<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 11, 1994
REGISTRATION NO. 33-52265
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ALASKA AIR GROUP, INC. AND ALASKA AIRLINES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
ALASKA-ALASKA AIRLINES, INC. 92-0009235-ALASKA AIRLINES, INC.
DELAWARE-ALASKA AIR GROUP, INC. 91-1292054-ALASKA AIR GROUP, INC.
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
19300 PACIFIC HIGHWAY SOUTH, SEATTLE, WASHINGTON 98188
(206) 433-3200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MARJORIE E. LAWS
VICE PRESIDENT/CORPORATE AFFAIRS AND CORPORATE SECRETARY
19300 PACIFIC HIGHWAY SOUTH, SEATTLE, WASHINGTON 98188
(206) 433-3131
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
--------------------------
COPIES TO:
STEPHEN A. MCKEON, ESQ.
JACK L. SIEMERING, ESQ.
PERKINS COIE
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
--------------------------
If any of the securities being registered on this form are to be offered
pursuant to dividend reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) PRICE PER UNIT (2) OFFERING PRICE (2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Convertible Debt Securities of Alaska Air Group,
Inc.............................................. 100%
Common Stock, $1.00 par value, of Alaska Air
Group, Inc. (3).................................. --
Guarantees of Alaska Air Group, Inc.(4)........... --
Debt Securities of Alaska Airlines, Inc........... 100%
Equipment Trust Certificates of Alaska Airlines,
Inc.............................................. 100%
Total......................................... $200,000,000 $200,000,000 $68,966(5)
<FN>
(1) If any of these securities are issued at an original issue discount, the
principal amount will be increased such that the aggregate proceeds will
equal $200,000,000.
(2) Estimated solely for the purpose of computing the registration fee.
(3) Such indeterminate number of shares of Common Stock as may be issuable upon
conversion of Convertible Debt Securities. Includes rights to purchase
Series A Participating Preferred Stock of Alaska Air Group, Inc. associated
with the Common Stock.
(4) To be issued in connection with Debt Securities and Equipment Trust
Certificates of Alaska Airlines, Inc.
(5) Previously paid.
</TABLE>
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement consists of three separate forms of
Prospectuses, covering securities to be registered as follows:
(1) Convertible Debt Securities of Alaska Air Group, Inc.
(2) Debt Securities of Alaska Airlines, Inc. and Guarantees, if any, of
Alaska Air Group, Inc.
(3) Equipment Trust Certificates of Alaska Airlines, Inc. and Guarantees, if
any, of Alaska Air Group, Inc.
None of these Prospectuses will be used to consummate sales of securities
unless accompanied by a Prospectus Supplement applicable to the securities
offered.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 11, 1994
PROSPECTUS
- ------------
ALASKA AIR GROUP, INC.
CONVERTIBLE DEBT SECURITIES
------------------
Alaska Air Group, Inc. ("Air Group") may from time to time offer its
convertible debt securities (the "Convertible Debt Securities"), consisting of
debentures, notes and/or other evidences of indebtedness representing unsecured
obligations of Air Group convertible into Common Stock, par value $1.00 per
share ("Common Stock"). The Convertible Debt Securities offered pursuant to this
Prospectus may be issued in one or more series or issuances and will be limited
to $200,000,000 aggregate public offering price. Certain specific terms of the
Convertible Debt Securities in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, the specific designation,
aggregate principal amount, the denomination, maturity, premium, if any, the
rate (which may be fixed or variable), time and method of calculating payment of
interest, if any, the place or places where principal of, premium, if any, and
interest, if any, on such Convertible Debt Securities will be payable, any terms
of redemption at the option of Air Group or the holder, any sinking fund
provisions, terms for conversion into Common Stock, the initial public offering
price and other special terms. The Prospectus Supplement will indicate whether
the Convertible Debt Securities will be Convertible Senior Debt Securities,
which will rank equally with all other unsubordinated and unsecured indebtedness
of Air Group, or as Convertible Subordinated Debt Securities which will be
subordinated in right of payment to all Senior Indebtedness of Air Group (as
hereinafter defined). See "Description of Convertible Debt Securities--
Subordination of Convertible Subordinated Debt Securities."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
Air Group may sell the Convertible Debt Securities to or through
underwriters, through dealers or agents or directly to purchasers. See "Plan of
Distribution." The accompanying Prospectus Supplement sets forth the names of
any underwriters, dealers or agents involved in the sale of the Convertible Debt
Securities in respect of which this Prospectus is being delivered, and any
applicable fee, commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Convertible Debt
Securities unless accompanied by a Prospectus Supplement applicable to the
Convertible Debt Securities being sold.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1994.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by Air Group or the Underwriter. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, the Convertible Debt Securities in
any jurisdiction where, or to any person to whom, it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of Air Group since the date hereof.
AVAILABLE INFORMATION
Air Group is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 75 Park Place, 14th Floor,
New York, New York 10007; and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
material filed by Air Group may be inspected and copied at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by Air Group and Alaska Airlines, Inc. ("Alaska") with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information included in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to Air Group and the Convertible Debt Securities
offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated into this Prospectus by reference and made a part
hereof: Air Group's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993.
All documents filed by Air Group pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus, and to be a part hereof from the date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Air Group will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any document incorporated by reference in this Prospectus
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference to such documents). Requests for such copies should be
directed to the office of the Corporate Secretary, Alaska Air Group, Inc., P.O.
Box 68947, Seattle, Washington 98168 (telephone (206) 433-3131).
2
<PAGE>
AIR GROUP AND ALASKA
Air Group is a holding company whose principal subsidiary is Alaska. Alaska
accounted for approximately 80% of Air Group's consolidated 1993 operating
revenues and 91% of its total assets at December 31, 1993. Alaska's all jet
fleet provides scheduled air transportation to 37 airports in six states
(Alaska, Washington, Oregon, California, Nevada and Arizona), five cities in
Mexico and three cities in Russia. Air Group also owns Horizon Air Industries,
Inc. ("Horizon"), a regional airline operating in the Pacific Northwest and
western Canada. The principal executive offices of Air Group are located at
19300 Pacific Highway South, Seattle, Washington 98188 (telephone (206)
433-3200).
In 1993 Alaska carried 6.4 million passengers. In each year since 1973,
Alaska has carried more passengers between Alaska and the U.S. mainland than any
other airline. Passenger traffic in the intra-Alaska markets and between Alaska
and the U.S. mainland accounted for 29% of Alaska's total revenue passenger
miles during 1993, while west coast traffic accounted for 59% and the Mexico
markets 12%. Based on passenger enplanements, Alaska's leading airports are
Seattle, Portland, Anchorage and Los Angeles. Based on revenues, the leading
nonstop routes were Seattle-Anchorage, Seattle-Los Angeles and Seattle-San
Francisco. Alaska's operating fleet at December 31, 1993 consisted of 66 jet
aircraft.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds to Air Group from the sale of the Convertible Debt Securities
offered hereby will be added to the working capital of Air Group and will be
available for general corporate purposes, among which may be the repayment of
outstanding indebtedness and financing of capital expenditures by Alaska and
Horizon, including the acquisition of aircraft and related equipment.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Air Group for the periods indicated. Earnings represents earnings before
accounting change, income tax expense and fixed charges (excluding interest
capitalized). Fixed charges consist of interest and the portion of rental
expense deemed representative of the interest factor.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio................................................... (a) (a) 1.10 1.32 2.30
<FN>
- ------------------------
(a) For the years ended December 31, 1993 and 1992, Air Group's earnings were
inadequate to cover fixed charges by $46.3 million and $131.8 million,
respectively.
</TABLE>
DESCRIPTION OF CONVERTIBLE DEBT SECURITIES
The Convertible Senior Debt Securities are to be issued under an Indenture
between Air Group and a Trustee (the "Convertible Senior Debt Indenture"). The
Convertible Subordinated Debt Securities are to be issued under an Indenture
between Air Group and a Trustee (the "Convertible Subordinated Debt Indenture").
The Convertible Senior Debt Securities Indenture and the Convertible
Subordinated Debt Securities Indenture are referred to herein individually as
the "Indenture" and collectively as the "Indentures." A copy of each Indenture
is filed as an exhibit to the Registration Statement. Information regarding the
Trustee will be set forth in the applicable Prospectus Supplement.
The Convertible Debt Securities offered pursuant to this Prospectus will be
limited to $200,000,000 aggregate principal amount (or such greater amount, if
Convertible Debt Securities are issued at an original issue discount, as shall
result in aggregate proceeds of $200,000,000 to Air Group). The statements
herein relating to the Convertible Debt Securities and the Indentures are
3
<PAGE>
summaries and are subject to the detailed provisions of the Indentures. The
following summaries of certain provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indentures, including the definitions therein of
certain terms capitalized in this Prospectus. Whenever particular Sections or
defined terms of the Indentures are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein by
reference.
GENERAL
The Indentures do not limit the aggregate principal amount of Convertible
Debt Securities which may be issued thereunder and provide that Convertible Debt
Securities may be issued from time to time in one or more series. The
Convertible Senior Debt Securities will be unsecured and unsubordinated
obligations of Air Group and will rank on a parity with all other unsecured and
unsubordinated indebtedness of Air Group. The Convertible Subordinated Debt
Securities will be unsecured obligations of Air Group and, as set forth below
under "Subordination of Convertible Debt Securities," will be subordinated in
right of payment to all Senior Indebtedness. The Indenture does not limit Air
Group's right to incur additional Senior Indebtedness. As of December 31, 1993,
Senior Indebtedness of Air Group on a consolidated basis aggregated
approximately $308,700,000.
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for a description of the specific series of Convertible Debt
Securities being offered thereby, including: (1) the specific designation of
such Convertible Debt Securities; (2) any limit upon the aggregate principal
amount of such Convertible Debt Securities; (3) the date or dates on which the
principal of such Convertible Debt Securities will mature or the method of
determining such date or dates; (4) the rate or rates (which may be fixed or
variable) at which such Convertible Debt Securities will bear interest, if any,
or the method of calculating such rate or rates; (5) the date or dates from
which interest, if any, will accrue or the method by which such date or dates
will be determined; (6) the date or dates on which interest, if any, will be
payable and the record date or dates therefor; (7) the place or places where
principal of, premium, if any, and interest, if any, on such Convertible Debt
Securities will be payable; (8) the period or periods within which, the price or
prices at which, and the terms and conditions upon which, such Convertible Debt
Securities may be redeemed, in whole or in part, at the option of Air Group; (9)
the obligation, if any, of Air Group to redeem or purchase such Convertible Debt
Securities pursuant to any sinking fund or analogous provisions, upon the
happening of a specified event or at the option of a holder thereof and the
period or periods within which, the price or prices at which and the terms and
conditions upon which, such Convertible Debt Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligations; (10) the
denominations in which such Convertible Debt Securities are authorized to be
issued; (11) the terms and conditions upon which conversion will be effected,
including the conversion price, the conversion period and other conversion
provisions in addition to or in lieu of those described below; (12) if other
than the principal amount thereof, the portion of the principal amount of such
Convertible Debt Securities which will be payable upon declaration of the
acceleration of the maturity thereof or the method by which such portion shall
be determined; (13) the person to whom any interest on any such Convertible Debt
Security shall be payable if other than the person in whose name such
Convertible Debt Security is registered on the applicable record date; (14) any
addition to, or modification or deletion of, any Event of Default (as
hereinafter defined) or any covenant of Air Group specified in the Indenture
with respect to such Convertible Debt Securities; (15) the application, if any,
of such means of covenant defeasance as may be specified for such Convertible
Debt Securities; (16) if applicable, provisions related to the issuance of
Convertible Debt Securities in book entry form; (17) any addition to, or
modification or deletion of, any provision of the Indenture related to the
subordination of such Convertible Debt Securities; and (18) any other special
terms pertaining to such Convertible Debt Securities. Unless otherwise specified
in the applicable Prospectus Supplement, the Convertible Debt Securities will
not be listed on any securities exchange. (Section 3.1 of the Indentures.)
Unless otherwise specified in the applicable Prospectus Supplement,
Convertible Debt Securities will be issued in fully registered form without
coupons. Where Convertible Debt Securities of any
4
<PAGE>
series are issued in bearer form, the special restrictions and considerations,
including special offering restrictions and special federal income tax
considerations, applicable to any such Convertible Debt Securities and to
payment on and transfer and exchange of such Convertible Debt Securities will be
described in the applicable Prospectus Supplement.
Convertible Debt Securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain federal income tax
consequences and special considerations applicable to any such Convertible Debt
Securities will be described in the applicable Prospectus Supplement.
The general provisions of the Indentures do not afford holders of the
Convertible Debt Securities protection in the event of a highly leveraged or
other transaction involving Air Group or Alaska that may adversely affect
holders of Convertible Debt Securities. Any covenants or other provisions
included in a supplement or amendment to any Indenture for the benefit of the
holders of any particular series of Convertible Debt Securities will be
described in the applicable Prospectus Supplement.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement, payments
in respect of the Convertible Debt Securities will be made at the office or
agency of Air Group maintained for that purpose, as Air Group may designate from
time to time, except that, at the option of Air Group, interest payments, if
any, on Convertible Debt Securities in registered form may be made by (i) checks
mailed by the Trustee to the holders of Convertible Debt Securities entitled
thereto at their registered addresses or (ii) wire transfer to an account
maintained by the Person entitled thereto as specified in the Register.
(Sections 3.7 and 9.2 of the Indentures.) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Convertible Debt Securities in registered form will be made to the Person in
whose name such Convertible Debt Security is registered at the close of business
on the regular record date for such interest. (Section 3.7 of the Indentures.)
Unless otherwise provided in the applicable Prospectus Supplement,
Convertible Debt Securities in registered form will be transferable or
exchangeable at the agency of Air Group maintained for such purpose as
designated by Air Group from time to time. (Sections 3.5 and 9.2 of the
Indentures.) Convertible Debt Securities may be transferred or exchanged without
service change, other than any tax or other governmental charge imposed in
connection therewith. (Section 3.5 of the Indentures.)
CONVERSION RIGHTS
The terms on which Convertible Debt Securities of any series are convertible
into Common Stock will be set forth in the Prospectus Supplement relating
thereto. Such terms shall include provisions as to whether conversion is
mandatory, at the option of the holder, or at the option of Air Group, and may
include provisions in which the number of shares of Common Stock to be received
by the holders of Convertible Debt Securities would be calculated according to
the market price of Common Stock as of a time stated in the Prospectus
Supplement.
SUBORDINATION OF CONVERTIBLE SUBORDINATED DEBT SECURITIES
Unless otherwise provided in the applicable Prospectus Supplement, the
obligation of Air Group to make payment on account of the principal of, and
premium, if any, and interest on Convertible Subordinated Debt Securities will
be subordinated and junior in right of payment, as set forth in the Convertible
Subordinated Debt Securities Indenture and described below, to the prior payment
in full of all Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness of Air Group unless such
Indebtedness, by its terms or the terms of the instrument creating or evidencing
it, is subordinate in right of payment to or PARI PASSU with the Convertible
Subordinated Debt Securities. (Section 1.1 of the Convertible Subordinated Debt
Securities Indenture.) Air Group's 7 1/4% Convertible Subordinated Notes Due
2006, 7 3/4% Convertible Subordinated Debentures Due 2010 and 6 7/8% Convertible
Subordinated Debentures Due 2014 do not constitute Senior Indebtedness.
"Indebtedness," when used with respect to Air Group,
5
<PAGE>
means, without duplication, the principal of, and premium, if any, and accrued
and unpaid interest (including post-petition interest) on (i) indebtedness of
Air Group for money borrowed, (ii) Indebtedness guarantees by Air Group of
indebtedness for money borrowed by any other person, (iii) indebtedness of Air
Group evidenced by notes, debentures, bonds or other instruments of indebtedness
for payment of which Air Group is responsible or liable, by Indebtedness
guarantees or otherwise, (iv) obligations for the reimbursement of any obligor
on any letter of credit, bankers' acceptance or similar credit transaction, (v)
obligations of Air Group under Capital Leases and Flight Equipment leases, (vi)
obligations under interest rate and currency swaps, caps, collars, options,
forward or spot contracts or similar arrangements or with respect to foreign
currency hedges, and (vii) commitment and other bank financing fees under
contractual obligations associated with bank debt; PROVIDED, HOWEVER, that
Indebtedness shall not include amounts owed to trade creditors in the ordinary
course of business. (Section 1.1 of the Convertible Subordinated Debt Securities
Indenture.)
No payment on account of principal of, or premium, if any, or interest on,
the Convertible Subordinated Debt Securities may be made if (i) any Senior
Indebtedness is not paid when due or (ii) the maturity of any Senior
Indebtedness is accelerated unless, in either case, (a) such failure to pay or
acceleration relates to such Senior Indebtedness in an aggregate amount equal to
less than $25 million, (b) the default has been cured or waived or has ceased to
exist, (c) such acceleration has been rescinded, or (d) such Senior Indebtedness
has been paid in full. During the continuance of any default (other than a
default described in the preceding sentence) on Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately (I.E., without further
notice and after the expiration of any applicable grace periods) and upon notice
by holders of at least $25 million of Senior Indebtedness to Air Group and the
Trustee (a "Payment Notice"), Air Group may not make any payments (a "Payment
Block") on the Convertible Subordinated Debt Securities until 120 days have
elapsed following the receipt of such Payment Notice. After 120 days Air Group
may resume payment on the Convertible Subordinate Debt Securities unless payment
is prohibited by the first sentence of this paragraph. No more than one Payment
Notice is permitted for any one default on Senior Indebtedness (which shall not
bar subsequent Payment Notices for other such defaults). All events of default
on Senior Indebtedness occurring within a 30-day period shall be treated as one
event of default on such Senior Indebtedness for purposes of the preceding
sentence. No more than two Payment Blocks are permitted within any 12-month
period. Except as provided in the next paragraph, a failure to make any payment
with respect to the Convertible Subordinated Debt Securities as a result of the
foregoing provisions will not limit the right of the holders of the Convertible
Subordinated Debt Securities to accelerate the maturity thereof as a result of
such payment default. (Section 13.2 of the Convertible Subordinated Debt
Securities Indenture.)
Upon any distribution of the assets of Air Group upon any dissolution, total
or partial liquidation or reorganization of or similar proceeding relating to
Air Group, the holders of Senior Indebtedness will be entitled to receive
payment in full before the holders of the Convertible Subordinated Debt
Securities are entitled to receive any payment. Upon any Event of Default with
respect to the Convertible Subordinated Debt Securities, the Trustee or holders
of 25% of the Convertible Subordinated Debt Securities must give notice of such
Event of Default and the intention to accelerate to Air Group and any other
holders of Senior Indebtedness which have theretofore requested such notice, and
such acceleration shall not become effective unless and until such Event of
Default is continuing on the 60th day after the date of delivery of such notice
of intention to accelerate; PROVIDED, HOWEVER, that the Convertible Subordinated
Debt Securities shall become immediately due and payable upon notice in the
event of a bankruptcy or insolvency of Air Group. (Section 13.3 of the
Convertible Subordinated Debt Securities Indenture.) By reason of such
subordination, in the event of insolvency, creditors of Air Group who are
holders of Senior Indebtedness or of other unsubordinated Indebtedness of Air
Group may recover more, ratably, than the holders of the Convertible
Subordinated Debt Securities.
6
<PAGE>
CONSOLIDATION, MERGER OR SALE BY THE ISSUER
The Indentures provides that Air Group may, without the consent of the
holders of Convertible Debt Securities, merge or consolidate with or into any
other corporation or sell, convey, transfer or otherwise dispose of all or
substantially all of its assets to any person, firm or corporation, if (i) (a)
in the case of a merger or consolidation, Air Group is the surviving corporation
or (b) in the case of a merger or consolidation where Air Group is not the
surviving corporation and in the case of such a sale, conveyance or other
disposition, the successor or acquiring corporation is a corporation organized
and existing under the laws of the United States of America or a State thereof
and such corporation expressly assumes by supplemental indenture all the
obligations of Air Group under the Convertible Debt Securities and any coupons
appertaining thereto and under the Indentures, and (ii) immediately after giving
effect to such merger or consolidation, or such sale, conveyance, transfer or
other disposition, no Default (as hereinafter defined) or Event of Default shall
have occurred and be continuing. In the event a successor corporation assumes
the obligations of Air Group, such successor corporation shall succeed to and be
substituted for Air Group under the Indentures and under the Convertible Debt
Securities and any coupons appertaining thereto and all obligations of Air Group
shall terminate. (Section 7.1 of the Indentures.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The Indentures provide that, if an Event of Default specified therein occurs
with respect to the Convertible Debt Securities of any series issued thereunder
and is continuing, the Trustee for such series or the holders of 25% in
aggregate principal amount of all of the outstanding Convertible Debt Securities
of that series, by written notice to Air Group (and to the Trustee for such
series, if notice is given by such holders of Convertible Debt Securities), may
declare the principal (or, if the Convertible Debt Securities of that series are
original issue discount Convertible Debt Securities or indexed Convertible Debt
Securities, such portion of the principal amount specified in the Prospectus
Supplement) of all the Convertible Debt Securities of that series to be due and
payable, subject in the case of Convertible Subordinated Debt Securities to the
60 day prior notice requirement described above under "Subordination of
Convertible Subordinated Debt Securities," PROVIDED that Convertible Debt
Securities shall become immediately due and payable without prior notice upon a
bankruptcy or insolvency of Air Group. (Section 5.2 of the Indentures.)
"Events of Default" with respect to Convertible Debt Securities of any
series issued thereunder are defined in the Indentures as being: default for 30
days in payment of any interest on any Convertible Debt Security of that series
or any coupon appertaining thereto or any additional amount payable with respect
to Convertible Debt Securities of such series as specified in the applicable
Prospectus Supplement when due; default for ten days in payment of principal,
premium, if any, or on redemption or otherwise, or in the making of a mandatory
sinking fund payment of any Convertible Debt Securities of that series when due;
default for 60 days after notice to Air Group by the Trustee for such series, or
by the holders of 25% in aggregate principal amount of the Convertible Debt
Securities of such series then outstanding, in the performance of any other
agreement in the Convertible Debt Securities of that series, in the Indentures
or in any supplemental indenture or board resolution referred to therein under
which the Convertible Debt Securities of that series may have been issued;
default resulting in acceleration of other indebtedness of Air Group for
borrowed money where the aggregate principal amount so accelerated exceeds $25
million and such acceleration is not rescinded or annulled within ten days after
the written notice thereof to Air Group by the Trustee or to Air Group and the
Trustee by the holders of 25% in aggregate principal amount of the Convertible
Debt Securities of such series then outstanding, PROVIDED that such Event of
Default will be cured or waived if the default that resulted in the acceleration
of such other indebtedness is cured or waived; and certain events of bankruptcy,
insolvency or reorganization of Air Group. (Section 5.1 of the Indentures.)
Events of Default with respect to a specified series of Convertible Debt
Securities may be added to the Indenture under which the series is issued and,
if so added, will be described in the applicable Prospectus Supplement.
(Sections 3.1 and 5.1(7) of the Indentures.)
7
<PAGE>
The Indentures provide that the Trustee for any series of Convertible Debt
Securities shall, within 90 days after the occurrence of a Default with respect
to Convertible Debt Securities of that series, give to the holder of the
Convertible Debt Securities of that series notice of all uncured Defaults known
to it, PROVIDED that, except in the case of default in payment on the
Convertible Debt Securities of that series, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers (as described therein)
in good faith determines that withholding such notice is in the interest of the
holders of the Convertible Debt Securities of that series. (Section 6.6 of the
Indentures.) "Default" means any event which is, or, after notice or passage of
time or both, would be, an Event of Default. (Section 1.1 of the Indentures.)
The Indentures provide that the holders of a majority in aggregate principal
amount of the Convertible Debt Securities of each series affected (with each
such series voting as a class) may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee for such
series, or exercising any trust or power conferred on such Trustee. (Section 5.8
of the Indentures.)
The Indenture includes a covenant that Air Group will file annually with the
Trustee a certificate as to Air Group's compliance with all conditions and
covenants of the applicable Indenture. (Section 9.7 of the Indentures.)
The holders of a majority in aggregate principal amount of any series of
Convertible Debt Securities by notice to the Trustee for such series may waive,
on behalf of the holders of all Convertible Debt Securities of such series, any
past Default or Event of Default with respect to that series and its
consequences except a Default or Event of Default in the payment of the
principal of, premium, if any, or interest, if any, on any Convertible Debt
Security and certain other defaults. (Section 5.7 of the Indentures.)
MODIFICATION OF THE INDENTURES
The Indenture contains provisions permitting Air Group and the Trustee to
enter into one or more supplemental indentures without the consent of the
holders of any of the Convertible Debt Securities in order (i) to evidence the
succession of another corporation to Air Group and the assumption of the
covenants of Air Group by a successor to Air Group; (ii) to add to the covenants
of Air Group or surrender any right or power of Air Group; (iii) to add
additional Events of Default with respect to any series; (iv) to add or change
any provisions to such extent as necessary to permit or facilitate the issuance
of Convertible Debt Securities in bearer form; (v) to add to, change or
eliminate any provision affecting Convertible Debt Securities not yet issued;
(vi) to secure the Convertible Debt Securities; (vii) to establish the form or
terms of Convertible Debt Securities; (viii) to evidence and provide for
successor Trustees; (ix) if allowed without penalty under applicable laws and
regulations, to permit payment in respect of Convertible Debt Securities in
bearer form in the United States; (x) to correct or supplement any inconsistent
provisions or to make any other provisions with respect to matters or questions
arising under the Indentures, PROVIDED that such action does not adversely
affect the interests of any holder of Convertible Debt Securities of any series
issued under such Indentures; or (xi) to cure any ambiguity or correct any
mistake. (Section 8.1 of the Indentures.)
The Indenture also contains provisions permitting Air Group and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the outstanding Convertible Debt Securities of each series affected by such
supplemental indenture, to execute supplemental indentures adding any provisions
to or changing or eliminating any of the provisions of the Indenture or any
supplemental indenture or modifying the rights of the holders of Convertible
Debt Securities of such series, except that no such supplemental Indenture may,
without the consent of the holder of each Convertible Debt Security so affected;
(i) change the time for payment of principal or interest on any Convertible Debt
Security; (ii) reduce the principal of, or any installment of principal of, or
interest on any Convertible Debt Security; (iii) reduce the amount of premium,
if any, payable upon the redemption of any Convertible Debt Security; (iv)
reduce the amount of principal payable upon acceleration of the maturity of an
Original Issue Discount Convertible Debt Security; (v) impair the right to
institute suit
8
<PAGE>
for the enforcement of any payment on or with respect to any Convertible Debt
Security; (vi) reduce the percentage in principal amount of the outstanding
Convertible Debt Securities of any series the consent of whose holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indentures or for waiver of certain
defaults; (vii) change the obligation of Air Group to maintain an office or
agency in the places and for the purposes specified in the Indentures; or (viii)
modify the provisions relating to waiver of certain defaults or any of the
foregoing provisions. (Section 8.2 of the Indentures.)
COVENANT DEFEASANCE
If indicated in the Prospectus Supplement, Air Group may elect to be
released from its obligations with respect to certain covenants applicable to
the Convertible Debt Securities of or within any series ("covenant defeasance"),
upon the deposit with the Trustee for such series (or other qualifying trustee),
in trust for such purpose, of money and/or Government Obligations which through
the payment of principal and interest in accordance with their terms will
provide money in the amount sufficient to pay the principal of and any premium
or interest on such Convertible Debt Securities to Maturity or redemption, as
the case may be, and any mandatory sinking fund or analogous payment thereon.
Upon the occurrence of a covenant defeasance, Air Group will be released only
from its obligations to comply with certain covenants contained in the Indenture
relating to such Convertible Debt Securities, will continue to be obligated in
all other respects under such Convertible Debt Securities and will continue to
be contingently liable with respect to the payment of principal, interest, if
any, and premium, if any, with respect to such Convertible Debt Securities.
Unless otherwise specified in the applicable Prospectus Supplement and
except as described below, the conditions to covenant defeasance are as follows:
(i) such covenant defeasance must not result in a breach or violation of, or
constitute a Default or Event of Default under, the Indentures, or result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument of Air Group; (ii) certain bankruptcy related Defaults
or Events of Default with respect to Air Group must not have occurred and be
continuing during the period commencing on the date of the deposit of the trust
funds to covenant defease such Convertible Debt Securities and ending on the
91st day after such date; (iii) Air Group must deliver to the Trustee an Opinion
of Counsel to the effect that the holders of such Convertible Debt Securities
will not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts and in the same manner and at all the same times as would have
been the case if such covenant defeasance had not occurred; (iv) Air Group must
deliver to the Trustee an Officers' Certificate and an Opinion of Counsel with
respect to compliance with the conditions precedent to such covenant defeasance;
and (v) any additional conditions to such covenant defeasance which may be
imposed on Air Group pursuant to the Indentures. (Article 4 of the Indentures.)
The Indenture requires that a nationally recognized firm of independent public
accountants deliver to the Trustee a written certification as to the sufficiency
of the trust funds deposited for the covenant defeasance of such Convertible
Debt Securities. The Indenture does not provide the holders of such Convertible
Debt Securities with recourse against such firm. As described above, in the
event of a covenant defeasance, Air Group remains contingently liable with
respect to the payment of principal, interest, if any, and premium, if any, with
respect to the Convertible Debt Securities.
If Air Group exercises its covenant defeasance option, payment of such
Convertible Debt Securities may not be accelerated by reason of a Default or an
Event of Default with respect to the covenants to which such covenant defeasance
is applicable. However, if such acceleration were to occur, the realizable value
at the acceleration date of the money and Government Obligations in the
defeasance trust could be less than the principal and interest then due on such
Convertible Debt Securities, in that the required deposit in the defeasance
trust is based upon scheduled cash flow rather than market value, which will
vary depending upon interest rates and other factors.
9
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Air Group is authorized to issue 30,000,000 shares of Common Stock, $1.00
par value, and 5,000,000 shares of preferred stock.
VOTING RIGHTS. Each holder of Common Stock is entitled to one vote per
share on all matters submitted to a vote of such class. Holders of Common Stock
do not have cumulative rights. The Board of Directors is classified into three
classes, with three or four Directors elected each year to three-year terms. A
vote of three-fourths of the shares present at a meeting is required to elect
each nominee as a Director and to approve any other matter brought before the
stockholders for a vote.
DIVIDEND RIGHTS. Holders of Common Stock share ratably in dividends that
may be declared by the Board of Directors out of funds legally available
therefor.
LIQUIDATION RIGHTS. Upon any liquidation of Air Group, the holders of
Common Stock are entitled to share ratably in the net assets of Air Group
available for distribution on the Common Stock.
OTHER. The Common Stock has no preemptive or conversion rights and there
are no redemption provisions applicable thereto. The Common Stock is listed on
the New York Stock Exchange and the Pacific Stock Exchange. The registrar and
transfer agent for the Common Stock is The First National Bank of Boston.
POTENTIAL RIGHTS OF PREFERRED STOCK. Under Air Group's Certificate of
Incorporation, the Board of Directors has authority to issue up to 5,000,000
shares of preferred stock. Such shares would have such voting, dividend,
liquidation, conversion, redemption and other rights as may be determined by the
Board of Directors, subject to the provisions of the Certificate of
Incorporation. Shares of Common Stock would be subject to the preferences,
rights and powers of any such shares of preferred stock as set forth in Air
Group's Certificate of Incorporation and in the resolutions establishing one or
more series of preferred stock. No preferred stock was outstanding at the date
of this Prospectus.
CERTAIN OTHER PROVISIONS. Air Group's Certificate of Incorporation contains
certain provisions sometimes referred to as "anti-takeover" provisions. In the
event that Air Group at any time has a stockholder who is a beneficial owner of
more than 15% of the voting power of Air Group, these provisions would require
the affirmative vote of the holders of not less than 80% of the outstanding
shares of voting stock to approve a consolidation or merger of Air Group with
any other corporation, the conveyance to any corporation or other person or any
other disposition of all or substantially all of Air Group's assets, or the
disposition by Air Group of all or substantially all of the stock or assets of
any major subsidiary; provided, however, that this 80% voting requirement does
not apply to a transaction which is approved by 80% of the disinterested members
of the Board of Directors.
Air Group is party to a Rights Agreement designed to deter partial and
two-tier tender offers, stock accumulation programs and other coercive tactics
that might be used to gain control without giving the Board of Directors the
opportunity to negotiate on behalf of the stockholders. In accordance with the
Rights Agreement, one right is attached to each share of outstanding Common
Stock. A holder of a right may, under certain circumstances, purchase at a
discount from market value either shares of a special class of voting preferred
stock of Air Group or shares of capital stock of a corporate entity attempting
to acquire Air Group or surviving a merger or consolidation with Air Group.
PLAN OF DISTRIBUTION
Air Group may sell Convertible Debt Securities to one or more underwriters
for public offering and sale by them or may sell Convertible Debt Securities to
investors or other persons directly or through agents. Any such underwriter or
agent involved in the offer and sale of the Convertible Debt Securities will be
named in an applicable Prospectus Supplement.
Underwriters may offer and sell the Convertible Debt Securities at a fixed
price or prices, which may be changed, or at prices related to prevailing market
prices or at negotiated prices. Air Group also
10
<PAGE>
may, from time to time, authorize underwriters acting as Air Group's agents to
offer and sell the Convertible Debt Securities upon the terms and conditions as
shall be set forth in any Prospectus Supplement. In connection with the sale of
Convertible Debt Securities, underwriters may be deemed to have received
compensation from Air Group in the form of underwriting discounts or commission
and may also receive commissions from purchasers of Convertible Debt Securities
for whom they may act as agent. Underwriters may sell Convertible Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by Air Group to underwriters or agents in
connection with the offering of Convertible Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Convertible Debt Securities
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of the Convertible Debt
Securities may be deemed to be underwriting discounts and commissions under the
Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with Air Group, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by Air Group for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, Air Group and its subsidiaries in the ordinary course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Convertible Debt Securities offered hereby will be passed upon
for Air Group by Perkins Coie, Seattle, Washington.
EXPERTS
The financial statements and schedules of Air Group incorporated by
reference in this Prospectus and in the Registration Statement have been audited
by Arthur Andersen & Co., independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
11
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 11, 1994
PROSPECTUS
- ------------
ALASKA AIRLINES, INC.
DEBT SECURITIES
------------------
Alaska Airlines, Inc. ("Alaska") may from time to time offer its Debt
Securities, consisting of debentures, notes and/or other evidences of
indebtedness representing unsecured obligations of Alaska, in amounts, at prices
and on terms to be determined at the time of offering. The Debt Securities
offered pursuant to this Prospectus may be issued in one or more series and will
be limited to $200,000,000 aggregate principal amount (or such greater amount,
if Debt Securities are issued at an original issue discount, as shall result in
aggregate proceeds of $200,000,000). Certain specific terms of the Debt
Securities in respect of which this Prospectus is being delivered are set forth
in the accompanying Prospectus Supplement (the "Prospectus Supplement"),
including, where applicable, the specific designation, aggregate principal
amount, the denomination, maturity, premium, if any, the rate (which may be
fixed or variable), time and method of calculating payment of interest, if any,
the place or places where principal of, premium, if any, and interest, if any,
on such Debt Securities will be payable, any terms of redemption at the option
of Alaska or the holder, any sinking fund provisions, the terms of any guarantee
by Alaska Air Group, Inc. ("Air Group"), the initial public offering price and
other special terms, together with any other terms in connection with the
offering and sale of the Debt Securities, and the net proceeds to Alaska from
such offering. The Debt Securities may be issued in registered form or bearer
form, or both.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
Alaska may sell the Debt Securities to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution." The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents involved in the sale of the Debt Securities in respect of
which this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1994.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by Air Group, Alaska or the Underwriter. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, the Debt Securities in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of Alaska since the date hereof.
AVAILABLE INFORMATION
Each of Alaska and Air Group is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 75 Park
Place, 14th Floor, New York, New York 10007; and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, such material filed by Air Group may be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by Alaska and Air Group with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements contained herein concerning the provisions of any document do not
purport to be complete and, in each instance, reference is made to the copy of
such document filed as in exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is subject to and qualified in
its entirety by such reference. Reference is made to such Registration Statement
and to the exhibits relating thereto for further information with respect to
Alaska, Air Group and the Debt Securities offered hereby.
So long as Alaska is subject to such periodic reporting requirements, it
will continue to furnish the information required thereby to the Commission and
will furnish copies of such reports and other information to the holders of
Certificates. Alaska's obligation to file periodic reports with the Commission
will be suspended if each class of Alaska's securities is held of record by
fewer than 300 holders at the beginning of any fiscal year of Alaska other than
a fiscal year in which a registration statement with respect to any such
securities becomes effective. Accordingly, in such case, Alaska may cease to
file reports with the Commission in respect of such fiscal year. In the event
Alaska ceases to file periodic reports with the Commission, Alaska is obligated
pursuant to the Indenture (as hereinafter defined) to distribute to the holders
of Debt Securities annual reports containing audited consolidated financial
statements and a report thereon by Alaska's independent public accountants and
quarterly reports for the first three quarters of each fiscal year containing
unaudited condensed financial information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated into this Prospectus by reference and made a part
hereof: Each of Alaska's and Air Group's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993.
All documents filed by Alaska and Air Group pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus, and to be a part hereof from the date of filing of
such documents. Any statement incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Alaska and Air Group will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or oral request of
such person, a copy of any document incorporated by reference in this Prospectus
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference to such documents). Requests for such copies should be
directed to the office of the Corporate Secretary, Alaska Airlines, Inc., P.O.
Box 68947, Seattle, Washington 98168 (telephone (206) 433-3131).
2
<PAGE>
ALASKA AND AIR GROUP
Alaska is a wholly owned subsidiary of Air Group, a holding company. Alaska
accounted for approximately 80% of Air Group's consolidated 1993 operating
revenues and 91% of its total assets at December 31, 1993. Alaska's all jet
fleet provides scheduled air transportation to 37 airports in six states
(Alaska, Washington, Oregon, California, Nevada and Arizona), five cities in
Mexico and three cities in Russia. Air Group also owns Horizon Air Industries,
Inc. ("Horizon"), a regional airline operating in the Pacific Northwest and
western Canada. The principal executive offices of Alaska and Air Group are
located at 19300 Pacific Highway South, Seattle, Washington 98188 (telephone
(206) 433-3200).
In 1993 Alaska carried 6.4 million passengers. In each year since 1973,
Alaska has carried more passengers between Alaska and the U.S. mainland than any
other airline. Passenger traffic in the intra-Alaska markets and between Alaska
and the U.S. mainland accounted for 29% of Alaska's total revenue passenger
miles during 1993, while west coast traffic accounted for 59% and the Mexico
markets 12%. Based on passenger enplanements, Alaska's leading airports are
Seattle, Portland, Anchorage and Los Angeles. Based on revenues, the leading
nonstop routes were Seattle-Anchorage, Seattle-Los Angeles and Seattle-San
Francisco. Alaska's operating fleet at December 31, 1993 consisted of 66 jet
aircraft.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds to Alaska from the sale of the Debt Securities offered hereby will
be added to the working capital of Alaska and will be available for general
corporate purposes, among which may be repayment of outstanding indebtedness and
the financing of capital expenditures by Alaska, including the acquisition by
Alaska of aircraft and related equipment.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Alaska and Air Group for the periods indicated. Earnings represents earnings
before accounting change, income tax expense and fixed charges (excluding
interest capitalized). Fixed charges consist of interest and the portion of
rental expense deemed representative of the interest factor.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Alaska.................................................. (a) (a) 1.14 1.35 2.67
Air Group............................................... (b) (b) 1.10 1.32 2.30
<FN>
- ------------------------
(a) For the years ended December 31, 1993 and 1992, Alaska's earnings were
inadequate to cover fixed charges by $44.5 million and $126.4 million,
respectively.
(b) For the years ended December 31, 1993 and 1992, Air Group's earnings were
inadequate to cover fixed charges by $46.3 million and $131.8 million,
respectively.
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture between Alaska, Air
Group and a Trustee (the "Indenture"). In the event that any Debt Securities are
guaranteed by Air Group (see "Guarantees of Debt Securities"), the applicable
Indenture will be supplemented by a Supplemental Indenture among Alaska, as
issuer, Air Group, as Guarantor, and the Trustee (each, a "Supplemental
Indenture"). A copy of the Indenture is filed as an exhibit to the Registration
Statement. Any such Supplemental Indenture will be filed as an exhibit to a
Current Report on Form 8-K, Quarterly Report
3
<PAGE>
on Form 10-Q or Annual Report on Form 10-K to be filed by Alaska with the
Commission following the issuance of such series of guaranteed Debt Securities.
Information regarding the Trustee will be set forth in the applicable Prospectus
Supplement.
The Debt Securities offered pursuant to this Prospectus will be limited to
$200,000,000 aggregate principal amount (or such greater amount, if Debt
Securities are issued at an original issue discount, as shall result in
aggregate proceeds of $200,000,000). The statements herein relating to the Debt
Securities and the Indenture are summaries and reference is made to the detailed
provisions of the Indenture, including the definitions therein of certain terms
capitalized in this Prospectus. Whenever particular Sections or defined terms of
the Indenture are referred to herein or in a Prospectus Supplement, such
Sections or defined terms are incorporated herein or therein by reference.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder. Debt Securities may be issued from
time to time in one or more series. The Debt Securities will be unsecured and
unsubordinated obligations of Alaska and will rank on a parity with all other
unsecured and unsubordinated indebtedness of Alaska.
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for a description of the specific series of Debt Securities being
offered thereby including: (1) the specific designation of such Debt Securities;
(2) any limit upon the aggregate principal amount of such Debt Securities; (3)
the date or dates on which the principal of such Debt Securities will mature or
the method of determining such date or dates; (4) the rate or rates (which may
be fixed or variable) at which such Debt Securities will bear interest, if any,
or the method of calculating such rate or rates; (5) the date or dates from
which interest, if any, will accrue or the method by which such date or dates
will be determined; (6) the date or dates on which interest, if any, will be
payable and the record date or dates therefor; (7) the place or places where
principal of, premium, if any, and interest, if any, on such Debt Securities
will be payable; (8) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, such Debt Securities may be
redeemed, in whole or in part, at the option of Alaska; (9) the obligation, if
any, of Alaska to redeem or purchase such Debt Securities pursuant to any
sinking fund or analogous provisions, upon the happening of a specified event,
or at the option of a holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which, such Debt
Securities shall be redeemed or purchased, in whole or in part, pursuant to such
obligations; (10), if applicable, the terms of any Guarantee; (11) the
denominations in which such Debt Securities are authorized to be issued; (12) if
other than the principal amount thereof, the portion of the principal amount of
such Debt Securities which will be payable upon declaration of the acceleration
of the maturity thereof or the method by which such portion shall be determined;
(13) the person to whom any interest on any such Debt Security shall be payable
if other than the person in whose name such Debt Security is registered on the
applicable record date; (14) any addition to, or modification or deletion of,
any Event of Default (as hereinafter defined) or any covenant of Alaska
specified in the Indenture with respect to such Debt Securities; (15) the
application, if any, of such means of defeasance or covenant defeasance as maybe
specified for such Debt Securities; (16) if applicable, provisions related to
the issuance of Debt Securities in book entry form; and (17) any other special
terms pertaining to such Debt Securities. Unless otherwise specified in the
applicable Prospectus Supplement, the Debt Securities will not be listed on any
securities exchange. (Section 3.1.)
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully registered form without coupons. Where Debt
Securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special Federal
income tax considerations, applicable to any such Debt Securities and to payment
on and transfer and exchange of such Debt Securities will be described in the
applicable Prospectus Supplement.
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Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain Federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
The general provisions of the Indenture do not afford holders of the Debt
Securities protection in the event of a highly leveraged or other transaction
involving Air Group or Alaska that may adversely affect holders of Debt
Securities. Any covenants or other provisions included in a supplement or
amendment to any Indenture for the benefit of the holders of any particular
series of Debt Securities will be described in the applicable Prospectus
Supplement.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement, payments
in respect of the Debt Securities will be made at the office or agency of Alaska
maintained for that purpose as Alaska may designate from time to time except
that, at the option of Alaska, interest payments, if any, on Debt Securities in
registered form may be made by (i) checks mailed by the Trustee to the holders
of Debt Securities entitled thereto at their registered addresses or (ii) wire
transfer to an account maintained by the Person entitled thereto as specified in
the Register. (Sections 3.7(a) and 9.2.) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on Debt
Securities in registered form will be made to the Person in whose name such Debt
Security is registered at the close of business on the regular record date for
such interest. (Section 3.7(a).)
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities in registered form will be transferable or exchangeable at the agency
of Alaska maintained for such purpose as designated by Alaska from time to time.
(Sections 3.5 and 9.2.) Debt Securities may be transferred or exchanged without
service charge, other than any tax or other governmental charge imposed in
connection therewith. (Section 3.5.)
GUARANTEES OF DEBT SECURITIES
Air Group shall unconditionally guarantee to the holders from time to time
of any series of Debt Securities that is not Investment Grade at the time of
issuance the full and prompt payment of principal, premium, if any, and interest
when and as the same shall become due and payable, whether at maturity, upon
redemption or otherwise. The terms of any such guarantees (each, a "Guarantee")
will be set forth in the applicable Supplemental Indenture. Any such Guarantee
will be an unsecured obligation of Air Group. A series of Debt Securities shall
be "Investment Grade" if so designated by at least one nationally recognized
statistical rating organization (as that term is used in Rule
15c3-1(c)(2)(vi)(F) under the 1934 Act).
If a Guarantee is applicable to Debt Securities offered hereby, reference is
made to the related Supplemental Indenture and the accompanying Prospectus
Supplement for a description of the specific terms of such Guarantee, including
events of default relating thereto and, where applicable, subordination
provisions of such Guarantee and covenants of Air Group.
The consolidated financial statements of Air Group are incorporated by
reference herein. See "Incorporation of Certain Documents by Reference." As
indicated by comparison of such consolidated financial statements with those of
Alaska, the total assets, revenues and shareholders' equity of Alaska comprise a
substantial portion of the consolidated total assets, revenues and shareholders'
equity of Air Group.
