type permitted by clause (v) of this Section 7.02(a); and (B) either: (1) Company has obtained from the lessor, conditional vendor or secured party of such airframe a written agreement (which may be a copy of the lease, conditional sale or other security agreement covering such airframe), in form satisfactory to Loan Trustee (an agreement from such lessor, conditional vendor or secured party substantially in the form of the penultimate paragraph of this Section 7.02(a) being deemed to be satisfactory to Loan Trustee), whereby such lessor, conditional vendor or secured party expressly agrees that neither it nor its successors or assigns will acquire or claim any right, title or interest in any Engine by reason of such Engine being installed on such airframe at any time while such Engine is subject to the Lien of this Indenture, or (2) such lease, conditional sale or other security agreement provides that such Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement at any time while such Engine is subject to the Lien of this Indenture, notwithstanding its installation on such airframe;
(vii) install an Engine on an airframe owned by Company (or any Permitted Lessee), leased to Company (or any Permitted Lessee) or purchased by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither clause (v) nor clause (vi) of this Section 7.02(a) is applicable; provided that such installation shall be deemed an Event of Loss with respect to such Engine, and Company shall comply with Section 7.05(b) in respect thereof, if such installation adversely affects Loan Trustee’s security interest in such Engine, Loan Trustee not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Company with Section 7.05(b);
(viii) lease any Engine, the Airframe or the Airframe and Engines to any United States air carrier as to which there is in force a certificate issued pursuant to the Transportation Code (49 U.S.C. Sections 41101-41112) or successor provision that gives like authority; provided that no Event of Default exists at the time such lease is entered into; and
(ix) lease any Engine, the Airframe or the Airframe and Engines to (A) any foreign air carrier that is at the inception of the lease based in and a domiciliary of a country listed in Exhibit B hereto, (B) the manufacturer of the Airframe or any Engine (either directly or through an affiliate) and (C) any foreign air carrier consented to in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders; provided that (w) no Event of Default exists at the time such lease is entered into, (x) in the case of a lease to any foreign air
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carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains normal diplomatic relations with the country in which such foreign air carrier is based at the time such lease is entered into and in the case of a lease to a foreign air carrier principally based in Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date, (y) in the case of a lease to any foreign air carrier, Company furnishes Loan Trustee with a certificate from a Responsible Officer of Company certifying that there exist no possessory rights in favor of such lessee under the laws of such lessee’s country which would, upon bankruptcy or insolvency of or other default by Company, and assuming at such time such lessee is not insolvent or bankrupt, prevent the taking of possession of any such Engine or the Airframe and any such Engine by Loan Trustee in accordance with and when permitted by the terms of Section 4.02 upon the exercise by Loan Trustee of its remedies under Section 4.02, and (z) in the case of any lease to a foreign air carrier, such carrier is not then subject to any bankruptcy, insolvency, liquidation, reorganization, dissolution or similar proceeding and shall not have substantially all of its property in the possession of any liquidator, trustee, receiver or similar person;
provided that the rights of any lessee or other transferee who receives possession of the Aircraft, the Airframe or any Engine by reason of a transfer permitted by this Section 7.02(a) (other than the transfer of an Engine which is deemed an Event of Loss) shall be subject and subordinate to, and any permitted lease shall be made expressly subject and subordinate to, all the terms of this Indenture, including Loan Trustee’s rights to repossess pursuant to Section 4.02 and to avoid such lease upon such repossession, and Company shall remain primarily liable hereunder for the performance and observance of all of the terms and conditions of this Indenture to the same extent as if such lease or transfer had not occurred, any such lease shall include appropriate provisions for the maintenance and insurance of the Aircraft, the Airframe or such Engine, and no lease or transfer of possession otherwise in compliance with this Section shall (x) result in any registration or re-registration of the Aircraft except to the extent permitted in Section 7.02(e) or the maintenance, operation or use thereof that does not comply with Sections 7.02(b) and (c) or (y) permit any action not permitted to be taken by Company with respect to the Aircraft hereunder. Company shall promptly notify Loan Trustee and the Rating Agencies of the existence of any such lease with a term in excess of one year.
Loan Trustee, each Noteholder by acceptance of an Equipment Note, and each Related Noteholder by acceptance of a Related Equipment Note agrees, for the benefit of Company (and any Permitted Lessee) and for the benefit of the lessor, conditional vendor or secured party of any airframe or engine leased to Company (or any Permitted Lessee) or leased to or purchased or owned by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement, that Loan Trustee, Noteholders and Related
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Noteholders will not acquire or claim, as against Company (or any Permitted Lessee) or such lessor, conditional vendor or secured party, any right, title or interest in: (A) any engine or engines owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of such engine or engines being installed on the Airframe at any time while such engine or engines are subject to such lease or conditional sale or other security agreement, or (B) any airframe owned by Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or other security agreement as the result of any Engine being installed on such airframe at any time while such airframe is subject to such lease or conditional sale or other security agreement.
Loan Trustee acknowledges that any “wet lease” or other similar arrangement under which Company (or any Permitted Lessee) maintains operational control of the Aircraft does not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 7.02(a).
(b) Operation and Use. Company agrees that the Aircraft will not be used or operated in violation of any law, rule or regulation of any government of any country having jurisdiction over the Aircraft or in violation of any airworthiness certificate, license or registration relating to the Aircraft issued by any such government, except (i) immaterial or non-recurring violations with respect to which corrective measures are taken promptly by Company or a Permitted Lessee, as the case may be, upon discovery thereof or (ii) to the extent Company (or, if a Lease is then in effect, any Permitted Lessee) is contesting in good faith the validity or application of any such law, rule or regulation or airworthiness certificate, license or registration in any manner that does not involve any material risk of sale, forfeiture or loss of the Aircraft or impair the Lien of this Indenture; provided that Company shall not be in default under, or required to take any action set forth in, this sentence if it is not possible for it (or any Permitted Lessee) to comply with the laws of a jurisdiction other than the United States (or other than any jurisdiction in which the Aircraft is then registered) because of a conflict with the applicable laws of the United States (or such jurisdiction in which the Aircraft is then registered). Company shall also have the right to operate the Aircraft without having on board the original registration certificate or airworthiness certificate in the event that either or both such certificates disappear from the Aircraft, but only to the extent permitted by Exemption No. 5318 of the regulations of the FAA or other similar exemption. Company will not operate the Aircraft, or permit the Aircraft to be operated or located, (i) in any area excluded from coverage by any insurance required by the terms of Section 7.06 or (ii) in any war zone or recognized or, in Company’s judgment, threatened areas of hostilities unless covered by war risk insurance in accordance with
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Section 7.06, unless in the case of either clause (i) or (ii), (x) government indemnification complying with Sections 7.06(a) and (b) has been provided or (y) the Aircraft is only temporarily located in such area as a result of an isolated occurrence or isolated series of occurrences attributable to a hijacking, medical emergency, equipment malfunction, weather conditions, navigational error or other similar circumstances or any other circumstances beyond the reasonable control of Company (or any Permitted Lessee) and Company (or any Permitted Lessee) is using its good faith efforts to remove the Aircraft from such area as promptly as practicable.
(c) Maintenance. Company shall maintain, service, repair and overhaul the Aircraft (or cause the same to be done) (i) so as to keep the Aircraft in good operating condition and in such condition as may be necessary to enable the airworthiness certification of the Aircraft to be maintained in good standing at all times (other than (v) during temporary periods of storage, during maintenance, testing or modification permitted hereunder, (w) during periods of grounding by applicable governmental authorities, (x) during periods when the FAA or such other aviation authority has revoked or suspended the airworthiness certificates for aircraft of the same manufacturer and model as the Aircraft, (y) with respect to minor or non-recurring violations with respect to which corrective measures are taken promptly upon discovery thereof and (z) to the extent Company or any Permitted Lessee is promptly contesting in good faith the validity or application of any law or requirement relating to any such certification in any manner which does not create a material risk of sale, loss or forfeiture of the Aircraft, the Airframe or any Engine or the interest of Loan Trustee therein or any material risk of criminal liability or material civil penalty against Loan Trustee) under the Transportation Code, during such periods in which the Aircraft is registered under the laws of the United States, or, if the Aircraft is registered under the laws of any other jurisdiction, the applicable laws of such jurisdiction and (ii) using the same standards as Company (or a Permitted Lessee, if a Lease is in effect) uses with respect to similar aircraft operated by Company (or such Permitted Lessee) in similar circumstances (it being understood that the obligations pursuant to this clause (ii) do not limit Company’s obligations under the preceding clause (i)). In any case, the Aircraft will be maintained in accordance with the maintenance standards required by the FAA (while operated under an FAA-approved maintenance program) or, while operated under the maintenance program of another jurisdiction, standards substantially equivalent to those required by the central aviation authority of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland or the United Kingdom. Company shall maintain or cause to be maintained all records, logs and other documents required to be maintained in respect of the Aircraft by appropriate authorities in the jurisdiction in which the Aircraft is registered.
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(d) Identification of Loan Trustee’s Interest. If not prevented by applicable law or regulations or by any government, Company agrees to affix as promptly as practicable after the Closing Date and thereafter to maintain in the cockpit of the Aircraft, in a clearly visible location, and on each Engine, a nameplate bearing the inscription “MORTGAGED TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS LOAN TRUSTEE” (such nameplate to be replaced, if necessary, with a nameplate reflecting the name of any successor Loan Trustee). Such placards may be removed temporarily, if necessary, in the course of maintenance of the Airframe or Engines.
(e) Registration. Company shall cause the Aircraft to remain duly registered, under the laws of the United States, in the name of Company except as otherwise required by the Transportation Code; provided that Loan Trustee shall, at Company’s expense, execute and deliver all such documents as Company may reasonably request for the purpose of continuing such registration. Notwithstanding the preceding sentence, Company, at its own expense, may cause or allow the Aircraft to be duly registered under the laws of any foreign jurisdiction in which a Permitted Lessee could be principally based, in the name of Company or of any nominee of Company, or, if required by applicable law, in the name of any other Person (and, following any such foreign registration, may cause the Aircraft to be re-registered under the laws of the United States); provided that in the case of jurisdictions other than those approved by Loan Trustee with the consent of a Majority in Interest of Noteholders (i) if such jurisdiction is at the time of registration listed on Exhibit B, Loan Trustee shall have received at the time of such registration an opinion of counsel to Company to the effect that (A) this Indenture and Loan Trustee’s right to repossession hereunder is valid and enforceable under the laws of such country, (B) after giving effect to such change in registration, the Lien of this Indenture shall continue as a valid Lien and shall be duly perfected in the new jurisdiction of registration and that all filing, recording or other action necessary to perfect and protect the Lien of this Indenture has been accomplished (or if such opinion cannot be given at such time, (x) the opinion shall detail what filing, recording or other action is necessary and (y) Loan Trustee shall have received a certificate from a Responsible Officer of Company 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 promptly delivered to Loan Trustee subsequent to the effective date of such change in registration), (C) the obligations of Company under this Indenture 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), (D) all approvals or consents of any government in such jurisdiction having jurisdiction required for such change in registration shall have been duly obtained and shall be in full force and effect and (E) (unless Company shall have agreed to provide insurance covering the risk of requisition of use or title of the
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Aircraft by the government of such jurisdiction so long as the Aircraft is registered under the laws of such jurisdiction) the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use or title of the Aircraft in the event of requisition by such government of such use or title, and (ii) if such jurisdiction is at the time of registration not listed on Exhibit B, Loan Trustee shall have received (in addition to the opinions set forth in clause (i) above) at the time of such registration an opinion of counsel to Company to the effect that (A) the terms of this Indenture are legal, valid, binding and enforceable in such jurisdiction (subject to exceptions customary in such jurisdiction; provided that, subject to exceptions relating to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and exceptions relating to general principles of equity, such counsel shall opine that any applicable laws limiting the remedies provided in Section 4.02 do not in the opinion of such counsel make the remedies provided in Section 4.02 inadequate for the practical realization of the rights and benefits provided thereby), (B) it is not necessary for Loan Trustee to register or qualify to do business in such jurisdiction and (C) there is no tort liability of the lender of an aircraft not in possession thereof under the laws of such jurisdiction other than tort liability that might have been imposed on such lender under the laws of the United States or any state thereof (it being understood that such opinion shall be waived if insurance reasonably satisfactory to Loan Trustee is provided, at Company’s expense, to cover such risk). Loan Trustee will cooperate with Company in effecting such foreign registration. Notwithstanding the foregoing, prior to any such change in the country of registry of the Aircraft, the following conditions shall be met (or waived as provided in Section 6.01(b) of the Participation Agreement):
(i) no Event of Default shall have occurred and be continuing at the effective date of the change in registration; provided that it shall not be necessary to comply with this condition if the change in registration results in the registration of the Aircraft under the laws of the United States or if a Majority in Interest of Noteholders consents to such change in registration;
(ii) Loan Trustee shall have received evidence of compliance with the insurance provisions contained herein after giving effect to such change in registration;
(iii) other than in the case of a change in registration to Taiwan, the proposed change in registration is made to a country with which the United States then maintains normal diplomatic relations, and in the case of a change in registration to Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing Date; and
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(iv) Company shall have paid or made provision reasonably satisfactory to Loan Trustee for the payment of all reasonable expenses (including reasonable attorneys’ fees) of Loan Trustee and Noteholders in connection with such change in registration.
Company shall (i) from time to time, take such actions as may be required to be taken by Company so that any International Interest arising in relation to this Indenture, the Aircraft, any Replacement Aircraft, any Engine or Replacement Engine may be duly registered (and any such registration may be assigned, amended, extended or discharged) at the International Registry, and (ii) obtain from the International Registry all approvals as may be required duly and timely to perform Company’s obligations under this Indenture with respect to the registration of any such International Interest. Loan Trustee shall take all actions necessary with respect to the International Registry to consent to Company’s initiation of any registrations required under this Indenture to enable Company to complete such registrations, including, without limitation, appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty) to consent to any registrations on the International Registry with respect to the Airframe or any Engine.
Section 7.03 Inspection; Financial Information.
(a) Inspection. At all reasonable times, but upon at least 15 Business Days’ prior written notice to Company, Loan Trustee or its authorized representatives may, subject to the other conditions of this Section 7.03(a), inspect the Aircraft and may inspect the books and records of Company relating to the maintenance of the Aircraft required to be maintained by the FAA or the government of another jurisdiction in which the Aircraft is then registered; provided that (i) Loan Trustee or its representatives, as the case may be, shall be fully insured at no cost to Company or any Permitted Lessee in a manner satisfactory to Company and such Permitted Lessee with respect to any risks incurred in connection with any such inspection or shall provide to Company and such Permitted Lessee a written release satisfactory to Company and such Permitted Lessee with respect to such risks, (ii) any such inspection shall be during Company’s or Permitted Lessee’s, as the case may be, normal business hours and subject to the safety, security and workplace rules applicable at the location where such inspection is conducted and any applicable governmental rules or regulations, (iii) any such inspection of the Aircraft shall be a visual, walk-around inspection of the interior and exterior of the Aircraft and shall not include opening any panels, bays or the like without Company’s express consent, which consent Company may in its sole discretion withhold, and (iv) no exercise of such inspection right shall interfere with the use, operation or maintenance of the Aircraft by, or the business of, Company or any Permitted Lessee and Company and
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any Permitted Lessee shall not be required to undertake or incur any additional liabilities in connection therewith. All information obtained in connection with any such inspection of the Aircraft and of such books and records shall be Confidential Information and shall be treated by Loan Trustee and its representatives in accordance with the provisions of Section 10.16. Any inspection pursuant to this Section 7.03(a) shall be at the sole risk (including, without limitation, any risk of personal injury or death) and expense of Loan Trustee (or its representatives) making such inspection. Except during the continuance of an Event of Default, all inspections by Loan Trustee and its representatives provided for under this Section 7.03(a) shall be limited to one inspection of any kind contemplated by this Section 7.03(a) during any consecutive twelve month period.
(b) Financial Information. So long as any of the Secured Obligations remain unpaid, Company agrees to furnish to Loan Trustee: (i) within 60 days after the end of each of the first three quarterly periods in each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries prepared by it as of the close of such period, together with the related consolidated statements of income for such period or (y) a report of Company on Form 10-Q in respect of such period in the form filed with the Securities and Exchange Commission and (ii) within 120 days after the close of each fiscal year of Company, either (x) a consolidated balance sheet of Company and its consolidated subsidiaries as of the close of such fiscal year, together with the related consolidated statements of income for such fiscal year, certified by independent public accountants, or (y) a report of Company on Form 10-K in respect of such year in the form filed with the Securities and Exchange Commission. The items required to be furnished pursuant to clause (i) and clause (ii) above shall be deemed to have been furnished on the date on which such item is posted on the Securities and Exchange Commission’s website at www.sec.gov, and such posting shall be deemed to satisfy the requirements of clause (i) and clause (ii); provided that Company will deliver a paper copy of any item referred to in clause (i) and clause (ii) above if Loan Trustee so requests.
Section 7.04 Replacement and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines.
(a) Replacement of Parts. Company shall (or shall cause a Permitted Lessee to) promptly replace or cause to be replaced all Parts incorporated or installed in or attached to the Airframe or any Engine and that become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use for any reason, except as otherwise provided in Section 7.04(c) or if the Airframe or an Engine to which a Part relates has suffered an Event of Loss. In addition, Company (or any Permitted Lessee) may remove (or cause to be removed) in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts, whether or not worn out, lost,
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stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use; provided that Company (or any Permitted Lessee), except as otherwise provided in Section 7.04(c), will replace such Parts as promptly as practicable. All replacement Parts shall be free and clear of all Liens (except for Permitted Liens and except in the case of replacement property temporarily installed on an emergency basis) and shall be in the condition and repair required to be maintained by the terms hereof. Except as otherwise provided in Section 7.04(c), any Part removed from the Airframe or any Engine shall remain subject to the Lien of this Indenture no matter where located until it is replaced by a part incorporated or installed in or attached to the Airframe or such Engine that meets the requirements for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated or installed in or attached to the Airframe or any Engine as above provided (except in the case of replacement property temporarily installed on an emergency basis), without further act, (i) the replaced Part shall thereupon be free and clear of all rights of Loan Trustee and of the Lien of this Indenture and shall no longer be deemed a Part hereunder, and (ii) such replacement Part shall become subject to the Lien of this Indenture and be deemed a Part of the Airframe or such Engine for all purposes to the same extent as the Parts originally incorporated or installed in or attached to the Airframe or such Engine. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such replaced Part from the Lien of this Indenture.
(b) Pooling of Parts. Any Part removed from the Airframe or any Engine as provided in Section 7.04(a) may be subjected by Company or a Person permitted to be in possession of the Airframe or such Engine to a pooling arrangement entered into in the ordinary course of Company’s or such Person’s business; provided that the part replacing such removed Part shall be incorporated or installed in or attached to the Airframe or such Engine in accordance with Section 7.04(a) as promptly as practicable after the removal of such removed Part. In addition, any replacement Part when incorporated or installed in or attached to the Airframe or any Engine may be owned by any third party subject to such a pooling arrangement; provided that Company, at its expense, as promptly thereafter as practicable either (i) causes title to such replacement Part to vest in Company free and clear of all Liens (except Permitted Liens), or (ii) replaces (or causes to be replaced) such replacement Part by incorporating or installing in or attaching to the Airframe or such Engine a further replacement Part in the manner contemplated by Section 7.04(a).
