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EXHIBIT 3.1
AMENDED AND RESTATED TRUST AGREEMENT
OF
LEASE INVESTMENT FLIGHT TRUST
Dated as of June 26, 2001
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TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS............................................................................................1
Section 1.01. Definitions and Construction..........................................................1
ARTICLE II GENERAL MATTERS.......................................................................................4
Section 2.01. Organizational Matters................................................................4
Section 2.02. Management by the Controlling Trustees; Authority of the Owner Trustee................5
Section 2.03. Objects...............................................................................6
Section 2.04. Prohibition and Limitation of Actions by LIFT and the Trustees........................7
Section 2.05. Limitation on the Issuance, Delivery and Sale of Equity Interests.....................9
Section 2.06. Independent Business.................................................................10
Section 2.07. Duration of LIFT.....................................................................11
Section 2.08. Trust for Benefit of Holders of LIFT Debt Securities.................................11
Section 2.09. Representation of Depositor..........................................................12
Section 2.10. Tax Matters Partner..................................................................12
Section 2.11. U.S. Tax Returns.....................................................................12
Section 2.12. Capital Accounts.....................................................................12
Section 2.13. Allocation of Profits and Losses for Capital Account Purposes........................13
Section 2.14. Allocations of Profits and Losses on Liquidation.....................................13
Section 2.15. Special Allocations to Capital Accounts..............................................13
Section 2.16. Allocation of Profits and Losses for United States Income Tax Purposes...............15
ARTICLE III THE BENEFICIAL INTEREST CERTIFICATES................................................................15
Section 3.01. Issuance of Beneficial Interest Certificates; Terms; Form; Execution and Delivery....15
Section 3.02. Restrictive Legends..................................................................16
Section 3.03. Register.............................................................................17
Section 3.04. Method of Payment....................................................................17
Section 3.05. Transfer and Exchange; Cancellation..................................................18
Section 3.06. Mutilated, Destroyed, Lost or Stolen Beneficial Interest Certificates................18
Section 3.07. Payments of Transfer Taxes...........................................................19
Section 3.08. Additional Certificates..............................................................19
Section 3.09. Special Transfer Provisions..........................................................19
Section 3.10. CUSIP, CINS and ISIN Numbers.........................................................21
Section 3.11. Distributions........................................................................22
Section 3.12. Subordination of the Securities......................................................22
Section 3.13. Additional Capital...................................................................22
Section 3.14. Class A Contingent Collateral Account and Permitted Beneficial Notes................ 22
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ARTICLE IV TRUSTEES.............................................................................................23
Section 4.01. Number and Status....................................................................23
Section 4.02. Owner Trustee........................................................................23
Section 4.03. Controlling Trustees.................................................................24
Section 4.04. Quorum; Meetings.....................................................................25
Section 4.05. Controlling Trustees' Resolution.....................................................26
Section 4.06. Notice of Meetings...................................................................26
Section 4.07. Voting ............................................................................26
Section 4.08. Resolutions..........................................................................28
Section 4.09. Delegation...........................................................................28
Section 4.10. Vacancies............................................................................28
Section 4.11. Effect of Replacement................................................................28
Section 4.12. Effect of Vacancies..................................................................28
Section 4.13. Transactions with Trustees...........................................................29
Section 4.14. Interests of Trustees................................................................29
Section 4.15. Confidentiality Obligations of Trustees..............................................29
Section 4.16. Contract with Trustee................................................................30
Section 4.17. Validity of Acts.....................................................................30
Section 4.18. Minute Book..........................................................................30
Section 4.19. Fees and Remuneration; Directors and Officers Insurance..............................30
Section 4.20. Trustees May Rely....................................................................30
Section 4.21. Trustees Act Solely as Trustees......................................................31
Section 4.22. No Expenses for the Trustees.........................................................31
Section 4.23. No Representations or Warranties as to Certain Matters...............................31
ARTICLE V INDEMNIFICATION OF TRUSTEES...........................................................................32
Section 5.01. Liability and Indemnity..............................................................32
Section 5.02. Agents...............................................................................32
Section 5.03. Insurance............................................................................32
Section 5.04. Non-Exclusive Rights.................................................................32
Section 5.05. Survival.............................................................................32
ARTICLE VI TERMINATION OF LIFT..................................................................................33
Section 6.01. Termination of LIFT..................................................................33
ARTICLE VII AMENDMENTS..........................................................................................33
Section 7.01. Amendments...........................................................................33
ARTICLE VIII MISCELLANEOUS......................................................................................34
Section 8.01. Notices..............................................................................34
Section 8.02. Governing Law........................................................................35
Section 8.03. Jurisdiction.........................................................................35
Section 8.04. Counterparts.........................................................................36
Section 8.05. Agreement............................................................................36
Section 8.06. Table of Contents; Headings..........................................................36
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EXHIBITS
Exhibit A - Form of Beneficial Interest Certificate
Exhibit B - Form of Affidavit of Citizenship
Exhibit C - Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
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This AMENDED AND RESTATED TRUST AGREEMENT (this "Trust
Agreement"), dated as of June 26, 2001, is made between AUTOMATIC LIFT I LP, a
Delaware limited partnership (the "Depositor") and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as the Person accepting appointment as the Owner
Trustee under this Trust Agreement.
Pursuant to that certain Trust Agreement dated June 12, 2001,
the parties created a business trust under the Business Trust Act (the "Original
Trust Agreement") and by this instrument intend to amend and restate such
agreement such that this Amended and Restated Trust Agreement shall constitute
the governing instrument of that business trust. Accordingly, the parties agree
that the Original Trust Agreement is hereby amended and restated in its entirety
to read as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS AND CONSTRUCTION. For purposes of
this Trust Agreement, the following terms shall have the meanings indicated
below. Capitalized terms used but not defined in this Trust Agreement shall have
the meaning given to such terms in the Indenture. The rules of construction
contained in Section 1.02 of the Indenture shall apply to this Trust Agreement.
A "subsidiary" of any Person shall include a trust of which such Person is the
holder of the beneficial interest.
"Basic Terms Modification" has the meaning given to such term
in Section 7.01 hereof.
"Book Value" means, with respect to any asset of LIFT as of
any date, such asset's adjusted basis for Federal income tax purposes as of such
date, except as follows: (i) the initial Book Value of an asset contributed by a
Certificateholder shall be the "fair market value" of such asset on the date of
such contribution; (ii) if the Book Value of an Aircraft has been determined
pursuant to clause (i) above, such Book Value shall thereafter be adjusted by
the depreciation, cost recovery and amortization attributable to such asset
assuming that the adjusted basis of such asset was equal to its Book Value
determined pursuant to the methodology described in United States Treasury
Regulation Section 1.704-1(b)(2)(iv)(g)(3).
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 et seq.
"Capital Account" has the meaning given to such term in
Section 2.12 hereof.
"Citizen of the United States" has the meaning given to the
term "citizen of the United States" in Section 40102(a)(15) of the
Transportation Code and in the FAA Regulations.
"Class A Contingent Collateral Account" has the meaning given
to such term in the Supplementary Security Trust Agreement.
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"Controlling Trustee" means each Person appointed, at the time
of determination, as a controlling trustee under this Trust Agreement. The
initial Controlling Trustees are identified in Section 4.03 hereof.
"Deficit Capital Account" means with respect to any
Certificateholder, the deficit balance, if any, in such Certificateholder's
capital account as of the end of the taxable year, after giving effect to the
following adjustments:
(i) Credit to such capital account any amount which such
Certificateholder is obligated to restore under Treasury Regulations Section
1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to
last sentence of Treasury Regulations Sections 1.704-2(g)(1) and (i)(5), after
taking into account thereunder any changes during such year in partnership
minimum gain (as determined in accordance with Treasury Regulations Section
1.704-2(d)) and in the minimum gain attributable to any partner
(Certificateholder) non-recourse debt (as determined under Treasury Regulations
Section 1.704-2(i)(3)); and
(ii) Debit to such capital account the items described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6); and
This definition of Deficit Capital Account is intended to
comply with the provision of Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)
and 1.704-2, and is to be interpreted consistently with those provisions.
"Depositor" has the meaning given to such term in the
introductory paragraph of this Trust Agreement.
"Eligibility Requirements" has the meaning given to such term
in Section 4.02 hereof.
"Equity Trustee" means the Person appointed, at the time of
determination, as the Trustee appointed by the Certificateholders under this
Trust Agreement. The initial Equity Trustee is identified in Section 4.03
hereof.
"FAA Regulations" means the Federal Aviation Regulations
issued or promulgated pursuant to the Transportation Code from time to time.
"Indenture" means the Trust Indenture between LIFT,
ReSource/Phoenix, Inc. and Bankers Trust Company.
"Indenture Trustee" means the "Trustee" as defined in the
Indenture.
"Independent Controlling Trustee" means the Controlling
Trustees appointed, at the time of determination, as the Independent Controlling
Trustees under this Trust Agreement. The initial Independent Controlling
Trustees are identified in Section 4.03 hereof.
"LIFT" has the meaning given to such term in Section 2.01(a)
hereof.
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"Original Trust Agreement" has the meaning given to such term
in the second introductory paragraph of this Trust Agreement.
"Owner Trustee" means the Person appointed, at the time of
determination, as the owner trustee under this Trust Agreement. The initial
Owner Trustee is Wilmington Trust Company.
"Permitted Beneficial Note" has the meaning given to such term
in the Supplementary Security Trust Agreement.
"Private Placement Legend" means the legend initially set
forth on the Beneficial Interest Certificates in the form set forth in Section
3.02 hereof.
"Profits and Losses" means, for any period, the taxable income
or taxable loss of LIFT for such period, but excluding any items specially
allocated pursuant to Section 2.15 hereof, all as determined in accordance with
the method of accounting followed by LIFT for federal income tax purposes, with
the following adjustments (solely for purposes of adjusting the Capital Accounts
of the Certificateholders and not for tax purposes):
(i) income that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses shall be added to
such taxable income or loss;
(ii) any expenditures not deductible in computing taxable
income and not properly chargeable to a capital account, as described in Section
705(a)(2)(B) of the Code, and not otherwise taken into account in computing
Profits or Losses shall be subtracted from such taxable income or loss;
(iii) any income, gain, loss or expense required to be
separately allocated pursuant to Section 702 and not otherwise taken into
account in computing Profits or Losses shall be added to or subtracted from such
taxable income or loss;
(iv) items of income, gain, loss or deduction attributable
to the disposition of property having a Book Value that differs from its
adjusted basis for tax purposes shall be computed by reference to such
property's book value in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(g); and
(v) if any asset distributed in kind is reflected in the
Capital Accounts of the Certificateholders at Book Value that differs from the
fair market value of the asset at the time of distribution, the difference shall
be treated as Profits or Losses on the sale of the asset and shall be allocated
among the Certificateholders as of the time immediately prior to such
distribution, in accordance with Section 2.13 hereof.
"Register" has the meaning given to such term in Section 3.03
hereof.
"Supplementary Security Trust Agreement" has the meaning given
to such term in the Security Trust Agreement.
"Tax Matters Partner" has the meaning given to such term in
Section 2.10 hereof.
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"Transportation Code" means part A of subtitle VII of title
49, United States Code.
"Trustee" means any of or in its plural form all of the Owner
Trustee and the Controlling Trustees.
"Trust Agreement" has the meaning given to such term in the
introductory paragraph of this Trust Agreement.
"Trust Property" means any and all property in which LIFT at
any time has any right, title or interest.
"United States Person" means a United States person within the
meaning of Section 7701(a)(30) of the Code or a person that will be treated as
such for United States federal income tax purposes.
ARTICLE II
GENERAL MATTERS
Section 2.01. ORGANIZATIONAL MATTERS.
(a) The name of the business trust that is the subject of this
Trust Agreement is "Lease Investment Flight Trust". If the Controlling Trustees
determine that the use of the name "Lease Investment Flight Trust" is not
practicable or desirable, they may change the name and use any other designation
or name for such business trust. To the extent practicable, the Trustees shall
conduct the activities of Lease Investment Flight Trust ("LIFT"), execute and
deliver all documents and cause LIFT to sue or be sued under its name. Any
reference to LIFT shall be a reference to the business trust created hereby and
not to any of the Trustees individually, to the officers, agents or employees of
LIFT, to the Depositor or to any other Certificateholders or other holders of a
beneficial interest in LIFT.
(b) The principal office of LIFT, and such additional
offices as the Controlling Trustees may determine to establish, shall be
located at such place or places inside or outside the State of Delaware as
the Controlling Trustees may designate from time to time. The principal
office of LIFT is initially located c/o Wilmington Trust Company, Attention:
Corporate Trust Administrator, at 1100 North Market Street, Rodney Square
North, Wilmington, DE 19890-0001.
(c) LIFT is a "business trust", the Trustees are the
"trustees" and each Certificateholder is a "beneficial owner", within the
meaning of the Business Trust Act. LIFT shall not be deemed to be a general
partnership, limited partnership, limited liability company, joint venture,
joint shares company or a corporation. It is intended that LIFT shall be treated
for tax purposes as a partnership (and not a publicly traded partnership) under
the United States Internal Revenue Code of 1986.
(d) Legal title to all Trust Property shall be vested in LIFT
as a separate legal entity, except that the Controlling Trustees may cause legal
title to any Trust Property to be held
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by or in the name of any other Person as a nominee and in furtherance thereof,
legal title to any Aircraft may be held in the name of the Owner Trustee or the
owner trustee under any trust established by and for the benefit of LIFT or any
trust acquired by LIFT or acquired by a trust established by and for the benefit
of LIFT. No Certificateholder or other owner of a beneficial interest in LIFT
shall be deemed to have a severable ownership interest in or any right of
partition or possession to any part of the Trust Property.
(e) The Owner Trustee hereby declares that it will hold the
Trust Property upon the terms set forth in this Trust Agreement. Each successor
Owner Trustee shall succeed to the right, title and interest of the Owner
Trustee in the Trust Property automatically upon its due succession or due
acceptance of appointment as the Owner Trustee without the need for any
conveyancing documents as to all or any part of the Trust Property. Subject to
the right of the Controlling Trustees to direct the Owner Trustee as to the
transfer or encumbering of all or any part of the Trust Property, all documents
effecting any transfer or encumbering of all or any part of the Trust Property
shall be executed and delivered exclusively by the Owner Trustee.
Section 2.02. MANAGEMENT BY THE CONTROLLING TRUSTEES;
AUTHORITY OF THE OWNER TRUSTEE.
