1
EXHIBIT 10.17
TRUST AGREEMENT
(N7379F)
DATED AS OF DECEMBER 30, 1986
AMONG
AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP,
as Owner Participant,
NORTH AMERICAN AIRCRAFT FINANCE CORPORATION,
as Owner Participant,
UNITED STATES AIRLEASE, INC.
as Owner Participant and Agent,
AND
TRUST COMPANY FOR USL, INC.,
as Trustee
Concerning
One (1) Boeing 737-200 Series Aircraft
with FAA Registration No. N7379F
Leased to New York Airlines, Inc. and
Subleased to Continental Airlines, Inc.
1
2
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
I Definitions 6
1.01 6
1.02 9
II Authority to Execute and Perform Various 9
Documents; Declaration of Trust by Trustee
2.01 Authority to Execute and Perform Various 9
Documents
2.02 Replacements 9
2.03 Declaration of Trust by Trustee 10
III Beneficial Interest of Owner Participants in 10
Trust Estate and Certificates
3.01. Beneficial Interest of Each Owner 10
Participant
3.02. The Certificates 10
3.03. Issuance of Certificates 11
3.04 Payments from Trust Estate Only 11
3.05 Payment to Holder of Certificate 12
3.06 Transfer of Certificate 12
3.07 Mutilated, Restored, Lost, or Stolen
Certificates 12
3.08 Payment of Expenses upon Transfer 12
3.09 Payments by Each Owner Participant 12
IV Acceptance of Lease Property 13
4.01 Acceptance of Lease Property 13
4.02 Conditions Precedent 13
4.03 Authority Without Express Instructions 13
V. Omitted 13
VI Distributions 13
6.01 Distribution of Basic Rent 14
6.02 Distribution of Payments 14
2
3
ARTICLE
- -------
6.03 Distribution of Trust Estate 14
VII Duties of the Trustee 14
7.01 Notice of Event of Default 14
7.02 Action Upon Instructions 15
7.03 Indemnification 15
7.04 No Duties Except as Specified in 15
Trust Agreement or Instructions
7.05 No Action Except Under Specified 16
Documents or Instructions
7.06 Absence of Duties 16
VIII The Trustee 16
8.01 Acceptance of Trusts and Duties 16
8.02 Furnishing of Documents 16
8.03 No Representations or Warranties as to 17
Lease Property or Documents
8.04 No Segregation of Monies; No Interest 17
8.05 Reliance; Advice of Counsel 17
8.06 Not Acting in Individual Capacity 17
IX Indemnification of Trustee by 18
Owner Participants
9.01 Owner Participants to Indemnify 18
Trustee
9.02 Compensation and Expense 19
X Termination of Trust Agreement 19
10.01 Termination of Trust Agreement 19
10.02 Termination at Option of Owner 20
Participants
XI Successor Trustees, Co-Trustees and Separate 20
Trustees
11.01 Resignation of Trustee; Appointment of 20
Successor
11.02 Co-Trustees and Separate Trustees 21
XII Concerning the Agent 21
3
4
ARTICLE
- -------
12.01 Appointment of Agent 21
12.02 Agent's Acceptance of Appointment 22
12.03 Agreements of the Agent 22
12.04 Standard of Care and Diligence 22
12.05 Resignation or Removal of Agent 22
12.06 Estates and Rights of Successor Agent 23
12.07 Merger or Consolidation of Agent 23
12.08 Agent's Duty to Indemnify 23
XIII Supplements and Amendments 23
XIV Sale, Transfer or Mortgage of Lease 24
Property
14.01 General 24
14.02 Permitted Transfers by the Owner 24
Participants
(a) Transfers by Airlease 24
(b) Transfers by the Partnership 24
(c) Transfer by NAF 24
14.03 Right of First Refusal as to an 24
Owner Participant's Trust Estate
Interest
(a) Offering Notice 24
(b) Requirements of Offer 25
(c) Procedure 25
(d) Acceptance of Sale Offer 25
(e) Right to Sell to Third Party 26
(f) Limitations on Exercise 26
14.04 Closings 26
(a) Location and Time Periods 26
(b) Closing Conditions 27
(c) Event of Loss 27
(d) Partial Loss 27
14.05 Termination of Obligations 27
14.06 Agreements with Transferees 27
14.07 Restraining Order 28
4
5
ARTICLE
- -------
14.08 Sale by an Owner Participant of an
Owner Participant's Trust Estate 28
XV Miscellaneous 28
15.01 No Legal Title to Trust Estate in 28
Owner Participants
15.02 Sale of Aircraft, etc., by Trustee is 28
Binding
15.03 Limitations on Rights of Others 29
15.04 No Partnership for Tax Purposes 29
15.05 Notices 29
15.06 Severability 30
15.07 Limitation on Liability of Owner 30
Participants and Agent
15.08 Separate Counterparts 30
15.09 Successors and Assigns 30
15.10 Headings 30
15.11 Governing Law 30
Schedule 1
5
6
TRUST AGREEMENT
(for N7379F)
THIS TRUST AGREEMENT dated as of December 30, 1986, by and among Trust
Company for USL, Inc., a trust company organized under the laws of the State of
Illinois, in its individual capacity as expressly stated herein and otherwise
not in its individual capacity but solely as trustee hereunder (herein in such
capacity with its permitted successors and assigns called the "Trustee");
Airlease Ltd., A California Limited Partnership (herein referred to as the
"Partnership" or "Owner Participant"); North American Aircraft Finance
Corporation, a California corporation (herein referred to as "NAF" or "Owner
Participant"); and United States Airlease, Inc., a California corporation,
(herein sometimes referred to as "Airlease" or "Owner Participant" in its
separate capacity as Owner Participant and at other times, herein sometimes
referred to as "Agent" in its separate capacity as Agent). (The Partnership,
NAF, and Airlease are herein sometimes referred to collectively as the "Owner
Participants.")
W I T N E S S E T H
WHEREAS, the Owner Participants are entering into this Trust Agreement
with the Trustee for the purpose of acquiring an aircraft and the Trustee shall
purchase such aircraft upon the instructions of the Owner Participants; with
funds advanced by each of the Owner Participants.
WHEREAS, Each of NAF, the Partnership, and Airlease shall hold, an
undivided one-third (1/3) beneficial interest in the Lease Property (as
hereinafter defined);
WHEREAS, upon the instructions of the owner Participants, the Trustee
is entering into an agreement with GATX Leasing Corporation ("Lessor") to
acquire the Lessor's interest in seven (7) Boeing 737-200 series aircraft each
subject to a lease ("Lease") between Lessor and New York Airlines, Inc. ("NYA"),
and a sublease ("Sublease") between NYA, as Sublessor, and Continental Airlines,
Inc., as Sublessee ("Continental");
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. For all purposes of this Agreement, the following terms
shall have the following meanings (such definitions to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliate" means any individual, partnership, joint venture, estate,
association, corporation, trust company, trust or other entity (collectively,
"Person") that directly or indirectly controls, is controlled by, or is under
common control with the Person in question.
6
7
"Agreement" means this Trust Agreement, as it may hereafter from time
to time be supplemented, amended, waived, or modified pursuant to the applicable
provisions hereof.
"Aircraft" means the Boeing 737-200 series airframe together with the
engines pertaining thereto as more particularly described and identified in
Schedule 1 hereto. "Aircraft" also means, if the context so requires the
Aircraft Records.
"Aircraft Records" means with respect to any Aircraft, (i) the
maintenance log books, flight log book, summaries of operations or work
performed, reports of repair, alterations, rebuild, installation, modification,
removal and replacement and inspection or overhaul of the Airframe, Engine or
Part and (ii) all publications, notebooks, data, operations manuals, maintenance
manuals, Aeronautics Authority-approved maintenance program, balance loading
manuals and equipment lists.
"Airframe" means (A) the used Boeing 737-200 series Airframe having the
Manufacturer's serial number and the FAA registration number as set forth in
Schedule 1 attached hereto, and (8) any and all Parts so long as the same shall
be , incorporated or installed in or attached to the Airframe, or so long as
title thereto shall remain vested in the Trustee, after removal from the
Airframe.
"Application for Aircraft Registration" means the Application for
Aircraft Registration (AC Form 8050-1) with respect to the Aircraft.
"Assigned Contracts" means all of the agreements identified in Section
7 of Schedule 2 to the Purchase Agreement with respect to the Aircraft.
"Certificate" means a certificate substantially in the form included in
Article III hereof issued by the Trustee hereunder.
"Closing Date" means the date the Aircraft is purchased by the Trustee
pursuant to the Purchase Agreement.
"Engine" means: (i) any of the engines listed by manufacturer's serial
number in Schedule 1 attached hereto whether or not from time to time thereafter
installed on the Airframe or installed on any other airframe or any other
aircraft; (ii) any engine which may from time to time be substituted, or be a
replacement or addition pursuant to the Lease for any such Engine; and (iii) any
and all Parts incorporated or installed in or attached thereto or any and all
parts removed therefrom so long as title thereto shall remain vested in the
Trustee in accordance with the terms of the applicable Lease after removal from
any such Engine.
"FAA" shall mean the Federal Aviation Administration and/or
Administrator of the Federal Aviation Administration or any person, governmental
department, bureau, commission or agency succeeding to the functions thereof,
"FAA Bill of Sale" means the bill of sale (AC Form 8050-2), covering
the Aircraft, executed by Lessor, in favor of the Trustee, dated the Closing
Date.
7
8
"Lease" means a Lease Agreement, dated as of November 6, 1986,
including the Lease Supplement executed pursuant thereto, between Lessor, as
Lessor, and NYA, as Lessee, covering the Aircraft as said Lease Agreement may
hereafter from time to time be supplemented, amended, waived or modified.
"Lease Assignment" means an Assignment and Assumption Agreement between
the Trustee and Lessor with respect to the Aircraft and the Assigned Contracts
in the form of Exhibit B to the Purchase Agreement as such Assignment and
Assumption Agreement may hereafter from time to time be supplemented, amended,
waived or modified.