CONSOLIDATION, MERGER OR SALE BY ALASKA
The Indenture provides that Alaska may merge or consolidate with or into any
other corporation or sell, convey, transfer or otherwise dispose of all or
substantially all of its assets to any person, firm or corporation, if (i) (a)
in the case of a merger or consolidation, Alaska is the surviving corporation or
(b) in the case of a merger or consolidation where Alaska is not the surviving
corporation and in the case of such a sale, conveyance or other disposition, the
successor or acquiring corporation is a corporation organized and existing under
the laws of the United States of America or a State thereof
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and such corporation expressly assumes by supplemental indenture all the
obligations of Alaska under the Debt Securities and any coupons pertaining
thereto and under the Indenture, and (ii) immediately after giving effect to
such merger or consolidation, or such sale, conveyance, transfer or other
disposition, no Default (as hereinafter defined) or Event of Default shall have
occurred and be continuing. In the event a successor corporation assumes the
obligations of Alaska, such successor corporation shall succeed to and be
substituted for Alaska under the Indenture and under the Debt Securities and any
coupons appertaining thereto and all obligations of Alaska shall terminate.
(Section 7.1.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The Indenture provides that, if an Event of Default specified therein occurs
with respect to the Debt Securities of any series issued thereunder and is
continuing, the Trustee for such series or the holders of 25% in aggregate
principal amount of all of the outstanding Debt Securities of that series, by
written notice to Alaska (and to the Trustee for such series, if notice is given
by such holders of Debt Securities), may declare the principal (or, if the Debt
Securities of that series are original issue discount Debt Securities or indexed
Debt Securities, such portion of the principal amount specified in the
Prospectus Supplement) of all the Debt Securities of that series to be due and
payable.
"Events of Default" with respect to Debt Securities of any series issued
thereunder are defined in the Indenture as being: default for 30 days in payment
of any interest on any Debt Security of that series or any coupon appertaining
thereto or any additional amount payable with respect to Debt Securities of such
series as specified in the applicable Prospectus Supplement when due; default
for ten days in payment of principal, premium, if any, or on redemption or
otherwise, or in the making of a mandatory sinking fund payment of any Debt
Securities of that series when due; default for 60 days after notice to Alaska
by the Trustee for such series, or by the holders of 25% in aggregate principal
amount of the Debt Securities of such series then outstanding, in the
performance of any other agreement in the Debt Securities of that series, in the
Indenture or in any supplemental indenture or board resolution referred to
therein under which the Debt Securities of that series may have been issued;
default resulting in acceleration of other indebtedness of Alaska for borrowed
money where the aggregate principal amount so accelerated exceeds $25 million
and such acceleration is not rescinded or annulled within ten days after the
written notice thereof to Alaska by the Trustee or to Alaska and the Trustee by
the holders of 25% in aggregate principal amount of the Debt Securities of such
series then outstanding, PROVIDED that such Event of Default will be cured or
waived if the default that resulted in the acceleration of such other
indebtedness is cured or waived; and certain events of bankruptcy, insolvency or
reorganization of Alaska. (Section 5.1 of the Indenture.) Events of Default with
respect to a specified series of Debt Securities may be added to the Indenture
and, if so added, will be described in the applicable Prospectus Supplement.
(Sections 3.1 and 5.1(7) of the Indenture.)
The Indenture provides that the Trustee for any series of Debt Securities
shall, within ninety days after the occurrence of a Default with respect to Debt
Securities of that series, give to the holder of the Debt Securities of that
series notice of all uncured Defaults known to it, PROVIDED that, except in the
case of default in payment on the Debt Securities of that series, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers (as defined therein) in good faith determines that withholding such
notice is in the interest of the holders of the Debt Securities of that series.
(Section 6.5.) "Default" means any event which is, or, after notice or passage
of time or both, would be, an Event of Default. (Section 1.1.)
The Indenture provides that the holders of a majority in aggregate principal
amount of the Debt Securities of each series affected (with each such series
voting as a class) may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee for such series, or
exercising any trust or power conferred on such Trustee. (Section 5.8.)
The Indenture includes a covenant that Alaska will file annually with the
Trustee a certificate as to Alaska's compliance with all conditions and
covenants of the Indenture. (Section 9.7.)
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The holders of a majority in aggregate principal amount of any series of
Debt Securities by notice to the Trustee for such series may waive, on behalf of
the holders of all Debt Securities of such series, any past Default or Event of
Default with respect to that series and its consequences except a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest, if any, on any Debt Security and certain other defaults. (Section
5.7.)
MODIFICATION OF THE INDENTURES
The Indenture contains provisions permitting Alaska and the Trustee to enter
into one or more supplemental indentures without the consent of the holders of
any of the Debt Securities in order (i) to evidence the succession of another
corporation to Alaska and the assumption of the covenants of Alaska by a
successor to Alaska; (ii) to add to the covenants of Alaska or surrender any
right or power of Alaska; (iii) to add additional Events of Default, with
respect to any series; (iv) to add to, change or eliminate any provision
affecting Debt Securities not yet issued; (v) to secure the Debt Securities;
(vi) to establish the form or terms of Debt Securities; (vii) to evidence and
provide for successor Trustees; (viii) if allowed without penalty under
applicable laws and regulations, to permit payment in respect of Debt Securities
in bearer form in the United States; (ix) to correct or supplement any
inconsistent provisions or to make any other provisions with respect to matters
or questions arising under the Indenture, provided that such action does not
adversely affect the interests of any holder of Debt Securities of any series
issued under the Indenture; or (x) to cure any ambiguity or correct any mistake.
(Section 8.1.)
The Indenture also contains provisions permitting Alaska and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the outstanding Debt Securities of each series affected by such supplemental
Indenture, to execute supplemental indentures adding any provisions to or
changing or eliminating any of the provisions of the indentures or any
supplemental indenture or modifying the rights of the holders of Debt Securities
of such series, except that no such supplemental indenture may, without the
consent of the holder of each Debt Security so affected, (i) change the time for
payment of principal or interest on any Debt Security; (ii) reduce the principal
of, or any installment of principal of or interest on any Debt Security; (iii)
reduce the amount of premium, if any, payable upon the redemption of any Debt
Security; (iv) reduce the amount of principal payable upon acceleration of the
maturity of an Original Issue Discount Debt Security; (v) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security; (vi) reduce the percentage in principal amount of the outstanding Debt
Securities of any series the consent of whose holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults; (vii)
change the obligation of Alaska to maintain an office or agency in the places
and for the purposes specified in the Indenture; or (viii) modify the provisions
relating to waiver of certain defaults or any of the foregoing provisions.
(Section 8.2 of the Indenture.)
DEFEASANCE AND COVENANT DEFEASANCE
If indicated in the Prospectus Supplement, Alaska may elect either (i) to
defease and be discharged from any and all obligations with respect to the Debt
Securities of or within any series (except as described below) ("defeasance") or
(ii) to be released from its obligations with respect to certain covenants
applicable to the Debt Securities of or within any series ("covenant
defeasance"), upon the deposit with the Trustee for such series (or other
qualifying trustee), in trust for such purpose, of money and/or Government
Obligations which through the payment of principal and interest in accordance
with their terms will provide money in the amount sufficient to pay the
principal of and any premium or interest on such Debt Securities to Maturity or
redemption, as the case may be, and any mandatory sinking fund or analogous
payments thereon. Upon the occurrence of a defeasance, Alaska will be deemed to
have paid and discharged the entire indebtedness represented by such Debt
Securities and any coupons appertaining thereto and to have satisfied all of its
other obligations under such Debt Securities and any coupons appertaining
thereto (except for (i) the rights of holders of such Debt Securities to
receive, solely from the trust funds deposited to defease such Debt Securities,
payments in respect of the principal of, premium, if any, and interest, if any,
on such Debt Securities or
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<PAGE>
any coupons appertaining thereto when such payments are due and (ii) certain
other obligations as provided in the Indenture). Upon the occurrence of a
covenant defeasance, Alaska will be released only from its obligations to comply
with certain covenants contained in the Indenture relating to such Debt
Securities, will continue to be obligated in all other respects under such Debt
Securities and will continue to be contingently liable with respect to the
payment of principal, interest, if any, and premium, if any, with respect to
such Debt Securities.
Unless otherwise specified in the applicable Prospectus Supplement and
except as described below, the conditions to both defeasance and covenant
defeasance are as follows: (i) such defeasance or covenant defeasance must not
result in a breach or violation of, or constitute a Default or Event of Default
under, the Indenture, or result in a breach or violation of, or constitute a
default under, any other material agreement or instrument of Alaska; (ii)
certain bankruptcy related Defaults or Events of Default with respect to Alaska
must not have occurred and be continuing during the period commencing on the
date of the deposit of the trust funds to defease such Debt Securities and
ending on the 91st day after such date; (iii) Alaska must deliver to the Trustee
an Opinion of Counsel to the effect that the holders of such Debt Securities
will not recognize income, gain or loss for Federal income tax purposes a result
of such defeasance or covenant defeasance and will be subject to Federal income
tax on the same amounts and in the same manner and at all the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred; (iv) Alaska must deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel with respect to compliance with the conditions precedent
to such defeasance or covenant defeasance; and (v) any additional conditions to
such defeasance or covenant defeasance which may be imposed on Alaska pursuant
to the Indenture. (Article 4.) The Indenture requires that a nationally
recognized firm of independent public accountants deliver to the Trustee a
written certification as to the sufficiency of the trust funds deposited for the
defeasance or covenant defeasance of such Debt Securities. The Indentures do not
provide the holders of such Debt Securities with recourse against such firm. If
indicated in the Prospectus Supplement, in addition to obligations of the United
States or an agency or instrumentality thereof, Government Obligations may
include obligations of the government or an agency or instrumentality of the
government issuing the currency in which Debt Securities of such series are
payable. (Sections 1.1 and 3.1.) In the event that Government Obligations
deposited with the Trustee for the defeasance of such Debt Securities decrease
in value or default subsequent to their being deposited, Alaska will have no
further obligation, and the holders of such Debt Securities will have no
additional recourse against Alaska, as a result of such decrease in value or
default. As described above, in the event of a covenant defeasance, Alaska
remains contingently liable with respect to the payment of principal, interest,
if any, and premium, if any, with respect to the Debt Securities.
Alaska may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If Alaska exercises its defeasance option, payment of such Debt Securities may
not be accelerated because of a Default or an Event of Default. If Alaska
exercises its covenant defeasance option, payment of such Debt Securities may
not be accelerated by reason of a Default or an Event of Default with respect to
the covenants to which such covenant defeasance is applicable. However, if such
acceleration to occur, the realizable value at the acceleration date of the
money and Government Obligations in the defeasance trust could be less than the
principal and interest then due on such Debt Securities, in that the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.
PLAN OF DISTRIBUTION
Alaska may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors or other
persons directly or through agents. Any such underwriter or agent involved in
the offer and sale of the Debt Securities will be named in an applicable
Prospectus Supplement.
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Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Alaska also may, from time to time, authorize underwriters
acting as Alaska's agents to offer and sell the Debt Securities upon the terms
and conditions as shall be set forth in any Prospectus Supplement. In connection
with the sale of Debt Securities, underwriters may be deemed to have received
compensation from Alaska in the form of underwriting discounts or commissions
and may also receive commissions from purchasers of Debt Securities for whom
they may act as agent. Underwriters may sell Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions (which may
be changed from time to time) from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by Alaska to underwriters or agents in
connection with the offering of Debt Securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be set
forth in an applicable Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Debt Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Debt Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements with Alaska, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by Alaska
for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, Alaska and its subsidiaries in the ordinary course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Debt Securities offered hereby will be passed upon for Alaska by
Perkins Coie, Seattle, Washington.
EXPERTS
The financial statements and schedules of Air Group and of Alaska
incorporated by reference in this Prospectus and in the Registration Statement
have been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their reports with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 11, 1994
PROSPECTUS
- ------------
ALASKA AIRLINES, INC.
EQUIPMENT TRUST CERTIFICATES
------------------
Up to $200,000,000 aggregate principal amount of Equipment Trust
Certificates (or such greater amount if Certificates are issued at an original
issue discount, as shall result in aggregate proceeds of $200,000,000) may be
offered for sale from time to time pursuant to this Prospectus and related
Prospectus Supplements (as hereinafter defined). Certificates may be issued in
one or more series in amounts, at prices and on terms to be determined at the
time of the offering. Certificates will be issued (a) on a nonrecourse basis by
one or more Owner Trustees (as hereinafter defined) pursuant to separate
leveraged lease transactions (the "Leased Aircraft Certificates") to finance or
refinance a portion of the equipment cost of aircraft, including engines (each,
a "Leased Aircraft" and collectively, the "Leased Aircraft"), which have been or
will be leased to Alaska Airlines, Inc. ("Alaska") or (b) with recourse to
Alaska (the "Owned Aircraft Certificates" and, together with any Leased Aircraft
Certificates, the "Certificates") to finance all or a portion of the equipment
cost of aircraft, including engines (each, an "Owned Aircraft" and collectively,
the "Owned Aircraft" and, together with the Leased Aircraft, the "Aircraft"),
which have been or will be purchased and owned by Alaska. Air Group will
unconditionally guarantee to the holders from time to time of any series of
Certificates that is not Investment Grade at the time of issuance (i) with
respect to Owned Aircraft Certificates, the full and prompt payment of
principal, premium, if any and interest thereon when and as the same shall
become due and payable, whether at maturity, upon redemption or otherwise and
(ii) with respect to Leased Aircraft Certificates, the full and prompt payment
of all amounts payable by Alaska under the related Lease when and as the same
shall become due and payable. See "Description of The Certificates -- Guarantees
of Certificates."
Certain specific terms of the particular Certificates in respect of which
this Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, the
specific designation, form, aggregate principal amount, initial public offering
price, maturity, premium, if any, the rate (which may be fixed or variable),
time and method of calculating payment of interest, if any, mandatory or
optional redemption by the applicable Owner Trustee or Alaska, the Aircraft
relating to such Certificates, the terms of the Guarantees by Air Group, if any,
the leveraged lease transactions or financing arrangements, as the case may be,
related thereto and other special terms relating to such Certificates and the
net proceeds from the offering of such Certificates. The Certificates shall be
issued in registered form only and may, if so specified in the applicable
Prospectus Supplement, be issued in accordance with a book-entry system.
Certificates may be issued in respect of an Aircraft in one or more series,
each series having its own interest rate and final maturity date. The
Certificates issued with respect to each Aircraft will be secured by a security
interest in such Aircraft and, in the case of the Leased Aircraft, by a security
interest in the lease relating thereto, including the right to receive rentals
payable in respect of such Leased Aircraft by Alaska. Although the Leased
Aircraft Certificates will not be direct obligations of, or guaranteed by,
Alaska, the amounts unconditionally payable by Alaska for lease of Leased
Aircraft will be sufficient to pay in full when due all payments required to be
made on the corresponding Leased Aircraft Certificates.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Certificates may be sold to or through underwriters, through dealers or
agents or directly to purchasers. See "Plan of Distribution." The accompanying
Prospectus Supplement sets forth the names of any underwriters, dealers or
agents involved in the sale of the Certificates in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them. See "Plan of Distribution" for information concerning
secondary trading of the Certificates.
This Prospectus may not be used to consummate sales of Certificates unless
accompanied by a Prospectus Supplement.
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THE DATE OF THIS PROSPECTUS IS , 1994.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by Alaska or the Underwriter. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, the Certificates in any jurisdiction
where, or to any person to whom, it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of Alaska since the date hereof.
AVAILABLE INFORMATION
Alaska is subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549; 75 Park Place, 14th Floor, New York,
New York 10007; and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by Alaska and Alaska Air Group, Inc. ("Air Group") with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information included in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to Alaska and the Certificates offered hereby.
So long as Alaska is subject to such periodic reporting requirements, it
will continue to furnish the information required thereby to the Commission and
will furnish copies of such reports and other information to the holders of
Certificates. Alaska's obligation to file periodic reports with the Commission
will be suspended if each class of Alaska's securities is held of record by
fewer than 300 holders at the beginning of any fiscal year of Alaska other than
a fiscal year in which a registration statement with respect to any such
securities becomes effective. Accordingly, in such case, Alaska may cease to
file reports with the Commission in respect of such fiscal year. In the event
Alaska ceases to file periodic reports with the Commission, Alaska is obligated
pursuant to the Indentures (as hereinafter defined) to distribute to the holders
of Certificates annual reports containing audited consolidated financial
statements and a report thereon by Alaska's independent public accountants and
quarterly reports for the first three quarters of each fiscal year containing
unaudited condensed financial information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated into this Prospectus by reference and made a part
hereof: Alaska's Annual Report on Form 10-K for the fiscal year ended December
31, 1993.
All documents filed by Alaska pursuant to Section 13(a), 13(c), 14 or 15(d)
of the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus, and to be a part hereof from the date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Alaska will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any document incorporated by reference in this Prospectus (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference to such documents). Requests for such copies should be directed to the
office of the Corporate Secretary, Alaska Airlines, Inc., P.O. Box 68947,
Seattle, Washington 98168 (telephone (206) 433-3131).
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THE COMPANY
Alaska is a wholly owned subsidiary of Air Group, a holding company. Alaska
accounted for approximately 80% of Air Group's consolidated 1993 operating
revenues and 91% of its total assets at December 31, 1993. Alaska's all jet
fleet provides scheduled air transportation to 37 airports in six states
(Alaska, Washington, Oregon, California, Nevada and Arizona), five cities in
Mexico and three cities in Russia. The principal executive offices of Alaska and
Air Group are located at 19300 Pacific Highway South, Seattle, Washington 98188
(telephone (206) 433-3200).
In 1993 Alaska carried 6.4 million passengers. In each year since 1973,
Alaska has carried more passengers between Alaska and the U.S. mainland than any
other airline. Passenger traffic in the intra-Alaska markets and between Alaska
and the U.S. mainland accounted for 29% of Alaska's total revenue passenger
miles during 1993, while west coast traffic accounted for 59% and the Mexico
markets 12%. Based on passenger enplanements, Alaska's leading airports are
Seattle, Portland, Anchorage and Los Angeles. Based on revenues, the leading
nonstop routes were Seattle-Anchorage, Seattle-Los Angeles and Seattle-San
Francisco. Alaska's operating fleet at December 31, 1993 consisted of 66 jet
aircraft.
USE OF PROCEEDS
The proceeds from the sale of the Certificates offered pursuant to any
Prospectus Supplement will be used (a) with respect to any Leased Aircraft
Certificates, by the respective Owner Trustee or Owner Trustees to finance or
refinance the debt portion of and, in certain cases, to refinance some of the
equity portion of the equipment cost of the related Leased Aircraft as described
in the applicable Prospectus Supplement, or (b) with respect to any Owned
Aircraft Certificates, by Alaska to finance all or a portion of the aggregate
principal amount of debt to be issued, or the purchase of all or a portion of
the aggregate principal amount of the debt previously issued, by Alaska in
respect of the equipment cost of the related Owned Aircraft as described in the
applicable Prospectus Supplement.
With respect to each Leased Aircraft, the related Owner Participant will
have provided or will provide from sources other than the Leased Aircraft
Certificates a portion (as specified in the applicable Prospectus Supplement) of
the equipment cost of the related Leased Aircraft. No Owner Participant,
however, will be personally liable for any amount payable under the related
Leased Aircraft Indenture or the Leased Aircraft Certificates issued thereunder.
Simultaneously with the acquisition of each Leased Aircraft, the related Owner
Trustee leased or will lease such Aircraft to Alaska pursuant to a separate
lease agreement (each such lease agreement being herein referred to as a
"Lease").
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Alaska for the periods indicated. Earnings represents earnings before accounting
change, income tax expense and fixed charges (excluding interest capitalized).
Fixed charges consist of interest and the portion of rental expense deemed
representative of the interest factor.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio................................................... (a) (a) 1.14 1.35 2.67
<FN>
- ------------------------
(a) For the years ended December 31, 1993 and 1992, Alaska's earnings were
inadequate to cover fixed charges by $44.5 million, and $126.4 million,
respectively.
</TABLE>
3
<PAGE>
DESCRIPTION OF THE CERTIFICATES
The Certificates offered pursuant to this Prospectus will be limited to
$200,000,000 aggregate principal amount (or such greater amount if Certificates
are issued at an original issue discount, as shall result in aggregate proceeds
of $200,000,000).
The Leased Aircraft Certificates will be issued under a separate Supplement
(each, a "Leased Aircraft Indenture Supplement") among Alaska, an Indenture
Trustee and an institution specified in the related Prospectus Supplement
acting, not in its individual capacity, but solely as owner trustee (an "Owner
Trustee") of a separate trust for the benefit of one or more institutional
investors (each, an "Owner Participant") to the Trust Indenture and Security
Agreement between the Indenture Trustee and Alaska with respect to Leased
Aircraft (the "Leased Aircraft Indenture"). Information regarding the Indenture
Trustee and Owner Trustee will be set forth in the applicable Prospectus
Supplement.
The Owned Aircraft Certificates will be issued under a separate Supplement
(each, an "Owned Aircraft Indenture Supplement," any Owned Aircraft Indenture
Supplement or Leased Aircraft Indenture Supplement being an "Indenture
Supplement") to the Trust Indenture and Security Agreement between the Indenture
Trustee, as trustee thereunder, and Alaska with respect to Owned Aircraft (the
"Owned Aircraft Indenture," any Owned Aircraft Indenture or Leased Aircraft
Indenture being an "Indenture"). A copy of each Indenture is filed as an exhibit
to the Registration Statement.
The statements made under this caption are summaries and do not purport to
be complete. The summaries relate to each of the Indentures and each of the
Indenture Supplements and the Certificates of each series, except to the extent,
if any, described in the applicable Prospectus Supplement. The summaries include
descriptions of material terms and are qualified in their entirety by reference
to all of the provisions of the Indentures. The Indenture Supplement relating to
each series of Certificates, and, with respect to Leased Aircraft Certificates,
the related Lease, Trust Agreement and Participation Agreement will be filed as
exhibits to a Current Report on Form 8-K, Quarterly Report on Form 10-Q or
Annual Report on Form 10-K to be filed by Alaska with the Commission following
the issuance of such series of Certificates. Where no distinction is made
between the Leased Aircraft Certificates and the Owned Aircraft Certificates or
between their respective Indentures, such summaries refer to any Certificates
and either Indenture.
GENERAL
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific series of Certificates being
offered thereby, including: (1) the Aircraft in which a security interest is
being granted to secure payment of the Certificates of such series; (2) the
specific designation of such Certificates, including whether such Certificates
are serial or installment Certificates; (3) if the Certificates are serial
Certificates, the dates on which the principal of the Certificates of the series
shall be payable; (4) if the Certificates are installment certificates, the
dates on which each installment payment of principal of the Certificates shall
be payable and the percentage of principal of the Certificates payable on each
such date; (5) the rate or rates at which the Certificates shall bear interest
or the method of calculating such rate or rates, the date or dates from which
interest will accrue or the method by which such dates shall be determined and
the date or dates on which interest will be payable and the record date or dates
therefor; (6) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Certificates may or must be
redeemed, in whole or in part, by Alaska; (7) the events of default, the
remedies exercisable upon the occurrence of such events of default and any
limitations on the exercise of such remedies with respect to such Certificates;
(8) the application, if any, of such means of defeasance as may be specified for
such Certificates; (9) if applicable, provisions related to the issuance of
Certificates in book entry form; (10) the terms of the Guarantees, if any; and
(11) any other special terms pertaining to such Certificates.
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<PAGE>
Additionally, with respect to any Prospectus Supplement that relates to the
offering of Leased Aircraft Certificates, such Prospectus Supplement will
include the following: (1) the names of the related Owner Trustees; (2) the
Leases in which an assignment is being granted to secure payment of the
Certificates of such series; (3) the period or periods within which, the price
or prices at which and the terms and conditions upon which such Certificates may
or must be redeemed, in whole or in part, by the Owner Trustee; (4) the extent,
if any, to which the provisions of the operative documents applicable to the
Certificates of the series may be amended by the parties thereto without the
consent of the holders of, or only upon the consent of the holders of a
specified percentage of the aggregate principal amount of, the Certificates of
such series; and (5) any other special terms pertaining to such Certificates.
With respect to each Leased Aircraft, the related Owner Trustee has acquired
or will acquire such Aircraft from Alaska, or the manufacturer of such Aircraft,
as the case may be, has granted or will grant a security interest in such
Aircraft to the Indenture Trustee as security for the payment of the
Certificates of the series related thereto, and has leased or will lease such
Aircraft to Alaska under the related Lease which was or will be assigned to the
Indenture Trustee. Pursuant to each Lease, Alaska will be obligated to make or
cause to be made rental and other payments to the related Indenture Trustee on
behalf of the related Owner Trustee in amounts that will be sufficient to make
payments of the principal, interest and premium, if any, required to be made in
respect of the series of Certificates issued with respect to such Aircraft when
and as due and payable.
The rental obligations of Alaska under each Lease and the obligations of
Alaska under the Owned Aircraft Indenture and the Owned Aircraft Certificates
and Air Group's Guarantees of such obligations, if any, will be general
obligations of Alaska. Except in certain circumstances involving Alaska's
purchase of a Leased Aircraft and the assumption of the Leased Aircraft
Certificates related thereto, the Leased Aircraft Certificates are not
obligations of, or guaranteed by, Alaska or Air Group.
Payments in respect of Certificates will be made at the principal corporate
trust office of the Indenture Trustee or at such other office of the Indenture
Trustee or another institution maintained for such purpose (the "Paying Agent")
as the Indenture Trustee shall provide for pursuant to the Indenture or the
applicable Indenture Supplement; payment of interest and installments of
principal, if any, on each installment payment date other than at maturity, may,
however, be made at the option of the Indenture Trustee or the Paying Agent by
check mailed to the address of the person entitled thereto, as such address
appears in the Register. (Sections 2.04 and 2.05 of the Indentures.)
The Certificates will be issued in fully registered form only in
denominations as set forth in the applicable Prospectus Supplement. Certificates
may be surrendered for registration of transfer or exchange for Certificates of
the same series and maturity at the principal corporate trust office of the
Indenture Trustee with respect to such series or the office of the Registrar. No
service charge will be made for any registration of any transfer or exchange of
Certificates, but payment may be required of any tax or other governmental
charges that may be imposed in connection therewith. (Sections 2.04 and 2.09 of
the Indentures.)
SECURITY
The Leased Aircraft Certificates will be secured by (i) an assignment by the
related Owner Trustee to the Indenture Trustee of such Owner Trustee's rights
(except for certain rights, including those described below) under the Lease
with respect to such Aircraft, including the right to receive payments of rent
thereunder, (ii) a mortgage granted to the Indenture Trustee on such Aircraft,
subject to the rights of Alaska under such Lease, (iii) an assignment to the
Indenture Trustee of certain of such Owner Trustee's rights with respect to such
Aircraft under the purchase agreement between Alaska and the related
manufacturer, and (iv) if applicable, Air Group's Guarantee of Alaska's
obligations under the Lease. Under the terms of each Lease, Alaska's obligations
in respect of each Leased Aircraft will be those of a lessee under a "net
lease." Accordingly, Alaska will be obligated,
5
<PAGE>
among other things and at its expense, to cause each Leased Aircraft to be duly
registered, to pay all costs of operating such Aircraft and to maintain,
service, repair and overhaul (or cause to be maintained, serviced, repaired and
overhauled) such Aircraft.
The Owned Aircraft Certificates will be secured by a mortgage granted to the
Indenture Trustee of all of Alaska's right, title and interest in and to such
Owned Aircraft and an assignment to the Indenture Trustee of certain of Alaska's
rights with respect to such Aircraft under the purchase agreement between Alaska
and the related manufacturer. Under the terms of the Owned Aircraft Indenture,
Alaska will be obligated, among other things and at its expense, to cause each
Owned Aircraft to be duly registered, to pay all costs of operating such
Aircraft and to maintain, service, repair and overhaul (or cause to be
maintained, serviced, repaired and overhauled) such Aircraft.
Alaska will be required, except under certain circumstances, to keep each
Aircraft registered under the Federal Aviation Act of 1958, as amended (the
"Aviation Act"), and to record the Indenture and the Lease, if any, among other
documents, with respect to each Aircraft under the Aviation Act. Such
recordation of the Indenture, the Lease, if any, and other documents with
respect to each Aircraft will give the related Indenture Trustee a first
priority perfected security interest in the related Aircraft wherever it is
located in the United States or any of its territories and possessions; the
Convention on the International Recognition of Rights in Aircraft (the
"Convention") provides that such security will also be recognized, with certain
limited exceptions, in those jurisdictions that have ratified or adhere to the
Convention. Although Alaska has no current intention to do so, Alaska will have
the right, subject to certain conditions, at its own expense to register each
Aircraft in countries other than the United States. Unless otherwise specified
in the applicable Prospectus Supplement, prior to any such change in the
jurisdiction of registry, the related Indenture Trustee shall have received an
opinion of Alaska's counsel that, among other things, confirms the perfected
status of the lien of the related Indenture and, in the case of Leased Aircraft,
confirms the validity and enforceability of the related Lease in such
jurisdiction, in each case subject, in certain cases, to certain filings,
recordations or other actions. Each Aircraft may also be operated by Alaska or
under lease, sublease or interchange arrangements in countries that are not
parties to the Convention. The extent to which the related Indenture Trustee's
security interest would be recognized in an Aircraft located in a country that
is not a party to the Convention, and the extent to which such security interest
would be recognized in a jurisdiction adhering to the Convention if the Aircraft
is registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of an event of default under an Indenture, the ability of
the related Indenture Trustee to realize upon its security interest in an
Aircraft could be adversely affected as a legal or practical matter if such
Aircraft were registered or located outside the United States.
The Certificates are not cross-collateralized and consequently the
Certificates issued in respect of any one Aircraft will not be secured by any
other Aircraft or, in the case of Leased Aircraft Certificates, the Lease
related thereto. With respect to the Leased Aircraft, the assignment by the
related Owner Trustee to the Indenture Trustee of its rights under the related
Lease will exclude, among other things, rights of such Owner Trustee and the
related Owner Participant relating to indemnification by Alaska for certain
matters, insurance proceeds payable to such Owner Trustee in its individual
capacity and to such Owner Participant under liability insurance maintained by
Alaska pursuant to such Lease or by such Owner Trustee or such Owner
Participant, insurance proceeds payable to such Owner Trustee in its individual
capacity or to such Owner Participant under certain casualty insurance
maintained by such Owner Trustee or such Owner Participant pursuant to such
Lease, and any rights of such Owner Participant or such Owner Trustee to enforce
payment of the foregoing amounts and their respective rights to the proceeds of
the foregoing.
Unless otherwise specified in the applicable Prospectus Supplement, Alaska
will, at its expense, maintain or cause to be maintained all-risk aircraft hull
insurance covering each Aircraft, fire and extended coverage and, to the extent
available at reasonable cost, all-risk property damage insurance covering
engines and parts while temporarily removed from an Aircraft and not replaced by
similar components, at all times in an amount not less than, with respect to any
Leased Aircraft, the
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<PAGE>
applicable stipulated loss value (which will be an amount at least equal to the
aggregate unpaid principal of, together with all unpaid interest accrued on, the
outstanding Leased Aircraft Certificates related to such Aircraft) or, with
respect to any Owned Aircraft, the aggregate unpaid principal of, together with
all unpaid interest accrued on, the applicable Owned Aircraft Certificates.
Unless otherwise specified in the applicable Prospectus Supplement, during any
period when an Aircraft is on the ground and not in operation Alaska may carry
or cause to be carried, in lieu of the insurance required by the previous
sentence, insurance otherwise conforming with the provisions of said sentence
except that the scope of the risks covered and the type of insurance shall be
the same as are from time to time applicable to aircraft owned or leased by
Alaska of the same type as such Aircraft similarly on the ground and not in
operation, in an amount at least equal to, with respect to any Leased Aircraft,
the applicable stipulated loss value or, with respect to any Owned Aircraft, the
aggregate unpaid principal of, together with the accrued interest on, the
applicable Owned Aircraft Certificates. All policies covering loss of or damage
to an Aircraft shall be made payable to the applicable Indenture Trustee for any
loss in excess of that certain amount specified in the applicable Prospectus
Supplement. Alaska may self-insure a portion of these risks, but in no case will
the self-insurance with respect to all of the aircraft in Alaska's fleet
(including the Aircraft) exceed the lesser of 50% of the largest replacement
value of any single aircraft in Alaska's fleet or 1 1/2% of the average
aggregate insurable value (during the preceding calendar year) of all aircraft
on which Alaska carries insurance. In addition, unless otherwise specified in
the applicable Prospectus Supplement, Alaska will, at its expense, maintain or
cause to be maintained comprehensive airline liability (including, without
limitation, passenger, contractual, bodily injury and property damage liability)
insurance (exclusive of manufacturer's product liability insurance) and cargo
liability insurance with respect to each Aircraft (i) in amounts that are not
less than the greater of the comprehensive airline liability insurance as is
from time to time applicable to aircraft owned and operated by Alaska of the
same type as such Aircraft, and an amount specified in the applicable Prospectus
Supplement, and (ii) of the types and covering the same risks as are from time
to time applicable to aircraft owned or operated by Alaska of the same type as
such Aircraft and which is maintained in effect with insurers of recognized
responsibility, provided that Alaska need not maintain cargo liability
insurance, or may maintain such insurance in an amount less than that specified
above for the respective Aircraft as long as the amount of cargo liability
insurance, if any, maintained with respect to such Aircraft is the same as the
cargo liability insurance, if any, maintained for other aircraft of the same
model as such Aircraft owned or operated by Alaska. Unless otherwise specified
in the applicable Prospectus Supplement, during any period when an Aircraft is
on the ground and not in operation Alaska may carry or cause to be carried, in
lieu of the insurance required by the previous sentence, insurance otherwise
conforming with the provisions of said sentence except that the amounts of
coverage shall not be required to exceed the amounts of comprehensive airline
liability insurance, and the scope of risks covered and type of insurance shall
be the same, as are from time to time in effect with respect to aircraft owned
or leased by Alaska of the same type as such Aircraft similarly on the ground
and not in operation. Alaska may also self-insure a portion of these risks
subject to the same limitations described above for insurance for risks of loss
of or damage to the Aircraft. The applicable Indenture Trustee, any applicable
Owner Participant and any applicable Owner Trustee, in its individual capacity
and as owner of the Aircraft, and Alaska will each be named as insured parties
under all liability insurance policies required with respect to the related
Aircraft. In addition, the insurance policies maintained under the Lease (with
respect to any Leased Aircraft) or the Indenture (with respect to any Owned
Aircraft), as the case may be, will provide that, in respect of the respective
interests of the applicable Indenture Trustee, any applicable Owner Participant,
and any Owner Trustee, relating to such Aircraft, the insurance shall not be
invalidated by any action or inaction of Alaska and shall insure the respective
interests of such Indenture Trustee, Owner Participant or Owner Trustee, as they
appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Alaska.
Funds, if any, held from time to time by the Indenture Trustee, prior to the
distribution thereof, will be invested and reinvested by the Indenture Trustee.
Such investment and reinvestment will be at the direction of Alaska (except,
with respect to a Leased Aircraft, in the case of an event of default
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<PAGE>
under the applicable Lease or, with respect to an Owned Aircraft, in the case of
an event of default under the Owned Aircraft Indenture) in certain investments
described in the related Indenture. The net amount of any loss resulting from
such investments will be paid by Alaska. (Section 9.04(a) of the Indentures.)
Section 1110 of title 11 of the United States Code (the "Bankruptcy Code")
provides that the right of lessors, conditional vendors and holders of purchase
money security interests with respect to aircraft used by air carriers operating
under certificates issued under Section 401 or 418 of the Aviation Act, to take
possession of such aircraft in compliance with the provisions of the lease,
conditional sale contract or purchase money equipment security agreement, as the
case may be, is not affected by (i) the automatic stay provision of the
Bankruptcy Code, which provision enjoins repossessions by creditors for the
duration of the reorganization period, (ii) the provision of the Bankruptcy Code
allowing the debtor in possession and/or the bankruptcy trustee to use property
of the bankruptcy estate during the bankruptcy case and (iii) any power of the
bankruptcy court to enjoin a repossession. Section 1110 provides, however, that
the right of a lessor, conditional vendor or holder of a purchase money
equipment security interest to take possession of an aircraft in the event of
any event of default may not be exercised for 60 days following the date of
commencement of the reorganization proceedings (unless specifically permitted by
the bankruptcy court) and may not be exercised at all if, within such 60-day
period, the debtor in possession and/or the bankruptcy trustee agrees to perform
the debtor's obligations that become due on or after such date and cures all
existing defaults (other than defaults resulting solely from the financial
condition, bankruptcy, insolvency or reorganization of the debtor).
In connection with any issuance of Certificates under this Prospectus and
the applicable Prospectus Supplement, Alaska shall have received an opinion from
its General Counsel to the effect that (i) with respect to any Leased Aircraft,
the related Owner Trustee, as lessor under the related Lease, and the related
Indenture Trustee, as assignee of such Owner Trustee's rights under such Lease
pursuant to the related Indenture, should be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to the Aircraft initially delivered
under such Lease and subjected to the related Indenture or (ii) with respect to
any Owned Aircraft, the related Indenture Trustee under the related Indenture
should be entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to the Aircraft initially subjected to the related Indenture. Such
opinions will not address the possible replacement of an Aircraft after an Event
of Loss in the future.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Aircraft will be leased separately by the related Owner Trustee
to Alaska for a term commencing on the delivery date thereof to such Owner
Trustee and expiring on a date not earlier than the latest maturity date of the
Leased Aircraft Certificates, unless previously terminated as permitted by the
terms of the related Lease. The basic rent and other payments under each such
Lease will be payable by Alaska in accordance with the terms specified in the
applicable Prospectus Supplement, and will be assigned by the related Owner
Trustee under the related Indenture to provide the funds necessary to pay
principal of, premium, if any, interest due from such Owner Trustee or the
Leased Aircraft Certificates issued under such Indenture. In certain cases, the
basic rent payments under a Lease may be adjusted, but each Lease will provide
that under no circumstances will rent payments by Alaska be less than the
scheduled payments on the related Leased Aircraft Certificates. The balance of
any basic rent payment under each Lease, after payment of amounts due on the
Leased Aircraft Certificates issued under the Indenture corresponding to such
Lease, will be paid over to the applicable Owner Participant. Alaska's
obligation to pay rent and to cause other payments to be made under each Lease
will be general obligations of Alaska.
With respect to the Leased Aircraft Certificates, except in certain
circumstances involving Alaska's purchase of a Leased Aircraft and the
assumption of the Leased Aircraft Certificates related thereto, the Leased
Aircraft Certificates will not be obligations of, or guaranteed by, Alaska or
Air Group. With respect to the Leased Aircraft Certificates, none of the Owner
Trustees, the Owner
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Participants or the Indenture Trustee shall be personally liable to any holder
of such Certificate for any amounts payable under such Certificates or, except
as provided in the Indentures relating thereto in the case of the Owner Trustees
and the Indenture Trustees, for any liability under such Indentures. Except in
the circumstances referred to above, all amounts payable under the Leased
Aircraft Certificates (other than payments made in connection with an optional
redemption or purchase by the related Owner Trustee or the related Owner
Participant) will be payable only from the assets subject to the lien of the
Leased Aircraft Indenture or the income and proceeds received by the Indenture
Trustee therefrom (including rent payable by Alaska and amounts payable by Air
Group pursuant to its Guarantee, if any, under the related Lease). (Section 2.10
of the Leased Aircraft Indenture.)
With respect to the Leased Aircraft Certificates, except as otherwise
provided in the Leased Aircraft Indenture, no Owner Trustee shall be personally
liable for any amount payable or for any statements, representations,
warranties, agreements or obligations made under such Indenture or under such
Leased Aircraft Certificates except for its own willful misconduct or gross
negligence. None of the Owner Participants shall have any duty or responsibility
under the Leased Aircraft Indenture or under such Leased Aircraft Certificates
to the Indenture Trustee or to any holder of any such Certificate. (Leased
Aircraft Indenture, Section 2.10 of the Leased Aircraft Indenture.)
Alaska's obligations under the Owned Aircraft Indenture and under the Owned
Aircraft Certificates will be general obligations of Alaska.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Alaska will be prohibited from consolidating with or merging into any other
corporation or transferring substantially all of its assets as an entirety to
any other corporation unless (i) the surviving successor or transferee
corporation shall (a) be a "citizen of the United States" as defined in the
Aviation Act, (b) be a United States certificated air carrier and (c) expressly
assume all of the obligations of Alaska contained in the Indentures, and, with
respect to the Leased Aircraft Certificates, the Participation Agreements and
the Leases, and any other operative documents; (ii) immediately after giving
effect to such transaction, no Indenture event of default (with respect to the
Owned Aircraft Certificates) or Lease event of default (with respect to the
Leased Aircraft Certificates) shall have occurred and be continuing; and (iii)
Alaska shall have delivered a certificate and an opinion or opinions of counsel
indicating that such transaction, in effect, complies with such conditions.
(Section 7.03 of the Indentures.)
The Indentures do not contain any covenants or provisions which may afford
holders of Certificates issued thereunder protection in the event of a highly
leveraged transaction, including transactions effected by management or
affiliates, which may or may not result in a change in control of Alaska. No
other instrument or agreement currently evidencing other indebtedness of Alaska
contains covenants or provisions affording holders of Debt protection in the
event of a change in control of Alaska.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The applicable Prospectus Supplement will set forth the events of default
applicable to a Leased Aircraft or an Owned Aircraft. There are no cross-default
provisions in the Indentures. Therefore, events resulting in a default with
respect to one series of Certificates will not in itself result in the
occurrence of an event of default with respect to any other series of
Certificates.
Each Indenture provides that the Indenture Trustee thereunder shall, after
the occurrence of any event known to it to be an event of default with respect
to such series of Certificates, promptly send written notice thereof to Alaska
and, with respect to Leased Aircraft, the related Owner Trustee and the related
Owner Participant, and within 90 days after the occurrence thereof if such
default remains uncured, and notice thereof to the holders of outstanding
Certificates of such series, but such Indenture Trustee may withhold such
notice, except in the case of a default in the payment of the principal of,
premium, if any, or interest on any Certificates of such series, if it in good
faith determines that withholding such notice is in the interest of such
holders. (Section 9.05 of the Indentures.)
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The holders of at least a majority in principal amount of outstanding
Certificates of the series to which an event of default relates, by notice to
the applicable Indenture Trustee, may on behalf of all of such holders waive any
existing event of default or default and its consequences except an event of
default or a default in the payment of the principal of, premium, if any, or
interest on any such Certificates or a default in respect of certain other
matters. (Section 8.05 of the Indentures.)
REMEDIES
If an event of default with respect to a series of Certificates shall occur
and be continuing, the Indenture Trustee thereunder or the holders of not less
than 25% in unpaid principal amount of outstanding Certificates of such series
may declare the principal of all Certificates of such series immediately due and
payable. The holders of a majority in unpaid principal amount of all outstanding
Certificates of such series may annul any such declaration by such Indenture
Trustee or by the holders at any time prior to the sale of the related Aircraft
after such an event of default if (i) there has been deposited with such
Indenture Trustee an amount sufficient to pay all installments of principal of,
and premium, if any, on any such Certificates that have become due otherwise
than by such declaration of acceleration, and any interest thereon and interest
due or past due, if any, and certain expenses, (ii) such annulment will not
conflict with any judgment or decree and (iii) all other events of default and
defaults have been cured or waived. (Section 8.02 of the Indentures.)
Each Indenture provides that, if an event of default under such Indenture
has occurred and is continuing, the Indenture Trustee thereunder may exercise
certain rights or remedies available to it under applicable law, including, with
respect to Leased Aircraft (if an event of default under the related Lease has
occurred and is continuing) one or more of the remedies with respect to the
related Aircraft afforded to the applicable Owner Trustee by the related Lease
for events of default thereunder. The applicable Prospectus Supplement will
describe any limitation on the exercise of remedies by the Indenture Trustee.
(Section 8.03 of the Indentures.)
The holders of a majority in principal amount of outstanding Certificates of
each series may direct the time, method and place of conducting any proceeding
for any remedy available to the related Indenture Trustee with respect to such
series or of exercising any trust or power conferred on such Indenture Trustee,
but in such event such Indenture Trustee shall be entitled to be indemnified by
the holders of Certificates of such series before proceeding so to act and such
Indenture Trustee may not be held liable for any such action taken in good
faith. (Sections 8.06, 9.01 and 9.02 of the Indentures.)
The right of any holder of Certificates of any series to institute an action
for any remedy with respect to such Certificates (except the right to enforce
payment of the principal of, premium, if any, and interest on its Certificates
when due) is subject to certain conditions precedent, including a request to the
related Indenture Trustee by the holders of not less than 25% in principal
amount of outstanding Certificates of the applicable series to take action, and
an offer to such Indenture Trustee of satisfactory indemnification against
liabilities incurred by it in so doing. (Sections 8.07 and 8.08 of the
Indentures.)
If an event of default with respect to any series of Certificates occurs and
is continuing, any sums held or received by the Indenture Trustee thereunder may
be applied to reimburse such Indenture Trustee for any tax, expense or other
loss incurred by it and to pay any other amounts due such Indenture Trustee
prior to any payments to holders of such series. (Section 3.05 of the
Indentures.)
With respect to a Leased Aircraft, in the event of insolvency proceedings
involving an Owner Participant, the related Aircraft and the related Lease could
become part of such insolvency proceedings. In such event, payments under such
Lease or on the related Certificates might be interrupted and the ability of the
Indenture Trustee to exercise its remedies under the applicable Indenture might
be restricted, although the Indenture Trustee would retain its status as a
secured creditor in respect of the Lease and the Aircraft.
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MODIFICATION OF AGREEMENTS
Without the consent of holders of a majority in principal amount of
outstanding Certificates of a series, the provisions of the Indentures may be
amended or modified (a) to cure any ambiguity, defect or inconsistency or to
make any change consistent with the provisions of the Indenture and related
supplement, PROVIDED that such change does not adversely affect the interests of
any holder of such series of Certificates in any material respect, (b) to
provide for a successor Indenture Trustee and, with respect to Leased Aircraft
Certificates, a successor Owner Trustee, (c) to establish the forms or terms of
Certificates of any series as permitted by the Indenture, (d) to facilitate the
defeasance and discharge or a series of Certificates, PROVIDED that such change
does not adversely affect the interests of the holders of such series of
Certificates or any other series of Certificates in any material respect, (e) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee or to make any other provisions with respect to matters or
questions arising hereunder so long as such action shall not adversely affect
the interests of the holders of such series of Certificates, (f) to correct or
amplify the description of any property at any time subject to the lien of the
Indenture or better to assure, convey and confirm until the Indenture Trustee
any property subject to the lien of the Indenture, (g) to add to the covenants
of Alaska and, with respect to Leased Aircraft Certificates, the Owner Trustee,
or to surrender any rights or powers conferred upon, with respect to Owned
Aircraft Certificates, Alaska and, with respect to Leased Aircraft Certificates,
the related Owner Trustee or Owner Participant, (h) to comply with any
requirements of the Commission, (i) to add to the rights of the holders of such
series of Certificates, (j) with respect to Leased Aircraft Certificates, to
provide for the assumption by Alaska of the obligations of the related Owner
Trustee and (k) to include on the Certificates of any series any legend required
by law. (Section 12.01(a) of the Indentures.)