(a) The Controlling Trustees shall have the exclusive and full
authority to manage the Trust Property and affairs of LIFT, subject to the terms
and provisions of this Trust Agreement. By acceptance of its appointment, each
Controlling Trustee agrees to manage the Trust Property and the affairs of LIFT
in accordance with the terms of this Trust Agreement and specifically, so long
as any debt securities of LIFT remain outstanding, to take no action with
respect to all or any part of the Trust Property that contravenes or conflicts
with any provision of the Indenture or other instrument governing such debt
securities.
(b) The Owner Trustee shall have the exclusive authority to
(i) accept legal process served on LIFT in the State of Delaware, (ii) execute
any certificates that the Owner Trustee is required to execute under Section
3811 of the Business Trust Act and file such certificates with the Delaware
Secretary of State, (iii) subject to the direction of the Controlling Trustees,
receive funds from the Indenture Trustee and distribute them in accordance
herewith, (iv) subject to the direction of the Controlling Trustees, send to the
Certificateholders a copy of each notice or other communication received by the
Owner Trustee under the Indenture for or on behalf of one or more of the
Certificateholders as provided herein, (v) subject to the direction of the
Controlling Trustees, send to the Indenture Trustee a copy of each notice,
request or other communication for or on behalf of one or more
Certificateholders as provided herein or in the Indenture, (vi) subject to the
direction of the Controlling Trustees, execute and send to the Indenture Trustee
in the name of and on behalf of LIFT such notices, requests or other
communications as the Indenture requires on the part of LIFT or as the
Controlling Trustees shall direct and (vii) execute and deliver in the name of
and on behalf of LIFT such Related Documents as are to be executed and delivered
on the Initial Closing Date or as the Controlling Trustees shall direct and any
amendments or supplements to any Related Documents and any other certificates,
instruments, documents or other papers (including documents of transfer or
emcumbrance) as the Controlling Trustees shall direct. Each such action shall be
taken by the Owner Trustee in its capacity as such and not in its individual
capacity, and any papers so executed may so state. The Owner Trustee shall not
be required to take any such action if the
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Owner Trustee shall determine, or shall be advised by counsel, that such action
is likely to result in personal liability or is contrary to Applicable Law or
any agreement to which LIFT or the Owner Trustee is a party.
Section 2.03. OBJECTS. LIFT is formed for the following
objects only:
(a) to enter into and to perform the Beneficial Interest
Purchase Agreement, the Indenture, the Security Trust Agreement, any of the
other Related Documents, and any other agreements as are required by the terms
of the Related Documents or as the Controlling Trustees determine to be
appropriate for the objects of and the proper conduct of the affairs of LIFT;
(b) to acquire, directly or indirectly through any subsidiary
or other intermediary, Aircraft and related assets pursuant to the Asset
Purchase Agreement, the Beneficial Interest Purchase Agreement or from time to
time pursuant to other Acquisition Agreements or otherwise;
(c) to own, hold, convert, maintain, modify, manage, operate,
lease, re-lease and sell or otherwise dispose (including by means of a Leveraged
Lease Transaction) of any Aircraft or related assets and enter into all
agreements and engage in all related activities incidental thereto (in each case
directly or indirectly through any subsidiary or other intermediary), including
from time to time accepting, exchanging, holding or permitting any of its
subsidiaries to accept, exchange or hold promissory notes, contingent payment
obligations or equity interests of lessees or their Affiliates issued in
connection with the bankruptcy, reorganization or other similar process, or in
settlement of delinquent obligations or obligations anticipated to be
delinquent, of such lessees or their respective Affiliates;
(d) to provide loans to or guarantee or otherwise support the
obligations and liabilities of any of its subsidiaries on such terms and in such
manner as the Controlling Trustees see fit and (whether or not LIFT or any of
its subsidiaries shall derive a benefit therefrom) so long as such loans,
guarantees, or other supports are provided for the purposes set forth in
paragraphs 2.03(a), (b) or (c) hereof; provided that no such loan, guarantee or
other support of the obligations or liabilities of any of its subsidiaries shall
be provided if it would materially adversely affect the holders of any debt
securities of LIFT;
(e) to finance and refinance the activities described in
paragraphs 2.03(a), (b) or (c) above through the offer, sale and issuance of any
securities of LIFT, including the Initial Notes, the Additional Notes, the
Refinancing Notes, the Exchange Notes, the Beneficial Interest Certificates and
the Additional Certificates, upon such terms and conditions as the Controlling
Trustees see fit, for cash or in payment or in partial payment for any property
purchased or otherwise acquired by LIFT or any of its subsidiaries and to
encumber, by grant of a security interest, mortgage or other charge (including
the Security Trust Agreement), all or any part of the Trust Property whether now
or hereinafter acquired and to permit its subsidiaries to do all or any of the
foregoing;
(f) to engage in currency and interest rate exchange
transactions for the purposes of avoiding, reducing, minimizing, hedging against
or otherwise managing the risk of any loss, cost, expense or liability arising,
or which may arise, directly or indirectly, from any
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change or changes in any interest rate or currency exchange rate or in the price
or value of any of LIFT's or any of its subsidiaries' property or assets, within
limits determined by the Controlling Trustees from time to time and submitted to
the Rating Agencies, including dealings, whether involving purchases, sales or
otherwise, in foreign currency, spot and forward interest rate exchange rate
contracts, forward interest rate agreements, caps, floors and collars, futures,
options, swaps and any other currency, interest rate and other similar hedging
arrangements and such other instruments as are similar to, or derivatives of,
any of the foregoing;
(g) to establish, promote and aid in promoting, constituting,
forming or organizing companies, trusts, syndicates, partnerships or other
entities of all kinds in any part of the world for the purposes set forth in
paragraph 2.03(a), (b), (c) or (d) hereof and to acquire, hold or exercise
rights with respect to and dispose of shares, securities and other interests in
any Person who is or becomes thereby a subsidiary or causing the disposition of
the assets of, or the dissolution of, any existing subsidiary;
(h) to take out, acquire, surrender, assign or exercise rights
with respect to and pay premiums on policies of insurance and assurances with
any insurance company or companies and permit its subsidiaries to do so, all as
the Controlling Trustees may think fit ; and
(i) to do all such things as may be deemed incidental or
conducive to the attainment of all or any of the above objects.
For the avoidance of doubt, LIFT is authorized to, and to
permit its subsidiaries to, engage in any activity or other undertaking
expressly required or authorized by the Indenture.
Section 2.04. PROHIBITION AND LIMITATION OF ACTIONS BY LIFT
AND THE TRUSTEES.
(a) PROHIBITED ACTIVITY. LIFT (and its subsidiaries) shall
not, and the Trustees shall not cause LIFT (or its subsidiaries) to engage in
any activity other than as required or authorized by Section 2.03 hereof or any
other provision of this Trust Agreement. Any party to this Trust Agreement, any
Certificateholder and, for so long as any debt securities of LIFT remain
outstanding, any holders of such debt securities (or any trustee or other
representative thereof), may bring a proceeding to set aside and enjoin the
performance of any act or acts by LIFT that are not required or authorized by
Section 2.03 hereof or any other provision of this Trust Agreement.
(b) LIMITATIONS ON NEW SUBSIDIARIES. The organizational
documents of each direct or indirect subsidiary of LIFT formed or acquired on or
after the date hereof shall limit such subsidiary's activities to those
permitted under Section 5.02(e) of the Indenture and shall provide that, except
to the extent otherwise required by Applicable Law, such subsidiary may not
commence a voluntary bankruptcy or similar proceeding except with the consent of
all of the trustees or directors, as applicable, of such subsidiary (other than
a statutory trustee), at least one of whom shall be an individual who is an
Independent Controlling Trustee under this Trust Agreement.
(c) LIMITATION ON EMPLOYEES. LIFT shall not, and LIFT shall
not permit any of its subsidiaries to, employ or maintain any employees other
than as required by any provisions of local law; provided that the Trustees (or
any Person serving on any committee thereof) and the
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trustees and directors of each of LIFT's subsidiaries shall not be deemed to be
employees for purposes of this Section 2.04(c). (d) LIMITATION ON INDEBTEDNESS.
LIFT shall not, and LIFT shall not permit any of its subsidiaries to, incur,
create, issue, assume, guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise,
whether present or future (in any such case, to "incur"), Indebtedness. The
Beneficial Interest Certificates shall not constitute Indebtedness.
Notwithstanding the foregoing, LIFT and any of its
subsidiaries may incur each and all of the following:
(i) Indebtedness in respect of any Initial Notes issued on the
Initial Closing Date;
(ii) Indebtedness in respect of any Refinancing Notes or other
Indebtedness described in the proviso to Section 5.02(c)(iii) of the Indenture;
provided that (A) such Refinancing Notes or other Indebtedness receive ratings
from the Rating Agencies at the close of such Refinancing or repurchase equal to
or higher than those of the subclass being refinanced or repurchased (determined
at the date of incurrence), (B) taking into account such Refinancing or
repurchase, a Rating Agency Confirmation is obtained prior to such Refinancing
or repurchase and (C) the net proceeds of any such Refinancing or other
Indebtedness shall be used only to repay the Outstanding Principal Balance of
the subclass of Notes being so refinanced or repurchased (plus any premium and
transaction expenses relating thereto) and to fund any Cash Collateral Account
and/or Reserved Cash in the Collections Account in respect of such Refinancing
Notes;
(iii) Indebtedness in respect of any Exchange Notes issued
pursuant to the Indenture and the Registration Rights Agreement;
(iv) Indebtedness in respect of any Additional Notes the
proceeds of which are applied to finance a Permitted Additional Aircraft
Acquisition; provided that (A) a Rating Agency Confirmation is obtained prior to
the incurrence of such Indebtedness and (B) the net proceeds of such
Indebtedness shall be used only to finance such Permitted Additional Aircraft
Acquisition (plus transaction expenses relating thereto) and to fund any Cash
Collateral Account and/or Reserved Cash in the Collections Account in respect of
such Additional Notes and (C) such Additional Notes will be cross-collateralized
with all Outstanding Notes by the Collateral under the Security Trust Agreement;
(v) Indebtedness in respect of guarantees by any Issuer Group
Member of any other Issuer Group Member; provided that no such Indebtedness
shall be incurred if it would materially adversely affect the Holders;
(vi) obligations to each Seller under each Acquisition
Agreement and any related lease assignment and assumption agreements and the
documents related thereto;
(vii) Indebtedness under any agreements between any Issuer
Group Member and any other Issuer Group Member (each, an "Intercompany Loan");
provided that such
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Indebtedness shall be evidenced by promissory notes and written notice shall
have been given to each Rating Agency of the incurrence of such Indebtedness;
(viii) Indebtedness of any Issuer Group Member under any
Credit Facility or Swap Agreement; and
(ix) Indebtedness in connection with any Leveraged Lease
Transaction.
(e) Limitation on Consolidation, Merger and Transfer of
Assets. LIFT shall not, and LIFT shall not permit any of its subsidiaries to,
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of its property and assets (as an entirety or substantially an
entirety in one transaction or in a series of related transactions) to, any
other Person, or permit any other Person to merge with or into LIFT or any of
its subsidiaries, unless (i) the resulting entity is a special purpose entity,
the organizational document of which is substantially similar to this Trust
Agreement or the equivalent organizational document of such Issuer Group Member,
as the case may be, and, after such consolidation, merger, sale, conveyance,
transfer, lease or other disposition, payments from such resulting entity to the
Holders and the Certificateholders do not give rise to any withholding tax
payments less favorable to the Holders or the Certificateholders than the amount
of any withholding tax payments that would have been required had such event not
occurred and such entity is not subject to taxation as a corporation or an
association or publicly traded partnership taxable as a corporation, (ii) in the
case of any consolidation, merger or transfer by LIFT, the Beneficial Interest
Certificates remain outstanding or new Ownership Interests having substantially
the same terms and conditions as the exchanged Beneficial Interest Certificates
are issued in exchange therefor and the surviving successor or transferee entity
expressly assumes all of the obligations of LIFT under the Indenture, the
Securities and each other Related Document to which LIFT is then a party, (iii)
a Rating Agency Confirmation is obtained with respect to such merger, sale,
conveyance, transfer, lease or disposition, (iv) immediately after giving effect
to such transaction, no Event of Default has occurred and is continuing, (v)
such transaction does not result in the recognition of gain or loss by the
Holders for U.S. federal income tax purposes, and (vi) LIFT delivers to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel, in each
case stating that such consolidation, merger or transfer and such assumption
documents comply with the above criteria and, if applicable, Section 5.02(g) of
the Indenture and that all conditions precedent provided for in the Indenture
relating to such transaction have been complied with; provided that this
covenant shall not apply to any such consolidation, merger, sale, conveyance,
transfer, lease or disposition (1) within and between LIFT and any of its
subsidiaries and any other Issuer Group Member if such consolidation, merger,
sale, conveyance, transfer, lease or disposition, as the case may be, would not
materially adversely affect the Holders and the Certificateholders, (2)
complying with the terms of Section 5.02(g) of the Indenture or (3) effected as
part of a single transaction providing for the redemption or defeasance of
Securities in accordance with Section 3.10 or Article XI, respectively, of the
Indenture.
Section 2.05. LIMITATION ON THE ISSUANCE, DELIVERY AND SALE OF
EQUITY INTERESTS. LIFT shall not (a) issue, deliver or sell any shares,
interests, participations or other equity equivalents (however designated,
whether voting or non-voting, other than beneficial interests, shares,
participations or other equivalents existing on the Initial Closing Date) or (b)
sell, or
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permit any subsidiary, directly or indirectly, to issue, deliver or sell, any
shares, interests, participations or other equity equivalents (however
designated, whether voting or non-voting, other than beneficial interests,
shares, participations or other equivalents existing on the Initial Closing
Date), except (i) the issuance, sale, delivery, transfer or pledge of Ownership
Interests in any Issuer Group Member to or for the benefit of any other Issuer
Group Member, (ii) issuances or sales of any Additional Certificates the
proceeds of which are applied to finance a Permitted Additional Aircraft
Acquisition and as provided in Section 2.04(d)(iv) hereof in accordance with the
provisions of Section 2.11 of the Indenture, provided that (A) a Rating Agency
Confirmation is obtained prior to such issuance and (B) the net proceeds of such
issuance shall be used only to finance such Permitted Additional Aircraft
Acquisition and as provided in Section 2.04(d)(iv) hereof, (iii) issuances or
sales of shares of Ownership Interests in foreign Issuer Subsidiaries to
nationals in the jurisdiction of incorporation or organization of such Issuer
Subsidiary, as the case may be, to the extent required by Applicable Law or
necessary in the determination of the Controlling Trustees to avoid adverse tax
consequences in any such jurisdiction, (iv) the pledge of the Pledged Stock and
Pledged Beneficial Interest or pledge of any other Ownership Interest pursuant
to the Security Trust Agreement, (v) the sale or other disposition of any
Ownership Interest in an Issuer Subsidiary in order to effect the sale of all
Aircraft owned by such Issuer Subsidiary in compliance with Section 5.02(g) of
the Indenture, (vi) contributions to the capital of LIFT by the
Certificateholders for the purpose of exercising LIFT's rights under Section
3.13 of the Indenture, for the purpose of an Optional Redemption of any subclass
of Notes or for the purpose of discharging the Notes upon their Acceleration and
(vii) the issuance of certificates in replacement for, or upon transfer or
exchange of, then Outstanding Beneficial Interest Certificates in accordance
with the terms hereof.