(c) Alterations, Modifications and Additions. Company will, or will cause a Permitted Lessee to, make (or cause to be made) such alterations and modifications in and additions to the Airframe and the Engines as are required from time to time to meet the applicable requirements of the FAA or any applicable government of any other
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jurisdiction in which the Aircraft is then registered; except for (i) immaterial and non-recurring violations with respect to which corrective measures are being taken promptly by Company (or, if a Lease is then in effect, any Permitted Lessee) upon discovery thereof and (ii) any law, rule, regulation or order the validity or application of which is being contested in good faith by Company (or, if a Lease is then in effect, any Permitted Lessee) in any manner which does not involve any material risk of sale, loss or forfeiture of the Aircraft and does not materially adversely affect Loan Trustee’s interest in the Aircraft. In addition, Company (or any Permitted Lessee), at its own expense, may from time to time add further parts or accessories and make or cause to be made such alterations and modifications in and additions to the Airframe or any Engine as Company (or any Permitted Lessee) deems desirable in the proper conduct of its business, including, without limitation, removal (without replacement) of Parts; provided that no such alteration, modification or addition shall materially diminish the value or utility of the Airframe or such Engine below its value or utility immediately prior to such alteration, modification or addition, assuming that the Airframe or such Engine was then in the condition required to be maintained by the terms of this Indenture, except that the value (but not the utility) of the Airframe or any Engine may be reduced by the value of any such Parts that are removed that Company (or such Permitted Lessee) deems obsolete or no longer suitable or appropriate for use on the Airframe or any Engine. For the avoidance of doubt, Company may make alterations in the passenger configuration of the Aircraft and such alterations shall not be subject to the immediately preceding sentence. All Parts incorporated or installed in or attached or added to the Airframe or any Engine as the result of such alteration, modification or addition shall, without further act, be subject to the Lien of this Indenture. Notwithstanding the foregoing, Company (or any Permitted Lessee) may, at any time, remove any Part from the Airframe or any Engine if such Part: (i) is in addition to, and not in replacement of or substitution for, any Part originally incorporated or installed in or attached to the Airframe or such Engine at the time of delivery thereof to Company or any Part in replacement of, or substitution for, any such Part, (ii) is not required to be incorporated or installed in or attached or added to the Airframe or such Engine pursuant to the first sentence of this Section 7.04(c) and (iii) can be removed from the Airframe or such Engine without materially diminishing the value or utility required to be maintained by the terms of this Indenture that the Airframe or such Engine would have had had such Part never been installed on the Airframe or such Engine. Upon the removal by Company (or any Permitted Lessee) of any Part as permitted by this Section 7.04(c), such removed Part shall, without further act, be free and clear of all rights and interests of Loan Trustee and the Lien of this Indenture and shall no longer be deemed a Part hereunder. Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the release of any such removed Part from the Lien of this Indenture. Loan Trustee acknowledges that it has no interest in the Excluded Equipment. Notwithstanding the provisions of this Section 7.04(c) or any other term or condition of this Indenture, Company (or any Permitted Lessee) may from time to time install on, and remove from, the Aircraft equipment that is owned by, leased to or
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conditionally sold to Company (or any Permitted Lessee) (and title to such equipment shall remain vested in Company, such Permitted Lessee, or the lessor or the conditional vendor thereof) if (1) such equipment is Excluded Equipment and (2) the location affected by any such removal, if damaged, is repaired prior to return, in a workmanlike manner, to a condition suitable for commercial passenger service; provided that all costs of installation, removal and replacement shall be the responsibility of Company.
(d) Substitution of Engines. Company shall have the right at its option at any time and from time to time, on at least 30 days’ prior written notice to Loan Trustee, to substitute a Replacement Engine for any Engine. In such event, and prior to the date of such substitution, Company shall replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine.
(e) Substitution of Airframe. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute a Substitute Airframe, free and clear of all Liens (other than Permitted Liens), for the Airframe so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) the Substitute Airframe has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the Manufacturer) and (iii) the Substitute Airframe has a MCMV (as defined below) at least equal to the MCMV of the Airframe being replaced by the Substitute Airframe (assuming that the Airframe had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV” is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Substitute Airframe and the Airframe being replaced by the Substitute Airframe, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Substitute Airframe and such Airframe as of the same date within the 60-day period prior to the substitution for both the Substitute Airframe and such Airframe.
Prior to or at the time of any substitution under this Section 7.04(e), Company will (A) cause an Indenture Supplement covering such Substitute Airframe to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft may then be registered, (B) cause the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute
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Airframe is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Substitute Airframe to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Substitute Airframe is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or statements with respect to such Substitute Airframe or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft may then be registered, (D) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such substitution, such Substitute Airframe will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Substitute Airframe, (F) furnish Loan Trustee with a copy of the original bill of sale in respect of such Substitute Airframe, (G) furnish Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Substitute Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the opinion of counsel to Company delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as shall at the time be customary in opinions rendered in comparable circumstances and (H) cause Loan Trustee to be named as “Controlling Party” under an airframe warranties agreement with respect to such Substitute Airframe substantially similar to the Airframe Warranties Agreement.
In the case of the Substitute Airframe subjected to the Lien of this Indenture under this Section 7.04(e), promptly upon the recordation of the Indenture Supplement covering such Substitute Airframe pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Substitute Airframe is registered), Company will cause to be delivered to Loan Trustee a favorable opinion of aviation law counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee as to the due registration of the aircraft to which the Substitute Airframe is part and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Substitute Airframe and the validity and perfection of the security interest in the Substitute Airframe granted to Loan Trustee under this Indenture.
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For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Substitute Airframe shall become part of the Collateral and shall be deemed an “Airframe” as defined herein. Upon compliance with clauses (A) through H) of the second preceding paragraph, Loan Trustee shall execute and deliver to Company an appropriate instrument releasing the replaced Airframe, all proceeds (including, without limitation, insurance proceeds, if any), and all rights relating to the foregoing, from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to such replaced Airframe.
(f) Substitution of Aircraft. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’ prior written notice to Loan Trustee, to substitute one or more Substitute Aircraft, free and clear of all Liens (other than Permitted Liens), for the Aircraft so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution, (ii) Company shall have obtained a written confirmation from each of the Rating Agencies to the effect that such substitution would not result in (x) a reduction of the rating for any class of Pass Through Certificates then rated by such Rating Agency below the then current rating for such class of Pass Through Certificates or (y) a withdrawal or suspension of the rating of any class of Pass Through Certificates then rated by such Rating Agency, (iii) with respect to each Substitute Aircraft, the airframe constituting a part of such Substitute Aircraft has a date of manufacture no earlier than one year prior to the date of manufacture of the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed to be the date of original delivery of the applicable airframe to a customer by the applicable airframe manufacturer) and (iv) such Substitute Aircraft has (or, in the case of more than one Substitute Aircraft, collectively have) an aggregate MCMV (as defined below) at least equal to the MCMV of the Aircraft being replaced by such Substitute Aircraft (assuming that the Aircraft had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV”, with respect to the Aircraft and any Substitute Aircraft, is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor organization) adjusted for the maintenance status of the Aircraft and such Substitute Aircraft, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser with respect to the Aircraft and such Substitute Aircraft as of the same date within the 60-day period prior to the substitution for each of the Aircraft and such Substitute Aircraft.
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Prior to the effectiveness of any such substitution pursuant to this Section 7.04(f), (A) if a single Substitute Aircraft is being substituted for the Aircraft, Company shall prepare amendments to this Indenture in order to make the reasonably necessary changes arising from such substitution and (B) if more than one Substitute Aircraft is being substituted for the Aircraft, Company shall (1) prepare amendments to this Indenture in order to make the reasonably necessary changes to substitute the Aircraft with one of such Substitute Aircraft, (2) prepare separate financing agreements substantially in the form of the Operative Documents with respect to each other Substitute Aircraft and (3) reallocate the principal amount of the Equipment Notes relating to the Aircraft among the Substitute Aircraft pro rata based on the MCMV of each Substitute Aircraft or on such other basis among each Substitute Aircraft determined in a manner consistent with, and as would preserve the aggregate amortization profile of, the Equipment Notes relating to the Aircraft.
Prior to or at the time of any substitution under this Section 7.04(f), with respect to the airframe and each engine constituting any Substitute Aircraft, Company shall comply with the terms of Section 7.04(d) or Section 7.04(e), as applicable, of this Indenture (or the other financing agreements substantially in the form of the Operative Documents to which such Substitute Aircraft shall be subject) with respect thereto; provided, however, notwithstanding anything to the contrary in any such Section 7.04(d) or Section 7.04(e), except as provided in the first paragraph of this Section 7.04(f), there shall be no requirement (or requirement to provide any certificate) that any airframe or any engine have a certain value or utility.
Section 7.05 Loss, Destruction or Requisition.
(a) Event of Loss with Respect to the Airframe. Upon the occurrence of an Event of Loss with respect to the Airframe or the Airframe and the Engines then installed thereon, Company shall as soon as practicable (and, in any event, within 30 days after an Event of Loss has occurred) notify Loan Trustee of such Event of Loss, and, within 90 days after such Event of Loss, Company shall give Loan Trustee written notice of its election to perform one of the following options (it being agreed that if Company has not given such notice of election within such 90-day period, Company shall be deemed to have elected to perform the option set forth in the following clause (ii)). Company may elect either to:
(i) substitute, on or before the Loss Payment Date (as defined below), as replacement for the Airframe or Airframe and Engines with respect to which an Event of Loss has occurred, a Replacement Airframe (together with a number of Replacement Engines equal to the number of Engines, if any, with respect to which the Event of Loss occurred), such Replacement Airframe and Replacement
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Engines to be owned by Company free and clear of all Liens (other than Permitted Liens); provided that if Company has not performed such obligation on or prior to the Loss Payment Date, then Company shall on the Loss Payment Date redeem the Equipment Notes in full in accordance with Section 2.10; or
(ii) redeem, on or before the Loss Payment Date, the Equipment Notes in full in accordance with Section 2.10. Company shall give Loan Trustee 20 days’ prior written notice if it elects to redeem the Equipment Notes on any day prior to the Loss Payment Date.
The “Loss Payment Date” with respect to an Event of Loss means the Business Day next succeeding the 120th day following the date of occurrence of such Event of Loss.
If Company elects to substitute a Replacement Airframe (or a Replacement Airframe and one or more Replacement Engines, as the case may be) Company shall, at its sole expense, not later than the Loss Payment Date, (A) cause an Indenture Supplement for such Replacement Airframe and Replacement Engines, if any, to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of such other jurisdiction in which the Aircraft is then registered, (B) cause the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Airframe and Replacement Engines, if any, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Airframe and Replacement Engines, if any, is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (C) cause a financing statement or statements with respect to the Replacement Airframe and Replacement Engines, if any, or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft is then registered, (D) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that upon such replacement, such Replacement Airframe and Replacement Engines, if any, will be subject to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with a certificate of an independent aircraft engineer or appraiser, certifying that the Replacement Airframe and Replacement Engines, if any, have a value and utility at least
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equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Airframe and Engines, if any, so replaced, assuming the Airframe and such Engines were in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss, (F) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Airframe and Replacement Engines, if any, (G) furnish Loan Trustee with a copy of the original bill of sale in respect of such Replacement Airframe and a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engines, if any, (H) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Replacement Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor contained in the Section 1110 opinion of Company’s counsel delivered pursuant to Section 3.01 of the Participation Agreement on the Closing Date and such other qualifications and assumptions as are at the time customary in opinions rendered in comparable circumstances and (I) cause Loan Trustee to be named as “Controlling Party” under an airframe warranties agreement with respect to such Replacement Airframe substantially similar to the Airframe Warranties Agreement.
In the case of each Replacement Airframe or Replacement Airframe and one or more Replacement Engines subjected to the Lien of this Indenture under this Section 7.05(a), promptly upon the recordation of the Indenture Supplement covering any such Replacement Airframe and Replacement Engines, if any, pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which such Replacement Airframe and Replacement Engines, if any, are registered), Company will cause to be delivered to Loan Trustee a favorable opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due registration of such Replacement Aircraft and the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Airframe and Replacement Engines, if any, to Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement
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Engines, if any, is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created pursuant to the Indenture Supplement with respect to such Replacement Airframe and Replacement Engines, if any, and the validity and perfection of the security interest in the Replacement Aircraft granted to Loan Trustee under this Indenture.
For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Aircraft and Replacement Engines, if any, shall become part of the Collateral, the Replacement Airframe shall be deemed an “Airframe” as defined herein, and each such Replacement Engine shall be deemed an “Engine” as defined herein. Upon compliance with clauses (A) through (I) of the third paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Airframe and Engines (if any) installed thereon at the time such Event of Loss occurred, all proceeds (including, without limitation, insurance proceeds) and all rights relating to the foregoing, from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement and assigning to Company all claims against third Persons for damage to or loss of the Airframe and Engines arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the replaced Airframe and replaced Engines, if any.
If, after an Event of Loss, Company performs the option set forth in clause (ii) of the first paragraph of this Section 7.05(a), Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing the Aircraft, all proceeds (including, without limitation, insurance proceeds) and all rights relating to the foregoing from the Lien of this Indenture, terminating Loan Trustee’s rights as “Controlling Party” under the Airframe Warranties Agreement and assigning to Company all claims against third Persons for damage to or loss of the Aircraft arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Airframe and Engines, if any, with respect to which such Event of Loss occurred.
(b) Event of Loss with Respect to an Engine. As soon as practicable following the occurrence of an Event of Loss with respect to an Engine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, Company shall give Loan Trustee prompt written notice thereof and shall, within 120 days after the occurrence of such Event of Loss, cause to be subjected to the Lien of this Indenture, as replacement for the Engine with respect to which such Event of Loss occurred, a Replacement Engine free and clear of all Liens (other than Permitted Liens).
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Prior to or at the time of any replacement under this Section 7.05(b), Company will (i) cause an Indenture Supplement covering such Replacement Engine to be delivered to Loan Trustee for execution and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the Aircraft is then registered, (ii) furnish Loan Trustee with a copy of the original bill of sale or, if the bill of sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice or purchase order) in respect of such Replacement Engine, which in the case of any such conveyance to which the Cape Town Convention is applicable shall be in such form as will qualify as “contract of sale” pursuant to Article V of the Aircraft Protocol, and all documents required under the Operative Documents to establish, continue, confirm, register and/or perfect the interests of Loan Trustee in such Replacement Engine, (iii) cause the sale of such Replacement Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Engine, each to be registered on the International Registry as a sale or an International Interest, respectively; provided that if the seller of such Replacement Engine is not situated in a country that has ratified the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International Registry, (iv) cause a financing statement or statements with respect to such Replacement Engine or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s interest therein in the United States, or in such other jurisdiction in which the Engine is then registered, (v) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to the effect that, upon such replacement, the Replacement Engine will be subject to the Lien of this Indenture, (vi) furnish Loan Trustee with a certificate of an aircraft engineer or appraiser (who may be an employee of Company) certifying that such Replacement Engine has a value and utility at least equal to (but in any event without regard to component modification status or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until any particular overhaul or maintenance visit) the Engine so replaced assuming such Engine was in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss and (vii) furnish Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06 with respect to such Replacement Engine. In the case of each Replacement Engine subjected to the Lien of this Indenture under this Section 7.05(b), promptly upon the recordation of the Indenture Supplement covering such Replacement Engine pursuant to the Transportation Code (or pursuant to the applicable law of such other jurisdiction in which the Aircraft is
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registered), Company will cause to be delivered to Loan Trustee an opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due recordation of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that has ratified the Cape Town Convention) and of the International Interest created pursuant to the Indenture Supplement with respect to such Replacement Engine and the validity and perfection of the security interest in the Replacement Engine granted to Loan Trustee under this Indenture. For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Engine shall become part of the Collateral and shall be deemed an “Engine” as defined herein. Upon compliance with clauses (i) through (vii) of the first sentence of this paragraph, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Engine, any proceeds (including, without limitation, insurance proceeds), the Warranty Rights in respect of such replaced Engine and all rights relating to any of the foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of such Engine arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation to the Engines with respect to which such Event of Loss occurred.
(c) Application of Payments for Event of Loss from Requisition of Title or Use. Any payments other than insurance proceeds (the application of which is provided for in Section 7.06) received at any time by Company or by Loan Trustee from any government or other Person with respect to an Event of Loss to the Airframe or any Engine, will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced pursuant to Section 7.05(a), so much of such payments remaining
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after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses that shall not exceed the amounts required to be paid by Company to Noteholders pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amount and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
(iii) if such payments are received with respect to an Engine with regard to which an Event of Loss has occurred, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
(d) Requisition for Use by the Government of the Airframe and the Engines Installed Thereon. In the event of the requisition for use or hire by any government (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition or hire) of the Airframe and the Engines or engines installed on the Airframe that does not constitute an Event of Loss, all of Company’s rights and obligations under this Indenture with respect to the Airframe and such Engines shall continue to the same extent as if such requisition or hire had not occurred; provided that, notwithstanding the foregoing, Company’s obligations other than payment obligations shall only continue to the extent feasible. All payments received by Company or Loan Trustee from such government for such requisition of the Airframe and Engines or engines shall be paid over to, or retained by, Company.
(e) Requisition for Use by the Government of an Engine not Installed on the Airframe. If any government requisitions the use or hire (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition), for a period in excess of sixty (60) days, of any Engine not then installed on the Airframe, Company will replace such Engine by complying with the terms of Section 7.05(b) to the same extent as if an Event of Loss had occurred with respect to such Engine. Upon such replacement, any payments received by Company or Loan Trustee from such government with respect to such requisition shall be paid over to, or retained by, Company.
(f) Application of Payments During Existence of Event of Default. Any amount referred to in Section 7.05 that is payable to or retainable by Company shall not be paid to or retained by Company if at the time of such payment or retention an Event of
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Default or Payment Default has occurred and is continuing, but shall be held by or paid over to Loan Trustee as security for the obligations of Company under this Indenture and the Participation Agreement. When any such Event of Default or Payment Default ceases, such amount shall be paid to Company.
Section 7.06 Insurance.
(a) Aircraft Liability Insurance.
(i) Except as provided in clause (ii) of this Section 7.06(a), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d), Company will carry, or cause to be carried, at no expense to Loan Trustee, aircraft liability insurance (including, but not limited to, passenger, contractual, bodily injury, personal injury, property damage, and products liability (exclusive of manufacturer’s product liability insurance and war risk, hijacking and allied perils insurance)) with respect to the Aircraft that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease in respect of the Aircraft is then in effect, by Permitted Lessee) of the same type as the Aircraft (A) in amounts that are not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s (or Permitted Lessee’s) fleet on which Company (or Permitted Lessee) carries insurance and operated by Company (or Permitted Lessee) on the same or similar routes as operated by the Aircraft; provided that such liability insurance shall not be less than the amount (the “Minimum Insurance Amount”) certified in the insurance report delivered to Loan Trustee and each Liquidity Provider on the Closing Date, and (B) that is maintained in effect with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(a) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests (defined below in this Section 7.06) may appear, as additional insureds (the “Additional Insureds”), (2) subject to the conditions of clause (3) below, provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report
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delivered on the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for 30 days after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. “Interests” as used in this Section 7.06(a), in Section 7.06(b), and in Section 7.06(c) with respect to any Person means the interests of such Person in the transactions contemplated by the Operative Documents.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of said clause (i) except that: (A) the amounts of coverage shall not be required to exceed the amounts of airline liability insurance from time to time applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown and (B) the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown.
(b) War Risk, Hijacking and Allied Perils Liability Insurance. If the Aircraft, the Airframe or any Engine is being operated in any war zone or area of recognized or, in Company’s (or Permitted Lessee’s) judgment, threatened hostilities, then Company shall maintain or cause to be maintained war risk, hijacking and allied perils liability insurance (x) in an amount that is not less than the aircraft liability insurance applicable to similar
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aircraft and engines in Company’s fleet on which Company carries insurance and operated by Company (or, if a Lease is then in effect, in the Permitted Lessee’s fleet on which such Permitted Lessee carries insurance and operated by such Permitted Lessee) on the same or similar routes as the Aircraft, the Airframe or such Engine; provided that such liability insurance shall not be less than the Minimum Insurance Amount, (y) that is maintained in effect with insurers of recognized responsibility, and (z) which shall cover the perils set forth in the insurance policies maintained in connection with the CRAF Program (as such insurance policies maintained in connection with the CRAF Program may be amended from time to time). Except with respect to any war risk, hijacking or allied perils liability insurance maintained on any aircraft operated by Company in connection with the CRAF Program (or, if a Lease is then in effect, by the Permitted Lessee), if war risk, hijacking or allied perils liability insurance is maintained by Company (or if a Lease is then in effect, by the Permitted Lessee) with respect to any aircraft owned or operated by Company (or such Permitted Lessee, as the case may be) of the same or similar type operated by Company (or such Permitted Lessee, as the case may be) on the same or similar routes as operated by the Aircraft, the Airframe or an Engine, then Company shall maintain or cause to be maintained with respect to the Aircraft war risk, hijacking and allied perils liability insurance in scope and coverage no less comprehensive, in an amount not less than the insurance maintained by Company (or such Permitted Lessee, as the case may be) with respect to such other aircraft, and with insurers of recognized responsibility. Any policies of insurance carried in accordance with this Section 7.06(b) and any policies taken out in substitution or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and each Liquidity Provider as their Interests may appear, as Additional Insureds, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee, or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance report delivered on or prior to the Closing Date to Loan Trustee and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for seven days (or such other period as is then generally available in the industry) after issuance to such Additional Insured of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by
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attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured. To the extent that Company’s war risk, hijacking and allied perils insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(c) Insurance Against Loss or Damage to Aircraft.