The Indenture also contain provisions permitted Alaska, the Indenture
Trustee and, with respect to Leased Aircraft Certificates, the related Owner
Trustee, with the consent of the holders of the Certificates of any series
aggregating not less than a majority interest of such series of Certificates, to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indentures, to the extent relating to
such series of Certificates, or modifying the rights of the Certificate holders
of such series, except that no such supplemental indenture may, without the
consent of the holder of each outstanding Certificate of a series affected
thereby, (a) reduce the principal amount, premium, if any, or any payment of
interest due on any Certificate of such series, (b) change the date on which any
principal, premium, if any, or interest is due or payable on any Certificate of
such series, (c) create any security interest with respect to the property
subject to the lien of the Indenture ranking prior to or on a parity with the
security interest created by the Indenture or deprive any holder of a
Certificate of such series of the lien of the Indenture upon the property
subject thereto, (d) reduce the percentage in principal amount of outstanding
Certificates of such series necessary to modify or amend any provision of such
Indenture or to waive compliance therewith, (e) modify any of the provisions
relating to the rights of holders in respect of the waiver of events or default
or receipt of payment, or (f) modify the obligation of Air Group to make
payments under the Guarantees, if any. (Section 12.02 of the Indentures.)
With respect to Leased Aircraft Certificates, certain provisions of the
Leases, the Participation Agreements and the Trust Agreements related thereto
may not be modified by the parties thereto without the consent of the holders of
all or a portion of the outstanding Certificates of the series related thereto
as is specified in the applicable Prospectus Supplement. (Section 12.06 of the
Leased Aircraft Indenture.)
DEFEASANCE OF THE INDENTURES AND THE CERTIFICATES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable Prospectus Supplement, the
applicable Indenture provides that the obligation of the Indenture Trustee and,
with respect to any series of Leased Aircraft Certificates, the Owner Trustee,
and, with respect to any series of Owned Aircraft Certificates, Alaska under the
applicable Indenture and Indenture Supplement with respect to such series shall
be deemed to have been discharged and paid in full (except for certain
obligations, including the obligation to
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<PAGE>
register the transfer or exchange of Certificates, to replace stolen, lost,
destroyed or mutilated Certificates and to maintain paying agencies and hold
money for payment in trust) on the 91st day after the date of irrevocable
deposit with the related Indenture Trustee of money or certain United States
government obligations which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an
aggregate amount sufficient to pay when due (including as a consequence of
redemption in respect of which notice is given on or prior to the date of such
deposit) principal of, premium, if any, and interest on all Certificates of such
series issued thereunder in accordance with the terms of such Indenture and the
applicable Indenture Supplement. Such discharge may occur only if, among other
things, Alaska has delivered to the Indenture Trustee an Opinion of Counsel to
the effect that holders of such Certificates will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same time as would have been the case if such
deposit, defeasance and discharge had not yet occurred. (Sections 2.01, 10.01
and 10.04 of the Indentures.)
Upon such defeasance, or upon payment in full of the principal of, premium,
if any, and interest on all Certificates in a series on the maturity date of
such Certificates or deposit with the applicable Indenture Trustee of money
sufficient therefor no earlier than one year prior to the date of such maturity,
the holders of such Certificates will have no beneficial interest in or other
rights with respect to the related Aircraft or other assets subject to the line
of the Indenture and the related Indenture Supplement and such lien shall
terminate. (Section 10.01 of the Indentures.)
ASSUMPTION OF OBLIGATIONS BY ALASKA
Unless otherwise specified by the applicable Prospectus Supplement, with
respect to Leased Aircraft, upon the exercise by Alaska of any purchase options
it may have under the related Lease prior to the end of the term of such Lease,
Alaska may assume on a full recourse basis all of the obligations of the Owner
Trustee (other than its obligations in its individual capacity) under the
indenture with respect to such Aircraft, including the obligations to make
payments in respect of the related Leased Aircraft Certificates. In such event,
certain relevant provisions of the related Lease, including (among others)
provisions relating to maintenance, possession and use of the related Aircraft,
liens, insurance and events of default will be incorporated into such Indenture,
and the Leased Aircraft Certificates issued under such Indenture Supplement will
not be redeemed and will continue to be secured by such Aircraft. It is a
condition to such assumption that, if such Aircraft is registered under the laws
of the United States, an opinion of counsel be delivered at the time of such
assumption substantially to the effect that the Indenture Trustee should,
immediately following such assumption, be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to such Aircraft (including the engines
related thereto), but such opinion need not be delivered to the extent that the
benefits of such Section 1110 are not available to the Indenture Trustee with
respect to such Aircraft or any engine related thereto immediately prior to such
assumption. (Section 7.05 of the Leased Aircraft Indenture.)
GUARANTEES OF CERTIFICATES
Air Group will unconditionally guarantee to the holders from time to time of
any series of Certificates that is not Investment Grade at the time of issuance
(i) with respect to Owned Aircraft Certificates, the full and prompt payment of
principal, premium, if any and interest thereon when and as the same shall
become due and payable, whether at maturity, upon redemption or otherwise and
(ii) with respect to Leased Aircraft Certificates, the full and prompt payment
of all accounts payable by Alaska under the related Lease when and as the same
shall become due and payable. Any such Guarantee will be an unsecured obligation
of Air Group. A series of Certificates shall be "Investment Grade" if so
designated by at least one nationally recognized statistical rating organization
(as that term is used in Rule 15c03-1(c)(2)(vi)(F) under the 1934 Act).
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<PAGE>
If a Guarantee is applicable to Certificates offered hereby, reference is
made to the related Supplemental Indenture and the accompanying Prospectus
Supplement for a description of the specific terms of such Guarantee, including
events of default relating thereto and covenants of Air Group.
The consolidated financial statements of Air Group are incorporated by
reference herein. See "Incorporation of Certain Documents by Reference." As
indicated by comparison of such consolidated financial statements with those of
Alaska, the total assets, revenues and shareholders' equity of Alaska comprise a
substantial portion of the consolidated total assets, revenues and shareholders'
equity of Air Group.
THE INDENTURE TRUSTEE
The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers. The Indenture Trustee shall be under no obligation to exercise any of
its rights or powers under such Indenture unless it receives indemnity
satisfactory to it for any loss, liability or expense. The Indentures provide
that the Indenture Trustee in its individual or any other capacity may acquire
and hold Certificates issued thereunder and, subject to certain conditions, may
otherwise deal with Alaska and, with respect to Leased Aircraft, with any Owner
Trustee with the same rights it would have if it were not the Indenture Trustee.
(Sections 9.01, 9.02 and 9.03 of the Indentures.)
The Indenture Trustee may resign with respect to the Certificates of any
series at any time, in which event Alaska or, with respect to any Leased
Aircraft Certificates, the related Owner Trustee, will be obligated to appoint a
successor indenture trustee. The holders of a majority in principal amount of
the outstanding Certificates of any series may remove the related Indenture
Trustee by giving at least 30 days' prior written notice to such Indenture
Trustee and Alaska and, with respect to any Leased Aircraft Certificates, the
related Owner Trustee, and may appoint a successor Indenture Trustee with the
consent of Alaska and, with respect to any Leased Aircraft Certificates, the
related Owner Trustee. If an Indenture Trustee ceases to be eligible to continue
as Indenture Trustee with respect to a series of Certificates or becomes
incapable of acting as Indenture Trustee or becomes insolvent, Alaska or, with
respect to any Leased Aircraft Certificates, the related Owner Trustee, may
remove such Indenture Trustee. Any resignation or removal of such Indenture
Trustee and appointment of a successor indenture trustee for a series of
Certificates does not become effective until acceptance of the appointment by
the successor indenture trustee. (Section 9.8 of the Indentures.) Pursuant to
such resignation and successor indenture trustee provisions, it is possible that
a different indenture trustee could be appointed to act as the successor
indenture trustee with respect to each series of Certificates. All references in
this Prospectus to the Indenture Trustee should be read to take into account the
possibility that each series of Certificates could have different successor
indenture trustees in the event of such a resignation or removal.
The Indentures provide that Alaska or, with respect to any Leased Aircraft
Certificates, the related Owner Trustee will pay the Indenture Trustee's fees
and expenses. (Section 9.07 of the Indentures.)
FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the anticipated material United
States federal income tax consequences to the initial holders of the
certificates of the purchase, ownership and disposition of the Certificates and
should be read in conjunction with any additional discussion of federal income
tax consequences included in the applicable Prospectus Supplement. The
discussion is based on laws, regulations, rulings and decisions, all as in
effect on the date of this Prospectus and all of which are subject to change or
different interpretations. The discussion below does not purport to address all
of the federal income tax consequences that may be applicable to particular
categories of investors, some of which (for example, insurance companies and
foreign investors) may be subject to special rules. The statements of law and
legal conclusions set forth herein are based upon the opinion of Perkins Coie,
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<PAGE>
counsel to Alaska. Investors should consult their own tax advisors in
determining the federal, state, local, foreign and any other tax consequences to
them of the purchase, ownership and disposition of the Certificates.
PAYMENT OF INTEREST
Subject to the discussion below under "Original Issue Discount," interest on
a Certificate will generally be includible in income by a holder as ordinary
income at the time it is accrued or received in accordance with the holder's
method of accounting.
SALES OF CERTIFICATES
A holder that sells a Certificate should recognize gain or loss equal to the
difference between its adjusted tax basis in the Certificate and the amount
realized on the sale (except to the extent attributable to accrued and unpaid
interest, which should be taxable as ordinary income). Any such gain or loss
will be capital gain or loss if the Certificate was held as a capital asset and
will be long-term capital gain or loss if the Certificate was held for more than
one year. Net capital gain (the excess of net long-term capital gain over net
short-term capital loss) of individuals is, under certain circumstances, taxed
at lower rates than items of ordinary income.
ORIGINAL ISSUE DISCOUNT
Certificates may be issued with original issue discount ("OID"), which may
require the holders to include such OID in gross income in advance of receipt or
accrual of the stated interest on such Certificates. The Prospectus Supplement
will state whether the Certificates are issued with OID. Generally, a holder of
a debt instrument issued with OID that is not de minimis (i.e., is not less than
one-quarter of 1% of the redemption price at maturity multiplied by the number
of complete years to maturity) must include such OID in income for federal
income tax purposes as it accrues, in advance of the receipt of the cash
attributable to such income, under a method that takes into account the
compounding of interest.
BACKUP WITHHOLDING
Payments made on the Certificates, and proceeds from the sale of the
Certificates to or through certain brokers, may be subject to a "backup"
withholding tax of 31% unless the holder complies with certain reporting
procedures or is exempt from such requirements under section 3406 of the Code.
Any such withheld amounts are allowed as a credit against the holder's federal
income tax.
INFORMATION REPORTING
Information reports will be made by the Indenture Trustee to the Internal
Revenue Service, and to holders of record that are not exempt from the reporting
requirements, annually or as otherwise required with respect to interest paid
(or OID accrued, if any) on the Certificates.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Certificates may, subject to certain legal restrictions, be purchased and held
by an employee benefit plan (a "Plan") subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or an individual
retirement account or an employee benefit plan subject to section 4975 of the
Code. A fiduciary of a Plan must determine that the purchase and holding of a
Certificate is consistent with its fiduciary duties under ERISA and does not
result in a non-exempt prohibited transaction as defined in section 406 of ERISA
or section 4975 of the Code. Employee benefit plans which are governmental plans
(as defined in section 3(32) of ERISA) and certain church plans (as defined in
section 3(33) of ERISA) are not subject to Title I of ERISA or section 4975 of
the Code. The Certificates may, subject to certain legal restrictions, be
purchased and held by such plans.
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<PAGE>
PLAN OF DISTRIBUTION
The Certificates being offered hereby may be sold in any one or more of the
following ways from time to time: (i) through agents; (ii) to or through
underwriters; (iii) through dealers; and (iv) directly to other purchasers.
The distribution of the Certificates may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase the Certificates may be solicited by agents designated by
Alaska from time to time. Any such agent involved in the offer or sale of the
Certificates in respect of which this Prospectus is delivered will be named, and
any commissions payable by Alaska to such agent will be set forth in the
applicable Prospectus Supplement. Unless otherwise indicated in such Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment. Any such agent may be deemed to be an underwriter, as that
term is defined in the Securities Act, of the Certificates so offered and sold.
If the Certificates are sold by means of an underwritten offering, Alaska
will execute an underwriting agreement with an underwriter or underwriters at
the time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, and the
terms of the transaction, including commissions, discounts and any other
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Settlement which will be used by the underwriters to make offers and
sales of the Certificates in respect of which this Prospectus is delivered to
the public. If underwriters are utilized in the sale of the Certificates in
respect of which this Prospectus is delivered, the Certificates will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriters at the time
of sale. The Certificates may be offered to the public either through
underwriting syndicates represented by managing underwrites or directly by the
managing underwriters. If any underwriter or underwriters are utilized in the
sale of the Certificates, unless otherwise indicated in the Prospectus
Supplement, the underwriting agreement will provide that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of Certificates will be obligated to
purchase all such Certificates if any are purchased. Alaska does not intend to
apply for listing of the Certificates on a national securities exchange. If the
Certificates are sold by means of an underwritten offering, the underwriters may
make a market in the Certificates as permitted by applicable laws and
regulations. No underwriter would be obligated, however, to make a market in the
Certificates and any such market making could be discontinued at any time at the
sole discretion of such underwriter. Accordingly, no assurance can be given as
to the liquidity of, or trading markets for, the Certificates.
If a dealer is utilized in the sale of the Certificates in respect of which
this Prospectus is delivered, such Certificates will be sold to the dealer as
principal. The dealer may then resell such Certificates to the public at varying
prices to be determined by such dealer at the time of resale. Any such dealer
may be deemed to be an underwriter, as such term is defined in the Securities
Act, of the Certificates so offered and sold. The name of the dealer and the
terms of the transactions will be set forth in the Prospectus Supplement
relating thereto.
Offers to purchase the Certificates may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resale thereof. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under relevant agreements
to indemnification or contribution by Alaska against certain liabilities,
including liabilities under the Securities Act.
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Agents, underwriters and dealers may engage in transactions with, or perform
services for, Air Group, Alaska and Air Group's other subsidiaries in the
ordinary course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Certificates offered hereby will be passed upon for Alaska by
Perkins Coie, Seattle, Washington. Unless otherwise indicated in the applicable
Prospectus Supplement, Perkins Coie will rely on the opinion of counsel for the
Owner Trustee for each series of Certificates as to certain matters relating to
the authorization, execution and delivery of such series of Certificates by, and
the valid and binding effect thereof on, such Owner Trustee.
EXPERTS
The financial statements and schedules of Alaska incorporated by reference
in this Prospectus and in the Registration Statement have been audited by Arthur
Andersen & Co., independent public accountants, as indicated in their reports
with respect thereto, and are incorporated herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discounts and
commissions, are set forth in the following table.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....... $ 68,966
Blue Sky fees and expenses................................ *
Printing and engraving expenses........................... *
Legal fees and expenses................................... *
Rating agency fees........................................ *
Accounting fees and expenses.............................. *
Owner Trustee fees and expenses........................... *
Indenture Trustee fees and expenses....................... *
Miscellaneous............................................. *
---------
Total................................................. $ *
---------
---------
<FN>
- ------------------------
* Information to be added by amendment.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware and Section 10.06.490
of the Alaska Corporations Code each provide that a corporation may indemnify
directors and officers as well as other employees and individuals against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
specified actions or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation -- a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action, and
the statutes require court approval before there can be any indemnification
where the person seeking indemnification has been found liable for negligence or
misconduct in the performance of the person's duty to the corporation. The
statutes provide that they are not exclusive of other indemnification that may
be granted by a corporation's bylaws, agreement, vote of shareholders or
disinterested directors or otherwise.
Article VIII of Air Group's By-Laws and Article VI of Alaska's Bylaws
require indemnification to the full extent permitted by the Delaware Corporation
Law and the Alaska Corporations Code, respectively. Subject to any restrictions
imposed by Delaware or Alaska law, respectively, the Bylaws of Air Group and
Alaska provide a right to indemnification for all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by any person in connection with any actual or threatened action, suit
or proceeding by reason of the fact that such person is or was a director or
officer of Air Group or Alaska or is or was serving at the request of Air Group
or Alaska as a director or officer of another corporation. The Bylaws of Air
Group and Alaska also provide that each of them may, by action of its Board of
Directors, approve indemnification of any other person whom they have the power
to indemnify under the Delaware Corporation Law and the Alaska Corporations
Code, respectively.
Officers and directors of Air Group and Alaska are covered by insurance
(with certain exceptions and within certain limitations) which indemnifies them
against losses and liabilities arising from certain alleged "wrongful acts,"
including alleged errors or misstatements, or certain other alleged wrongful
acts or omissions constituting neglect or breach of duty.
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<PAGE>
The Underwriting Agreements, filed as Exhibits 1(a), 1(b) and 1(c) hereto,
contain provisions whereby the Underwriters agree to indemnify the registrant,
its directors and certain officers and certain other persons, and are
incorporated herein by reference.
ITEM 16. EXHIBITS
(a) The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C>
Exhibit 1(a) Form of Underwriting Agreement for Convertible Debt Securities of Air
Group**
Exhibit 1(b) Form of Underwriting Agreement for Debt Securities of Alaska*
Exhibit 1(c) Form of Underwriting Agreement for Equipment Trust Certificates of
Alaska**
Exhibit 4(a)(1) Form of Convertible Senior Debt Securities Indenture for Air Group
Exhibit 4(a)(2) Form of Convertible Senior Debt Securities of Air Group (included in
Exhibit 4(a)(1))
Exhibit 4(a)(3) Form of Convertible Subordinated Debt Securities Indenture for Air Group
Exhibit 4(a)(4) Form of Convertible Subordinated Debt Securities of Air Group (included
in Exhibit 4(a)(3))
Exhibit 4(b)(1) Form of Debt Securities Indenture for Alaska*
Exhibit 4(b)(2) Form of Debt Securities of Alaska (included in Exhibit 4(b)(1))*
Exhibit 4(c)(1) Form of Leased Aircraft Trust Indenture and Security Agreement between
the Indenture Trustee and Alaska relating to Equipment Trust Certificates
of Alaska
Exhibit 4(c)(2) Form of Leased Aircraft Equipment Trust Certificate of Alaska (included
in Exhibit 4(c)(1))
Exhibit 4(c)(3) Form of Owned Aircraft Trust Indenture and Security Agreement between the
Indenture Trustee and Alaska relating to Equipment Trust Certificates of
Alaska
Exhibit 4(c)(4) Form of Owned Aircraft Equipment Trust Certificate of Alaska (included in
Exhibit 4(c)(3))
Exhibit 4(d) Certificate of Incorporation of Alaska Air Group, Inc., as amended to
date*
Exhibit 4(e) Bylaws of Alaska Air Group, Inc., as amended to date (incorporated by
reference to Exhibit 3.(ii) to Form 10-K of Alaska Air Group, Inc. for
the year ended December 31, 1993)
Exhibit 4(f) Rights Agreement dated as of December 2, 1986 between Alaska Air Group,
Inc. and The First National Bank of Boston, as Rights Agent (incorporated
by reference to Exhibit No. 1 to Form 8-A of Alaska Air Group, Inc. filed
December 12, 1986)
Exhibit 5(a) Opinion of Perkins Coie, counsel for Alaska
Exhibit 5(b) Form of Opinion of counsel for Owner Trustee**
Exhibit 8 Tax Opinion of Perkins Coie**
Exhibit 12(a) Computation of Ratio of Earnings to Fixed Charges of Air Group*
Exhibit 12(b) Computation of Ratio of Earnings to Fixed Charges of Alaska*
Exhibit 23(a) Consent of Perkins Coie (included in Exhibit 5(a))
Exhibit 23(b) Consent of counsel for Owner Trustee (included in Exhibit 5(b))**
Exhibit 23(d) Consent of Perkins Coie (included in Exhibit 8)**
Exhibit 23(e) Consent of Arthur Andersen & Co.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
Exhibit 25 Power of Attorney (included on signature pages to the Registration
Statement)*
Exhibit 26(a) Form T-1 Statement of Eligibility of Trustee under Convertible Debt
Securities Indenture of Air Group**
Exhibit 26(b) Form T-1 Statement of Eligibility of Trustee under Debt Securities
Indenture of Alaska**
Exhibit 26(c) Form T-1 Statement of Eligibility of Trustee under Trust Indenture and
Security Agreement relating to Equipment Trust Certificates of Alaska**
<FN>
- ------------------------
* Previously filed.
** To be filed by amendment.
</TABLE>
ITEM 17. UNDERTAKINGS
A. The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "1933 Act");
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs A(1)(a) and A(1)(b) do not apply if
the information required to be included in such post-effective amendment
is contained in a periodic report filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned hereby undertake that, for purposes of determining any
liability under the 1933 Act, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefits plan's annual report pursuant to
Section 15(d) of the 1934 Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions described under Item 15 above,
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director,
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<PAGE>
officer or controlling person of the registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Alaska Air Group, Inc. has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Seattle, Washington, this 11th day of March, 1994.
ALASKA AIR GROUP, INC.
By: Raymond J. Vecci
--------------------------------------
Raymond J. Vecci
Chairman of the Board, President
and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 11th day of March, 1994.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------------- ---------------------------------------------
<C> <S>
Chief Executive Officer:
Raymond J. Vecci
------------------------------------------------ Chairman of the Board, President and Chief
(Raymond J. Vecci) Executive Officer
Chief Financial Officer:
J. Ray Vingo*
------------------------------------------------ Vice President/Finance, Chief Financial
(J. Ray Vingo) Officer and Director
Chief Accounting Officer:
Kathleen H. Iskra*
------------------------------------------------ Controller
(Kathleen H. Iskra)
William H. Clapp*
------------------------------------------------ Director
(William H. Clapp)
Ronald F. Cosgrave*
------------------------------------------------ Director
(Ronald F. Cosgrave)
Mary Jane Fate*
------------------------------------------------ Director
(Mary Jane Fate)
John F. Kelly*
------------------------------------------------ Director
(John F. Kelly)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------------- ---------------------------------------------
<C> <S>
Bruce R. Kennedy*
------------------------------------------------ Director
(Bruce R. Kennedy)
R. Marc Langland*
------------------------------------------------ Director
(R. Marc Langland)
Byron I. Mallott*
------------------------------------------------ Director
(Byron I. Mallott)
Robert L. Parker, Jr.*
------------------------------------------------ Director
(Robert L. Parker, Jr.)
Richard A. Wien*
------------------------------------------------ Director
(Richard A. Wien)
*By: Raymond J. Vecci
- -------------------------------------------------------------
(Raymond J. Vecci)
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Alaska Airlines, Inc. has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Seattle, Washington, this 11th day of March, 1994.
ALASKA AIRLINES, INC.
By: Raymond J. Vecci
--------------------------------------
Raymond J. Vecci
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 11th day of March, 1994.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- -------------------------------------------------------- --------------------------------------------------------
<C> <S>
Chief Executive Officer:
Raymond J. Vecci Chairman of the Board, President and Chief Executive
-------------------------------------------- Officer
(Raymond J. Vecci)
Chief Financial Officer:
J. Ray Vingo* Vice President/Finance, Chief Financial Officer and
-------------------------------------------- Director
(J. Ray Vingo)
Chief Accounting Officer:
Kathleen H. Iskra* Controller
--------------------------------------------
(Kathleen H. Iskra)
William H. Clapp* Director
--------------------------------------------
(William H. Clapp)
Ronald F. Cosgrave* Director
--------------------------------------------
(Ronald F. Cosgrave)
R. Marc Langland* Director
--------------------------------------------
(R. Marc Langland)
*By: Raymond J. Vecci
----------------------------------------------------
(Raymond J. Vecci)
Attorney-in-Fact
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. EXHIBIT NUMBERED PAGE
- ------------------ --------------------------------------------------------------------------------- ---------------
<S> <C> <C>
Exhibit 1(a) Form of Underwriting Agreement for Convertible Debt Securities of Air Group**
Exhibit 1(b) Form of Underwriting Agreement for Debt Securities of Alaska*
Exhibit 1(c) Form of Underwriting Agreement for Equipment Trust Certificates of Alaska**
Exhibit 4(a)(1) Form of Convertible Senior Debt Securities Indenture for Air Group
Exhibit 4(a)(2) Form of Convertible Senior Debt Securities of Air Group (included in Exhibit
4(a)(1))
Exhibit 4(a)(3) Form of Convertible Subordinated Debt Securities Indenture for Air Group
Exhibit 4(a)(4) Form of Convertible Subordinated Debt Securities of Air Group (included in
Exhibit 4(a)(3))
Exhibit 4(b)(1) Form of Debt Securities Indenture for Alaska*
Exhibit 4(b)(2) Form of Debt Securities of Alaska (included in Exhibit 4(b)(1))*
Exhibit 4(c)(1) Form of Leased Aircraft Trust Indenture and Security Agreement between the
Indenture Trustee and Alaska relating to Equipment Trust Certificates of Alaska
Exhibit 4(c)(2) Form of Leased Aircraft Equipment Trust Certificate of Alaska (included in
Exhibit 4(c)(1))
Exhibit 4(c)(3) Form of Owned Aircraft Trust Indenture and Security Agreement between the
Indenture Trustee and Alaska relating to Equipment Trust Certificates of Alaska
Exhibit 4(c)(4) Form of Owned Aircraft Equipment Trust Certificate of Alaska (included in Exhibit
4(c)(3))
Exhibit 4(d) Certificate of Incorporation of Alaska Air Group, Inc., as amended to date*
Exhibit 4(e) Bylaws of Alaska Air Group, Inc., as amended to date (incorporated by reference
to Exhibit 3.(ii) to Form 10-K of Alaska Air Group, Inc. for the year ended
December 31, 1993)
Exhibit 4(f) Rights Agreement dated as of December 2, 1986 between Alaska Air Group, Inc. and
The First National Bank of Boston, as Rights Agent (Exhibit No. 1 to Form 8-A of
Alaska Air Group, Inc. filed December 12, 1986)
Exhibit 5(a) Opinion of Perkins Coie, counsel for Alaska
Exhibit 5(b) Form of Opinion of counsel for Owner Trustee**
Exhibit 8 Tax Opinion of Perkins Coie**
Exhibit 12(a) Computation of Ratio of Earnings to Fixed Charges of Air Group*
Exhibit 12(b) Computation of Ratio of Earnings to Fixed Charges of Alaska*
Exhibit 23(a) Consent of Perkins Coie (included in Exhibit 5(a))
Exhibit 23(b) Consent of counsel for Owner Trustee (included in Exhibit 5(b))**
Exhibit 23(d) Consent of Perkins Coie (included in Exhibit 8)**
Exhibit 23(e) Consent of Arthur Andersen & Co.
Exhibit 25 Power of Attorney (included on signature page to the Registration Statement)*
Exhibit 26(a) Form T-1 Statement of Eligibility of Trustee under Convertible Debt Securities
Indenture of Air Group**
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. EXHIBIT NUMBERED PAGE
- ------------------ --------------------------------------------------------------------------------- ---------------
<S> <C> <C>
Exhibit 26(b) Form T-1 Statement of Eligibility of Trustee under Debt Securities Indenture of
Alaska**
Exhibit 26(c) Form T-1 Statement of Eligibility of Trustee under Trust Indenture and Security
Agreement relating to Equipment Trust Certificates of Alaska**
<FN>
- ------------------------
* Previously filed.
** To be filed by amendment
</TABLE>
<PAGE>
EXHIBIT 4(a)(1)
------------------------------------------------------------
------------------------------------------------------------
ALASKA AIR GROUP, INC., ISSUER
TO
______________________, TRUSTEE
____________________
INDENTURE
DATED AS OF ___________ ___, 199__
____________________
CONVERTIBLE SENIOR DEBT SECURITIES
------------------------------------------------------------
------------------------------------------------------------
<PAGE>
Reconciliation and tie between Indenture, dated as of ____________ ___, 199__,
and the Trust Indenture Act of 1939, as amended.
TRUST INDENTURE ACT INDENTURE
OF 1939 SECTION SECTION
- ------------------ ---------
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . TIA
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.10; 6.12; TIA
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(b) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(d) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 9.6; 9.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(f) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(1). . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(2). . . . . . . . . . . . . . . . . . . . . . . . TIA
(d)(3). . . . . . . . . . . . . . . . . . . . . . . . TIA
(e) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
316(a)(last sentence). . . . . . . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 5.2; 5.8
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.9; 5.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
<PAGE>
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 9.3
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1.11; TIA
- ---------------
This reconciliation and tie section does not constitute part of the
Indenture.
- 2 -
<PAGE>
CONTENTS
ARTICLE 1 Definitions and Other Provisions of General Application. . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Compliance Certificates and Opinions . . . . . . . . . 7
Section 1.3 Form of Document Delivered to Trustee. . . . . . . . . 8
Section 1.4 Acts of Holders. . . . . . . . . . . . . . . . . . . . 8
Section 1.5 Notices, etc., to Trustee and Company. . . . . . . . . 9
Section 1.6 Notice to Holders; Waiver. . . . . . . . . . . . . . . 10
Section 1.7 Headings and Table of Contents . . . . . . . . . . . . 10
Section 1.8 Successors and Assigns . . . . . . . . . . . . . . . . 10
Section 1.9 Separability . . . . . . . . . . . . . . . . . . . . . 11
Section 1.10 Benefits of Indenture . . . . . . . . . . . . . . . . 11
Section 1.11 Governing Law . . . . . . . . . . . . . . . . . . . . 11
Section 1.12 Legal Holidays. . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2 Security Forms . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . 11
Section 2.2 Form of Face of Security . . . . . . . . . . . . . . . 12
Section 2.3 Form of Reverse of Security. . . . . . . . . . . . . . 14
Section 2.4 Form of Trustee's Certificate of Authentication. . . . 19
ARTICLE 3 The Securities . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.1 Amount Unlimited; Issuable in Series . . . . . . . . . 19
Section 3.2 Denominations. . . . . . . . . . . . . . . . . . . . . 22
Section 3.3 Execution, Authentication, Delivery and Dating . . . . 22
Section 3.4 Temporary Securities . . . . . . . . . . . . . . . . . 24
<PAGE>
Section 3.5 Registration, Registration of Transfer and Exchange. . 25
Section 3.6 Replacement Securities . . . . . . . . . . . . . . . . 26
Section 3.7 Payment of Interest; Interest Rights Preserved . . . . 27
Section 3.8 Persons Deemed Owners. . . . . . . . . . . . . . . . . 29
Section 3.9 Cancellation . . . . . . . . . . . . . . . . . . . . . 29
Section 3.10 Computation of Interest . . . . . . . . . . . . . . . 29
Section 3.11 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 4 Satisfaction, Discharge and Covenant Defeasance. . . . . . . . 30
Section 4.1 Termination of Company's Obligations Under the
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.2 Application of Trust Funds . . . . . . . . . . . . . . 31
Section 4.3 Applicability of Covenant Defeasance Provisions;
Company's Option to Effect Covenant Defeasance . . . . . . . 31
Section 4.4 Covenant Defeasance. . . . . . . . . . . . . . . . . . 31
Section 4.5 Conditions to or Covenant Defeasance . . . . . . . . . 32
Section 4.6 Deposited Money and Government Obligations to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.7 Transfers and Distribution at Company Request. . . . . 33
ARTICLE 5 Defaults and Remedies. . . . . . . . . . . . . . . . . . . . . 34
Section 5.1 Events of Default. . . . . . . . . . . . . . . . . . . 34
Section 5.2 Acceleration, Rescission and Annulment . . . . . . . . 36
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.4 Trustee May File Proofs of Claim . . . . . . . . . . . 37
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . 37
-ii-
<PAGE>
Section 5.6 Delay or Omission Not Waiver . . . . . . . . . . . . . 37
Section 5.7 Waiver of Past Defaults. . . . . . . . . . . . . . . . 37
Section 5.8 Control by Majority. . . . . . . . . . . . . . . . . . 37
Section 5.9 Limitation on Suits by Holders . . . . . . . . . . . . 38
Section 5.10 Rights of Holders to Receive Payment . . . . . . . . . 38
Section 5.11 Application of Money Collected. . . . . . . . . . . . 39
Section 5.12 Restoration of Rights and Remedies. . . . . . . . . . 39
Section 5.13 Rights and Remedies Cumulative. . . . . . . . . . . . 39
ARTICLE 6 The Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.1 Certain Duties and Responsibilities. . . . . . . . . . 40
Section 6.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . 41
Section 6.3 Trustee May Hold Securities. . . . . . . . . . . . . . 42
Section 6.4 Money Held in Trust. . . . . . . . . . . . . . . . . . 42
Section 6.5 Trustee's Disclaimer . . . . . . . . . . . . . . . . . 42
Section 6.6 Notice of Defaults . . . . . . . . . . . . . . . . . . 42
Section 6.7 Reports by Trustee to Holders. . . . . . . . . . . . . 43
Section 6.8 Securityholder Lists . . . . . . . . . . . . . . . . . 43
Section 6.9 Compensation and Indemnity . . . . . . . . . . . . . . 43
Section 6.10 Replacement of Trustee . . . . . . . . . . . . . . . . 44
Section 6.11 Acceptance of Appointment by Successor. . . . . . . . 45
Section 6.12 Eligibility; Disqualification . . . . . . . . . . . . 47
Section 6.13 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 6.14 Appointment of Authenticating Agent . . . . . . . . . 47
Section 6.15 Trustee's Application for Instructions From the Company 49
-iii-
<PAGE>
ARTICLE 7 Consolidation, Merger or Sale by the Company . . . . . . . . . 49
Section 7.1 Consolidation, Merger or Sale of Assets Permitted. . . 49
ARTICLE 8 Supplemental Indentures. . . . . . . . . . . . . . . . . . . . 50
Section 8.1 Supplemental Indentures Without Consent of Holders . . 50
Section 8.2 With Consent of Holders. . . . . . . . . . . . . . . . 51
Section 8.3 Compliance With Trust Indenture Act. . . . . . . . . . 52
Section 8.4 Execution of Supplemental Indentures . . . . . . . . . 52
Section 8.5 Effect of Supplemental Indentures. . . . . . . . . . . 52
Section 8.6 Reference in Securities to Supplemental Indentures . . 52
ARTICLE 9 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.1 Payment of Principal, Premium, if Any, and Interest. . 53
Section 9.2 Maintenance of Office or Agency. . . . . . . . . . . . 53
Section 9.3 Money for Securities to Be Held in Trust; Unclaimed
Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.4 Corporate Existence. . . . . . . . . . . . . . . . . . 55
Section 9.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.6 Reports by the Company . . . . . . . . . . . . . . . . 55
Section 9.7 Annual Review Certificate; Notice of Default . . . . . 56
Section 9.8 Provision of Financial Statements. . . . . . . . . . . 56
ARTICLE 10 Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.1 Applicability of Article. . . . . . . . . . . . . . . 56
Section 10.2 Election to Redeem; Notice to Trustee . . . . . . . . 57
Section 10.3 Selection of Securities to Be Redeemed. . . . . . . . 57
Section 10.4 Notice of Redemption. . . . . . . . . . . . . . . . . 57
Section 10.5 Deposit of Redemption Price . . . . . . . . . . . . . 58
-iv-
<PAGE>
Section 10.6 Securities Payable on Redemption Date . . . . . . . . 59
Section 10.7 Securities Redeemed in Part . . . . . . . . . . . . . 59
ARTICLE 11 Sinking Funds. . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.1 Applicability of Article. . . . . . . . . . . . . . . 60
Section 11.2 Satisfaction of Sinking Fund Payments With Securities 60
Section 11.3 Redemption of Securities for Sinking Fund . . . . . . 60
ARTICLE 12 Conversion of Securities. . . . . . . . . . . . . . . . . . . 61
Section 12.1 Conversion Privilege. . . . . . . . . . . . . . . . . 61
Section 12.2 Exercise of Conversion Privilege. . . . . . . . . . . 61
Section 12.3 Fractions of Shares . . . . . . . . . . . . . . . . . 62
Section 12.4 Adjustment of Conversion Price. . . . . . . . . . . . 62
Section 12.5 Notice of Adjustments of Conversion Price . . . . . . 64
Section 12.6 Notice of Certain Corporate Action. . . . . . . . . . 65
Section 12.7 Company to Reserve Common Stock . . . . . . . . . . . 66
Section 12.8 Taxes on Conversions. . . . . . . . . . . . . . . . . 66
Section 12.9 Covenant as to Common Stock . . . . . . . . . . . . . 66
Section 12.10 Cancellation of Converted Securities . . . . . . . . 66
Section 12.11 Provisions in Case of Consolidation, Merger of Sale of
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
-v-
<PAGE>
INDENTURE, dated as of __________ __, 199__, from ALASKA AIR GROUP,
INC., a Delaware corporation (the "Company"), as issuer, to _________________,
a ____________ corporation, as Trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
convertible debentures, notes or other evidences of indebtedness
("Securities") to be issued in one or more series as herein provided.
All things necessary to make the Securities, when executed by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"AFFILIATE" of any specified Person means any Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether
<PAGE>
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Paying Agent or Registrar.
AUTHENTICATING AGENT" means any authenticating agent appointed by the
Trustee pursuant to Section 6.13.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation, in
the English language, customarily published on each Business Day whether or
not published on Saturdays, Sundays or holidays, and of general circulation in
the place in connection with which the term is used or in the financial
community of such place. Whenever successive publications in an Authorized
Newspaper are required hereunder they may be made (unless otherwise expressly
provided herein) on any Business Day and in the same or different Authorized
Newspapers.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company, the Executive Committee or any other duly authorized committee
thereof.
"BOARD RESOLUTION" means a copy of a resolution of the Board of
Directors, certified by the Corporate Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment or particular
location are authorized or obligated by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"COMMON STOCK" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However,
subject to the provisions of Section 12.11, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock
of the Company at the date of this instrument or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company and which are not subject to redemption
-2-
<PAGE>
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"COMPANY" means the Person named as the Company in the first paragraph
of this Indenture until one or more successor corporations shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
means such successors.
"COMPANY ORDER" and "COMPANY REQUEST" mean, respectively, a written
order or request signed in the name of the Company by the Chairman of the
Board, the President, any Executive Vice President or any Senior Vice
President, signing alone, by any Vice President signing together with the
Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant
Secretary of the Company, or, with respect to Sections 3.3, 3.4, 3.5 and 6.1,
any other employee of the Company named in an Officers' Certificate delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered.
"CORPORATION" includes corporations, associations, companies and
business trusts.
"DEFAULT" means any event which is, or after notice or passage of
time, or both, would be, an Event of Default.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct
obligations of the United States or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depositary receipt, PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Government Obligation evidenced by such depositary
receipt.
"HOLDER" means a person in whose name a Security is registered on the
Register.
"INDENTURE" means this Indenture as originally executed or as amended
or supplemented from time to time and shall include the forms and terms (but
not defined terms established in an Officers' Certificate or a Board
Resolution) of particular series of Securities established as contemplated by
Section 2.1 and Section 3.1.
"INDEXED SECURITY" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
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"INTEREST," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity, means interest
payable after maturity.
"INTEREST PAYMENT DATE," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"MATURITY," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"OFFICER" means the Chairman of the Board of Directors, the President,
any Executive Vice President, any Senior Vice President, any Vice President or
the Corporate Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President, any Executive Vice President or any Senior Vice
President, signing alone, or by any Vice President signing together with the
Corporate Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company.
"OPINION OF COUNSEL" means a written opinion of legal counsel, who may
be (a) the senior attorney employed by the Company, (b) Perkins Coie, or (c)
other counsel designated by the Company and who shall be reasonably acceptable
to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
"OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities PROVIDED that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provisions therefor satisfactory to the
Trustee have been made;
(iii) Securities, except to the extent provided in Sections 4.4
and 4.5, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article 4; and
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(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, or whether sufficient funds are available for redemption or for any
other purpose, and for the purpose of making the calculations required by
section 313 of the Trust Indenture Act, (x) the principal amount of any
Original Issue Discount Securities that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the amount of principal thereof that would
be (or shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.2, and (y) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation
or in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate
or rates of interest thereon, if any, the Stated Maturity or Stated Maturities
thereof, the original issue date or dates thereof, the redemption provisions,
if any, with respect thereto, and any other terms specified as contemplated by
Section 3.1 with respect thereto, are to be determined by the Company upon the
issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities of or
within any series, means the place or places where, subject to the provisions
of Section 9.2 the principal of, premium, if any, and interest on such
Securities are payable as specified as contemplated by Section 3.1.
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"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, in whole or in part, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of or within any series means the date specified for
that purpose as contemplated by Section 3.1.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, shall
mean the chairman or any vice chairman of the board of directors, the chairman
or any vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any senior vice president, any
vice president, any assistant vice president, the secretary, the treasurer,
any assistant treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer, the controller, any assistant controller, or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"SECURITY" or "SECURITIES" has the meaning stated in the first
recital of this Indenture and more particularly means any Security or
Securities of the Company issued, authenticated and delivered under this
Indenture.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Securities of any issue means a date fixed by the Trustee pursuant to Section
3.7.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means any corporation of which the Company at the time
owns or controls, directly or indirectly, more than 50% of the shares of
outstanding stock having general voting power under ordinary circumstances to
elect a majority of the Board of Directors of such corporation (irrespective
of whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening
of any contingency).
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"TRADING DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the
applicable securities exchange or in the applicable securities market.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor Trustee replaces it pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Trustee and
if, at any time, there is more than one Trustee, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
the Securities of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as in effect on the date of this Indenture, except as provided in
Section 8.3.
"YIELD TO MATURITY" means the yield to maturity, calculated by the
Company at the time of issuance of a series of Securities or, if applicable,
at the most recent determination of interest on such series, in accordance
with accepted financial practice.
(b) The following terms shall have the meanings specified in the Sections
referred to opposite such term below:
TERM SECTION
---- -------
"Act" 1.4(a)
"Bankruptcy Law" 5.1
"Custodian" 5.1
"Defaulted Interest" 3.7(b)
"Event of Default" 5.1
"Register" 3.5
"Registrar" 3.5
"Valuation Date" 3.7(c)
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than pursuant to Sections
2.3, 3.3 and 9.7) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENT DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificates or opinions of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of
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execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) The ownership of Securities shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to an Officers' Certificate delivered to
the Trustee, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Outstanding Securities have
authorized or agreed to consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date; PROVIDED
that no such authorization, agreement or consent by the Holders on such record
date shall be deemed effective unless it shall become effective pursuant to
the provisions of clause (a) of this Section 1.4 not later than six months
after the record date.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at Alaska Airlines, Inc., P.O. Box 68947, Seattle,
Washington 98168, Attention: Vice President-Finance or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided
or otherwise agreed to by a Holder) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Register, within the time prescribed for the giving of such
notice.
In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice.
If by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice as provided
above, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.7 HEADINGS AND TABLE OF CONTENTS
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
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SECTION 1.9 SEPARABILITY
In case any provision of this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 1.10 BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.11 GOVERNING LAW
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture is subject
to the Trust Indenture Act and if any provision hereof limits, qualifies or
conflicts with the Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 1.12 LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date, Stated Maturity or Maturity of any Security or the last
date on which a Holder has the right to convert his Securities shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture of any Security other than a provision in the
Securities of any series which specifically states that such provision shall
apply in lieu of this Section) payment of principal, premium, if any, or
interest or conversion of the Securities need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on such date;
PROVIDED that no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, Redemption Date, sinking
fund payment date, Stated Maturity or Maturity, or on such last day for
conversion, as the case may be.
ARTICLE 2
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form or forms as shall be established
by delivery to the Trustee of an Officers' Certificate or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the
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officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities of any series are issued as permitted by
Section 3.4, the form thereof also shall be established as provided in the
preceding sentence. If the form of Securities of any series are established by
an Officers' Certificate, such Officers' Certificate shall be delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
3.3 for the authentication and delivery of such Securities.
The permanent Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner, all as determined by the officers executing such Securities as
evidenced by their execution of such Securities.
SECTION 2.2 FORM OF FACE OF SECURITY
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF ITS
PRINCIPAL AMOUNT AND THE ISSUE DATE IS , 19 [, -- AND] THE YIELD TO
MATURITY IS %. [THE METHOD USED TO DETERMINE THE YIELD IS AND THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF
, 19 TO , 19 IS % OF THE PRINCIPAL AMOUNT
OF THIS SECURITY.]]
ALASKA AIR GROUP, INC.
____% CONVERTIBLE SENIOR DUE _________
$ No.
ALASKA AIR GROUP, INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
or registered assigns, the principal sum of Dollars on
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT--, and to pay
interest thereon from or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semiannually on
and in each year, commencing , [IF
THE SECURITY IS TO BEAR INTEREST AT A FIXED RATE, INSERT--at the rate of %
per annum] [IF THE SECURITY IS TO BEAR INTEREST AT AN ADJUSTABLE RATE,
INSERT--at a rate per annum computed or determined in accordance with the
provisions below], until the principal hereof is paid or made available for
payment [IF APPLICABLE, INSERT--, and (to the extent that the payment of
such interest shall be legally enforceable) at the rate of % per annum on
any overdue principal and premium and on any overdue installment of interest].
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the
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close of business on the Regular Record Date for such interest, which shall be
the or (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY,
INSERT--The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration or redemption or
at the Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal shall
be payable on demand. Any such interest on any overdue principal that is not
so paid on demand shall bear interest at the rate of % per annum (to
the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date
payment of such interest has been made or duly provided for, and such interest
shall also be payable on demand.]
Payment of the principal of (and premium, if any, on) and [IF
APPLICABLE, INSERT--any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the City and
State of New York in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts
[IF APPLICABLE, INSERT--; PROVIDED, HOWEVER, that at the option of the
Company payment of interest may be made by check mailed on or before the
relevant Interest Payment Date to the address of the Person entitled thereto
as such address shall appear in the Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
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ALASKA AIR GROUP, INC.
By __________________________________
Attest:
SECTION 2.3 FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or
more series under an Indenture, dated as of ___________, 1994 (herein called
the "Indenture"), between the Company (which term includes any successor
corporation under the Indenture) [, Alaska Air Group, Inc., as Guarantor (the
"Guarantor")] and _________________________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture with
respect to the series of which this Security is a part), to which the
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof[, limited in aggregate principal amount to $ ].