Section 2.06. INDEPENDENT BUSINESS. LIFT will conduct its
activities, and will cause each of its subsidiaries to conduct its business such
that it is a separate and readily identifiable business from, and independent
of, any Certificateholder and any of its Affiliates (it being understood that
any Certificateholder and its Affiliates may publish financial statements that
consolidate those of LIFT and any of its Affiliates, if to do so is required by
any Applicable Law or accounting principles from time to time in effect and
LIFT's subsidiaries may file consolidated tax returns with any Certificateholder
and its Affiliates for tax purposes). Without limiting the foregoing, LIFT:
(a) will observe, and will cause its subsidiaries to observe,
all formalities necessary to remain legal entities separate and distinct from
each Certificateholder and any of its Affiliates;
(b) will maintain, and will cause its subsidiaries to
maintain, each of their respective assets and liabilities separate and distinct
from those of each Certificateholder and any of its Affiliates;
(c) will maintain, and will cause its subsidiaries to
maintain, records, books, accounts, and minutes separate from those of each
Certificateholder and any of its Affiliates;
(d) will pay its obligations, and will cause its subsidiaries
to pay each of their respective obligations in the ordinary course of business
as legal entities separate from each Certificateholder and any of its
Affiliates;
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(e) will keep, and will cause its subsidiaries to keep, each
of their respective funds separate and distinct from any funds of each
Certificateholder and any of its Affiliates, and will receive, deposit, withdraw
and disburse such funds separately from any funds of each Certificateholder and
any of its Affiliates;
(f) will conduct its activities, and will cause each of its
respective subsidiaries to conduct their respective businesses in their own
name, and not in the name of any Certificateholder or any of its Affiliates;
(g) will not agree, and will cause its subsidiaries not to
agree, to pay or become liable for any debt of any Certificateholder or any of
its Affiliates;
(h) will not hold out, and will cause its subsidiaries not to
hold out, that any of them is a division of any Certificateholder or any of its
Affiliates or that any Certificateholder or any of its Affiliates is a division
of any of them;
(i) will not induce, and will cause its subsidiaries not to
induce, any third party to rely on the creditworthiness of any Certificateholder
or any of its Affiliates in order that such third party will contract with it;
and
(j) will not enter into, and will cause its subsidiaries not
to enter into, any transaction between any of them and any Certificateholder or
any of its Affiliates that are more favorable to such Certificateholder and its
Affiliates than transactions that LIFT and its subsidiaries would have been able
to enter into at such time on an arm's-length basis with a non-affiliated third
party, other than any agreements in effect on the date hereof or any
transactions permitted pursuant to the Indenture.
For the avoidance of doubt, LIFT is authorized to, and to
permit its subsidiaries to, engage in any activity or other undertaking
expressly required or authorized by the Indenture.
Section 2.07. DURATION OF LIFT. LIFT, unless terminated
pursuant to the provisions of Article VI hereof, shall have a perpetual
existence.
Section 2.08. TRUST FOR BENEFIT OF HOLDERS OF LIFT DEBT
SECURITIES.
(a) This Trust Agreement has been entered into, and LIFT has
been created, in part to induce the Holders to purchase their respective Notes.
Each Certificateholder (by accepting a Beneficial Interest Certificate) and the
Trustees agree that the Holders from time to time are third party beneficiaries
hereof, and shall be entitled to enforce the terms of this Trust Agreement to
the same extent as if they were parties hereto, subject, however, to the
provisions of the documents governing the Notes.
(b) Neither the bankruptcy, insolvency or other incapacity of
any Certificateholder, nor any transfer, by operation of law or otherwise, by it
of any interest in LIFT or the Trust Property, shall (i) operate to terminate
this Trust Agreement or the existence of LIFT, (ii) entitle any
Certificateholder or its legal representatives or transferees to claim an
accounting or to take any action in any court for a partition of all or any part
of the Trust
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Property or for the winding up of LIFT or (iii) otherwise affect the rights,
duties and liabilities of the parties hereto.
Section 2.09. REPRESENTATION OF DEPOSITOR. The Depositor
represents that it is a United States Person and a Citizen of the United States
and that it is acquiring the Beneficial Interest Certificates for its own
account. The Depositor shall provide LIFT and the Owner Trustee an affidavit in
the form of Exhibit B certifying that it is a Citizen of the United States.
Section 2.10. TAX MATTERS PARTNER. For purposes of Section
6231(a)(7) of the Code, the "Tax Matters Partner" shall be Automatic Lift I, LP.
The Tax Matters Partner shall keep the Certificateholders fully informed of any
inquiry, examination or proceeding (including, without limitation, the beginning
and completion of an administrative proceeding involving LIFT) promptly upon
notice thereof being received by the Tax Matters Partner. The then current Tax
Matters Partner may at any time appoint a successor to itself as the Tax Matters
Partner. At the request of any Certificateholder, the Tax Matters Partner shall
make the election referred to in Section 754 of the Code.
Section 2.11. U.S. TAX RETURNS. LIFT shall cause the
Administrative Agent, acting for the Owner Trustee, to provide each
Certificateholder with any information the Certificateholder may require to
complete and file its United States federal income tax return and all other
returns required to be filed by the Certificateholder in connection with their
United States tax reporting obligations. In particular, LIFT shall cause the
Administrative Agent, acting for the Owner Trustee, to provide each
Certificateholder with annual tax reports on form K-1 on or prior to the date
required by applicable law. The parties hereto intend that LIFT be taxed as a
partnership for United States federal income tax purposes and no such party or
any person acting on its behalf shall file any election to have LIFT be taxed as
an association taxable as a corporation.
Section 2.12. CAPITAL ACCOUNTS. Solely for United States
federal, state and local income and franchise tax purposes, LIFT shall cause the
Administrative Agent to maintain an account (a "Capital Account") for each
Certificateholder in compliance with Section 704(b) of the Code and Treasury
Regulation Sections 1.704-1(b)(2)(iv) and 1.704-2. Subject to the preceding
sentence, a Certificateholder's Capital Account will initially equal the amount
paid by the Certificateholder to LIFT with respect to its Beneficial Interest
Certificate (which shall be treated as such Certificateholder's capital
contribution to LIFT) and shall, throughout the term of LIFT, be (a) increased
by the amount of (i) Profits allocated to such Certificateholder pursuant to
Section 2.13 hereof and (ii) the amount of any cash or the fair market value of
other property contributed by the Certificateholder to LIFT (net of liabilities
secured by the property that LIFT is considered to assume or take subject to
pursuant to the provisions of Section 752 of the Code) subsequent to the
Certificateholder's initial contribution, and (b) decreased by the amount of (i)
Losses allocated to such Certificateholder pursuant to Section 2.13 and (ii) the
amount of distributions in cash and the fair market value of any other property
(net of liabilities secured by the property that the Certificateholder is
considered to assume or take subject to pursuant to the provisions of Section
752 of the Code) distributed to such Certificateholder.
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Section 2.13. ALLOCATION OF PROFITS AND LOSSES FOR CAPITAL
ACCOUNT PURPOSES. As of the close of each fiscal quarter, and as of the date on
which a Certificateholder's interest is redeemed or LIFT is terminated, Profits
and Losses shall be allocated among the Capital Accounts of the
Certificateholders PRO RATA to each Certificateholder based upon the percentage
residual interest represented by its Beneficial Interest Certificates.
Section 2.14. ALLOCATIONS OF PROFITS AND LOSSES ON LIQUIDATION
Notwithstanding Section 2.13, in the year in which LIFT is liquidated, Profits
and Losses, and items of income, gain, loss and deduction shall be allocated to
the extent possible to cause distributions to the Certificateholders pursuant to
Section 6.01(b) to equal the distributions the Certificateholders would have
received were liquidating distributions effected in accordance with Sections
3.11, 3.13 and 3.14.
Section 2.15. SPECIAL ALLOCATIONS TO CAPITAL ACCOUNTS (a) No
allocation of loss, deduction, and/or expenditures described in Section
705(a)(2)(B) of the Code shall be charged to the Capital Accounts of any
Certificateholder if such allocation would cause such Certificateholder to have
a Deficit Capital Account. The amount of the loss, deduction, or Section
705(a)(2)(B) of the Code expenditure which would have caused a Certificateholder
to have a Deficit Capital Account shall instead be charged to the Capital
Account of any Certificateholders which would not have a Deficit Capital Account
as a result of the allocation pro rata based upon the percentage residual
interest represented by their Beneficial Interest Certificates, or, if no such
Certificateholders exist, then to all the Certificateholders pro rata based upon
the percentage residual interest represented by their Beneficial Interest
Certificates.
(b) If any Certificateholder unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), which create or increase a Deficit
Capital Account of the Certificateholder, then items of LIFT's income and gain
(consisting of a pro rata portion of each item of LIFT's income, including gross
income, and gain for such year and, if necessary, for subsequent years) shall be
specially allocated to the capital account of the Certificateholder in an amount
and manner sufficient to eliminate, to the extent required by the Treasury
Regulations, the Deficit Capital Account so created as quickly as possible. This
Section 2.15(b) is intended to comply with the "qualified income offset"
provisions of the alternate test for economic effect set forth in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
(c) If any Certificateholder would have a Deficit Capital
Account at the end of any LIFT's taxable year (after taking into account the
allocation pursuant to Section 2.15(b) and all other allocations) which is in
excess of the sum of any amount that the Certificateholder is obligated to
restore to LIFT under Treasury Regulations Sections 1-704-1(b)(2)(ii)(c),
1.704-2(g)(1) and 1.704-2(i)(5) (which are also treated as an obligation to
restore in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)),
the capital account of the Certificateholder shall be specially credited with
items of LIFT's income (including gross income) and gain in the amount of the
excess as quickly as possible.
(d) Notwithstanding any other provision of this Section 2.14,
if there is a net decrease in LIFT's minimum gain as defined in Treasury
Regulations Section 1.704-2(d) during a taxable year of LIFT, the Capital
Accounts of each Certificateholder shall be allocated items of
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income (including gross income) and gain for such year (and if necessary for
subsequent years) equal to that Certificateholder's share of the net decrease in
LIFT's minimum gain. This Section 2.14(d) is intended to comply with the minimum
gain chargeback requirement of Treasury Regulations Section 1.704-2 and shall be
interpreted consistently therewith. If in any taxable year that LIFT has a net
decrease in LIFT's minimum gain, if the minimum gain chargeback requirement
would cause a distortion in the economic arrangement among the
Certificateholders and it is not expected that LIFT will have sufficient other
income to correct that distortion, the Tax Matters Partner may seek to have the
Internal Revenue Service waive the minimum gain chargeback requirement in
accordance with Treasury Regulations Section 1.704-2(f)(4).
(e) Notwithstanding any other provision of this Section 2.14
other than the preceding paragraph (d), if there is a net decrease in partner
non-recourse debt minimum gain as defined in Treasury Regulations Section
1.704-2(i)(3) during a taxable year of LIFT, then, in addition to the amounts,
if any, allocated pursuant to the preceding paragraph, each Certificateholder
with a share of that partner non-recourse debt minimum gain (determined in
accordance with Treasury Regulations Section 1.704-2(i)(5)) shall be allocated
items of income (including gross income) and gain for such year (and if
necessary for subsequent years) equal to that Certificateholder's share of the
net decrease in partner non-recourse debt minimum gain. This Section 2.14(e) is
intended to comply with the minimum gain chargeback requirement of Treasury
Regulations Section 1.704-2 and shall be interpreted consistently therewith. If
in any taxable year that there is a decrease in partner non-resource debt
minimum gain, if the minimum gain chargeback requirement would cause a
distortion in the economic arrangement among the Certificateholders and it is
not expected that LIFT will have sufficient other income to correct that
distortion, the Tax Matters Partner may seek to have the Internal Revenue
Service waive the minimum gain chargeback requirement in accordance with
Treasury Regulations Sections 1.704-2(f)(4) and 1.704-2(i)(4).
(f) Items of LIFT's Loss, deduction, and expenditures
described in Section 705(a)(2)(B) of the Code which are attributable to any
non-recourse debt of LIFT and are characterized as partner (Certificateholder)
non-recourse deductions under Treasury Regulations Section 1.704-2(i) shall be
allocated to the Certificateholders' Capital Accounts in accordance with
Treasury Regulations Section 1.704-2(i).
(g) Beginning in the first taxable year in which there are
allocations of "non-recourse deductions" (as described in Treasury Regulations
Section 1.704-2(b)) those deductions shall be allocated to the
Certificateholders pro rata based upon the percentage residual interest
represented by their Beneficial Interest Certificates.
(h) In determining the Certificateholders' share of the excess
non-recourse liabilities of LIFT for purposes of Treasury Regulations Section
1.752-3(a), the Certificateholder's share of LIFT Profits shall be based upon
the percentage residual interest represented by their Beneficial Interest
Certificate.
(i) To the extent that any item of income, gain, loss or
deduction has been specially allocated pursuant to this Section 2.15, and such
allocation is inconsistent with the manner in which such amount otherwise would
have been allocated pursuant to Section 2.14,
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subsequent allocations under Section 2.14 shall be made to the extent possible
and without duplication, in a manner consistent with this Section 2.15, which
negate the effects of such inconsistent allocations pursuant to this Section
2.15.
Section 2.16. ALLOCATION OF PROFITS AND LOSSES FOR UNITED
STATES INCOME TAX PURPOSES. The income, gains, losses, deductions and credits of
LIFT for federal income tax purposes for any taxable year shall be allocated to
the Certificateholders in the same manner Profits and Net Losses are allocated
to the Certificateholders pursuant to Sections 2.13, 2.14 and 2.15 provided,
however, that solely for United States federal, state and local income tax
purposes and not for book or Capital Account purposes, income, gain, loss and
deduction with respect to property properly reflected in the Capital Accounts at
a value other than its tax basis shall be allocated so as to take into account
the difference between such property's Book Value and its tax basis in a manner
consistent with Section 704(c) of the Code and Treasury Regulations Section
1.704-3.