"Lease Property" means the Lease, the Assigned Contracts, the Aircraft,
and all income, deductions, credits and other benefits to which an owner of
property would be entitled to as lessor under the Lease, and owner of the
Aircraft, including without limitation, all rental payments under the Lease and
Assigned Contracts, the right to possession of the Aircraft, and all proceeds
upon the sale or re-lease of the Aircraft.
"Lender" means any Person whose principal business is providing
financing and which provides financing to the Trustee or Owner Participants and
is granted a Lien on the Aircraft, or the Airframe, or an Engine or Part.
"Lessee" means NYA and its permitted successors and assigns.
"Lien" means any mortgage, pledge, lien, charge, encumbrance, lease,
exercise of rights, security interest or claim.
"Majority in Interest of Owner Participants", as of a particular date
of determination, means the Owner Participant(s) having in excess of 75% of the
aggregate original investment of all Owner Participants paid to the Trustee for
payment of the Lease Property as of such date.
"Operative Documents" means this Agreement, the Assigned Contracts, the
Lease Assignment, the Certificates, the Purchase Agreement, the Application for
Aircraft Registration, the FAA Bill of Sale and the Warranty Bill of Sale, and
all other agreements, instruments and certificates contemplated by such
agreements.
"Parts" means any and all appliances, parts, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than complete Engines or engines), which (A) are from time to time
incorporated or installed in or attached to the Airframe or an Engine, or (B)
having been so installed or attached, are later removed therefrom, so long as
title thereto remains vested in the Trustee in accordance with the Lease. "Part"
means any one of the Parts.
"Purchase Agreement" means the Aircraft Purchase Agreement, dated as of
December 30, 1986, between the Trustee and Lessor, as such Purchase Agreement
may hereafter from time to time be supplemented, amended, waived or modified.
"Sublessee" means Continental.
8
9
"Trust Estate" means all estate, right, title and interest of the Trust
in and to the Operative Documents, any funds given to the Trustee by the Owner
Participants, and the Lease Property, including, without limitation, all amounts
of rent, insurance proceeds, stipulated loss value payments, and requisition,
indemnity or other payments of any kind (1) for or with respect to the Lease
Property or (2) payable to the Trustee under the Purchase Agreement, Lease
Assignment, Lease, or Assigned Contracts, or with respect to the Lease Property,
excluding any indemnity payments paid directly to an Owner Participant.
"Warranty Bill of Sale" means the bill of sale covering the Aircraft in
the form of Exhibit A to the Purchase Agreement.
Section 1.02. For all purposes of this Agreement, any term used but not
defined herein shall have the meanings assigned to it in the Lease, including,
without limitation, the following: "Basic Rent," "Default" and, "Event of
Default."
ARTICLE II
Authority to Execute and Perform Various Documents
Declaration of Trust by Trustee
Section 2.01 Authority to Execute and Perform Various Documents-. Each
Owner Participant hereby authorizes and directs the Trustee (i) to execute and
deliver the Purchase Agreement, the Lease Assignment, the Certificates and the
Application for Aircraft Registration with respect to the Aircraft, and all
other agreements, instruments and certificates contemplated by the Operative
Documents, and to accept the FAA Bill of Sale and the Warranty Bill of Sale and
(ii) subject to the terms of this Agreement, to take other action in connection
with the foregoing as the Owner Participants may from time to time direct in
writing.
Section 2.02 Replacements. The Owner Participants hereby authorize and
direct the Trustee, and the Trustee agrees for the benefit of the Owner
Participants that, in the event of a replacement airframe or engine, if any,
being substituted pursuant to Section 12.01(A) of the Lease, it will, subject to
Section 7.02 hereof and in compliance with the terms of Section 12.01(A) of the
Lease:
(a) to the extent not previously accomplished by a prior
authorization, authorize a representative of the Trustee (who may be an employee
of the Lessee) to accept delivery of the replacement airframe or engine;
(b) accept from the Lessee or other vendor of a replacement
airframe or engine a bill of sale or bills of sale and the invoice, if any, with
respect to such replacement airframe or engine being furnished pursuant to
Section 12.01(A) of the Lease;
(c) execute and deliver a Lease Supplement covering such
replacement engine and, to the extent requested by special counsel to any Owner
Participant, execute and deliver any required amendments to this Agreement or
any other Operative Document to which the Trustee is a party and request any
required consent from the manufacturer of such replacement airframe or engine;
and
(d) transfer title to the airframe or engine being replaced to
the Lessee.
9
10
Section 2.03 Declaration of Trust by Trustee. The Trustee hereby
declares that it will and does hold the Trust Estate upon the trusts set forth
herein for the sole use and benefit of the Owner Participants.
ARTICLE III
Beneficial Interest of Owner Participants in Trust Estate and Certificates
Section 3.01. Beneficial Interest of Each Owner Participant.
(a) Each Owner Participant shall have and retain an undivided
one-third (1/3) beneficial interest in the Trust Estate, such interest to be
evidenced by Certificate(s) to be issued hereunder. The Owner Participants have
jointly agreed to participate in the purchase of the Lease Property on the
Closing Date on the terms set forth in the Purchase Agreement, and each Owner
Participant shall, on the Closing Date, wire transfer to the Lessor on behalf of
the Trustee its pro-rata portion of the purchase price for the Aircraft and the
other related Lease Property.
Section 3.02. The Certificates. The Owner Participants hereby authorize
and direct the Trustee, and the Trustee agrees that it will issue to each Owner
Participant a Certificate substantially in the form set forth below as provided
in Section 3.03 hereof.
Trust Company for USL, Inc., Trustee
Under Trust Agreement Dated as of
December -, 1986
CERTIFICATE
Issued in connection with the Aircraft hereinafter described: Boeing
737-200 series aircraft, Serial No. _________________
__________________,1986.
$__________________
Trust Company for USL, Inc., not in its individual capacity but solely
as Trustee (herein in such capacity called the "Trustee") under the Trust
Agreement hereinafter referred to hereby certifies as follows: (i) this
Certificate is one of the Certificates referred to in the certain Trust
Agreement (N7379F) dated as of December 30, 1986, by and among the Trustee,
Airlease Ltd., A California Limited Partnership, United States Airlease, Inc.,
and North American Aircraft Finance Corporation (herein called "Trust
Agreement"); the defined terms therein not otherwise defined herein being herein
used with the same meaning), which Certificates have been or are to be issued by
the Trustee pursuant to the Trust Agreement; (ii) is an Owner Participant and
owns an undivided % interest in the Trust Estate; and (iii) the holder of this
Certificate has, ratably with the holders of the other Certificates, an
undivided beneficial interest in the Trust Estate and is entitled to receive,
ratably with the holders of the other Certificates issued with respect to the
Trust Estate as provided in the Trust Agreement, a share of a portion of (1) the
rental received or to be received by the Trustee with respect to the Trust
Estate, or (2) upon the sale or lease of all or any part of the Trust Estate,
any
10
11
proceeds received or receivable therefrom, as well as a share of certain other
payments which may be received by the Trustee pursuant to the terms of the Trust
Agreement as more particularly set forth therein.
All amounts payable hereunder and under the Trust Agreement shall be
paid only from the income and the proceeds from the Trust Estate and only to the
extent that the Trustee shall have sufficient income or proceeds from the Trust
Estate to make such payments in accordance with the terms of the Trust
Agreement, except as specifically provided in Section 8.01 thereof; and each
holder hereof, by its acceptance of this Certificate, agrees that it will look
solely to the income and proceeds from the Trust Estate to the extent available
for distribution to such holder as above provided and that neither the Owner
Participants nor the Trustee (except to the extent provided in Section 8.01 of
the Trust Agreement) are personally liable to the holder hereof for any amounts
payable under this Certificate or the Trust Agreement.
Reference is hereby made to the Trust Agreement for a statement of the
rights of the holder of this Certificate and of the rights of the holders of the
other Certificates, as well as for a statement of the terms and conditions of
the trusts created by, and the rights, limitations of rights, obligations and
duties of the Trustee set forth in, the Trust Agreement, to all of which terms
and conditions each holder hereof agrees by its acceptance of this Certificate.
Each holder hereof, by its acceptance of this Certificate, agrees not
to transfer this Certificate except in accordance with the terms of Article XIV
and Section 3.06 of the Trust Agreement.
These Certificates have not been registered under the Securities Law of
1933, as amended, and may be transferred only in compliance with such law.
IN WITNESS WHEREOF, the Trustee has duly executed this Certificate as
of the date first above written.
--------------
TRUSTEE
Section 3.03. Issuance of Certificates. Each Certificate issued to an
Owner Participant shall contain a statement by the Trustee that the holder of
such Certificate has, ratably with the holders of the other Certificates, an
undivided beneficial interest in the Trust Estate, and is entitled to receive,
ratably with the holders of the other like Certificates as provided herein, a
share of a portion of (i) the rental received or to be received by the Trustee
for such Trust Estate, or (ii) upon the sale or lease of all or any part of the
Trust Estate, any proceeds received or receivable therefrom, as well as a share
of certain other payments which may be received by the Trustee pursuant to the
terms hereof as more particularly set forth herein.
Section 3.04. Payments from Trust Estate Only. All payments to be made
under the Certificates and under this Trust Agreement shall be made only from
the income and the proceeds from the Trust Estate and only to the extent that
the Trustee shall have sufficient income or proceeds from the Trust Estate to
make such payments in accordance with the terms of Article VI hereof, except as
specifically provided in Section 8.01 hereof. Each holder of a Certificate, by
its acceptance of such Certificate, agrees that it will look solely to the
income and proceeds from the Trust Estate, to the extent available for
distribution to such holder as above provided and that the Owner Participants
are not personally liable to the holder of any Certificates.
11
12
Except as specifically provided herein, the Trustee is not liable to the Owner
Participants for any amounts payable under this Agreement and is not subject to
any liability in its individual capacity under this Agreement.
Section 3.05. Payment to Holder of Certificate. Subject to Article VI,
any amounts received by the Trustee and payable to each holder of a Certificate
pursuant to this Trust Agreement will be payable to each such holder by wire
transfer of immediately available funds to the bank for the account of each
Owner Participant as such Owner Participant shall direct in writing, without any
presentment or surrender of any Certificate. The Trustee may deem and treat the
person in whose name any Certificate shall have been issued by the Trustee as
the absolute owner and holder of such Certificate for the purpose of receiving
payment of all amounts payable by the Trustee with respect to such Certificate
and for all other purposes, and the Trustee shall not be affected by any notice
to the contrary.