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before
the close of business on _______ __, _____, or in case this Security or a
portion hereof is called for redemption, then in respect of this Security or
such portion hereof until and including, but (unless the Company defaults in
making the payment due upon redemption) not after, the close of business on the
Business Day which is ten days prior to the Redemption Date, to convert this
Security (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount hereof, or of such portion,
into fully paid and non-assessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company at a conversion
price equal to $______ aggregate principal amount of Securities for each share
of Common Stock (or at the current adjusted conversion price if an adjustment
has been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its office or
agency in _______________, accompanied by written notice to the Company that the
Holder hereof elects to convert this Security, or if less than the entire
principal amount hereof is to be converted, the portion hereof to be converted,
and, in case such surrender shall be made during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date (unless this Security or
the portion thereof being converted has been called for redemption on a
Redemption Date within such period), also accompanied by payment in New York
Clearing House or other funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment and, in the case of a conversion after the Regular Record Date next
preceding any
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Interest Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an installment of interest (with
certain exceptions provided in the Indenture), no payment or adjustment is to
be made on conversion for interest accrued hereon or for dividends on the
Common Stock issued on conversion. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest the Company shall pay a cash adjustment as provided in
the Indenture. The conversion price is subject to adjustment as provided in
the Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the transfer of
substantially all of the assets of the Company, the Indenture shall be amended,
without the consent of any Holders of Securities, so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger or
transfer by a holder of the number of shares of Common Stock into which this
Security might have been converted immediately prior to such consolidation,
merger or transfer (assuming such holder of Common Stock failed to exercise any
rights of election and received per share the kind and amount received per share
by a plurality of nonelecting shares).
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE,
INSERT--(1) on ___________ in any year commencing with the year __________
and ending with the year _________ at a Redemption Price equal to % of the
principal amount and (2)] at any time [on or after 19__], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
______, ___%, and if redeemed] during the 12-month period beginning
_________ of the years indicated,
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof, all as provided in
the Indenture.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ___________ in
any year commencing with the year ____________ and ending with the year
_________ through operation of the sinking fund for
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this series at the Redemption Prices for redemption through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in
the table below and (2) at any time [on or after ____________], as a whole or
in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning _____________ of the years
indicated,
Redemption Price for Redemption Redemption Price for Redemption
Through Operation of the Otherwise Than Through
Year Sinking Fund Operation of the Sinking Fund
---- ------------------------------- -------------------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to __________,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than ___% per annum.]
[The sinking fund for this series provides for the redemption on
__________ in each year beginning with the year _______________ and ending
with the year ____________ of [not less than] $____________ [("mandatory
sinking fund")] and not more than $____________ aggregate principal amount of
Securities of this series. [Securities of this series converted pursuant to
the Indenture or acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [DESCRIBE ORDER]
order in which they become due.]]
[In the event of redemption or conversion of this Security in part only,
a new Security or Securities of this series for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to
the covenant defeasance provisions set forth in Article Four of the
Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY,
INSERT--If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of
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<PAGE>
the Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Outstanding
Securities of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Outstanding Securities of each series, on behalf of the Holders of all
Outstanding Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the amount of principal of (and premium,
if any, on) and interest, if any, on this Security herein provided, and at the
times, place and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any, on) and interest, if any, on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $___________ and any integral multiple
thereof. As provided in the
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<PAGE>
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series of different authorized denominations as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company
nor the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
FORM OF CONVERSION NOTICE
To: ALASKA AIR GROUP, INC.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Alaska Air Group, Inc. in accordance with the terms of the Indenture referred
to in this Security, and directs that the shares issuable and deliverable upon
the conversion, together with any check in payment for fractional shares and
any Securities representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account
of interest accompanies this Security.
Dated:
Fill in for registration of shares
of Common Stock and Securities if
to be issued otherwise than to the
registered holder.
Principal Amount to be converted (in an
integral multiple of $1,000, if less than
all):
$_________________
- ------------------------------
Name
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<PAGE>
- ------------------------------
Address
- ------------------------------ ------------------------------
(Please print name and Signature
address (including
zip code number))
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING
NUMBER
SECTION 2.4 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of a series issued under the within-mentioned
Indenture.
______________________________,
as Trustee
By ____________________________________
Authorized Signatory
ARTICLE 3
THE SECURITIES
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
(b) The following matters shall be established and (subject to Section
3.3) set forth, or determined in the manner provided, in an Officers'
Certificate and a Board Resolution of the Company or one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other Securities);
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<PAGE>
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(which limit shall not pertain to (i) Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 8.6,
or 10.7 and (ii) any Securities which, pursuant to the last paragraph of
Section 3.3, are deemed never to have been authenticated and delivered
thereunder);
(3) the date or dates on which the principal of the Securities of the
series is payable or the method of determination thereof;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which any such interest shall be payable and the Regular
Record Date, if any, for the interest payable on any Interest Payment Date;
(5) the place or places where, subject to the provisions of Section
9.2, the principal of, premium, if any, and interest, if any, on Securities
of the series shall be payable;
(6) the period or periods within which, the price or prices at which,
and the other terms and conditions upon which, Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if
other than as provided in Section 10.3, the manner in which the particular
Securities of such series (if less than all Securities of such series are
to be redeemed) are to be selected for redemption;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or periods within which, the price or prices
at which, and the other terms and conditions upon which, Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if the amount of payments or principal of, premium, if any, and
interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method, the index, formula or other
method by which such amounts shall be determined;
(10) if other than the principal amount thereof, the portion of the
principal amount of such Securities of the series which shall be payable
upon declaration of the acceleration thereof pursuant to Section 5.2 or the
method by which such portion shall be determined;
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<PAGE>
(11) if other than as provided in Section 3.7, the Person to whom any
interest on any Security of the series shall be payable and the extent to
which, or the manner in which (including any certification requirement and
other terms and conditions under which), any interest payable on a
temporary Security on an Interest Payment Date will be paid if other than
in the manner provided in Section 3.4, as applicable;
(12) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(13) any deletions from, modifications of or additions to the Events
of Default set forth in Section 5.1 or covenants of the Company set forth
in Article 9 pertaining to the Securities of the series;
(14) under what circumstances, if any, the Company will pay additional
amounts on the Securities of that series held by a Person who is not a U.S.
Person in respect of taxes or similar charges withheld or deducted and, if
so, whether the Company will have the option to redeem such Securities
rather than pay such additional amounts (and the terms of any such option);
(15) the date as of which any temporary Security representing
outstanding Securities of the series shall be dated if other than the date
of original issuance of the first Security of the series to be issued;
(16) the applicability, if any, to the Securities of or within the
series of Sections 4.4 and 4.5, or such other means of defeasance or
covenant defeasance as may be specified for the Securities of such series;
(17) if other than the Trustee, the identity of the Registrar and any
Paying Agent;
(18) any terms which may be related to warrants issued by the Company
in connection with, or for the purchase of, Securities of such series,
including whether and under what circumstances the Securities of any series
may be used toward the exercise price of any such warrants;
(19) whether Guarantees will be endorsed on Securities of the series,
and, if so, the terms of the Guarantees if other than as specified in
Section 12.2;
(20) the terms and conditions upon which Securities of the series will
be convertible into shares of Common Stock of the Company; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture), including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Securities of
the series.
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<PAGE>
(c) All Securities of any one series shall be substantially identical
except as to denomination and the rate or rates of interest, if any, and
Stated Maturity, the date from which interest, if any, shall accrue and except
as may otherwise be provided in or pursuant to an Officers' Certificate
pursuant to this Section 3.1 or in an indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the
Holders, for issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such
series.
(d) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of such
Board Resolution shall be certified by the Corporate Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth, or providing the manner
for determining, the terms of the Securities of such series, and an
appropriate record of any action taken pursuant thereto in connection with the
issuance of any Securities of such series shall be delivered to the Trustee
prior to the authentication and delivery thereof. With respect to Securities
of a series subject to a Periodic Offering, such Board Resolution or Officers'
Certificate may provide general terms for Securities of such series and
provide either that the specific terms of particular Securities of such series
shall be specified in a Company Order or that such terms shall be determined by
the Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 3.3
SECTION 3.2 DENOMINATIONS
The Securities of each series shall be issuable only in definitive
registered form without coupons and in such denominations as shall be
specified as contemplated by Section 3.1. In the absence of any such
provisions with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
Securities shall be executed on behalf of the Company by the Chairman,
President or Chief Executive Officer and attested to by the Secretary of the
Company. The Company's seal shall be affixed to the Securities, or a
facsimile of such seal shall be engraved, printed, or otherwise reproduced on
the Securities. The signatures of such officers on the Securities may be
manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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<PAGE>
At any time and from time to time, the Company may deliver Securities of
any series executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and make available for delivery
such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; PROVIDED, HOWEVER, that in the
case of Securities offered in a Periodic Offering, the Trustee shall
authenticate and deliver such Securities from time to time in accordance with
such other procedures (including, without limitation, the receipt by the Trustee
of oral or electronic instructions from the Company or its duly authorized
agents, promptly confirmed in writing) acceptable to the Trustee as may be
specified by or pursuant to a Company Order delivered to the Trustee prior to
the time of the first authentication of Securities of such series.
If the form or terms of the Securities of a series have been established
by or pursuant to one or more Officers' Certificates as permitted by Sections
2.1 and 3.1, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to section 315(a) through
(d) of the Trust Indenture Act) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(1) that the forms and terms of such Securities have been established
in conformity with the provisions of this Indenture; and
(2) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to customary exceptions;
PROVIDED, HOWEVER, that, with respect to Securities of a series subject to
a Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as may
be specified from time to time in a Company Order, all as contemplated by
and in accordance with a Board Resolution or an Officers' Certificate
pursuant to Section 3.1, as the case may be) will have been, established in
conformity with the provisions of this Indenture; and
(y) that such Securities, when (1) executed by the Company, (2)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, and (3) issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company, enforceable in accordance
with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the
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<PAGE>
Opinion of Counsel and other documents delivered pursuant to Sections 2.1 and
3.1 of this Section, as applicable, at or prior to the time of the first
authentication of Securities of such series unless and until it has received
written notification that such opinion or other documents have been superseded
or revoked. In connection with the authentication and delivery of Securities of
a series subject to a Periodic Offering, the Trustee shall be entitled to assume
that the Company's instructions to authenticate and deliver such Securities do
not violate any rules, regulations or orders of any governmental agency or
commission having jurisdiction over the Company.
If the form or terms of the Securities of a series have been established
by or pursuant to one or more Officers' Certificates as permitted by Sections
2.1 and 3.1, the Trustee shall have the right to decline to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all of the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 at or prior to the time of the authentication
of each Security of such series if the Officers' Certificate is delivered at or
prior to the authentication upon original issuance of the first Security of such
series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefits under this Indenture or be
valid or obligatory for any purpose until authenticated by the manual
signature of one of the authorized signatories of the Trustee or an
Authenticating Agent. Such signature upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly
authenticated and delivered under this Indenture and is entitled to the
benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.9 together with a written statement
(which need not comply with Section 1.2 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall not
be entitled to the benefits of this Indenture.
SECTION 3.4 TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the
Company may execute and, upon Company Order, the Trustee shall authenticate
and deliver temporary Securities of such series which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor and form of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions,
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<PAGE>
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
permanent Securities of such series to be prepared without unreasonable delay.
After preparation of such permanent Securities, the temporary Securities shall
be exchangeable for such permanent Securities of like tenor upon surrender of
the temporary Securities of such series at the office or agency of the Company
pursuant to Section 9.2 in a Place of Payment for such series, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Permanent Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as permanent
Securities of such series except as otherwise specified as contemplated by
Section 3.1.
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency to be maintained by the Company in
accordance with Section 9.2 in a Place of Payment a register (the "Register")
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and the registration
of transfers of Securities. The Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee is hereby appointed "Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency maintained pursuant to Section 9.2 in a Place
of Payment for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of like aggregate principal amount containing identical terms and provisions,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
Whenever any Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
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All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of such
transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Registrar or the
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to those of the Company, the Registrar and the
Trustee requiring such written instrument of transfer duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service change shall be made for any registration of transfer or for
any exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration or transfer or exchange of Securities,
other than exchanges pursuant to Section 3.4 or 10.7 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of, or exchange any Securities for a period beginning at the opening of
business 15 days before any selection for redemption of Securities of like
tenor and of the series of which such Security is a part and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of Securities of like
tenor and of such series to be redeemed or (ii) to register the transfer of or
exchange of any Security so selected for redemption, in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 3.6 REPLACEMENT SECURITIES
If a mutilated Security is surrendered to the Trustee, together with, in
proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them harmless, the Company shall execute and the
Trustee shall authenticate and deliver a replacement Security of the same
series and date of maturity, if the Trustee's requirements are met.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agency of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and the Trustee shall authenticate
and deliver in lieu of any such destroyed, lost or stolen Security, a
replacement Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee connected therewith).
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security, shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED
Unless otherwise provided as contemplated by Section 3.1, interest, if
any, on any Security which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office
or agency maintained for such purpose pursuant to Section 9.2; PROVIDED,
HOWEVER, that, at the option of the Company, interest on any series of
Securities that bear interest may be paid (i) by check mailed to the address
of the Person entitled thereto as it shall appear on the Register of Holders
of Securities of such series or (ii) to the extent specified as contemplated
by Section 3.1, by wire transfer to an account maintained by the Person
entitled thereto as specified in the Register of Holders of Securities of such
series.
Unless otherwise provided as contemplated by Section 3.1, any interest
on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any interest payment date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall
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make arrangements satisfactory to the trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in
this clause (1) provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series at his address
as it appears in the Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a
specified date in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause (2), such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable.
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SECTION 3.8 PERSONS DEEMED OWNERS
Prior to due presentment of any Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if
any, and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9 CANCELLATION
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and any Paying Agent shall forward to the Trustee
any Securities surrendered to them for replacement, for registration of
transfer, or for exchange, conversion or payment. The Trustee shall cancel
all Securities surrendered for replacement, for registration of transfer, or
for exchange, conversion, payment, redemption or cancellation and may dispose
of cancelled Securities and issue a certificate of destruction to the Company.
The Company may not issue new Securities to replace Securities that it has
paid or delivered to the Trustee for cancellation, except as expressly
permitted in the terms of Securities for any particular series or as permitted
pursuant to the terms of this Indenture.
SECTION 3.10 COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 3.1 (i)
interest of any Securities that bear interest at a fixed rate shall be
computed on the basis of a 360-day year of twelve 30 day months and (ii)
interest on any Securities the bear interest at a variable rate shall be
computed on the basis of the actual number of days in an interest period
divided by 360 or the actual number of days in the year.
SECTION 3.11 CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers (in
addition to the other identification numbers printed on the Securities) in
notices of redemption as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
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ARTICLE 4
SATISFACTION, DISCHARGE AND COVENANT DEFEASANCE
SECTION 4.1 TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE INDENTURE
Except as otherwise provided as contemplated by Section 3.1, this
Indenture shall upon Company Request cease to be of further effect with
respect to Securities of or within any series (except as to any surviving
rights of registration of transfer or exchange of such Securities and
replacement of such Securities which may have been lost, stolen or mutilated
as herein expressly provided for) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to such Securities when
(1) either
(A) all such Securities previously authenticated and delivered
(other than (i) such Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
3.6, and (ii) such Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as
provided in Section 9.3) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal, premium, if
any, and interest, with respect thereto, to the date of such deposit
(in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
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(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligation of the Company to the Trustee and any predecessor Trustee under
Section 6.8, the obligations of the Company to any Authenticating Agent under
Section 6.13 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 9.3 shall survive.
SECTION 4.2 APPLICATION OF TRUST FUNDS
Subject to the provisions of the last paragraph of Section 9.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal, premium, if
any, and any interest for whose payment such money has been deposited with or
received by the Trustee, but such money need not be segregated from other
funds except to the extent required by law. All moneys deposited with the
Trustee pursuant to Section 4.1 (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon Company Request.
SECTION 4.3 APPLICABILITY OF COVENANT DEFEASANCE PROVISIONS; COMPANY'S
OPTION TO EFFECT COVENANT DEFEASANCE
If pursuant to Section 3.1 provision is made for covenant defeasance of
the Securities of or within a series under Section 4.4, then the provisions of
such Section, together with the provisions of Sections 4.5 through 4.8
inclusive, with such modifications thereto as may be specified pursuant to
Section 3.1 with respect to any Securities, shall be applicable to such
Securities, and the Company may at its option by Board Resolution, at any
time, with respect to such Securities, elect to have Section 4.4 (if
applicable) be applied to such Outstanding Securities upon compliance with the
conditions set forth below in this Article.
SECTION 4.4 COVENANT DEFEASANCE
Upon the Company's exercise of the option specified in Section 4.3
applicable to this Section with respect to any Securities of or within a
series, the Company shall be released from its obligations under Sections 7.1,
9.4 and 9.5, and, if specified pursuant to Section 3.1, its obligations under
any other covenant, with respect to such Securities on and after the date the
conditions set forth in Section 4.5 are satisfied (hereinafter, "covenant
defeasance"), and such
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Securities shall thereafter be deemed to be not "Outstanding" for the purposes
of any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 7.1, 9.4 and 9.5, or
such other covenant, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such Section or such other covenant, whether directly or indirectly, by reason
of any reference elsewhere herein to any such Section or such other covenant or
by reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 5.1(3) or 5.1(7)
or otherwise, as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 4.5 CONDITIONS TO COVENANT DEFEASANCE
The following shall be the conditions to application of Section 4.4 to
any Securities of or within a series:
(a) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 6.11 who shall agree to comply with, and shall be
entitled to the benefits of, the provisions of Sections 4.3 through 4.8
inclusive and the last paragraph of Section 9.3 applicable to the Trustee,
for purposes of such Sections also a "Trustee") as trust funds in trust for
the purpose of making the payments referred to in clauses (x) and (y) of
this Section 4.5(a), specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, with instructions
to the Trustee as to the application thereof, (A) money in an amount, or
(B) if Securities of such series are not subject to repayment at the option
of Holders, Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment referred
to in clause (x) or (y) of this Section 4.5(a), money in an amount or (C) a
combination thereof in an amount, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee to pay and
discharge, (x) the principal of, premium, if any, and interest, if any, on
such Securities on the Maturity of such principal or installment of
principal or interest and (y) any mandatory sinking fund payments
applicable to such Securities on the day on which such payments are due and
payable in accordance with the terms of this Indenture and such Securities.
Before such a deposit the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date or dates in
accordance with Article 10 which shall be given effect in applying the
foregoing.
(b) Such covenant defeasance shall not result in a breach or
violation of, or constitute a Default or Event of Default under, this
Indenture or result in a breach or
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violation of, or constitute a default under, any other material agreement
or instrument to which the Company is a party or by which it is bound.
(c) No Default or Event of Default under Section 5.1(5) or 5.1(6)
with respect to such Securities shall have occurred and be continuing
during the period commencing on the date of such deposit and ending on the
91st day after such date (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
(d) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(e) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the covenant defeasance under Section 4.4 have been
complied with and an Opinion of Counsel to the effect that either (i) as
a result of a deposit pursuant to subsection (a) above and the related
exercise of the Company's option under Section 4.4, registration is not
required under the Investment Company Act of 1940, as amended, by the
Company, with respect to the trust funds representing such deposit or by
the trustee for such trust funds or (ii) all necessary registrations
under said act have been effected.
(f) Such covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which
may be imposed on the Company in connection therewith as contemplated by
Section 3.1.
SECTION 4.6 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST
Subject to the provisions of the last paragraph of Section 9.3, all
money and Government Obligations (or other property as may be provided
pursuant to Section 3.1) (including the proceeds thereof) deposited with the
Trustee pursuant to Section 4.5 in respect of any Securities of any series
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
of all sums due and to become due thereon in respect of principal, premium, if
any, and interest, if any, but such money need not be segregated from other
funds except to the extent required by law.
SECTION 4.7 TRANSFERS AND DISTRIBUTION AT COMPANY REQUEST
To the extent permitted by the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 76, as amended or interpreted
by the Financial Accounting Standards Board from time to time, or any
successor thereto ("Standard No. 76"), or to the
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extent permitted by the Commission, the Trustee shall, from time to time, take
one or more of the following actions as specified in a Company Request:
(a) Retransfer, reassign and deliver to the Company any
securities deposited with the Trustee pursuant to Section 4.5(a),
provided that the Company shall in substitution therefor, simultaneously
transfer, assign and deliver to the Trustee other Government Obligations
appropriate to satisfy the Company's obligations in respect of the
relevant Securities; and
(b) The Trustee (and any Paying Agent) shall promptly pay to the
Company upon Company Request any excess money or securities held by them
at any time, including, without limitation, any assets deposited with
the Trustee pursuant to Section 4.5(a) exceeding those necessary for the
purposes of Section 4.5(a).
The Trustee shall not take the actions described in subsections (a) and
(b) of this Section 4.7 unless it shall have first received a written report
of Arthur Andersen & Co., or another nationally recognized independent public
accounting firm, (i) expressing their opinion that the contemplated action is
permitted by Standard No. 76 or the Commission, for transactions accounted for
as extinguishment of debt under the circumstances described in paragraph 3.c
of Standard No. 76 or any successor provision and (ii) verifying the accuracy,
after giving effect to such action or actions, of the computations which
demonstrate that the amounts remaining to be earned on the Government
Obligations deposited with the Trustee pursuant to Section 4.5(a) will be
sufficient for purposes of Section 4.5(a).
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT
An "Event of Default" occurs with respect to the Securities of any
series if (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) the Company defaults in the payment of interest on any
Security of that series or any additional amount payable with respect to
any Security of that series as specified pursuant to Section 3.1(b)(14)
when the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of or
any premium on any Security of that series when the same becomes due and
payable at its Maturity or on redemption or otherwise, or in the payment
of a mandatory sinking fund payment when and as due by the terms of the
Securities of that series, and in each case such default continues for a
period of ten days;
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(3) the Company defaults in the performance of, or breaches, any
covenant or warranty of the Company in this Indenture with respect to
any Security of that series (other than a covenant or warranty a default
in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and such default or breach continues for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the Outstanding
Securities of that series, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) the Company defaults under the terms of any agreement or
instrument evidencing or under which the Company has at the date of this
Indenture or hereafter outstanding any indebtedness for borrowed money
and such indebtedness shall be accelerated so that the same shall be or
become due and payable prior to the date on which the same would
otherwise become due and payable and the aggregate principal amount
thereof so accelerated exceeds $___________ and such acceleration is not
rescinded or annulled within ten days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series a written
notice specifying such default and stating that such notice is a "Notice
of Default" hereunder; (it being understood, however, that, subject to
the provisions of Section 6.1, the Trustee shall not be deemed to have
knowledge of such default under such agreement or instrument unless
either (A) a Responsible Officer of the Trustee shall have actual
knowledge of such default or (B) a Responsible Officer of the Trustee
shall have received written notice thereof from the Company, from any
Holder, from the holder of any such indebtedness or from the trustee
under any such agreement or other instrument); PROVIDED, HOWEVER,
that if such default under such agreement or instrument is remedied or
cured by the Company or waived by the holders of such indebtedness, then
the Event of Default hereunder by reason thereof shall be deemed
likewise to have been thereupon remedied, cured or waived without
further action upon the part of either the Trustee or any of such
Holders;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) consents to the entry
of an order for relief against it in an involuntary case, (C) consents
to the appointment of a Custodian of it or for all or substantially all
of its property, or (D) makes a general assignment for the benefit of
its creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against the Company in
an involuntary case, (B) appoints a Custodian of the Company or for all
or substantially all of its property, or (C) orders the liquidation of
the Company; and the order or decree remains unstayed and in effect for
90 consecutive days; or
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(7) any other Event of Default provided as contemplated by
Section 3.1 with respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under
any Bankruptcy Law.
SECTION 5.2 ACCELERATION, RESCISSION AND ANNULMENT
If an Event of Default with respect to the Securities of any series at
the time Outstanding occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of all of the outstanding
Securities of that series, by written notice to the Company (and, if given by
the Holders, to the Trustee), may declare the principal (or, if the Securities
of that series are Original Issue Discount Securities or Indexed Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all the Securities of that series to be due and payable and upon
any such declaration such principal (or, in the case of original Issue
Discount Securities or Indexed Securities, such specified amount) shall be
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal amount
of the outstanding Securities of that series, by written notice to the
Trustee, may rescind and annul such declaration and its consequences if all
existing Defaults and Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of Securities of that
series which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.7. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof and such
default continues for a period of 10 days,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal, premium, if any, and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal, premium, if any, and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as
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shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
and the Holders of Securities allowed in any judicial proceedings relating to
the Company, its creditors or its property.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto.
SECTION 5.6 DELAY OR OMISSION NOT WAIVER
No delay or omission by the Trustee or any Holder of any Securities to
exercise any right or remedy accruing upon an Event of Default shall impair
any such right or remedy or constitute a waiver of or acquiescence in any such
Event of Default.
SECTION 5.7 WAIVER OF PAST DEFAULTS
The Holders of a majority in aggregate principal amount of Outstanding
Securities of any series by notice to the Trustee may waive on behalf of the
Holders of all Securities of such series a past Default or Event of Default
with respect to that series and its consequences except (i) a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
any Security of such series or (ii) in respect of a covenant or provision
hereof which pursuant to Section 8.2 cannot be amended or modified without the
consent of the Holder of each outstanding Security of such series adversely
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture.
SECTION 5.8 CONTROL BY MAJORITY
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of each series affected (with each such series voting
as a class) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it with respect to Securities of
that series;
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PROVIDED, HOWEVER, that (i) the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, (ii) the Trustee may refuse to follow any
direction that is unduly prejudicial to the rights of the Holders of Securities
of such series not consenting, or that would in the good-faith judgment of the
Trustee have a substantial likelihood of involving the Trustee in personal
liability and (iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.9 LIMITATION ON SUITS BY HOLDERS
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) the Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of at least 25% in aggregate principal amount of
the Outstanding Securities of that series have made a written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to
be, or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such notice,
request and the offer of indemnity has failed to institute any such
proceedings; and
(5) during such 60-day period, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series
has not given to the Trustee a direction inconsistent with such written
request.
No one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders, or to obtain or
to seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all of such Holders.
SECTION 5.10 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, premium, if any, and,
subject to Section 3.7, interest on the Security, on or after the respective
due dates expressed in the Security (or, in case of redemption, on the
redemption dates) and to convert such Security in accordance with Article 12,
and, subject to Section 5.9, to bring suit for the enforcement of any such
payment
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and right to convert on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 5.11 APPLICATION OF MONEY COLLECTED
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of
principal, premium, if any, or interest, upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 6.9;
SECOND: to Holders of Securities in respect of which or for the
benefit of which such money has been collected for amounts due and
unpaid on such Securities for principal of, premium, if any, and
interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal,
premium, if any, and interest, respectively; and
THIRD: to the Company.
SECTION 5.12 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 5.13 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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ARTICLE 6
THE TRUSTEE
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing with
respect to the Securities of any series, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture with respect to the
Securities of such series, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, EXCEPT that:
(1) this subjection shall not be construed to limit the effect
of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties
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hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.2 RIGHTS OF TRUSTEE
Subject to the provisions of the Trust Indenture Act:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties.
(b) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
(other than delivery of any Security to the Trustee for authentication
and delivery pursuant to Section 3.3, which shall be sufficiently
evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution.
(c) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate.
(d) The Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(e) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall
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determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney.
(g) The Trustee may act through agents or attorneys and shall
not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(h) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
(i) The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 6.3 TRUSTEE MAY HOLD SECURITIES
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 310(b) and 311 of the Trust
Indenture Act, may otherwise deal with the Company, an Affiliate or Subsidiary
with the same rights it would have if it were not Trustee, Paying Agent,
Registrar or such other agent.
SECTION 6.4 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.5 TRUSTEE'S DISCLAIMER
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities. The Trustee shall not be accountable for the
Company's use of the proceeds from the Securities or for monies paid over to
the Company pursuant to the Indenture.
SECTION 6.6 NOTICE OF DEFAULTS
If a Default occurs and is continuing with respect to the Securities of
any series and if it is known to the Trustee, the Trustee shall, within 90
days after it occurs, transmit, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, notice of all uncured Defaults
known to it; PROVIDED, HOWEVER, that, in the case of a Default in payment
on the Securities of any series, the Trustee may withhold the notice if and so
long as the board of
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directors, the executive committee or a committee of its Responsible Officers in
good faith determines that withholding such notice is in the interests of
Holders of Securities of that series; PROVIDED FURTHER that, in the case of any
default or breach of the character specified in Section 5.1(3) with respect to
the Securities of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof.
SECTION 6.7 REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each May 15 of each year commencing with the first
May 15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in
Section 313(c) of the Trust Indenture Act a brief report dated as of such May
15 if required by Section 313(a) of the Trust Indenture Act. The Trustee also
shall comply with Section 313(b) and (d) of the Trust Indenture Act.
SECTION 6.8 SECURITYHOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Securities of each series. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee semiannually on or before the last
day of June and December in each year, and at such other times as the Trustee
may request in writing, a list, in such form and as of such date as the
Trustee may reasonably require, containing all the information in the
possession of the Registrar, the Company or any of its Paying Agents other
than the Trustee as to the names and addresses of Holders of Securities of
each such series.
SECTION 6.9 COMPENSATION AND INDEMNITY
(a) The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for all
services rendered by it hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in connection with the performance of
its duties under this Indenture, except any such expense as may be
attributable to its negligence or bad faith. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it without negligence or
bad faith on its part arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent.
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(c) The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or bad faith.
(d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Securities of any series
on all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest on particular
Securities.
(e) when the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(5) or Section 5.1(6), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
(f) The provisions of this Section shall survive the termination of
this Indenture.
SECTION 6.10 REPLACEMENT OF TRUSTEE
(a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of any series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities or such series.
(c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with respect to
that series by so notifying the Trustee and the Company and may appoint a
successor Trustee for such series with the Company's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months; or
(2) the Trustee shall cease to be eligible under Section 310(a)
of the Trust Indenture Act and shall fail to resign after written
request therefor by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months; or
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(3) the Trustee becomes incapable of acting, is adjudged a
bankrupt or an insolvent or a receiver or public officer takes charge of
the Trustee or its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Company by or pursuant to a Board Resolution may remove the Trustee
with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all other
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to Securities of one or more
series, the Company, by or pursuant to Board Resolution, shall promptly
appoint a successor Trustee with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
6.11. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 6.11, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment. Thereupon, the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee,
without further act, deed or conveyance, shall become vested with all the
rights, powers and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and such successor Trustee shall execute and deliver an
indenture supplemental hereto wherein such successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, such successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates, (ii) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (iii) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under the Trust Indenture Act.
(e) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series in the manner provided for notices to the Holders of Securities in
Section 1.6. Each notice shall include the name of the successor Trustee with
respect to the securities of such series and the address of its Corporate
Trust office.
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SECTION 6.12 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under Section 310(a)(1) of the Trust Indenture Act and shall
have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or the requirements of Federal, State Territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee 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 Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue exchange, registration of transfer, partial conversion or partial
redemption thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authenticating
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and,
except as may otherwise be provided pursuant to Section 3.1, shall at all
times be a bank or trust company or corporation organized and doing business
and in good standing under the laws of the United States of America or of any
State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$10,000,000 and subject to supervision or
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examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating 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 such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, PROVIDED, such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any
time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the
series with respect to which such Authenticating Agent will serve in the
manner set forth in Section 1.6. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of a series issued under the
within-mentioned Indenture.
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_________________________________,
as Trustee
By ___________________________
as Authenticating Agent
By ___________________________
Authorized Officer
SECTION 6.15 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY
Any application by the Trustee for written instructions from the Company
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective.
The Trustee shall not be liable for any action taken by, or omission of, the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than
fifteen Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to
be taken or omitted.
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
SECTION 7.1 CONSOLIDATION, MERGER OR SALE OF ASSETS PERMITTED
The Company may merge or consolidate with or into any other corporation
or sell, convey, transfer or otherwise dispose of all or substantially all of
its assets to any person, firm or corporation, if (i) (A) in the case of a
merger or consolidation, the Company is the surviving corporation or (B) in
the case of a merger or consolidation where the Company is not the surviving
corporation and in the case of any such sale, conveyance or other disposition,
the successor or acquiring corporation is a corporation organized and existing
under the laws of the United States or a State thereof and such corporation
expressly assumes by supplemental indenture all of the obligations of the
Company under the Securities and under this Indenture and shall have provided
for conversion rights in accordance with Section 12.11, (ii) immediately
thereafter, giving effect to such merger or consolidation, or such sale,
conveyance, transfer or other disposition, no Default or Event of Default
shall have occurred and be continuing and (iii) the company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such merger or consolidation, or such sale, conveyance, transfer or other
disposition, complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with. In
the
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event of the assumption by a successor corporation of the obligations of
the Company as provided in clause (i)(B) of the immediately preceding
sentence, such successor corporation shall succeed to and be substituted for
the Company hereunder and under the Securities and all such obligations of the
Company shall terminate.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may
enter into indentures supplemental hereto, in form reasonably satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities, stating
that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon
the Company; or
(3) to add any additional Events of Default with respect to all
or any series of Securities; or
(4) to add to or change any of the provisions of this Indenture
to such extent as shall be necessary to facilitate the issuance of
Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to facilitate the
issuance of Securities in global form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture, PROVIDED that any such addition, change or elimination
shall become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture
which is entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 and 3.2; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to
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or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section 6.10; or
(9) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 12.11; or
(10) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture, PROVIDED such action shall not adversely affect the
interests of the Holders of Securities of any series, or to cure any
ambiguity or correct any mistake.
SECTION 8.2 WITH CONSENT OF HOLDERS
With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Securities of each series adversely
affected by such supplemental indenture, the Company and the Trustee may enter
into an indenture or indentures supplemental hereto to add any provisions to
or to change or eliminate any provisions of this Indenture or of any other
indenture supplemental hereto or to modify the rights of the Holders of
Securities of each such series; PROVIDED, HOWEVER, that without the
consent of the Holder of each Outstanding Security affected thereby, an
amendment under this Section may not:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the coin or currency in which, any
Securities or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or adversely affect the right to convert any
Security as provided in Article 12 (except as permitted by Section 8.1(9));
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture;
(3) change any obligation of the Company to maintain an office
or agency in the places and for the purposes specified in Section 9.2;
or
(4) make any change in Section 5.7 or this 8.2(a) except to
increase any percentage or to provide that certain other provisions of
this Indenture cannot be
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modified or waived with the consent of the Holders of each Outstanding
Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture, which has expressly been included solely
for the benefit of one or more particular series of Securities, or that
modifies the rights of the Holders of Securities of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
It is not necessary under this Section 8.2 for the Holders to consent to
the particular form of any proposed supplemental indenture, but it is
sufficient if they consent to the substance thereof.
SECTION 8.3 COMPLIANCE WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article shall
comply with the requirements of the Trust Indenture Act as then in effect.
SECTION 8.4 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 8.5 EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 8.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
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ARTICLE 9
COVENANTS
SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest on the Securities of that series in accordance
with the terms of the Securities of such series and this Indenture. An
installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay the installment.
SECTION 9.2 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities may be
surrendered for conversion and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.
SECTION 9.3 MONEY FOR SECURITIES TO BE HELD IN TRUST; UNCLAIMED MONEY
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of, premium, if any, or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming
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due until such sums shall be paid to such persons or otherwise disposed of as
herein provided and will promptly notify the Trustee in writing of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of
any payment of principal, premium, if any, or interest on the
Securities; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of any principal, premium or interest
on any Security of any series and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
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SECTION 9.4 CORPORATE EXISTENCE
Subject to Article 7, the Company will at all times do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and its rights and franchises; PROVIDED that nothing in
this Section 9.4 shall prevent the abandonment or termination of any right or
franchise of the Company if, in the opinion of the Company, such abandonment
or termination is in the best interests of the Company and does not materially
adversely affect the ability of the Company to operate its business or to
fulfill its obligations hereunder.
SECTION 9.5 INSURANCE
The Company covenants and agrees that it will maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations or through a program of self-insurance in
such amounts and covering such risks as are consistent with sound business
practice for corporations engaged in the same or a similar business similarly
situated.
SECTION 9.6 REPORTS BY THE COMPANY
The Company covenants:
(a) to file with the Trustee, within 30 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934, as amended; or, if the
Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and
the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
section 13 of the Securities Exchange Act of 1934, as amended, in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
provided for in this Indenture, as may be required from time to time by
such rules and regulations; and
(c) to transmit to all Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the
extent provided in section 313(c) of the Trust Indenture Act, such
summaries of any information, documents and reports
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required to be filed by the Company pursuant to subsections (a) and (b) of
this Section 9.6, as may be required by rules and regulations prescribed
from time to time by the Commission.
SECTION 9.7 ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULT
The Company covenants and agrees to deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, a brief certificate
from the principal executive officer, principal financial officer, or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For
purposes of this Section 9.7, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. The Company shall file with the Trustee written notice of
occurrence of any Event of Default within 30 Business Days of its becoming
aware of any such Event of Default.
SECTION 9.8 PROVISION OF FINANCIAL STATEMENTS
If the Company is not required to file with the Commission periodic
reports and other information pursuant to section 13(a), 13(c) or 15(d) of the
Securities Exchange Act of 1934, the Company shall furnish without cost to
each Holder and file with the Trustee (i) within 135 days after the end of
each fiscal year, annual reports containing the information required to be
contained in Items 1, 2, 3, 5, 6, 7, 8 and 9 of Form 10-K promulgated under
the Securities Exchange Act of 1934, or substantially the same information
required to be contained in comparable items of any successor form, (ii)
within 60 days after the end of each of the first three fiscal quarters of
each fiscal year, quarterly reports containing the information required to be
contained in Form 10-Q promulgated under the Securities Exchange Act of 1934,
or substantially the same information required to be contained in any
successor form and (iii) promptly from the time after the occurrence of an
event required to be therein reported, such other reports containing
information required to be contained in Form 8-K promulgated under the
Securities Exchange Act of 1934, or substantially the same information
required to be contained in any successor form. The Company shall also make
such reports available to prospective purchasers of the Securities, securities
analysts and broker-dealers upon their request.
ARTICLE 10
REDEMPTION
SECTION 10.1 APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any
series) in accordance with this Article.
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SECTION 10.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution or any Officers' Certificate. In the
case of any redemption at the election of the Company of less than all the
Securities, if any, of any series, the Company shall, at least 60 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (i) prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture or (ii) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 10.3 SELECTION OF SECURITIES TO BE REDEEMED
Unless otherwise specified as contemplated by Section 3.1, if less than
all the Securities of a series with the same original issue date, interest
rate and Stated Maturity are to be redeemed, the Trustee, not more than 45
days prior to the redemption date, shall select the Securities of the series
to be redeemed in such manner as the Trustee shall deem fair and appropriate.
The Trustee shall make the selection from Securities of the series that are
Outstanding and that have not previously been called for redemption and may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series. The Trustee shall promptly notify the Company in writing of the
Securities selected by the Trustee for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection.
For purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 10.4 NOTICE OF REDEMPTION
Unless otherwise specified as contemplated by Section 3.1, notice of
redemption shall be given in the manner provided in Section 1.6 not less than
30 days nor more than 60 days prior to the Redemption Date to the Holders of
the Securities to be redeemed.
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All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of a series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Security or
Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed;
(5) the conversion price, the date on which the right to convert
the principal of the Securities to be redeemed will terminate and the
place or places where such Securities may be surrendered for conversion;
(6) the Place or Places of Payment where such Securities
maturing after the Redemption Date, are to be surrendered for payment
for the Redemption Price;
(7) that Securities of the series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(8) that, on the Redemption Date, the Redemption Price will
become due and payable upon each such Security, or the portion thereof,
to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date;
(9) that the redemption is for a sinking fund, if such is the
case; and
(10) CUSIP number.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 10.5 DEPOSIT OF REDEMPTION PRICE
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.3) an amount of
money sufficient to pay on the Redemption Date the Redemption Price of, and
(unless the Redemption Date shall be an Interest Payment Date) interest
accrued to the Redemption Date on, all Securities or portions thereof which
are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
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Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust
for the redemption of such Security shall (subject to any right of the Holder
of such Security or any Predecessor Security to receive interest as provided
in the last paragraph of Section 3.7) be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.
SECTION 10.6 SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Except as provided in
the next succeeding paragraph, upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest on Securities whose
Stated Maturity is prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 10.7 SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part at any Place of
Payment therefor (with, if the Company or the Trustee so required, due
endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of that Security, without
service charge, a new Security or Securities of the same series, the same form
and the same Maturity in any authorized denomination equal in aggregate
principal amount to the unredeemed portion of the principal of the Security
surrendered.
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ARTICLE 11
SINKING FUNDS
SECTION 11.1 APPLICABILITY OF ARTICLE
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 11.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company (i) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (ii) may apply as a credit
Securities of a series which have been converted pursuant to Article 12 or
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case
in satisfaction of all or any part of any sinking fund payment with respect to
the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; PROVIDED that
such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 11.3 REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 11.2 and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 10.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 10.4. Such notice having
been
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duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 10.6 and 10.7.
ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 CONVERSION PRIVILEGE
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, Securities of any series or any portion of
the principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted at the principal amount thereof, or of such portion thereof,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company, in accordance
with the terms of such series of Securities and (except as otherwise specified
as contemplated by Section 3.1) in accordance with this Article. In case a
Security or portion thereof is called for redemption, such conversion right in
respect of the Security or portion so called shall expire at the close of
business on the Business Day which is ten days prior to the Redemption Date,
unless the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion, which shall be specified as contemplated by Section 3.1, shall be
referred to herein as the "conversion price." The conversion price shall be
adjusted in certain instances as provided in paragraphs (1), (2), (3), (4) and
(7) of Section 12.4.
SECTION 12.2 EXERCISE OF CONVERSION PRIVILEGE
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 9.2, accompanied by written
notice to the Company at such office or agency that the Holder elects to
convert such Security or, if less than the entire principal amount thereof is
to be converted, the portion thereof to be converted. Securities surrendered
for conversion during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of Securities
or portions thereof which have been called for redemption on a Redemption Date
within such period) be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Securities
being surrendered for conversion. Except as provided in the preceding
sentence and in Section 3.7, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered
for conversion or on account of any dividends on the Common Stock issued upon
conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for
conversion in accordance with the
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foregoing provisions, and at such time the rights of the Holders of such
Securities as Holders shall cease, and the Person or Persons entitled to receive
the Common Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver at such office or agency a certificate or certificates for the number of
full shares of Common Stock issuable upon conversion, together with payment in
lieu of any fraction of a share, as provided in Section 12.3.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations in aggregate principal amount equal
to the uncontroverted portion of the principal amount of such Security.
SECTION 12.3 FRACTIONS OF SHARES
No fractional shares of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the market
price per share of Common Stock (as determined by the Board of Directors or in
any manner prescribed by the Board of Directors) at the close of business on
the day of conversion.
SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For
the purposes of this paragraph (1), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not
pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
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(2) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the dated fixed for the determination of stockholders entitled to receive
such rights or warrants, the conversion price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for determination.
For the purposes of this paragraph (2), the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not
issue any rights or warrants in respect of shares of Common Stock held in the
treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid in cash out
of the retained earnings of the Company and any dividend or distribution
referred to in paragraph (1) of this Section), the conversion price shall be
adjusted so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price share (determined as provided in paragraph (6) of this Section) of the
Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution filed with the
Trustee) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall
be such current market price per share of the Common Stock, such adjustment to
become effective immediately prior
-63-
<PAGE>
to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(5) The reclassification of Common Stock into securities including
other than Common Stock (other than any reclassification upon a consolidation
or merger to which Section 12.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of stockholders entitled to
receive such distribution" and "the date fixed for such determination" within
the meaning of paragraph (4) of this Section) and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of this
Section).
(6) For the purpose of any computation under paragraphs (2) and (4) of
this Section, the current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the five
consecutive Trading Days selected by the Company commencing not more than 20
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The closing price for each day shall
be the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq National Market, or, if the Common Stock is
not listed or admitted to trading on any national securities exchange or
quoted on the Nasdaq National Market, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for that
purpose. For purposes of this paragraph, the term "ex' date", when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(7) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (1), (2), (3) and (4) of this
Section, as it considers to be advisable in order that any event treated for
federal income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipients.
SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE
Whenever the conversion price is adjusted as herein provided:
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<PAGE>
(a) the Company shall compute the adjusted conversion price in
accordance with Section 12.4 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section
9.2; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be required, and
as soon as practicable after it is required, such notice shall be mailed by
the Company to all Holders at their last addresses as they shall appear in the
Register.
SECTION 12.6 NOTICE OF CERTAIN CORPORATE ACTION
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common Stock),
or of any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 9.2, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Register, at least 20 days (or ten days in any case specified in clause
(a) or (b) above) prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
-65-
<PAGE>
SECTION 12.7 COMPANY TO RESERVE COMMON STOCK
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares
of Common Stock then issuable upon the conversion of all outstanding
Securities.
SECTION 12.8 TAXES ON CONVERSIONS
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to
the Company the amount of any such tax, or has established to the satisfaction
of the Company that such tax has been paid.
SECTION 12.9 COVENANT AS TO COMMON STOCK
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 12.8, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
SECTION 12.10 CANCELLATION OF CONVERTED SECURITIES
All Securities delivered for conversion shall be delivered to the
Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.9.
SECTION 12.11 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OF SALE OF ASSETS
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any sale or transfer of all or substantially all of the assets
of the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 12.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer by
a holder of the number of shares of Common Stock of the Company into which
such Security might have been converted immediately prior to such
consolidation, merger, sale or transfer, assuming such holder of Common Stock
of the Company (i) is not a Person with which the Company
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<PAGE>
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("constituent
Person"), or an Affiliate of a constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer is not the same
for each share of Common Stock of the Company held immediately prior to such
consolidation, merger, sale or transfer by others than a constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("nonelecting share"), then for the purpose of this
Section the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by each nonelecting share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the nonelecting shares). Such supplemental indenture shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
The Company shall be solely responsible for performing the duties and
responsibilities contained in this Article and the Trustee shall have no
responsibility therefor.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute
but one instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ALASKA AIR GROUP, INC.
By:__________________________________
Title: Vice President - Finance
[Seal]
Attest
- ------------------------------
Title: Vice President
________________________, TRUSTEE
By:__________________________________
Title:
[Seal]
Attest:
- ------------------------------
Title:
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<PAGE>
EXHIBIT 4(a)(3)
---------------------------------------------------------------
---------------------------------------------------------------
ALASKA AIR GROUP, INC., ISSUER
TO
, TRUSTEE
____________________
-------------------
INDENTURE
DATED AS OF ___________ ___, 199__
_____________________
CONVERTIBLE SUBORDINATED DEBT SECURITIES
---------------------------------------------------------------
---------------------------------------------------------------
<PAGE>
Reconciliation and tie between Indenture, dated as of ____________ ___, 199__,
and the Trust Indenture Act of 1939, as amended.