(i) Except as provided in clause (ii) of this Section 7.06(c), and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in Section 7.06(d) below, Company shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to Loan Trustee, all-risk aircraft hull insurance covering the Aircraft and all-risk coverage with respect to any Engines or Parts while removed from the Aircraft (including, but not limited to, war risk, hijacking and allied perils insurance, if and to the extent the same is maintained by Company (or, if a Lease is then in effect, by the Permitted Lessee) with respect to other similar aircraft operated by Company or such Permitted Lessee, as the case may be, on the same or similar routes) that is of the type as from time to time applicable to aircraft operated by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as the Aircraft; provided that (A) such insurance (including the permitted self-insurance) shall at all times while the Aircraft is subject to this Indenture be for an amount not less than 110% of the aggregate principal amount of the Equipment Notes outstanding from time to time, (B) such insurance need not cover an Engine while attached to an airframe not owned, leased or operated by Company, and (C) such insurance covering Engines and Parts removed from an Airframe or an airframe or (in the case of Parts) an Engine need be obtained only to the extent available at reasonable cost (as reasonably determined by Company (or Permitted Lessee)). Any policies carried in accordance with this Section 7.06(c) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds up to an amount equal to the outstanding principal amount of the Equipment Notes, together with accrued but unpaid interest thereon, plus an
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amount equal to the interest that would accrue on the outstanding principal amount of the Equipment Notes at the Debt Rate in effect on the date of payment of such insurance proceeds to Loan Trustee (as provided for in this sentence) during the period commencing on the day following the date of such payment to Loan Trustee and ending on the Loss Payment Date (the sum of such three amounts being the “Loan Amount”), payable for any loss or damage constituting an Event of Loss with respect to the Aircraft and any insurance proceeds in excess of the Insurance Threshold up to an amount equal to the Loan Amount for any loss or damage to the Aircraft (or Engines) not constituting an Event of Loss with respect to the Aircraft (or Engines), shall be paid to Loan Trustee as long as this Indenture has not been discharged, and that all other amounts shall be paid to Company or its designee, unless the insurer has received notice that an Event of Default exists, in which case all insurance proceeds for any loss or damage to the Aircraft (or Engines) up to an amount equal to the Loan Amount shall be payable to Loan Trustee, (2) subject to the conditions of clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided for by Company’s (or any Permitted Lessee’s) hull war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount) certified in the insurance report delivered on the Closing Date to Loan Trustee, and each Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not be effective as to the Additional Insureds for 30 days (seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking, or allied perils coverage) after issuance to the Additional Insureds of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent Company has waived its rights by its agreement to indemnify the Additional Insureds pursuant to the Operative Documents and (6) include a 50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insurance. To the extent that Company’s war risk, hijacking, and allied perils
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insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Additional Insureds immediate notice of each cancellation or change to such insurance.
(ii) During any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company (or Permitted Lessee) may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 7.06(d) below, insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes and engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 7.06(d) below, Company shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe or Engine in an amount at least equal to 110% of the aggregate outstanding principal amount of the Equipment Notes for the Aircraft or, with respect to a non-flown Engine, the replacement value of such Engine.
(d) Self-Insurance. Company may from time to time self-insure, by way of deductible, self-insured retention, premium adjustment or franchise or otherwise (including, with respect to insurance maintained pursuant to Sections 7.06(a), (b) or (c), insuring for a maximum amount that is less than the amounts set forth in Sections 7.06(a), (b) and (c) above), the risks required to be insured against pursuant to Sections 7.06(a), (b) and (c) above, but in no case shall the self-insurance with respect to all of the aircraft and engines in the combined fleet of Company and its Affiliates (including, without limitation, the Aircraft) exceed for any 12-month policy year 1.0% of the average aggregate insurable value (during the preceding policy year) of all aircraft (including, without limitation, the Aircraft) on which Company and its Affiliates carry insurance, unless an insurance broker of national standing certifies that the standard among other major United States airlines is a higher level of self-insurance, in which case Company may self-insure the Aircraft to such higher level; provided that (1) any deductible per occurrence that, in the case of the Aircraft, is not in excess of the amount customarily allowed as a deductible in the industry or is required to facilitate claims handling or (2) any applicable mandatory minimum per aircraft (or if applicable per annum or other period) hull or liability insurance deductibles imposed by the aircraft hull or liability insurers shall be permitted in addition to the above-mentioned self-insurance.
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(e) Indemnification by United States Government in Lieu of Insurance. Notwithstanding any provision of this Section 7.06 requiring insurance, in lieu of insurance against any risk with respect to the Aircraft, indemnification from, or insurance provided by, the United States government, or any agency or instrumentality thereof, against such risk in an amount which, when added to the amount of insurance maintained against such risk by Company (or, if a Lease is then in effect, by the Permitted Lessee), shall be at least equal to the amount of insurance against such risk otherwise required by this Section 7.06 (taking into account self-insurance permitted by Section 7.06(d)) shall be considered adequate insurance for purposes of this Section 7.06.
(f) Application of Insurance Payments. All losses will be adjusted by Company with the insurers. As between Loan Trustee and Company it is agreed that all insurance payments received under policies required to be maintained by Company hereunder, exclusive of any payments received in excess of the Loan Amount for the Aircraft from such policies, as the result of the occurrence of an Event of Loss with respect to the Airframe or an Engine will be applied as follows:
(i) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been or is being replaced by Company pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;
(ii) if such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not been and will not be replaced as contemplated by Section 7.05(a), so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses, as do not exceed the amounts required to be paid by Company pursuant to Section 2.10 shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid by Company, shall be applied to reimburse Company for its payment of such amounts, and the balance, if any, of such payment remaining thereafter will be paid over to, or retained by, Company; and
(iii) if such payments are received with respect to an Engine, so much of such payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that Company has fully performed its obligations under Section 7.05(b) with respect to the Event of Loss for which such payments are made.
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In all events, the insurance payment of any property damage or loss received under policies maintained by Company in excess of the Loan Amount for the Aircraft shall be paid to Company.
The insurance payments for any loss or damage to the Airframe or an Engine not constituting an Event of Loss with respect to the Airframe or such Engine will be applied in payment (or to reimburse Company) for repairs or for replacement property in accordance with the terms of Sections 7.02 and 7.04, and any balance remaining after compliance with such Sections with respect to such loss or damage shall be paid to Company. Any amount referred to in the preceding sentence or in clause (i) or (ii) of the first paragraph of this Section 7.06(f) that is payable to Company shall not be paid to Company (or, if it has been previously paid directly to Company, shall not be retained by Company) if at the time of such payment an Event of Default or Payment Default has occurred and is continuing, but shall be paid to and held by Loan Trustee as security for the obligations of Company under this Indenture and the other Operative Documents and shall be invested pursuant to Section 5.06 unless and until such amount is applied, at the option of Loan Trustee, to Company’s obligations under this Indenture and the other Operative Documents as and when due, it being understood that any such application shall be made to such obligations of Company as Loan Trustee may determine in its sole discretion. Loan Trustee shall give Company prompt written notice of any such application, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder. At such time as there shall be continuing no Event of Default or Payment Default, such amount shall be paid to Company to the extent not previously applied in accordance with this Section 7.06(f).
(g) Reports, Etc. On or before the Closing Date and annually following renewal of Company’s insurance coverage, Company will furnish to Loan Trustee and each Liquidity Provider current certificates of insurance and a report signed by a firm of independent aircraft insurance brokers appointed by Company (which brokers may be in the regular employ of Company), stating the opinion of such firm that the commercial hull and liability insurance then carried and maintained on the Aircraft complies with the terms hereof. All information contained in such report shall be Confidential Information and shall be treated by Loan Trustee and each Liquidity Provider and each of their Affiliates and their respective officers, directors, agents and employees in accordance with the provisions of Section 10.16. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider of any act or omission on the part of Company of which such firm has knowledge that might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft. Company will use commercially reasonable efforts to cause such firm to notify Loan Trustee and each Liquidity Provider as promptly as practicable after such firm acquires knowledge that a cancellation of any insurance carried and maintained on the Aircraft pursuant to this Section 7.06 will occur. Such information may only be provided to other Persons in accordance with Section 10.16.
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In the event that Company shall fail to maintain or to cause to be maintained insurance as herein provided, Loan Trustee may at its option obtain such insurance (giving Company prompt written notice thereof, but the failure to so notify Company shall not in any way affect the rights of Loan Trustee hereunder) and, in such event, Company shall, upon demand, reimburse Loan Trustee for the cost to Loan Trustee of such insurance, together with interest thereon at the Past Due Rate for the period commencing with the date such cost was paid to the date of reimbursement; provided, however, that no exercise by Loan Trustee of said option shall affect the provisions of this Indenture, including the provisions that failure by Company to maintain the prescribed insurance shall constitute an Event of Default.
(h) Salvage Rights; Other. All salvage rights to the Airframe and each Engine shall remain with Company’s insurers at all times, and any insurance policies of Loan Trustee insuring the Airframe or any Engine shall provide for a release to Company of any and all salvage rights in and to the Airframe or any Engine except if such insurance policies of Loan Trustee are obtained pursuant to the last paragraph of Section 7.06(g). Neither Loan Trustee nor any Noteholder may, directly or indirectly, obtain insurance for its own account with respect to the Airframe or any Engine if such insurance would limit or otherwise adversely affect the coverage or amounts payable under, or increase the premiums for, any insurance required to be maintained pursuant to this Section 7.06 or any other insurance maintained with respect to the Aircraft or any other aircraft in Company’s (or Permitted Lessee’s) fleet.
ARTICLE VIII
Successor and Additional Trustees
Section 8.01 Resignation or Removal; Appointment of Successor.
(a) The resignation or removal of Loan Trustee and the appointment of a successor Loan Trustee shall become effective only upon the successor Loan Trustee’s acceptance of appointment as provided in this Section 8.01. Loan Trustee or any successor thereto must resign if at any time it ceases to be eligible in accordance with the provisions of Section 8.01(c) and may resign at any time without cause by giving at least 60 days’ prior written notice to Company and each Noteholder. In addition, either
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Company (so long as no Event of Default or Payment Default shall have occurred and be continuing) or a Majority in Interest of Noteholders (but only with the consent of Company so long as no Event of Default or Payment Default shall have occurred and be continuing), may at any time remove Loan Trustee without cause by an instrument in writing delivered to Loan Trustee and each Noteholder, and, in case of a removal by a Majority in Interest of Noteholders, to Company. In the case of the resignation or removal of Loan Trustee, Company shall promptly appoint a successor Loan Trustee. If a successor Loan Trustee has not been appointed within 60 days after such notice of resignation or removal, Loan Trustee, Company or any Noteholder may apply to any court of competent jurisdiction to appoint a successor Loan Trustee to act until such time, if any, as a successor is appointed as above provided. The successor Loan Trustee so appointed by such court shall immediately and without further act be superseded by any successor Loan Trustee appointed as above provided.
(b) Any successor Loan Trustee, however appointed, shall execute and deliver to the predecessor Loan Trustee and Company an instrument accepting such appointment and assuming the obligations of Loan Trustee arising from and after the time of such appointment, and thereupon such successor Loan Trustee, without further act, shall become vested with all the estates, properties, rights, powers and duties of the predecessor Loan Trustee in the trust hereunder applicable to it with like effect as if originally named Loan Trustee herein; but nevertheless upon the written request of such successor Loan Trustee, such predecessor Loan Trustee shall execute and deliver an instrument transferring to such successor Loan Trustee all the estates, properties, rights and powers of such predecessor Loan Trustee, and such predecessor Loan Trustee shall duly assign, transfer, deliver and pay over to such successor Loan Trustee all monies or other property and all other books and records, or true, correct and complete copies thereof, then held by such predecessor Loan Trustee.
(c) This Indenture shall at all times have a Loan Trustee, however appointed, that is a Citizen of the United States (without the use of a voting trust) and a bank or trust company having a combined capital and surplus of at least $100,000,000 (or a combined capital and surplus in excess of $5,000,000 and the obligations of which, whether now in existence or hereafter incurred, are fully and unconditionally guaranteed by a corporation organized and doing business under the laws of the United States or any state or territory thereof or the District of Columbia and having a combined capital and surplus of at least $100,000,000) or a corporation with a net worth of at least $100,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Loan Trustee upon reasonable or customary terms. If such bank, trust company or corporation publishes reports of conditions at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 8.01(c) the combined capital and surplus of such bank,
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trust company or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. In case at any time Loan Trustee ceases to be eligible in accordance with the provisions of this Section 8.01(c), Loan Trustee shall resign immediately in the manner and with the effect specified in Section 8.01(a).
(d) Any bank, trust company or corporation into which Loan Trustee may be merged or converted or with which it may be consolidated, or any bank, trust company or corporation resulting from any merger, conversion or consolidation to which Loan Trustee is a party, or any bank, trust company or corporation to which substantially all the corporate trust business of Loan Trustee may be transferred, shall, subject to the terms of Section 8.01(c), be a successor Loan Trustee under this Indenture without further act.
Section 8.02 Appointment of Additional and Separate Trustees.
(a) Whenever (i) Company or Loan Trustee deems it necessary or desirable in order to conform to any law of any jurisdiction in which all or any part of the Collateral is situated or to make any claim or bring any suit with respect to or in connection with the Collateral, any Operative Document or any of the transactions contemplated by the Operative Documents, (ii) Loan Trustee shall be advised by counsel satisfactory to it that it is necessary or prudent in the interests of Noteholders (and Loan Trustee shall so advise Company) or (iii) Loan Trustee has been requested to do so by a Majority in Interest of Noteholders, then in any such case, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and such other, instruments as from time to time are necessary or advisable either (1) to constitute one or more banks or trust companies or corporations meeting the requirements of Section 8.01(c) and approved by Loan Trustee, either to act jointly with Loan Trustee as additional trustee or trustees of all or any part of the Collateral or to act as separate trustee or trustees of all or any part of the Collateral, in each case with such rights, powers, duties and obligations consistent with this Indenture as is provided in such supplemental indenture or other instruments as Loan Trustee or a Majority in Interest of Noteholders deems necessary or advisable, or (2) to clarify, add to or subtract from the rights, powers, duties and obligations theretofore granted any such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. If no Event of Default has occurred and is continuing, no additional or supplemental trustee shall be appointed without Company’s consent. If an Event of Default shall have occurred and be continuing, Loan Trustee may act under the foregoing provisions of this Section 8.02(a) without the concurrence of Company, and, to the extent permitted by applicable law, Company hereby irrevocably appoints (which appointment is coupled with an interest) Loan Trustee as its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 8.02(a). Loan Trustee may, in such capacity, execute, deliver and perform
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any such supplemental indenture, or any such instrument, as may be required for the appointment of any such additional or separate trustee or for the clarification of, addition to or subtraction from the rights, powers, duties or obligations theretofore granted to any such additional or separate trustee, subject in each case to the remaining provisions of this Section 8.02. In case any additional or separate trustee appointed under this Section 8.02(a) becomes incapable of acting, resigns or is removed, all the assets, property, rights, powers, trusts, duties and obligations of such additional or separate trustee shall revert to Loan Trustee until a successor additional or separate trustee is appointed as provided in this Section 8.02(a).
(b) No additional or separate trustee shall be entitled to exercise any of the rights, powers, duties and obligations conferred upon Loan Trustee in respect of the custody, investment and payment of monies and all monies received by any such additional or separate trustee from or constituting part of the Collateral or otherwise payable under any Operative Documents to Loan Trustee shall be promptly paid over by it to Loan Trustee. All other rights, powers, duties and obligations conferred or imposed upon any additional or separate trustee shall be exercised or performed by Loan Trustee and such additional or separate trustee jointly except to the extent that applicable law of any jurisdiction in which any particular act is to be performed renders Loan Trustee incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title to all or part of the Collateral in any such jurisdiction) shall be exercised and performed by such additional or separate trustee. No additional or separate trustee shall take any discretionary action except on the instructions of Loan Trustee or a Majority in Interest of Noteholders. No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, except that Loan Trustee shall be liable for the consequences of its lack of reasonable care in selecting, and Loan Trustee’s own actions in acting with, any additional or separate trustee. Each additional or separate trustee appointed pursuant to this Section 8.02 shall be subject to, and shall have the benefit of Articles IV, V, VI, VIII, IX and X insofar as they apply to Loan Trustee. The powers of any additional or separate trustee appointed pursuant to this Section 8.02 shall not in any case exceed those of Loan Trustee.
(c) If at any time Loan Trustee deems it no longer necessary or desirable or in the event that Loan Trustee has been requested to do so in writing by a Majority in Interest of Noteholders, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any additional or separate trustee. Loan Trustee may act on behalf of Company under this Section 8.02(c) when and to the extent it could so act under Section 8.02(a). In any case, Company may remove an additional or separate trustee in the manner set forth in Section 8.01.
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ARTICLE IX
Amendments and Waivers
Section 9.01 Amendments to this Indenture without Consent of Holders. At any time after the date hereof, Company may and Loan Trustee shall, at Company’s request, enter into one or more agreements supplemental hereto and amend the Equipment Notes without notice to or consent of any Noteholder, Indenture Indemnitee or Related Indenture Indemnitee for any of the following purposes: (i) to evidence the succession of another Person to Company and the assumption by any such successor of the covenants of Company contained in any Operative Documents pursuant to Section 6.02(e) of the Participation Agreement; (ii) to cure any defect or inconsistency herein or in the Equipment Notes, or to make any change not inconsistent with the provisions hereof (provided that such change does not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be); (iii) to cure any ambiguity or correct any mistake; (iv) to evidence the succession of a new trustee hereunder pursuant hereto or the removal of the trustee hereunder or to provide for or facilitate the appointment of an additional or separate trustee pursuant to Section 8.02; (v) to convey, transfer, assign, mortgage or pledge any property to or with Loan Trustee; (vi) to make any other provisions or amendments with respect to matters or questions arising hereunder or under the Equipment Notes, or to amend, modify or supplement any provision hereof or thereof, so long as such action shall not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be; (vii) to correct, supplement or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto Loan Trustee any property subject or required to be subject to the Lien of this Indenture or to subject to the Lien of this Indenture the Airframe or Engines or any Substitute Airframe, Replacement Airframe or Replacement Engine; (viii) to add to the covenants of Company for the benefit of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees or to surrender any rights or power herein conferred upon Company; (ix) to add to the rights of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees; (x) to include on the Equipment Notes any legend as may be required by law or as otherwise necessary or advisable; (xi) to comply with any applicable requirements of the Trust Indenture Act, or any other requirements of applicable law or of any regulatory body; (xii) to give effect to the replacement of a Liquidity Provider with a Replacement Liquidity Provider and the replacement of a Liquidity Facility with a Replacement Liquidity Facility therefor, and, if a Replacement Liquidity Facility is to be comprised of more than one instrument as contemplated by the definition of the term “Replacement Liquidity Facility” in the Intercreditor Agreement, to incorporate appropriate mechanics for multiple instruments
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for such Replacement Liquidity Facility for a single Pass Through Trust (including, without limitation, amendments to Section 2.14 with respect to the Replacement Liquidity Provider of such Replacement Liquidity Facility); (xiii) to provide for the original issuance of Additional Series Equipment Notes of one or more Series (and Related Additional Series Equipment Notes relating thereto) pursuant to clause (i) of the third sentence of Section 2.02 or the issuance of new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes of any one or more Series (and new Related Additional Series Equipment Notes relating thereto) pursuant to clause (ii) or (iii), as the case may be, of the third sentence of Section 2.02, and for the issuance of pass through certificates by any pass through trust that acquires any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) and to make changes relating to any of the foregoing (including, without limitation, to provide for any prefunding mechanism in connection therewith or to provide for the priority in payment among different Series of Additional Series Equipment Notes) and to provide for any credit support for any pass through certificates relating to any such Additional Series Equipment Notes (and Related Additional Series Equipment Notes), new Series A Equipment Notes (and new Related Series A Equipment Notes) or new Additional Series Equipment Notes (and new Related Additional Series Equipment Notes) (including, without limitation, to secure claims for fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider” and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple Liquidity Facilities for a single Pass Through Trust)); provided that any such Additional Series Equipment Notes, new Series A Equipment Notes or new Additional Series Equipment Notes, as the case may be, are issued in accordance with Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable; (xiv) to provide for the issuance of “Additional Series Equipment Notes” of one or more series or new “Series A Equipment Notes” or new “Additional Series Equipment Notes” in each case under any or all Related Indentures and other matters incidental or relating thereto; and (xv) to give effect to the substitution of the Aircraft pursuant to Section 7.04(f).