Section 3.06. Transfer of Certificate. Subject to Article XIV, a holder
of a Certificate intending to transfer any Certificate held by such holder to a
new holder shall surrender such Certificate to the Trustee, together with a
written request from such holder for the issuance of a new Certificate,
specifying the name and address of the transferee and evidence that the
conditions set forth herein for such transfer have been satisfied. Promptly upon
receipt of such documents the Trustee will issue a new Certificate of the same
type, dated the same date or dates, in the amounts indicated, and designated as
issued in connection with the Aircraft as the Certificate surrendered, and
naming such transferee as shall be specified in the written request from such
holder, the Trustee shall not be required to exchange any surrendered
Certificate as above , provided during the 10-day period preceding the due date
of any payment on such Certificate.
Section 3.07. Mutilated, Destroyed, Lost, or Stolen Certificates. If
any Certificate shall become mutilated, destroyed, lost or stolen, the Trustee
shall, upon the written request of the holder of such Certificate, execute and
deliver in replacement thereof a new Certificate, in the same original amount,
dated the same date, as the Certificate so mutilated, destroyed, lost or stolen.
If the Certificate being replaced has become mutilated, such Certificate shall
be surrendered to the Trustee. If the Certificate being replaced has been
destroyed, lost or stolen the holder of such Certificate shall furnish to the
Trustee such security or indemnity as may be required by either of them to save
it harmless and evidence satisfactory to the Trustee of the destruction, loss or
theft of such Certificate and of the ownership thereof. If such holder is an
original Owner Participant, the written undertaking of such Owner Participant
shall be sufficient indemnity.
Section 3.08. Payment of Expenses Upon Transfer. Upon the issuance of a
new Certificate or Certificates pursuant to Section 3.06 or 3.07 hereof, the
Trustee may require the payment from the party or parties to whom such new
Certificate or Certificates are issued of a sum to reimburse itself for, or to
provide funds for, the payment of any tax or other governmental charge or any
charges and expenses connected therewith paid or payable by the Trustee.
Section 3.09. Payments by Each Owner Participant. Payments and
contributions (including, without limitation, Trustee's fees and expenses and
indeminifications of the Trustee) provided for herein to be made by each Owner
Participant shall be made by each Owner Participant in proportion to its
beneficial interest in the Trust Estate at the time such payments or
contributions are due and payable. In the event that any Owner Participant makes
a payment for any costs or expenses (including legal fees and expenses) pursuant
to the written instructions of the Trustee or a Majority in Interest of Owner
Participants, such Owner Participant all
12
13
be entitled to immediate reimbursement therefor from the other Owner
Participants in proportion to its beneficial interest in the Trust Estate.
ARTICLE IV
Acceptance of Lease Property
Section 4.01 Acceptance of Lease Property. The Owner Participants
hereby authorize and direct the Trustee to, and the Trustee agrees for the
benefit of the Owner Participants, that on the Closing Date, it will, ubject to
due compliance with the terms of Section 4.02 hereof, take such actions as are
required of the Trustee hereunder or under the Operative Documents, including
without limitation, the following:
(a) authorize a representative or representatives of the
Trustee to accept the FAA Bill of Sale, Warranty Bill of Sale and original
counterpart of the Lease and the applicable Assigned Contracts on such Closing
Date;
(b) execute and deliver a Lease Assignment relating to the
Lease Property; and
(c) upon the payment by each Owner Participant of its
proportionate share of the purchase price for the Aircraft, the Trustee shall
cause the Agent, without further act, authorization, or direction by the Owner
Participants to the Trustee, to file on behalf of the Trustee the FAA Bill of
Sale, UCC-1 Financing Statements and the Aircraft Registration Application in
the name of the Trustee; and
(d) execute and deliver each of the Operative Documents and
all other related documents to which it is a party; and
(e) issue a Trust Certificate for such interest in the Trust
Estate to each of the Owner Participants.
Section 4.02 Conditions Precedent. The right and obligation of the
Trustee to take the action required by Section 4.01 hereof shall be subject to
the conditions precedent enumerated in Article III of the Purchase Agreement.
Section 4.03 Authority Without Express Instructions. The Trustee,
without the necessity of further instructions from the Owner Participants, is
hereby authorized and directed by the Owner Participants to take any action in
connection with postponing the Closing Date; provided, however, that the Trustee
shall not give any consent, waive any right or benefit or enter into any
modification or amendment of the Operative Documents or take any other action to
perform any obligations whatsoever except at the direction of all of the Owner
Participants or a Majority in Interest Owner Participants, as applicable.
ARTICLE V
Article V is intentionally omitted.
ARTICLE VI
Distributions
13
14
Section 6.01 Distribution of Basic-Rent. Each payment of Basic Rent, as
well as payment of interest on overdue installments of Basic Rent, received by
the Trustee at any time shall be distributed in accordance with Section 3.05 by
the Trustee on the date such payment is due from the Lessee, (or as soon
thereafter as such payment shall be received by the Trustee) to each Owner
Participant without priority of one over the other ratably in proportion to its
undivided beneficial interest in the Trust Estate. The Trustee agrees to take
all reasonable steps necessary to collect any rent or other amounts due under
the Operative Documents.
Section 6.02. Distribution of Payments. All payments and amounts,
except for Basic Rent, if any, received by the Trustee shall be distributed
forthwith upon receipt, provided, however, all such amounts in excess of $10,000
shall be distributed no later than twenty four (24) hours after the Trustee has
knowledge of its receipt, in the following order of priority: first, so much of
such payment or amount as shall be required to reimburse the Trustee for any
reasonable fees or expenses not otherwise paid or reimbursed by the Owner
Participants as to which the Trustee is entitled to be paid or reimbursed
hereunder shall be retained by the Trustee; second, to reimburse an Owner
Participant for payments made by it and not by all Owner Participants, pursuant
to Section 7.03 or 9.01 hereof, or an instruction from the Trustee pursuant to a
written instruction from all of the Owner Participants or a Majority in Interest
of Owner Participants, as required, ratably in proportion to the aggregate
amount of such payments made by each Owner Participant; and third, the balance,
if any, of such payment or amount remaining thereafter shall be distributed to
the Owner Participants ratably, without priority of one over the other, in
proportion to the beneficial interest of each Owner Participant in the Trust
Estate.
Section 6.03 Distribution of Trust Estate. Whenever the terms of this
Agreement shall require the Trustee to distribute or transfer the entire Trust
Estate to any person(s), the Trustee shall be entitled to retain such monies and
securities, if any, as shall then be held by the Trustee as a part of the Trust
Estate and as shall be required to reimburse or pay the Trustee for any
reasonable fees, expenses, or liabilities not reimbursed or paid by the Owner
Participants as to which the Trustee is entitled to be paid or reimbursed
hereunder or under any Operative Document and shall distribute the Trust Estate
in accordance with Section 6.02.
ARTICLE VII
Duties of the Trustee
Section 7.01 Notice of Event of Default. In the event the Trustee shall
have knowledge of a Default or Event of Default, the Trustee shall give prompt
written notice thereof to each Owner Participant. Subject to the terms of
Section 7.03 hereof, the Trustee shall take or refrain from taking such action
with respect to a Default or Event of Default as the Trustee shall be instructed
in a written instrument executed by a Majority in Interest of Owner
Participants. If the Trustee shall not have received instructions within twenty
(20) days after giving notice of a Default or Event of Default as above
provided, the Trustee may, but shall be under no duty to, and it shall have no
liability for its failure or refusal, to take or refrain from taking any action
with respect to such Default or Event of Default as it shall deem advisable and
in the best interests of the Owner Participants; provided, however, that the
Trustee shall give the Owner Participants ten days' notice thereof prior to
taking any such action. For all purposes of this Agreement, in the absence of
actual knowledge of an officer of the Trustee, the Trustee shall not be deemed
to have knowledge of a Default or an Event of Default unless it receives written
notification thereof given by or on behalf of the Lessee or any Owner
Participant.
14
15
Section 7.02 Action upon Instructions. Subject to the terms of Sections
7.01 and 7.03 hereof, upon the written instructions of a Majority in Interest of
Owner Participants, the Trustee will take or refrain from taking such action or
actions, as may be specified in such instructions, including, without
limitation, (i) enforcing provisions of the Lease, (ii) executing and filing
UCC-1 Financing Statements for informational purposes, (iii) executing and
delivering loan agreements with any Lender(s) (but only upon the written
instruction of all of the Owner Participants), (iv) executing and delivering
amendments to the Lease, (v) giving such notice of direction or exercising such
right, remedy or power hereunder or under any of the Assigned Contracts or the
Purchase Agreement or in respect of all or any part of the Trust Estate, or
taking such other action as shall be specified in such instructions; (vi) taking
such action to pressure or protect the Trust Estate (including the discharge of
liens and encumbrances) as may be specified in such instructions; (vii)
approving as satisfactory to it or consenting to all matters required by the
terms of the Assigned Contracts to be satisfactory to the Trustee, it being
understood that without the written instructions of a Majority in Interest of
Owner Participants, the Trustee shall not approve any such matter as
satisfactory to it or consent to any such action; and (viii) taking such other
action as a Majority in Interest of Owner Participants shall direct in writing.
Section 7.03 Indemnification. The Trustee shall not be required to take
or refrain from taking any action under this Agreement or any Operative Document
(other than the actions specified in the first sentence of Section 7.01 hereof)
unless the Trustee shall have been indemnified by the owner Participants, in
accordance with Article IX hereof, against any liability, fee, cost or expense
(including attorneys' fees) which may be incurred or charged in connection
therewith; and, if the Owner Participants or a Majority in Interest of Owner
Participants, as required, shall have directed the Trustee to take or refrain
from taking any action under this Agreement or any Operative Document, the Owner
Participants agree to furnish the Trustee, with the indemnification more
particularly set forth in Article IX hereof, and, in addition, to pay the
reasonable compensation of the Trustee for the services performed or to be
performed by it pursuant to such direction. The Trustee shall not be required to
take any action under this Agreement or any Operative Document if the Trustee
shall reasonably determine, or shall have been advised by counsel, that such
action is contrary to the terms hereof or of any document contemplated hereby to
which the Trustee is a party or is otherwise contrary to law.