TRUST INDENTURE ACT INDENTURE
OF 1939 SECTION SECTION
- ------------------- ---------
310(a)(1). . . . . . . . . . . . . . . . . . . 6.12
(a)(2). . . . . . . . . . . . . . . . . . . 6.12
(a)(3). . . . . . . . . . . . . . . . . . . TIA
(a)(4). . . . . . . . . . . . . . . . . . . Not applicable
(a)(5). . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . 6.10; 6.12; TIA
311(a) . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . TIA
312(a) . . . . . . . . . . . . . . . . . . . . 6.8
(b) . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . TIA
313(a) . . . . . . . . . . . . . . . . . . . . 6.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . TIA
(d) . . . . . . . . . . . . . . . . . . . . TIA
314(a) . . . . . . . . . . . . . . . . . . . . 9.6; 9.7; TIA
(b) . . . . . . . . . . . . . . . . . . . . Not applicable
(c)(1). . . . . . . . . . . . . . . . . . . 1.2
(c)(2). . . . . . . . . . . . . . . . . . . 1.2
(c)(3). . . . . . . . . . . . . . . . . . . Not applicable
(d) . . . . . . . . . . . . . . . . . . . . Not applicable
(e) . . . . . . . . . . . . . . . . . . . . TIA
(f) . . . . . . . . . . . . . . . . . . . . TIA
315(a) . . . . . . . . . . . . . . . . . . . . TIA
(b) . . . . . . . . . . . . . . . . . . . . 6.6
(c) . . . . . . . . . . . . . . . . . . . . TIA
(d)(1). . . . . . . . . . . . . . . . . . . TIA
(d)(2). . . . . . . . . . . . . . . . . . . TIA
(d)(3). . . . . . . . . . . . . . . . . . . TIA
(e) . . . . . . . . . . . . . . . . . . . . TIA
316(a)(last sentence). . . . . . . . . . . . . 1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . 5.2; 5.8
(a)(1)(B) . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . 5.9; 5.10
(c) . . . . . . . . . . . . . . . . . . . . TIA
<PAGE>
317(a)(1). . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . 9.3
318(a) . . . . . . . . . . . . . . . . . . . . 1.11
(b) . . . . . . . . . . . . . . . . . . . . TIA
(c) . . . . . . . . . . . . . . . . . . . . 1.11; TIA
- ---------------------
This reconciliation and tie section does not constitute part of the
Indenture.
-2-
<PAGE>
CONTENTS
ARTICLE 1 Definitions and Other Provisions of General Application . . . . 1
Section 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Compliance Certificates and Opinions . . . . . . . . . 7
Section 1.3 Form of Document Delivered to Trustee. . . . . . . . . 8
Section 1.4 Acts of Holders. . . . . . . . . . . . . . . . . . . . 8
Section 1.5 Notices, etc., to Trustee and Company. . . . . . . . . 10
Section 1.6 Notice to Holders; Waiver. . . . . . . . . . . . . . . 10
Section 1.7 Headings and Table of Contents . . . . . . . . . . . . 10
Section 1.8 Successors and Assigns . . . . . . . . . . . . . . . . 11
Section 1.9 Separability . . . . . . . . . . . . . . . . . . . . . 11
Section 1.10 Benefits of Indenture. . . . . . . . . . . . . . . . . 11
Section 1.11 Governing Law. . . . . . . . . . . . . . . . . . . . . 11
Section 1.12 Legal Holidays . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2 Security Forms . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . 11
Section 2.2 Form of Face of Security . . . . . . . . . . . . . . . 12
Section 2.3 Form of Reverse of Security. . . . . . . . . . . . . . 14
Section 2.4 Form of Trustee's Certificate of Authentication. . . . 19
ARTICLE 3 The Securities . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.1 Amount Unlimited; Issuable in Series . . . . . . . . . 20
Section 3.2 Denominations. . . . . . . . . . . . . . . . . . . . . 22
Section 3.3 Execution, Authentication, Delivery and Dating . . . . 23
Section 3.4 Temporary Securities . . . . . . . . . . . . . . . . . 25
<PAGE>
Section 3.5 Registration, Registration of Transfer and Exchange. . 25
Section 3.6 Replacement Securities . . . . . . . . . . . . . . . . 26
Section 3.7 Payment of Interest; Interest Rights Preserved . . . . 27
Section 3.8 Persons Deemed Owners. . . . . . . . . . . . . . . . . 29
Section 3.9 Cancellation . . . . . . . . . . . . . . . . . . . . . 29
Section 3.10 Computation of Interest. . . . . . . . . . . . . . . . 29
Section 3.11 CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 4 Satisfaction, Discharge and Covenant Defeasance. . . . . . . . . 30
Section 4.1 Termination of Company's Obligations Under the
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.2 Application of Trust Funds . . . . . . . . . . . . . . 31
Section 4.3 Applicability of Covenant Defeasance Provisions;
Company's Option to Effect Covenant Defeasance . . . . . . . . 31
Section 4.4 Covenant Defeasance. . . . . . . . . . . . . . . . . . 32
Section 4.5 Conditions to Covenant Defeasance . . . . . . .. . . . 32
Section 4.6 Deposited Money and Government Obligations to Be
Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.7 Transfers and Distribution at Company Request. . . . . 34
ARTICLE 5 Defaults and Remedies. . . . . . . . . . . . . . . . . . . . . . 34
Section 5.1 Events of Default. . . . . . . . . . . . . . . . . . . 34
Section 5.2 Acceleration, Rescission and Annulment . . . . . . . . 36
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.4 Trustee May File Proofs of Claim . . . . . . . . . . . 37
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-ii-
<PAGE>
Section 5.6 Delay or Omission Not Waiver . . . . . . . . . . . . . 37
Section 5.7 Waiver of Past Defaults. . . . . . . . . . . . . . . . 37
Section 5.8 Control by Majority. . . . . . . . . . . . . . . . . . 38
Section 5.9 Limitation on Suits by Holders . . . . . . . . . . . . 38
Section 5.10 Rights of Holders to Receive Payment . . . . . . . . . 39
Section 5.11 Application of Money Collected . . . . . . . . . . . . 39
Section 5.12 Restoration of Rights and Remedies . . . . . . . . . . 39
Section 5.13 Rights and Remedies Cumulative . . . . . . . . . . . . 39
ARTICLE 6 The Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.1 Certain Duties and Responsibilities. . . . . . . . . . 40
Section 6.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . 41
Section 6.3 Trustee May Hold Securities. . . . . . . . . . . . . . 42
Section 6.4 Money Held in Trust. . . . . . . . . . . . . . . . . . 42
Section 6.5 Trustee's Disclaimer . . . . . . . . . . . . . . . . . 42
Section 6.6 Notice of Defaults . . . . . . . . . . . . . . . . . . 42
Section 6.7 Reports by Trustee to Holders. . . . . . . . . . . . . 43
Section 6.8 Securityholder Lists . . . . . . . . . . . . . . . . . 43
Section 6.9 Compensation and Indemnity . . . . . . . . . . . . . . 43
Section 6.10 Replacement of Trustee . . . . . . . . . . . . . . . . 44
Section 6.11 Acceptance of Appointment by Successor . . . . . . . . 45
Section 6.12 Eligibility; Disqualification. . . . . . . . . . . . . 47
Section 6.13 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 6.14 Appointment of Authenticating Agent. . . . . . . . . . 47
Section 6.15 Trustee's Application for Instructions From the Company 49
-iii-
<PAGE>
ARTICLE 7 Consolidation, Merger or Sale by the Company . . . . . . . . . . 49
Section 7.1 Consolidation, Merger or Sale of Assets Permitted. . . 49
ARTICLE 8 Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . 50
Section 8.1 Supplemental Indentures Without Consent of Holders . . 50
Section 8.2 With Consent of Holders. . . . . . . . . . . . . . . . 51
Section 8.3 Compliance With Trust Indenture Act. . . . . . . . . . 52
Section 8.4 Execution of Supplemental Indentures . . . . . . . . . 52
Section 8.5 Effect of Supplemental Indentures. . . . . . . . . . . 52
Section 8.6 Reference in Securities to Supplemental Indentures . . 52
ARTICLE 9 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.1 Payment of Principal, Premium, if Any, and Interest. . 53
Section 9.2 Maintenance of Office or Agency. . . . . . . . . . . . 53
Section 9.3 Money for Securities to Be Held in Trust;
Unclaimed Money. . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.4 Corporate Existence. . . . . . . . . . . . . . . . . . 55
Section 9.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.6 Reports by the Company . . . . . . . . . . . . . . . . 55
Section 9.7 Annual Review Certificate; Notice of Default . . . . . 56
Section 9.8 Provision of Financial Statements. . . . . . . . . . . 56
ARTICLE 10 Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.1 Applicability of Article . . . . . . . . . . . . . . . 56
Section 10.2 Election to Redeem; Notice to Trustee. . . . . . . . . 57
Section 10.3 Selection of Securities to Be Redeemed . . . . . . . . 57
Section 10.4 Notice of Redemption . . . . . . . . . . . . . . . . . 57
Section 10.5 Deposit of Redemption Price. . . . . . . . . . . . . . 58
-iv-
<PAGE>
Section 10.6 Securities Payable on Redemption Date. . . . . . . . . 59
Section 10.7 Securities Redeemed in Part. . . . . . . . . . . . . . 59
ARTICLE 11 Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.1 Applicability of Article . . . . . . . . . . . . . . . 60
Section 11.2 Satisfaction of Sinking Fund Payments With Securities. 60
Section 11.3 Redemption of Securities for Sinking Fund. . . . . . . 60
ARTICLE 12 Conversion of Securities. . . . . . . . . . . . . . . . . . . . 61
Section 12.1 Conversion Privilege . . . . . . . . . . . . . . . . . 61
Section 12.2 Exercise of Conversion Privilege . . . . . . . . . . . 61
Section 12.3 Fractions of Shares. . . . . . . . . . . . . . . . . . 62
Section 12.4 Adjustment of Conversion Price . . . . . . . . . . . . 62
Section 12.5 Notice of Adjustments of Conversion Price. . . . . . . 64
Section 12.6 Notice of Certain Corporate Action . . . . . . . . . . 65
Section 12.7 Company to Reserve Common Stock. . . . . . . . . . . . 66
Section 12.8 Taxes on Conversions . . . . . . . . . . . . . . . . . 66
Section 12.9 Covenant as to Common Stock. . . . . . . . . . . . . . 66
Section 12.10 Cancellation of Converted Securities . . . . . . . . . 66
Section 12.11 Provisions in Case of Consolidation, Merger of
Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 13 Subordination of Securities . . . . . . . . . . . . . . . . . . 67
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . . . 67
SECTION 13.2 Company Note to Make Payments with Respect to
Securities in Certain Circumstances; Limitations on
Acceleration of Securities . . . . . . . . . . . . . . . . . . 67
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<PAGE>
SECTION 13.3 Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or
Reorganization of the Company. . . . . . . . . . . . . . . . . 70
SECTION 13.4 Holders to Be Subrogated to Rights of Holders of
Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.5 Obligation of the Company Unconditional. . . . . . . . 71
SECTION 13.6 Knowledge of Trustee . . . . . . . . . . . . . . . . . 72
SECTION 13.7 Application by Trustee of Moneys Deposited With It . . 73
SECTION 13.8 Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness . . . . 73
SECTION 13.9 Holders Authorize Trustee to Effectuate
Subordination of Securities. . . . . . . . . . . . . . . . . . 73
SECTION 13.10 Right of Trustee to Hold Senior Indebtedness . . . . . 74
SECTION 13.11 Article 13 Not to Prevent Events of Default. . . . . . 74
SECTION 13.12 Paying Agents Other Than the Trustee . . . . . . . . . 74
SECTION 13.13 Trustee's Compensation Not Prejudiced. . . . . . . . . 74
SECTION 13.14 Trust Moneys Not Subordinated. . . . . . . . . . . . . 74
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INDENTURE, dated as of __________ __, 199__, from ALASKA AIR GROUP, INC., a
Delaware corporation (the "Company"), as issuer, to _________________, a
____________ corporation, as Trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
convertible subordinated debentures, notes or other evidences of indebtedness
("Securities") to be issued in one or more series as herein provided.
All things necessary to make the Securities, when executed by the Company,
the valid obligations of the Company, and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms, have been
done.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed as follows for the
equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"AFFILIATE" of any specified Person means any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with
such specified Person. For purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether
<PAGE>
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Paying Agent or Registrar.
AUTHENTICATING AGENT" means any authenticating agent appointed by the
Trustee pursuant to Section 6.13.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation, in the
English language, customarily published on each Business Day whether or not
published on Saturdays, Sundays or holidays, and of general circulation in the
place in connection with which the term is used or in the financial community
of such place. Whenever successive publications in an Authorized Newspaper
are required hereunder they may be made (unless otherwise expressly provided
herein) on any Business Day and in the same or different Authorized
Newspapers.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company, the Executive Committee or any other duly authorized committee
thereof.
"BOARD RESOLUTION" means a copy of a resolution of the Board of Directors,
certified by the Corporate Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"BUSINESS DAY," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment or particular location
are authorized or obligated by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"COMMON STOCK" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company. However, subject to
the provisions of Section 12.11, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock of the
Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which
have no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which are not subject to redemption
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<PAGE>
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.
"COMPANY" means the Person named as the Company in the first paragraph of
this Indenture until one or more successor corporations shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter means
such successors.
"COMPANY ORDER" and "COMPANY REQUEST" mean, respectively, a written order
or request signed in the name of the Company by the Chairman of the Board, the
President, any Executive Vice President or any Senior Vice President, signing
alone, by any Vice President signing together with the Treasurer, any
Assistant Treasurer, the Corporate Secretary or any Assistant Secretary of the
Company, or, with respect to Sections 3.3, 3.4, 3.5 and 6.1, any other
employee of the Company named in an Officers' Certificate delivered to the
Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"DEFAULT" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct obligations
of the United States or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States the payment
of which is unconditionally guaranteed as a full faith and credit obligation
by the United States, which are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a
bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of
a depositary receipt, PROVIDED that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the
custodian in respect of the Government Obligation evidenced by such depositary
receipt.
"HOLDER" means a person in whose name a Security is registered on the
Register.
"INDENTURE" means this Indenture as originally executed or as amended or
supplemented from time to time and shall include the forms and terms (but not
defined terms established in an Officers' Certificate or a Board Resolution)
of particular series of Securities established as contemplated by Section 2.1
and Section 3.1.
"INDEXED SECURITY" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
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<PAGE>
"INTEREST," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after maturity, means interest payable
after maturity.
"INTEREST PAYMENT DATE," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"MATURITY," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"OFFICER" means the Chairman of the Board of Directors, the President, any
Executive Vice President, any Senior Vice President, any Vice President or the
Corporate Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the President, any Executive Vice President or any Senior Vice
President, signing alone, or by any Vice President signing together with the
Corporate Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company.
"OPINION OF COUNSEL" means a written opinion of legal counsel, who may be
(a) the senior attorney employed by the Company, (b) Perkins Coie, or (c)
other counsel designated by the Company and who shall be reasonably acceptable
to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the stated principal amount thereof to be due and payable
upon declaration of acceleration of the Maturity thereof pursuant to Section
5.2.
"OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities PROVIDED that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provisions therefor satisfactory to the
Trustee have been made;
(iii) Securities, except to the extent provided in Sections 4.4 and 4.5,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article 4; and
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<PAGE>
(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, or whether sufficient funds are available for redemption or for any
other purpose, and for the purpose of making the calculations required by
section 313 of the Trust Indenture Act, (x) the principal amount of any
Original Issue Discount Securities that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the amount of principal thereof that would be
(or shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.2, and (y) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation
or in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a series from time
to time the specific terms of which Securities, including, without limitation,
the rate or rates of interest or formula for determining the rate or rates of
interest thereon, if any, the Stated Maturity or Stated Maturities thereof,
the original issue date or dates thereof, the redemption provisions, if any,
with respect thereto, and any other terms specified as contemplated by Section
3.1 with respect thereto, are to be determined by the Company upon the
issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities of or within
any series, means the place or places where, subject to the provisions of
Section 9.2 the principal of, premium, if any, and interest on such Securities
are payable as specified as contemplated by Section 3.1.
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<PAGE>
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE," when used with respect to any Security to be redeemed,
in whole or in part, means the price at which it is to be redeemed pursuant to
this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Securities of or within any series means the date specified for that
purpose as contemplated by Section 3.1.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, shall mean
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any senior vice president, any
vice president, any assistant vice president, the secretary, the treasurer,
any assistant treasurer, the cashier, any assistant cashier, any senior trust
officer, any trust officer, the controller, any assistant controller, or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"SECURITY" or "SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities of the
Company issued, authenticated and delivered under this Indenture.
"SENIOR INDEBTEDNESS" means all Indebtedness of the Company (other than the
Securities), unless such Indebtedness, by its terms or the terms of the
instrument creating or evidencing it, is subordinate in right of payment to or
PARI PASSU with the Securities.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Securities of any issue means a date fixed by the Trustee pursuant to Section
3.7.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"SUBSIDIARY" means any corporation of which the Company at the time owns or
controls, directly or indirectly, more than 50% of the shares of outstanding
stock having general voting power under ordinary circumstances to elect a
majority of the Board of
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<PAGE>
Directors of such corporation (irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency).
"TRADING DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor Trustee replaces it pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Trustee and
if, at any time, there is more than one Trustee, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
the Securities of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended, as
in effect on the date of this Indenture, except as provided in Section 8.3.
"YIELD TO MATURITY" means the yield to maturity, calculated by the Company
at the time of issuance of a series of Securities or, if applicable, at the
most recent determination of interest on such series, in accordance with
accepted financial practice.
(b) The following terms shall have the meanings specified in the Sections
referred to opposite such term below:
TERM SECTION
"Act" 1.4(a)
"Bankruptcy Law" 5.1
"Custodian" 5.1
"Defaulted Interest" 3.7(b)
"Event of Default" 5.1
"Register" 3.5
"Registrar" 3.5
"Valuation Date" 3.7(c)
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
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<PAGE>
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Sections 2.3,
3.3 and 9.7) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has
been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENT DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificates or opinions of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations as to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in
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<PAGE>
person or by agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to an Officers' Certificate delivered to
the Trustee, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Outstanding Securities have
authorized or agreed to consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date; PROVIDED
that no such authorization, agreement or consent by the Holders on such record
date shall be deemed effective unless it shall become effective pursuant to
the provisions of clause (a) of this Section 1.4 not later than six months
after the record date.
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<PAGE>
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to it at Alaska Airlines, Inc., P.O. Box 68947, Seattle, Washington 98168,
Attention: Vice President-Finance or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided
or otherwise agreed to by a Holder) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Register, within the time prescribed for the giving of such
notice.
In any case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Any notice mailed to a Holder in the manner herein prescribed shall
be conclusively deemed to have been received by such Holder, whether or not
such Holder actually receives such notice.
If by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice as provided above,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.7 HEADINGS AND TABLE OF CONTENTS
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 1.8 SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9 SEPARABILITY
In case any provision of this Indenture or the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10 BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.11 GOVERNING LAW
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture is subject
to the Trust Indenture Act and if any provision hereof limits, qualifies or
conflicts with the Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 1.12 LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date, sinking fund
payment date, Stated Maturity or Maturity of any Security or the last date on
which a Holder has the right to convert his Securities shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture of any Security other than a provision in the Securities of any
series which specifically states that such provision shall apply in lieu of
this Section) payment of principal, premium, if any, or interest or conversion
of the Securities need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on such date; PROVIDED that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, sinking fund payment date, Stated
Maturity or Maturity, or on such last day for conversion, as the case may be.
ARTICLE 2
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form or forms as shall be established by
delivery to the Trustee of an Officers'
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Certificate or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. If temporary Securities of any series are issued as permitted by
Section 3.4, the form thereof also shall be established as provided in the
preceding sentence. If the form of Securities of any series are established
by an Officers' Certificate, such Officers' Certificate shall be delivered to
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 3.3 for the authentication and delivery of such Securities.
The permanent Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner, all as determined by the officers executing such Securities as
evidenced by their execution of such Securities.
SECTION 2.2 FORM OF FACE OF SECURITY
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF ITS
PRINCIPAL AMOUNT AND THE ISSUE DATE IS , 19 [, -- AND] THE YIELD TO
MATURITY IS %. [THE METHOD USED TO DETERMINE THE YIELD IS
AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF , 19 TO , 19 IS
% OF THE PRINCIPAL AMOUNT OF THIS SECURITY.]]
ALASKA AIR GROUP, INC.
____% CONVERTIBLE SUBORDINATED DUE _________
$ No.
ALASKA AIR GROUP, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
or registered assigns, the principal sum of Dollars on
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO
MATURITY, INSERT--, and to pay interest thereon from or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on and in each year,
commencing , [IF THE SECURITY IS TO BEAR INTEREST AT A FIXED
RATE, INSERT--at the rate of % per annum] [IF THE SECURITY IS TO BEAR
INTEREST AT AN ADJUSTABLE RATE, INSERT--at a rate per annum computed or
determined in accordance with the provisions below], until the principal
hereof is paid or made available for
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payment [IF APPLICABLE, INSERT--, and (to the extent that the payment of
such interest shall be legally enforceable) at the rate of % per annum on
any overdue principal and premium and on any overdue installment of interest].
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the or (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture].
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration or redemption or at the
Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of % per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the
date of such default in payment to the date payment of such principal has been
made or duly provided for. Interest on any overdue principal shall be payable
on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of % per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
Payment of the principal of (and premium, if any, on) and [IF APPLICABLE,
INSERT--any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in the City and State of New
York in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts [IF
APPLICABLE, INSERT--; PROVIDED, HOWEVER, that at the option of the
Company payment of interest may be made by check mailed on or before the
relevant Interest Payment Date to the address of the Person entitled thereto
as such address shall appear in the Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
ALASKA AIR GROUP, INC.
By __________________________________
Attest:
SECTION 2.3 FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company
(herein called the "Securities") issued and to be issued in one or more series
under an Indenture, dated as of ___________, 1994 (herein called the
"Indenture"), between the Company (which term includes any successor
corporation under the Indenture) [, Alaska Air Group, Inc., as Guarantor (the
"Guarantor")] and _________________________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture with
respect to the series of which this Security is a part), to which the
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof[, limited in aggregate principal amount to $ ].
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before
the close of business on _______ __, _____, or in case this Security or a
portion hereof is called for redemption, then in respect of this Security or
such portion hereof until and including, but (unless the Company defaults in
making the payment due upon redemption) not after, the close of business on
the Business Day which is ten days prior to the Redemption Date, to convert
this Security (or any portion of the principal amount hereof which is $1,000
or an integral multiple thereof), at the principal amount hereof, or of such
portion, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock of the Company at
a conversion price equal to $______ aggregate principal amount of Securities
for each share of Common Stock (or at the current adjusted conversion price if
an adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank, to the Company
at its office or agency in _______________, accompanied by written notice to
the Company that the Holder hereof elects to convert this Security, or if less
than the entire principal amount hereof is to be converted, the portion hereof
to be converted, and, in case such surrender shall be made during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
(unless this Security or the portion thereof
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being converted has been called for redemption on a Redemption Date within
such period), also accompanied by payment in New York Clearing House or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case
of a conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
on conversion for interest accrued hereon or for dividends on the Common Stock
issued on conversion. No fractions of shares or scrip representing fractions
of shares will be issued on conversion, but instead of any fractional interest
the Company shall pay a cash adjustment as provided in the Indenture. The
conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all
of the assets of the Company, the Indenture shall be amended, without the
consent of any Holders of Securities, so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger
or transfer by a holder of the number of shares of Common Stock into which
this Security might have been converted immediately prior to such
consolidation, merger or transfer (assuming such holder of Common Stock failed
to exercise any rights of election and received per share the kind and amount
received per share by a plurality of nonelecting shares).
The indebtedness evidenced by the Securities is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all indebtedness and obligations of the Company as are defined in the
Indenture as "Senior Indebtedness," and this Security is issued subject to the
provisions of the Indenture with respect thereto, and each Holder of this
Security, by accepting the same, agrees to and shall be bound by such
provisions. Each Holder of this Security, by accepting the same, agrees that
each holder of Senior Indebtedness, whether created or acquired before or
after the issuance of this Security, shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold,
or in continuing to hold, such Senior Indebtedness.
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE,
INSERT--(1) on ___________ in any year commencing with the year __________
and ending with the year _________ at a Redemption Price equal to % of the
principal amount and (2)] at any time [on or after 19 ], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
______, %, and if redeemed] during the 12-month period beginning
_________ of the years indicated,
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
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and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof, all as provided in
the Indenture.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ___________ in
any year commencing with the year ____________ and ending with the year
_________ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below and (2) at any time [on or after ____________], as a whole or in part,
at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the
12-month period beginning _____________ of the years indicated,
Redemption Price for Redemption Redemption Price for Redemption
Through Operation of the Otherwise Than Through
Year Sinking Fund Operation of the Sinking Fund
---- ------------------------------- -------------------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to __________,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed
having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ___% per annum.]
[The sinking fund for this series provides for the redemption on __________
in each year beginning with the year _______________ and ending with the year
____________ of [not less than] $____________ [("mandatory sinking fund")] and
not more than
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$____________ aggregate principal amount of Securities of this series.
[Securities of this series converted pursuant to the Indenture or acquired or
redeemed by the Company otherwise than through [mandatory] sinking fund
payments may be credited against subsequent [mandatory] sinking fund payments
otherwise required to be made in the [DESCRIBE ORDER] order in which they
become due.]]
[In the event of redemption or conversion of this Security in part only, a
new Security or Securities of this series for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]
[IF APPLICABLE, INSERT--The Securities of this series are subject to the
covenant defeasance provisions set forth in Article Four of the Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the
Outstanding Securities of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Outstanding Securities of each series, on behalf of
the Holders of all Outstanding Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the amount of principal of (and premium, if
any, on) and interest, if any,
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on this Security herein provided, and at the times, place and rate, and in the
coin or currency, herein prescribed or to convert this Security as provided in
the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if
any, on) and interest, if any, on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $___________ and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of different authorized
denominations as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company nor
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
FORM OF CONVERSION NOTICE
To: ALASKA AIR GROUP, INC.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Alaska Air Group, Inc. in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all
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transfer taxes payable with respect thereto. Any amount required to be paid
by the undersigned on account of interest accompanies this Security.
Dated:
Fill in for registration of shares
of Common Stock and Securities if
to be issued otherwise than to the
registered holder.
Principal Amount to be converted
(in an integral multiple of $1,000,
if less than all):
$_________________
- ----------------------------------
Name
- ----------------------------------
Address
- ---------------------------------- ---------------------------------
(Please print name and Signature
address (including
zip code number))
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING
NUMBER
SECTION 2.4 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of a series issued under the within-mentioned
Indenture.
___________________________,
as Trustee
By
----------------------------
Authorized Signatory
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ARTICLE 3
THE SECURITIES
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
(b) The following matters shall be established and (subject to Section
3.3) set forth, or determined in the manner provided, in an Officers'
Certificate and a Board Resolution of the Company or one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(which limit shall not pertain to (i) Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 8.6,
or 10.7 and (ii) any Securities which, pursuant to the last paragraph of
Section 3.3, are deemed never to have been authenticated and delivered
thereunder);
(3) the date or dates on which the principal of the Securities of the
series is payable or the method of determination thereof;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which any such interest shall be payable and the Regular
Record Date, if any, for the interest payable on any Interest Payment Date;
(5) the place or places where, subject to the provisions of Section
9.2, the principal of, premium, if any, and interest, if any, on Securities
of the series shall be payable;
(6) the period or periods within which, the price or prices at which,
and the other terms and conditions upon which, Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if
other than as provided in Section 10.3, the manner in which the particular
Securities of such series (if less than all Securities of such series are
to be redeemed) are to be selected for redemption;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or
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periods within which, the price or prices at which, and the other terms and
conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if the amount of payments or principal of, premium, if any, and
interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method, the index, formula or other
method by which such amounts shall be determined;
(10) if other than the principal amount thereof, the portion of the
principal amount of such Securities of the series which shall be payable
upon declaration of the acceleration thereof pursuant to Section 5.2 or the
method by which such portion shall be determined;
(11) if other than as provided in Section 3.7, the Person to whom any
interest on any Security of the series shall be payable and the extent to
which, or the manner in which (including any certification requirement and
other terms and conditions under which), any interest payable on a
temporary Security on an Interest Payment Date will be paid if other than
in the manner provided in Section 3.4, as applicable;
(12) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(13) any deletions from, modifications of or additions to the Events
of Default set forth in Section 5.1 or covenants of the Company set forth
in Article 9 pertaining to the Securities of the series;
(14) under what circumstances, if any, the Company will pay additional
amounts on the Securities of that series held by a Person who is not a U.S.
Person in respect of taxes or similar charges withheld or deducted and, if
so, whether the Company will have the option to redeem such Securities
rather than pay such additional amounts (and the terms of any such option);
(15) the date as of which any temporary Security representing
outstanding Securities of the series shall be dated if other than the date
of original issuance of the first Security of the series to be issued;
(16) the applicability, if any, to the Securities of or within the
series of Sections 4.4 and 4.5, or such other means of defeasance or
covenant defeasance as may be specified for the Securities of such series;
(17) if other than the Trustee, the identity of the Registrar and any
Paying Agent;
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(18) any terms which may be related to warrants issued by the Company
in connection with, or for the purchase of, Securities of such series,
including whether and under what circumstances the Securities of any series
may be used toward the exercise price of any such warrants;
(19) whether Guarantees will be endorsed on Securities of the series,
and, if so, the terms of the Guarantees if other than as specified in
Section 12.2;
(20) the terms and conditions upon which Securities of the series will
be convertible into shares of Common Stock of the Company; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture), including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Securities of
the series.
(c) All Securities of any one series shall be substantially identical
except as to denomination and the rate or rates of interest, if any, and Stated
Maturity, the date from which interest, if any, shall accrue and except as may
otherwise be provided in or pursuant to an Officers' Certificate pursuant to
this Section 3.1 or in an indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series or for the establishment of
additional terms with respect to the Securities of such series.
(d) If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be certified by the Corporate Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the Securities of such series, and an appropriate record of any
action taken pursuant thereto in connection with the issuance of any
Securities of such series shall be delivered to the Trustee prior to the
authentication and delivery thereof. With respect to Securities of a series
subject to a Periodic Offering, such Board Resolution or Officers' Certificate
may provide general terms for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company, or one or more of the Company's agents designated in an Officers'
Certificate, in accordance with the Company Order as contemplated by the first
proviso of the third paragraph of Section 3.3
SECTION 3.2 DENOMINATIONS
The Securities of each series shall be issuable only in definitive
registered form without coupons and in such denominations as shall be specified
as contemplated by Section 3.1. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall
be issuable in denominations of $1,000 and any integral multiple thereof.
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<PAGE>
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
Securities shall be executed on behalf of the Company by the Chairman,
President or Chief Executive Officer and attested to by the Secretary of the
Company. The Company's seal shall be affixed to the Securities, or a
facsimile of such seal shall be engraved, printed, or otherwise reproduced on
the Securities. The signatures of such officers on the Securities may be
manual or facsimile signatures of the present or any future such authorized
officers and may be imprinted or otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time, the Company may deliver Securities of
any series executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and make available for delivery
such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; PROVIDED, HOWEVER, that in the
case of Securities offered in a Periodic Offering, the Trustee shall
authenticate and deliver such Securities from time to time in accordance with
such other procedures (including, without limitation, the receipt by the
Trustee of oral or electronic instructions from the Company or its duly
authorized agents, promptly confirmed in writing) acceptable to the Trustee as
may be specified by or pursuant to a Company Order delivered to the Trustee
prior to the time of the first authentication of Securities of such series.
If the form or terms of the Securities of a series have been established by
or pursuant to one or more Officers' Certificates as permitted by Sections 2.1
and 3.1, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to section 315(a) through
(d) of the Trust Indenture Act) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(1) that the forms and terms of such Securities have been established
in conformity with the provisions of this Indenture; and
(2) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to customary exceptions;
PROVIDED, HOWEVER, that, with respect to Securities of a series subject to
a Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
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(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as may
be specified from time to time in a Company Order, all as contemplated by
and in accordance with a Board Resolution or an Officers' Certificate
pursuant to Section 3.1, as the case may be) will have been, established in
conformity with the provisions of this Indenture; and
(y) that such Securities, when (1) executed by the Company, (2)
completed, authenticated and delivered by the Trustee in accordance with
this Indenture, and (3) issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company, enforceable in accordance
with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering, the
Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
other documents delivered pursuant to Sections 2.1 and 3.1 of this Section, as
applicable, at or prior to the time of the first authentication of Securities
of such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection
with the authentication and delivery of Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any governmental agency or commission having
jurisdiction over the Company.
If the form or terms of the Securities of a series have been established by
or pursuant to one or more Officers' Certificates as permitted by Sections 2.1
and 3.1, the Trustee shall have the right to decline to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all of the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 at or prior to the time of the authentication
of each Security of such series if the Officers' Certificate is delivered at
or prior to the authentication upon original issuance of the first Security of
such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefits under this Indenture or be
valid or obligatory for any purpose until authenticated by the manual signature
of one of the authorized signatories of the Trustee or an Authenticating Agent.
Such signature upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered under
this Indenture and is entitled to the benefits of this Indenture.
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Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall not be entitled to the
benefits of this Indenture.
SECTION 3.4 TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the Company
may execute and, upon Company Order, the Trustee shall authenticate and
deliver temporary Securities of such series which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor and form of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
permanent Securities of such series to be prepared without unreasonable delay.
After preparation of such permanent Securities, the temporary Securities shall
be exchangeable for such permanent Securities of like tenor upon surrender of
the temporary Securities of such series at the office or agency of the Company
pursuant to Section 9.2 in a Place of Payment for such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Permanent Securities of the same series of authorized denominations and of
like tenor. Until so exchanged, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
permanent Securities of such series except as otherwise specified as
contemplated by Section 3.1.
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency to be maintained by the Company in
accordance with Section 9.2 in a Place of Payment a register (the "Register")
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and the registration
of transfers of Securities. The Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee is hereby appointed "Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency maintained pursuant to Section 9.2 in a Place of Payment
for that series, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated
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transferee or transferees, one or more new Securities of the same series, of
any authorized denominations and of a like aggregate principal amount and
tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of
like aggregate principal amount containing identical terms and provisions,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
Whenever any Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of such transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company, the Registrar or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to those of the Company, the Registrar and the Trustee
requiring such written instrument of transfer duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service change shall be made for any registration of transfer or for any
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration or transfer or exchange of Securities,
other than exchanges pursuant to Section 3.4 or 10.7 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer of,
or exchange any Securities for a period beginning at the opening of business 15
days before any selection for redemption of Securities of like tenor and of
the series of which such Security is a part and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Securities of like tenor and of
such series to be redeemed or (ii) to register the transfer of or exchange of
any Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 3.6 REPLACEMENT SECURITIES
If a mutilated Security is surrendered to the Trustee, together with, in
proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them harmless, the Company shall execute and the
Trustee shall authenticate and deliver a
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replacement Security of the same series and date of maturity, if the Trustee's
requirements are met.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agency of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a replacement
Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee connected therewith).
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security, shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED
Unless otherwise provided as contemplated by Section 3.1, interest, if any,
on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest at the office or agency
maintained for such purpose pursuant to Section 9.2; PROVIDED, HOWEVER,
that, at the option of the Company, interest on any series of Securities that
bear interest may be paid (i) by check mailed to the address of the Person
entitled thereto as it shall appear on the Register of Holders of Securities
of such series or (ii) to the extent specified as contemplated by Section 3.1,
by wire transfer to an account maintained by the Person entitled thereto as
specified in the Register of Holders of Securities of such series.
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Unless otherwise provided as contemplated by Section 3.1, any interest on
any Security of any series which is payable, but is not punctually paid or duly
provided for, on any interest payment date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause (1) provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the Company
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in
the Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a
specified date in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause (2), such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
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In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable.
SECTION 3.8 PERSONS DEEMED OWNERS
Prior to due presentment of any Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of, premium, if any, and
(subject to Section 3.7) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 3.9 CANCELLATION
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and any Paying Agent shall forward to the Trustee
any Securities surrendered to them for replacement, for registration of
transfer, or for exchange, conversion or payment. The Trustee shall cancel
all Securities surrendered for replacement, for registration of transfer, or
for exchange, conversion, payment, redemption or cancellation and may dispose
of cancelled Securities and issue a certificate of destruction to the Company.
The Company may not issue new Securities to replace Securities that it has
paid or delivered to the Trustee for cancellation, except as expressly
permitted in the terms of Securities for any particular series or as permitted
pursuant to the terms of this Indenture.
SECTION 3.10 COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 3.1 (i) interest
of any Securities that bear interest at a fixed rate shall be computed on the
basis of a 360-day year of twelve 30 day months and (ii) interest on any
Securities the bear interest at a variable rate shall be computed on the basis
of the actual number of days in an interest period divided by 360 or the
actual number of days in the year.
SECTION 3.11 CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers (in
addition to the other identification
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numbers printed on the Securities) in notices of redemption as a convenience
to Holders; PROVIDED that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of
such numbers.
ARTICLE 4
SATISFACTION, DISCHARGE AND COVENANT DEFEASANCE
SECTION 4.1 TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE INDENTURE
Except as otherwise provided as contemplated by Section 3.1, this Indenture
shall upon Company Request cease to be of further effect with respect to
Securities of or within any series (except as to any surviving rights of
registration of transfer or exchange of such Securities and replacement of
such Securities which may have been lost, stolen or mutilated as herein
expressly provided for) and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to such Securities when
(1) either
(A) all such Securities previously authenticated and delivered
(other than (i) such Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
3.6, and (ii) such Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as
provided in Section 9.3) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company, are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company,
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and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal, premium, if any, and interest, with respect thereto,
to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligation of the Company to the Trustee and any predecessor Trustee under
Section 6.8, the obligations of the Company to any Authenticating Agent under
Section 6.13 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 9.3 shall survive.
SECTION 4.2 APPLICATION OF TRUST FUNDS
Subject to the provisions of the last paragraph of Section 9.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal, premium, if any,
and any interest for whose payment such money has been deposited with or
received by the Trustee, but such money need not be segregated from other
funds except to the extent required by law. All moneys deposited with the
Trustee pursuant to Section 4.1 (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon Company Request.
SECTION 4.3 APPLICABILITY OF COVENANT DEFEASANCE PROVISIONS; COMPANY'S
OPTION TO EFFECT COVENANT DEFEASANCE
If pursuant to Section 3.1 provision is made for covenant defeasance of the
Securities of or within a series under Section 4.4, then the provisions of
such Section, together with the provisions of Sections 4.5 through 4.8
inclusive, with such modifications thereto as may be specified pursuant to
Section 3.1 with respect to any Securities, shall be applicable to such
Securities, and the Company may at its option by Board Resolution, at any
time, with respect to such Securities, elect to have Section 4.4 (if
applicable) be applied to such Outstanding Securities upon compliance with the
conditions set forth below in this Article.
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SECTION 4.4 COVENANT DEFEASANCE
Upon the Company's exercise of the option specified in Section 4.3
applicable to this Section with respect to any Securities of or within a series,
the Company shall be released from its obligations under Sections 7.1, 9.4 and
9.5, and, if specified pursuant to Section 3.1, its obligations under any
other covenant, with respect to such Securities on and after the date the
conditions set forth in Section 4.5 are satisfied (hereinafter, "covenant
defeasance"), and such Securities shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with Sections 7.1, 9.4 and 9.5, or such other covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any such Section or such other covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event of Default under Section 5.1(3) or 5.1(7)
or otherwise, as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 4.5 CONDITIONS TO COVENANT DEFEASANCE
The following shall be the conditions to application of Section 4.4 to any
Securities of or within a series:
(a) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 6.11 who shall agree to comply with, and shall be
entitled to the benefits of, the provisions of Sections 4.3 through 4.8
inclusive and the last paragraph of Section 9.3 applicable to the Trustee,
for purposes of such Sections also a "Trustee") as trust funds in trust for
the purpose of making the payments referred to in clauses (x) and (y) of
this Section 4.5(a), specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, with instructions
to the Trustee as to the application thereof, (A) money in an amount, or
(B) if Securities of such series are not subject to repayment at the option
of Holders, Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment referred
to in clause (x) or (y) of this Section 4.5(a), money in an amount or (C) a
combination thereof in an amount, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee to pay and
discharge, (x) the principal of, premium, if any, and interest, if any, on
such Securities on the Maturity of such principal or installment of
principal or interest and (y) any mandatory sinking fund payments
applicable to such Securities on the day on which such payments are due and
payable in accordance with the terms of this Indenture and
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such Securities. Before such a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future
date or dates in accordance with Article 10 which shall be given effect in
applying the foregoing.
(b) Such covenant defeasance shall not result in a breach or
violation of, or constitute a Default or Event of Default under, this
Indenture or result in a breach or violation of, or constitute a default
under, any other material agreement or instrument to which the Company is a
party or by which it is bound.
(c) No Default or Event of Default under Section 5.1(5) or 5.1(6)
with respect to such Securities shall have occurred and be continuing
during the period commencing on the date of such deposit and ending on the
91st day after such date (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
(d) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(e) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the covenant defeasance under Section 4.4 have been complied
with and an Opinion of Counsel to the effect that either (i) as a result of
a deposit pursuant to subsection (a) above and the related exercise of the
Company's option under Section 4.4, registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with respect to
the trust funds representing such deposit or by the trustee for such trust
funds or (ii) all necessary registrations under said act have been
effected.
(f) Such covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith as contemplated by Section
3.1.
SECTION 4.6 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST
Subject to the provisions of the last paragraph of Section 9.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.5 in respect of any Securities of any series shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and
to become due thereon in respect of principal, premium, if any, and interest,
if any, but such money need not be segregated from other funds except to the
extent required by law.
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SECTION 4.7 TRANSFERS AND DISTRIBUTION AT COMPANY REQUEST
To the extent permitted by the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 76, as amended or interpreted by
the Financial Accounting Standards Board from time to time, or any successor
thereto ("Standard No. 76"), or to the extent permitted by the Commission, the
Trustee shall, from time to time, take one or more of the following actions as
specified in a Company Request:
(a) Retransfer, reassign and deliver to the Company any securities
deposited with the Trustee pursuant to Section 4.5(a), provided that the
Company shall in substitution therefor, simultaneously transfer, assign and
deliver to the Trustee other Government Obligations appropriate to satisfy
the Company's obligations in respect of the relevant Securities; and
(b) The Trustee (and any Paying Agent) shall promptly pay to the
Company upon Company Request any excess money or securities held by them at
any time, including, without limitation, any assets deposited with the
Trustee pursuant to Section 4.5(a) exceeding those necessary for the
purposes of Section 4.5(a).
The Trustee shall not take the actions described in subsections (a) and (b)
of this Section 4.7 unless it shall have first received a written report of
Arthur Andersen & Co., or another nationally recognized independent public
accounting firm, (i) expressing their opinion that the contemplated action is
permitted by Standard No. 76 or the Commission, for transactions accounted for
as extinguishment of debt under the circumstances described in paragraph 3.c
of Standard No. 76 or any successor provision and (ii) verifying the accuracy,
after giving effect to such action or actions, of the computations which
demonstrate that the amounts remaining to be earned on the Government
Obligations deposited with the Trustee pursuant to Section 4.5(a) will be
sufficient for purposes of Section 4.5(a).
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT
An "Event of Default" occurs with respect to the Securities of any series
if (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the Company defaults in the payment of interest on any Security
of that series or any additional amount payable with respect to any
Security of that series as specified pursuant to Section 3.1(b)(14) when
the same becomes due and payable and such default continues for a period of
30 days;
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(2) the Company defaults in the payment of the principal of or any
premium on any Security of that series when the same becomes due and
payable at its Maturity or on redemption or otherwise, or in the payment of
a mandatory sinking fund payment when and as due by the terms of the
Securities of that series, and in each case such default continues for a
period of ten days;
(3) the Company defaults in the performance of, or breaches, any
covenant or warranty of the Company in this Indenture with respect to any
Security of that series (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and such default or breach continues for a period of 60 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of that series, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
(4) the Company defaults under the terms of any agreement or
instrument evidencing or under which the Company has at the date of this
Indenture or hereafter outstanding any indebtedness for borrowed money and
such indebtedness shall be accelerated so that the same shall be or become
due and payable prior to the date on which the same would otherwise become
due and payable and the aggregate principal amount thereof so accelerated
exceeds $___________ and such acceleration is not rescinded or annulled
within ten days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series a written notice specifying such
default and stating that such notice is a "Notice of Default" hereunder;
(it being understood, however, that, subject to the provisions of Section
6.1, the Trustee shall not be deemed to have knowledge of such default
under such agreement or instrument unless either (A) a Responsible Officer
of the Trustee shall have actual knowledge of such default or (B) a
Responsible Officer of the Trustee shall have received written notice
thereof from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such agreement or other
instrument); PROVIDED, HOWEVER, that if such default under such agreement
or instrument is remedied or cured by the Company or waived by the holders
of such indebtedness, then the Event of Default hereunder by reason thereof
shall be deemed likewise to have been thereupon remedied, cured or waived
without further action upon the part of either the Trustee or any of such
Holders;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law (A) commences a voluntary case, (B) consents to the entry of an order
for relief against it in an involuntary case, (C) consents to the
appointment of a Custodian of it or for all or substantially all of its
property, or (D) makes a general assignment for the benefit of its
creditors;
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(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Company in an
involuntary case, (B) appoints a Custodian of the Company or for all or
substantially all of its property, or (C) orders the liquidation of the
Company; and the order or decree remains unstayed and in effect for 90
consecutive days; or
(7) any other Event of Default provided as contemplated by Section
3.1 with respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 5.2 ACCELERATION, RESCISSION AND ANNULMENT
If an Event of Default with respect to the Securities of any series at the
time Outstanding occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of all of the outstanding Securities
of that series, by written notice to the Company (and, if given by the
Holders, to the Trustee), may declare the principal (or, if the Securities of
that series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount as may be specified in the terms of that
series) of all the Securities of that series to be due and payable and upon
any such declaration such principal (or, in the case of original Issue
Discount Securities or Indexed Securities, such specified amount) shall be
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal amount
of the outstanding Securities of that series, by written notice to the
Trustee, may rescind and annul such declaration and its consequences if all
existing Defaults and Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of Securities of that
series which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.7. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof and such default continues
for a period of 10 days,
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the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal, premium, if any, and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal, premium, if any, and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and
the Holders of Securities allowed in any judicial proceedings relating to the
Company, its creditors or its property.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto.