Section 9.02 Amendments to this Indenture with Consent of Holders.
(a) With the written consent of a Majority in Interest of Noteholders, Company may, and Loan Trustee shall, subject to Section 9.06, at any time and from time to time, enter into such supplemental agreements to add any provisions to or to change or eliminate any provisions of this Indenture or of any such supplemental agreements or to modify in any manner the rights and obligations of Company, Loan Trustee and Noteholders under this Indenture; provided that, without the consent of each Noteholder affected thereby, an amendment under this Section 9.02 may not:
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(1) reduce the principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note; provided that any change in the principal amount of any Equipment Note in connection with any substitution pursuant to Section 7.04(f) shall not require the consent of any Noteholder;
(2) change the date on which any principal amount of, Make-Whole Amount, if any, or interest on any Equipment Note, is due or payable;
(3) create any Lien with respect to the Collateral prior to or pari passu with the Lien thereon under this Indenture except such as are permitted by this Indenture, or deprive any Noteholder of the benefit of the Lien on the Collateral created by this Indenture, except as provided in connection with the exercise of remedies under Article IV; provided that, without the consent of each holder of an affected Related Equipment Note then outstanding, no such amendment, waiver or modification of terms of, or consent under, any thereof shall modify Section 3.03 or this clause (3) or deprive any Related Noteholder of the benefit of the Lien of this Indenture on the Collateral, except as provided in connection with the exercise of remedies under Article IV;
(4) reduce the percentage of the outstanding principal amount of the Equipment Notes the consent of whose holders is required for any such supplemental agreement, or the consent of whose holders is required for any waiver of compliance with certain provisions of this Indenture or of certain defaults hereunder or their consequences provided for in this Indenture; or
(5) make any change in Section 4.05 or this Section 9.02, except to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of each Noteholder affected thereby.
Notwithstanding the foregoing, neither Company nor Loan Trustee shall enter into any amendment, waiver or modification of, or supplement or consent to, this Indenture or any other Operative Document other than the Participation Agreement (which is addressed in Section 9.03) which shall reduce, modify or amend any indemnities in favor of any Liquidity Provider without the consent of such Liquidity Provider that is subject to such reduction, modification or amendment.
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(b) It is not necessary under this Section 9.02 for Noteholders to consent to the particular form of any proposed supplemental agreement, but it is sufficient if they consent to the substance thereof.
(c) Promptly after the execution by Company and Loan Trustee of any supplemental agreement pursuant to the provisions of this Section 9.02, Loan Trustee shall transmit by first-class mail or by hand delivery a notice, setting forth in general terms the substance of such supplemental agreement, to all Noteholders, as the names and addresses of such Noteholders appear on the Equipment Note Register. Any failure of Loan Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental agreement.
Section 9.03 Amendments, Waivers, Etc. of the Participation Agreement. Without the consent of a Majority in Interest of Noteholders, the respective parties to the Participation Agreement may not modify, amend or supplement such agreement, or give any consent, waiver, authorization or approval thereunder, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the respective parties thereunder; provided that, without the consent of Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee, the Participation Agreement may be modified, amended or supplemented in order (i) to cure any defect or inconsistency therein or to cure any ambiguity or correct any mistake, (ii) to amend, modify or supplement any provision thereof or make any other provision with respect to matters or questions arising thereunder or under this Indenture (provided that the making of any such other provision shall not materially adversely affect the interests of Noteholders) or (iii) to make any other change, or reflect any other matter, of the kind referred to in clauses (i) through (xiv) of Section 9.01. Notwithstanding the foregoing, without the consent of any Liquidity Provider, Company shall not enter into any amendment, waiver or modification of or supplement or consent to the Participation Agreement which shall reduce, modify or amend any indemnities in favor of such Liquidity Provider contained therein.
Section 9.04 Revocation and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Noteholder is a continuing consent by Noteholder and every subsequent Noteholder, even if notation of the consent is not made on any Equipment Note.
Section 9.05 Notation on or Exchange of Equipment Notes. Loan Trustee may place an appropriate notation about an amendment or waiver on any Equipment Note thereafter executed. Loan Trustee in exchange for such Equipment Notes may execute new Equipment Notes that reflect the amendment or waiver.
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Section 9.06 Trustee Protected. If, in the reasonable opinion of the institution acting as Loan Trustee, any document required to be executed by it pursuant to the terms of Section 9.01 or 9.02 adversely affects any right, duty, immunity or indemnity with respect to such institution under this Indenture, such institution may in its discretion decline to execute such document.
Section 9.07 No Consent of Individual Indenture Indemnitees Required. Notwithstanding anything in this Indenture or any other Operative Document to the contrary, when any provision hereof or thereof would otherwise require a consent of an Indenture Indemnitee, such provision shall always be construed to require only the consent of an Indenture Indemnitee other than any Indenture Indemnitee covered by clause (vii) of the definition of “Indenture Indemnitees”.
ARTICLE X
Miscellaneous
Section 10.01 Termination of Indenture. Subject to Sections 7.04 and 7.05, upon (or at any time after) payment in full of the principal amount of, Make-Whole Amount, if any, and interest on and all other amounts then due under all Equipment Notes and provided that there shall then be (x) no other Secured Obligations due and unpaid to Noteholders, Loan Trustee and other Indenture Indemnitees hereunder, under the Participation Agreement or any other Operative Document, and (y) no Related Secured Obligations due and unpaid under any Related Indenture or any other “Operative Document” (as defined in any Related Indenture), Company shall direct Loan Trustee to execute and deliver to or as directed in writing by Company an appropriate instrument releasing the Aircraft and the Engines and (subject to paragraph (ix) of clause “third” of Section 3.03, if applicable) all other Collateral from the Lien of this Indenture and Loan Trustee shall execute and deliver such instrument as aforesaid; provided that this Indenture and the trusts created hereby shall earlier terminate and this Indenture shall be of no further force or effect upon any sale or other final disposition by Loan Trustee of all property constituting part of the Collateral and the final distribution by Loan Trustee of all monies or other property or proceeds constituting part of the Collateral in accordance with the terms hereof. Except as aforesaid otherwise provided, this Indenture and the trusts created hereby shall continue in full force and effect in accordance with the terms hereof.
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Section 10.02 No Legal Title to Collateral in Noteholders. No holder of an Equipment Note or a Related Equipment Note shall have legal title to any part of the Collateral. No transfer, by operation of law or otherwise, of any Equipment Note, Related Equipment Note or other right, title and interest of any Noteholder or Related Noteholder in and to the Collateral or hereunder shall operate to terminate this Indenture or entitle such holder or any successor or transferee of such holder to an accounting or to the transfer to it of any legal title to any part of the Collateral.
Section 10.03 Sale of Aircraft by Loan Trustee is Binding. Any sale or other conveyance of the Aircraft, the Airframe, any Engine or any interest therein by Loan Trustee made pursuant to the terms of this Indenture shall bind Noteholders and Company and shall be effective to transfer or convey all right, title and interest of Loan Trustee, Company and such Noteholders in and to such Aircraft, Airframe, Engine or interest therein. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency or regularity of such sale or conveyance or as to the application of any sale or other proceeds with respect thereto by Loan Trustee or Noteholders.
Section 10.04 Indenture for Benefit of Company, Loan Trustee and Noteholders. Nothing in this Indenture, whether express or implied, shall be construed to give any Person other than Company, Noteholders, Loan Trustee, other Indenture Indemnitees, Related Loan Trustees and Related Indenture Indemnitees any legal or equitable right, remedy or claim under or in respect of this Indenture, except that the Persons referred to in the second to last full paragraph of Section 7.02(a) shall be third party beneficiaries of such paragraph.
Section 10.05 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents required or permitted under the terms and provisions of this Indenture shall be in English and in writing, and any such notice may be given by United States mail, courier service, facsimile, and any such notice shall be effective when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class U.S. mail and, if delivered by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient or by machine confirmation) that such transmission was received) addressed as follows:
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if to Company, addressed to:
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Attention: Treasurer, Dept. 856
Telephone: (404) 715-5993
Facsimile: (404) 715-4862
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (404) 715-7820
Facsimile: (404) 715-2233;
if to Loan Trustee, addressed to:
U.S. Bank Trust National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services
Ref.: Delta 2020-1 EETC
Telephone: (617) 603-6553
Facsimile: (617) 603-6683;
if to any Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to Section 2.07;
if to any Indenture Indemnitee other than Loan Trustee, addressed to the address of such party (if any) set forth in Section 7.01 of the Participation Agreement or to such other address as such Indenture Indemnitee shall have furnished by notice to Company and Loan Trustee; and
if to any Related Indenture Indemnitee, addressed to such Related Indenture Indemnitee at its address set forth in the Equipment Note Register (defined in the applicable Related Indenture) maintained pursuant to Section 2.07 of the applicable Related Indenture.
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Any party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as set forth in this Section 10.05.
Section 10.06 Severability. To the extent permitted by applicable law, any provision of this Indenture that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.07 No Oral Modification or Continuing Waivers. No terms or provisions of this Indenture or of the Equipment Notes may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by Company and Loan Trustee, in compliance with Article IX. Any waiver of the terms hereof or of any Equipment Note shall be effective only in the specific instance and for the specific purpose given.
Section 10.08 Successors and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of, and be enforceable by, each of the parties hereto and the successors and permitted assigns of each, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by any Noteholder shall bind the successors and permitted assigns of such Noteholder. Each Noteholder by its acceptance of an Equipment Note agrees to be bound by (i) this Indenture and all provisions of the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to a Noteholder and (ii) all provisions of each Related Indenture applicable to a Related Noteholder to the extent such Noteholder is such Related Noteholder.
Section 10.09 Headings. The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 10.10 Normal Commercial Relations. Anything contained in this Indenture to the contrary notwithstanding, Loan Trustee, any Noteholder or any other party to any of the Operative Documents or the Pass Through Documents or any of their affiliates may conduct any banking or other financial transactions, and have banking or other commercial relationships, with Company, fully to the same extent as if this Indenture were not in effect, including without limitation the making of loans or other extensions of credit to Company for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.
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| 94 | ||||
Section 10.11 Voting by Noteholders. All votes of Noteholders shall be governed by a vote of a Majority in Interest of Noteholders, except as otherwise provided herein.
Section 10.12 Section 1110. It is the intention of the parties hereto that the security interest created hereby, to the fullest extent available under applicable law, entitles Loan Trustee, on behalf of Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft.
Section 10.13 Company’s Performance and Rights. Any obligation imposed on Company herein shall require only that Company perform or cause to be performed such obligation, even if stated as a direct obligation, and the performance of any such obligation by any permitted assignee, lessee or transferee under an assignment, lease or transfer agreement then in effect and in accordance with the provisions of the Operative Documents shall constitute performance by Company and, to the extent of such performance, discharge such obligation by Company. Except as otherwise expressly provided herein, any right granted to Company in this Indenture shall grant Company the right to permit such right to be exercised by any such assignee, lessee or transferee, and, in the case of a lessee, as if the terms hereof were applicable to such lessee were such lessee Company hereunder. The inclusion of specific references to obligations or rights of any such assignee, lessee or transferee in certain provisions of this Indenture shall not in any way prevent or diminish the application of the provisions of the two sentences immediately preceding with respect to obligations or rights in respect of which specific reference to any such assignee, lessee or transferee has not been made in this Indenture.
Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts (and each of the parties hereto shall not be required to execute the same counterpart). Each counterpart of this Indenture including a signature page or pages executed by each of the parties hereto shall be an original counterpart of this Indenture, but all of such counterparts together shall constitute one instrument.
Section 10.15 Governing Law. THIS INDENTURE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS INDENTURE, ANY INDENTURE SUPPLEMENT AND THE EQUIPMENT NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
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| 95 | ||||
Section 10.16 Confidential Information. The term “Confidential Information” means: (a) the existence and terms of any lease of the Airframe or Engines pursuant to Section 7.02(a) and the identity of the Permitted Lessee thereunder; (b) all information obtained in connection with any inspection conducted by Loan Trustee or its authorized representatives pursuant to Section 7.03(a); (c) each certification furnished to Loan Trustee or any Liquidity Provider pursuant to Sections 7.06(a) and 7.06(b); (d) all information contained in each report furnished to Loan Trustee or any Liquidity Provider pursuant to Section 7.06(g); and (e) all information designated by Company as non-public information. All Confidential Information shall be held confidential by Loan Trustee, each Liquidity Provider and each Noteholder and each affiliate, agent, officer, director, or employee of any thereof and shall not be furnished or disclosed by any of them to anyone other than (i) Loan Trustee or any Noteholder and (ii) their respective bank examiners, auditors, accountants, agents and legal counsel, and except as may be required by an order of any court or administrative agency or by any statute, rule, regulation or order of any governmental authority.
Section 10.17 Submission to Jurisdiction. Each of the parties hereto, and by acceptance of Equipment Notes, each Noteholder, to the extent it may do so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Indenture, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, 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 Indenture or the Equipment Notes or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts.
[Signature Pages Follow.]
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| 96 | ||||
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereof duly authorized, as of the date first above written.
| DELTA AIR LINES, INC. | ||
| By: |
/s/ Kenneth W. Morge II |
|
| Name: Kenneth W. Morge II | ||
| Title: Vice President & Treasurer | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: |
/s/ Georgina Nassar |
|
| Name: Georgina Nassar | ||
| Title: Assistant Vice President | ||
Signature Page
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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Exhibit A
to Indenture and Security Agreement
(N822NW)
FORM OF INDENTURE SUPPLEMENT
INDENTURE SUPPLEMENT NO. _____
INDENTURE SUPPLEMENT NO. ____, dated _______________ ____, 20__ (“Indenture Supplement”), between DELTA AIR LINES, INC. (“Company”) and U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Loan Trustee under the Indenture (each as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement (N822NW), dated as of March 12, 2020 (the “Indenture”; capitalized terms used herein without definition shall have the meanings specified therefor in Annex A to the Indenture), between Company and U.S. Bank Trust National Association, not in its individual capacity, except as expressly provided therein, but solely as Loan Trustee (“Loan Trustee”), provides for the execution and delivery of supplements thereto substantially in the form hereof which shall particularly describe the Aircraft, and shall specifically grant a security interest in the Aircraft to Loan Trustee; and
[WHEREAS, the Indenture relates to the Airframe and Engines described in Annex A attached hereto and made a part hereof, and a counterpart of the Indenture is attached to and made a part of this Indenture Supplement;]7
[WHEREAS, Company has, as provided in the Indenture, heretofore executed and delivered to Loan Trustee Indenture Supplement(s) for the purpose of specifically subjecting to the Lien of the Indenture certain airframes and/or engines therein described, which Indenture Supplement(s) is/are dated and has/have been duly recorded with the FAA as set forth below, to wit:
Date Recordation Date FAA Document Number]8
| 7 |
Use for Indenture Supplement No. 1 only. |
| 8 |
Use for all Indenture Supplements other than Indenture Supplement No. 1. |
|
Indenture Supplement No. ____ (2020-1 EETC) N822NW |
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| A-1 | ||||
NOW, THEREFORE, (x) to secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in, to and under the Aircraft, including the Airframe and Engines described in Annex A attached hereto, whether or not any such Engine from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided in the Indenture, all substitutions and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment) relating thereto;
To have and to hold all and singular the aforesaid property unto Loan Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture Indemnitees, except as otherwise provided in the Indenture, including Section 2.13 and Article III of the Indenture, without any priority of any one Equipment Note over any other, or any Related Equipment Note over any other by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and subject to the terms and provisions set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the Indenture and shall form a part thereof, and the Indenture is hereby incorporated by reference herein and is hereby ratified, approved and confirmed.
|
Indenture Supplement No. ____ (2020-1 EETC) N822NW |
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| A-2 | ||||
THIS INDENTURE SUPPLEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
[Signature Pages Follow.]
|
Indenture Supplement No. ____ (2020-1 EETC) N822NW |
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| A-3 | ||||
IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement No. _____ to be duly executed by their respective duly authorized officers, on the date first above written.
| DELTA AIR LINES, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Loan Trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page
|
Indenture Supplement No. ____ (2020-1 EETC) N822NW |
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Annex A
to Indenture Supplement No. ___
(N822NW)
DESCRIPTION OF AIRFRAME AND ENGINES
AIRFRAME
|
Manufacturer |
Model |
Generic Manufacturer Model |
FAA Registration No. |
Manufacturer’s Serial No. |
||||
| Airbus | A330-302 | Airbus A330 | N822NW | 1627 |
ENGINES
|
Manufacturer |
Model |
Generic Manufacturer Model |
Manufacturer’s Serial Nos. |
|||
| General Electric | CF6-80E1A4 | GE CF6-80E |
811731 811732 |
Each Engine has 550 or more rated take-off horsepower or the equivalent of such horsepower and is a jet propulsion aircraft engine having at least 1750 pounds of thrust or the equivalent of such thrust.
|
Indenture Supplement No. ____ (2020-1 EETC) N822NW |
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Exhibit B
to Indenture and Security Agreement
(N822NW)
LIST OF PERMITTED COUNTRIES
| Argentina | Guatemala | Norway | ||
| Australia | Hong Kong | Panama | ||
| Austria | Hungary | Peoples’ Republic of China | ||
| Bahamas | Iceland | Philippines | ||
| Barbados | India | Poland | ||
| Belgium | Indonesia | Portugal | ||
| Bermuda Islands | Ireland | Republic of China (Taiwan) | ||
| Bolivia | Italy | Russia | ||
| Brazil | Jamaica | Singapore | ||
| British Virgin Islands | Japan | South Africa | ||
| Canada | Jordan | South Korea | ||
| Cayman Islands | Kuwait | Spain | ||
| Chile | Liechtenstein | Sweden | ||
| Colombia | Luxembourg | Switzerland | ||
| Czech Republic | Malaysia | Thailand | ||
| Denmark | Malta | Trinidad and Tobago | ||
| Ecuador | Mexico | Turkey | ||
| Egypt | Monaco | United Kingdom | ||
| Finland | Morocco | Uruguay | ||
| France | Netherlands Antilles | Venezuela | ||
| Germany | Netherlands, the | |||
| Greece | New Zealand | |||
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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| B-1 | ||||
Exhibit C
to Indenture and
Security Agreement
(N822NW)
CERTAIN TERMS
|
Insurance Threshold: |
$ | 20,000,000 |
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
||||
| C-1 | ||||
Schedule I
to Indenture and
Security Agreement
DESCRIPTION OF EQUIPMENT NOTES
|
Original Principal
Amount |
Maturity Date | |||||||
|
Series AA
Equipment Notes: |
$ | 41,175,000.00 | June 10, 2027 | |||||
|
Series A
Equipment Notes: |
$ | 10,559,000.00 | June 10, 2027 | |||||
CERTAIN DEFINED TERMS
|
Defined Term |
Definition | |||
|
Debt Rate for Series AA Equipment Notes |
2.000 | % per annum | ||
|
Make-Whole Spread for Series AA Equipment Notes |
0.200 | % | ||
|
Debt Rate for Series A Equipment Notes |
2.500 | % per annum | ||
|
Make-Whole Spread for Series A Equipment Notes |
0.300 | % | ||
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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| I-1 | ||||
Schedule I
to Indenture and
Security Agreement
(Cont’d)
DESCRIPTION OF EQUIPMENT NOTES9
The information set forth below this text in this Schedule has been intentionally omitted from the FAA filing copy as the parties hereto deem it to contain confidential information.
| 9 |
This page to be included only in the FAA filing package in the place of the completed amortization schedules. |
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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Schedule I
to Indenture and
Security Agreement
(Cont’d)
EQUIPMENT NOTES AMORTIZATION
SERIES AA EQUIPMENT NOTES
Airbus model A330-302
N822NW
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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Schedule I
to Indenture and
Security Agreement
(Cont’d)
SERIES A EQUIPMENT NOTES
Airbus model A330-302
N822NW
|
Indenture and Security Agreement (2020-1 EETC) N822NW |
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Schedule II
to Indenture and
Security Agreement
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date.
Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. and U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2020-1A, dated as of the Issuance Date.
Annex A to
Participation Agreement and
Indenture and Security Agreement
(N822NW)
DEFINITIONS
(N822NW)
“Additional Insureds” has the meaning specified in Section 7.06(a) of the Indenture.