ARTICLE III
THE BENEFICIAL INTEREST CERTIFICATES
Section 3.01. ISSUANCE OF BENEFICIAL INTEREST CERTIFICATES;
TERMS; FORM; EXECUTION AND DELIVERY.
(a) LIFT is hereby authorized to issue the Initial
Certificates and such Additional Certificates as are authorized in a Controlling
Trustees' Resolution; provided that any Additional Certificates shall be issued
in accordance with Section 2.05 hereof and Section 2.11 of the Indenture.
On the Initial Closing Date, LIFT shall issue to the
Depositor in consideration of and against receipt of the initial contribution of
the Depositor in the amount set forth in a Controlling Trustees' Resolution and
against receipt from the Depositor of affidavits in the form of Exhibits B and C
to this Trust Agreement, Beneficial Interest Certificates representing the
percentage beneficial interest of the Depositor in the Trust Property and LIFT
specified in such Controlling Trustees' Resolution, such percentages
representing in the aggregate for the Depositor all of the beneficial interest
in the Trust Property and LIFT.
(b) Each Beneficial Interest Certificate to be issued on any
Closing Date (including any Additional Certificates) shall be issued and
delivered to, and registered in the name of, the relevant Certificateholder in
registered form, in the form of a permanent certificated certificate and
substantially in the form set forth in Exhibit A to this Trust Agreement, with
such appropriate insertions, omissions, substitutions and other variations as
are required by this Trust Agreement or as are, consistently herewith, set forth
in a Controlling Trustees' Resolution and may have such letters, numbers or
other marks of identification and such legends or endorsements printed,
lithographed or engraved thereon, as may be required to conform to any usage in
respect thereof or as may, consistently herewith, be prescribed by a Controlling
Trustees' Resolution.
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Beneficial Interest Certificates shall be printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner, all as determined by a Controlling Trustees'
Resolution.
(c) The Beneficial Interest Certificates shall be executed on
behalf of LIFT by the manual or facsimile signature of any Responsible Officer
of the Owner Trustee, such execution to constitute the authentication thereof.
(d) Each Beneficial Interest Certificate bearing the manual or
facsimile signature of any individual who at the time such Beneficial Interest
Certificate was executed was a Responsible Officer of the Owner Trustee shall
bind LIFT, notwithstanding that any such individual has ceased to hold such
office or to be a Responsible Officer prior to the delivery of such Beneficial
Interest Certificate or any payment thereon or at any time thereafter.
(e) No Beneficial Interest Certificate shall be entitled to
any benefit under this Trust Agreement or be valid or obligatory for any
purpose, unless it shall have been executed on behalf of LIFT and authenticated
as provided in clause (c) above. The signature of a Responsible Officer of the
Owner Trustee on any Beneficial Interest Certificate shall be conclusive
evidence that such Beneficial Interest Certificate has been duly executed and
authenticated under this Trust Agreement. Each Beneficial Interest Certificate
shall be dated the date of its execution.
(f) No ownership interest in any Beneficial Interest
Certificate shall be issued, sold, transferred, listed or otherwise exchanged at
any time on an established securities market, including (w) a national
securities exchange registered under the Exchange Act or exempted from
registration because of the limited volume of transactions; (x) a foreign
securities exchange that, under the law of the jurisdiction where it is
organized, satisfies regulatory requirements that are analogous to the
regulatory requirements under the Exchange Act applicable to exchanges described
in subclause (w); (y) a regional or local exchange; or (z) an over-the-counter
market, as the trm "established securities market" and the terms in subclauses
(x), (x), (y) and (z) are defined for purposes of Section 7704 of the Code.
Section 3.02. RESTRICTIVE LEGENDS. Each Beneficial Interest
Certificate shall bear the following legends on the face thereof:
THIS BENEFICIAL INTEREST CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
CERTIFICATEHOLDER (1) REPRESENTS THAT IT (A) IS A "UNITED STATES
PERSON" (AS DEFINED IN SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED), (B) IS A "CITIZEN OF THE UNITED STATES" (AS
DEFINED IN SECTION 40102(a)(15) OF PART A OF SUBTITLE VII OF TITLE 49,
UNITED STATES CODE AND IN THE FEDERAL AVIATION REGULATIONS)
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AND (C) IS EITHER A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3), (5), (6), (7) OR (8) OF REGULATION D UNDER
THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS
OF RULE 144(d) IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON
THE DATE OF THE TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE,
RESELL OR OTHERWISE TRANSFER THIS BENEFICIAL INTEREST CERTIFICATE
EXCEPT (A) TO LEASE INVESTMENT FLIGHT TRUST, A DELAWARE BUSINESS TRUST
ESTABLISHED UNDER THE TRUST AGREEMENT DATED AS OF JUNE 26, 2001 (THE
"TRUST AGREEMENT"), OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT OR (C) TO AN ACCREDITED INVESTOR PURSUANT TO AN EXEMPTION FROM
REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), AND, IN EACH CASE (A) THROUGH (C) ABOVE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION ONLY TO A PERSON THAT IS A UNITED STATES
PERSON AND A CITIZEN OF THE UNITED STATES AND OTHERWISE IN ACCORDANCE
WITH SECTION 3.09 OF THE TRUST AGREEMENT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS BENEFICIAL INTEREST CERTIFICATE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE
WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE CERTIFICATEHOLDER MUST
SUBMIT THIS BENEFICIAL INTEREST CERTIFICATE TO THE OWNER TRUSTEE. THE
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE OWNER TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
REFERENCE IS ALSO MADE TO THE PROVISIONS OF SECTION 3.09 OF
THE TRUST AGREEMENT AS TO ADDITIONAL RESTRICTIONS ON THE TRANSFER OF
THIS BENEFICIAL INTEREST CERTIFICATE.
Section 3.03. REGISTER. With respect to each of the Beneficial
Interest Certificates, the Owner Trustee shall at all times be the Person at
whose office in the location set forth in Section 8.01 hereof the Beneficial
Interest Certificates may be presented or surrendered for registration of
transfer or for exchange and for payment thereof and where notices and demands
to or upon LIFT in respect of the Beneficial Interest Certificates may be
served. The Owner Trustee shall keep a register of the Beneficial Interest
Certificates and of their transfer and exchange (the "Register").
Section 3.04. METHOD OF PAYMENT. (a) On (i) each Payment Date
to the extent received by it under Section 3.08 of the Indenture and (ii) upon
receipt by it of any Excluded Payments, the Owner Trustee shall pay to the
Certificateholders all distributions with respect to the Beneficial Interest
Certificates to which they are entitled in accordance with the provisions
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hereof; provided, that in the event and to the extent receipt of any payment is
not confirmed by the Owner Trustee by 1:00 p.m. (New York time) on such Payment
Date or any Business Day thereafter or on the date of the Owner Trustee's
receipt of any Excluded Payments, as applicable, distribution thereof shall be
made on the Business Day following the Business Day such payment is received.
Each payment on any Payment Date of amounts received under Section 3.08 of the
Indenture with respect to any Beneficial Interest Certificates shall be made by
the Owner Trustee to the Certificateholders as of the Record Date for such
Payment Date, and each payment of any Excluded Payment shall be made to the
Certificateholders on the date of payment.
(b) Payments under Section 3.04(a) hereof shall be made by
check mailed to each Certificateholder on the applicable Record Date or, in the
case of Excluded Payments, on the date of payment, at its address appearing on
the Register. Alternatively, in the case of the Depositor or upon application in
writing to the Controlling Trustees, not later than the applicable Record Date,
by any other Certificateholder (which may be granted or denied in the discretion
of the Controlling Trustees), any such payments shall be made by wire transfer
to an account designated by such Certificateholder at a financial institution in
the United States of America.
Section 3.05. TRANSFER AND EXCHANGE; CANCELLATION. A
Certificateholder may transfer a Beneficial Interest Certificate only by written
application to the Owner Trustee stating the name of the proposed transferee and
otherwise complying with the terms of this Trust Agreement. No such transfer
shall be effective until, and such transferee shall succeed to the rights of a
Certificateholder only upon, final acceptance and registration of the transfer
by the Owner Trustee in the Register.
Prior to the due presentment for registration of transfer of a
Beneficial Interest Certificate, LIFT and the Owner Trustee may deem and treat
the applicable registered Certificateholder as the absolute owner and
Certificateholder of such Beneficial Interest Certificate for the purpose of
receiving payment of all amounts payable with respect to such Beneficial
Interest Certificate and for all other purposes and shall not be affected by any
notice to the contrary. The Owner Trustee shall promptly notify the Controlling
Trustees of each request for a registration of transfer of a Beneficial Interest
Certificate.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN BENEFICIAL
INTEREST CERTIFICATES. If any Beneficial Interest Certificate shall become
mutilated, destroyed, lost or stolen, LIFT shall, upon the written request of
the Certificateholder thereof and presentation of the Beneficial Interest
Certificate or satisfactory evidence of destruction, loss or theft thereof to
the Owner Trustee, issue, and the Owner Trustee shall authenticate and deliver
in exchange therefor or in replacement thereof, a new Beneficial Interest
Certificate in the name of such Certificateholder and in the same percentage of
residual interest and dated the date of its authentication. If the Beneficial
Interest Certificate being replaced has become mutilated, such Beneficial
Interest Certificate shall be surrendered to the Owner Trustee and forwarded to
LIFT by the Owner Trustee. If the Beneficial Interest Certificate being replaced
has been destroyed, lost or stolen, the Certificateholder thereof shall furnish
to LIFT or the Owner Trustee (i) such security or indemnity as may be required
by them to save LIFT and the Owner Trustee harmless and (ii) evidence
satisfactory to LIFT and the Owner Trustee of the destruction, loss or theft of
such Beneficial Interest Certificate and of the ownership thereof. The
applicable Certificateholder will be required to pay any tax or other
governmental charge imposed in
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connection with such exchange or replacement and any other expenses (including
the fees and expenses of the Owner Trustee) connected therewith.
Section 3.07. PAYMENTS OF TRANSFER TAXES. Upon the transfer of
any Beneficial Interest Certificate pursuant to Section 3.06 hereof, LIFT or the
Owner Trustee may require from the party requesting such new Beneficial Interest
Certificate payment of a sum to reimburse LIFT or the Owner Trustee for, or to
provide funds for the payment of, any transfer tax or similar governmental
charge payable in connection therewith.
Section 3.08. ADDITIONAL CERTIFICATES. (a) Subject to Section
2.11 of the Indenture and Section 5.02(f)(iv) of the Indenture, LIFT may issue
Additional Certificates pursuant to this Trust Agreement the proceeds of which
in each case shall be used to acquire Additional Aircraft (each, an "Additional
Issuance"). Each issuance of any Additional Certificates shall be authorized
pursuant to the prior written consent of the Certificateholders, one or more
Controlling Trustees' Resolutions and shall be effected only following a Rating
Agency Confirmation. Each Additional Certificate shall be designated generally
as a "Beneficial Interest Certificate" for all purposes under this Trust
Agreement and shall constitute a beneficial interest representing a percentage
residual interest (as determined pursuant to the relevant Controlling Trustees
Resolution) in LIFT pari passu with all of the Beneficial Interest Certificates.
Upon the issuance of any such Additional Certificates, the percentage of the
residual interest of LIFT represented by each then outstanding Beneficial
Interest Certificate shall be adjusted accordingly.
Section 3.09. SPECIAL TRANSFER PROVISIONS.
(a) The Owner Trustee shall register the transfer of a
Beneficial Interest Certificate if such transfer is being made by a proposed
transferor who has (A) checked the box provided for on the Form of Beneficial
Interest Certificate attached hereto as Exhibit A stating, or has otherwise
advised LIFT and the Owner Trustee in writing, that the sale has been made in
compliance with the provisions of Rule 144A and (B) provided LIFT and the Owner
Trustee an affidavit in the form attached hereto as Exhibit B certifying, or has
otherwise advised LIFT and the Owner Trustee in writing, that it is a Citizen of
the United States to a transferee who has (X) signed the certification provided
for on the Form of Beneficial Interest Certificate attached hereto as Exhibit A
stating, or has otherwise advised LIFT and the Owner Trustee in writing, that it
is purchasing the Beneficial Interest for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account are QIBs within the meaning of Rule 144A, that it is aware that the
sale to it or such account is being made in reliance on Rule 144A and that it
acknowledges that it has received such information regarding LIFT as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
foregoing representations in order to claim the exemption from registration
provided by Rule 144A and (Y) provided LIFT and the Owner Trustee an affidavit
in the form attached hereto as Exhibit B certifying, or has otherwise advised
LIFT and the Owner Trustee in writing, that it is a Citizen of the United
States. No transfer of a Beneficial Interest Certificate or issuance of any
Additional Certificates will be registered by the Owner Trustee if such transfer
would cause LIFT to lose the benefits of the safe harbor from "publicly traded
partnership taxable as a corporation for federal income tax purposes" status
provided by Treasury Regulation Section 1.7704-1 or any other available
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exemption from such status, determined as if the Class D Notes evidenced
partnership interests in LIFT (including, but not limited to, as a result of an
ownership interest in any Beneficial Interest Certificates being issued, sold,
transferred, listed or otherwise exchanged at any time on an established
securities market, including (w) a national securities exchange registered under
the Exchange Act or exempted from registration because of the limited volume of
transactions; (x) a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that are
analogous to the regulatory requirements under the Exchange Act applicable to
exchanges described in subclause (w); (y) a regional or local exchange; or (z)
an over-the-counter market, as the term "established securities market" and the
terms in subclauses (w), (x), (y) and (z) are defined for purposes of Section
7704 of the Code).
(b) The Owner Trustee shall register the transfer of a
Beneficial Interest Certificate by the proposed transferor who has (A) checked
the box provided for on the form of Beneficial Interest Certificate attached
hereto as Exhibit A stating that the Beneficial Interest Certificate is being
transferred other than in accordance with the exemption from registration under
the Securities Act provided by Rule 144A thereunder and (B) provided LIFT and
the Owner Trustee an affidavit in the form attached hereto as Exhibit B
certifying, or has otherwise advised LIFT and the Owner Trustee in writing, that
it is a Citizen of the United States to a transferee who has delivered to the
Owner Trustee (X) an affidavit in the form attached hereto as Exhibit B
certifying, or has otherwise advised LIFT and the Owner Trustee in writing, that
it is a Citizen of the United States, (Y) a certificate substantially in the
form of Exhibit C hereto and (Z) an Opinion of Counsel acceptable to the
Controlling Trustees that such transfer is in compliance with the Securities
Act.