Section 7.04 No Duties Except as Specified in Trust Agreement or
Instructions. The Trustee shall not have any duty or obligation to manage,
control, make any payment in respect of, register, record, insure, inspect,
instruct, use, sell, dispose of or otherwise deal with the Lease Property, or
any other part of the Trust Estate, or to otherwise take or refrain from taking
any action under, or in connection with, any document contemplated hereby to
which the Trustee is a party, except as expressly provided by the terms of this
Agreement, or in written instructions from a Majority in Interest of Owner
Participants received pursuant to Section 7.01 or 7.02 hereof; and no implied
duties or obligations shall be read into this Agreement against the Trustee. The
Trustee, in its individual capacity, nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any Liens (including Lessor's Liens) on any part of the Trust Estate which
result from actions or commissions or omissions by or claims against the
Trustee, in its individual capacity, or the trusts created hereby not related to
the Trustee's ownership of the Lease Property or any other part of the Trust
Estate or the administration of the Trust Estate or the transactions
contemplated by the Operative Documents or this Agreement.
15
16
Section 7.05 No Action Except Under Specified Documents or
Instructions. The Trustee agrees that it will not manage, control, use, sell,
dispose of or otherwise deal with the Lease Property or any other part of the
Trust Estate except (i) as required by this Agreement and the Operative
Documents, or (ii) in accordance with the powers granted to, or the authority
conferred upon, or the directions given to, the Trustee pursuant to or under
this Agreement.
Section 7.06 Absence of Duties. Except in accordance with written
instructions furnished pursuant to Section 7.02 hereof, and without limitation
of the generality of Section 7.04 and the last sentence of Section 11.01(b)
hereof, the Trustee shall have no duty (i) to file, record or deposit any
Operative Documents, any financing statements or this Agreement, or to maintain
any such filing, recording or deposit or to refile, rerecord or re-deposit any
such document, except as specified in Section 7.02 hereof, (ii) to obtain
insurance on the Aircraft, the Airframe, or an Engine, or Part or to effect or
maintain any such insurance, (iii) to maintain or mark the Aircraft, the
Airframe, or an Engine, or Part, (iv) to pay or discharge any tax, assessment or
other governmental charge or any lien or encumbrance of any kind owing with
respect to or assessed or levied against any part of the Trust Estate, except as
provided in the last sentence of Section 7.04 hereof, (v) to confirm, verify,
investigate or inquire into the failure to receive any reports or financial
statement of Lessee and Sublessee, or (vi) to inspect the Aircraft, the
Airframe, or an Engine, or Part at any time or to ascertain or inquire as to the
performance or observance of any covenants of Lessee under any Operative
Document with respect to the Aircraft, the Airframe, or an Engine or Part.
ARTICLE VIII
The Trustee
Section 8.01 Acceptance of Trusts and Duties. The Trustee accepts the
trusts hereby created and agrees to perform the same but only upon the terms of
this Agreement. The Trustee also agrees to disburse all monies, if any, actually
received by it constituting part of the Trust Estate upon the terms of this
Agreement. The Trustee shall not be answerable or accountable under any
circumstances, in its individual capacity, except (i) for its own willful
misconduct or gross negligence, (ii) in the case of the inaccuracy of any
representation or warranty of the Trustee contained in Section 8.03 hereof or
any representation or warranty of the Trustee in its individual capacity
contained in the Operative Documents, (iii) as arising from the failure by the
Trustee to perform its obligations under the last sentence of Section 7.04
hereof, (iv) for taxes, fees or other charges on, based on or measured by any
fees, commissions or compensation received by Trustee for acting as Trustee in
connection with any of the transactions contemplated by the Operative Documents.
Section 8.02 Furnishing of Documents. The Trustee will furnish to each
Owner Participant, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Trustee hereunder or under the Operative
Documents.
In case any tax report or tax return is required to be made with
respect to the Trust Estate and the Lessee or Sublessee is not required to
prepare and file the same pursuant to the Lease or Sublease, the Trustee will
prepare such tax report or return and deliver a copy thereof to each Owner
Participant. Upon the request of the Trustee, each Owner Participant will
provide such instruments, documents, certificates or other information as is
reasonably necessary to enable the Trustee to prepare any such tax report or
return. The Trustee agrees to
16
17
forward to each Owner Participant a copy of any communications with respect to
taxes pertaining to the Trust Estate which are received by the Trustee.
Section 8.03 No Representations or Warranties as to Lease Property or
Documents. THE TRUSTEE, IN ITS INDIVIDUAL CAPACITY, MAKES (i) NO REPRESENTATION
OR WARRANTY AS TO THE TITLE, VALUE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF THE AIRCRAFT OR ANY OTHER REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, AIRFRAME; OR ANY
ENGINE OR PART WHATSOEVER, or the validity or enforceability of the Lease and
Assigned Contracts, and (ii) no representation or warranty as to the validity or
enforceability of this Agreement or the Operative Documents, or as to the
correctness of any statement contained in any thereof, except to the extent that
any such statement is made therein by the Trustee, in its individual capacity,
and except that the Trustee, in its individual capacity, hereby represents and
warrants to each Owner Participant that this Agreement has been and each of such
other documents which contemplates execution thereof by the Trustee has been or
will be, executed and delivered by its officers who are or will be duly
authorized to execute and deliver such document on its behalf, and except that
the Trustee, in its individual capacity, hereby represents and warrants to each
Owner Participant that the Lease Property is free and clear of any liens
attributable to it and that it will comply with the last sentence of Section
7.04 hereof.
Section 8.04 No Segregation of Monies; No Interest. Except as otherwise
provided herein, monies, if any, received by the Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Trustee shall not be liable for any interest thereon.
Section 8.05 Reliance; Advice of Counsel. The Trustee shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Trustee may accept a certified copy of a
resolution of the Board of Directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
manner of ascertainment of which is not specifically prescribed herein, the
Trustee may for all purposes hereof rely on a certificate, signed by a duly
authorized officer of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Trustee for any action taken
or omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Trustee may execute any of the
trusts or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may consult, with counsel, accountants and other
skilled persons to be selected and employed by it, and the Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons and not contrary to this Agreement, so long as such advice or opinion
pertains to such matters as the Trustee may reasonably presume to be within the
scope of such person's expertise.
Section 8.06 Not Acting in Individual Capacity. Except as provided in
this Article VIII, in accepting the trusts hereby created the Trustee acts
solely as trustee hereunder and not in its individual capacity; and all persons
having any claim against the Trustee by reason of the transactions contemplated
hereby or by the
17
18
other Operative Documents shall look only to the Trust Estate for payment or
satisfaction thereof, except as specifically provided in this Article VIII.
ARTICLE IX
Indemnification of Trustee by Owner Participants
Section 9.01 Owner Participants to Indemnify Trustee. Each Owner
Participant agrees to pay, severally, in proportion to its respective beneficial
interest in the Trust Estate, to the extent not paid by the Lessee pursuant to
the Lease, (or reimburse the Trustee for) all reasonable expenses of the Trustee
hereunder, including, without limitation, the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Trustee may employ in connection with the exercise and performance of its rights
and duties hereunder or under the other Operative Documents, whether or not the
transactions contemplated hereby are consummated; provided, however, that if the
Trustee deems it advisable to employ any such agent, representative, expert or
counsel, and the Trustee reasonably believes that the fees of such agent,
representative, expert or counsel will exceed $5,000, the Trustee shall notify
the Owner Participants thereof and shall employ such agent, representative,
expert or counsel only if a Majority in Interest of Owner Participants has
approved such employment. The Owner Participants agree to assume liability for,
and to indemnify the Trustee in its individual capacity and its successors,
assigns, agents and servants against and from any and all liabilities (including
without limitation, any liability of the Owner Participants, and liability
without fault and any strict liability), obligations, losses, damages, taxes
(such term "taxes" or the term "tax" as used in this Article IX shall include,
without limitation, all taxes specifically related to this Agreement and the
Trust Estate created hereby excluding, however, any income taxes or fees or
other compensation received by the trustee in its capacity as Trustee), claims,
actions, suits, costs, expenses and disbursements (including legal fees and
expenses) of any kind and nature whatsoever (collectively, "Expenses") which may
be imposed on, incurred by or asserted at any time against the Trustee (whether
or not indemnified against by the Lessee or any other parties) in any way
relating to or arising out of the existence or administration of this Agreement,
the Trust Estate or the action or inaction of the Trustee hereunder or under the
other Operative Documents, or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, financing,
possession, use, operation, condition, sale, return or other disposition of the
Aircraft, the Airframe, or an Engine (including, without limitation, latent and
other defects, whether or not discoverable, and any claim for patent, trademark
or copyright infringement) or in any way relating to or arising out of the
Assigned Contracts, except that the foregoing indemnities shall not cover the
Trustee (i) for its own willful misconduct or gross negligence, (ii) in the case
of the inaccuracy of any representation or warranty of the Trustee contained in
Section 7.03 hereof or any representation or warranty of the Trustee in its
individual capacity contained in the operative Documents, and (iii) as arising
from the failure by the Trustee to perform its obligations under the last
sentence of Section 7.04 hereof, or obligations in its individual capacity
contained in the Operative Documents. In addition, if necessary, the Trustee
shall be entitled to indemnification from the Trust Estate, for any liability,
obligation, loss, damage, penalty, tax, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Section 9.01 to the extent not
reimbursed by Lessee, the Owner Participants or others, but without releasing
any of them from their respective agreements of reimbursement; and, to secure
the same, the Trustee shall have a lien on the Trust Estate, subject to the
Lien, if any, of any Lender, which shall be prior to any interest therein of the
Owner Participants, but only in the event and to the extent that the Trustee
does not receive payment from
18
19
the Lessee or pursuant to any other provision of any Operative Document, except
only that the Owner Participants shall not be required to indemnify the Trustee
for expenses arising or resulting from any of the matters described in the last
sentence of Section 8.01 hereof. The indemnities contained in this Section 9.01
shall survive the termination of this Agreement.