“Additional Series” or “Additional Series Equipment Notes” means Equipment Notes issued under the Indenture and designated as a Series (other than “Series AA” or “Series A”) thereunder in the principal amounts and maturities and bearing interest as specified in Schedule I to the Indenture amended at the time of original issuance of such Additional Series under the heading for such Series.
“Additional Series Pass Through Certificates” means the pass through certificates issued by any Additional Series Pass Through Trust.
“Additional Series Pass Through Trust” means a grantor trust created to facilitate the issuance and sale of pass through certificates in connection with the issuance of any Additional Series Equipment Notes.
“Additional Series Pass Through Trust Agreement” means a Trust Supplement entered into in connection with the creation of an Additional Series Pass Through Trust, together with the Basic Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Additional Series Pass Through Trustee” means, with respect to any Additional Series Pass Through Trust, the trustee under the Additional Series Pass Through Trust Agreement for such Additional Series Pass Through Trust.
“Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the purposes of this definition, “control” (including “controlled by” and “under common control with”) shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether through the ownership of voting securities or by contract or otherwise. In no event shall U.S. Bank be deemed to be an Affiliate of Loan Trustee or vice versa.
“After-Tax Basis” means that indemnity and compensation payments required to be made on such basis will be supplemented by the Person paying the base amount by that amount which, when added to such base amount, and after deduction of all Federal, state, local and foreign Taxes required to be paid by or on behalf of the payee with respect of the receipt or realization of the base amount and any such supplemental amounts, and after consideration of any current tax savings of such payee resulting by way of any deduction, credit or other tax benefit actually and currently realized that is attributable to such base amount or Tax, shall net such payee the full amount of such base amount.
|
Annex A (2020-1 EETC) N822NW |
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“Agreement” and “Participation Agreement” mean that certain Participation Agreement (N822NW), dated on or before the Closing Date, among Company, U.S. Bank, Pass Through Trustee under each Pass Through Trust Agreement, Subordination Agent and Loan Trustee, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Aircraft” means the Airframe (or any Substitute Airframe or Replacement Airframe substituted therefor pursuant to Section 7.04 or Section 7.05, respectively, of the Indenture) together with the two Engines described in the Indenture Supplement originally executed and delivered under the Indenture (or any Replacement Engine that may from time to time be substituted for any of such Engines pursuant to Section 7.04 or Section 7.05 of the Indenture), whether or not any of such initial or substituted Engines is from time to time installed on such Airframe or installed on any other airframe or on any other aircraft. The term “Aircraft” includes any Replacement Aircraft.
“Aircraft Protocol” means the official English language text of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements, and revisions thereto (and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Aircraft Protocol with respect to that country, the Aircraft Protocol as in effect in such country, unless otherwise indicated).
“Airframe” means (a) the Airbus A330-302 (generic manufacturer and model Airbus A330) aircraft (except (i) the Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (ii) Excluded Equipment) specified on Annex A to the Indenture Supplement originally executed and delivered under the Indenture and (b) any and all related Parts. The term “Airframe” includes any Substitute Airframe or Replacement Airframe that is substituted for the Airframe pursuant to Section 7.04 or Section 7.05, respectively, of the Indenture. At such time as any Substitute Airframe or Replacement Airframe is so substituted and the Airframe for which such substitution is made is released from the Lien of the Indenture, such replaced Airframe shall cease to be an Airframe under the Indenture.
“Airframe Warranties Agreement” means the Airframe Warranties Agreement, dated November 14, 2016, substantially in the form of Exhibit D to the Participation Agreement, executed by the Manufacturer and as supplemented, modified and amended by the Replacement Controlling Party Notice, substantially in the form of Schedule 5 thereunder, dated the Closing Date and executed by the Company as “Outgoing Controlling Party” and the Loan Trustee as “New Controlling Party” and acknowledged and agreed by the Manufacturer.
“Appraisers” has the meaning set forth in the Intercreditor Agreement.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 United States Code §§101 et seq., as amended from time to time, or any successor statutes thereto.
|
Annex A (2020-1 EETC) N822NW |
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| 2 |
“Basic Pass Through Trust Agreement” means that certain Pass Through Trust Agreement, dated as of November 16, 2000, between Company and U.S. Bank (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association), as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms (but does not include any Trust Supplement).
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to close in New York, New York, Atlanta, Georgia, Boston, Massachusetts, Wilmington, Delaware or, if different from the foregoing, the city and state in which Loan Trustee, any Pass Through Trustee or Subordination Agent maintains its Corporate Trust Office or receives and disburses funds.
“Cape Town Convention” means the official English language text of the Convention on International Interests in Mobile Equipment, adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements, and revisions thereto (and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape Town Convention with respect to that country, the Cape Town Convention as in effect in such country, unless otherwise indicated).
“Cape Town Treaty” means, collectively, the official English language text of (a) the Convention on International Interests in Mobile Equipment, and (b) the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, in each case adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape Town Treaty with respect to that country, the Cape Town Treaty as in effect in such country, unless otherwise indicated, and (c) all rules and regulations adopted pursuant thereto and, in the case of each of the foregoing described in clauses (a) through (c), all amendments, supplements, and revisions thereto.
“Certificated Air Carrier” means a Citizen of the United States holding an air carrier operating certificate issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United States Code for aircraft capable of carrying ten or more individuals or 6,000 pounds or more of cargo or that otherwise is certified or registered to the extent required to fall within the purview of Section 1110.
“Citizen of the United States” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United States Code or any similar legislation of the United States enacted in substitution or replacement therefor.
“Claim” has the meaning specified in Section 4.02(a) of the Participation Agreement.
“Class AA Certificates” means Pass Through Certificates issued by the Class AA Pass Through Trust.
“Class AA Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Class AA Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
“Class AA Pass Through Trust” means the Delta Air Lines Pass Through Trust 2020-1AA created pursuant to the Basic Pass Through Trust Agreement, as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and U.S. Bank, as Class AA Trustee.
|
Annex A (2020-1 EETC) N822NW |
||||
| 3 |
“Class AA Trustee” means the trustee for the Class AA Pass Through Trust.
“Class A Certificates” means Pass Through Certificates issued by the Class A Pass Through Trust.
“Class A Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Class A Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
“Class A Pass Through Trust” means the Delta Air Lines Pass Through Trust 2020-1A created pursuant to the Basic Pass Through Trust Agreement, as supplemented by Trust Supplement No. 2020-1A, dated as of the Issuance Date, between Company and U.S. Bank, as Class A Trustee.
“Class A Trustee” means the trustee for the Class A Pass Through Trust.
“Closing” has the meaning specified in Section 2.03 of the Participation Agreement.
“Closing Date” means the Issuance Date.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” has the meaning specified in the granting clause of the Indenture.
“Company” means Delta Air Lines, Inc., and its successors and permitted assigns.
“Compulsory Acquisition” means requisition of title or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft, the Airframe or any Engine by any government that results in the loss of title or use of the Aircraft, the Airframe or any Engine by Company (or any Permitted Lessee) for a period in excess of 180 consecutive days, but shall exclude requisition for use or hire not involving requisition of title.
“Confidential Information” has the meaning specified in Section 10.16 of the Indenture.
“Controlling Party” has the meaning specified in Section 2.06 of the Intercreditor Agreement.
“Corporate Trust Office” has the meaning specified in Section 1.01 of the Intercreditor Agreement.
“CRAF Program” means the Civil Reserve Air Fleet Program authorized under 10 U.S.C. Section 9511 et seq. or any similar or substitute program under the laws of the United States.
“Debt Rate” means (i) with respect to any Series of Equipment Notes, the rate per annum specified for the applicable Series as such in Schedule I to the Indenture (as amended, in the case of any Series of Additional Series Equipment Notes, new Series A Equipment Notes or new
|
Annex A (2020-1 EETC) N822NW |
||||
| 4 |
Additional Series Equipment Notes of any Series issued pursuant to Section 2.02 of the Indenture, at the time of issuance of such Series), and (ii) for any other purpose, with respect to any period, the weighted average interest rate per annum during such period borne by the outstanding Equipment Notes, excluding in each case any interest payable at the Past Due Rate.
“Defaulted Operative Indenture” means any Operative Indenture (the terms “Event of Default”, “Equipment Notes” and “Payment Default” used in this definition have the meanings specified therefor in such Operative Indenture) with respect to which (i) a Payment Default has occurred and is continuing or an Event of Default described in Section 4.01(a) of such Operative Indenture has occurred and is continuing or (ii) an Event of Default other than an Event of Default described in Section 4.01(a) of such Operative Indenture has occurred and is continuing and, in any such case, either (x) the Equipment Notes issued thereunder have been accelerated and such acceleration has not been rescinded and annulled in accordance therewith or (y) the loan trustee under such Operative Indenture has given Company a notice of its intention to exercise one or more of the remedies specified in Section 4.02(a) of such Operative Indenture; provided that in the event of a bankruptcy proceeding under the Bankruptcy Code under which Company is a debtor, if and so long as the trustee or the debtor agrees to perform and performs all obligations of Company under such Operative Indenture and the Equipment Notes issued thereunder in accordance with Section 1110(a)(2) of the Bankruptcy Code and cures defaults under such Operative Indenture and Equipment Notes to the extent required by Section 1110(a)(2) of the Bankruptcy Code, such Operative Indenture shall not be a Defaulted Operative Indenture.
“Department of Transportation” means the United States Department of Transportation and any agency or instrumentality of the United States government succeeding to its functions.
“Direction” has the meaning specified in Section 2.16 of the Indenture.
“Dollars” and “$” mean the lawful currency of the United States.
“Eligible Account” means an account established by and with an Eligible Institution at the request of Loan Trustee, which institution agrees, for all purposes of the NY UCC including Article 8 thereof, that (a) such account shall be a “securities account” (as defined in Section 8-501(a) of the NY UCC), (b) such institution is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC), (c) all property (other than cash) credited to such account shall be treated as a “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC), (d) Loan Trustee shall be the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) in respect of such account, (e) it will comply with all entitlement orders issued by Loan Trustee to the exclusion of Company, (f) it will waive or subordinate in favor of Loan Trustee all claims (including, without limitation, claims by way of security interest, lien or right of set-off or right of recoupment), and (g) the “securities intermediary jurisdiction” (under Section 8-110(e) of the NY UCC) shall be the State of New York.
“Eligible Institution” means the corporate trust department of (a) U.S. Bank or any other Person that becomes a successor Loan Trustee under the Indenture, in each case, acting solely in its capacity as a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC), or (b) a depository institution organized under the laws of the United States of America or any
|
Annex A (2020-1 EETC) N822NW |
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| 5 |
one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), which has a Long-Term Rating (or, in each case, if a Long-Term Rating is not available, its Short-Term Rating equivalent) from either Moody’s of at least A3 or its equivalent or S&P of at least A- or its equivalent.
“Engine” means (a) each of the two General Electric CF6-80E1A4 engines (generic manufacturer and model GE CF6-80E) listed by manufacturer’s serial number and further described on Annex A to the Indenture Supplement originally executed and delivered under the Indenture, whether or not from time to time installed on the Airframe or installed on any other airframe or on any other aircraft and (b) any Replacement Engine substituted for an Engine pursuant to Section 7.04 or 7.05 of the Indenture; together in each case with any and all related Parts but excluding Excluded Equipment. At such time as a Replacement Engine is so substituted and the Engine for which substitution is made is released from the Lien of the Indenture, such replaced Engine shall cease to be an Engine under the Indenture.
“Equipment Note” means and includes any equipment notes issued under the Indenture in the form specified in Section 2.01 thereof (as such form may be varied pursuant to the terms of the Indenture) and any Equipment Note issued in exchange therefor or replacement thereof pursuant to Section 2.07 or 2.08 of the Indenture.
“Equipment Note Register” has the meaning specified in Section 2.07 of the Indenture.
“Equipment Note Registrar” has the meaning specified in Section 2.07 of the Indenture.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA as in effect at the date of the Participation Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“Event of Default” has the meaning specified in Section 4.01 of the Indenture.
“Event of Loss” means, with respect to the Aircraft, Airframe or any Engine, any of the following events with respect to such property:
(a) the loss of such property or of the use thereof due to destruction, damage beyond repair or rendition of such property permanently unfit for normal use for any reason whatsoever;
(b) any damage to such property which results in an insurance settlement with respect to such property on the basis of a total loss, a compromised total loss or a constructive total loss;
(c) the theft, hijacking or disappearance of such property for a period in excess of 180 consecutive days;
(d) the requisition for use or hire of such property by any government (other than a requisition for use or hire by a Government or the government of the country of registry of the Aircraft) that results in the loss of possession of such property by Company (or any Permitted Lessee) for a period in excess of 12 consecutive months;
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(e) the operation or location of the Aircraft, while under requisition for use by any government, in any area excluded from coverage by any insurance policy in effect with respect to the Aircraft required by the terms of Section 7.06 of the Indenture, unless Company shall have obtained indemnity or insurance in lieu thereof from such government;
(f) any Compulsory Acquisition;
(g) as a result of any law, rule, regulation, order or other action by the FAA or other government of the country of registry, the use of the Aircraft or Airframe in the normal business of air transportation is prohibited by virtue of a condition affecting all aircraft of the same type for a period of 18 consecutive months, unless Company is diligently carrying forward all steps that are necessary or desirable to permit the normal use of the Aircraft or Airframe or, in any event, if such use is prohibited for a period of three consecutive years; and
(h) with respect to an Engine only, any divestiture of title to or interest in an Engine or any event with respect to an Engine that is deemed to be an Event of Loss with respect to such Engine pursuant to Section 7.02(a)(vii) of the Indenture.
An Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe unless Company elects to substitute a Replacement Airframe pursuant to Section 7.05(a)(i) of the Indenture.
“Excluded Equipment” means (i) defibrillators, enhanced emergency medical kits and other medical equipment, (ii) airphones and other components or systems installed on or affixed to the Airframe that are used to provide individual telecommunications or electronic entertainment to passengers aboard the Aircraft, (iii) galley carts, beverage carts, waste containers, liquor kits, food tray carriers, ice containers, oven inserts, galley inserts, and other branded passenger convenience or service items, (iv) any items, equipment or systems leased by Company or any Permitted Lessee (other than items, equipment, or systems that are leased from Company pursuant to the applicable Lease) or owned by Company or any Permitted Lessee subject to a conditional sales agreement or a security interest (other than the security interest granted under the Indenture), and (v) cargo containers.
“FAA” means the United States Federal Aviation Administration and any agency or instrumentality of the United States government succeeding to its functions.
“FAA Bill of Sale” means collectively, (a) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by Manufacturer or an affiliate of Manufacturer in favor of the Company and recorded with the FAA, (b) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by the Company in favor of U.S. Bank National Association, as Owner Trustee and recorded with the FAA and (c) the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) executed by U.S. Bank National Association, as Owner Trustee in favor of the Company and recorded with the FAA.
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“Federal Funds Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by U.S. Bank from three Federal funds brokers of recognized standing selected by it.
“Government” means the government of any of Canada, France, Germany, Japan, The Netherlands, Sweden, Switzerland, the United Kingdom or the United States and any instrumentality or agency thereof.
“Indemnitee” has the meaning specified in Section 4.02(b) of the Participation Agreement.
“Indenture” means that certain Indenture and Security Agreement (N822NW), dated as of the Closing Date, between Company and Loan Trustee, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, including supplementation by an Indenture Supplement pursuant to the Indenture.
“Indenture Indemnitee” means (i) Loan Trustee, (ii) U.S. Bank, (iii) each separate or successor or additional trustee appointed pursuant to Section 8.02 of the Indenture, (iv) so long as it holds any Equipment Notes as agent and trustee of any Pass Through Trustee, Subordination Agent, (v) each Liquidity Provider, (vi) so long as it is the holder of any Equipment Notes, each Pass Through Trustee, and (vii) any of their respective successors and permitted assigns in such capacities, directors, officers, employees, agents and servants. No holder of a Pass Through Certificate in its capacity as such shall be an Indenture Indemnitee.
“Indenture Supplement” means a supplement to the Indenture, substantially in the form of Exhibit A to the Indenture, which particularly describes the Aircraft, and any Substitute Airframe, Replacement Airframe and/or Replacement Engine, included in the property subject to the Lien of the Indenture.
“Insurance Threshold” is the amount set forth as the Insurance Threshold in Exhibit C to the Indenture.
“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the Issuance Date, among Pass Through Trustees, Liquidity Providers and Subordination Agent, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms; provided that, for purposes of any obligations of Company, no amendment, modification or supplement to, or substitution or replacement of, such Intercreditor Agreement shall be effective unless consented to by Company.
“Interests” has the meaning specified in Section 7.06(a) of the Indenture.
“International Interest” has the meaning ascribed to the defined term “international interest” under the Cape Town Treaty.
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“International Registry” means the international registry established pursuant to the Cape Town Treaty.
“Issuance Date” means [ ], 2020.
“Lease” means any lease permitted by the terms of Section 7.02(a) of the Indenture.
“Lien” means any mortgage, pledge, lien, encumbrance, lease, sublease, sub-sublease or security interest.
“Liquidity Facilities” means, collectively, the Class AA Liquidity Facility and the Class A Liquidity Facility.
“Liquidity Providers” means, collectively, Class AA Liquidity Provider and Class A Liquidity Provider.
“Loan Amount” has the meaning specified in Section 7.06(c) of the Indenture.
“Loan Trustee” has the meaning specified in the introductory paragraph of the Indenture.
“Loan Trustee Liens” means any Lien attributable to U.S. Bank or Loan Trustee with respect to the Aircraft, any interest therein or any other portion of the Collateral arising as a result of (i) claims against U.S. Bank or Loan Trustee not related to its interest in the Aircraft or the administration of the Collateral pursuant to the Indenture, (ii) acts of U.S. Bank or Loan Trustee not permitted by, or the failure of U.S. Bank or Loan Trustee to take any action required by, the Operative Documents or the Pass Through Documents, (iii) claims against U.S. Bank or Loan Trustee relating to Taxes or Claims that are excluded from the indemnification provided by Section 4.02 of the Participation Agreement pursuant to said Section 4.02 or (iv) claims against U.S. Bank or Loan Trustee arising out of the transfer by any such party of all or any portion of its interest in the Aircraft, the Collateral, the Operative Documents or the Pass Through Documents, except while an Event of Default is continuing and prior to the time that Loan Trustee has received all amounts due to it pursuant to the Indenture.
“Long-Term Rating” has the meaning specified in the Intercreditor Agreement.
“Loss Payment Date” has the meaning specified in Section 7.05(a) of the Indenture.
“Majority in Interest of Noteholders” means, as of a particular date of determination and subject to Section 2.16 of the Indenture, the holders of at least a majority in aggregate unpaid principal amount of all Equipment Notes outstanding as of such date (excluding any Equipment Notes actually known by Loan Trustee to be held by Company or any Affiliate thereof, it being understood that a Pass Through Trustee shall be considered an Affiliate of Company as long as more than 50% in the aggregate face amount of Pass Through Certificates issued by the corresponding Pass Through Trust are held and able to be voted by Company or an Affiliate of Company or a Pass Through Trustee is otherwise under the control of Company or such Affiliate of Company (unless all Equipment Notes then outstanding are held by Company or any Affiliate thereof, including Pass Through Trustees which are considered Affiliates of Company pursuant hereto)); provided that for the purposes of directing any action or casting any vote or giving any consent, waiver or instruction hereunder, any Noteholder of an Equipment Note or Equipment Notes may allocate, in such Noteholder’s sole discretion, any fractional portion of the principal amount of such Equipment Note or Equipment Notes in favor of or in opposition to any such action, vote, consent, waiver or instruction.