(c) (i) Without the consent of each Certificateholder, which
consent may be withheld in such holder's sole discretion, no Certificateholder
may transfer a Beneficial Interest Certificate (A) to a Person that is a
"tax-exempt entity" within the meaning of Section 168(h)(2) of the Code, or any
successor provision thereto, or (B) to a Person that is a partnership, S
corporation or trust (a "flow through entity"), if any immediate equity holder
of such Person or any equity holders holding through tiers of flow through
entities is a tax-exempt entity; provided that for this purpose, a foreign
transferee or foreign equity holder shall not be treated as a "tax-exempt
entity" if the exception of Section 168(h)(2)(B) of the Code would apply to any
property owned directly or indirectly by such foreign transferee or foreign
equity holder through LIFT, or (C) if such transfer would result in a
termination of LIFT as a partnership pursuant to Section 708 of the Code, or any
successor provision thereto, determined as if the Class D Notes did not evidence
equity interests in LIFT.
(ii) Notwithstanding any other provision of this Agreement, no
Certificateholder may transfer a Beneficial Interest Certificate (A) to a Person
that is not a United States Person or (B) determined as though the Class D Notes
do evidence equity interests in LIFT, would cause LIFT to lose the benefits of a
safe harbor from publicly traded partnership taxable as a corporation for
federal income tax purposes status provided by Treasury Regulations Section
1.7704-1 or any other available like exemption (including, but not limited to,
as a result of an ownership interest in any Beneficial Interest Certificates
being issued, sold, transferred, listed or otherwise exchanged at any time on an
established securities market, including (w) a national securities exchange
registered under the Exchange Act or exempted from registration because of the
limited volume of transactions; (x) a foreign securities exchange that, under
the law of the
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jurisdiction where it is organized, satisfies regulatory requirements that are
analogous to the regulatory requirements under the Exchange Act applicable to
exchanges described in subclause (w); (y) a regional or local exchange; or (z)
an over-the-counter market, as the terms in subclauses (w), (x), (y) and (z) are
defined for purposes of Section 7704 of the Code).
(d) Absent a Rating Agency Confirmation, no Beneficial
Interest Certificate may be transferred to or held by any Seller, any other
direct or indirect seller of any Aircraft to the Issuer Group, or any Affiliate
of any thereof or of the Depositor other than a Person whose organic documents
restrict its purposes and powers in a manner analogous to the restriction on the
purposes and powers of the Depositor contained in their respective organic
documents.
(e) By its acceptance of any Beneficial Interest Certificate,
each Certificateholder of such Beneficial Interest Certificate acknowledges the
restrictions on transfer of such Beneficial Interest Certificate set forth in
this Trust Agreement and in the Private Placement Legend and agrees that it will
transfer such Beneficial Interest Certificate only as provided in this Trust
Agreement. The Owner Trustee shall not register a transfer of any Beneficial
Interest Certificate unless such transfer complies with the restrictions on
transfer of such Beneficial Interest Certificate set forth in this Trust
Agreement. In connection with any transfer of Beneficial Interest Certificates,
each Certificateholder agrees by its acceptance of the Beneficial Interest
Certificates to furnish the Owner Trustee the certifications and legal opinions
described herein to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act. The Owner Trustee shall not be required to determine (but
may rely on a determination made by the Controlling Trustees with respect to)
the sufficiency of any such legal opinions.
The Owner Trustee shall retain copies of all letters, notices
and other written communications received pursuant to this Section 3.09. The
Controlling Trustees shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Owner Trustee.
(f) For purposes of Sections 3.09(a), (b) or (c), the
determination of whether a transfer would cause LIFT to lose the benefits of a
safe harbor from publicly traded partnership taxable as a corporation for
federal income tax purposes status provided by Treasury Regulations Section
1.7704-1 or any other available like exemption shall be made by counsel selected
by LIFT.
Section 3.10. CUSIP, CINS AND ISIN NUMBERS. The Owner Trustee
in issuing the Beneficial Interest Certificates shall, if so requested by the
Equity Trustee, use such "CUSIP", "CINS", "ISIN" or other identification numbers
as are then generally in use and, if so requested, the Owner Trustee shall use
CUSIP numbers, CINS numbers, ISIN numbers or other identification numbers, as
the case may be, in notices of exchange as a convenience to Certificateholders;
provided that any such notice shall state that no representation is made as to
the correctness of such numbers either as printed on the Beneficial Interest
Certificates or as contained in any notice of exchange and that reliance may be
placed only on the other identification numbers printed on the Beneficial
Interest Certificates; provided further, that any failure to use "CUSIP",
"CINS", "ISIN" or other identification numbers in any notice of exchange shall
not affect the validity or sufficiency of such notice.
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Section 3.11. DISTRIBUTIONS. Subject to Sections 3.13 and
6.01(b), on the date of the receipt of any Excluded Payments and, to the extent
and only to the extent of any payment received pursuant to Section 3.08 of the
Indenture, on each Payment Date, the Owner Trustee shall distribute the amounts
so received pro rata to each Certificateholder (subject to the final sentence of
Section 3.04(a) hereof) based upon the percentage residual interest represented
by its Beneficial Interest Certificates.
Section 3.12. SUBORDINATION OF THE SECURITIES. Each
Certificateholder (by holding a Beneficial Interest Certificate) hereby
expressly acknowledges and agrees that (i) its right, if any, to receive
dividends or other distributions of Trust Property is subordinate to the rights
of the Holders as provided in the Indenture and (ii) it may not withdraw from
LIFT or obtain possession of, or otherwise exercise legal or equitable remedies
with respect to, all or any part of the Trust Property prior to the payment in
full of the principal and interest of, and any other amount owing with respect
to, the Notes from time to time outstanding other than as expressly provided in
the Indenture. Each Certificateholder further acknowledges that the LIFT has
agreed, on behalf of the Certificateholders, to the terms of Article X of the
Indenture and confirms that LIFT is authorized to do so and that such
Certificateholder is bound thereby.
Section 3.13. ADDITIONAL CAPITAL. In the event that any
Certificateholder determines that it wishes, by itself or together with one or
more other Certificateholder, to provide funds for LIFT either (i) to make any
Issuer Cure Amount payments under Section 3.13 of the Indenture, (ii) to provide
for an Optional Redemption of any subclass of Notes or (iii) following the
Acceleration of the Notes to discharge the Notes in full in accordance with the
Indenture, such Certificateholders shall give notice of such election to the
Trustee and shall provide the requisite funds to the Owner Trustee, who shall
thereupon apply such funds accordingly. Upon the receipt by the Owner Trustee of
any such funds in respect of the discharge of the Notes, the percentage
beneficial interests of all the Certificateholders shall be adjusted to reflect
such funds. Notwithstanding anything to the contrary in this Agreement, any
funds received by the Owner Trustee as reimbursement under the Indenture of an
Issuer Cure Amount shall be distributed only to those Certificateholders who
provided funds for the purpose of making the Issuer Cure Amount payments being
reimbursed, pro rata in proportion to the amount so provided. Nothing in this
Section 3.13 shall impose or be deemed to impose any obligation on any
Certificateholder to provide any such funds. Each Certificateholder
acknowledges, for the avoidance of doubt, that all funds so provided and any
reimbursement to LIFT in respect of Issuer Cure Payments constitute part of the
Trust Property subject to the terms of this Agreement (including without
limitation Article II hereof).
Section 3.14. CLASS A CONTINGENT COLLATERAL ACCOUNT AND
PERMITTED BENEFICIAL NOTES. The Depositor is concurrently entering into the
Supplementary Security Trust Agreement with the Security Trustee pursuant to
which it shall fund the Class A Contingent Collateral Account. In addition, from
time to time, certain Certificateholders (or the holders of direct or indirect
equity interests therein) may issue Permitted Beneficial Notes to the Security
Trustee. The issuance of such Permitted Beneficial Notes shall be treated as a
direct or indirect capital contribution by such Persons to LIFT (except that,
solely for the maintenance of capital accounts, payments on the Permitted
Beneficial Notes or the sales proceeds of sales of Permitted Beneficial Notes
and not the initial contribution of the Permitted Beneficial Notes shall be
treated as capital contributions). To the extent any amounts in the Class A
Contingent Collateral
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Account are released pursuant to Section 2.12 the Supplementary Security Trust
Agreement or the Permitted Beneficial Notes are cancelled and returned in
accordance with the Supplementary Security Trust Agreement, such action shall be
treated as distributions by LIFT to the applicable Certificateholder. In no
event and under no circumstances shall the Depositor have any right to recover
the amount of any deposit to the Class A Contingent Collateral Account or any
withdrawal from the Class A Contingent Collateral Account under Article III of
the Supplementary Security Trust Agreement or the issuers of the Permitted
Beneficial Notes have any right to recover the amount of any payment made by the
issuers of the Permitted Beneficial Notes whether by right of reimbursement,
subrogation, contribution, indemnification or otherwise arising by contract,
operation of law, or under the laws of partnerships, trusts, suretyships,
guarantees or fiduciaries, or under any claim of breach of trust or fiduciary
duty, otherwise from LIFT, the Depositor, any direct or indirect equity holders
of LIFT or the Depositor, any other issuer of the Permitted Beneficial Notes or
any other persons, any such right as may exist being waived by the terms of the
Supplementary Security Trust Agreement and the Permitted Beneficial Notes, as
applicable.
ARTICLE IV
TRUSTEES
Section 4.01. NUMBER AND STATUS. The number of Trustees shall
be at least four, and at all times, there shall be three Controlling Trustees
(two of whom shall be Independent Controlling Trustees and one of whom shall be
the Equity Trustee) and the Owner Trustee; provided that the vacancy in the
position of any Trustee pending the replacement of such Trustee shall not
prevent any of the other Trustees from taking such actions as they would be
entitled to the take in accordance with the terms of this Trust Agreement
without the approval of the Trustee whose position is vacant; provided that any
and all votes of the Trustees shall be in accordance with Section 4.07 hereof
and no vacancy shall result in the number of votes required thereby being
diminished in any way. The Owner Trustee and, by its acceptance of its
appointment hereunder, each of the other Trustees accepts the trust created
hereby and agrees to perform its duties in accordance with all of the terms and
conditions contained in this Trust Agreement. Neither the Owner Trustee nor any
Controlling Trustee shall have any duties or responsibilities under this Trust
Agreement except to the extent explicitly set forth in this Trust Agreement or
any other Related Document. Notwithstanding any other provision of this
Agreement, each Trustee shall at all times be a Citizen of the United States.
Section 4.02. OWNER TRUSTEE.
(a) Wilmington Trust Company is hereby appointed, and it
hereby accepts appointment as, the Owner Trustee under this Trust Agreement. The
Owner Trustee is entering into this Trust Agreement to satisfy the requirements
of Section 3807(a) of the Business Trust Act, and it shall have only such duties
and responsibilities as are expressly set forth in this Trust Agreement. Except
as otherwise expressly provided herein, the Owner Trustee shall act only at the
direction of the Controlling Trustees, the Owner Trustee shall have no
responsibility for performing or overseeing the duties of the Controlling
Trustees and the Owner Trustee shall have no liability for following in good
faith any direction of the Controlling Trustees given to it in accordance with
this Trust Agreement or for the acts or omission of any other Trustee.
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(b) The Owner Trustee represents that it is, as required under
the Business Trust Act, an entity that has its principal place of business in
the State of Delaware and otherwise meets the requirements of Applicable Law of
the State of Delaware and that it is a Citizen of the United States. Any
successor to or permitted assigns of the Owner Trustee shall be:
(i) an entity that has its principal place of business in the
State of Delaware, and otherwise meets the requirements of Applicable Law; and
(ii) a Person that is a bank or trust company, a corporation
organized and doing business under the laws of the United States or any state or
territory thereof or of the District of Columbia, with a combined capital and
surplus of at least $75,000,000 (or having 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, any state or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000), authorized under the laws of the United
States or any state or territory thereof to exercise corporate trust powers,
subject to supervision by Federal or state authorities and a Citizen of the
United States (such requirements, the "Eligibility Requirements").
(c) The Owner Trustee may resign upon 30 days prior written
notice to LIFT, such resignation to be effective upon the appointment of a
successor Owner Trustee meeting the requirements of Section 4.02(b) hereof. If
no successor has been appointed within such 30-day period, the Owner Trustee
may, at the expense of LIFT, petition a court to appoint a successor Owner
Trustee meeting the Eligibility Requirements. The Controlling Trustees may at
time upon 30 days prior notice to the Owner Trustee and shall promptly in the
event the Owner Trustee resigns or the office of the Owner Trustee is deemed
vacant replace the Owner Trustee by appointing a successor meeting the foregoing
requirements, such replacement to be effective upon the acceptance of
appointment by the successor Owner Trustee. The successor Owner Trustee shall
notify the Indenture Trustee of its appointment.
(d) Any corporation into which the Owner Trustee may be merged
or converted or with which it may be consolidated, any corporation resulting
from any merger, consolidation or conversion to which the Owner Trustee shall be
a party or any corporation succeeding to the corporate trust business of the
Owner Trustee shall be the successor of the Owner Trustee, if such successor
corporation otherwise meets the Eligibility Requirements, without the need for
the execution or filing of any paper or any further act on the part of the
parties hereto or the Owner Trustee or such successor corporation.
Section 4.03. CONTROLLING TRUSTEES.
(a) The following individual is hereby appointed as the Equity
Trustee and a Controlling Trustee under this Trust Agreement:
David H. Treitel
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and the following two individuals are hereby appointed as the Independent
Controlling Trustees:
Joseph E. Francht, Jr.
Jonathan M. Schofield
The Controlling Trustees shall have the duties and authority
provided for in this Trust Agreement and shall direct the affairs of LIFT.
(b) Each Independent Controlling Trustee, by its acceptance of
its appointment, represents that it is not at the time of its appointment and
has not been for the twenty-four months prior to its appointment as a Trustee an
employee, officer or director of General Electric Capital Corporation, any
Depositor or any Affiliate of any such Person and agrees that it will not at any
time during its service as a Trustee be such an employee, officer or director,
provided that an Independent Controlling Trustee may serve as a trustee or
director of another special purpose vehicle another trustee or director of which
has been appointed by General Electric Capital Corporation or any Depositor (or
any of their respective Affiliates) as the holder of any indebtedness of such
special purpose vehicle.