SECTION 5.6 DELAY OR OMISSION NOT WAIVER
No delay or omission by the Trustee or any Holder of any Securities to
exercise any right or remedy accruing upon an Event of Default shall impair
any such right or remedy or constitute a waiver of or acquiescence in any such
Event of Default.
SECTION 5.7 WAIVER OF PAST DEFAULTS
The Holders of a majority in aggregate principal amount of Outstanding
Securities of any series by notice to the Trustee may waive on behalf of the
Holders of all Securities of such series a past Default or Event of Default
with respect to that series and its consequences except (i) a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on
any Security of such series or (ii) in respect of a covenant or provision
hereof which pursuant to Section 8.2 cannot be amended or modified without the
consent of the Holder of each outstanding Security of such series adversely
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture.
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SECTION 5.8 CONTROL BY MAJORITY
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series affected (with each such series voting as a class)
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to Securities of that series; PROVIDED,
HOWEVER, that (i) the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, (ii) the Trustee may refuse to follow
any direction that is unduly prejudicial to the rights of the Holders of
Securities of such series not consenting, or that would in the good-faith
judgment of the Trustee have a substantial likelihood of involving the Trustee
in personal liability and (iii) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
SECTION 5.9 LIMITATION ON SUITS BY HOLDERS
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) the Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series have made a written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to be,
or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such notice, request
and the offer of indemnity has failed to institute any such proceedings;
and
(5) during such 60-day period, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series has not given
to the Trustee a direction inconsistent with such written request.
No one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all of such Holders.
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SECTION 5.10 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, premium, if any, and,
subject to Section 3.7, interest on the Security, on or after the respective
due dates expressed in the Security (or, in case of redemption, on the
redemption dates) and to convert such Security in accordance with Article 12,
and, subject to Section 5.9, to bring suit for the enforcement of any such
payment and right to convert on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 5.11 APPLICATION OF MONEY COLLECTED
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 6.9;
SECOND: to Holders of Securities in respect of which or for the
benefit of which such money has been collected for amounts due and unpaid
on such Securities for principal of, premium, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any,
and interest, respectively; and
THIRD: to the Company.
SECTION 5.12 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination
in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as
though no such proceeding had been instituted.
SECTION 5.13 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right
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or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.
ARTICLE 6
THE TRUSTEE
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing with
respect to the Securities of any series, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture with respect to the Securities
of such series, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, EXCEPT that:
(1) this subjection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series.
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(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2 RIGHTS OF TRUSTEE
Subject to the provisions of the Trust Indenture Act:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties.
(b) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security to the Trustee for authentication and delivery
pursuant to Section 3.3, which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(c) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate.
(d) The Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or
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document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney.
(g) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(h) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(i) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
SECTION 6.3 TRUSTEE MAY HOLD SECURITIES
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 310(b) and 311 of the Trust
Indenture Act, may otherwise deal with the Company, an Affiliate or Subsidiary
with the same rights it would have if it were not Trustee, Paying Agent,
Registrar or such other agent.
SECTION 6.4 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 6.5 TRUSTEE'S DISCLAIMER
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities. The Trustee shall not be accountable for the
Company's use of the proceeds from the Securities or for monies paid over to
the Company pursuant to the Indenture.
SECTION 6.6 NOTICE OF DEFAULTS
If a Default occurs and is continuing with respect to the Securities of any
series and if it is known to the Trustee, the Trustee shall, within 90 days
after it occurs, transmit, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, notice of all
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uncured Defaults known to it; PROVIDED, HOWEVER, that, in the case of a
Default in payment on the Securities of any series, the Trustee may withhold
the notice if and so long as the board of directors, the executive committee
or a committee of its Responsible Officers in good faith determines that
withholding such notice is in the interests of Holders of Securities of that
series; PROVIDED FURTHER that, in the case of any default or breach of the
character specified in Section 5.1(3) with respect to the Securities of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof.
SECTION 6.7 REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each May 15 of each year commencing with the first May
15 after the first issuance of Securities pursuant to this Indenture, the
Trustee shall transmit by mail to all Holders of Securities as provided in
Section 313(c) of the Trust Indenture Act a brief report dated as of such May
15 if required by Section 313(a) of the Trust Indenture Act. The Trustee also
shall comply with Section 313(b) and (d) of the Trust Indenture Act.
SECTION 6.8 SECURITYHOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Securities of each series. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee semiannually on or before the last day of
June and December in each year, and at such other times as the Trustee may
request in writing, a list, in such form and as of such date as the Trustee may
reasonably require, containing all the information in the possession of the
Registrar, the Company or any of its Paying Agents other than the Trustee as
to the names and addresses of Holders of Securities of each such series.
SECTION 6.9 COMPENSATION AND INDEMNITY
(a) The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for all
services rendered by it hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in connection with the performance of its
duties under this Indenture, except any such expense as may be attributable to
its negligence or bad faith. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it without negligence or bad
faith on its part arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent.
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(c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
(d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Securities of any series on
all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest on particular Securities.
(e) when the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(5) or Section 5.1(6), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
(f) The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.10 REPLACEMENT OF TRUSTEE
(a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
any series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.11 shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities or such series.
(c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with respect to that
series by so notifying the Trustee and the Company and may appoint a successor
Trustee for such series with the Company's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months; or
(2) the Trustee shall cease to be eligible under Section 310(a) of
the Trust Indenture Act and shall fail to resign after written request
therefor by the Company or by any Holder of a Security who has been a bona
fide Holder of a Security for at least six months; or
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(3) the Trustee becomes incapable of acting, is adjudged a bankrupt
or an insolvent or a receiver or public officer takes charge of the Trustee
or its property or affairs for the purpose of rehabilitation, conservation
or liquidation, then, in any such case, (i) the Company by or pursuant to a
Board Resolution may remove the Trustee with respect to all Securities, or
(ii) subject to Section 315(e) of the Trust Indenture Act, any Holder who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to Securities of one or more
series, the Company, by or pursuant to Board Resolution, shall promptly appoint
a successor Trustee with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of
Section 6.11. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been a bona fide Holder of
a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment. Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee, without
further act, deed or conveyance, shall become vested with all the rights, powers
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and such successor Trustee shall execute and deliver an
indenture supplemental hereto wherein such successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, such successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates, (ii) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (iii) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
the Trust Indenture Act.
(e) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the securities
of such series and the address of its Corporate Trust office.
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SECTION 6.12 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under Section 310(a)(1) of the Trust Indenture Act and shall
have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law
or the requirements of Federal, State Territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee 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 Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
exchange, registration of transfer, partial conversion or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authenticating
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and,
except as may otherwise be provided pursuant to Section 3.1, shall at all
times be a bank or trust company or corporation organized and doing business
and in good standing under the laws of the United States of America or of any
State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$10,000,000 and subject to supervision or
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examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating 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 such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, PROVIDED, such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Company. The Trustee for any series of Securities may at any time terminate
the agency of an Authenticating Agent by giving written notice of termination
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the
series with respect to which such Authenticating Agent will serve in the
manner set forth in Section 1.6. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions
of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of a series issued under the within-mentioned
Indenture.
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_________________________________,
as Trustee
By _______________________________
as Authenticating Agent
By _______________________________
Authorized Officer
SECTION 6.15 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY
Any application by the Trustee for written instructions from the Company
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective.
The Trustee shall not be liable for any action taken by, or omission of, the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than
fifteen Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to
be taken or omitted.
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY THE COMPANY
SECTION 7.1 CONSOLIDATION, MERGER OR SALE OF ASSETS PERMITTED
The Company may merge or consolidate with or into any other corporation or
sell, convey, transfer or otherwise dispose of all or substantially all of its
assets to any person, firm or corporation, if (i) (A) in the case of a merger
or consolidation, the Company is the surviving corporation or (B) in the case
of a merger or consolidation where the Company is not the surviving
corporation and in the case of any such sale, conveyance or other disposition,
the successor or acquiring corporation is a corporation organized and existing
under the laws of the United States or a State thereof and such corporation
expressly assumes by supplemental indenture all of the obligations of the
Company under the Securities and under this Indenture and shall have provided
for conversion rights in accordance with Section 12.11, (ii) immediately
thereafter, giving effect to such merger or consolidation, or such sale,
conveyance, transfer or other disposition, no Default or Event of Default
shall have occurred and be continuing and (iii) the company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such merger or consolidation, or such sale, conveyance, transfer or other
disposition, complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with. In
the
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event of the assumption by a successor corporation of the obligations of the
Company as provided in clause (i)(B) of the immediately preceding sentence,
such successor corporation shall succeed to and be substituted for the Company
hereunder and under the Securities and all such obligations of the Company
shall terminate.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
indentures supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default with respect to all or
any series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to facilitate the issuance of Securities in
global form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture, PROVIDED that any such addition, change or elimination shall
become effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.2; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to
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or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section 6.10; or
(9) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 12.11; or
(10) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture, PROVIDED such action shall not adversely affect the interests of
the Holders of Securities of any series, or to cure any ambiguity or
correct any mistake.
SECTION 8.2 WITH CONSENT OF HOLDERS
With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Securities of each series adversely
affected by such supplemental indenture, the Company and the Trustee may enter
into an indenture or indentures supplemental hereto to add any provisions to
or to change or eliminate any provisions of this Indenture or of any other
indenture supplemental hereto or to modify the rights of the Holders of
Securities of each such series; PROVIDED, HOWEVER, that without the
consent of the Holder of each Outstanding Security affected thereby, an
amendment under this Section may not:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.2, or change the coin or currency in which, any Securities or any premium
or the interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
or adversely affect the right to convert any Security as provided in
Article 12 (except as permitted by Section 8.1(9)), or modify the
provisions of this Indenture with respect to the subordination of the
Securities in a manner adverse to the Holders;
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture;
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 9.2; or
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(4) make any change in Section 5.7 or this 8.2(a) except to increase
any percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived with the consent of the Holders of
each Outstanding Security affected thereby.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture, which has expressly been included solely for the
benefit of one or more particular series of Securities, or that modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It is not necessary under this Section 8.2 for the Holders to consent to
the particular form of any proposed supplemental indenture, but it is sufficient
if they consent to the substance thereof.
SECTION 8.3 COMPLIANCE WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article shall comply
with the requirements of the Trust Indenture Act as then in effect.
SECTION 8.4 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 8.5 EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 8.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
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ARTICLE 9
COVENANTS
SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest on the Securities of that series in accordance
with the terms of the Securities of such series and this Indenture. An
installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay the installment.
SECTION 9.2 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities may be
surrendered for conversion and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.
SECTION 9.3 MONEY FOR SECURITIES TO BE HELD IN TRUST; UNCLAIMED MONEY
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of, premium, if any, or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming
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due until such sums shall be paid to such persons or otherwise disposed of as
herein provided and will promptly notify the Trustee in writing of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal, premium, if any, or interest on the Securities; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of any principal, premium or interest on
any Security of any series and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
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SECTION 9.4 CORPORATE EXISTENCE
Subject to Article 7, the Company will at all times do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence and its rights and franchises; PROVIDED that nothing in
this Section 9.4 shall prevent the abandonment or termination of any right or
franchise of the Company if, in the opinion of the Company, such abandonment
or termination is in the best interests of the Company and does not materially
adversely affect the ability of the Company to operate its business or to
fulfill its obligations hereunder.
SECTION 9.5 INSURANCE
The Company covenants and agrees that it will maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations or through a program of self-insurance in such
amounts and covering such risks as are consistent with sound business practice
for corporations engaged in the same or a similar business similarly situated.
SECTION 9.6 REPORTS BY THE COMPANY
The Company covenants:
(a) to file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company is not
required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to section 13 of the Securities
Exchange Act of 1934, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in
this Indenture, as may be required from time to time by such rules and
regulations; and
(c) to transmit to all Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent
provided in section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports
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required to be filed by the Company pursuant to subsections (a) and (b) of
this Section 9.6, as may be required by rules and regulations prescribed
from time to time by the Commission.
SECTION 9.7 ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULT
The Company covenants and agrees to deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, a brief certificate from the
principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this
Section 9.7, such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture. The Company
shall file with the Trustee written notice of occurrence of any Event of
Default within 30 Business Days of its becoming aware of any such Event of
Default.
SECTION 9.8 PROVISION OF FINANCIAL STATEMENTS
If the Company is not required to file with the Commission periodic reports
and other information pursuant to section 13(a), 13(c) or 15(d) of the
Securities Exchange Act of 1934, the Company shall furnish without cost to
each Holder and file with the Trustee (i) within 135 days after the end of
each fiscal year, annual reports containing the information required to be
contained in Items 1, 2, 3, 5, 6, 7, 8 and 9 of Form 10-K promulgated under
the Securities Exchange Act of 1934, or substantially the same information
required to be contained in comparable items of any successor form, (ii)
within 60 days after the end of each of the first three fiscal quarters of
each fiscal year, quarterly reports containing the information required to be
contained in Form 10-Q promulgated under the Securities Exchange Act of 1934,
or substantially the same information required to be contained in any
successor form and (iii) promptly from the time after the occurrence of an
event required to be therein reported, such other reports containing
information required to be contained in Form 8-K promulgated under the
Securities Exchange Act of 1934, or substantially the same information
required to be contained in any successor form. The Company shall also make
such reports available to prospective purchasers of the Securities, securities
analysts and broker-dealers upon their request.
ARTICLE 10
REDEMPTION
SECTION 10.1 APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in
accordance with this Article.
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SECTION 10.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution or any Officers' Certificate. In the case of
any redemption at the election of the Company of less than all the Securities,
if any, of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (i) prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture or (ii) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 10.3 SELECTION OF SECURITIES TO BE REDEEMED
Unless otherwise specified as contemplated by Section 3.1, if less than all
the Securities of a series with the same original issue date, interest rate
and Stated Maturity are to be redeemed, the Trustee, not more than 45 days
prior to the redemption date, shall select the Securities of the series to be
redeemed in such manner as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities of the series that are
Outstanding and that have not previously been called for redemption and may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series. The Trustee shall promptly notify the Company in writing of the
Securities selected by the Trustee for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection.
For purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case
of any Securities redeemed or to be redeemed only in part, to the portion of
the principal amount of such Securities which has been or is to be redeemed.
SECTION 10.4 NOTICE OF REDEMPTION
Unless otherwise specified as contemplated by Section 3.1, notice of
redemption shall be given in the manner provided in Section 1.6 not less than
30 days nor more than 60 days prior to the Redemption Date to the Holders of
the Securities to be redeemed.
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All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of a series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Security or Securities to be
redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(5) the conversion price, the date on which the right to convert the
principal of the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion;
(6) the Place or Places of Payment where such Securities maturing
after the Redemption Date, are to be surrendered for payment for the
Redemption Price;
(7) that Securities of the series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(8) that, on the Redemption Date, the Redemption Price will become
due and payable upon each such Security, or the portion thereof, to be
redeemed and, if applicable, that interest thereon will cease to accrue on
and after said date;
(9) that the redemption is for a sinking fund, if such is the case;
and
(10) CUSIP number.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 10.5 DEPOSIT OF REDEMPTION PRICE
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.3) an amount of
money sufficient to pay on the Redemption Date the Redemption Price of, and
(unless the Redemption Date shall be an Interest Payment Date) interest
accrued to the Redemption Date on, all Securities or portions thereof which
are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
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Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust
for the redemption of such Security shall (subject to any right of the Holder
of such Security or any Predecessor Security to receive interest as provided in
the last paragraph of Section 3.7) be paid to the Company upon Company Request
or, if then held by the Company, shall be discharged from such trust.
SECTION 10.6 SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Except as provided in
the next succeeding paragraph, upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest on Securities whose
Stated Maturity is prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 10.7 SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part at any Place of
Payment therefor (with, if the Company or the Trustee so required, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of that Security, without service
charge, a new Security or Securities of the same series, the same form and the
same Maturity in any authorized denomination equal in aggregate principal
amount to the unredeemed portion of the principal of the Security surrendered.
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ARTICLE 11
SINKING FUNDS
SECTION 11.1 APPLICABILITY OF ARTICLE
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 11.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company (i) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (ii) may apply as a credit
Securities of a series which have been converted pursuant to Article 12 or
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case
in satisfaction of all or any part of any sinking fund payment with respect to
the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; PROVIDED that
such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 11.3 REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 11.2 and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 10.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 10.4. Such notice having
been
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duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 10.6 and 10.7.
ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 CONVERSION PRIVILEGE
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, Securities of any series or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may
be converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of the Company, in accordance with
the terms of such series of Securities and (except as otherwise specified as
contemplated by Section 3.1) in accordance with this Article. In case a
Security or portion thereof is called for redemption, such conversion right in
respect of the Security or portion so called shall expire at the close of
business on the Business Day which is ten days prior to the Redemption Date,
unless the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon conversion,
which shall be specified as contemplated by Section 3.1, shall be referred to
herein as the "conversion price." The conversion price shall be adjusted in
certain instances as provided in paragraphs (1), (2), (3), (4) and (7) of
Section 12.4.
SECTION 12.2 EXERCISE OF CONVERSION PRIVILEGE
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security, duly endorsed or assigned to the
Company or in blank, at any office or agency of the Company maintained for
that purpose pursuant to Section 9.2, accompanied by written notice to the
Company at such office or agency that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion. Except as provided in the preceding sentence and
in Section 3.7, no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Securities surrendered for conversion
or on account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the
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foregoing provisions, and at such time the rights of the Holders of such
Securities as Holders shall cease, and the Person or Persons entitled to
receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time.
As promptly as practicable on or after the conversion date, the Company shall
issue and shall deliver at such office or agency a certificate or certificates
for the number of full shares of Common Stock issuable upon conversion,
together with payment in lieu of any fraction of a share, as provided in
Section 12.3.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations in aggregate principal amount equal
to the uncontroverted portion of the principal amount of such Security.
SECTION 12.3 FRACTIONS OF SHARES
No fractional shares of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the market
price per share of Common Stock (as determined by the Board of Directors or in
any manner prescribed by the Board of Directors) at the close of business on
the day of conversion.
SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock,
the conversion price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such conversion price by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
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(2) In case the Company shall issue rights or warrants to all holders of
its Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the current market price per share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the dated fixed for the determination of stockholders entitled to receive
such rights or warrants, the conversion price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for determination. For the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company will not issue any rights or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the conversion price in effect at
the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in
effect at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in paragraph (2)
of this Section, any dividend or distribution paid in cash out of the retained
earnings of the Company and any dividend or distribution referred to in
paragraph (1) of this Section), the conversion price shall be adjusted so that
the same shall equal the price determined by multiplying the conversion price
in effect immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall be such current market price per
share of the Common Stock, such adjustment to become effective immediately
prior
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to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(5) The reclassification of Common Stock into securities including other
than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 12.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning
of paragraph (4) of this Section) and (b) a subdivision or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(6) For the purpose of any computation under paragraphs (2) and (4) of
this Section, the current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the five
consecutive Trading Days selected by the Company commencing not more than 20
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The closing price for each day shall
be the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq National Market, or, if the Common Stock is
not listed or admitted to trading on any national securities exchange or
quoted on the Nasdaq National Market, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for that
purpose. For purposes of this paragraph, the term "'ex' date", when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(7) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (1), (2), (3) and (4) of this Section,
as it considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights shall not be taxable
to the recipients.
SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE
Whenever the conversion price is adjusted as herein provided:
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(a) the Company shall compute the adjusted conversion price in
accordance with Section 12.4 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section
9.2; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be
mailed by the Company to all Holders at their last addresses as they shall
appear in the Register.
SECTION 12.6 NOTICE OF CERTAIN CORPORATE ACTION
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 9.2, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Register, at least 20 days (or ten days in any case specified in clause
(a) or (b) above) prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
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SECTION 12.7 COMPANY TO RESERVE COMMON STOCK
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares
of Common Stock then issuable upon the conversion of all outstanding
Securities.
SECTION 12.8 TAXES ON CONVERSIONS
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to
the Company the amount of any such tax, or has established to the satisfaction
of the Company that such tax has been paid.
SECTION 12.9 COVENANT AS TO COMMON STOCK
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and nonassessable
and, except as provided in Section 12.8, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION 12.10 CANCELLATION OF CONVERTED SECURITIES
All Securities delivered for conversion shall be delivered to the Trustee
to be cancelled by or at the direction of the Trustee, which shall dispose of
the same as provided in Section 3.9.
SECTION 12.11 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OF SALE OF ASSETS
In case of any consolidation of the Company with, or merger of the Company
into, any other Person, any merger of another Person into the Company (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the
Company, the Person formed by such consolidation or resulting from such merger
or which acquires such assets, as the case may be, shall execute and deliver
to the Trustee a supplemental indenture providing that the Holder of each
Security then outstanding shall have the right thereafter, during the period
such Security shall be convertible as specified in Section 12.1, to convert
such Security only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Common Stock of the Company
(i) is not a Person with which the Company
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consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("constituent
Person"), or an Affiliate of a constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, sale or
transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer is not
the same for each share of Common Stock of the Company held immediately prior
to such consolidation, merger, sale or transfer by others than a constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("nonelecting share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective
date of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
The Company shall be solely responsible for performing the duties and
responsibilities contained in this Article and the Trustee shall have no
responsibility therefor.
ARTICLE 13
SUBORDINATION OF SECURITIES
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS
(a) The Company agrees, and each Holder of the Securities by acceptance
thereof likewise agrees, that the payment of the principal of, premium, if any,
and interest on the Securities is subordinated, to the extent and in the manner
provided in this Article 13, to the prior payment in full of all Senior
Indebtedness of the Company.
(b) All provisions of this Article 13 shall be subject to Section 13.14.
SECTION 13.2 COMPANY NOTE TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN
CERTAIN CIRCUMSTANCES; LIMITATIONS ON ACCELERATION OF SECURITIES
(a) Upon the maturity of any Senior Indebtedness of the Company by lapse
of time, acceleration or otherwise, all obligations with respect thereto shall
first be paid in full, or such payment duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness, before any payment is
made on account of the principal of, premium, if any, or interest on the
Securities or to redeem, retire, purchase, deposit moneys for the defeasance of
or acquire any of the Securities.
(b) Upon the happening of (i) any default in payment of any Senior
Indebtedness of the Company, or (ii) any other default on Senior Indebtedness of
the Company and the
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maturity of such Senior Indebtedness is accelerated in accordance with its
terms, then, unless (w) such default relates to Senior Indebtedness of the
Company in an aggregate amount equal to or less than $20 million, (x) such
default shall have been cured or waived or shall have ceased to exist, (y) any
such acceleration has been rescinded, or (z) such Senior Indebtedness has been
paid in full, no direct or indirect payment in cash, property or securities,
by set-off or otherwise (except payment of the Securities from funds
previously deposited in accordance with Section 4.1 at any time such deposit
was not prohibited by this Indenture), shall be made or agreed to be made by
the Company on account of the principal of or premium, if any, or interest on
the Securities, or in respect of any redemption, retirement, purchase, deposit
of moneys for the covenant defeasance or other acquisition of any of the
Securities in the case of such a default in Senior Indebtedness of the Company
and the Company shall not deposit money for any such payment or distribution
with the Trustee or any Paying Agent nor shall the Company (if the Company is
acting as its own Paying Agent) segregate and hold in trust money for any such
payment or distribution.
(c) Upon the happening of an event of default (other than under
circumstances when the terms of paragraph (b) of this Section 13.2 are
applicable) with respect to any Senior Indebtedness of the Company pursuant to
which the holders thereof are entitled under the terms of such Senior
Indebtedness to immediately accelerate the maturity thereof (without further
notice or expiration of any applicable grace periods), upon written notice
thereof given to each of the Company and the Trustee by the trustee for or other
representative of the holders of at least $25 million of Senior Indebtedness
of the Company (a "Payment Notice"), then, unless and until such event of
default shall have been cured or waived or shall have ceased to exist, no
direct or indirect payment in cash, property or securities, by set-off or
otherwise (except payment of the Securities from funds previously deposited in
accordance with Section 4.1 at any time such deposit was not prohibited by
this Indenture), shall be made or agreed to be made by the Company on account
of the principal of or premium, if any, or interest on the Securities, or in
respect of any redemption, retirement, purchase, deposit of moneys for the
covenant defeasance or other acquisition of any of the Securities, in the case
of Senior Indebtedness of the Company, and the Company shall not deposit money
for any such payment or distribution with the Trustee or any Paying Agent nor
shall the Company or a Subsidiary (if the Company or such Subsidiary is acting
as Paying Agent) segregate and hold in trust money for any such payment or
distribution (a "Payment Block"); PROVIDED, HOWEVER, that this Section
13.2(c) shall not prevent the making of any payment for more than 120 days
after a Payment Notice shall have been given unless the Senior Indebtedness in
respect of which such event of default exists has been declared due and
payable in its entirety, in which case no such payment shall be made until
such acceleration has been rescinded or annulled or such Senior Indebtedness
has been paid in full in accordance with its terms. Notwithstanding the
foregoing, (i) not more than one Payment Notice shall be given with respect to
a particular event of default (which shall not bar subsequent Payment Notices
for other such events of default), (ii) all events of default under Senior
Indebtedness occurring within any 30-day period shall be treated as one event
of default to the extent that one or more Payment Notices are issued in
connection therewith and (iii) no more than two Payment Blocks shall be
permitted
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within any period of 12 consecutive months. Any payment made in contravention
of the provisions of this Section 13.2(c) shall be returned to the Company.
(d) In the event that, notwithstanding the provisions of Section 13.2(a)
or 13.2(b), the Trustee or the Holder of any Security shall have received any
payment on account of the principal of or premium, if any, or interest on the
Securities in contravention of Section 13.2(a) or 13.2(b) or after the
happening of a default in payment of any Senior Indebtedness of the Company or
any acceleration of the maturity of any Senior Indebtedness of the Company
then, in either such case, except in the case of any such default which shall
have been cured or waived or shall have ceased to exist, such payment (subject
to the provisions of Sections 1306 and 1307) shall be held for the benefit of,
and shall be paid over and delivered to, the holders of such Senior
Indebtedness of the Company (PRO RATA as to each of such holders on the
basis of the respective amounts of Senior Indebtedness of the Company held by
them) or their representative or the trustee under the indenture or other
agreement (if any) pursuant to which Senior Indebtedness of the Company may
have been issued, as their respective interests may appear, for application to
the payment of all Senior Indebtedness of the Company remaining unpaid to the
extent necessary to pay all Senior Indebtedness of the Company in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness of the Company.
(e) (1) Upon the occurrence of an Event of Default under Section 5.1(1)
through (4) and (7), the Trustee or holders of 25% of the outstanding principal
amount of the Securities of any series must give notice of such Event of Default
and the intention to accelerate to the Company and any holders of Senior
Indebtedness which have theretofore requested of the Trustee such notice, and
no acceleration of the Securities of any series shall be effective unless and
until such Event of Default is continuing on the 60th day after the date of
delivery of such notice. The Company may pay the holders of the Securities of
any series any defaulted payment and all other amounts due following any such
acceleration of the maturity of the Securities if this Section 13.2(a) would
not prohibit such payment to be made at that time.
(2) Nothing in this Article 13 shall prevent or delay the Trustee or the
holders of the Securities from taking any action in connection with the
acceleration of the maturity of the Securities pursuant to Section 5.2 upon
the occurrence of an Event of Default under either of Section 5.1(5) or
5.1(6).
(3) Except as provided in Section 13.2(e)(1), a failure to make any
payment with respect to the Securities as a result of the rights of holders of
Senior Indebtedness of the Company described in Section 13.2(b) or 13.2(c) will
not have any effect on the right of holders of the Securities to accelerate the
maturities thereof as a result of such payment default. The Company shall
give prompt written notice to the Trustee of any default in the payment of
principal of or interest on any Senior Indebtedness of the Company and in the
event of any such default, shall provide to the Trustee, in the form of an
Officers' Certificate, the names, addresses and respective amounts due holders
of such Senior Indebtedness or the name and address of the trustee acting on
their behalf, if any. The Trustee shall be entitled to rely conclusively on
such Officers' Certificate without independent verification.
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SECTION 13.3 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE COMPANY
Upon the distribution of assets of the Company in any dissolution, winding
up, liquidation (total or partial) or similar proceeding relating to the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise):
(1) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payment in full of all Senior Indebtedness (or to have
such payment duly provided for in a manner satisfactory to them) in cash or in
a manner satisfactory to the holders of Senior Indebtedness of the Company
before the Holders of the Securities are entitled to receive any payment on
account of the principal of, premium, if any, or interest on the Securities;
(2) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than securities of
the Company as reorganized or readjusted or securities of the Company or any
other company, trust or corporation provided for by a plan of reorganization
or readjustment, the payment of which is junior or otherwise subordinate, at
least to the extent provided in this Article 13 with respect to the Securities
to the payment of all Senior Indebtedness of the Company at the time
outstanding and to the payment of all securities issued in exchange therefor
to the holders of the Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, at the time outstanding),
to which the Holders of the Securities or the Trustee on behalf of the Holders
of the Securities would be entitled except for the provisions of this Article
13, shall be paid by the liquidating trustee or agent or other person making
such payment or distribution directly to the holders of the Senior
Indebtedness of the Company or their representatives or to the trustee under
any indenture under which such Senior Indebtedness may have been issued (PRO
RATA as to each such holder, representative or trustee on the basis of
respective amounts of unpaid Senior Indebtedness held or represented by each),
to the extent necessary to make payment in full of all Senior Indebtedness of
the Company remaining unpaid, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Senior Indebtedness;
and
(3) in the event that notwithstanding the foregoing provisions of this
Section 13.3, any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than securities of
the Company as reorganized or readjusted or securities of the Company or
Guarantor or any other company, trust or corporation provided for by a plan of
reorganization or readjustment, the payment of which is junior or otherwise
subordinate, at least to the extent provided in this Article 13 with respect
to the Securities to the payment of all Senior Indebtedness of the Company at
the time outstanding and to the payment of all securities issued in exchange
therefor to the holders of the Senior Indebtedness of the Company as the case
may be, at the time outstanding), shall be received by the Trustee or the
Holders of the Securities on account of principal of, premium, if any, or
interest on the Securities before all Senior Indebtedness of the Company is
paid in full in cash
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or in a manner satisfactory to the holders of such Senior Indebtedness in
accordance with its terms, or effective provision made for its payment, such
payment or distribution (subject to the provisions of Sections 13.6 and 13.7)
shall be received and held for the benefit of and paid over to the holders of
the Senior Indebtedness of the Company remaining unpaid or unprovided for or
their representative, or to the trustee under any indenture under which such
Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor, as
the case may be, may have been issued (PRO RATA as provided in paragraph (2)
above), for application to the payment of such Senior Indebtedness of the
Company to the extent necessary to pay all such Senior Indebtedness of the
Company in full in cash or in a manner satisfactory to the holders of Senior
Indebtedness of the Company in accordance with its terms, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Company.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company or any
assignment for the benefit of the Company's creditors, tending toward the
liquidation of the business and assets of the Company.
SECTION 13.4 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS
Upon the payment in full of all Senior Indebtedness of the Company in cash
or in a manner satisfactory to the holders of such Senior Indebtedness, the
Holders of the Securities shall be subrogated equally and ratably to the
rights of the holders of Senior Indebtedness of the Company to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness of the Company until all amounts owing on the Securities shall be
paid in full, and for the purpose of such subrogation no payments or
distributions to the holders of Senior Indebtedness of the Company by or on
behalf of the Company or by or on behalf of Holders of the Securities by
virtue of this Article 13 which otherwise would have been made to the Holders
of the Securities shall, as between the Company and the Holders of the
Securities be deemed to be payment by the Company to or on account of Senior
Indebtedness of the Company it being understood that the provisions of this
Article 13 are intended solely for the purpose of defining the relative rights
of the Holders of the Securities, on the one hand, and the holders of Senior
Indebtedness of the Company, on the other hand.
SECTION 13.5 OBLIGATION OF THE COMPANY UNCONDITIONAL
Nothing contained in this Article 13 or elsewhere in this Indenture or in
any Security is intended to or shall impair, as between the Company and the
Holders of the Securities the obligations of the Company which are absolute
and unconditional, to pay to the Holders of the Securities the principal of
(premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of Senior Indebtedness of the
Company nor, except as expressly provided in this Article 13, shall anything
herein or in the Securities prevent the Trustee or the Holder of
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any Security from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article 13 of the holders of Senior Indebtedness of the Company, in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 13, the Trustee, subject to the provisions of
Section 6.1, and the Holders of the Securities endorsed thereon shall be
entitled to rely upon any order or decree by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or the
Holders of the Securities for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of Senior Indebtedness of the
Company and Senior Indebtedness of the Guarantor and other indebtedness of the
Company the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
13.
Nothing contained in this Article 13 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligations of the Company to
make, or prevent the Company from making, at any time except during the
pendency of any dissolution, winding up, liquidation (total or partial) or
similar proceeding, and except during the continuance of any event specified
in Section 13.2 (not cured or waived), payments at any time of the principal
of (or premium, if any) or interest on the Securities.
SECTION 13.6 KNOWLEDGE OF TRUSTEE
Notwithstanding any provision of this Indenture, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee until three
Business Days after a Responsible Officer of the Trustee on behalf of the
Trustee shall have received at the Corporate Trust Office of the Trustee
written notice thereof from the Company, any Holder, or the holder or
representative of any class of Senior Indebtedness of the Company identifying
the specific sections of this Indenture involved and describing in detail the
facts that would obligate the Trustee to withhold payments to Holders of
Securities, and prior to such time, the Trustee, subject to the provisions of
Section 6.1, shall be entitled in all respects conclusively to assume that no
such facts exist. The Trustee shall be entitled to rely on the delivery to it
of a written notice by an individual representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of any such Senior
Indebtedness or a trustee on behalf of any such holder.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to amount of Senior
Indebtedness of the Company held by such person, the extent to which such
person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this Article, and if
such evidence is not furnished, the Trustee may defer
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any payment to such person pending judicial determination as to the right of
such person to receive such payment.
SECTION 13.7 APPLICATION BY TRUSTEE OF MONEYS DEPOSITED WITH IT
If two Business Days prior to the date on which by the terms of this
Indenture any moneys deposited with the Trustee or any Paying Agent (other
than the Company or a Subsidiary) may become payable for any purpose
(including, without limitation, the payment of the principal of, premium, if
any, or interest on any Security) the Trustee shall not have received with
respect to such moneys the notice provided for in Section 13.6, then the
Trustee shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section 13.7 shall be construed solely for the benefit of the
Trustee and Paying Agent and shall not otherwise affect the rights of holders
of such Senior Indebtedness.
SECTION 13.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS
No right of any present or future holders of any Senior Indebtedness of the
Company to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or be otherwise charged
with.
SECTION 13.9 HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
SECURITIES
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate in the discretion of the Trustee to effectuate the
subordination provided in this Article 13 and appoints the Trustee his
attorney-in-fact for such purpose, including, without limitation, in the event
of any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company the timely filing of a
claim for the unpaid balance of its or his Securities in the form required in
said proceedings. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceedings before the expiration of the
time to file such claim or claims, then the holders of Senior Indebtedness of
the Company are hereby authorized to have the right to file and are hereby
authorized to file an appropriate claim for and on behalf of the Holders of
said Securities.
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SECTION 13.10 RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS
The Trustee shall be entitled to all of the rights set forth in this
Article 13 in respect of any Senior Indebtedness of the Company at any time held
by it to the same extent as any other holder of such Senior Indebtedness of the
Company and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder. With respect to the holders of
Senior Indebtedness of the Company the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article 13, and no implied covenants or obligations with respect
to the holders of Senior Indebtedness of the Company shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and the
Trustee shall not be liable to any holder of Senior Indebtedness of the
Company if it shall mistakenly pay over or deliver to Holders of Securities,
the Company or any other Person monies or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article 13 or
otherwise.
SECTION 13.11 ARTICLE 13 NOT TO PREVENT EVENTS OF DEFAULT
The failure to make a payment on account of principal or interest by reason
of any provision in this Article 13 shall not be construed as preventing the
occurrence of an Event of Default under Section 5.1.
SECTION 13.12 PAYING AGENTS OTHER THAN THE TRUSTEE
In case at any time any Paying Agent (including, without limitation, the
Company or any Subsidiary) other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Trustee" as used in this
Article 13 shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent (except the Company
and their subsidiaries in the case of Sections 13.6 and 13.7) within its
meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 13 in addition to or in place of the Trustee.
SECTION 13.13 TRUSTEE'S COMPENSATION NOT PREJUDICED
Nothing in this Article 13 shall apply to amounts due to the Trustee
pursuant to Section 6.9.
SECTION 13.14 TRUST MONEYS NOT SUBORDINATED
Notwithstanding anything contained herein to the contrary, payments from
money held in trust under Article 4 by the Trustee for the payment of
principal of, premium, if any, and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 13 and none of the
Holders shall be obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.
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This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ALASKA AIR GROUP, INC.
By: ______________________________
Title: Vice President - Finance
[Seal]
Attest
- -----------------------------------
Title: Vice President
________________________, TRUSTEE
By:____________________________________
Title:
[Seal]
Attest:
___________________________________
Title:
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<PAGE>
EXHIBIT 4(c)(1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[LEASED AIRCRAFT]
TRUST INDENTURE
AND SECURITY AGREEMENT
DATED AS OF ___________________, 199___
BETWEEN
ALASKA AIRLINES, INC.
AND
----------------------------------------------,
AS INDENTURE TRUSTEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Reconciliation and tie between Trust Indenture and Security Agreement,
dated as of February 1, 1992, and the Trust Indenture Act of 1939.
This reconciliation section does not constitute part of the Trust
Indenture and Security Agreement
Trust Indenture and
Trust Indenture Act Security Agreement
of 1939 Section Section
- ------------------- -------------------
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . 9.10(a)
(a)(2) . . . . . . . . . . . . . . . . . . . . 9.10(a)
Section 312 (a) . . . . . . . . . . . . . . . . . . . . 2.06(a)
(c) . . . . . . . . . . . . . . . . . . . . 13.03
Section 313 (a) . . . . . . . . . . . . . . . . . . . . 9.06
Section 314 (a) . . . . . . . . . . . . . . . . . . . . 7.02(a)-(d)
(b) . . . . . . . . . . . . . . . . . . . . 7.02(e)
(c)(1) . . . . . . . . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . 13.04
(d)(1) . . . . . . . . . . . . . . . . . . . . 5.01(c)
9.04(b)
(d)(2) . . . . . . . . . . . . . . . . . . . . 9.04(b)
(d)(3) . . . . . . . . . . . . . . . . . . . . 5.01(c)
(e) . . . . . . . . . . . . . . . . . . . . 13.05
Section 315 (b) . . . . . . . . . . . . . . . . . . . . 9.05
(e) . . . . . . . . . . . . . . . . . . . . 8.10
Section 316 (a)(last sentence) . . . . . . . . . . . . . . . 1.01(b)
(a)(1)(A). . . . . . . . . . . . . . . . . . . . 8.06
(a)(1)(B). . . . . . . . . . . . . . . . . . . . 8.05
(b) . . . . . . . . . . . . . . . . . . . . 8.08
(c) . . . . . . . . . . . . . . . . . . . . 13.11(c)
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . 8.03(h)
(a)(2) . . . . . . . . . . . . . . . . . . . . 8.09
(b) . . . . . . . . . . . . . . . . . . . . 2.09(c)
Section 318 (a) . . . . . . . . . . . . . . . . . . . . 13.01
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 THE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.01 Amount Unlimited; Issuable in Series . . . . . . . . . . 11
Section 2.02 Execution, Authentication, Delivery and Dating . . . . . 14
Section 2.03 Temporary Certificates . . . . . . . . . . . . . . . . . 15
Section 2.04 Registrar and Paying Agent . . . . . . . . . . . . . . . 15
Section 2.05 Transfer and Exchange. . . . . . . . . . . . . . . . . . 16
Section 2.06 Holder Lists; Ownership of Certificates. . . . . . . . . 17
Section 2.07 Mutilated, Destroyed, Lost or Stolen Certificates. . . . 17
Section 2.08 Cancellation . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.09 Payment on Certificates; Defaulted Amounts . . . . . . . 18
Section 2.10 Payment From Indenture Estate Only . . . . . . . . . . . 20
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS
IN INDENTURE ESTATE . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.01 Application of Proceeds of Initial Issuance of
Certificates . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.02 Payment in Case of Redemption of Certificates. . . . . . 22
Section 3.03 Application of Rent When No Indenture Event of
Default Is Continuing. . . . . . . . . . . . . . . . . . 23
Section 3.04 Application of Certain Payments in Case of Requisition
or Event of Loss . . . . . . . . . . . . . . . . . . . . 24
Section 3.05 Payments During Continuance of Indenture Event of
Default. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.06 Payments for Which Application Is Provided in Other
Documents. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.07 Payments for Which No Application Is Otherwise
Provided . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.08 Credit in Respect of Certificates Surrendered for
Cancellation . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 4 COVENANTS OF OWNER TRUSTEE. . . . . . . . . . . . . . . . . . . . 28
Section 4.01 Covenants of Owner Trustee . . . . . . . . . . . . . . . 28
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ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF
PROPERTY INCLUDED IN INDENTURE ESTATE DURING
CONTINUATION OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.0l Disposition, Substitution and Release of Property
Included in Indenture Estate During Continuation of
Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 6 REDEMPTION OF CERTIFICATES. . . . . . . . . . . . . . . . . . . . 31
Section 6.01 Redemption of Certificates in the Event of Non-
Delivery of Aircraft or Upon Event of Loss,
Termination of Lease or Refunding. . . . . . . . . . . . 31
Section 6.02 Redemption of Certificates by Owner Trustee Upon
Lease Event of Default . . . . . . . . . . . . . . . . . 32
Section 6.03 Notice of Redemption to Holders. . . . . . . . . . . . . 33
Section 6.04 Deposit of Redemption Price. . . . . . . . . . . . . . . 33
Section 6.05 Certificates Payable on Redemption Date. . . . . . . . . 33
ARTICLE 7 COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . 34
Section 7.01 Repayment of Monies for Certificate Payments Held by
Indenture Trustee. . . . . . . . . . . . . . . . . . . . 34
Section 7.02 Reports by the Company . . . . . . . . . . . . . . . . . 34
Section 7.03 Consolidation, Merger, Etc.. . . . . . . . . . . . . . . 36
Section 7.04 Change in Registration . . . . . . . . . . . . . . . . . 37
Section 7.05 Assumption of Obligations of Owner Trustee by the
Company. . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 8 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.01 Indenture Events of Default. . . . . . . . . . . . . . . 40
Section 8.02 Acceleration; Rescission and Annulment . . . . . . . . . 40
Section 8.03 Other Remedies Available to Indenture Trustee. . . . . . 41
Section 8.04 Waiver of Owner Trustee. . . . . . . . . . . . . . . . . 47
Section 8.05 Waiver of Existing Defaults. . . . . . . . . . . . . . . 47
Section 8.06 Control by Majority. . . . . . . . . . . . . . . . . . . 47
Section 8.07 Limitation on Suits by Holders . . . . . . . . . . . . . 48
Section 8.08 Rights of Holders to Receive Payment . . . . . . . . . . 48
Section 8.09 Indenture Trustee May File Proofs of Claim . . . . . . . 48
Section 8.10 Undertaking for Costs. . . . . . . . . . . . . . . . . . 49
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ARTICLE 9 INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.01 Duties of Indenture Trustee. . . . . . . . . . . . . . . 49
Section 9.02 Rights of Indenture Trustee. . . . . . . . . . . . . . . 49
Section 9.03 Individual Rights of Indenture Trustee . . . . . . . . . 50
Section 9.04 Funds May Be Held by Indenture Trustee or Paying
Agent; Investments . . . . . . . . . . . . . . . . . . . 50
Section 9.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . 53
Section 9.06 Reports by Indenture Trustee to Holders. . . . . . . . . 53
Section 9.07 Compensation and Indemnity . . . . . . . . . . . . . . . 53
Section 9.08 Replacement of Indenture Trustee . . . . . . . . . . . . 54
Section 9.09 Successor Indenture Trustee; Agents by Merger, Etc.. . . 56
Section 9.10 Eligibility; Disqualification. . . . . . . . . . . . . . 56
Section 9.11 Trustee's Liens. . . . . . . . . . . . . . . . . . . . . 56
Section 9.12 Withholding Taxes; Information Reporting . . . . . . . . 56
ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 57
Section 10.01 Satisfaction and Discharge of Agreement; Defeasance;
Termination of Obligations . . . . . . . . . . . . . . . 57
Section 10.02 Survival of Certain Obligations. . . . . . . . . . . . . 59
Section 10.03 Monies to Be Held in Trust . . . . . . . . . . . . . . . 59
Section 10.04 Monies to Be Returned to Owner Trustee . . . . . . . . . 59
ARTICLE 11 ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE. . . . . . . . . . 60
Section 11.01 Actions to Be Taken Upon Termination of Lease. . . . . . 60
ARTICLE 12 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . 61
Section 12.01 Amendments to This Indenture and Indenture
Supplement Without Consent of Holders. . . . . . . . . . 61
Section 12.02 Amendments to This Indenture and Indenture
Supplement With Consent of Holders . . . . . . . . . . . 62
Section 12.03 Compliance With Trust Indenture. . . . . . . . . . . . . 64
Section 12.04 Notation on or Exchange of Certificates. . . . . . . . . 64
Section 12.05 Indenture Trustee Protected. . . . . . . . . . . . . . . 64
Section 12.06 Amendments, Waivers, Etc. of Other Operative
Documents. . . . . . . . . . . . . . . . . . . . . . . . 64
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ARTICLE 13 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 13.01 Trust Indenture Act Controls . . . . . . . . . . . . . . 64
Section 13.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 13.03 Disclosure of Names and Addresses of Holders . . . . . . 66
Section 13.04 Certificate and Opinion as to Conditions Precedent . . . 66
Section 13.05 Statements Required in Certificate or Opinion. . . . . . 66
Section 13.06 Separability Clause. . . . . . . . . . . . . . . . . . . 67
Section 13.07 Non-Business Days. . . . . . . . . . . . . . . . . . . . 67
Section 13.08 Governing Law. . . . . . . . . . . . . . . . . . . . . . 67
Section 13.09 No Recourse Against Others . . . . . . . . . . . . . . . 67
Section 13.10 Execution in Counterparts. . . . . . . . . . . . . . . . 67
Section 13.11 Acts of Holders. . . . . . . . . . . . . . . . . . . . . 68
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Exhibit A-1 Form of Installment Certificates
Exhibit A-2 Form of Serial Certificates
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<PAGE>
TRUST INDENTURE AND SECURITY AGREEMENT
THIS TRUST INDENTURE AND SECURITY AGREEMENT, dated as of _____________,
199___, between ALASKA AIRLINES, INC., an Alaska corporation, and
________________________________________________________________________________
______________, as Indenture Trustee hereunder.
WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its equipment trust
certificates (hereinafter called the "Certificates"), unlimited as to principal
amount, to be issued to finance or refinance the debt portion of leveraged
leases of aircraft in one or more series, to be secured by an assignment of such
rental and certain other amounts payable by the Company under such leveraged
leases and by a security interest in such aircraft to bear such rates of
interest, to mature at such times and to have such other provisions as shall
from time to time be fixed as hereinafter provided;
WHEREAS, this Agreement is subject to the provisions of the Trust Indenture
Act of 1939, as amended, that are required to be a part of this Agreement and
shall, to the extent applicable, be governed by such provisions; and
WHEREAS, all things necessary to make this Agreement a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Certificates by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Certificates or of any
series thereof as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINITIONS
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article l have the meaning assigned to
them in this Article l, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them
<PAGE>
therein; except that the "obligor" within the meaning of the Trust
Indenture Act shall be the Company for all purposes of this Agreement;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(5) all references in this Indenture to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibit of this Indenture; and
(6) with respect to the Certificates of any series or with respect to
an Operative Document related to such series of Certificates, "this
Agreement" means this Indenture as supplemented by the Indenture Supplement
applicable to such series of Certificates.