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“Make-Whole Amount” means, with respect to any Equipment Note, the amount (as determined by an independent investment banker selected by Company (and, following the occurrence and during the continuance of an Event of Default, reasonably acceptable to Loan Trustee)), if any, by which (i) the present value of the remaining scheduled payments of principal and interest from the redemption date to maturity of such Equipment Note computed by discounting each such payment on a semiannual basis from its respective Payment Date (assuming a 360-day year of twelve 30 day months) using a discount rate equal to the Treasury Yield plus the Make-Whole Spread exceeds (ii) the outstanding principal amount of such Equipment Note plus accrued but unpaid interest thereon to the date of redemption. For purposes of determining the Make-Whole Amount, “Treasury Yield” means, at the date of determination, the interest rate (expressed as a semiannual equivalent and as a decimal rounded to the number of decimal places as appears in the Debt Rate of such Equipment Note and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing on the Average Life Date and trading in the public securities market either as determined by interpolation between the most recent weekly average constant maturity, non-inflation-indexed series yield to maturity for two series of United States Treasury securities, trading in the public securities markets, (A) one maturing as close as possible to, but earlier than, the Average Life Date and (B) the other maturing as close as possible to, but later than, the Average Life Date, in each case as reported in the most recent H.15 Page or, if a weekly average constant maturity, non-inflation indexed series yield to maturity for United States Treasury securities maturing on the Average Life Date is reported in the most recent H.15 Page, such weekly average yield to maturity as reported in such H.15 Page. “H.15 Page” means the H.15 Page, published by the Board of Governors of the Federal Reserve System on its website (or successor publication of such information by such Board of Governors). The date of determination of a Make-Whole Amount shall be the third Business Day prior to the applicable redemption date and the “most recent H.15 Page” means the H.15 Page published prior to the close of business on the third Business Day prior to the applicable redemption date. “Average Life Date” means, for each Equipment Note to be redeemed, the date which follows the redemption date by a period equal to the Remaining Weighted Average Life at the redemption date of such Equipment Note. “Remaining Weighted Average Life” of an Equipment Note, at the redemption date of such Equipment Note, means the number of days equal to the quotient obtained by dividing: (i) the sum of the products obtained by multiplying (A) the amount of each then remaining installment of principal, including the payment due on the maturity date of such Equipment Note, by (B) the number of days from and including the redemption date to but excluding the scheduled Payment Date of such principal installment by (ii) the then unpaid principal amount of such Equipment Note. Loan Trustee shall have no obligation to calculate, or verify the calculation of, the Make-Whole Amount.
“Make-Whole Spread” means, with respect to any Series of Equipment Notes, the percentage specified for the applicable Series as such in Schedule I to the Indenture (as amended, in the case of any Additional Series, new Series A Equipment Notes or new Additional Series issued pursuant to Section 2.02 of the Indenture, at the time of issuance of such Series).
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“Manufacturer” means, as the context may require, Airbus S.A.S., a société par actions simplifiée organized and existing under the laws of the Republic of France, or Airbus Americas, Inc., a Delaware corporation, and its successors and assigns.
“MCMV” has the meaning (i) in the case of the Airframe and any Substitute Airframe, specified in Section 7.04(e) of the Indenture and (ii) in the case of the Aircraft and any Substitute Aircraft, specified in Section 7.04(f) of the Indenture.
“Minimum Insurance Amount” has the meaning specified in Section 7.06(a) of the Indenture.
“Moody’s” means Moody’s Investors Service, Inc.
“Noteholder” means any Person in whose name an Equipment Note is registered on the Equipment Note Register (including, for so long as it is the registered holder of any Equipment Notes, Subordination Agent on behalf of Pass Through Trustees pursuant to the provisions of the Intercreditor Agreement).
“Noteholder Liens” means any Lien attributable to any Noteholder on or against the Aircraft, any interest therein or any other portion of the Collateral, arising out of any claim against such Noteholder that is not related to the Operative Documents or Pass Through Documents, or out of any act or omission of such Noteholder that is not related to the transactions contemplated by, or that constitutes a breach by such Noteholder of its obligations under, the Operative Documents or the Pass Through Documents.
“NY UCC” means the UCC as in effect in the State of New York.
“Operative Documents” means, collectively, the Participation Agreement, the Indenture, each Indenture Supplement and the Equipment Notes.
“Operative Indentures” means, as of any date, each “Indenture” (as such term is defined in the Intercreditor Agreement), dated as of the date of the Indenture, including the Indenture, but only if as of such date all “Equipment Notes” (as defined in each such “Indenture”) are held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in each such “Indenture”.
“Other Party Liens” means any Lien attributable to any Pass Through Trustee (other than in its capacity as Noteholder), Subordination Agent (other than in its capacity as Noteholder) or any Liquidity Provider on or against the Aircraft, any interest therein, or any other portion of the Collateral arising out of any claim against such party that is not related to the Operative Documents or Pass Through Documents, or out of any act or omission of such party that is not related to the transactions contemplated by, or that constitutes a breach by such party of its obligations under, the Operative Documents or the Pass Through Documents.
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“Participation Agreement” has the meaning set forth under the definition of “Agreement”.
“Parts” means any and all appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature (other than (a) complete Engines or engines and (b) Excluded Equipment), so long as the same are incorporated or installed in or attached to the Airframe or any Engine or so long as the same are subject to the Lien of the Indenture in accordance with the terms of Section 7.04 thereof after removal from the Airframe or any Engine.
“Pass Through Certificates” means the pass through certificates issued by any Pass Through Trust (and any other pass through certificates for which such pass through certificates may be exchanged).
“Pass Through Documents” means each Pass Through Trust Agreement, the Intercreditor Agreement and each Liquidity Facility.
“Pass Through Trust” means each of the two separate grantor trusts that have been created pursuant to the Pass Through Trust Agreements to facilitate certain of the transactions contemplated by the Operative Documents.
“Pass Through Trust Agreement” means each of the two separate Trust Supplements relating to the Pass Through Trusts, together in each case with the Basic Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Pass Through Trustee” means the trustee under each Pass Through Trust Agreement, together with any successor in interest and any successor or other trustee appointed as provided in such Pass Through Trust Agreement.
“Past Due Rate” means the lesser of (a) with respect to (i) any payment made to a Noteholder under any Series of Equipment Notes, the Debt Rate then applicable to such Series plus 1% and (ii) any other payment made under any Operative Document to any other Person, the Debt Rate plus 1% (computed on the basis of a year of 360 days comprised of twelve 30-day months) and (b) the maximum rate permitted by applicable law.
“Payment Date” means, for any Equipment Note, each December 10 and June 10, commencing with June 10, 2020.
“Payment Default” means the occurrence of an event that would give rise to an Event of Default under Section 4.01(a) of the Indenture upon the giving of notice or the passing of time or both.
“Permitted Investments” means each of (a) direct obligations of the United States and agencies thereof; (b) obligations fully guaranteed by the United States; (c) certificates of deposit issued by, or bankers’ acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the states thereof having combined capital and surplus and retained earnings of at least
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$100,000,000 and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (d) commercial paper of any holding company of a bank, trust company or national banking association described in clause (c); (e) commercial paper of companies having a Short-Term Rating assigned to such commercial paper by either Moody’s or S&P (or, if neither such organization then rates such commercial paper, by any nationally recognized rating organization in the United States) equal to the highest rating assigned by such organization; (f) Dollar-denominated certificates of deposit issued by, or time deposits with, the European subsidiaries of (i) any bank, trust company or national banking association described in clause (c), or (ii) any other bank or financial institution described in clause (g), (h) or (j) below; (g) United States-issued Yankee certificates of deposit issued by, or bankers’ acceptances of, or commercial paper issued by, any bank having combined capital and surplus and retained earnings of at least $100,000,000 and headquartered in Canada, Japan, the United Kingdom, France, Germany, Switzerland or The Netherlands and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (h) Dollar-denominated time deposits with any Canadian bank having a combined capital and surplus and retained earnings of at least $100,000,000 and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (i) Canadian Treasury Bills fully hedged to Dollars; (j) repurchase agreements with any financial institution having combined capital and surplus and retained earnings of at least $100,000,000 collateralized by transfer of possession of any of the obligations described in clauses (a) through (i) above; (k) bonds, notes or other obligations of any state of the United States, or any political subdivision of any state, or any agencies or other instrumentalities of any such state, including, but not limited to, industrial development bonds, pollution control revenue bonds, public power bonds, housing bonds, other revenue bonds or any general obligation bonds, that, at the time of their purchase, such obligations have a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such obligations, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (1) bonds or other debt instruments of any company, if such bonds or other debt instruments, at the time of their purchase, have a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such obligations, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States); (m) mortgage backed securities (i) guaranteed by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Government National Mortgage Association or having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such securities, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States) or, if unrated, deemed to be of a comparable
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quality by Loan Trustee and (ii) having an average life not to exceed one year as determined by standard industry pricing practices presently in effect; (n) asset-backed securities having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least A (or its equivalent) (or, if neither such organization then rates such securities, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States) or, if unrated, deemed to be of a comparable quality by Loan Trustee; and (o) such other investments approved in writing by Loan Trustee; provided that the instruments described in the foregoing clauses shall have a maturity no later than the earlier of (i) 365 days following the date of their purchase and (ii) the date when such investments may be required for distribution. The bank acting as Pass Through Trustee or Loan Trustee is hereby authorized, in making or disposing of any investment described herein, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of Pass Through Trustee or Loan Trustee or for any third person or dealing as principal for its own account.
“Permitted Lessee” means any Person to whom Company is permitted to lease the Airframe or any Engine pursuant to Section 7.02(a) of the Indenture and is a party to a Lease.
“Permitted Lien” has the meaning specified in Section 7.01 of the Indenture.
“Person” means any person, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.
“Prospective International Interest” has the meaning ascribed to the defined term “prospective international interest” under the Cape Town Treaty.
“Purchase Agreement” means Airbus A321 Aircraft and A330 Aircraft Purchase Agreement, dated as of September 3, 2013, between Manufacturer and Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Rating Agencies” has the meaning specified in the Intercreditor Agreement.
“Related Additional Series Equipment Note” means, with respect to any particular Series of Additional Series Equipment Notes and as of any date, an “Additional Series Equipment Note”, as defined in each Related Indenture, having the same designation (i.e., “Series B”, “Series C” or the like) as such Series of Additional Series Equipment Notes, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Equipment Note” means, as of any date, an “Equipment Note” as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Indemnitee Group” has the meaning specified in Section 4.02(b) of the Participation Agreement.
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“Related Indenture” means each Operative Indenture (other than the Indenture).
“Related Indenture Bankruptcy Default” means any “Event of Default” under Section 4.01(f), (g), (h) or (i) of any Related Indenture, determined without giving effect to any applicable grace period.
“Related Indenture Event of Default” means any “Event of Default” under any Related Indenture.
“Related Indenture Indemnitee” means each Related Noteholder.
“Related Loan Trustee” means “Loan Trustee” as defined in each Related Indenture.
“Related Make-Whole Amount” means the “Make-Whole Amount”, as defined in each Related Indenture.
“Related Noteholder” means a registered holder of a Related Equipment Note.
“Related Secured Obligations” means, as of any date, the outstanding principal amount of the Related Equipment Notes issued under each Related Indenture, the accrued and unpaid interest (including, to the extent permitted by applicable law, post-petition interest and interest on any overdue amounts) due thereon in accordance with such Related Indenture as of such date, the Related Make-Whole Amount, if any, with respect thereto due thereon in accordance with such Related Indenture as of such date, and any other amounts payable as of such date under the “Operative Documents” (as defined in each Related Indenture).
“Related Series AA Equipment Note” means, as of any date, a “Series AA Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Related Series A Equipment Note” means, as of any date, a “Series A Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.
“Replacement Aircraft” means the Aircraft of which a Replacement Airframe is part.
“Replacement Airframe” means an Airbus A330 aircraft or a comparable or improved model of Manufacturer (except (a) Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded Equipment), that shall have been made subject to the Lien of the Indenture pursuant to Section 7.05 thereof, together with all Parts relating to such aircraft.
“Replacement Engine” means a General Electric CF6-80E1A4 engine (or an engine of the same or another manufacturer of a comparable or an improved model and suitable for installation and use on the Airframe with the other Engine (or any other Replacement Engine being substituted simultaneously therewith)) that is made subject to the Lien of the Indenture pursuant to Section 7.04 or Section 7.05 thereof, together with all Parts relating to such engine.
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“Replacement Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.
“Replacement Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.
“Responsible Officer” means, with respect to Company, its Chairman of the Board, its President, its Chief Operating Officer, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, any Vice President, the Treasurer, the Assistant Treasurer, the Controller or the Secretary.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.
“Section 1110” means Section 1110 of the Bankruptcy Code.
“Secured Obligations” has the meaning specified in Section 2.06 of the Indenture.
“Securities Account” has the meaning specified in Section 3.07 of the Indenture.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Securities and Exchange Commission” means the United States Securities and Exchange Commission and any agency or instrumentality of the United States government succeeding to its functions.
“Securities Intermediary” has the meaning specified in Section 3.07 of the Indenture.
“Series” means any series of Equipment Notes, including the Series AA Equipment Notes, the Series A Equipment Notes or, if issued, any Additional Series Equipment Notes.
“Series AA” or “Series AA Equipment Notes” means Equipment Notes issued and designated as “Series AA Equipment Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture under the heading “Series AA Equipment Notes” and bearing interest at the Debt Rate for Series AA Equipment Notes specified in Schedule I to the Indenture.
“Series A” or “Series A Equipment Notes” means Equipment Notes issued and designated as “Series A Equipment Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture under the heading “Series A Equipment Notes” and bearing interest at the Debt Rate for Series A Equipment Notes specified in Schedule I to the Indenture.
“Short-Term Rating” has the meaning specified in the Intercreditor Agreement.
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“Similar Law” has the meaning specified in Section 4.02(d)(xi) of the Participation Agreement.
“Subordination Agent” has the meaning specified in the introductory paragraph of the Participation Agreement.
“Substitute Aircraft” means an airframe of a different model of the same or different manufacturer as the Airframe, together with two engines suitable for installation and use on such airframe.
“Substitute Airframe” means an Airbus A330 aircraft or a comparable or improved model of Manufacturer (except (a) Engines or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded Equipment), that shall have been made subject to the Lien of the Indenture pursuant to Section 7.04 thereof, together with all Parts relating to such aircraft.
“Tax” and “Taxes” mean all governmental fees (including, without limitation, license, filing and registration fees) and all taxes (including, without limitation, franchise, excise, stamp, value added, income, gross receipts, sales, use and property taxes), withholdings, assessments, levies, imposts, duties or charges, of any nature whatsoever, together with any related penalties, fines, additions to tax or interest thereon imposed, withheld, levied or assessed by any country, taxing authority or governmental subdivision thereof or therein or by any international authority, including any taxes imposed on any Person as a result of such Person being required to collect and pay over withholding taxes.
“Transportation Code” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time.
“Trust Officer” means any officer within the Corporate Trust Office of Loan Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer or any other officer of Loan Trustee who shall have direct responsibility for the administration of the Indenture, or any other officer of Loan Trustee to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Trust Supplements” means those agreements supplemental to the Basic Pass Through Trust Agreement referred to in Schedule II to the Participation Agreement.
“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.
“Underwriter” means each of the underwriters identified as such in the Underwriting Agreement.
“Underwriting Agreement” means that certain Underwriting Agreement, dated [ ], 2020, among Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representative of the Underwriters listed on Schedule I thereto, and the Company, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
|
Annex A (2020-1 EETC) N822NW |
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| 17 |
“United States” means the United States of America.
“U.S. Bank” has the meaning specified in the introductory paragraph of the Participation Agreement.
“Warranty Bill of Sale” means collectively, (a) the warranty (as to title) bill of sale covering the Aircraft executed by Manufacturer or an affiliate of Manufacturer in favor of the Company and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft, (b) the warranty (as to title) bill of sale covering the Aircraft executed by the Company in favor of U.S. Bank National Association, as Owner Trustee and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft and (c) the warranty (as to title) bill of sale covering the Aircraft executed by U.S. Bank National Association, as Owner Trustee in favor of the Company and specifically referring to each Engine, as well as the Airframe, constituting a part of the Aircraft.
|
Annex A (2020-1 EETC) N822NW |
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| 18 |
Exhibit 5.1
[Letterhead of Hughes Hubbard & Reed LLP]
March 12, 2020
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Delta Air Lines, Inc.
Pass Through Certificates, Series 2020-1
Ladies and Gentlemen:
We have acted as special New York counsel to Delta Air Lines, Inc., a Delaware corporation (the “Company”), in connection with the issuance and sale today of $795,894,000 face amount of Pass Through Certificates, Series 2020-1AA (the “Class AA Certificates”) and $204,106,000 face amount of Pass Through Certificates, Series 2020-1A (the “Class A Certificates” and, together with the Class AA Certificates, the “Pass Through Certificates”) pursuant to the Underwriting Agreement, dated March 4, 2020 (the “Underwriting Agreement”), between Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representatives of the underwriters, and the Company. The Pass Through Certificates have been issued under the Pass Through Trust Agreement, dated as of November 16, 2000 (the “Pass Through Trust Agreement”), between the Company and U.S. Bank Trust National Association (as successor-in-interest to State Street Bank and Trust Company of Connecticut, National Association), as pass through trustee for the trust relating to each class of Pass Through Certificates (with respect to the Class AA Certificates, the “Class AA Trustee” and with respect to the Class A Certificates, the “Class A Trustee” and, together, the “Trustee”), as amended and supplemented for the Class AA Certificates by the Trust Supplement No. 2020-1AA, dated as of March 12, 2020 (the “Class AA Trust Supplement”), between the Company and the Class AA Trustee (the Pass Through Trust Agreement, together with the Class AA Trust Supplement, the “Class AA Trust Agreement”) and as amended and supplemented for the Class A Certificates by the Trust Supplement No. 2020-1A, dated as of March 12, 2020 (the “Class A Trust Supplement” and together with the Class AA Trust Supplement, the “Trust Supplements”), between the Company and the Class A Trustee (the Pass Through Trust Agreement, together with the Class A Trust Supplement, the “Class A Trust Agreement” and, together with the Class AA Trust Agreement, the “Trust Agreements”).
As used herein, the following terms have the following meanings: (a) the term “Registration Statement” means the registration statement on Form S-3 of the Company filed on March 6, 2019 (Registration No. 333-230087) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”); (b) the term “Prospectus Supplement” means the prospectus supplement, dated March 4, 2020, relating to the Pass Through Certificates, in the form filed with the Commission pursuant to Rule 424(b) under the Act, including the documents incorporated by reference therein; and (c) the term “Prospectus” means the base prospectus included in the Registration Statement, as supplemented by, and together with, the Prospectus Supplement, in the forms filed with the Commission pursuant to Rule 424(b) under the Act, including the documents incorporated by reference therein.
1
In arriving at the opinions expressed below, we have (a) examined and relied on the originals, or copies certified or otherwise identified to our satisfaction, of such agreements, documents and records of the Company and such other instruments and certificates of public officials, officers and representatives of the Company and others as we have deemed necessary or appropriate for the purposes of such opinions, (b) examined and relied as to factual matters upon, and have assumed the accuracy of, the statements made in the certificates of public officials, officers and representatives of the Company and others delivered to us and the representations and warranties contained in or made pursuant to the Trust Agreements, the Underwriting Agreement and any other applicable documents and (c) made such investigations of law as we have deemed appropriate as a basis for such opinions.
In rendering the opinions expressed below, we have assumed, without independent investigation or inquiry, (a) the authenticity and completeness of all documents that we have examined, (b) the genuineness of all signatures on all documents that we examined, (c) the conformity to authentic originals and completeness of documents examined by us that are certified, conformed, reproduction, photostatic or other copies, and (d) the legal capacity of all natural persons executing documents. We have further assumed that the Pass Through Certificates have been issued, delivered and paid for in accordance with the terms of the Underwriting Agreement.
Based on and subject to the foregoing and subject to the limitations, qualifications and assumptions set forth herein, we are of the opinion that:
1. The Class AA Certificates being issued today constitute the valid and binding obligation of the Class AA Trustee, enforceable against the Class AA Trustee in accordance with their terms, and the holders of the Class AA Certificates are entitled to the benefits of the Class AA Trust Agreement.
2. The Class A Certificates being issued today constitute the valid and binding obligation of the Class A Trustee, enforceable against the Class A Trustee in accordance with their terms, and the holders of the Class A Certificates are entitled to the benefits of the Class A Trust Agreement.