(c) Any Controlling Trustee may resign upon 30 days prior
written notice to the Owner Trustee, the other Controlling Trustees and the
Certificateholders, such resignation to be effective upon the appointment of a
successor Controlling Trustee. If no successor has been appointed within such
30-day period, such Controlling Trustee may, at the expense of LIFT, petition a
court to appoint a successor Controlling Trustee. The Certificateholders holding
a majority by percentage of the residual interest of LIFT may, with or without
cause, by 30 days prior notice delivered to each Trustee, at any time and from
time to time and shall, if the Equity Trustee resigns or the office of the
Equity Trustee is deemed vacant promptly by notice to the other Trustees,
replace the Equity Trustee, such replacement to be effective upon the acceptance
of appointment by the successor Equity Trustee specified by such
Certificateholders in such notice. An Independent Controlling Trustee shall, if
the other Independent Controlling Trustee resigns or the office of such other
Independent Controlling Trustee is deemed vacant, promptly by notice to the
other Trustees replace such Independent Controlling Trustee, such replacement to
be effective upon the acceptance of appointment by the successor Independent
Controlling Trustee specified by such notifying Independent Controlling Trustee
in such notice. In the event both Independent Controlling Trustees resign or the
offices of both Independent Controlling Trustees are deemed vacant, the Equity
Trustee (subject to a Rating Agency Confirmation with respect thereto) shall
appoint successor Independent Controlling Trustees meeting the qualifications
set forth in Section 4.03(b). Any Controlling Trustee who gives notice of
resignation, whose office is deemed vacant or who is the subject of any
replacement notice by the Certificateholders as provided above shall not be
entitled to vote on any matters hereunder. For the avoidance of doubt, the
Equity Trustee may not remove an Independent Controlling Trustee.
Section 4.04. QUORUM; MEETINGS. (a) A meeting of the
Controlling Trustees at which a majority of the Controlling Trustees (or, if
less, the number of Controlling Trustees required by Section 4.07 hereof for the
approval of the matter considered at such meeting) is present shall be competent
to exercise all powers and discretion for the time being exercisable by the
Controlling Trustees. The quorum necessary for the transaction of the business
specified in
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Section 4.07 shall be the number of Trustees required by the applicable
provision of Section 4.07 A Controlling Trustee, notwithstanding his interest,
may be counted in the quorum present at any meeting at which he is appointed to
hold office or at which the terms of his appointment are arranged, but he may
not vote on his own appointment or the terms thereof.
(b) The Controlling Trustees shall meet together for the
dispatch of business on a quarterly basis, and may adjourn, convene additional
meetings and otherwise regulate their meetings as they think fit. At such
meetings the Controlling Trustees shall review financial information presented
to them by the Administrative Agent, review filings made or to be made with the
Commission, review the provisions of any existing or proposed Swap Agreements
and the performance of any Swap Providers, appoint or dismiss auditors and
conduct such other business as they shall deem appropriate or advisable. Subject
to Section 4.07 hereof, questions arising at any meeting shall be determined by
a majority of the Controlling Trustees. A Controlling Trustee may, at any time,
request a meeting of the Controlling Trustees by giving each other Controlling
Trustee not less than twenty-four hours' notice of the meeting; provided, that
any meeting may be convened at shorter notice and in such manner as a majority
of all the Controlling Trustees shall approve; provided further, that,
notwithstanding the provisions of Section 8.01 hereof, unless otherwise resolved
by the Controlling Trustees, notices of Controlling Trustees' meetings need not
be in writing.
(c) If a Trustee is by any means in communication with one or
more other Trustees so that each Trustee participating in the communication can
hear what is said by any other of them, each Trustee so participating in the
communication is deemed to be present at a meeting with the other Trustees so
participating, notwithstanding that all the Trustees so participating are not
present together in the same place.
Section 4.05. CONTROLLING TRUSTEES' RESOLUTION. Each action
taken at a meeting of the Controlling Trustees under Section 4.04 hereof by the
requisite Trustee or requisite number of Trustees (as applicable) shall be
reflected in writing as, and each action taken without a meeting under Section
4.08 hereof by the requisite Trustee or requisite number of Trustees (as
applicable) shall constitute, a Controlling Trustees' Resolution.
Section 4.06. NOTICE OF MEETINGS. Any notice of any meeting to
be given to or by any Trustee pursuant to this Trust Agreement shall be in
writing, save as provided in Section 4.05 hereof. Any Trustee present in person
at any meeting of Trustees shall, for all purposes, be deemed to have received
due notice of such meeting and, where requisite, of the purposes for which such
meeting was convened.
Section 4.07. VOTING. The Controlling Trustees shall possess
and be entitled in their discretion to exercise all rights and power to vote
with respect to any lawful action to be taken by the Controlling Trustees,
except as otherwise provided herein. For so long as any amount is outstanding or
payable under any debt securities of LIFT, the Trustees shall not have the power
to take any action in their capacities as Trustees that would cause LIFT or any
of its subsidiaries to be in violation of the terms governing any such debt
securities. Each Controlling Trustee shall have the power to vote an equal
portion of all of the voting rights of LIFT. Except as provided below, the vote
of at least two of the Controlling Trustees shall be sufficient.
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Notwithstanding any other provision herein to the contrary:
(a) The unanimous affirmative vote of the Controlling Trustees
shall be required to:
(i) cause LIFT or any subsidiary of LIFT to take any action
with respect to the institution of any proceeding by LIFT or any subsidiary of
LIFT seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or any substantial part of its property, or seeking
termination of LIFT's existence other than pursuant to Section 6.01 or the
existence of any subsidiary of LIFT;
(ii) in the case of any such proceeding instituted against
LIFT or any subsidiary of LIFT (but not instituted by it), cause LIFT or any
subsidiary of LIFT to take any action to authorize or consent to such
proceedings (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for LIFT or any subsidiary of LIFT, or any substantial part of its
property, or that of any subsidiary); and
(iii) cause LIFT or any subsidiary of LIFT to take any action
with respect to any merger, consolidation, amalgamation, or reorganization of
LIFT or any subsidiary of LIFT, with or into any other Person, or any
conveyance, transfer or other disposal of (whether in one transaction or a
series of transactions) all or substantially all of the assets of LIFT or any
subsidiary of LIFT; provided, however, that such unanimous approval is not
required so long as the organizational documents of the resulting Person provide
for the unanimous approval of the Independent Controlling Trustees for the
events contemplated by this Section 4.07 and Section 7.01 hereof;
(b) the affirmative vote of at least two of the Controlling
Trustees, one of whom is an Independent Controlling Trustee and one of whom is
the Equity Trustee, shall be required to approve (i) any action under Section
7.04 of the Servicing Agreement, (ii) any reduction in the amount of the Senior
Note Blockage Amount, the Mezzanine Note Blockage Amount, the Junior Note
Blockage Amount or the Subordinate Note Blockage Amount and (iii) any Sale,
directly or indirectly, of any Aircraft pursuant to clause (v) of Section
5.02(g) of the Indenture and to provide the confirmation required thereby;
(c) the affirmative vote of the Equity Trustee shall be
sufficient to approve (i) the purchase or other acquisition, directly or
indirectly, of any Additional Aircraft from any Certificateholder or any of its
Affiliates or GECC or any of its Affiliates, (ii) (A) the issuance by LIFT of
Additional Notes or Additional Certificates pursuant to Section 2.04(d)(iv) or
3.08 hereof and (B) any related increase in the Senior Note Blockage Amount, the
Mezzanine Note Blockage Amount, the Junior Note Blockage Amount or the
Subordinate Note Blockage Amount, (iii) any action for the release of amounts in
the Class A Contingent Account or the substitution of any Permitted Beneficial
Note for another Permitted Beneficial Note, or (iv) any action under clause (ii)
or (vi) of Section 2.05 hereof, provided that, with respect to clauses (i)
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and (ii)(A) above, the Equity Trustee has provided reasonable prior notice to
the Independent Controlling Trustees of such proposed issuance of Additional
Notes and/or Additional Certificates and/or purchase of Additional Aircraft by
LIFT and agreed to consult with the Independent Controlling Trustees prior to
any such issuance of Additional Notes or Additional Certificates or purchase of
Additional Aircraft; and
(d) the affirmative vote of the Trustees specified in Section
7.01 hereof shall be required for any action under such section.
Section 4.08. RESOLUTIONS. A resolution in writing signed by
the requisite Trustee or number of Trustees pursuant to Section 4.07 hereof (as
the case may be) shall be valid and effectual as if it had been passed at a
meeting of the Controlling Trustees duly convened and held. Such resolution
(when to be adopted by more than one Trustee) may consist of two or more
documents in like form each signed by at least one of the number of Trustees.
Section 4.09. DELEGATION. Except as otherwise provided in
Section 4.07 hereof, the Controlling Trustees may delegate any of their powers
to committees consisting of any one or more or such Controlling Trustees or such
other Persons as they think fit. Any committee so formed shall in the exercise
of the powers so delegated conform to any regulations that may be imposed on it
by the Controlling Trustees. The meetings and proceedings of any such committee
consisting of one or more persons shall be governed by the provisions of this
Trust Agreement regulating the meetings and proceedings of the Controlling
Trustees, so far as the same are applicable and are not superseded by any
regulations made by the Trustees under this Trust Agreement.
Section 4.10. VACANCIES. The office of a Trustee shall be
deemed vacated if:
(a) in the case of an Independent Controlling Trustee, such
Trustee ceases to meet the criteria set forth in Section 4.03(b) hereof;
(b) such Trustee dies or is unable or refuses to act;
(c) such Trustee is the subject of any Insolvency Proceeding;
or
(d) in the case of the Owner Trustee, the Owner Trustee ceases
to meet the requirements of Section 3807(a) of the Business Trust Act or of
Section 4.02(b) hereof.
Section 4.11. EFFECT OF REPLACEMENT. Any successor Trustee,
however appointed, shall execute and deliver to the Controlling Trustees an
instrument accepting such appointment and thereupon such successor Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers, duties and trusts of the predecessor Trustee in the trusts
hereunder with like effect as if originally named as such Trustee herein; but
nevertheless, upon the written request of such successor Trustee, such
predecessor Trustee shall execute and deliver an instrument transferring to such
successor Trustee, upon the trusts herein expressed, all the estates,
properties, rights, powers and trusts of such predecessor Trustee.
Section 4.12. EFFECT OF VACANCIES. (a) Neither the death,
resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity of a Trustee (except,
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with respect to the Owner Trustee, as otherwise required by Applicable Law of
the State of Delaware) shall operate to terminate this Trust Agreement or LIFT.
Any notice or document served on a Trustee shall, notwithstanding that such
Trustee be then incompetent, disabled, dead or bankrupt and whether or not LIFT
has notice of his incompetence, disability, death or bankruptcy, be deemed to
have been duly served on such Trustee. Notwithstanding any of the provisions of
this Trust Agreement, any notice to be given by LIFT to a Trustee may be given
in any manner agreed in advance by any such Trustee.
(b) If there is at any time a vacancy in the position of a
Trustee, it is understood that the Certificateholders may not exercise the
voting power of the vacant Trustee position and that such voting power will
accordingly remain suspended during such vacancy.
Section 4.13. TRANSACTIONS WITH TRUSTEES. A Trustee may hold
any other office with respect of LIFT (other than the office of auditor) in
conjunction with his office of Trustee and may act in a professional capacity to
LIFT on such terms as to tenure of office, remuneration and otherwise as the
Controlling Trustees may determine.
Section 4.14. INTERESTS OF TRUSTEES. Subject to Applicable Law
of the State of Delaware, and provided that it has disclosed to the Controlling
Trustees the nature and extent of any of its material interests, a Trustee
notwithstanding his office:
(a) may be a party to, or otherwise interested in, any
transaction or arrangement with LIFT or in which LIFT is otherwise interested;
(b) may be a director or other officer of, or employed by, or
a party to any transaction or arrangement with, or otherwise interested in, any
body corporate promoted by General Electric Capital Corporation or by any
Affiliate of the Depositor or in which General Electric Capital Corporation or
any Affiliate of the Depositor is otherwise interested or that engages in
transactions similar to those engaged in by LIFT and might present a conflict of
interest for such Trustee in discharging his duties (provided that nothing in
this clause (b) shall be construed to limit any Trustee's acting in a like
capacity for any other Issuer Group Member); provided that each Independent
Controlling Trustee must comply with Section 4.03(b) hereof; and
(c) shall not, by reason of his office, be accountable to LIFT
or any Certificateholder for any benefit which he derives from any such office
or employment or from any such transaction or arrangement or from any interest
in such body corporate and no such transaction or arrangement shall be liable to
be avoided on the ground of any such interest or benefit.
Section 4.15. CONFIDENTIALITY OBLIGATIONS OF TRUSTEES. Each
Controlling Trustee will provide a written undertaking to LIFT and the Servicer
to substantially the effect that such Controlling Trustee (a) will not provide
to any Person (other than as required by law or, subject to clause (c) below,
another Controlling Trustee) competitively sensitive information that it may
receive from the Servicer pursuant to the Servicing Agreement, (b) will not use
any such competitively sensitive information for any purpose other than in
performing its duties and responsibilities as set forth in this Trust Agreement
and (c) will not provide to any other
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Controlling Trustee, to the extent that such other Controlling Trustee is
involved in any other business activities that are competitive with those of the
Servicer, any competitively sensitive information that may be requested by such
Controlling Trustee beyond the information that is normally provided to the
Controlling Trustees as a group pursuant to this Trust Agreement.
Section 4.16. CONTRACT WITH TRUSTEE. A Controlling Trustee,
notwithstanding its interest, may be counted in the quorum present at any
meeting at which any contract or arrangement in which such Trustee is interested
is considered and, subject to the provisions of Sections 4.15 and 4.17 hereof,
may vote in respect of any such contract or arrangement.
Section 4.17. VALIDITY OF ACTS. All acts done bona fide by any
meeting of Trustees or by a committee appointed by the Controlling Trustees or
by any Person acting as a Trustee shall, notwithstanding that it is afterwards
discovered that there was some defect in the appointment of any such Trustee,
committee or Person so acting or that they or any of them were disqualified or
had vacated office or were not entitled to vote, be as valid as if every such
Person had been duly appointed and was qualified and had continued to be a
Trustee or a member of a committee appointed by the Trustees and had been
entitled to vote.
Section 4.18. MINUTE BOOK. The Trustees shall cause all
resolutions in writing passed by them in accordance with Section 4.08 hereof and
minutes of proceedings at all meetings of the Trustees and of committees
appointed by the Controlling Trustees to be entered in books kept for the
purpose. Any minutes of a meeting shall be evidence of the proceedings.