Section 9.02 Compensation and Expense. The Trustee shall receive the
following as compensation for its services hereunder, and as payment for all its
costs, fees and expenses incurred in connection with the administration of the
Trust Estate (including legal fees and expenses):
(a) An acceptance fee of $2,500 and an administration fee of
$2,000 ("Annual Administration Fee") for the one year period commencing on the
Closing Date, and each year thereafter in which it is the Trustee hereunder and
under the Operative Documents; provided, however, that such Annual
Administrative Fee shall be increased or decreased annually by any change in the
Gross National Product Implicit Price Deflator or should such index be
discontinued or abolished, the replacement index therefor or a comparable index
thereof. Notwithstanding anything to the contrary herein, to the extent the
Trustee has received the acceptance fee and the Annual Administration Fee with
respect to any trust created as of the date of this Agreement by the original
Owner Participants, Trustee shall not be entitled to any fees hereunder. Such
Annual Administration Fee shall cover all of the Trustee's costs, fees and
expenses of any kind incurred in connection with the administration of the
Trust-Estate, including, without limitation, any fees paid to the Agent and
executing and delivering loan agreement(s) and other agreements with any Lender
and taking such other action under or in connection with the Operative Documents
as the Owner Participants shall direct in writing.
(b) The Trustee shall be entitled to compensation for any of
its reasonable out-of-pocket expenses and the reasonable fees and expenses of
any agent, representative, expert or counsel employed by the Trustee, incurred
in connection with its administration of the Trust Estate hereunder; provided,
however, that if the Trustee reasonably believes that such expenses, fees and
expenses will exceed $5,000, the Trustee will obtain the prior approval thereof
of a Majority in Interest of Owner Participants.
ARTICLE X
Termination of Trust Agreement
Section 10.01 Termination of Trust Agreement. Subject to Section 10.02
of this Agreement, this Agreement and the trusts created hereby shall terminate
and the Trust Estate shall, subject to Article VI hereof, be distributed to the
Owner Participants, and this Agreement shall be of no further force or effect,
upon the earlier of (i) the sale or other final disposition by the Trustee of
all property constituting part of the Trust Estate and the final distribution by
the Trustee or any other party of all monies or other property or proceeds
constituting part of the Trust Estate in accordance with the terms of Article VI
hereof, provided that at such time the Lessee shall have fully complied with all
the terms of the Lease, or (ii) twenty-one (21) years less one day after the
death of the last survivor of all of the descendants living on the date of this
Agreement of the present members of the Boards of Directors of the Trustee and
the Owner Participants; but if this Agreement and the trusts created hereby
shall be or become valid under applicable law for a period subsequent to the
21st anniversary of the death of such last survivor, or if legislation shall
become effective providing for the validity thereof for a period in gross
exceeding the period hereinabove stated, then this Agreement and the trusts
created hereby shall not terminate as aforesaid but shall extend to and continue
in
19
20
effect, but only if such nontermination and extension shall then be valid under
applicable law, until such time as the same shall, under applicable law, cease
to be valid.
Section 10.02 Termination at Option of Owner Participants. The
provisions of Section 10.01 hereof notwithstanding, this Agreement and the
trusts created hereby shall terminate and the Trust Estate shall be distributed
to the Owner Participants in accordance with the terms of Article VI hereof, and
this Agreement shall be of no further force and effect, upon the election, in
their sole discretion, of all of the owner Participants by notice to the
Trustee, if such notice shall be accompanied by the written agreement of all of
the Owner Participants assuming all the obligations of the Trustee under the
Operative Documents and all other obligations of the Trustee incurred by it as
Trustee hereunder. Such written agreement shall fully and completely release the
Trustee from all further obligations and liabilities of the Trustee hereunder
and under the agreements and other instruments mentioned in the preceding
sentence; provided, however, that the obligations and liabilities of any party
hereinunder arising prior to the date of such written agreement shall survive
such termination of the Trustee.
ARTICLE XI
Successor Trustees, Co-Trustees and
Separate Trustees
Section 11.01 Resignation of Trustee; Appointment of Successor.
(a) The Trustee may resign at any time without cause by giving
at least 30 days' prior written notice to each Owner Participant, such
resignation to be effective upon the acceptance of appointment by a successor
Trustee under Section 11.01(b) hereof. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Article XI, the
Trustee shall resign immediately by giving written notice to each Owner
Participant, such resignation to be effective upon the acceptance of appointment
by a successor Trustee under Section 11.01(b) hereof. In addition, the Trustee
may be removed at any time without cause by an instrument in writing executed by
each Owner Participant and delivered to the Trustee, such removal to be
effective upon the acceptance of appointment by a successor Trustee under
Section 11.01(b) hereof. In case of the resignation or removal of the Trustee, a
Majority in Interest of Owner Participants may appoint a successor Trustee by an
instrument signed by such a Majority in Interest of Owner Participants. If a
successor Trustee shall not have been appointed within thirty (30) days after
the giving of written notice of such resignation or the delivery of the written
instrument with respect to such removal, the Trustee or a Majority in Interest
of Owner Participants may apply to any court of competent jurisdiction to
appoint a successor Trustee to act until such time, if any, as a successor
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Trustee appointed as above provided within one year
from the date of the appointment by such court.
(b) Any successor Trustee, however appointed, shall execute
and deliver to the predecessor Trustee and each Owner Participant 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 the 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,
duties and trusts of such predecessor Trustee, and such predecessor
20
21
Trustee shall duly assign, transfer, deliver and pay over to such successor
Trustee all monies or other property then held by such predecessor Trustee upon
the trusts herein expressed. The predecessor Trustee will cooperate in causing
registration of the Aircraft to be transferred to the successor Trustee in
accordance with applicable law.
(c) The Trustee and any successor Trustee, however appointed,
must resign if at any time it is unable to obtain or maintain at all times
satisfactory registration of each Aircraft pursuant to the Federal Aviation Act,
as amended (the "Act"). Any successor Trustee shall be a bank or trust company
incorporated and doing business within the United States of America and having a
combined capital and surplus of at least $50,000,000, or the subsidiary of an
institution having a combined capital and surplus of at least $50,000,000, which
guarantees the obligations of such subsidiary.
(d) The Trustee shall be and any successor Trustee will be "a
citizen of the United States" as defined in Section 101(16) of the Act.
(e) Any corporation into which the Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger,
or consolidation to which the Trustee shall be a party, or any corporation to
which substantially all the corporate trust business of the Trustee may be
transferred, shall, subject to the terms of Section 11.01(c) hereof, be the
Trustee under this Agreement without further act.
Section 11.02 Co-Trustees and Separate Trustees. Whenever the Trustee
or a Majority in Interest of Owner Participants shall deem it necessary or
prudent in order either to conform to any law of any jurisdiction in which all
or any part of the Trust Estate shall be situated or to make any claim or bring
any suit with respect to the Trust Estate or the Operative Documents, or either
the Trustee or a Majority in Interest of Owner Participants shall be advised by
counsel satisfactory to it that it is so necessary or prudent, the Trustee and a
Majority in Interest of Owner Participants shall execute and deliver an
agreement supplemental hereto and all other instruments and agreements, and
shall take all other action, necessary or proper to constitute one or more
persons (and the Trustee may appoint one or more of its officers) (any and all
of which shall be a "citizen of the United States" as defined in Section 101(16)
of the Act) either as co-trustee or co-trustees jointly with the Trustee of all
or any part of the Trust Estate, or as separate trustee or separate trustees of
all or any part of the Trust Estate, and to vest in such persons, in such
capacity, such title to the Trust Estate or any part thereof, and such rights or
duties as may be necessary or desirable, all for such period and under such
terms and conditions as are satisfactory to the Trustee and a Majority in
Interest of Owner Participants. In case any co-trustee or separate trustee shall
die, become incapable of acting, resign or be removed, the title to the Trust
Estate and all rights and duties of such co-trustee or separate trustee shall,
so far as permitted by law, vest in and be exercised by the Trustee, without the
appointment of a successor to such co-trustee or separate trustee.
ARTICLE XII
Concerning the Agent
Section 12.01. Appointment of Agent. The Owner Participants authorize
and direct the Trustee to appoint, and the Trustee hereby does appoint,
Airlease, in its separate capacity as Agent and not as Owner Participant, as its
agent to do all such acts and things and execute all such documents, instruments
and other
21
22
agreements as the Trustee hereafter may from time to time direct, in its place
and stead, in accordance with the terms of this Agreement and the Operative
Documents.
Section 12.02. Agent's Acceptance of Appointment. The Agent agrees to
act as Agent for the Trustee hereunder and to accept possession of and hold such
items of the Trust Estate as it may from time to time receive on behalf of the
Trustee subject to the trusts hereby created and the terms and conditions of
this Agreement.
Section 12.03. Agreements of the Agent. The Agent hereby agrees:
(a) to exercise the rights and perform the duties of the
Trustee as directed by the Trustee in accordance with the terms hereof;
(b) to assume liability for and indemnify the Owner
Participants, Trustee, and Trust Estate from and against Liens attributable to
it; and
(c) pursuant to the instructions of the Trustee in accordance
with the terms hereof, to conduct negotiations with respect to the documents
contemplated by this Agreement and the Operative Documents and to use its best
efforts by administrative means to cause the Operative Documents to be executed
and to consummate the purchase of the Aircraft, Airframe, and Engines and
delivery of the Aircraft, Airframe, and Engines under the Purchase Agreement in
the manner contemplated by the Operative Documents.
Section 12.04. Standard of Care and Diligence
(a) Agent's Liability. Except as provided in Section 12.03
hereof, the Agent assumes no liability for anything other than its own willful
misconduct or gross negligence. It shall give each Owner Participant prompt
notice of any Events of Default or claimed Events of Default under the Lease of
which it shall have actual knowledge. For all purposes of this Agreement, in the
absence of actual knowledge of an officer of the Agent, the Agent shall not be
deemed to have actual knowledge of a Default or an Event of Default unless it
receives written notification thereof given by or on behalf of the Lessee, the
Trustee, any Owner Participant, or any other party.