Our opinions set forth above are subject to the effects of: (i) bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization and moratorium laws and other similar laws relating to or affecting creditors’ or secured parties’ rights or remedies generally, to the extent any such law may affect the enforceability of the Pass Through Certificates or the Trust Agreements, (ii) general equitable principles (whether considered in a proceeding in equity or at law), including without limitation the possible unavailability of specific performance or injunctive relief and the exercise of discretionary powers by any court before which specific performance, injunctive relief, the appointment of a receiver or other equitable remedies may be sought, (iii) concepts of good faith, diligence, reasonableness and fair dealing, and standards of materiality and (iv) limitations on the validity or enforceability of indemnification, contribution or exculpation under applicable law (including court decisions) or public policy. Without limiting the foregoing, we express no opinion as to the validity, binding effect or enforceability of any provision of the Pass Through Certificates or the Trust Agreements that purports to (i) waive, release or vary any defense, right or privilege of, or any duties owing to, any party to the
2
extent that such waiver, release or variation may be limited by Section 1-302(b) of the Uniform Commercial Code (as in effect in any applicable jurisdiction) (the “UCC”) or other provisions of applicable law, (ii) constitute a waiver of inconvenient forum or improper venue, (iii) relate to the subject matter jurisdiction of a court to adjudicate any controversy, (iv) grant a right to collect any amount that a court determines to constitute unearned interest, post-judgment interest, or a penalty or forfeiture, (v) prohibit any person from transferring its rights in any collateral or other property, as the enforceability of such prohibition may be limited by Section 9-401 of the UCC or other provisions of applicable law, (vi) provide for liquidated damages or otherwise specify or limit damages, liabilities or remedies, or provide for cumulative remedies, (vii) provide for the severability of, or that the parties to the Trust Agreements shall engage in negotiations to replace, any illegal, prohibited or unenforceable provision, (viii) grant any right of set-off with respect to any contingent or unmatured obligations, (ix) provide for the reimbursement for costs and expenses, including without limitation attorney’s fees and legal expenses and expenses incurred in connection with the collection or enforcement or the custody, preservation, use or operation of any collateral, to the extent such reimbursement is not permitted by Section 9-207, 9-607, 9-608 or 9-615 of the UCC or other provisions of applicable law, (x) establish (or may be construed to establish) evidentiary standards or (xi) provide for the waiver of any statutory right or any broadly or vaguely stated rights or unknown future rights, or provide any waiver that is against public policy considerations. In addition, the enforceability of any provision in the Pass Through Certificates or the Trust Agreements, to the effect that (x) the terms thereof may not be waived or modified except in writing, or (y) certain determinations made by one party shall have conclusive effect, may be limited under certain circumstances. We express no opinion as to any provisions of the Pass Through Certificates or the Trust Agreements relating to the submission to the jurisdiction of any court other than the courts of the State of New York sitting in the City of New York and the United States District Court for the Southern District of New York, and we express no opinion as to whether a United States Federal court would accept jurisdiction in any dispute, action, suit or proceeding arising out of or relating to the Pass Through Certificates or the Trust Agreements or any of the transactions contemplated thereby.
We express no opinion as to the laws of any jurisdiction other than the laws of the State of New York and the Federal laws of the United States of America, as currently in effect, in each case that in our experience are generally applicable to transactions of the type contemplated by the Trust Agreements without regard to the particular nature of the businesses conducted by, or the legal or regulatory status of, the parties to the Trust Agreements except that we express no opinion with respect to the laws, regulations or ordinances of any county, town or municipality or governmental subdivision or agency thereof. In addition, without limiting the generality of the foregoing, we express no opinion with respect to, or with respect to the applicability to the opinions expressed herein of, any aviation laws (including without limitation Title 49 of the U.S. Code, the Cape Town Convention on International Interests in Mobile Equipment and the related Aircraft Equipment Protocol, or any other laws, rules, or regulations governing, regulating or relating to the acquisition, ownership, registration, leasing, financing, mortgaging, use or operation of any aircraft, aircraft engines or any part thereof), or any other laws, rules or regulations applicable to the particular nature of the equipment subject to the Trust Agreements, or the business conducted by the Company or the Trustee. In addition, we express no opinion as to the effect of, or compliance with, any (A) United States Federal or state laws, rules or regulations relating to (i) fraudulent transfers, fraudulent conveyances or preferential transfers,
3
(ii) taxes, (iii) banking, insurance, financial services, financial institutions, bribery, corruption, money-laundering, anti-terrorism, communications, customs, imports or exports, international trade, sanctions or embargoes (whether foreign trade, economic, financial or otherwise), or public utilities, (iv) commodities trading, futures or swaps, (v) pensions or employee benefits (including the Employee Retirement Income Security Act of 1974, as amended), or (vi) environmental matters, public health, safety, intellectual property or antitrust or (B) United States Federal or state securities or “blue sky” laws, rules or regulations, including without limitation, in each case, as to the effect of any thereof on the validity, binding effect or enforceability of any of the Pass Through Certificates or the Trust Agreements. Our opinions expressed above are limited to the laws of the State of New York governing the enforceability of contracts as such.
In rendering the opinions set forth above, we have relied upon, and have assumed the correctness of, (a) the opinion dated today and delivered to you of Alan T. Rosselot, Esq., Assistant General Counsel of the Company, and (b) the opinion dated today and delivered to you of Shipman & Goodwin LLP, counsel for the Trustee, and we have made no investigation of law or fact as to the matters stated in such opinions. Other than to the extent we specifically express an opinion herein, we have made the same assumptions as set forth in such opinions, and our opinion is subject to all the assumptions, qualifications and limitations as are therein set forth.
This opinion letter is limited to, and no opinion is implied or may be inferred beyond, the matters expressly stated herein. The opinions expressed herein are rendered only as of the date hereof, and we assume no responsibility to advise you of facts, circumstances, changes in law, or other events or developments that hereafter may occur or be brought to our attention and that may alter, affect or modify the opinions expressed herein.
We hereby consent to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K filed with the Commission on the date hereof and incorporated by reference in the Registration Statement and to the reference to our firm under the caption “Validity of the Certificates” in the Prospectus. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
| Very truly yours, | ||
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/s/ Hughes Hubbard & Reed LLP |
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Hughes Hubbard & Reed LLP |
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4
Exhibit 5.2
[LETTERHEAD OF SHIPMAN & GOODWIN LLP]
March 12, 2020
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
| RE: |
Delta Air Lines 2020-1 Pass Through Certificates Form S-3 Registration Opinion |
Ladies and Gentlemen:
We are acting as counsel to U.S. Bank Trust National Association, in its individual capacity (“U.S. Bank Trust”), and as (i) Pass Through Trustee (the “Class AA Pass Through Trustee”) under the Pass Through Trust Agreement, dated as of November 16, 2000, between Delta Air Lines, Inc. (the “Company”) and U.S. Bank Trust (as successor in interest to State Street Bank and Trust Company of Connecticut, National Association) (the “Basic Agreement”) as supplemented by the Trust Supplement No. 2020-1AA dated as of the date hereof, between the Company and U.S. Bank Trust (the “Trust Supplement No. 2020-1AA”, and the Basic Agreement as so supplemented, the “2020-1AA Pass Through Trust Agreement”), pursuant to which the Delta Air Lines Pass Through Certificates, Series 2020-1AA (the “Class AA Pass Through Certificates”) have been issued, and (ii) Pass Through Trustee (the “Class A Pass Through Trustee”) under the Basic Agreement as supplemented by the Trust Supplement No. 2020-1A dated as of the date hereof, between the Company and U.S. Bank Trust (the “Trust Supplement No. 2020-1A”, and the Basic Agreement as so supplemented, the “2020-1A Pass Through Trust Agreement”) pursuant to which the Delta Air Lines Pass Through Certificates, Series 2020-1A (the “Class A Pass Through Certificates” and together with the Class AA Pass Through Certificates, the “Pass Through Certificates” and together with the 2020-1AA Pass Through Trust Agreement, each individually, a “Pass Through Trust Agreement” and collectively, the “Pass Through Trust Agreements”) have been issued, pursuant to the Registration Statement on Form S-3 (Registration No. 333-230087) of the Company filed on March 6, 2019 with the Securities and Exchange Commission (the “Registration Statement”). This opinion is delivered to you at the request of U.S. Bank Trust.
Except as otherwise defined herein, capitalized terms used herein shall have the meanings set forth in, or by reference in, the Pass Through Trust Agreements. As used herein, the term “Prospectus” means the base prospectus relating to the Pass Through Certificates filed as part of the Registration Statement, as supplemented by the prospectus supplement filed with the Securities and Exchange Commission on March 6, 2019.
| Page 2 |
Our representation of U.S. Bank Trust and the Pass Through Trustee has been as special counsel for the limited purposes stated above. As to all matters of fact (including factual conclusions and characterizations and descriptions of purpose, intention or other state of mind), we have relied, with your permission, entirely upon (i) the representations and warranties of the parties set forth in the Operative Documents (as defined below) and (ii) certificates of public officials and of officers and representatives of U.S. Bank Trust and have assumed, without independent inquiry, the accuracy of those representations, warranties and certificates.
We have examined the Basic Agreement, the Trust Supplement No. 2020-1AA, the Trust Supplement No. 2020-1A (collectively, the “Operative Documents”) and the Pass Through Certificates, and have also examined and relied upon originals or copies certified or otherwise identified to our satisfaction, of such records of U.S. Bank Trust, certificates of public officials and of officers and other representatives of U.S. Bank Trust, that certain Officer’s Certificate of U.S. Bank Trust, dated as of the date hereof, and such other documents and instruments, and have made such other examination, as we have deemed necessary or appropriate to enable us to render the opinions set forth herein. As to certain questions of fact material to our opinions, we have relied upon the representations and warranties in the Operative Documents and upon said certificates, copies of which are being delivered to you herewith, and we have made no independent investigation of such matters. All opinions expressed herein which refer to our “knowledge” are based upon the current, actual knowledge of the lawyers in the firm who have devoted substantive attention to the transactions described in the Operative Documents without any independent investigation.
Subject to the limitation set forth below, we have made such examination of law as we have deemed necessary for the purposes of this opinion. The following opinions on behalf of U.S. Bank Trust, in its individual capacity and as Pass Through Trustee are limited to the laws of the Commonwealth of Massachusetts and the federal laws of the United States of America governing the banking and trust powers of U.S. Bank Trust, without regard to conflicts of laws principles that would require the application of the laws of another jurisdiction. We express no opinion with respect to federal securities laws, including the Securities Act of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of 1939, as amended or state securities or blue sky laws. In addition, other than our opinion expressed in paragraph 1 below with respect to the citizenship of U.S. Bank Trust, no opinion is expressed as to matters governed by any law, statute, rule or regulation of the United States relating to the acquisition, ownership, registration, re-registration, use, operation, maintenance, repair, replacement or sale of or the nature of the Aircraft or the Convention on International Interests in Mobile Equipment (sometimes referred to as the Cape Town Convention).
To the extent to which this opinion deals with matters governed by or relating to the laws of the State of New York or other jurisdiction other than the Commonwealth of Massachusetts, we have assumed with your permission that the Operative Documents are governed by the internal substantive laws of the Commonwealth of Massachusetts, without regard to conflicts of laws principles that would require the application of the laws of another jurisdiction. We have assumed for the purposes of this opinion letter that the parties’ choice of law will be respected, and accordingly we express no opinion as to the choice of law rules or other laws that any tribunal may apply to the transactions referred to in this opinion letter.
| Page 3 |
Our opinion is further subject to the following exceptions, qualifications and assumptions:
(a) We have assumed without any independent investigation (i) that each party to the Operative Documents, other than U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as applicable, at all times relevant thereto, is validly existing and in good standing under the laws of the jurisdiction in which it is organized, and is qualified to do business and in good standing under the laws of each jurisdiction where such qualification is required generally or necessary in order for such party to enforce its rights under the Operative Documents, (ii) that each party to the Operative Documents (other than U.S. Bank Trust and the Pass Through Trustee), at all times relevant thereto, had and has the full power, authority and legal right under its certificate of incorporation, partnership agreement, by-laws, and other governing organizational documents, and the applicable corporate, partnership, or other enterprise legislation and other applicable laws, as the case may be, to execute, deliver and to perform its obligations under the Operative Documents, and (iii) the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies, the genuineness of all signatures, and the legal capacity of natural persons. We were not present at the signing of the Operative Documents and have relied with your approval upon a review of a photocopy, .pdf copy or facsimile of the signature pages. We have assumed that any certificates of government officials dated prior to the date hereof are still effective and accurate as of the date of this opinion letter.
(b) We have assumed without any independent investigation that each of the Operative Documents is a valid, binding and enforceable obligation of each party thereto other than U.S. Bank Trust and the Pass Through Trustee, as applicable.
(c) We express no opinion as to the availability of any specific or equitable relief of any kind.
(d) The enforcement of any of your rights may in all cases be subject to an implied duty of good faith and fair dealing and to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity) and, as to any of your rights to collateral security, will be subject to a duty to, act in a commercially reasonable manner.
(e) We express no opinion as to the enforceability of any particular provision of any of the Operative Documents relating to (i) waivers of rights to object to jurisdiction or venue, or consents to jurisdiction or venue, (ii) waivers of rights to (or methods of) service of process, or rights to trial by jury, or other rights or benefits bestowed by operation of law, (iii) waivers of any applicable defenses, setoffs, recoupments, or counterclaims, (iv) the grant of powers of attorney to any person or entity, (v) exculpation or exoneration clauses, indemnity clauses, and clauses relating to releases or waivers of unmatured claims or rights,
| Page 4 |
(vi) the imposition or collection of interest on overdue interest or providing for a penalty rate of interest or late charges on overdue or defaulted obligations, or the payment of any premium, liquidated damages, or other amount which may be held by any court to be a “penalty” or a “forfeiture,” or (vii) so-called “usury savings clauses” purporting to specify methods of (or otherwise assure) compliance with usury laws or other similar laws of any jurisdiction.
(f) In addition to any other limitation by operation of law upon the scope, meaning or purpose of this opinion, this opinion speaks only as of the date hereof. We express no opinion herein regarding the effect that any future event or change in circumstances would have on the opinions expressed herein, and we disclaim any obligation to advise you of any changes in circumstances or any change in applicable law, or the interpretation thereof, after the date hereof. Any such change in circumstances or in any applicable law, or the interpretation thereof, or in any information or assumptions upon which we have relied, or any inaccuracy of such information or assumptions, could affect the opinions expressed herein.
All opinions contained herein with respect to the enforceability of documents and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including, without limitation, specific enforcement and injunctive relief, is subject to the discretion of the court before which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in the Operative Documents may be limited by
(i) applicable bankruptcy, reorganization, fraudulent conveyance, arrangement, insolvency, moratorium or similar law affecting the enforcement of creditors’ rights generally as at the time in effect, and
(ii) general principles of equity and the discretion of a court in granting equitable remedies (whether enforceability is considered in a proceeding at law or in equity).
This opinion is rendered solely for the benefit of those institutions listed on Schedule A hereto and their successors and assigns in connection with the transactions contemplated by the Operative Documents and may not be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and qualifications set forth herein, we are of the opinion that:
| Page 5 |
| 1. |
Based solely upon the Certificate of Corporate Existence and Fiduciary Powers, issued on January 15, 2020 by the Office of the Comptroller of the Currency of the United States attached hereto as Annex A-1, U.S. Bank Trust is a national banking association validly existing and authorized to operate as a national banking association under the laws of the United States of America. U.S. Bank Trust is a “citizen of the United States” within the meaning of Section 40102(a)(15) of Title 49 of the United States Code and, in its individual capacity or as Pass Through Trustee, as the case may be, has the requisite corporate and trust power and authority to execute, deliver and perform its obligations under the Operative Documents, and U.S. Bank Trust, in its capacity as Pass Through Trustee, has the requisite corporate and trust power and authority to issue, execute, deliver and authenticate the Pass Through Certificates. |
| 2. |
U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, has duly authorized by all necessary corporate and trust action the Operative Documents, is the duly authorized successor pass through trustee under the Basic Agreement, has duly executed and delivered the Trust Supplement No. 2020-1AA and the Trust Supplement No. 2020-1A, and the Operative Documents constitute the valid and legally binding obligations of U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, enforceable against U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, in accordance with their respective terms. |
| 3. |
The issuance of the Pass Through Certificates by the Pass Through Trustee has been authorized by all necessary corporate and trust action by the Pass Through Trustee. Each Pass Through Certificate has been duly authenticated, executed and delivered in accordance with the Basic Agreement and the Trust Supplement No. 2020-1AA and the Trust Supplement No. 2020-1A, as applicable, and constitutes a valid and legally binding obligation of the Pass Through Trustee, enforceable against the Pass Through Trustee in accordance with its terms, and the holders of such Pass Through Certificates are entitled to the benefits of the Basic Agreement and the Trust Supplement No. 2020-1AA and the Trust Supplement No. 2020-1A, as applicable. |
| 4. |
The authorization, execution, delivery and performance by U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, of the Operative Documents and the consummation of the transactions therein contemplated and compliance with the terms thereof and the issuance of the Pass Through Certificates thereunder do not and will not result in the violation of the provisions of the charter documents or by-laws of U.S. Bank Trust and, to the best of our knowledge, do not conflict with, or result in a breach of any terms or provisions of, or constitute a default under, or result in the creation or the imposition of any lien, charge or encumbrance upon any property or assets of U.S. Bank Trust in its individual capacity or as Pass Through Trustee under any indenture, mortgage or other agreement or instrument, in each case known to us, to which U.S. Bank Trust in its individual capacity or as Pass Through Trustee is a party or by which it or any of its properties is bound, or violate any applicable Massachusetts or federal law, rule or regulation governing U.S. Bank Trust’s banking or trust powers, or, to the best of our knowledge, of any judgment, license, registration, permit, order or decree, in each case known to us, applicable to U.S. Bank Trust in its individual capacity or as Pass Through Trustee of any court, regulatory body, administrative agency, government or governmental body having jurisdiction over U.S. Bank Trust in its individual capacity or as Pass Through Trustee. |
| Page 6 |
| 5. |
No authorization, approval, consent, license or order of, giving of notice to, registration with, or taking of any other action in respect of, any federal or Massachusetts state governmental authority or agency pursuant to any federal or Massachusetts law governing the banking or trust powers of U.S. Bank Trust is required for the authorization, execution, delivery and performance by U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, of the Operative Documents or the consummation of any of the transactions by U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, contemplated thereby or the issuance of the Pass Through Certificates under the Basic Agreement, as supplemented by the Trust Supplement No. 2020-1AA and the Trust Supplement No. 2020-1A, as applicable (except as shall have been duly obtained, given or taken); and such authorization, execution, delivery, performance, consummation and issuance do not conflict with or result in a breach of the provisions of any such law. |
| 6. |
To our knowledge, there are no proceedings pending or overtly threatened in writing against or affecting U.S. Bank Trust in any court or before any governmental authority, agency, arbitration board or tribunal which, if adversely determined, individually or in the aggregate, could reasonably be expected to affect materially and adversely the pass through trust created pursuant to the Operative Documents or affect the right, power and authority of U.S. Bank Trust, in its individual capacity or as Pass Through Trustee, as the case may be, to enter into or perform its obligations under the Operative Documents or to issue the Pass Through Certificates. |
We hereby consent to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K filed on the date hereof and incorporated by reference in the Registration Statement and to the use of our name under the heading “Validity of the Certificates” in the Prospectus. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission.
The law firm Hughes Hubbard & Reed LLP is entitled to rely upon this opinion letter in rendering its opinion as described in the Prospectus under the heading “Validity of the Certificates” and filed as an Exhibit to the Company’s Current Report on Form 8-K filed on the date hereof as if addressed and delivered to it subject to all assumptions, qualifications and limitations set forth herein.
| Very truly yours, |
| /s/ Shipman & Goodwin LLP |
| SHIPMAN & GOODWIN LLP |
SCHEDULE A
U.S. Bank Trust National Association
Delta Air Lines, Inc.
Hughes Hubbard & Reed LLP
Exhibit 5.3
[Letterhead of Delta Air Lines]
March 12, 2020
| Re: |
Delta Air Lines, Inc. 2020-1 Pass Through Trust |
Pass Through Certificates, Series 2020-1AA
Pass Through Certificates, Series 2020-1A
Ladies and Gentlemen:
I am Assistant General Counsel of Delta Air Lines, Inc., a Delaware corporation (the “Company”), and have acted as such in connection with the issuance and sale today of $795,894,000 face amount of Pass Through Certificates, Series 2020-1AA (the “Class AA Certificates”) and $204,106,000 face amount of Pass Through Certificates, Series 2020-1A (the “Class A Certificates” and, together with the Class AA Certificates, the “Pass Through Certificates”) pursuant to the Underwriting Agreement, dated March 4, 2020 (the “Underwriting Agreement”), among Morgan Stanley & Co. LLC, and Credit Suisse Securities, LLC (USA), as representatives of the several underwriters, and the Company. The Pass Through Certificates have been issued under the Pass Through Trust Agreement (the “Pass Through Trust Agreement”), dated as of November 16, 2000, between the Company and U.S. Bank Trust National Association (as successor-in-interest to State Street Bank and Trust Company of Connecticut, National Association) (“U.S. Bank Trust”), as pass through trustee for the trust relating to each class of Pass Through Certificates (with respect to the Class AA Certificates, the “Class AA Trustee” and with respect to the Class A Certificates, the “Class A Trustee” and, together, the “Trustee”), as supplemented for the Class AA Certificates by the Trust Supplement 2020-1AA, dated as of March 12, 2020 (the “Class AA Trust Supplement”) and as supplemented for the Class A Certificates by the Trust Supplement 2020-1A, dated as of March 12, 2020 (the “Class A Trust Supplement” and, together with the Class AA Trust Supplement, the “Trust Supplements”). As used herein, (a) the term “Registration Statement means the registration statement on Form S-3 of the Company filed on March 6, 2019 (Registration No. 333-230087) with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”); and (b) the term “Prospectus” means the final prospectus supplement relating to the Pass Through Certificates in the form filed with the SEC pursuant to Rule 424(b) under the 1933 Act on March 4, 2020.