Section 4.19. FEES AND REMUNERATION; DIRECTORS AND OFFICERS
INSURANCE. The Trustees shall be paid out of the funds of LIFT their reasonable
traveling and (subject to the limitation on counsel fees and expenses set forth
in the immediately succeeding sentence) other expenses properly and necessarily
expended by them in attending meetings of the Trustees or otherwise in the
affairs of LIFT. Each Controlling Trustee shall be paid by way of remuneration
for its services a sum of $60,000 per annum plus $20,000 per annum after the
Closing Date of each issuance of Additional Notes, subject to a maximum annual
total of $100,000 per Controlling Trustee, which shall be deemed to accrue from
day to day and shall be paid monthly in advance on each Payment Date and, for
the period commencing on the Initial Closing Date and ending on (but excluding)
the first Payment Date, the Initial Closing Date. The Controlling Trustees shall
be entitled to reimbursement for reasonable fees and expenses of counsel
incurred by them in connection with each issuance of Exchange Notes or
Additional Securities, not to exceed (without the unanimous consent of all
Controlling Trustees) $50,000 in the aggregate for all Controlling Trustees per
issuance. The Independent Controlling Trustees and the Equity Trustee may (but
shall not be obligated to), at any time, agree to increase any of the fees set
forth above for inflation, the acquisition by the Issuer Group of Additional
Aircraft, or otherwise. The Owner Trustee shall be paid such fees as shall be
agreed upon in a separate fee agreement to be entered into by the Owner Trustee
and LIFT. Unless the Controlling Trustees shall otherwise unanimously agree,
LIFT shall maintain, on behalf of the Controlling Trustees, directors and
officers insurance with a minimum coverage of $40,000,000 and on terms no less
favorable than the policy in effect on the date hereof.
Section 4.20. TRUSTEES MAY RELY. No Trustee shall incur any
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate,
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report, opinion, bond or other document or paper reasonably and in good faith
believed by it to be genuine and signed by the proper party or parties thereto.
The Trustees may accept a copy of a resolution of the board of directors of any
corporate entity, certified by the secretary, an assistant secretary or any
other officer of the said entity, as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been adopted by said board and
is in full force and effect. As to any fact or matter, the manner of
ascertainment of which is not specifically described herein, the Trustees may
for all purposes hereof rely on a certificate, signed by or on behalf of the
party executing such certificate, as to such fact or matter, and such
certificate shall constitute full protection of the Trustees for any action
taken or omitted to be taken by them in good faith in reliance thereon. The
Trustees may (a) exercise their powers and perform their duties by or through
such attorneys and agents as they shall appoint with due care, and they shall
not be liable for the acts or omissions of such attorneys and agents and (b)
consult with counsel, accountants and other experts, and the Trustees shall be
entitled to rely upon the advice of counsel, accountants and other experts
selected by them with due care and shall be protected by the advice of such
counsel in anything done or omitted to be done in accordance with such advice.
In particular, no provision of this Trust Agreement shall be deemed to impose
any duty on any Trustee to take any action if such Trustee shall have been
advised by counsel that such action would expose it to personal liability or is
contrary to the terms hereof, or is contrary to law. The Owner Trustee and each
Independent Controlling Trustee shall not incur any liability to any Person for
any action taken, or any failure to take action, by the Equity Trustee pursuant
to Section 4.07(c).
Section 4.21. TRUSTEES ACT SOLELY AS TRUSTEES. In accepting
and performing the trusts created hereby, each Trustee acts solely as trustee
hereunder and not in any individual capacity, and all persons having any claims
against any Trustee by reason of the transactions contemplated hereby shall not
have any recourse to such Trustee in its individual capacity and shall look only
to the property of LIFT for payment or satisfaction thereof. The Trustees shall
not be liable for the acts or omissions of any Depositor or Certificateholder.
Section 4.22. NO EXPENSES FOR THE TRUSTEES. No Trustee shall
have any obligation by virtue of this Trust Agreement to spend any of its own
funds, or to take any action which could, in the discretion of such Trustee,
result in any cost or expense being incurred by the Trustee, other than in
connection with its own obligations hereunder.
Section 4.23. NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN
MATTERS. NONE OF THE TRUSTEES, EITHER WHEN ACTING HEREUNDER IN ITS CAPACITY AS
TRUSTEE OR IN ITS INDIVIDUAL CAPACITY, MAKES OR SHALL BE DEEMED TO HAVE MADE (A)
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR
A PARTICULAR PURPOSE OF THE AIRCRAFT OWNED BY THE ISSUER GROUP, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THOSE
AIRCRAFT OR ANY PART THEREOF.
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ARTICLE V
INDEMNIFICATION OF TRUSTEES
Section 5.01. LIABILITY AND INDEMNITY.
(a) The Trustees shall not be liable to LIFT or the
Certificateholders for monetary or other damages for breach of fiduciary duty as
a Trustee; such exculpation shall be to the fullest extent permitted by Delaware
law.
(b) Each Trustee (and the officers, directors, employees,
heirs, executors or administrators of such Trustee) who was or is a party or is
threatened to be made a party to, or is involved in any threatened, pending or
completed action or suit by or in the right of LIFT to procure a judgment in its
favor by reason of the fact that such Person is or was a Trustee of LIFT or is
or was serving at the request of LIFT as a trustee, director or officer of
another trust, corporation, partnership, joint venture or other enterprise,
shall be indemnified and held harmless by LIFT to the fullest extent permitted
by Delaware law.
(c) LIFT does hereby assume liability for and agree to
indemnify, reimburse and hold harmless each of the Trustees from any and all
losses, liabilities or expenses that may be imposed on, incurred by or asserted
against any of them arising out of, in connection with or related to their
performance under this Trust Agreement, including any resignation of any Trustee
as provided hereby, and such indemnification shall be to the fullest extent
permitted by Delaware law.
(d) The right to indemnification conferred in this Article 5
shall also include the right to be paid by LIFT the expenses incurred in
connection with any such proceeding in advance of its final disposition to the
fullest extent authorized by Delaware law. The right to indemnification
conferred in this Article 5 shall be a contract right.
Section 5.02. AGENTS. LIFT may, by action of its Controlling
Trustees, provide indemnification to such of the agents of LIFT to such extent
and to such effect as the Controlling Trustees shall determine to be appropriate
and authorized by Delaware law.
Section 5.03. INSURANCE. LIFT shall have power to purchase and
maintain insurance on behalf of any Person who is or was a Trustee or agent of
LIFT, or is or was serving at the request of LIFT as a trustee, director,
officer, employee or agent of another trust, corporation, partnership, joint
venture or other enterprise against any expense, liability or loss incurred by
such Person in any such capacity or arising out of his status as such, whether
or not LIFT would have the power to indemnify him against such liability under
Delaware law.
Section 5.04. NON-EXCLUSIVE RIGHTS. The rights and authority
conferred in this Article V shall not be exclusive of any other right which any
Person may otherwise have or hereafter acquire.
Section 5.05. SURVIVAL. Neither the amendment nor repeal of
this Trust Agreement, nor, to the fullest extent permitted by Delaware law, any
adoption or modification of law, shall eliminate or reduce the effect of this
Article 5 in respect of any acts or omissions occurring prior to such amendment,
repeal, adoption or modification.
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ARTICLE VI
TERMINATION OF LIFT
Section 6.01. TERMINATION OF LIFT.
(a) LIFT shall dissolve only (i) upon satisfaction in full by
LIFT of all debt securities issued by LIFT in accordance with their respective
terms and (ii) with the consent of all of the Controlling Trustees.
(b) As soon as is practicable after the occurrence of the
events referred to in Section 6.01(a) above, the Controlling Trustees shall,
after paying or making provision for the payment of all obligations of LIFT in
accordance with Applicable Law, file a certificate of cancellation with the
Secretary of State of the State of Delaware, and thereupon LIFT shall terminate.
Any amounts available for distribution to the Certificateholders after making
such payments or provisions for payment shall, subject to Section 3.14 hereof,
be distributed to the then Certificateholders in accordance with the
Certificateholders' Capital Account balances, as such balances have been
adjusted for all events leading up to and including the liquidation of LIFT;
PROVIDED THAT, the Certificateholders agree that the effect of any deemed
capital contribution resulting pursuant to Section 3.14 hereof from payments on
or sales proceeds of a Permitted Beneficial Note shall be to reduce a negative
balance in the Capital Account of the Certificateholders who (or whose direct or
indirect equity holder) issued such Permitted Beneficial Note and in no
circumstances will the deemed contribution cause such Certificateholder to
receive a greater distribution pursuant to this Agreement than the
Certificateholder would have received had there been no such deemed capital
contribution and, if necessary, the allocations of Profits and Losses and items
thereof pursuant to Sections 2.13 through 2.15 hereof shall be adjusted
appropriately.
(c) The provisions of Article 5 shall survive termination of
LIFT.
ARTICLE VII
AMENDMENTS
Section 7.01. AMENDMENTS.
(a) Subject always to the provisions of the Indenture and any
debt securities of LIFT, this Trust Agreement and the Beneficial Interest
Certificates may only be amended or modified with the consent of the majority in
interest of the Certificateholders, and then only by a written instrument
approved and executed by:
(i) a majority of the Controlling Trustees, one of whom shall
be the Equity Trustee;
(ii) if the amendment affects the rights, powers, duties or
obligations of the Owner Trustee, the Owner Trustee; and
(iii) if the amendment affects (A) the rights, powers, duties
or obligations, including the events contemplated by Section 4.07 hereof, of any
Independent Controlling
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Trustee, (B) any organizational documents of any Issuer Subsidiary, to the
extent such amendment would affect the rights, powers or duties of any
Independent Controlling Trustee or directors of such subsidiary comparable to
those in Sections 4.07 and 7.01 hereof or (C) any of the provisions of
Sections 2.02(b), 2.07 or 7.01, the Independent Controlling Trustees,
provided, however, that no such amendment may modify the provisions of this
Trust Agreement or the Beneficial Interest Certificates setting forth the
frequency or the currency of payment of, or the method of calculation of the
amount of, any distribution payable in respect of any Beneficial Interest
Certificates, or reduce the percentage of the Certificateholders required to
approve any amendment or waiver of this Section 7.01 or alter the manner or
priority of payment of the Beneficial Interest Certificates without the
consent of each affected Certificateholder and, so long as any Notes are
Outstanding, no such amendment may modify the provisions of this Trust
Agreement relating to the maintenance of LIFT's status as a partnership (and
not a publicly traded partnership taxable as a corporation) for federal
income tax purposes (each, a "Basic Terms Modification").
(b) It shall not be necessary for the consent of the
Certificateholders under this Section 7.01 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof. Any such modification approved by the required
Certificateholders will be binding on all Certificateholders.
(c) Notice of each amendment to this Trust Agreement shall be
given to each of the Rating Agencies.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. NOTICES. All notices, consents, directions,
approvals, instructions, requests and other communications required or permitted
by such agreement to be given to any Person shall be in writing, and any such
notice shall become effective ten days after being deposited in the mails,
certified or registered, return receipt requested, with appropriate postage
prepaid for first class mail, or if delivered by hand or courier service or in
the form of a facsimile, when received (and, in the case of a facsimile, receipt
of such facsimile is confirmed to the sender), and shall be directed to the
address or facsimile number of such Person set forth below:
If to the Owner Trustee:
Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Fax: (302) 651-8882
If to the Equity Trustee, to:
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David H. Treitel
c/o Simat Helliesen & Eichner, Inc.
90 Park Avenue
New York, NY 10016
If to the Independent Controlling Trustees, to:
Joseph E. Francht, Jr.
18 Devon Drive
New Hope, PA 18938
and
Jonathan M. Schofield
7640 Kincheloe Road
Clifton, VA 20124
If to the Certificateholders, to:
Automatic I, LP
Grand Bay Plaza
2665 South Bayshore Drive, Suite 1006
Coconut Grove, FL 33133
From time to time any Trustee or Certificateholder may
designate a new address or number for purposes of notice hereunder by notice to
each of the other Trustee.
Section 8.02. GOVERNING LAW. This Trust Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.
Section 8.03. JURISDICTION. By holding a Beneficial Interest
Certificate, each Certificateholder hereby submits to the jurisdiction of the
Courts of Delaware or the United States Federal Courts sitting therein, in any
action or proceeding brought to enforce or otherwise arising out of or relating
to this Trust Agreement. By holding a Beneficial Interest Certificate, each
Certificateholder irrevocably appoints Corporation Service Corporation, with an
office on the date hereof at 1013 Centre Road, Wilmington, County of New Castle,
Delaware 19805, as its agent for service of process to receive on behalf of such
Certificateholder service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to each
Certificateholder in care of such process agent, at the address of such process
agent stated above, and each Certificateholder, by holding a Beneficial Interest
Certificate, hereby irrevocably authorizes and directs such process agent to
accept such service on its behalf. As an alternative method of service of
process, each Certificateholder, by holding a Beneficial Interest Certificate,
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to such Certificateholder by registered
or certified mail at its address designated in Section 8.01. In addition, each
Certificateholder, by holding a Beneficial Interest
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Certificate, hereby irrevocably waives to the fullest extent permitted by law
any objection which it may now or hereafter have to the laying of venue in any
such action or proceeding in the Courts of the State of Delaware or the United
States Federal Courts sitting therein, and hereby further irrevocably waives any
claim that any such forum is an inconvenient forum.
Section 8.04. COUNTERPARTS. This Trust Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 8.05. AGREEMENT. The terms of this Trust Agreement
shall be binding upon and inure to the benefit of and shall be enforceable by
the Depositor and the Trustees and their respective successors and assigns.
Section 8.06. TABLE OF CONTENTS; HEADINGS. The table of
contents and headings of the various articles, sections and other subdivisions
of this Trust Agreement are for convenience of reference only and shall not
modify, define or limit any of the terms or provisions of such agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Trust Agreement or caused this Trust Agreement to be duly executed by their
respective officer hereunto duly authorized, as of the day and year first above
written.
WILMINGTON TRUST COMPANY
By: /s/ PATRICIA A. EVANS
------------------------------------------
Name: PATRICIA A. EVANS
-------------------------------------
Title: SENIOR FINANCIAL SERVICES OFFICER
------------------------------------
AUTOMATIC LIFT I, LP
By: Automatic LIFT GP I, LLC, as General
Partner of Automatic Lift I, LP
By: Automatic Flight Operations, LLC,
as Manager of Automatic LIFT GP I, LLC
By: /s/ MARC H. LIPPMAN
---------------------------------
Name: Marc H. Lippman
Title: Manager
The undersigned hereby confirm their acceptance of appointment
As the Equity Trustee and a Controlling Trustee:
/s/ DAVID H. TREITEL
-----------------------------------
David H. Treitel
As the Independent Controlling Trustees:
/s/ JOSEPH E. FRANCHT, JR.