(b) For all purposes of this Agreement, the following capitalized terms
have the following respective meanings:
"Affiliate," with respect to a specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent," with respect to the Certificate, of any series, means any Paying
Agent or Registrar applicable to the Certificates of such series.
"Aircraft," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Lease applicable to the Certificates of such
series.
"Airframe," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Lease applicable to the Certificates of such
series.
"Appraiser" means a Person engaged in the business of making appraisals
and, in the case of the Aircraft, familiar with aviation equipment.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978, as
amended.
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"Basic Rent," with respect to the Certificates of any series, shall have
the meaning specified therefor in the Lease applicable to the Certificates of
such series.
"Board of Directors" means the board of directors of the Company or the
executive committee or any other committee of such board duly authorized to act
on behalf of the Company with respect to the financing of aircraft, including
the borrowing of money in respect thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Indenture Trustee.
"Business Day," with respect to the Certificates of any series, shall have
the meaning specified therefor in the Lease applicable to the Certificates of
such series.
"Certificate" or "Certificates" means any Certificate or Certificates
issued under this Agreement.
"Company" means Alaska Airlines, Inc., an Alaska corporation, and, subject
to the provisions hereof, its permitted successors and assigns, or any other
obligor with respect to the Certificates (within the meaning of the Trust
Indenture Act).
"Company Request" means a written request of the Company executed on its
behalf by a Responsible Company Officer.
"Co-Registrar" has the meaning specified therefor in Section 2.04.
"Debt" means any liability for borrowed money, or any liability for the
payment of money in connection with any letter of credit transaction, or other
liabilities evidenced or to be evidenced by bonds, debentures, notes or other
similar instruments.
"Defaulted Installment" has the meaning specified therefor in Section 2.09.
"Defaulted Interest" has the meaning specified therefor in Section 2.09.
"Delivery Date," with respect to the Certificates of any series, shall have
the meaning specified therefor in the Lease applicable to the Certificates of
such series.
"Engine," with respect to the Certificates of any series, shall have the
meaning specified therefor or in the Lease applicable to the Certificates of
such series.
"Event of Loss," with respect to the Certificates of any series, shall have
the meaning specified therefor in the Lease applicable to the Certificates of
such series.
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"Excluded Payments," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Indenture Supplement entered into in
respect of the Certificates of such series pursuant to Section 2.01.
"Federal Aviation Act" means the Federal Aviation Act of 1958, as amended,
or any similar legislation of the United States enacted to supersede, amend or
supplement such Act.
"Guarantee" means Alaska Air Group, Inc.'s unconditional guarantee of the
Certificates of one or more series as more fully described in an Indenture
Supplement.
"Holder," with respect to the Certificates of any series, means a person in
whose name such a Certificate is registered on the Register for such series.
"Indenture" means this Trust Indenture and Security Agreement, as the same
may from time to time be supplemented, amended or modified with effect for all
series of Certificates as are or may be issued pursuant to Article 2.
"Indenture Default" with respect to the Certificates of any series, means
any event which is, or after notice or passage of time, or both, would be, an
Indenture Event of Default applicable to the Certificates of such series.
"Indenture Estate," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Indenture Supplement entered into in
respect of the Certificates of such series pursuant to Section 2.01.
"Indenture Event of Default" with respect to the Certificates of any
series, shall have the meaning specified therefor in the Indenture Supplement
applicable to the Certificates of such series.
"Indenture Supplement" means a supplement to this Indenture entered into by
the Company, the Indenture Trustee and the Owner Trustee with respect to the
Certificates of a particular series, as the same may be amended and restated
from time to time.
"Indenture Trustee" means ________________________________________________
____________________________________and each other Person which may from time to
time be acting as Indenture Trustee with respect to any series in accordance
with the provisions of this Agreement.
"Independent," when used with respect to an engineer, Appraiser or other
expert who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company or any
Affiliate of the Company, and (iii) is not connected with the Company or any
Affiliate of the Company as an officer,
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employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Installment Certificate" means a Certificate substantially in the form of
Exhibit A-1.
"Installment Payment Amount" means, with respect to each Installment
Certificate of any series, the amount of the installment payment of principal
due and payable on each Installment Payment Date applicable to such Installment
Certificate, which amount shall be equal to the product of the original
principal amount of such Certificate and the Installment Payment Percentage (as
adjusted in the case of any partial redemption) for such Installment Payment
Date.
"Installment Payment Date," with respect to Installment Certificates of any
series, means each date on which an installment payment of principal is due and
payable on such Installment Certificates, as set forth in the Indenture
Supplement applicable to the Certificates of such series.
"Installment Payment Percentage" means, with respect to each Installment
Payment Date applicable to the Installment Certificates of any series, the
percentage set forth opposite such Installment Payment Date in the Indenture
Supplement applicable to the Certificates of such series.
"Interest Payment Date," with respect to the Certificates of any series,
shall have the meaning specified therefor in the Indenture Supplement applicable
to the Certificates of such series.
"Lease," with respect to any Aircraft, Airframe or any Engine, means the
Lease Agreement applicable to the Certificates of such series, between the Owner
Trustee, as lessor, and the Company, as lessee, identified in the Indenture
Supplement entered into in respect of the Certificate of such series pursuant to
Section 2.01, as such Lease Agreement may from time to time be supplemented,
amended or modified in accordance with the terms thereof and this Agreement.
"Lease Default," with respect to the Certificates of any series, shall have
the meaning specified for the term "Default" in the Lease applicable to the
Certificates of such series.
"Lease Event of Default," with respect to the Certificates of any series,
shall have the meaning specified for the term "Event of Default" in the Lease
applicable to the Certificates of such series.
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"Lease Loss Payment Date," with respect to the Certificates of any series,
shall have the meaning specified for the term "Loss Payment Date" in the Lease
applicable to the Certificates of such series.
"Lease Termination Date," with respect to the Certificates of any series,
shall have the meaning specified for the term "Termination Date" in the Lease
applicable to the Certificates of such series.
"Lessor's Liens," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Lease applicable to the Certificates
of such series.
"Lien" means any mortgage, pledge, lien, charge, encumbrance, lease,
exercise of rights, security interest or claim.
"Maturity Date" means (a) in the case of a Serial Certificate, the date on
which the principal amount thereof is stated to mature and (b) in the case of an
Installment Certificate, the stated final maturity date thereof.
"Officers' Certificate" means a certificate signed (a) in the case of the
Company, by (i) the Chairman of the Board of Directors, the President, any
Executive Vice President, any Senior Vice President or any Vice President of
Finance of the Company, signing alone, or (ii) any other Vice President of the
Company signing together with the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company or (b) in the case of any
Owner Trustee, by a Responsible Officer of such Owner Trustee.
"Operative Documents" with respect to the Certificates of any series, means
this Agreement, the Participation Agreement applicable to the Certificates of
such series, the Lease applicable to the Certificates of such series, the
Purchase Agreement applicable to the Certificates of such series (to the extent
assigned by the Owner Trustee to the Indenture Trustee pursuant to this
Agreement), the Certificates of such series, and the Trust Agreement applicable
to the Certificates of such series.
"Opinion of Counsel" means a written opinion of legal counsel, who (a) in
the case of counsel for the Company may be (i) a senior attorney employed by the
Company (ii) Perkins Coie or (iii) other counsel designated by the Company and
who shall be reasonably satisfactory to the Indenture Trustee or (b) in the case
of legal counsel for any Owner Trustee, may be any counsel designated by such
Owner Trustee who shall be reasonably satisfactory to the Indenture Trustee.
"Outstanding," when used with respect to Certificates of any series, means,
as of the date of determination, all Certificates of such series theretofore
executed and delivered under this Agreement other than:
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(i) Certificates of such series theretofore cancelled by the
Indenture Trustee or delivered to the Indenture Trustee for cancellation
pursuant to Section 2.08 or otherwise;
(ii) Certificates of such series for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Holders of the Certificates of such series;
provided that, if the Certificates of such series are to be redeemed,
notice of such redemption has been duly given pursuant to this Agreement or
provision therefor satisfactory to the Indenture Trustee has been made; and
(iii) Certificates of such series in exchange for or in lieu of which
other Certificates of such series have been executed and delivered pursuant
to this Agreement;
PROVIDED, HOWEVER, that, in determining whether the Holders of the requisite
aggregate principal amount of Outstanding Certificates of any series have given
any request, demand, authorization, declaration, direction, notice, consent or
waiver hereunder, Certificates of such series owned by or pledged to the Company
or any Affiliate of the Company or the related Owner Trustee or the related
Owner Participant or any Affiliate thereof, shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
declaration, direction, notice, consent or waiver, only Certificates which the
Indenture Trustee knows to be so owned or so pledged shall be disregarded.
Certificates of any series owned by the Company, the Owner Trustee applicable to
the Certificates of such series or the Owner Participant applicable to the
Certificates of such series, which have been pledged in good faith may be
regarded as Outstanding if the Company, the Owner Trustee applicable to the
Certificates of such series or the Owner Participant applicable to the
Certificates of such series, as the case may be, establishes to the satisfaction
of the Indenture Trustee the pledgee's right to act with respect to such
Certificates and that the pledgee is not the Company, such Owner Trustee or such
Owner Participant or any Affiliate thereof.
"Owner Participant," with respect to the Certificates of any series, means
the Owner Participant applicable to the Certificates of such series, as
specified in the Indenture Supplement entered into in respect of the
Certificates of such series pursuant to Section 2.01, and, to the extent
permitted by the Trust Agreement and the Participation Agreement applicable to
the Certificates of such series, its permitted successors and assigns.
"Owner Trustee," with respect to the Certificates of any series, means the
Owner Trustee applicable to the Certificates of such series, as specified in the
Indenture Supplement in respect of the Certificates of such series entered into
pursuant to Section 2.01, not in its individual capacity, but solely as trustee
under the Trust Agreement
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applicable to the Certificates of such series, and each other Person which may
from time to time be acting as such Owner Trustee in accordance with the
provisions of the Operative Documents applicable to the Certificates of such
series.
"Owner Trustee's Purchase Agreement," with respect to the Certificates of
any series, shall have the meaning specified therefor in the Lease applicable to
the Certificates of such series.
"Participation Agreement," with respect to the Certificates of any series,
means the Participation Agreement applicable to the Certificates of such series
identified in the Indenture Supplement entered into in respect of the
Certificates of such series pursuant to Section 2.01.
"Parts," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Lease applicable to the Certificates of such
series.
"Paying Agent," with respect to the Certificates of any series, means any
person acting as Paying Agent for such series pursuant to Section 2.04.
"Permitted Investment" means each of (i) obligations of, or guaranteed by,
the United States Government or agencies thereof, (ii) open market commercial
paper of any corporation incorporated under the laws of the United States of
America or any State thereof rated at least P-2 or its equivalent by Moody's
Investors Service, Inc. or at least A-2 or its equivalent by Standard & Poor's
Corporation, (iii) certificates of deposit issued by commercial banks organized
under the laws of the United States or of any political subdivision thereof
having a combined capital and surplus in excess of $500,000,000 which banks or
their holding companies have a rating of A or its equivalent by Moody's
Investors Service, Inc. or Standard & Poor's Corporation; PROVIDED, HOWEVER,
that the aggregate amount at any one time so invested in certificates of deposit
issued by any one bank shall not exceed 5% of such bank's capital and surplus,
(iv) U.S. dollar denominated offshore certificates of deposit issued by, or
offshore time deposits with, any commercial bank described in (iii) or any
subsidiary thereof and (v) repurchase agreements with any financial institution
having combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (i) through (iv) as collateral.
"Permitted Lien," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Lease applicable to the Certificates
of such series.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Premium," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Indenture Supplement applicable to the
Certificates of such series.
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"Purchase Agreement," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Lease applicable to the Certificates
of such series.
"Record Date" with respect to the Certificates of any series, shall have
the meaning specified therefor in the Indenture Supplement entered into in
respect of the Certificates of such series pursuant to Section 2.01.
"Redemption Date," with respect to any redemption of the Certificates of
any series, means the date of such redemption as determined pursuant to
Section 6.01 or Section 6.02 or pursuant to the provision of the Indenture
Supplement entered into with respect to such series of Certificates.
"Redemption Price," with respect to any redemption of the Certificates of
any series, means the price at which such Certificates are to be redeemed,
determined as of the applicable Redemption Date pursuant to Section 6.01 or
Section 6.02 or pursuant to the provision of the Indenture Supplement entered
into with respect to such series of Certificates.
"Register," with respect to the Certificates of any series, has the meaning
specified therefor in Section 2.04.
"Registrar" with respect to the Certificates of any series, means any
person acting as Registrar hereunder pursuant to Section 2.04.
"Rent," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Lease applicable to the Certificates of such
series.
"Replacement Airframe," with respect to the Certificates of any series,
shall have the meaning specified therefor in the Lease applicable to the
Certificates of such series.
"Replacement Engine," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Lease applicable to the Certificates
of such series.
"Responsible Company Officer" means the Chairman of the Board, the
President, any Executive Vice President, any Senior Vice President, the Chief
Financial Officer, any Vice President or the Treasurer of the Company or, with
respect to the Certificates of any series, any other management employee of the
Company (a) working under the direct supervision of such Chairman of the Board,
President, Executive Vice President, Senior Vice President, Chief Financial
Officer, Vice President or Treasurer and (b) whose responsibilities include the
administration of the transactions and agreements applicable to the Certificates
of such series.
"Responsible Officer," in the case of an Owner Trustee or the Indenture
Trustee, shall mean an any officer in such institution's Corporate Trust
Administration Department
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(or comparable department) or any other officer customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of their knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Serial Certificate" means a Certificate substantially in the form of
Exhibit A-1.
"Special Purchase Option Date," with respect to the Certificates of any
series, shall have the meaning specified therefor in the Lease applicable to the
Certificates of such series.
"Stipulated Loss Value," with respect to the Certificates of any series,
shall have the meaning specified therefor in the Lease applicable to the
Certificates of such series.
"Supplemental Rent," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Lease applicable to the Certificates
of such series.
"Tax Indemnity Agreement," with respect to the Certificates of any series,
shall have the meaning specified therefor in the Lease applicable to the
Certificates of such series.
"Termination Value," with respect to the Certificates of any series, shall
have the training specified therefor in the Lease applicable to the Certificates
of such series.
"Trust Agreement," with respect to the Certificates of any series, means
the Trust Agreement applicable to the Certificates of such series between the
Owner Trustee specified therein and the Owner Participant specified therein,
identified in the Indenture Supplement entered into in respect of the
Certificates of such series pursuant to Section 2.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Office," with respect to the Certificates of any series, means the
principal corporate trust office of the Owner Trustee applicable to the
Certificates of such series, as such office is specified in the Trust Agreement
applicable to the Certificates of such series, or at such other office at which
such Owner Trustee's corporate trust business shall be administered which such
Owner Trustee shall have specified by notice in writing to the Company, the
Indenture Trustee and each Holder of a Certificate of such series.
"Trustee's Liens" has the meaning specified therefor in Section 9.11.
"U.S. Government Obligations" means securities that are direct obligations
of the United States of America or agencies or instrumentalities thereof for the
payment of which
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the full faith and credit of the United States of America is pledged which are
not callable or redeemable, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian or the account of the holder of a
depository receipt so long as such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
ARTICLE 2
THE CERTIFICATES
SECTION 2.01 AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Certificates which may be authenticated
and delivered under this Indenture is unlimited.
The Certificates may be issued in one or more series. The following
matters shall be established with respect to the Certificates of each series
issued hereunder by an Indenture Supplement executed and delivered by and among
the Company, the Owner Trustee and the Indenture Trustee:
(1) the names of the Owner Participant and Owner Trustee with respect
to the Certificates of such series;
(2) the information identifying the Lease and Airframe and Engines in
which an assignment and security interest is being granted to secure
payment of the Certificates of such series;
(3) the title of such Certificates of the series (which shall
distinguish the Certificates of such series from all other series of
Certificates), and whether the Certificates of such series are one or both
of Serial Certificates or Installment Certificates;
(4) any limit upon the aggregate principal amount of the Certificates
of such series that may be authenticated and delivered (except for
Certificates authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Certificates of such series
pursuant to Section 2.03, 2.05, 2.07 or 12.04);
(5) if the Certificates of such series are Serial Certificates, the
dates on which the principal of the Certificates of such series shall be
payable;
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(6) If the Certificates of such series are Installment Certificates,
the Installment Payment Percentages and Installment Payment Dates;
(7) the rate or rates at which the Certificates of such series shall
bear or accrue interest or the method by which such rate or rates shall be
determined, the date or dates from which such Interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest shall be payable and the Record Date,
if any, for the Interest payable on such Certificates on each Interest
Payment or the method by which such date or dates shall be determined, and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(8) the period or periods within which, the price or prices,
including the Premium, if any, at which, the timing of notice and other
terms and conditions upon which Certificates of such series may be
redeemed, in whole or in part, at the option of the Company or the Owner
Trustee applicable to the series of such Certificates, if the Company or
such Owner Trustee is to have the option, including the rights, if any, of
such Owner Trustee to redeem the Certificates of such series in the event
of a Lease Event of Default applicable to the Certificates of such series,
as such right is referred to in Sections 6.02 and 8.03(e)(ii);
(9) the obligation, if any, of the Company or the Owner Trustee with
respect to the Certificates of such series to redeem Certificates of such
series, and the period or periods within which or the date or dates on
which, the price or prices at which, the timing of notice and other terms
and conditions upon which Certificates of such series shall be redeemed
pursuant to such obligation;
(10) the limits, if any, on the transferability of the Certificates
and any legend to be included on such Certificates deemed desirable by the
applicable Owner Trustee, the Company and the Indenture Trustee;
(11) if other than the Indenture Trustee, the identity of each
Registrar and/or Paying Agent with respect to the Certificates of such
series;
(12) the Indenture Events of Default for the Certificates of such
series, the remedies exercisable upon the occurrence of such Event of
Default, to the extent not set forth herein, and the limitations, if any,
on the exercise of such remedies;
(13) whether any Certificates of such series are to be issuable
initially in temporary global form and whether any Certificates of such
series are to be issuable in permanent global form and, if so, whether
beneficial owners of interests in any such permanent global Certificates
may exchange such interests for Certificates of such series and of like
tenor of any authorized form and denomination and the
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circumstances under which any such exchanges may occur, if other than in
the manner provided in Section 2.05, and, if Certificates of such series
are to be issuable as a global Certificate, the Identity of the depository
for such series;
(14) any provisions in modification of, in addition to or in lieu of
any of the provisions of Article 10;
(15) if the Certificates of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Certificate of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
(16) the agreements, if any, of the Owner Trustee applicable to the
Certificates of such series the performance of which such Owner Trustee
shall be personally liable for, as referred to in the proviso to the last
paragraph of Section 2.10;
(17) the period, if any, after which amounts payable in respect of the
Certificates of such series shall be distributed after a Lease Event of
Default with respect to the Certificates of such series has occurred and
during which the Certificates of such series could have been but were not
accelerated, as such period is referred to in the proviso to clause FOURTH
of Section 3.05;
(18) the extent, if any, to which the Owner Trustee applicable to the
Certificates of such series is not required to indemnify the Indenture
Trustee with respect to a breach of its representations and warranties by
the Indenture Trustee, as referred to in Section 9.07(a)(iii);
(19) the extent, if any, to which the provisions of the Participation
Agreement, Lease and Trust Agreement applicable to the Certificates of such
series may be amended by the parties thereto without the consent of the
Holders of or only upon the consent of the Holders of a specified
percentage of aggregate principal amount of, the Certificates of such
series as referred to in Section 12.06;
(20) provisions with respect to the terms for which the definitions
set forth in Article 1 hereof permit or require further specification in
the Indenture Supplement; and
(21) whether Guarantees will be endorsed on Certificates of the series
and, if so, the terms of the Guarantees; and
(22) any other terms, conditions, rights and preferences (or
limitations on such rights or preferences) relating to the Certificates of
such series (which terms
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shall not be inconsistent with the requirements of the Trust Indenture Act or
the provisions of this Indenture).
If any of the terms of the Certificates of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Indenture Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the
Certificates of such series.
SECTION 2.02 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
(a) At any time and from time to time, the Company may cause the Owner
Trustee applicable thereto to deliver Certificates of a series, executed by such
Owner Trustee for authentication, together with a Company Request for the
authentication and delivery of such Certificates, and the Indenture Trustee in
accordance with such Company Request shall authenticate and deliver such
Certificates. In authenticating such Certificates, and accepting the additional
responsibilities under this Agreement in relation to such Certificates, the
Indenture Trustee shall be entitled to receive (separately or in connection with
the satisfaction of any conditions precedent to the delivery of the Certificates
of such series as provided for in the Operative Documents related thereto), and
(subject to Section 315(a) through 315(d) of the Trust Indenture Act) shall be
fully protected in relying upon an Opinion of Counsel of the Company stating:
(A) that the form or forms of such Certificates have been established
in conformity with the provisions of this Agreement; and
(B) that the terms of such Certificates have been established in
conformity with the provisions of this Agreement.
The Indenture Trustee shall not be required to authenticate and deliver any
such Certificates if the issue of such Certificates pursuant to this Agreement
will affect the Indenture Trustee's own rights, duties or immunities under the
Certificates and this Agreement or otherwise in a manner which is not reasonably
acceptable to the Indenture Trustee.
(b) Certificates of each series shall be executed on behalf of the related
Owner Trustee or by the manual or facsimile signature of the president, any
senior vice president, any vice president, any assistant vice president, the
treasurer, the secretary, any assistant secretary or any assistant treasurer of
such Owner Trustee.
(c) If any officer of the Owner Trustee executing any Certificate no
longer holds that office at the time the Certificate is authenticated on behalf
of the Indenture Trustee and issued, the Certificate shall be valid
nevertheless.
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(d) At any time and from time to time after the execution of the
Certificates of any series, the related Owner Trustee may deliver such
Certificates to the Indenture Trustee for authentication and the Indenture
Trustee shall authenticate the Certificates by manual signature upon written
orders of such Owner Trustee. Certificates shall be authenticated on behalf of
the Indenture Trustee by any authorized officer or signatory of the Indenture
Trustee.
(e) A Certificate of any series shall not be valid or obligatory for any
purpose or entitled to any security or benefit hereunder until executed on
behalf of the related Owner Trustee by the manual or facsimile signature of the
officer of such Owner Trustee specified in the first sentence of Section 2.02(b)
and until authenticated on behalf of the Indenture Trustee by the manual
signature of the officer or signatory of the Indenture Trustee specified in the
second sentence of Section 2.02(d). Such signatures shall be conclusive
evidence that such Certificate has been duly executed, authenticated and issued
under this Agreement.
(f) Each Certificate shall be issued in registered form only and shall be
dated the date of its authentication.
SECTION 2.03 TEMPORARY CERTIFICATES
Until definitive Certificates are ready for delivery, the Indenture Trustee
may prepare, and the Owner trustee may execute, temporary Certificates.
Temporary Certificates shall be substantially in the form of definitive
Certificates but may have variations that the Indenture Trustee considers
appropriate for temporary Certificates. Every temporary Certificate shall be
executed by the Owner Trustee applicable to the Certificates of the series in
question, and authenticated by the Indenture Trustee, and registered by the
Registrar upon the same conditions, and with like effect, as a definitive
Certificate. The Owner Trustee applicable to the Certificates of the series in
question shall execute, and the Indenture Trustee shall authenticate, definitive
Certificates in exchange for temporary Certificates without unreasonable delay.
SECTION 2.04 REGISTRAR AND PAYING AGENT
The Indenture Trustee shall maintain an office or agency where the
Certificates of each series may be presented for registration of transfer or for
exchange (the "Registrar") and an office or agency where (subject to
Sections 2.05 and 2.09) the Certificates of each series may be presented for
payment or for exchange (the "Paying Agent"). The Registrar shall keep a
register (the "Register") with respect to the Certificates of such series and
their transfer and exchange. The Indenture Trustee may appoint one or more co-
registrars (the "Co-Registrars") and one or more additional Paying Agents for
the Certificates and the Indenture Trustee may terminate the appointment of any
Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
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The Indenture Trustee shall initially act as Registrar and Paying Agent for
the Certificates of each series.
SECTION 2.05 TRANSFER AND EXCHANGE
At the option of the Holder thereof, Certificates of any series may be
exchanged for an equal aggregate principal amount of other Certificates of the
same series and maturity and of any authorized denominations upon surrender of
the Certificates to be exchanged at the principal corporate trust office of the
Indenture Trustee, or at any office or agency maintained for such purpose
pursuant to Section 2.04. Whenever Certificates of any series are so
surrendered for exchange, the related Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and deliver, the replacement Certificates
of such series which the Holder making the exchange is entitled to receive. Upon
surrender for registration of transfer of Certificates of any series at the
principal corporate trust office of the Indenture Trustee, or at any office or
agency maintained for such purpose pursuant to Section 2.04, the Owner Trustee
applicable to the Certificates of such series shall execute, and the Indenture
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, an equal aggregate principal amount of other Certificates of the
same series and maturity and of any authorized denominations.
All Certificates of any series issued upon any registration of transfer or
exchange of Certificates shall be the valid obligations of the Owner Trustee
applicable to the Certificates of such series, evidencing the same obligations,
and entitled to the same security and benefits under this Agreement, as the
Certificates of such series surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates,
other than exchanges pursuant to Section 2.03 not involving any transfer.
The Registrar shall not be required to register the transfer of or to
exchange any Certificate called for redemption or purchase pursuant to such
Section 6.0l or Section 6.02 or pursuant to the Indenture Supplement for the
Certificates of such series.
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SECTION 2.06 HOLDER LISTS; OWNERSHIP OF CERTIFICATES
(a) The Indenture Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders of the Certificates of each series, which list shall be
available to the Company for inspection. If the Indenture Trustee is not the
Registrar, the Registrar shall furnish (and the Company shall cause the
Registrar to furnish) to the Indenture Trustee semiannually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the possession
or control of the Registrar as to the names and addresses of Holders of the
Certificates of each series.
(b) Ownership of the Certificates of each series shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration or
transfer of a Certificate of any series, the Owner Trustee applicable to the
Certificates of such series, the Indenture Trustee, the Paying Agent, the
Registrar and the Company may deem and treat the Person in whose name such
Certificate is registered as the absolute owner of such Certificate for the
purpose of receiving payments of principal of, Premium, if any, and interest on
such Certificate and for all other purposes whatsoever, whether or not such
Certificate is overdue, and none of such Owner Trustee, the Indenture Trustee,
the Paying Agent, the Registrar or the Company shall be affected by notice to
the contrary.
SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES
If a Certificate of any series shall become mutilated, destroyed, lost or
stolen, the Owner Trustee applicable to the Certificates of such series shall,
upon the written request of the Holder of such Certificate, issue and execute,
and the Indenture Trustee shall authenticate and deliver, in replacement
thereof, as applicable, a new Certificate of the same series and maturity,
payable to the same Holder in the same principal amount as the Certificate so
mutilated, destroyed, lost or stolen. If the Certificate being replaced has
become mutilated, such Certificate shall be surrendered to the Indenture
Trustee. If the Certificate being replaced has been destroyed, lost or stolen,
the Holder of such Certificate shall furnish to the applicable Owner Trustee and
the Indenture Trustee such security or indemnity as may be required by it to
save such Owner Trustee and the Indenture Trustee harmless and evidence
satisfactory to such Owner Trustee and the Indenture Trustee of the destruction,
loss or theft of such Certificate and of the ownership thereof.
SECTION 2.08 CANCELLATION
The Registrar and any Paying Agent shall forward to the Indenture Trustee
all Certificates surrendered to them for replacement, redemption, registration
of transfer, exchange or payment. The Indenture Trustee shall cancel all
Certificates surrendered for replacement, redemption, registration of transfer,
exchange, payment or cancellation and shall destroy cancelled Certificates.
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SECTION 2.09 PAYMENT ON CERTIFICATES; DEFAULTED AMOUNTS
(a) The Indenture Trustee will arrange directly with any Paying Agent for
the payment, or the Indenture Trustee will make payment, all pursuant to
Section 2.10, of the principal of (including Installment Payment Amounts), and
Premium, if any, and interest payable on or in respect of each Certificate.
Payment on Serial Certificates of each series and Installment Certificates of
each series in respect of interest, and payment on Installment Certificates of
each series in respect of Installment Payment Amounts (other than the final
Installment Payment Amount), shall be paid in lawful currency of the United
States on each Interest Payment Date or Installment Payment Date (other than the
final Installment Payment Date), as the case may be, to the Holder thereof at
the close of business on the relevant Record Date at the principal corporate
trust office of the Indenture Trustee or at any office or agency maintained for
such purpose pursuant to Section 2.04; PROVIDED, HOWEVER, that the Paying Agent
will, at the request of the Indenture Trustee and may, at its option, pay such
interest and Installment Payment Amounts by check mailed to such Holder's
address as it appears on the Register. Principal of Serial Certificates, the
final Installment Payment Amount payable on any Installment Certificates, and
Premium, if any, payable on any Certificates, shall be payable in U.S. currency
only against presentation and surrender thereof at the principal corporate trust
office of the Indenture Trustee or at the office or agency maintained for such
purpose pursuant to Section 2.04.
A Holder of a Certificate of any series shall have no further interest in,
or other right with respect to, the Indenture Estate applicable to the
Certificates of such series when and if the principal amount of and Premium, if
any, and interest on all Certificates of such series held by such Holder and all
other sums payable to such Holder hereunder, shall have been paid in full.
(b) Any Installment Payment Amount payable in respect of any Installment
Certificate of any series on an Installment Payment Date (other than the final
Installment Payment Amount) which is not punctually paid on such Installment
Payment Date or any interest payable in respect of any Serial or Installment
Certificate of any series on any Interest Payment Date which is not punctually
paid on such Interest Payment Date, as the case may be (herein called,
respectively, a "Defaulted Installment" and "Defaulted Interest"), shall
forthwith cease to be payable to the Holder on the relevant Record Date by
virtue of his having been such Holder; and such Defaulted Installment or
Defaulted Interest may be paid by the Indenture Trustee, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Indenture Trustee may elect to make payment of any Defaulted
Installment or Defaulted Interest, as the case may be, to the Person in
whose name any such Certificate is registered at the close of business on a
special record date for the payment of such Defaulted Installment or
Defaulted Interest, as the case may be, which shall be fixed in the
following manner. The Indenture Trustee shall
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notify the Paying Agent in writing of the amount of Defaulted Installment
or Defaulted Interest, as the case may be, proposed to be paid on each such
Certificate and the date of the proposed payment, and at the same time the
Indenture Trustee shall make arrangements to set aside an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Installment or Defaulted Interest, as the case may be, prior to
the date of the proposed payment, to be held in trust for the benefit of
the Persons entitled to such Defaulted Installment or Defaulted Interest,
as the case may be, as this clause provides and shall fix a special record
date for the payment of such Defaulted Installment or Defaulted Interest,
as the case may be, which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment. The Indenture Trustee
shall promptly notify the Owner Trustee applicable to the Certificates of
the series in question, the Company and the Registrar of such special
record date and shall cause notice of the proposed payment of such
Defaulted Installment or Defaulted Interest, as the case may be, and the
special record date therefor to be mailed, first class postage prepaid, to
each Holder of a Certificate of such series at its address as it appears in
the Register, not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Installment or Defaulted
Interest, as the case may be, and the special record date therefor having
been mailed, as aforesaid, such Defaulted Installment or Defaulted
Interest, as the case may be, shall be paid to the Persons in whose names
the applicable Certificates are registered on such special record date and
shall no longer be payable pursuant to the following clause (2).
(2) The Indenture Trustee may make, or cause to be made, payment of
any Defaulted Installment or Defaulted Interest, as the case may be, in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which Certificates of the series in question may be
listed, and upon such notice as may be required by such exchange, if such
payment shall be deemed practicable by the Indenture Trustee.
(c) The Indenture Trustee shall require each Paying Agent to agree in
writing that such Paying Agent will hold in trust, for the benefit of each
Holder of a Certificate of any series and the Indenture Trustee, all money held
by the Paying Agent for the payment of the principal of, Premium, if any, and
interest on the Certificates of such series and for all other amounts payable
hereunder and will give to the Indenture Trustee notice of any default by any
obligor upon the Certificates of such series in the making of any such payment
upon the Certificates of such series. The Indenture Trustee at any time may
require a Paying Agent to repay to the Indenture Trustee all money held by it.
Upon so doing the Paying Agent shall have no further liability for the money so
paid.
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SECTION 2.10 PAYMENT FROM INDENTURE ESTATE ONLY
All amounts payable by the Indenture Trustee and the Owner Trustee
applicable to the Certificates of any series under the Certificates of such
series and this Agent shall be made only from the income and proceeds of the
Indenture Estate applicable to the Certificates of such series. Each holder of
a Certificate of any series, by its acceptance of such Certificate, agrees that
(a) it will look solely to the income and proceeds of such Indenture Estate for
the payment of such amounts, to the extent available for distribution to it as
herein provided, and (b) none of the Owner Trustee applicable to the
Certificates of such series, the Owner Participant applicable to the
Certificates of such series or the Indenture Trustee is or shall be personally
liable to such Holder for any such amounts or, except as expressly provided in
this Agreement in the case of such Owner Trustee and the Indenture Trustee, for
any liability thereunder.
It is understood and agreed that an Owner Trustee which enters into an
Indenture Supplement with respect to the Certificates of any series shall do so
solely as Owner Trustee under the Trust Agreement applicable to the Certificates
of such series and not in its individual capacity, and in no case whatsoever
shall such Owner Trustee in its individual capacity (or any entity acting as
successor trustee under the applicable Trust Agreement) be personally liable
far, or for any loss in respect of, any statements, representations, warranties,
agreements or obligations hereunder or thereunder; PROVIDED that such Owner
Trustee shall be liable under this Agreement in its individual capacity (i) for
the performance of its agreements under such sections of the Indenture
Supplement applicable to the Certificates of such series which expressly provide
that such Owner Trustee will be so liable and (ii) for its own willful
misconduct or gross negligence. If a successor Owner Trustee is appointed in
accordance with the terms of the applicable Trust Agreement and Participation
Agreement, such successor Owner Trustee shall, without any further act, succeed
to all of the rights, duties, immunities and obligations hereunder, and its
predecessor Owner Trustee (as such and in its individual capacity) shall be
released from all further duties and obligations hereunder, without prejudice to
any claims against such Owner Trustee (as such and in its individual capacity)
for any default by it (as such and in its individual capacity) in the
performance of its obligations hereunder prior to such appointment.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN INDENTURE ESTATE
SECTION 3.01 APPLICATION OF PROCEEDS OF INITIAL ISSUANCE OF CERTIFICATES
(a) The Indenture Trustee shall apply the proceeds of the issuance of
Certificates of any series as follows:
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(i) if such proceeds are received on the Delivery Date applicable to
the Certificates of such series, the Indenture Trustee shall apply such
proceeds in accordance with clause (x) of the last sentence of this
Section 3.01;
(ii) if such proceeds are received subsequent to the Delivery Date and
are intended to be applied to refinance existing indebtedness of the Owner
Trustee applicable to the Certificates of such series incurred to finance
the acquisition of the Aircraft applicable to the Certificates of such
series, the Indenture Trustee shall apply such proceeds to refinance such
indebtedness as more particularly set forth in the Indenture Supplement
applicable to the Certificates of such series; and
(iii) if such proceeds are not applied in accordance with either of the
foregoing clauses (i) and (ii), the Indenture Trustee shall deposit such
proceeds in an account to be held as part of the Indenture Estate
applicable to the Certificates of such series, to be invested and
reinvested as provided in Section 9.04, and to be distributed and applied
as provided in this Article 3.
On the date the Aircraft applicable to the Certificates of such series is
subjected to the Lien of this Agreement, upon execution by the Indenture
Trustee, the Company and the Owner Trustee applicable to the Certificates of
such series of the Indenture Supplement applicable to the Certificates of such
series, and subject to fulfillment to the satisfaction of or waiver by the
Indenture Trustee of the conditions thereto specified in the Participation
Agreement applicable to the Certificates of such series and satisfaction of the
additional conditions specified in Section 3.01(b), the Indenture Trustee shall
(x) make available an amount equal to the proceeds to the Indenture Trustee from
the sale of the Certificates of such series to such Owner Trustee to finance or
refinance the acquisition of the Aircraft applicable to the Certificates of such
series in accordance with this Agreement and (y) pay to the Company an amount
equal to any net income or net gain, if any, realized from the investment by the
Indenture Trustee of any funds held in the Indenture Estate applicable to the
Certificates of such series for the period from the date of issuance of the
Certificates of such series to and including the date immediately preceding such
Delivery Date.
(b) The payment by the Indenture Trustee specified in the last sentence of
Section 3.01(a) shall be subject to the additional condition that on the date
the Aircraft applicable to the Certificates of any series is subjected to the
Lien of this Agreement the Indenture Trustee shall have received:
(i) a certificate of an Independent Appraiser with respect to the
fair value of the Aircraft as at such Delivery Date applicable to the
Certificates of such series;
(ii) an Officer's Certificate of the Company to the effect that such
payment will not be inconsistent with any of the provisions of this
Agreement and that all conditions precedent to such payment have been
satisfied;
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(iii) an Opinion of Counsel of the Company stating that the
certificates, opinions and other instruments which have been or are
therewith delivered to the Indenture Trustee conform to the requirements of
this Agreement and that all conditions precedent herein provided for
relating to the release of funds provided for in Section 3.01(a) have been
complied with; and
(iv) such other documents, certificates, opinions and other evidence
with respect to the Company, the manufacturer of such Aircraft, the Owner
Trustee and Owner Participant applicable to the Certificates of such series
and the consummation of the transactions contemplated hereunder as the
Indenture Trustee may reasonably request.
SECTION 3.02 PAYMENT IN CASE OF REDEMPTION OF CERTIFICATES
(a) In the event the Certificates of any series are redeemed (or purchased
in lieu of redemption) in accordance with the provisions of paragraph (a) of
Section 6.01, the Indenture Trustee shall apply on the applicable Redemption
Date any amounts then held by it in the Indenture Estate applicable to the
Certificates of such series in the following order of priority;
FIRST, so much of such amount as shall be required to pay the
Redemption Price of the Outstanding Certificates of such series pursuant to
paragraph (a) of Section 6.01 on the applicable Redemption Date shall be
applied to the redemption (or purchase in lieu of redemption) of the
Certificates of such series on such Redemption Date; and
SECOND, the balance, if any, of such amount remaining thereafter shall
be distributed to the Company.
(b) Except as otherwise provided in Section 3.05, the aggregate amount
received by the Indenture Trustee in respect of the Certificates of any series
upon a Lease Termination Date or Special Purchase Option Date applicable to the
Certificates of such series, if any, shall be distributed on such Lease
Termination Date or Special Purchase Option Date by the Indenture Trustee in the
following order of priority:
FIRST, so much of such amount as shall be required to pay any amount
due the Indenture Trustee pursuant to Section 9.07 in respect of the
Certificates of such series shall be applied to pay the Indenture Trustee
such amount;
SECOND, so much of such amount remaining as shall be required to pay
the Redemption Price (or the estimated Redemption Price) of the
Certificates of such series to be redeemed on or with reference to such
Lease Termination Date or Special Purchase Option Date (such estimated
Redemption Price to be reduced by the aggregate principal amount of, and
estimated Premium, if any, computed as
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provided for in the related Indenture Supplement, and interest accrued and
to accrue to but excluding the Redemption Date on, the Certificates of such
series, if any, being applied as a credit to such redemption payment
pursuant to Section 3.08) shall be held by the Indenture Trustee as part of
the Indenture Estate applicable to the Certificates of such series until
applied to the redemption (or purchase in lieu of redemption) of the
Certificates of such series on the Redemption Date as provided in
Section 3.02(c); and
THIRD, the balance, if any, of such amount remaining thereafter shall
be distributed to the Owner Trustee applicable to the Certificates of such
series, to be held or distributed in accordance with the terms of the
Operative Documents applicable to the Certificates of such series.
(c) In the event the Certificates of any series are redeemed, in whole or
in part, in accordance with the provisions of paragraphs (b) through (d) of
Section 6.01 or Section 6.02 or pursuant to the provisions of the Indenture
Supplement, the Indenture Trustee shall apply on the applicable Redemption Date
any amounts then held by it in the Indenture Estate applicable to the
Certificates of such series and received by it from or on behalf of the Company
or the Owner Trustee applicable to the Certificates of such series, including,
without limitation, any amounts held by the Indenture Trustee in respect of such
series pursuant to clause SECOND of Section 3.02(b), in the following order of
priority:
FIRST, so much of such amount as shall be required to pay the
Redemption Price of the Outstanding Certificates of such series pursuant to
paragraphs (b) through (d) of Section 6.01 or Section 6.02 or pursuant to
the provisions of the related Indenture Supplement, as the case may be, on
the applicable Redemption Date shall be applied to the redemption of the
Certificates of such series on such Redemption Date; and
SECOND, the balance, if any, of such amount remaining thereafter shall
be distributed to the Owner Trustee applicable to the Certificates of such
series to be held or distributed in accordance with the terms of the
Operative Document, applicable to the Certificates of such series.
SECTION 3.03 APPLICATION OF RENT WHEN NO INDENTURE EVENT OF DEFAULT IS
CONTINUING
Each amount of Rent applicable to the Certificates of any series received
by the Indenture Trustee from the Owner Trustee applicable to the Certificates
of such series or from the Company in respect of the Certificates of such
series, shall, except as otherwise provided in Section 3.02, 3.04 or 3.05, be
distributed by the Indenture Trustee in the following order of priority:
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FIRST, so much of such amount as shall be required to pay in full the
principal of, and Premium, if any, and interest then due on all Outstanding
Certificates of such series shall be distributed to the Persons entitled
thereto;
SECOND, so much of such amount remaining thereafter as shall be
required to pay any amount due the Indenture Trustee pursuant to
Section 9.07 in respect of the Certificates of such series shall be applied
to pay the Indenture Trustee such amount; and
THIRD, the balance, if any, of such amount remaining thereafter shall
be distributed to such Owner Trustee to be held or distributed in
accordance with the terms of the Operative Documents applicable to the
Certificates of such series.
SECTION 3.04 APPLICATION OF CERTAIN PAYMENTS IN CASE OF REQUISITION OR EVENT
OF LOSS
Except as otherwise provided in Section 3.05, any amounts received directly
or through the Company from any governmental authority or other party pursuant
to the Lease applicable to the Certificates of any series as the result of an
Event of Loss, to the extent that such amounts are not at the time required to
be paid to the Company pursuant to such Lease, and any amounts of Insurance
proceeds for damage to the Indenture Estate applicable to the Certificates of
such series received directly or through the Company from any insurer pursuant
to such Lease as the result of such event of Loss, to the extent such amounts
are not at the time required to be paid to the Company pursuant to such Lease,
shall, except as otherwise provided in the next sentence, be applied in
reduction of the Company's obligations to pay Stipulated Loss Value in respect
of the Certificates of such series and the other amounts payable by the Company
pursuant to such Lease and the remainder, if any, shall, except as provided in
the next sentence, be distributed to the Owner Trustee applicable to the
Certificates of such series to be held or distributed in accordance with the
terms of such Lease. Any portion of any such amount referred to in the
preceding sentence which is not required to be so paid to the Company pursuant
to such Lease, solely because a Lease Default or Lease Event of Default
applicable to the Certificates of such series shall have occurred, shall be held
by the Indenture Trustee as security for the obligations of the Company under
such Lease and at such time as there shall not be continuing any such Lease
Default or Lease Event of Default or such earlier time as shall be provided for
in such Lease, such portion shall be paid to the Owner Trustee applicable to the
Certificates of such series to be held or distributed in accordance with the
term of such Lease, unless the Indenture Trustee shall have theretofore declared
such Lease to be in default pursuant to the provisions thereof, in which event
such portion shall be distributed forthwith upon such declaration in accordance
with the provisions of Section 3.05.