In so acting, I or other counsel under the general supervision of the Chief Legal Officer of the Company have examined the Registration Statement, the Prospectus, the Pass Through
Trust Agreement and the Trust Supplements and have also examined and relied upon the representations and warranties contained therein or made pursuant thereto, and on certificates of officers of the Company and of public officials as to factual matters, and upon the originals, or copies certified or otherwise identified to my satisfaction, of such records, documents and other instruments as in my judgment are necessary or advisable to enable me to render the opinion expressed below. In all such examinations, I have assumed the genuineness of all signatures (other than those on behalf of the Company), the legal capacity of natural persons, the authenticity of all documents submitted to me as originals and the conformity to original documents of all documents submitted to me as certified or photostatic copies, and as to certificates and telegraphic and telephonic confirmations given by public officials, I have assumed the same to have been properly given and to be accurate.
Based on the foregoing and subject to the assumptions and qualifications set forth below, I am of the following opinion:
1. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority under Delaware law to execute, deliver and perform its obligations under the Pass Through Trust Agreement and the Trust Supplements.
3. The Pass Through Trust Agreement and the Trust Supplements have been duly authorized, validly executed and delivered by the Company.
The opinions expressed herein are limited in all respects to the General Corporation Law of the State of Delaware, the applicable provisions of the Delaware Constitution, and the reported judicial decisions interpreting these laws, and the federal laws of the United States, except that I express no opinion with respect to the antitrust, bankruptcy, environmental, securities or tax laws of any jurisdiction, and no opinion is expressed with respect to the laws of any other jurisdiction or any effect which such law may have on the opinions expressed herein.
This opinion letter is limited to the matters stated, and no opinion is implied or may be inferred beyond those opinions expressly stated herein. The opinions expressed herein are rendered only as of the date hereof, and I assume no responsibility to advise you of changes in law, facts, circumstances, events or developments which hereafter may be brought to my attention and which may alter, affect or modify such opinions. In connection with the issuance of the Pass Through Certificates, Hughes Hubbard & Reed LLP may receive a copy of this letter and rely on the opinions set forth herein.
I hereby consent to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K filed on the date hereof and incorporated by reference in the Registration Statement and the reference to my name under the caption “Validity of the Certificates” in the Prospectus. In giving such consent, I do not thereby concede that I am within the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the SEC thereunder.
| Sincerely, |
| /s/ Alan T. Rosselot |
| Alan T. Rosselot |
| Assistant General Counsel |
| Delta Air Lines, Inc. |
[Signature Page to Opinion of Alan T. Rosselot, Esq.]
Exhibit 8.1
[Letterhead of Hughes Hubbard & Reed LLP]
March 12, 2020
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, Georgia 30354
Delta Air Lines, Inc.
Pass Through Certificates, Series 2020-1
Ladies and Gentlemen:
We have acted as special United States tax counsel to Delta Air Lines, Inc., a Delaware corporation (the “Company”), in connection with the issuance and sale today of $795,894,000 face amount of Pass Through Certificates, Series 2020-1AA (the “Class AA Certificates”) and $204,106,000 face amount of Pass Through Certificates, Series 2020-1A (the “Class A Certificates” and, together with the Class AA Certificates, the “Pass Through Certificates”) pursuant to the Underwriting Agreement, dated March 4, 2020 (the “Underwriting Agreement”), between Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, as representatives of the underwriters, and the Company. The Pass Through Certificates have been issued under the Pass Through Trust Agreement, dated as of November 16, 2000 (the “Pass Through Trust Agreement”), between the Company and U.S. Bank Trust National Association (as successor-in-interest to State Street Bank and Trust Company of Connecticut, National Association), as pass through trustee for the trust relating to each class of Pass Through Certificates (with respect to the Class AA Certificates, the “Class AA Trustee” and with respect to the Class A Certificates, the “Class A Trustee” and, together, the “Trustee”), as amended and supplemented for the Class AA Certificates by the Trust Supplement No. 2020-1AA, dated as of March 12, 2020 (the “Class AA Trust Supplement”), between the Company and the Class AA Trustee (the Pass Through Trust Agreement, together with the Class AA Trust Supplement, the “Class AA Trust Agreement”) and as amended and supplemented for the Class A Certificates by the Trust Supplement No. 2020-1A, dated as of March 12, 2020 (the “Class A Trust Supplement” and together with the Class AA Trust Supplement, the “Trust Supplements”), between the Company and the Class A Trustee (the Pass Through Trust Agreement, together with the Class A Trust Supplement, the “Class A Trust Agreement” and, together with the Class AA Trust Agreement, the “Trust Agreements”). Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Trust Agreements.
As used herein, the following terms have the following meanings: (a) the term “Registration Statement” means the registration statement on Form S-3 of the Company filed on March 6, 2019 (Registration No. 333-230087) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”); (b) the term “Prospectus Supplement” means the prospectus supplement, dated March 4, 2020, relating to the Pass Through Certificates, in the form filed with the Commission pursuant to Rule 424(b) under the Act, including the documents incorporated by reference therein; and (c) the term “Prospectus” means the base prospectus included in the Registration Statement, as supplemented by, and together with, the Prospectus Supplement, in the forms filed with the Commission pursuant to Rule 424(b) under the Act, including the documents incorporated by reference therein.
1
In rendering the opinion expressed below, (a) we have examined and relied on the originals, or copies certified or otherwise identified to our satisfaction, of such agreements, documents and records of the Company and such other instruments and certificates of public officials, officers and representatives of the Company and others as we have deemed necessary or appropriate for the purposes of such opinion, (b) we have examined and relied as to factual matters upon, and have assumed the accuracy of, the statements made in the certificates of public officials, officers and representatives of the Company and others delivered to us and the representations and warranties contained in or made pursuant to the Trust Agreements, the Underwriting Agreement, the Intercreditor Agreement, the Participation Agreements, the Indentures, the Liquidity Facilities and any other applicable documents (all of the foregoing, the “Transaction Documents”) and (c) we have made such investigations of law as we have deemed necessary or appropriate as a basis for such opinions. In addition, we have assumed, without independent investigation or inquiry, (i) the authenticity and completeness of all documents submitted to us as originals, (ii) the genuineness of all signatures on all documents that we examined, (iii) the conformity to authentic originals and completeness of documents submitted to us as certified, conformed or reproduction copies, (iv) the legal capacity of all natural persons executing documents, (v) the performance of all covenants and other undertakings set forth in, and the consummation of all transactions contemplated by, the Transaction Documents in accordance with the terms thereof, and (vi) that none of the material terms and conditions of the Transaction Documents have been or will be waived or modified and that there are no documents or understandings between the parties that would alter, or are inconsistent with, the terms set forth in the Transaction Documents. We have further assumed that the Pass Through Certificates have been issued, delivered and paid for in accordance with the terms of the Underwriting Agreement.
Based on the foregoing, and subject to the limitations, qualifications and assumptions set forth herein and in the Prospectus, we are of the opinion that the statements in the Prospectus under the heading “Certain U.S. Federal Income Tax Consequences”, insofar as such statements purport to summarize certain provisions of U.S. federal income tax law or provide legal conclusions with respect thereto, are accurate in all material respects.
Our opinion is based upon the tax laws of the United States, as well as judicial and administrative interpretations thereof (in final or proposed form), all as in effect on the date of the Prospectus Supplement and all of which are subject to change or differing interpretations, which could apply retroactively. Our opinion is limited to, and no opinion is implied or may be inferred beyond, the matters expressly addressed herein. Our opinion is rendered only as of the date hereof, and we assume no responsibility to advise you or any other person of facts, circumstances, changes in law, or other events or developments that hereafter may occur or be brought to our attention and that may affect the opinion expressed herein.
2
We hereby consent to the filing of this opinion as an exhibit to the Company’s Current Report on Form 8-K filed with the Commission on the date hereof and incorporated by reference in the Registration Statement. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
| Very truly yours, | ||
|
/s/ Hughes Hubbard & Reed LLP |
||
| Hughes Hubbard & Reed LLP | ||
3
Exhibit 23.1
[LETTERHEAD]
March 4, 2020
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA 30354-1989
| Re: |
Delta Air Lines, Inc. (the “Company”) |
22 Boeing 737-932ER, Five Airbus A321-211 and Six Airbus A330-302 Aircraft Appraisals
Ladies and Gentlemen:
We hereby consent to (i) the use of the report prepared by us with respect to the aircraft referred to above (ii) the summary of such report under the headings (a) “Prospectus Supplement Summary – Summary of Terms of Certificates,” (b) “Prospectus Supplement Summary – Equipment Notes and the Aircraft,” (c) “Prospectus Supplement Summary – Loan to Aircraft Value Ratios,” (d) “Prospectus Supplement Summary – The Offering,” (e) “Risk Factors – Risk Factors Relating to the Certificates and the Offering,” (f) “Description of the Aircraft and the Appraisals – The Appraisals” and (g) “Description of the Equipment Notes – Loan to Value Ratios of Equipment Notes” and (iii) references to our firm under the headings “Description of the Aircraft and the Appraisals – The Appraisals” and “Experts” in the Company’s preliminary Prospectus Supplement expected to be dated on or about March 4, 2020, and the Company’s final Prospectus Supplement, in each case to the Prospectus, dated March 6, 2019, included in Registration Statement No. 333-230087 and relating to the offering of Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1.
| Sincerely, | ||
| AIRCRAFT INFORMATION SERVICES, INC. | ||
| By: |
/s/ Mark D. Halsor |
|
| Name: | Mark D. Halsor | |
| Title: | President | |
Main Office: 1440 Dutch Valley Place, Suite 180, Atlanta, Georgia 30324
TEL: 404 870-AISI (2474) E-MAIL: mail@AISI.aero www.aisi.aero
Exhibit 23.2
[LETTERHEAD]
March 4, 2020
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA 30354-1989
| Re: |
Delta Air Lines, Inc. (the “Company”) |
22 Boeing 737-932ER, Five Airbus A321-211 and Six Airbus A330-302 Aircraft Appraisals
Ladies and Gentlemen:
We hereby consent to (i) the use of the report prepared by us with respect to the aircraft referred to above (ii) the summary of such report under the headings (a) “Prospectus Supplement Summary – Summary of Terms of Certificates,” (b) “Prospectus Supplement Summary – Equipment Notes and the Aircraft,” (c) “Prospectus Supplement Summary – Loan to Aircraft Value Ratios,” (d) “Prospectus Supplement Summary – The Offering,” (e) “Risk Factors – Risk Factors Relating to the Certificates and the Offering,” (f) “Description of the Aircraft and the Appraisals – The Appraisals” and (g) “Description of the Equipment Notes – Loan to Value Ratios of Equipment Notes” and (iii) references to our firm under the headings “Description of the Aircraft and the Appraisals – The Appraisals” and “Experts” in the Company’s preliminary Prospectus Supplement expected to be dated on or about March 4, 2020, and the Company’s final Prospectus Supplement, in each case to the Prospectus, dated March 6, 2019, included in Registration Statement No. 333-230087 and relating to the offering of Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1.
| Sincerely, | ||
| BK ASSOCIATES, INC. | ||
| By: |
/s/ Pooja Gardemal |
|
| Name: | Pooja Gardemal, CPA/ABV | |
| Title: | Managing Director | |
Exhibit 23.3
[LETTERHEAD]
March 4, 2020
Delta Air Lines, Inc.
1030 Delta Boulevard
Atlanta, GA 30354-1989
| Re: |
Delta Air Lines, Inc. (the “Company”) |
22 Boeing 737-932ER, Five Airbus A321-211 and Six Airbus A330-302 Aircraft Appraisals
Ladies and Gentlemen:
We hereby consent to (i) the use of the report prepared by us with respect to the aircraft referred to above (ii) the summary of such report under the headings (a) “Prospectus Supplement Summary – Summary of Terms of Certificates,” (b) “Prospectus Supplement Summary – Equipment Notes and the Aircraft,” (c) “Prospectus Supplement Summary – Loan to Aircraft Value Ratios,” (d) “Prospectus Supplement Summary – The Offering,” (e) “Risk Factors – Risk Factors Relating to the Certificates and the Offering,” (f) “Description of the Aircraft and the Appraisals – The Appraisals” and (g) “Description of the Equipment Notes – Loan to Value Ratios of Equipment Notes” and (iii) references to our firm under the headings “Description of the Aircraft and the Appraisals – The Appraisals” and “Experts” in the Company’s preliminary Prospectus Supplement expected to be dated on or about March 4, 2020, and the Company’s final Prospectus Supplement, in each case to the Prospectus, dated March 6, 2019, included in Registration Statement No. 333-230087 and relating to the offering of Delta Air Lines, Inc. Pass Through Certificates, Series 2020-1.
| Sincerely, | ||
| mba Aviation | ||
| By: |
/s/ David Tokoph |
|
| Name: | David Tokoph | |
| Title: | President and CEO | |
2101 WILSON BOULEVARD SUITE 1001 ARLINGTON, VIRGINIA 22201
PHONE: 1 703 276 3200 FAX: 1 703 276 3201
WWW.MBA.AERO
EXHIBIT 99.1
SCHEDULE I
The following documents (hereinafter collectively referred to as the “N301DV Documents”) have been filed: (a) Participation Agreement (N301DV), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein (filed as Exhibit 4.8) and (b) Indenture and Security Agreement (N301DV), dated as of March 12, 2020, between Delta Air Lines, Inc., and U.S. Bank Trust National Association, as Loan Trustee (filed as Exhibit 4.9).
The corresponding documents with respect to the other Airbus A321-211 Aircraft listed below are substantially identical in all material respects to the N301DV Documents, with the following exceptions: (1) conforming changes have been made to reflect the appropriate United States registration number of the aircraft (i.e., N305DN, N306DN, N307DX and N319DN) and the appropriate manufacturer’s serial number of the airframe (i.e., 7149, 7165, 7214 and 7479); and (2) the descriptions, including original principal amount and amortization profile, of the equipment notes set forth in, as applicable, Schedule I to the Participation Agreement and Schedule I to the Indenture differ.
| 1. |
(N305DN) |
| (a) |
Participation Agreement (N305DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N305DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 2. |
(N306DN) |
| (a) |
Participation Agreement (N306DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N306DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 3. |
(N307DX) |
| (a) |
Participation Agreement (N307DX), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N307DX), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 4. |
(N319DN) |
| (a) |
Participation Agreement (N319DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N319DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
2
EXHIBIT 99.2
SCHEDULE II
The following documents (hereinafter collectively referred to as the “N826DN Documents”) have been filed: (a) Participation Agreement (N826DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein (filed as Exhibit 4.10) and (b) Indenture and Security Agreement (N826DN), dated as of March 12, 2020, between Delta Air Lines, Inc., and U.S. Bank Trust National Association, as Loan Trustee (filed as Exhibit 4.11).
The corresponding documents with respect to the other Boeing 737-932ER Aircraft listed below are substantially identical in all material respects to the N826DN Documents, with the following exceptions: (1) conforming changes have been made to reflect the appropriate United States registration number of the aircraft (i.e., N827DN, N828DN, N829DN, N830DN, N831DN, N832DN, N834DN, N835DN, N836DN, N837DN, N838DN, N839DN, N840DN, N841DN, N851DN, N852DN, N853DN, N854DN, N855DN, N856DN and N857DZ) and the appropriate manufacturer’s serial number of the airframe (i.e., 31938, 31939, 31941, 31940, 31942, 31943, 31946, 31945, 31947, 31948, 31949, 31950, 31951, 31952, 31962, 31963, 31964, 31965, 31966, 31967 and 31968); and (2) the descriptions, including original principal amount and amortization profile, of the equipment notes set forth in, as applicable, Schedule I to the Participation Agreement and Schedule I to the Indenture differ.
| 1. |
(N827DN) |
| (a) |
Participation Agreement (N827DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N827DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 2. |
(N828DN) |
| (a) |
Participation Agreement (N828DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N828DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 3. |
(N829DN) |
| (a) |
Participation Agreement (N829DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N829DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 4. |
(N830DN) |
| (a) |
Participation Agreement (N830DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N830DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 5. |
(N831DN) |
| (a) |
Participation Agreement (N831DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N831DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 6. |
(N832DN) |
| (a) |
Participation Agreement (N832DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N832DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
2
| 7. |
(N834DN) |
| (a) |
Participation Agreement (N834DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N834DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 8. |
(N835DN) |
| (a) |
Participation Agreement (N835DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N835DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 9. |
(N836DN) |
| (a) |
Participation Agreement (N836DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N836DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 10. |
(N837DN) |
| (a) |
Participation Agreement (N837DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N837DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 11. |
(N838DN) |
| (a) |
Participation Agreement (N838DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
3
| (b) |
Indenture and Security Agreement (N838DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 12. |
(N839DN) |
| (a) |
Participation Agreement (N839DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N839DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 13. |
(N840DN) |
| (a) |
Participation Agreement (N840DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N840DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 14. |
(N841DN) |
| (a) |
Participation Agreement (N841DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N841DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 15. |
(N851DN) |
| (a) |
Participation Agreement (N851DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N851DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
4
| 16. |
(N852DN) |
| (a) |
Participation Agreement (N852DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N852DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 17. |
(N853DN) |
| (a) |
Participation Agreement (N853DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N853DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 18. |
(N854DN) |
| (a) |
Participation Agreement (N854DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N854DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 19. |
(N855DN) |
| (a) |
Participation Agreement (N855DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N855DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 20. |
(N856DN) |
| (a) |
Participation Agreement (N856DN), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
5
| (b) |
Indenture and Security Agreement (N856DN), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 21. |
(N857DZ) |
| (a) |
Participation Agreement (N857DZ), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N857DZ), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
6
EXHIBIT 99.3
SCHEDULE III
The following documents (hereinafter collectively referred to as the “N822NW Documents”) have been filed: (a) Participation Agreement (N822NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein (filed as Exhibit 4.12) and (b) Indenture and Security Agreement (N822NW), dated as of March 12, 2020, between Delta Air Lines, Inc., and U.S. Bank Trust National Association, as Loan Trustee (filed as Exhibit 4.13).
The corresponding documents with respect to the other Airbus A330-302 Aircraft listed below are substantially identical in all material respects to the N822NW Documents, with the following exceptions: (1) conforming changes have been made to reflect the appropriate United States registration number of the aircraft (i.e., N824NW, N823NW, N825NW, N826NW and N831NW) and the appropriate manufacturer’s serial number of the airframe (i.e., 1637, 1628, 1679, 1701 and 1783); and (2) the descriptions, including original principal amount and amortization profile, of the equipment notes set forth in, as applicable, Schedule I to the Participation Agreement and Schedule I to the Indenture differ.
| 1. |
(N824NW) |
| (a) |
Participation Agreement (N824NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N824NW), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 2. |
(N823NW) |
| (a) |
Participation Agreement (N823NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N823NW), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 3. |
(N825NW) |
| (a) |
Participation Agreement (N825NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N825NW), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 4. |
(N826NW) |
| (a) |
Participation Agreement (N826NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N826NW), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
| 5. |
(N831NW) |
| (a) |
Participation Agreement (N831NW), dated as of March 12, 2020, among Delta Air Lines, Inc., U.S. Bank Trust National Association, as Pass Through Trustee under the Pass Through Trust Agreements, U.S. Bank Trust National Association, as Subordination Agent, U.S. Bank Trust National Association, as Loan Trustee, and U.S. Bank Trust National Association, in its individual capacity as set forth therein |
| (b) |
Indenture and Security Agreement (N831NW), dated as of March 12, 2020, between Delta Air Lines, Inc. and U.S. Bank Trust National Association, as Loan Trustee |
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