(b) Use of Agents. Subject to the same limitations as the
Trustee herein, the Agent may exercise its powers and perform its duties by or
through such attorneys, agents and servants as it shall appoint; and it shall be
entitled to the advice of counsel (who may, in cases deemed by the Agent in its
reasonable discretion to be appropriate, be counsel for the Agent) and shall be
protected by the advice of such counsel in anything done or omitted to be done
in accordance with such advice.
Section 12.05. Resignation or Removal of Agent. The Agent or any
successor thereto may resign at any time without cause by giving at least 30
days prior written notice to the Trustee and each Owner Participant, such
resignation to be effective on the date specified in such notice. In addition, a
Majority in Interest of Owner Participants may at any time remove the Agent
without cause by an instrument in writing executed by a Majority in Interest of
Owner Participants delivered to the Agent and the Trustee. In the case of the
resignation or removal of the Agent, a Majority in Interest of Owner
Participants may, at their sole cost and expense, appoint a successor Agent by
an instrument signed by a Majority in Interest of Owner
22
23
Participants. If a Majority in Interest of Owner Participants shall not have
appointed a successor Agent within 30 days after such resignation or removal,
the Trustee may apply to any court of competent jurisdiction to appoint a
successor Agent to act until such time, if any, as a successor shall have been
appointed by a Majority in Interest of Owner Participants as above provided. The
successor Agent so appointed by such court shall immediately and without further
act be superseded by any successor Agent appointed by a Majority in Interest of
Owner Participants within one year from the date of the appointment by such
court.
Section 12.06. Estates and Rights of Successor Agent. Any Agent,
whether appointed by a Majority in Interest of Owner Participants or a court,
shall execute and deliver to the Trustee and to the predecessor Agent an
instrument accepting such appointment, and thereupon such successor Agent,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Agent hereunder with like effect as
if originally named the Agent herein; but nevertheless upon the written request
of the Trustee or such successor Agent, such predecessor Agent shall execute and
deliver an instrument transferring to such successor Agent all the estates,
properties, rights and powers of such predecessor Agent, and such predecessor
Agent shall duly assign, transfer, deliver and pay over to such successor Agent
all monies or other property then held by such predecessor Agent hereunder.
Section 12.07. Merger or Consolidation of Agent. Any corporation into
which the Agent may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Agent shall be a party, or any corporation to which substantially all
the business of the Agent may be transferred, shall be the Agent under this
Agreement without further act.
Section 12.08. Agent's Duty to Indemnify. The obligation of the Agent
under Section 12.03(b) to indemnify the Owner Participants, Trust Estate, and
Trustee shall survive the resignation or removal of the Agent and the
termination of the Trust.
ARTICLE XIII
Supplements and Amendments
This Agreement shall be amended only by a written instrument signed by
the Trustee and a Majority in Interest of Owner Participants and to the extent
any such amendment affects the Agent, signed by the Agent; but if in the
reasonable opinion of the Trustee or Agent, as the case may be, any instrument
required to be so executed adversely affects any right, duty, liability of, or
immunity or indemnity in favor of it under this Agreement or any of the
documents contemplated hereby to which it is a party, or would cause or result
in any conflict with or breach of any terms, conditions or provisions of, or
default under the charter documents or by-laws of the Trustee or Agent or any
document contemplated hereby to which the Trustee or Agent is a party, the
Trustee or Agent, as the case may be, may in its sole discretion decline to
execute such instrument and upon the request of a Majority in Interest of Owner
Participants immediately shall resign as the Trustee or Agent, as the case may
be, under this Agreement, any Operative Document, or other related document. No
supplement, amendment or modification of the Agreement shall impair any
requirement in this Agreement that the consent of a Majority in Interest of or
all of the Owner Participants be obtained for any purpose and no such
supplement, amendment or modification shall require any Owner Participant to
invest or advance funds or shall entail any additional personal liability or the
surrender of any
23
24
indemnification, claim or individual right on the part of any Owner Participant
with respect to any agreement or obligation or create or suffer to exist any
additional obligation of or liability on the Trust Estate, except with the
written consent of each of the Owner Participants.
ARTICLE XIV
Sale, Transfer or Mortgage of Lease Property
Section 14.01. General. Except as hereinafter expressly permitted, no
Owner Participant may sell, assign, transfer, mortgage, charge or otherwise
encumber, or suffer any third party to sell, assign, transfer, mortgage, charge
or otherwise encumber, or contract to do or permit any of the foregoing, whether
voluntarily or by operation of law (herein sometimes collectively called a
"transfer"), any part or all of its interest hereunder or in the Trust Estate
without the written consent of the other Owner Participants and any attempt to
do so shall be void. The giving of such consent in any one or more instances
shall not limit or waive the need for such consent in any other or subsequent
instances.
Section 14.02. Permitted Transfers by the Owner Participants.
(a) Transfers by Airlease. Notwithstanding the provisions of
Subsection 14.01, without the consent of the other Owner Participants, Airlease
may from time to time transfer all or any portion of its interest hereunder to
an Affiliate.
(b) Transfers by the Partnership. Notwithstanding the
provisions of Section 14.01, without the consent of the other Owner
Participants, the Partnership may from time to time transfer all or any portion
of its interest hereunder to an Affiliate.
(c) Transfer by NAF. Notwithstanding the provisions of Section
14.01, without the consent of the other Owner Participants, NAF may from time to
time transfer all or any portion of its interest hereunder to an Affiliate.
(d) Notwithstanding anything to the contrary in this Article
XIV, the Trustee and each of the Owner Participants acknowledge and agree that
Section 13.3 and the Agreements of the Owner Participants in the Purchase
Agreement, with respect to the sale, assignment or transfer of the Aircraft or
Assigned Contracts, are for the mutual benefit of and binding on each of the
parties hereto.
Section 14.03. Right of First Refusal as to an Owner Participant's
Trust Estate Interest.
(a) Offering Notice. Except for permitted transfers under
Section 14.02 above, if any Owner Participant receives a bona fide offer for the
purchase of either (i) all of its interest hereunder or (ii) less than all of
its interest hereunder, (the recipient of any such offer being hereinafter
called the "Offeror"), which offer complies with the provisions of Section
14.03(b) and which offer it desires and intends to accept, before accepting such
offer it shall give notice (the "Offering Notice") to the other Owner
Participants (the "Offerees") which shall include a true copy of such offer,
whereupon the provisions set forth in this Section 14.03 shall apply. Except for
permitted transfers under Section 14.02 above, no Owner Participant shall accept
an offer unless such offer complies with the provisions of Section 14.03(b).
24
25
(b) Requirements of Offer. Such an offer shall comply with the
following requirements:
(1) the proposed purchase price (which shall be net
of any Trust Estate debts or liabilities which the proposed
purchaser has agreed to assume in its offer to purchase the
Offeror's interest) is payable solely in lawful money of the
United States and, if not payable in its entirety in cash,
under no circumstances may payment of the non-cash portion of
the proposed purchase price be secured by any charge,
encumbrance or hypothecation of the Trust Estate;
(2) the offer contains provisions whereby the proposed
purchaser is obligated to comply with the provisions of
Section 14.06 hereof, requiring it to assume certain
obligations prior to or at closing;
(3) the offer is accompanied by a certified check of the
prospective purchaser for a sum equal to at least ten percent
(10%) of the proposed purchase price; provided, however, that
if the sale to the third party purchaser is not consummated
for any reason other than due to the failure of the Owner
Participants to perform their obligations pursuant to the
offer, each Owner Participant shall be entitled to a pro rata
portion of such sum;
(4) the Offeror shall not have caused or permitted an Owner
Participant Event of Default (as hereinafter defined); and
(5) the prospective purchaser shall be capable of carrying
out all obligations of an Owner Participant under this
Agreement and all related agreements; and as shown by the
audited financial statements of such prospective purchaser for
the two (2) most recent fiscal years of such prospective
purchaser, shall have a tangible net worth satisfactory to the
offerees, determined in accordance with generally accepted
accounting principles.
(c) Procedure. In the Offering Notice, the Offeror shall offer
(the "Sale Offer") to each Offeree the right to purchase a portion of the
interest (the "Portion of the Interest") of the Offeror referred to in said
offer, at a portion of the same price and subject to the same terms and
conditions as set forth in said offer and the Offeror shall submit with the
offering Notice a true copy of said offer. The portion shall be equal to the
full amount of the interest offered multiplied by a fraction, the numerator of
which is such Offeree's then interest in the Trust Estate and the denominator is
the then interest in the Trust Estate of all Offerees. Each Offeree shall notify
the Offeror and the other Offeree(s) of its election within fifteen (15) days of
the date of its receipt of the Offering Notice; provided, however, that such
election shall be as to all of the Portion of the Interest.
(d) Acceptance of Sale Offer.
(1) If the Sale Offer is accepted by each Offeree,
and notice in writing is given within the period specified in
Section 14.03(c), the Offeror shall thereupon be bound to sell
to such Offeree and the offeror shall thereupon be bound to
purchase the Portion of the Interest
25
26
referred to in the Sale Offer in accordance with the terms of
the Sale offer and the closing of the purchase shall take
place in accordance with Section 14.04.
(2) If one Offeree has not accepted the Sale Offer or
has not accepted the Sale Offer within such fifteen (15) day
period and one or more of the other Offerees has accepted the
Sale Offer ("Accepting Offeree"), the Accepting Offeree(s)
shall have the right to purchase the entire interest referred
to in the Sale Offer (but not less than such entire interest)
in accordance with the terms of the Sale Offer and the
purchase shall take place in accordance with Section 14.04 and
the procedures included in Section 14.03(c). Except that the
Accepting Offerees shall notify the Offeror and other Offerees
of such election within ten (10) days of the end of the
initial fifteen (15) day period referred to in Section
14.03(c). The Offeror shall thereupon be bound to sell to such
Accepting Offeree(s) and the Accepting Offeree(s) shall
thereupon be bound to purchase the entire interest referred to
in the Sale Offer in accordance with the terms of the Sale
Offer and the closing of the purchase shall take place in
accordance with Section 14.04.