-----------------------------------
Joseph E. Francht, Jr.
/s/ JONATHAN M. SCHOFIELD
-----------------------------------
Jonathan M. Schofield
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EXHIBIT A
FORM OF BENEFICIAL INTEREST CERTIFICATE
THIS BENEFICIAL INTEREST CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY
JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE CERTIFICATEHOLDER (1) REPRESENTS THAT IT (A) IS
A UNITED STATES PERSON, (B) IS A "CITIZEN OF THE UNITED STATES" (AS
DEFINED IN SECTION 40102(a)(15) OF PART A OF SUBTITLE VII OF TITLE 49,
UNITED STATES CODE AND IN THE FEDERAL AVIATION REGULATIONS) AND (C) IS
EITHER A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3), (5), (6), (7) OR (8) OF REGULATION D UNDER THE
SECURITIES ACT), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE
OF THE TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE, RESELL OR
OTHERWISE TRANSFER THIS BENEFICIAL INTEREST CERTIFICATE EXCEPT (A) TO
LEASE INVESTMENT FLIGHT TRUST, A DELAWARE BUSINESS TRUST ESTABLISHED
UNDER THE TRUST AGREEMENT DATED AS OF JUNE 26, 2001 (THE "TRUST
AGREEMENT"), OR ANY SUBSIDIARY THEREOF (B) TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) TO
AN ACCREDITED INVESTOR PURSUANT TO AN EXEMPTION FROM REGISTRATION IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),AND IN
EACH CASE (A) THROUGH (C) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION ONLY TO A PERSON THAT IS A UNITED STATES PERSON
AND A CITIZEN OF THE UNITED STATES AND OTHERWISE IN ACCORDANCE WITH
SECTION 3.09 OF THE TRUST AGREEMENT, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS BENEFICIAL INTEREST CERTIFICATE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE
WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE CERTIFICATEHOLDER MUST
SUBMIT THIS BENEFICIAL INTEREST CERTIFICATE TO THE OWNER TRUSTEE. THE
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE OWNER TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS BENEFICIAL INTEREST CERTIFICATE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
<Page>
REFERENCE IS ALSO MADE TO THE PROVISIONS OF SECTION 3.09 OF
THE TRUST AGREEMENT AS TO ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
BENEFICIAL INTEREST CERTIFICATE.
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LEASE INVESTMENT FLIGHT TRUST
BENEFICIAL INTEREST CERTIFICATE
No. ____ {CUSIP}{ISIN}{CCN}
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (the "Issuer"), certifies that
________________________ is the owner of a beneficial interest equal to _____%
(______ per cent) or such lower percentage as is determined as provided below of
the residual interest in the Issuer, issued pursuant to the Trust Agreement
dated as of June 26, 2001 as amended and restated under the Amended and Restated
Trust Agreement dated as of June 26, 2001 (the "Trust Agreement") between
Automatic Lift I LP, a Delaware limited partnership (the "Depositor"), and
Wilmington Trust Company, a Delaware banking corporation (the "Owner Trustee").
This Beneficial Interest Certificate is one of a duly
authorized issue of Beneficial Interest Certificates, issued under the Trust
Agreement. All capitalized terms used in this Beneficial Interest Certificate
and not defined herein shall have the respective meanings assigned to such terms
in the Trust Agreement. Reference is made to the Trust Agreement and all
agreements supplemental thereto for a statement of the respective rights and
obligations thereunder of LIFT, the Trustees and the Certificateholders. This
Beneficial Interest Certificate is subject to all terms of the Trust Agreement.
The Trust Agreement provides for the issuance from time to
time of Additional Certificates. Upon the issuance of any such Additional
Certificates, the percentage of the residual interest of the Issuer represented
by this Beneficial Interest Certificate shall be adjusted as provided in Section
3.08 of the Trust Agreement. Such percentage may also be adjusted as provided in
Section 3.13 of the Trust Agreement.
This Beneficial Interest Certificate is, to the extent and in
the manner provided in the Trust Agreement, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Beneficial Interest Certificate is issued subject to such
provisions. Each Certificateholder of this Beneficial Interest Certificate, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Owner Trustee on his behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
the Trust Agreement and (c) appoints the Owner Trustee his attorney-in-fact for
such purpose.
Subject to and in accordance with the terms of the Trust
Agreement, there will be distributed, on the date of the receipt of any Excluded
Payment, and monthly on each Payment Date commencing on ____________, 2001 to
the Person in whose name this Beneficial Interest Certificate is registered at
the close of business on the Record Date with respect to such Payment Date, in
the manner specified in Section 3.04 of the Trust Agreement, such Person's pro
rata
<Page>
share (based on the percentage of the residual interest in the Issuer then
represented by this Beneficial Interest Certificate) of the aggregate amount
distributable to all Certificateholders on such date or Payment Date.
Payments under Section 3.04(a) of the Trust Agreement shall be
made by check mailed to each Certificateholder on the applicable Record Date or,
in the case of Excluded Payments, on the date of payment, at its address
appearing on the Register. Alternatively, in the case of the Depositor or upon
application in writing to the Controlling Trustees, not later than the
applicable Record Date, by any other Certificateholder (which may be granted or
denied in the discretion of the Controlling Trustees), any such payments shall
be made by wire transfer to an account designated by such Certificateholder at a
financial institution in the United States of America.
The Certificateholder of this Beneficial Interest Certificate
agrees, by acceptance hereof, to pay over to the Administrative Agent any money
paid to it in respect of this Beneficial Interest Certificate in the event that
the Administrative Agent, acting in good faith, determines subsequently that
such monies were not paid in accordance with the priority of payment provisions
of the Trust Agreement or as a result of any other mistake of fact or law on the
part of the Administrative Agent in making such payment.
This Beneficial Interest Certificate is issuable only in
registered form. A Certificateholder may transfer this Beneficial Interest
Certificate only by written application to the Owner Trustee stating the name of
the proposed transferee and otherwise complying with the terms of the Trust
Agreement. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Certificateholder only upon, final acceptance and
registration of the transfer by the Owner Trustee in the Register. When this
Beneficial Interest Certificate is presented to the Owner Trustee with a request
to register the transfer or to exchange it for a Beneficial Interest Certificate
having the same percentage residual interest, the Owner Trustee shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Beneficial
Interest Certificate is duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee duly executed by the
Certificateholder thereof or by an attorney who is authorized in writing to act
on behalf of the Certificateholder). No service charge shall be made for any
registration of transfer or exchange of this Beneficial Interest Certificate,
but the party requesting such new Beneficial Interest Certificate or Beneficial
Interest Certificates may be required to pay a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith.
Prior to the registration of transfer of this Beneficial
Interest Certificate, the Issuer and the Owner Trustee may deem and treat the
Person in whose name this Beneficial Interest Certificate (as of the day of
determination or as of such other date as may be specified in the Trust
Agreement) is registered as the absolute owner and Certificateholder hereof for
the purpose of receiving payment of all amounts payable with respect to this
Beneficial Interest Certificate and for all other purposes, and neither the
Issuer nor the Owner Trustee shall be affected by notice to the contrary.
2
<Page>
The Trust Agreement permits the amendment or modification of
the Trust Agreement and the Beneficial Interest Certificate by LIFT with the
consent of the majority in interest of the Certificateholders on the date of any
vote of such Certificateholders and certain of the Trustees as provided in the
Trust Agreement; provided that, no Basic Terms Modification shall be effected
without the consent of each Certificateholder affected thereby. Any such
amendment or modification shall be binding on every Certificateholder, whether
or not notation thereof is made upon this Beneficial Interest Certificate.
The Issuer is permitted by the Trust Agreement, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee under the Indenture and the Trustees and the Certificateholders under
the Trust Agreement.
This Beneficial Interest Certificate shall in all respects be
governed by, and construed in accordance with, the laws of the State of
Delaware.
3
<Page>
IN WITNESS WHEREOF, LIFT has caused this Beneficial Interest
Certificate to be signed manually or by facsimile by the Owner Trustee.
Date:______________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
---------------------------------
Name:
Title:
<Page>
[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 Beneficial Interest Certificate and all rights thereunder, hereby
irrevocably constituting and
appointing ___________________________________ attorney to transfer said
Beneficial Interest Certificate on the books of LIFT with full power of
substitution in the premises.
Date:
{Signature of Transferor}
NOTE: 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.
Date:
In connection with any transfer of this Beneficial Interest
Certificate, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
{Check One}
|_| (a) this Beneficial Interest Certificate is being transferred in
compliance with the exemption from registration under the
Securities Act of 1933 provided by Rule 144A thereunder.
or
|_| (b) this Beneficial Interest Certificate is being transferred
other than in accordance with (a) above and documents are
being furnished that comply with the conditions of transfer
set forth in this Beneficial Interest Certificate and the
Trust Agreement.
If none of the foregoing boxes is checked or if any of the
other conditions to transfer set forth in Section 3.09 of the Trust Agreement
are not satisfied, the Owner Trustee
<Page>
shall not be obligated to register this Beneficial Interest Certificate in the
name of any Person other than the Certificateholder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Section
3.09 of the Trust Agreement shall have been satisfied.
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.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing
this Beneficial Interest Certificate for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act of 1933 and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding LIFT as the undersigned has requested pursuant to Rule
144A or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
----------------------------------------------
Dated:
NOTICE: to be executed by an executive officer
2
<Page>
EXHIBIT B
AFFIDAVIT OF CITIZENSHIP
)
) ss.
)
I, ________________, being duly sworn, depose and say, that:
1. I am a ________________ of [CERTIFICATEHOLDER], a _____________ (the
"Certificateholder");
2. The president and two-thirds or more of the board of directors and
other managing officers of the Certificateholder are individuals who are
citizens of the United States of America and at least seventy-five percent (75%)
of the voting interest of the Certificateholder is owned or controlled by
persons or corporations who are citizens of the United States of America
OR
The Certificateholder is a partnership each of whose partners is an
individual who is a citizen of the United States, and
3. Accordingly, the Certificateholder is a "citizen of the United
States" as defined in Section 40102(a)(15) of the Transportation Code.
SWORN to this ____ day of ____________, ____.
[CERTIFICATEHOLDER]
By:
---------------------------------
Name:
Title:
SWORN AND SUBSCRIBED TO
Before me this ________ day
of ____________, _____
----------------------------
Notary Public
My Commission Expires on _________________
<Page>
EXHIBIT C
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
-----, ----
LEASE INVESTMENT FLIGHT TRUST
c/o Wilmington Trust Company
Attention: Corporate Trust Administrator
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-0001
Ladies and Gentlemen:
In connection with our proposed purchase of the Beneficial Interest
Certificate of LEASE INVESTMENT FLIGHT TRUST (the "Issuer"), we confirm that:
1. We have received a copy of the Trust Agreement dated as of June __,
2001 as amended and restated under the Amended and Restated Trust Agreement
dated June __, 2001 (the "Trust Agreement") relating to the Beneficial Interest
Certificate and such other information as we deem necessary in order to make our
investment decision. We acknowledge that we have read and agreed to the matters
stated therein.
2. We understand that any subsequent transfer of the Beneficial
Interest Certificate is subject to certain restrictions and conditions set forth
in the Trust Agreement and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Beneficial Interest Certificate except
in compliance with such restrictions and conditions and the Securities Act of
1933 (the "Securities Act").
3. We understand that the offer and sale of the Beneficial Interest
Certificate has not been registered under the Securities Act, that the
Beneficial Interest Certificate will only be in the form of definitive physical
certificates and that the Beneficial Interest Certificate may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell a Beneficial Interest Certificate in the future, we will
do so only (1) (A) to the Issuer or any subsidiary thereof that is a Citizen of
the United States, (B) to a "qualified institutional buyer" in compliance with
Rule 144A under the Securities Act (and as defined therein) that is a "citizen
of the United States" (as defined in Section 40102(a)(15) of Part A of Subtitle
VII of Title 49, United States Code and in the Federal Aviation Regulations),
(C) to an "accredited investor" (as defined below) that is also a "citizen of
the United States" (as defined in Section 40102(a)(15) of Part A of Subtitle VII
of Title 49, United States Code and in the Federal Aviation Regulations) that,
prior to such transfer, furnishes to the Owner Trustee (as defined in the Trust
Agreement) a
<Page>
signed letter containing certain representations and agreements relating to the
restrictions on transfer of the Beneficial Interest Certificate and an opinion
of counsel acceptable to the Owner Trustee that such transfer is in compliance
with the Securities Act or (D) to a citizen of the United States, pursuant to
the exemption from registration provided by Rule 144 under the Securities Act
(if available), and we further agree to provide to any person purchasing any
Beneficial Interest Certificate from us a notice advising such purchaser that
resales of the Beneficial Interest Certificates are restricted as stated herein
and (2) in each case, in accordance with any applicable securities laws of any
state in the United States or any other applicable jurisdiction and in
accordance with the legend to be set forth in the Beneficial Interest
Certificates, which will reflect the substance of this paragraph.
4. We understand that, on any proposed resale of any Beneficial
Interest Certificates, we will be required to furnish to the Owner Trustee such
certifications, legal opinions and other information as the Owner Trustee may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions.
5. We are an "accredited investor" (as defined in Rule 501(a)(1), (2),
(3), (5), (6), (7) or (8) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Beneficial Interest
Certificates, and we and any accounts for which we are acting are each able to
bear the economic risks of our or their investment.
6. We are acquiring the Beneficial Interest Certificates purchased by
us for our own account or for one or more accounts (each of which is an
"accredited investor") as to each of which we exercise sole investment
discretion.
7. We are not acquiring the Beneficial Interest Certificates with a
view to distribution thereof or with any present intention of offering or
selling the Beneficial Interest Certificates, except as permitted above,
provided that the disposition of our property and property of any accounts for
which we are acting as fiduciary shall remain at all times within our control.
8. We understand the additional restrictions on transfer contained in
Section 3.09 of the Trust Agreement.
An opinion of counsel to the effect that the purchase of this
Beneficial Interest Certificate does not require registration under the
Securities Act is attached to this certificate. You, the Issuer and the Owner
Trustee are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
---------------------------
Name:
Title:
2