(e) Right to Sell to Third Party. If the Offerees have not
accepted the Sale Offer as provided in Section 14.03(c) within the time limits
referred to therein, or if the Accepting Offeree(s) have not accepted the Sale
Offer as provided in Section 14.03(d)(2) within the time limits referred to
therein, the Sale Offer shall be deemed to have been declined by such Offerees
and the Offeror shall be free to sell its interest to the maker of said offer at
a price and upon terms and conditions not less favorable to the Offeror than
those set forth in the Offering Notice within the time period set forth below.
If in any instance such Offerees elect not to exercise their rights hereunder or
to waive such rights, such election shall not constitute a waiver of the
Offerees' right to an Offering Notice in the case of any subsequent offer. If
such interest is not so sold and the transfer not consummated within thirty (30)
days, unless extended by mutual agreement, from the expiration of the time
limits referred to in Section 14.03(c) or Section 14.03(d)(2), as applicable,
the relevant interest shall then again become subject to all the provisions of
this Section 14.03.
(f) Limitations on Exercise. Notwithstanding anything to the
contrary contained in this Section 14.03, no Offeree which has failed to perform
or observe any of its obligations, covenants, conditions, or agreements under
this Agreement or any related document (an "Owner Participant Event of
Default"), which Owner Participant Event of Default is still continuing, shall
be entitled to exercise its right to purchase (or sell, unless the Owner
Participant Event of Default is cured by such sale) any portion of the Offeror's
interest.
Section 14.04. Closings.
(a) Location and Time Periods. The closing of any sale of an
interest in the Trust Estate pursuant to this Article XIV shall be held at a
mutually acceptable place and on a mutually acceptable date not more than thirty
(30) days, unless extended by mutual agreement, after the receipt by the Offeror
of the written notices of election by the Offerees, Accepting Offeree, or Third
Party Accepting Offeree, as applicable, or after the expiration of the time
within which the Offeree must so elect, as provided in Sections 14.03(c) or
14.03(d).
26
27
(b) Closing Conditions. Any Owner Participant transferring its
interest shall transfer such interest free and clear of all liens, encumbrances
or any interests of any third party (excepting any liens permitted under the
Lease) and shall execute or cause to be executed any and all documents required
to fully transfer such interest to the acquiring third party or acquiring Owner
Participant(s), including, but not limited to, any documents necessary to
evidence such transfer and to evidence the agreement by the acquiring third
party or acquiring Owner Participant(s) to be bound by all applicable provisions
of the Operative Documents, and all documents required to release any interest
in such selling Owner Participant's interest. Any sums owed by the selling Owner
Participants to the Trust Estate or the other Owner Participants shall be paid
concurrently from the proceeds from such sale at the closing. Following the date
of closing, unless otherwise agreed, the selling Owner Participant(s) shall have
no further rights to any rent or proceeds from the Trust Estate assets
attributable to any period or event following the date of closing and all such
rights shall vest in the transferee of the interest purchased from the selling
Owner Participant(s).
(c) Event of Loss. If an Event of Loss (as defined in the
Lease) shall occur with respect to the Aircraft between (i) the date an election
is made by an Owner Participant, the Owner Participants, or a third party
transferee to purchase pursuant to Section 14.03, and (ii) the closing of such
purchase, the offer to purchase shall automatically terminate, without any
further action or notice required.
(d) Partial Loss. If a partial loss shall occur with respect
to the Aircraft under the Lease, subject to the performance by Lessee of its
obligations under the Lease and so long as there is no Event of Default
thereunder, the purchase of the interest hereunder shall be consummated as
contemplated by the parties.
Section 14.05. Termination of obligations.
As of the closing date of any transfer not prohibited hereunder by an
owner Participant of its entire interest in the Trust Estate to the other Owner
Participant(s) or to a third party purchaser, such transferring Owner
Participant's rights and obligations hereunder shall terminate except as to any
of its unperformed obligations accrued as of such date and except as to any
unperformed indemnity obligations of such Owner Participant attributable to acts
or events occurring prior to such closing date. Thereupon, except as limited by
the preceding sentence, this Agreement shall terminate as to the transferring
Owner Participant(s) but all terms and conditions thereof shall remain in effect
as to the other Owner Participant(s) and the third party purchaser shall become
an Owner Participant hereunder. In the event of a transfer of its entire Trust
Estate interest by an Owner Participant to the other Owner Participant(s) or to
a third party purchaser, the Owner Participant(s) or third party purchaser to
which such interest is transferred, shall indemnify, defend and hold harmless
the Owner Participant so transferring its interest from and against any and all
claims, demands, losses, liabilities, expenses, actions, lawsuits, and other
proceedings, judgments, awards, and costs and expenses (including but not
limited to reasonable attorneys' fees) incurred in or rising directly or
indirectly, in whole or in part, out of the Trust Estate, excluding only those
liabilities, if any, accruing prior to the closing date of such transfer.
Section 14.06. Agreements with Transferees.
In the event that pursuant to the provisions of this Article XIV, any
Owner Participant shall transfer its interest hereunder to any person or entity
other than the other Owner Participant(s), no such transfer shall
27
28
be made or shall be effective to make such transferee an Owner Participant or
entitle such transferee to any benefits or rights hereunder or under the
Operative Documents until the proposed Transferee agrees in writing to assume
and be bound by all the obligations of the selling Owner Participant and be
subject to all the restrictions to which the selling Participant is subject
under the terms of this Agreement, the Operative Documents, and any further
agreement which may be required with respect to the Trust Estate. In the event
an Owner Participant's interest hereunder is transferred by operation of law,
such Owner Participant's transferee shall sign such a writing within fifteen
(15) days of the closing date as an express condition to the effectiveness of
any such transfer.
Section 14.07. Restraining Order.
In the event that any Owner Participant shall at any time transfer or
attempt to transfer its interest hereunder in violation of the provisions of
this Agreement and any rights hereby granted, then the other Owner
Participant(s) shall, in addition to all rights and remedies at law and in
equity, be entitled to a decree or order restraining and enjoining such transfer
and the defaulting owner Participant shall not plead in defense thereto that
there would be an adequate remedy at law; it being hereby expressly acknowledged
and agreed by the parties hereto that damages at law will be an inadequate
remedy for a breach or threatened breach of the violation of the provisions
concerning transfer of a Trust Estate interest as set forth in this Agreement.
Section 14.08. Sale by an Owner Participant of an Owner Participant's
Trust Estate.
The parties agree that in the event that one of the Owner Participants
should decide to purchase the Trust Estate interest of the other Owner
Participants, the parties shall negotiate the terms and conditions of such
purchase in good faith, including, without limitation, the purchase price, any
financing arrangements, and like matters. Such purchase shall take place in
accordance with Section 14.04.
ARTICLE XV
Miscellaneous
Section 15.01 No Legal Title to Trust Estate in Owner Participants. The
Owner Participants shall not have legal title to any part of the Trust Estate.
No transfer, by operation of law or otherwise, of any right, title and interest
of the Owner Participants in and to the Trust Estate or hereunder shall operate
to terminate this Agreement or the trusts hereunder or entitle any successor or
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Estate.
Section 15.02 Sale of Aircraft, etc., by Trustee is Binding. Any sale
or other conveyance of the Aircraft, the Airframe, an Engine or Part by the
Trustee made pursuant to the terms of this Agreement (so long as such sale is
not contrary to the provisions of the Operative Documents) shall bind the Owner
Participants and shall be effective to transfer or convey all right, title and
interest of the Trustee and the Owner Participants in and to the Aircraft, the
Airframe, or an Engine or Part. No purchaser or other grantee shall be required
to inquire as to the authorization, necessity, expediency or regularity of such
sale or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Trustee.
28
29
Section 15.03 Limitations on Rights of Others. Nothing in this
Agreement shall be construed to give to any person other than the Trustee, Owner
Participants, and the Agent (to the extent provided in Article XII hereof) any
legal or equitable right, remedy or claim under or in respect of this Agreement,
any covenants, conditions or provisions contained herein or the Trust Estate.
Section 15.04 No Partnership for Tax Purposes. The Owner Participants
agree that this Trust Estate is not to be construed as a partnership for tax
purposes; provided, however, that if it is determined to be a partnership for
tax purposes, each of Airlease and NAF agree to be bound by an election under
Section 754 of the Internal Revenue Code of 1954, as amended, made by the
Partnership.
Section 15.05 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required under-the terms and
provisions hereof shall be in writing by first class mail, personal delivery,
cable, telex or telecopy (with such cable, telex or telecopy confirmed in
writing, mailed by first-class mail, postage prepaid) addressed to such person
at the address set forth herein with copies to Trustee, Owner Participants, or
Agent, as the case may be. Whenever any notice is required to be given, such
notice shall be deemed given and such requirement satisfied if such notice is
(i) mailed, on the day of deposit into the mail, or (ii) personally delivered,
when delivered, or (iii) cabled, when such notice is delivered to the telegraph
company, or (iv) telecopied, when the telecopy has been received, or (v)
telexed, when the answer back of the addressee is received. Any person entitled
to notice hereunder may change the address to which notices to such person will
be sent by giving notice of such change to Trustee, Owner Participant, or Agent.
If to Trustee: Trust Company for USL, Inc.
615 Battery Street
San Francisco, Ca 94111
Attn: President
Telex: 278031
If to Airlease: United States Airlease, Inc.
615 Battery Street
San Francisco, Ca 94111
Attn: President
If to the
Partnership: Airlease Ltd., A California Limited Partnership
c/o Airlease Management Services, Inc.
2988 Campus Drive
San Mateo, Ca 94403
Attn: President
If to NAF: North American Aircraft Finance Corporation
3225 North Harbor Drive
San Diego, California 92101
Attn: Executive Vice President
29
30
Section 15.06 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 15.07 Limitation on Liability of Owner Participants and Agent.
The Owner Participants or Agent shall not have any liability for the performance
of this Agreement except as expressly set forth herein or, with respect to the
Agent, in any written instructions of the Trustee pursuant to this Agreement.
Section 15.08 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 15.09 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Trustee
and its successors and assigns, the Owner Participants and their successors and,
to the extent permitted by Article XIV hereof, its assigns, all as herein
provided, and the Agent and its successors and assigns, to the extent permitted
by Article XII hereof. Any request, notice, direction, consent, waiver or other
instrument or action by the Owner Participants, shall bind the successors and
assigns of such Owner Participant.
Section 15.10 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof. The remainder of this page is
intentionally omitted.
Section 15.11 Governing Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of
California, including all matters of construction, validity and performance.
30
31
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereto duly
authorized, as of the day and year first above written.
AIRLEASE LTD., A CALIFORNIA UNITED STATES AIRLEASE, INC.,
LIMITED PARTNERSHIP, as as Owner Participant
Owner Participant
/s/ Douglas C. Kay
-------------------
By: Airlease Management Services, Inc., By: Douglas C. Kay
General Partner Vice President
/s/ Douglas C. Kay
- ------------------
By: Douglas C. Kay TRUST COMPANY FOR USL, INC.
Vice President as Trustee
/s/ Frances E. Liu
-------------------
NORTH AMERICAN AIRCRAFT By: Frances E. Liu
FINANCE CORPORATION, Vice President
as Owner Participant
/s/ George M. Shortley
- -----------------------
By: George M. Shortley UNITED STATES AIRLEASE, INC.
Executive Vice President as Agent
/s/ Douglas C. Kay
-------------------
By: Douglas C. Kay
Vice President
31
32
SCHEDULE 1
AIRCRAFT DATA
FAA Manufacturer's Pratt & Whitney
Registration Serial JT8D-9 Engines
No. No. Serial Nos.
- --------------------------------------------------------------------------------
N7379F 20071 P674314B
P673484B
32
33
EXHIBIT 10.17
Trust Company for USL, Inc., Trustee
Under Trust Agreement Dated as of
December 30, 1986
CERTIFICATE
Issued in connection with the Aircraft hereinafter described: Boeing
737-200 series aircraft, FAA Registration No. N7379F.
January 6, 1987
$2,366,666.67
Trust Company for USL, Inc., not in its individual capacity but solely
as Trustee (herein in such capacity called the "Trustee") under the Trust
Agreement hereinafter referred to hereby certifies as follows: (i) this
Certificate is one of the Certificates referred to in the certain Trust
Agreement (N7379F) dated as of December 30, 1986 by and among the Trustee,
Airlease Ltd., A California Limited Partnership, United States Airlease, Inc.,
and North American Aircraft Finance Corporation (herein called "Trust
Agreement"): the defined terms therein not otherwise defined herein being herein
used with the same meaning), which Certificates have been or are to be issued by
the Trustee pursuant to the Trust Agreement; (ii) United States Airlease, Inc.
is an Owner Participant and owns an undivided one-third (1/3) interest in the
Trust Estate; and (iii) the holder of this Certificate has, ratably with the
holders of the other Certificates, an undivided beneficial interest in the Trust
Estate and is entitled to receive ratably with the holders of the other
Certificates issued with respect to the Trust Estate as provided in the Trust
Agreement, a share of a portion of (1) the rental received or to be received by
the Trustee with respect to the Trust Estate or (2) upon the sale or lease of
all or any part of the Trust Estate any proceeds received or receivable
therefrom as well as a share of certain other payments which may be received by
the Trustee pursuant to the terms of the Trust Agreement as more particularly
set forth therein.
All amounts payable hereunder and under the Trust Agreement shall be
paid only from the income and the proceeds from the Trust Estate and only to the
extent that the Trustee shall have sufficient income or proceeds from the Trust
Estate to make such payments in accordance with the terms of the Trust
Agreement, except as specifically provided in Section 8.01 thereof, and each
holder hereof by its acceptance of this Certificate, agrees that it will look
solely to the income and proceeds from the Trust Estate to the extent available
for distribution to such holder as above provided and that neither the Owner
Participants nor the Trustee (except to the extent provided in Section 8.01 of
the Trust Agreement) are personally liable to the holder hereof for any amounts
payable under this Certificate or the Trust Agreement.
34
Trust Company for USL, Inc., Trustee
Under Trust Agreement Dated as of
December 30, 1986
CERTIFICATE
Issued in connection with the Aircraft hereinafter described: Boeing
737-200 series aircraft, FAA Registration No. N7379F
January 6, 1987
$2,366,666.67
Trust Company for USL, Inc., not in its individual capacity but solely
as Trustee (herein in such capacity called the "Trustee") under the Trust
Agreement hereinafter referred to hereby certifies as follows: (i) this
Certificate is one of the Certificates referred to in the certain Trust
Agreement (N7379F) dated as of December 30, 1986, by and among the Trustee,
Airlease Ltd., A California Limited Partnership, United States Airlease, Inc.,
and North American Aircraft Finance Corporation (herein called "Trust
Agreement"); the defined terms therein not otherwise defined herein being herein
used with the same meaning), which Certificates have been or are to be issued by
the Trustee pursuant to the Trust Agreement; (ii) Airlease Ltd., A California
Limited Partnership is an Owner Participant and owns an undivided one-third
(1/3) interest in the Trust Estate; and (iii) the holder of this Certificate
has, ratably with the holders of the other Certificates, an undivided beneficial
interest in the Trust Estate and is entitled to receive, ratably with the
holders of the other Certificates issued with respect to the Trust Estate as
provided in the Trust Agreement, a share of a portion of (1) the rental received
or to be received by the Trustee with respect to the Trust Estate, or (2) upon
the sale or lease of all or any part of the Trust Estate, any proceeds received
or receivable therefrom, as well as a share of certain other payments which may
be received by the Trustee pursuant to the terms of the Trust Agreement as more
particularly set forth therein.
All amounts payable hereunder and under the Trust Agreement shall be
paid only from the income and the proceeds from the Trust Estate and only to the
extent that the Trustee shall have sufficient income or proceeds from the Trust
Estate to make such payments in accordance with the terms of the Trust
Agreement, except as specifically provided in Section 8.01 thereof, and each
holder hereof, by its acceptance of this Certificate, agrees that it will look
solely to the income and proceeds from the Trust Estate to the extent available
for distribution to such holder as above provided and that neither the Owner
Participants nor the Trustee (except to the extent provided in Section 8.01 of
the Trust Agreement) are personally liable to the holder hereof for any amounts
payable under this Certificate or the Trust Agreement.
Reference is hereby made to the Trust Agreement for a statement of the
rights of the holder of this Certificate and of the rights of the holders of
the other Certificates as well as for a statement of the terms and conditions
of the trusts created by, and the rights limitations of rights obligations and
duties of the Trustee set forth in, the Trust Agreement, to all of which terms
and conditions each holder hereof agrees by its acceptance of this Certificate.
35
Each holder hereof by its acceptance of this Certificate, agrees not
to transfer this Certificate except in accordance with the terms of Article XIV
and Section 3.06 of the Trust Agreement.
These Certificates have not been registered under the Securities Law of
1933, as amended, and may be transferred only in compliance with such law.
IN WITNESS WHEREOF the Trustee has duly executed this Certificate as of
the date first above written.
Trust Company for USL, Inc.
as Trustee,
/s/ Douglas C. Kay
-----------------------------
By Douglas C. Kay
Vice President
2
36
Trust Company for USL. Inc., Trustee
Under Trust Agreement Dated as of
December 30, 1986
CERTIFICATE
Issued in connection with the Aircraft hereinafter described: Boeing
737-200 series aircraft. FAA Registration No. N7379F.
January 6, 1987
$2,366,666.67
Trust Company for USL, Inc. not in its individual capacity but solely
as Trustee (herein in such capacity called the "Trustee") under the Trust
Agreement hereinafter referred to hereby certifies as follows: (i) this
Certificate is one of the Certificates referred to in the certain Trust
Agreement (N7379F) dated as of December 30, 1986, by and among the Trustee.
Airlease Ltd., A California Limited Partnership. United States Airlease, Inc.
and North American Aircraft Finance Corporation (herein called "Trust
Agreement"), the defined terms therein not otherwise defined herein being herein
used with the same meaning), which Certificates have been or are to be issued by
the Trustee pursuant to the Trust Agreement, (ii) North American Aircraft
Finance Corporation is an Owner Participant and owns an undivided one-third
(1/3) interest in the Trust Estate, and (iii) the holder of this Certificate
has, ratably with the holders of the other Certificates, an undivided beneficial
interest in the Trust Estate and is entitled to receive, ratably with the
holders of the other Certificates issued with respect to the Trust Estate as
provided in the Trust Agreement, a share of a portion of (1) the rental received
or to be received by the Trustee with respect to the Trust Estate or (2) upon
the sale or lease of all or any part of the Trust Estate, any proceeds received
or receivable therefrom as well as a share of certain other payments which may
be received by the Trustee pursuant to the terms of the Trust Agreement as more
particularly set forth therein.
All amounts payable hereunder and under the Trust Agreement shall be
paid only from the income and the proceeds from the Trust Estate and only to the
extent that the Trustee shall have sufficient income or proceeds from the Trust
Estate to make such payments in accordance with the terms of the Trust
Agreement, except as specifically provided in Section 8.01 thereof, and each
holder hereof, by its acceptance of this Certificate agrees that it will look
solely to the income and proceeds from the Trust Estate to the extent available
for distribution to such holder as above provided and that neither the Owner
Participants nor the Trustee (except to the extent provided in Section 8.01 of
the Trust Agreement) are personally liable to the holder hereof for any amounts
payable under this Certificate or the Trust Agreement.
Reference is hereby made to the Trust Agreement for a statement of the
rights of the holder of this Certificate and of the rights of the holders of the
other Certificates, as well as for a statement of the terms and conditions of
the trusts created by and the right a limitations of rights obligations and
duties of the Trustee
37
set forth in, the Trust Agreement, to all of which terms and conditions each
holder hereof agrees by its acceptance of this Certificate.
Each holder hereof by its acceptance of this Certificate agrees not to
transfer this Certificate except in accordance with the terms of Article XIV and
Section 3.06 of the Trust Agreement.
These Certificates have not been registered under the Securities Law of
1933, as amended, and may be transferred only in compliance with such law.
IN WITNESS WHEREOF, the Trustee has duly executed this Certificate as
of the date first above written.
Trust Company for USL, Inc.,
as Agent
/s/ Douglas C. Kay
-----------------------------
By: Douglas C. Kay
Vice President
2