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SECTION 3.05 PAYMENTS DURING CONTINUANCE OF INDENTURE EVENT OF DEFAULT
All payments received and amounts held or realized by the Indenture Trustee
after an Indenture Event of Default applicable to the Certificates of any series
shall have occurred and be continuing (including any amounts realized by the
Indenture Trustee from the exercise of any remedies in respect of the
Certificates of such series pursuant to Article 8), as well as all payments or
amounts then held or thereafter received by the Indenture Trustee as part of the
Indenture Estate applicable to the Certificates of such series while such
Indenture Event of Default shall be continuing, shall be distributed by the
Indenture Trustee in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to pay
the Indenture Trustee any amount then due it pursuant to Section 9.07 in
respect of the Certificates of such series shall be applied to pay the
Indenture Trustee such amount;
SECOND, so much of such payments or amounts remaining as shall be
required to pay the expenses incurred (including unbilled expenses in
respect of property delivered or contracted for or services rendered or
contracted for if the amount of such expenses is liquidated) in using,
operating, storing, leasing, controlling or managing such Indenture Estate,
and of all maintenance, insurance, repairs, replacements, alterations,
additions and improvements of and to such Indenture Estate and to make all
payments which the Indenture Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon such
Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine and make reports upon the properties, books and
records of the Owner Trustee applicable to the Certificates of such series
and, to the extent permitted under the Lease applicable to the Certificates
of such series, the Company), all in accordance with Section 8.03(c), shall
be applied for such purposes;
THIRD, so much of such payments or amounts remaining as shall be
required to pay the principal of, and Premium, if any, and accrued interest
on, all Outstanding Certificates of such series then due, whether upon
redemption, by declaration of acceleration pursuant to Section 8.02 or
otherwise, shall be applied ratably to the payment of such principal,
Premium, if any, and interest; and in case such payments or amounts shall
be insufficient to pay in full the whole amount so due and unpaid, then to
the payment of such principal, Premium, if any, and interest, without any
preference or priority of one Certificate of such series over another,
ratably according to the aggregate amount so due for principal, Premium, if
any, and interest at the date fixed by the Indenture Trustee for the
distribution of such payments or amounts; and
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FOURTH, the balance, if any, of such payments or amounts remaining
thereafter shall be held by the Indenture Trustee as collateral security
for the obligations secured hereby until such time as no Indenture Event of
Default applicable to the Certificates of such series shall be continuing
hereunder or the Certificates of such series have been accelerated and all
amounts due thereon have been paid, at which time such payments or amounts
shall be distributed to the Owner Trustee applicable to the Certificates of
such series to be held or distributed in accordance with the terms of the
Operative Documents applicable to the Certificates of such series; PROVIDED
that at such time as one or more Lease Events of Default applicable to the
Certificates of such series shall have occurred and any such Lease Event of
Default shall have continued for the period, if any, specified in the
Indenture Supplement applicable to the Certificates of such series during
which time the Certificates of such series could, but shall not, have been
accelerated pursuant to Section 8.02, such amounts shall be distributed to
the Owner Trustee applicable to the Certificates of such series to be held
or distributed in accordance with the terms of the Operative Documents
applicable to the Certificates of such series so long as no Indenture Event
of Default applicable to the Certificates of such series exists other than
by virtue of such Lease Event of Default.
SECTION 3.06 PAYMENTS FOR WHICH APPLICATION IS PROVIDED IN OTHER DOCUMENTS
Except as otherwise provided in this Agreement applicable to the
Certificates of any series, any payment received by the Indenture Trustee in
respect of the Certificates of such series for which provision as to the
application thereof is made in the Lease or Participation Agreement applicable
to the Certificates of such series shall be distributed to the Person for whose
benefit such payments were made. The Indenture Trustee shall be obligated to
distribute to the Owner Participant or Owner Trustee applicable to the
Certificates of any series, as the case may be, any Excluded Payments in respect
of the Certificates of such series received by the Indenture Trustee promptly
upon receipt thereof by the Indenture Trustee.
SECTION 3.07 PAYMENTS FOR WHICH NO APPLICATION IS OTHERWISE PROVIDED
Except as otherwise provided in Section 3.05:
(a) any payment in respect of the Certificates of any series received
by the Indenture Trustee for which no provision as to the application
thereof is made elsewhere in this Agreement, and
(b) any payment in respect of the Certificates of such series
received and amounts realized by the Indenture Trustee with respect to the
Aircraft applicable to the Certificates of such series to the extent
received or realized at any time after the conditions set forth in
Article 10 for the satisfaction and discharge of this
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Agreement as applicable to the Certificates of such series or for the
defeasance of the Certificates of such series shall have been satisfied, as
well as any other amounts remaining as part of the Indenture Estate
applicable to the Certificates of such series after such satisfaction shall
be distributed by the Indenture Trustee in the following order of priority:
FIRST, so much of such amount as shall be required to pay the
Indenture Trustee any amount then due it pursuant to Section 9.07 in
respect of the Certificates of such series shall be applied to pay the
Indenture Trustee such amount; and
SECOND, the balance, if any, of such amount remaining thereafter
shall be distributed to the Owner Trustee applicable to the
Certificates of such series to be held or distributed in accordance
with the terms of the Operative Documents applicable to the
Certificates of such series.
SECTION 3.08 CREDIT IN RESPECT OF CERTIFICATES SURRENDERED FOR CANCELLATION
(a) To the extent permitted in the Lease applicable to a series of
Certificates, in satisfaction of the obligation of the related Owner Trustee to
pay all or any part of principal of, Premium, if any, and interest on the
Certificates of such series due on any date. Such Owner Trustee (or the Company
acting on behalf of such Owner Trustee) may surrender, or cause to be
surrendered, Certificates of such series the principal of which is or will be
due on such date to the Indenture Trustee for cancellation pursuant to
Section 2.08 not later than 10 Business Days prior to such date, in which case
there shall be credited against the amounts so payable by such Owner Trustee in
respect of the Certificates of such series as of such date the aggregate
principal amount as of such date of the Certificates of such series so
surrendered, the Premium, if any, thereon as of such date and the amount of
interest which would have been payable on the Certificates of such series so
surrendered on such date had they not been surrendered for cancellation and had
they remained Outstanding; PROVIDED that an Installment Certificate may be
surrendered only after the penultimate Installment Payment Date for credit in
accordance with the provisions of this Section 3.08(a).
(b) To the extent permitted in the Lease applicable to a series of
Certificates, in satisfaction of the obligation of the related Owner Trustee to
pay the Redemption Price upon a redemption of the Certificates of such series
pursuant to Section 6.01, Section 6.02 or the provisions of the related
Indenture Supplement, such Owner Trustee (or the Company acting on behalf of
such Owner Trustee) may surrender Certificates of such series the principal of
which is or will be due on the applicable Redemption Date to the Indenture
Trustee for cancellation pursuant to Section 2.08 not later than 10 Business
Days prior to such date, in which case there shall be credited against the
amount so payable by such Owner Trustee in respect of the Certificates of such
series as of such date, the principal amount as of such date of the Certificates
of such series so surrendered, the
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Premium, if any, thereon as of such date and the amount of the interest which
would have been payable on the Certificates of such series so surrendered on
such date had they not been surrendered for cancellation and had they remained
Outstanding.
(c) In the event of a credit against the amounts payable by the Owner
Trustee in respect of the Certificates of any series on any date as aforesaid,
as a result of the surrender of any Certificates of such series by the Company
acting on behalf of such Owner Trustee to the Indenture Trustee, the Indenture
Trustee and such Owner Trustee shall credit an amount equal to the amount of
such credit against the Basic Rent or Supplemental Rent payable under the Lease
applicable to the Certificates of such series on such date or on the Lease
Termination Date, Lease Loss Payment Date or Special Purchase Option Date
applicable to the Certificates of such series, as the case may be.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
SECTION 4.01 COVENANTS OF OWNER TRUSTEE
Each Owner Trustee entering into the Indenture Supplement in respect of the
Certificates of any series pursuant to Section 2.01 shall thereby be deemed to
covenant and agree that:
(i) such Owner Trustee will duly and punctually pay the principal of,
and Premium, if any, and interest on, and other amounts due under, the
Certificates of such series, provided it or the Indenture Trustee has funds
in the Indenture Estate applicable to the Certificates of such series for
such purpose;
(ii) such Owner Trustee will, in its individual capacity, not directly
or indirectly create, incur, assume or suffer to exist any Lessor's Lien
attributable to it in its individual capacity with respect to any of the
properties or assets of such Indenture Estate;
(iii) in the event an officer in the Corporate Trust Administration
Department of such Owner Trustee shall have actual knowledge of an
Indenture Event of Default, Indenture Default or Event of Loss applicable
to the Certificates of such series, such Owner Trustee will give prompt
written notice of such Indenture Event of Default, Indenture Default or
Event of Loss to the Indenture Trustee, the Owner Participant applicable to
the Certificates of such series and the Company;
(iv) such Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, true and correct duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished
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to such Owner Trustee under the Lease applicable to the Certificates of
such series, to the extent that the same shall not have been furnished to
the Indenture Trustee pursuant to such Lease;
(v) except as contemplated by the Operative Documents applicable to
the Certificates of such series, such Owner Trustee will not contract for,
create, incur, assume or suffer to exist any Debt, and will not guarantee
(directly or indirectly or by an instrument having the effect of assuring
another payment or performance on any obligation or capability of so doing,
or otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other Person;
and
(vi) such Owner Trustee will not enter into any business or other
activity other than owning the Aircraft applicable to the Certificates of
such series, the leasing thereof to the Company and the carrying out of the
transactions contemplated hereby and by the Operative Documents applicable
to the Certificates of such series.
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN INDENTURE ESTATE DURING
CONTINUATION OF LEASE
SECTION 5.01 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN
INDENTURE ESTATE DURING CONTINUATION OF LEASE
With respect to the Certificates of any series, so long as the Lease
applicable to the Certificates of any series is in effect:
(a) PARTS. Any Parts applicable to the Certificates of such series
and alterations, improvements and modifications in and additions to the
Aircraft applicable to the Certificates of such series shall, to the extent
required or specified by such Lease, become subject to the Lien of this
Agreement and be leased to the Company under such Lease; PROVIDED that, to
the extent permitted by and as provided in such Lease, the Company shall
have the right, at any time and from time to time, without any release from
or consent by the Owner Trustee applicable to the Certificates of such
series or the Indenture Trustee, to remove, replace and pool such Parts and
to make alterations, improvements and modifications in, and additions to,
such Aircraft. The Indenture Trustee agrees that, to the extent permitted
by and as provided in such Lease, title to any such Part shall vest in the
Company. The Indenture Trustee shall from time to time execute an
appropriate written instrument or instruments to confirm the release of the
security interest of the Indenture Trustee in any such Part as provided in
this Section 5.01, in each case
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upon receipt by the Indenture Trustee of a Company Request stating that
said action was duly taken by the Company in conformity with this
Section 5.01 and that the execution of such written instrument or
instruments is appropriate to evidence such release of a security interest
under this Section 5.01.
(b) SUBSTITUTION UNDER LEASE UPON AN EVENT OF LOSS OCCURRING TO
AIRFRAME OR ENGINES OR UPON VOLUNTARY TERMINATION OF LEASE WITH RESPECT TO
ENGINES. Upon (i) the occurrence of an Event of Loss to the Airframe or
any Engine applicable to the Certificates of any series, or (ii) a
voluntary termination of the Lease applicable to the Certificates of any
series with respect to such an Engine, the Company may, in the case of an
Event of Loss which has occurred to such Airframe, or shall (except to the
extent otherwise provided in the Indenture Supplement), in the case of an
Event of Loss which has occurred to or termination of the Lease with
respect to such an engine, substitute an airframe or engine, as the case
may be, in which case, upon satisfaction of all conditions to such
substitution specified in such Lease and the additional condition specified
in Section 5.01(c), if applicable, the Indenture Trustee shall release all
of its right, interest and Lien in and to such Airframe or Engine in
accordance with the provisions of the following two sentences. The
Indenture Trustee shall execute and deliver to the Owner Trustee applicable
to the Certificates of such series an instrument releasing its Lien in and
to such Airframe or Engine and shall execute for recording in public
offices, at the expense of such Owner Trustee (if requested by such Owner
Trustee) or the Company (if requested by the Company), such instruments in
writing as such Owner Trustee or the Company shall reasonably request and
as shall be reasonably acceptable to the Indenture Trustee in order to make
clear upon public records that such Lien has been released under the laws
of the applicable jurisdiction. Each of such Owner Trustee and the Company
hereby waives and releases any and all rights existing or that may be
acquired to and penalties, forfeit or damages from or against the Indenture
Trustee for failure to execute and deliver any document in connection with
the release of any Lien or to file any certificate in compliance with any
law or statute requiring the filing of the same in connection with the
release of any Lien, except for failure by the Indenture Trustee to execute
and deliver any document or to file any certificate as may be specifically
requested in writing by such Owner Trustee or the Company.
(c) CONDITION TO RELEASE. The Indenture Trustee's release of all of
its right, interest and Lien in and to an Airframe or Engine applicable to
the Certificates of any series, as provided for in Section 5.0l(b), shall
be subject to the condition that the Indenture Trustee shall have received
(i) a certificate of an Independent Appraiser reasonably acceptable to the
Owner Trustee applicable to the Certificates of such series and the
Indenture Trustee, following a physical inspection, stating the fair value
to the Company of the airframe or engine to be substituted for such
Airframe or Engine and the value, utility and, solely with
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respect to the Airframe, useful life thereof, and (ii) a certificate of an
Appraiser as to the fair value of such Airframe or Engine, as the case may
be, to be released from such Lien and stating that in the opinion of such
Appraiser the proposed release will not impair the security under this
Agreement in contravention of the provisions hereof, which certificate
shall be prepared by an Independent Appraiser if the fair value of such
Airframe or Engine, as the case may be, to be released from the Lien of
this Agreement and of all other property and securities released since the
commencement of the then current calendar year, as set forth in the
certificates required by Section 314(d)(1) of the Trust Indenture Act, is
10% or more of the aggregate principal amount of the Certificates of such
series at the time Outstanding.
ARTICLE 6
REDEMPTION OF CERTIFICATES
SECTION 6.01 REDEMPTION OF CERTIFICATES IN THE EVENT OF NON-DELIVERY OF
AIRCRAFT OR UPON EVENT OF LOSS, TERMINATION OF LEASE OR REFUNDING
(a) In the event that the Aircraft applicable to the Certificates of any
series is not subjected to the Lease applicable to the Certificates of such
series and not subjected to the Lien of this Agreement prior to the date
therefor specified in the Indenture Supplement, each Outstanding Certificate of
such series shall be redeemed in whole at a Redemption Price equal to 100% of
the outstanding principal amount of such Certificate plus accrued and unpaid
interest thereon to but excluding the applicable Redemption Date, without
Premium. The Redemption Date for Certificates redeemed pursuant to this
Section 6.01(a) shall be the date specified therefor in the Indenture
Supplement.
(b) Upon the occurrence of an Event of Loss to the Airframe or Engine
applicable to the Certificates of any series, if such Aircraft is not replaced
pursuant to the Lease applicable to the Certificates of such series, each
Outstanding Certificate of such series shall be redeemed at a Redemption Price
equal to 100% of the outstanding principal amount of the Certificates to be
redeemed plus accrued and unpaid interest thereon to but excluding the
applicable Redemption Date, without Premium. As provided in the Indenture
Supplement for such series of Certificates, if the Engine is not replaced
pursuant to the Lease applicable to the Certificates of such series, the
principal amount of Certificates redeemed and the Redemption Price therefor will
be set forth in such Indenture Supplement. The Redemption Date for Certificates
redeemed pursuant to this Section 6.01(b) shall be the Lease Loss Payment Date
applicable to the Certificates of such series.
(c) Upon termination of the Lease applicable to the Certificates of any
series by the Company upon exercise of any termination option it may have
thereunder or upon the
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purchase of such Aircraft by the Company upon exercise of any purchase option it
may have under such Lease (unless the Company shall have elected to assume the
rights and obligations of the Owner Trustee applicable to the Certificates of
such series in accordance with Section 7.05), each Outstanding Certificate of
such series shall be redeemed in whole at a Redemption Price determined in
accordance with the provisions of the Indenture Supplement applicable to such
series of Certificates. The Redemption Date for Certificates to be redeemed
pursuant to this Section 6.01(c) shall be the date specified in such Indenture
Supplement.
(d) If and to the extent specifically provided in the Indenture Supplement
applicable to the Certificates of any series, the Certificates of such series
may be redeemed in whole as part of a refunding or refinancing, upon
satisfaction of all conditions to such refunding or refinancing set forth in the
Operative Documents applicable to the Certificates of such series. In such
event, each Outstanding Certificate of such series shall be redeemed at a
Redemption Price determined in accordance with the provisions set forth in the
Indenture Supplement applicable to such series of Certificates. The Redemption
Date for Certificates to be redeemed pursuant to this Section 6.01(d) shall be
the date specified in such Indenture Supplement.
SECTION 6.02 REDEMPTION OF CERTIFICATES BY OWNER TRUSTEE UPON LEASE EVENT OF
DEFAULT
If and to the extent specifically provided in the Indenture Supplement
applicable to the Certificates of any series each Outstanding Certificate of
such series may be redeemed (or purchased in lieu of redemption) in whole, at
the option of the Owner Trustee applicable to the Certificates of such series
pursuant to such Indenture Supplement and Section 8.03(e)(ii), (a) in the event
that one or more Lease Events of Default applicable to the Certificates of such
series shall have occurred and shall have continued for not less than the period
specified therefor in such Indenture Supplement, during which time the
Certificates could, but shall not have been accelerated, or in the event that
the Certificate of such series shall have been accelerated pursuant to
Section 8.02, or (b) in the event that one or more Lease Events of Default
applicable to the Certificates of such series shall have occurred and shall have
continued for not less than the minimum number of days and not more than the
maximum number of days specified therefor in such Indenture Supplement during
which time the Certificates could, but shall not have been accelerated. The
Redemption Price for Certificates redeemed (or purchased in lieu of redemption)
pursuant to this Section 6.02 shall be equal to 100% of the outstanding
principal amount thereof plus accrued and unpaid interest thereon to but
excluding the applicable Redemption Date, without Premium, in the case of a
redemption pursuant to the foregoing clause (a), or together with a Premium, if
any, determined in accordance with the provisions of the Indenture Supplement,
in the case of a redemption pursuant to the foregoing clause (b). The
Redemption Date for Certificates redeemed (or purchased in lieu of redemption)
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pursuant to this Section 6.02 shall be the date provided therefor in such
Indenture Supplement.
SECTION 6.03 NOTICE OF REDEMPTION TO HOLDERS
Notice of redemption with respect to Certificates of any series shall be
given by first-class mail, postage prepaid, mailed not less than the minimum nor
more than the maximum number of days specified in the Indenture Supplement prior
to the Redemption Date, to each Holder of such Certificates to be redeemed, at
such Holder's address appearing in the Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the applicable basis for determining the Redemption Price,
(3) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Certificate, and that interest on such
Certificates shall cease to accrue on and after such Redemption Date, and
(4) the place or places where such Certificates are to be surrendered
for payment of the Redemption Price.
Notice of redemption of such Certificates to be redeemed shall be given by the
Indenture Trustee.
SECTION 6.04 DEPOSIT OF REDEMPTION PRICE
On or before the Redemption Date for the Certificates of any series, the
Owner Trustee applicable to the Certificates of the series being redeemed (or
any person on behalf of such Owner Trustee) shall, to the extent an amount equal
to the Redemption Price for such Certificates shall not then be held in the
Indenture Estate applicable to the Certificates of such series, deposit or cause
to be deposited with the Indenture Trustee or the Paying Agent by 12:00 noon in
immediately available funds an amount equal to such Redemption Price.
SECTION 6.05 CERTIFICATES PAYABLE ON REDEMPTION DATE
Notice of redemption of the Certificates of any series having been given as
aforesaid, such Certificates shall, on the Redemption Date, become due and
payable at the principal corporate trust office of the Indenture Trustee or at
any office or agency maintained for such purposes pursuant to Section 2.04, and
from and after such Redemption Date (unless there shall be a default in the
payment of the Redemption Price) any such Certificates then Outstanding shall
cease to bear interest. Upon surrender of any
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such Certificates for redemption in accordance with said notice such
Certificates shall be redeemed at the Redemption Price. If any Certificate of
any series called for redemption shall not be so paid upon surrender thereof for
redemption, the principal amount thereof shall, until paid, continue to bear
interest from the applicable Redemption Date at the interest rate applicable to
such Certificate.
ARTICLE 7
COVENANTS OF THE COMPANY
SECTION 7.01 REPAYMENT OF MONIES FOR CERTIFICATE PAYMENTS HELD BY INDENTURE
TRUSTEE
Any money held by the Indenture Trustee or any Paying Agent in trust for
any payment of the principal of, or Premium, if any, or interest on the
Certificates of any series (including without limitation any money deposited
pursuant to Article 10) and remaining unclaimed for two years and eleven months
after the due date for such payment, shall be paid to the Owner Trustee
applicable to the Certificates of such series; and the Holders of any
Outstanding Certificates of such series shall thereafter, as unsecured general
creditors, look only to the Company on behalf of such Owner Trustee, or to the
Owner Trustee as specified in the applicable Participation Agreement for payment
thereof, and all liability of the Indenture Trustee or any such Paying Agent
with respect to such trust money shall thereupon cease; PROVIDED that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be mailed to each Holder
of a Certificate of such series notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of mailing, any unclaimed balance of such money then remaining will be
repaid to such Owner Trustee as provided herein.
SECTION 7.02 REPORTS BY THE COMPANY
The Company shall:
(a) file with the Indenture Trustee, within 30 days after the Company
is required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such portions
of any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with
the Indenture Trustee and the SEC, in accordance with rules and regulations
prescribed by the SEC, such of the supplementary and periodic information,
documents and reports which may be required pursuant to section 13 of the
Securities Exchange Act of 1934, as
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amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
(b) file with the Indenture Trustee and the SEC, in accordance with
the rules and regulations prescribed by the SEC, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants provided for in this Agreement,
as may be required by such rules and regulations, including, in the case of
annual reports, if required by such rules and regulations, certificates or
opinions of independent public accountants, conforming to the requirements
of Section 13.05;
(c) transmit to all Holders, in the manner and to the extent provided
in Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section 7.02 as may be required
by rules and regulations prescribed by the SEC;
(d) furnish to the Indenture Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Agreement
(it being understood that for purposes of this paragraph (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Agreement); and
(e) furnish to the Indenture Trustee:
(1) promptly after the execution and delivery of the Indenture
Supplement, an Opinion of Counsel either stating that in the opinion
of such counsel such Indenture Supplement has been properly recorded
and filed so as to make effective the Lien intended to be created
thereby, and reciting the details of such action, or stating that in
the opinion of such counsel no such action is necessary to make such
Lien effective; and
(2) at least annually after the execution and delivery of this
Agreement, an Opinion of Counsel either stating that in the opinion of
such counsel such action has been taken with respect to the recording,
filing, re-recording, and refiling of this Agreement entered into
hereunder as is necessary to maintain the Lien of this Agreement, and
reciting the details of such action, or stating that in the opinion of
such counsel no such action is necessary to maintain such Lien.
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SECTION 7.03 CONSOLIDATION, MERGER, ETC.
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease substantially all of its assets as an entirety to
any Person unless:
(i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
be (i) a citizen of the United States as defined in Section 101(16) of the
Federal Aviation Act and (ii) a United States certificated air carrier;
(ii) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Owner Trustee applicable to the Certificates of
each series, the Indenture Trustee and the Owner Participant applicable to
the Certificates of such series a duly authorized, valid, binding and
enforceable agreement in form and substance reasonably satisfactory to the
Indenture Trustee and each such Owner Trustee and Owner Participant
containing an assumption by such successor corporation or Person of the due
and punctual performance and observance of each covenant and condition of
the Operative Documents applicable to the Certificates of each series to be
performed or observed by the Company;
(iii) immediately after giving effect to such transaction, no Lease
Event of Default applicable to the Certificates of each series or event
which is, or after notice or passage of time, or both, would be, such a
Lease Event of Default shall have occurred and be continuing; and
(iv) the Company shall have delivered to each such Owner Trustee, the
Indenture Trustee and each such Owner Participant an Officers' Certificate
of the Company and an Opinion of Counsel of the Company (which may be the
Company's General Counsel) reasonably satisfactory to the Indenture Trustee
and each such Owner Participant, each stating that such consolidation,
merger, conveyance, transfer or lease and the assumption agreement
mentioned in clause (ii) above comply with this Section 7.03 and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease of
substantially all of the assets of the Company as an entirety in accordance with
this Section 7.03, the successor corporation or Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and the
Indenture Supplement applicable to the Certificates of each series with the same
effect as if such successor corporation or Person had been
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named as the Company herein. No such conveyance, transfer or lease of
substantially all of the assets of the Company as an entirety shall have the
effect of releasing the Company or any successor corporation or Person which
shall theretofore have become such in the manner prescribed in this Section 7.03
from its liability in respect of any Operative Document applicable to the
Certificates of such series to which it is a party.
SECTION 7.04 CHANGE IN REGISTRATION
The Indenture Trustee shall, upon the request of the Company, consent to
the deregistration of the Aircraft applicable to the Certificates of any series
under the laws of the jurisdiction in which it is at the time registered and the
registration of such Aircraft under the laws of another jurisdiction (herein
called a "change in registration") provided that the following conditions are
met:
(a) such change in registration complies with the provisions of the
Lease applicable to the Certificates of such series;
(b) no Lease Event of Default applicable to the Certificates of such
series and no event which, with lapse of time or the giving of notice, or
both, would become such a Lease Event of Default, shall have occurred and
be continuing at the effective date of the change in registration, provided
that it shall not be necessary to comply with this condition (b) if the
change in registration results in the registration of such Aircraft under
the laws of the United States of America or if the Indenture Trustee it its
discretion believes the change in registration would be advantageous to the
Holders of the Certificates of such series; and
(c) the Indenture Trustee shall have received an Opinion of Counsel
of the Company reasonably satisfactory to the Indenture Trustee to the
effect that:
(i) after giving effect to the change in registration, the Lien
on such Aircraft and the other property included in the Indenture
Estate applicable to the Certificates of such series shall continue as
a fully perfected Lien and that all filing, recording or other action
necessary to perfect and protect the Lien of this Agreement has been
accomplished (or if such opinion cannot be given on or prior to the
effective date of such change in registration, (x) such opinion shall
be to the effect that such filing, recording or other action as is
feasible on or prior to such effective date (detailing the same) has
been accomplished and that such filings, recording or other action as
must be accomplished subsequently (detailing the same) is of a routine
nature and (y) the Indenture Trustee shall have received an Officer's
Certificate of the Company that all possible preparations to
accomplish such subsequent filing, recording and other action shall
have been done, and such filing, recording and other action will be
accomplished (the Company agreeing to deliver an Opinion of Counsel of
the Company as promptly as
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possible subsequent to such effective date confirming that all such
filing, recording and other action has been taken); and
(ii) the terms of such Lease and this Agreement (including the
governing law clauses) being legal, valid, binding and enforceable in
such jurisdiction, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally, and by general principles
of equity and except as limited by applicable laws which may affect
the remedies provided in such Lease and this Agreement, respectively,
which laws, however, do not in the opinion of such counsel make the
remedies provided in such Lease and this Agreement, respectively,
inadequate for the practical realization of the rights and benefits
provided thereby.
The Indenture Trustee shall execute such documents as the Company or the Owner
Trustee applicable to the Certificates of such series shall reasonably request
in order to satisfy the above conditions and, upon satisfaction of such
conditions, to effect the change in registration.
SECTION 7.05 ASSUMPTION OF OBLIGATIONS OF OWNER TRUSTEE BY THE COMPANY
In the event that the Company shall have the option, as provided in the
applicable Lease or Participation Agreement, to assume the rights and
obligations of the Owner Trustee applicable to the Certificates of any series in
connection with the purchase by the Company of the Aircraft applicable to the
Certificates of such series, then the exercise of such option shall be subject
to the satisfaction of the following conditions on or prior to the Purchase
Option Date applicable to the Certificates of such series:
(a) the Company shall have delivered to the Indenture Trustee a
certificate, dated such Special Purchase Option Date, of a Responsible
Company Officer stating that the Company has paid to such Owner Trustee all
amounts required to be paid to such Owner Trustee pursuant to the Lease or
the Participation Agreement applicable to the Certificates of such series
in connection with such purchase and assumption;
(b) no event which constitutes or, with the lapse of time or the
giving of notice, or both, would become a Lease Event of Default applicable
to the Certificates of such series shall have occurred and be continuing
immediately after giving effect to such purchase or assumption and the
Indenture Trustee shall have received a certificate, dated such Special
Purchase Option Date, of a Responsible Company Officer to such effect;
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(c) the Indenture Trustee shall have received, on or prior to such
Special Purchase Option Date, evidence of all filings, recordings and other
action referred to in the Opinion or Opinions of Counsel referred to below;
(d) the Indenture Trustee shall have received an Opinion or Opinions
of Counsel for the Company, dated such Special Purchase Option Date, which
without unusual qualification shall be to the effect that, after giving
effect to the indenture supplement referred to below:
(i) this Agreement constitutes the legal, valid and binding
obligation, of the Company, enforceable against the Company in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable laws
which may affect the remedies provided for in this Agreement, which
laws, however, do not in the opinion of such counsel make the remedies
provided for in this Agreement inadequate for the practical
realization of the rights and benefits provided for in this Agreement;
(ii) the Aircraft applicable to the Certificates of such series
is duly registered in compliance with applicable law;
(iii) the Lien on such Aircraft constitutes a fully perfected Lien
and all filings, recordings or other action (specifying the same)
necessary to perfect and protect the Lien of this Agreement have been
accomplished; and
(iv) the Indenture Trustee should be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to such Aircraft;
PROVIDED that such opinion need not be delivered to the extent that
the benefits of Section 1110 of the Bankruptcy Code are not available
to the Indenture Trustee with respect to such Aircraft immediately
prior to such assumption; and PROVIDED FURTHER that such opinion may
contain qualifications of the tenor contained in the opinion of
special counsel for the Company delivered pursuant to the
Participation Agreement applicable to the Certificates of such series
on the Delivery Date applicable to the Certificates of such series;
and
(e) an indenture supplement giving effect to such assumption
reasonably satisfactory to the Indenture Trustee, dated the Special
Purchase Option Date, shall have been entered into and delivered to the
Indenture Trustee.
Upon satisfaction of such conditions and without the requirement of further
action by any Person, effective as of such Special Purchase Option Date, such
Owner Trustee shall be released from all of its obligations under this Agreement
in respect of the Certificates of
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such series (other than any obligations or liabilities of such Owner Trustee in
its individual capacity incurred on or prior to such Special Purchase Option
Date or arising out of or based upon events occurring on or prior to such
Special Purchase Option Date, which obligations and liabilities shall remain the
sole responsibility of such Owner Trustee).
ARTICLE 8
DEFAULTS AND REMEDIES
SECTION 8.01 INDENTURE EVENTS OF DEFAULT
"Indenture Event of Default," with respect to the Certificates of any
series, means each of the events specified as such in the Indenture Supplement
related to such series of Certificates.
SECTION 8.02 ACCELERATION; RESCISSION AND ANNULMENT
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing, the Indenture Trustee, by notice to the Company
and the Owner Trustee applicable to the Certificates of such series, or the
Holders of at least 25% in aggregate principal amount of Outstanding
Certificates of such series, by notice to the Company, the Indenture Trustee,
such Owner Trustee and the Owner Participant applicable to the Certificates of
such series, may declare the principal of all the Certificates of such series to
be due and payable. Upon such declaration, the principal of all Certificates of
such series together with accrued interest thereon from the date in respect of
which interest was last paid hereunder to the date payment of such principal is
made or duly provided for, shall be immediately due and payable. At any time
after such declaration and prior to the sale or disposition of the Indenture
Estate applicable to the Certificates of such series, the Holders of a majority
in aggregate principal amount of all the Outstanding Certificates of such
series, by notice to the Indenture Trustee, the Company and such Owner Trustee
and Owner Participant, may rescind such a declaration and thereby annul its
consequences if (i) an amount sufficient to pay all principal of, and Premium,
if any, on any Certificates of such series which have become due otherwise than
by such declaration and any interest thereon and interest due or past due, if
any, and all other sums due and payable to the Indenture Trustee in respect of
the Certificates of such series have been deposited with the Indenture Trustee,
(ii) the rescission would not conflict with any judgment or decree and (iii) all
existing Indenture Defaults applicable to the Certificates of such series and
Indenture Events of Default applicable to the Certificates of such series under
this Agreement have been cured or waived (except nonpayment of amounts of
principal of, and Premium, if any, and interest on the Certificates of such
series that have become due solely because of such acceleration).
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SECTION 8.03 OTHER REMEDIES AVAILABLE TO INDENTURE TRUSTEE
(a) After an Indenture Event of Default with respect to the Certificates
of any series shall have occurred and so long as such Indenture Event of Default
shall be continuing, then and in every such case the Indenture Trustee, as
trustee of an express trust and as assignee hereunder of the Lease applicable to
the Certificates of such series or as holder of a security interest in the
Aircraft or Engines may, and when required pursuant to the provisions of
Article 9 shall, exercise (subject to Sections 8.03(e) and 8.03(f)) any or all
of the rights and powers and pursue any and all of the remedies accorded to the
Owner Trustee applicable to the Certificates of such series pursuant to the
Lease applicable to the Certificates of such series and this Article 8, may
recover judgment in its own name as Indenture Trustee against the Indenture
Estate applicable to the Certificates of such series and may take possession of
all or any part of such Indenture Estate and may exclude such Owner Trustee and
the Owner Participant applicable to the Certificates of such series and all
persons claiming under any of them wholly or partly therefrom.
(b) Subject to Sections 8.03(e) and 8.03(f), the Indenture Trustee may, if
at the time such action is lawful and always subject to compliance with any
mandatory legal requirements, either with or without taking possession, and
either before or after taking possession, and without instituting any legal
proceedings whatsoever, and having first given notice of such sale by registered
mail to the Owner Trustee and Owner Participant applicable to the Certificates
of such series and to the Company once at least 30 days prior to the date of
such sale, and any other notice which may be required by law, sell and dispose
of the Indenture Estate applicable to the Certificates of such series, or any
part thereof, or interest therein, at public auction to the highest bidder, in
one lot as an entirety or in separate lots, and either for cash or on credit and
on such terms as the Indenture Trustee may determine, and at any place (whether
or not it be the location of such Indenture Estate or any part thereof) and time
designated in the notice above referred to; PROVIDED that, notwithstanding any
provision herein to the contrary, the Indenture Trustee shall not sell any of
such Indenture Estate unless a declaration of acceleration of the Certificates
of such series has been made pursuant to Section 8.02. Any such sale or sales
may be adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned sale or sales,
without further notice, and the Indenture Trustee and the Holder or Holders of
any Certificates of such series, or any interest therein, may bid and become the
purchaser at any such sale. The Indenture Trustee may exercise such right
without possession or production of the Certificates of such series or proof of
ownership thereof, and as representative of the Holders may exercise such right
without notice to the Holders or including the Holders as parties to any suit or
proceeding relating to foreclosure of any property in such Indenture Estate. By
entering into the Indenture Supplement applicable to the Certificates of such
series, such Owner Trustee irrevocably constitutes the Indenture Trustee the
true and lawful attorney-in-fact of such Owner Trustee (in the name of such
Owner Trustee or otherwise) for the purpose of effectuating any sale,
assignment, transfer or delivery for enforcement of the
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Lien created under this Agreement, whether pursuant to foreclosure or power of
sale or otherwise to execute and deliver all such bills of sale, assignments and
other instruments as the Indenture Trustee may consider necessary or
appropriate, with full power of substitution, such Owner Trustee, by so entering
into such Indenture Supplement, thereby ratifying and confirming all that such
attorney or any substitute shall lawfully do by virtue hereof. Nevertheless, if
so requested by the Indenture Trustee or any purchaser, such Owner Trustee shall
ratify and confirm any such sale, assignment, transfer or delivery, by executing
and delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.
(c) Subject to Sections 8.03(e) and 8.03(f), if an Indenture Event of
Default with respect to the Certificates of any series has occurred and is
continuing, the Owner Trustee applicable to the Certificates of such series and
the Company shall, at the request of the Indenture Trustee, promptly execute and
deliver to the Indenture Trustee such instruments of title or other documents as
the Indenture Trustee may deem necessary or advisable to enable the Indenture
Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Indenture Estate applicable to the
Certificates of such series. If such Owner Trustee or the Company shall for any
reason fail to execute and deliver such instruments and documents after such
request by the Indenture Trustee, the Indenture Trustee shall be entitled, in a
proceeding to which such Owner Trustee and the Company will be necessary
parties, to a judgment for specific performance of the covenants contained in
the foregoing sentence, conferring upon the Indenture Trustee the right to
immediate possession and requiring such Owner Trustee or the Company or both to
execute and deliver such instruments and documents to the Indenture Trustee. The
Indenture Trustee shall also be entitled to pursue all or any part of such
Indenture Estate wherever it may be found and may enter any of the premises of
such Owner Trustee or the Company or any other Person wherever such Indenture
Estate may be or be supposed to be and search for such Indenture Estate and take
possession of any item of such Indenture Estate pursuant to this
Section 8.03(c). The Indenture Trustee may, from time to time, at the expense
of such Indenture Estate, make all such expenditures for maintenance, insurance,
repairs, replacements, alterations, additions and improvements to and of such
Indenture Estate, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to use, operate, store, lease, control or manage
such Indenture Estate, and to exercise all rights and powers of such Owner
Trustee and the Company relating to such Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, easing, control or
management of such Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent payable under the Lease applicable to the Certificates of such
series), issues, profits, products, revenues and other income of such Indenture
Estate and every part thereof, without prejudice, however, to the right of the
Indenture Trustee under any
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provision of this Agreement to collect and receive all cash held by, or required
to be deposited with, the Indenture Trustee hereunder. In accordance with the
terms of this Section 8.03(c), such tolls, rents (including such Rent), issues,
profits, products, revenues and other income shall be applied to pay the
expenses of using, operating, storing, leasing, controlling or managing such
Indenture Estate, and of all maintenance, insurance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Indenture Trustee may he required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon such Indenture Estate or any
part thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of such Owner
Trustee and, to the extent permitted by such Lease, the Company), and all other
payments which the Indenture Trustee may be required or authorized to make under
any provision of this Agreement, including this Section 8.03(c), as well as just
and reasonable compensation for the services of the Indenture Trustee, and of
all persons properly engaged and employed by the Indenture Trustee.
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing and the Indenture Trustee shall have obtained
possession of or title to the Aircraft applicable to the Certificates of such
series, the Indenture Trustee shall not be obligated to use or operate such
Aircraft or cause such Aircraft to be used or operated directly or Indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of such Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its discretion
to protect the Indenture Estate applicable to the Certificates of such series
and the Indenture Trustee, as trustee and individually, against any and all
liability for loss or damage to such Aircraft and for public liability and
property damage resulting from use or operation of such Aircraft and (ii) funds
are available in such Indenture Estate to pay for such insurance or, in lieu of
such insurance, the Indenture Trustee is furnished with indemnification from the
Holders of the Certificates of such series or any other Person upon terms and in
amounts satisfactory to the Indenture Trustee in its discretion to protect such
Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all such liabilities.
(d) Subject to Sections 8.03(e) and 8.03(f), the Indenture Trustee may
proceed to protect and enforce this Agreement and the Certificates of such
series by suit or suits or proceedings in equity, at law or in bankruptcy, and
whether for the specific performance of any covenant or agreement herein
contained or In execution or aid of any power herein granted; or for foreclosure
hereunder, or for the appointment of a receiver or receivers for the Indenture
Estate applicable to the Certificates of such series or any part thereof, or for
the recovery of judgment for the indebtedness secured by the Lien created under
this Agreement or for the enforcement of any other proper, legal or equitable
remedy available under applicable law.
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(e) (i) If and to the extent provided in the Indenture Supplement
applicable to the Certificates of any series, upon a failure by the Company to
make any payment of Basic Rent under the Lease applicable to the Certificates of
such series within such period, if any as specified in the Indenture Supplement
(the "Basic Rent Grace Period") after the same shall become due, then as long as
no Indenture Event of Default with respect to the Certificates of such series
(other than arising from such failure to pay Basic Rent) shall have occurred and
be continuing, the Owner Participant or Owner Trustee applicable to the
Certificates of such series may (but need not) pay to the Indenture Trustee, at
any time prior to the expiration of the period specified in such Indenture
Supplement (the "Specified Cure Period") after the expiration of such Basic Rent
Grace Period (prior to the expiration of which Specified Cure Period the
Indenture Trustee shall not declare such Lease in default or exercise any of the
rights, powers or remedies which are then exercisable thereunder or under this
Article 8), an amount equal to the full amount of such payment of Basic Rent,
together with any interest due thereon on account of the delayed payment
thereof, and such payment by such Owner Participant or Owner Trustee shall be
deemed to cure any such Indenture Event of Default arising from such failure of
the Company (but such cure shall not relieve the Company of any of its
obligations). To the extent permitted by the Indenture Supplement, if the
Company shall fail to perform or observe any covenant, condition or agreement to
be performed or observed by it under the Lease applicable to the Certificates of
any series, then, as long as no other Indenture Event of Default with respect to
the Certificates of such series shall have occurred and be continuing, the Owner
Participant or Owner Trustee applicable to the Certificates of such series may
(but need not) pay to the Indenture Trustee (or to such other person as may be
entitled to receive the same), at any time prior to the expiration of a period
of 15 Business Days after the expiration of the grace period, if any, provided
with respect to such failure on the part of the Company in such Lease (the "15-
Day Period") (prior to the expiration of which 15-Day Period the Indenture
Trustee shall not declare such Lease in default or exercise any of the rights,
powers or remedies which are then exercisable thereunder or under this
Article 8), all sums necessary to effect the performance or observance of such
covenant or agreement of the Company, together with any interest due thereon on
account of the delayed payment thereof, and such payment by such Owner
Participant or Owner Trustee shall be deemed to cure any such Indenture Event of
Default arising from such failure of the Company (but such cure shall not
relieve the Company of any of its obligations). Upon any payment of Basic Rent
by the Owner Participant or Owner Trustee applicable to the Certificates of any
series in accordance with the first sentence of this Section 8.03(e), or upon
any payment of any other sums by such Owner Participant or Owner Trustee in
accordance with the second sentence of this Section 8.03(e), such Owner
Participant or Owner Trustee shall, to the extent of their respective payments,
be subrogated, in the case of any such payment in accordance with such first
sentence, to the rights of the Indenture Trustee, as assignee hereunder of such
Owner Trustee, or, in the case of any such payment in accordance with such
second sentence, to the rights of the Indenture Trustee or such other person, as
the case may be, which actually received such payment, to receive such payment
of Basic Rent or such other payment, as the case may be
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(and any interest due thereon on account of the delayed payment thereof), and
shall be entitled to receive such payment upon its receipt by the Indenture
Trustee or such other person, as aforesaid (but in each case only if all amounts
of principal of, and Premium, if any, and interest on the Certificates of such
series at the time due and payable together with interest due thereon on account
of the delayed payment thereof shall have been paid in full); PROVIDED that
neither such Owner Participant nor such Owner Trustee shall attempt to recover
any such amount paid by it on behalf of the Company pursuant to this
Section 8.03(e) except by demanding of the Company payment of such amount or by
commencing an action against the Company to require the payment of such amount.
(ii) If and to the extent provided in the Indenture Supplement
applicable to the Certificates of any series, in the event that (a) at any time
one or more Lease Events of Default applicable to the Certificates of such
series shall have occurred and any such Lease Event of Default shall have
continued beyond the minimum period, if any, specified therefor in such
Indenture Supplement, during which time the Certificates of such series could,
but shall not, have been accelerated pursuant to Section 8.02 or (b) the
Certificates of such series shall have been accelerated pursuant to
Section 8.02, the Owner Trustee applicable to the Certificates of such series
may at its option, give notice to the Indenture Trustee that it will redeem all
Certificates of such series then Outstanding, which redemption shall be pursuant
to Section 6.02 at a Redemption Price equal to 100% of the principal amount of
the Outstanding Certificates of such series plus accrued interest thereon, plus
to the extent provided in the Indenture Supplement, Premium, if any. As and to
the extent provided in the Indenture Supplement, concurrently with such notice,
such Owner Trustee will deposit with the Indenture Trustee an amount which at
the time of such notice is estimated to be sufficient to redeem at the
applicable Redemption Price all Certificates of such series then Outstanding
(including, in the case of a redemption pursuant to clause (b) of Section 6.02,
the estimated Premium with respect to the Certificates of such series) and to
pay the Indenture Trustee all amounts then due it hereunder with respect to the
Certificates of such series, which funds shall be held by the Indenture Trustee
as provided in Section 9.04(a). For purposes of the immediately preceding
sentence, the estimated Redemption Price applicable to the Certificates of any
series shall be the amount computed using the same procedures as would be used
for calculating such actual Redemption Price pursuant to Section 6.02 on the
applicable Redemption Date, except that for purposes of calculating such
estimated amount, the Premium, if any, on the Certificates of such series shall
be computed by reference to the first Business Day preceding the applicable
Lease Termination Date following the procedures for calculating the Premium set
forth in the Indenture Supplement determined as of such first Business Day. If
such notice is given, such Owner Trustee will deposit or cause to be deposited
with the Indenture Trustee, on or prior to the Business Day preceding the
applicable Redemption Date, whether or not an Indenture Event of Default with
respect to the Certificates of such series is then continuing, funds sufficient,
when added to the funds already held by the Indenture Trustee for such purpose,
to redeem at the applicable Redemption Price (including the Premium, if any,
actually payable in respect thereof
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computed as provided for in Section 6.02 with respect to the Certificates of
such series) on such Redemption Date all Certificates of such series then
Outstanding and to pay the Indenture Trustee all amounts then due it hereunder
in respect of the Certificates of such series.
(iii) Anything in this Agreement to the contrary notwithstanding, the
Indenture Trustee shall not be entitled to exercise any remedy hereunder as a
result of an Indenture Event of Default with respect to the Certificates of any
series which arises solely by reason of one or more Lease Events of Default
with respect to the Certificates of such series to the extent the Indenture
Supplement applicable to the Certificates of such series so provides.
(f) Notwithstanding any provision of this Agreement to the contrary,
including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d), as long as
no Lease Event of Default with respect to the Certificates of any series shall
have occurred and be continuing, neither the Indenture Trustee nor the Owner
Trustee applicable to the Certificates of such series shall take any action
inconsistent with the Company's rights under the Lease applicable to the
Certificates of such series, including, without limitation, (x) the right to
receive all monies due and payable to it in accordance with the provisions of
such Lease and (y) the Company's rights to possession and use of, and of quiet
enjoyment of, the Aircraft applicable to the Certificates of such series.
(g) With respect to the Certificates of any series, each and every right,
power and remedy herein given to the Indenture Trustee specifically or otherwise
in this Agreement shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given or now or hereafter existing
at law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often in such order as may be deemed expedient by the
Indenture Trustee, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or power
or in pursuing any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of any Owner Trustee or the
Company or to be an acquiescence therein.
(h) Notwithstanding any other provision hereof, if any payment of
principal of the Certificates of any series shall not be made when and as the
same shall become due and payable, or if any payment of interest on the
Certificates of any series shall not be made when the same shall become due and
payable and such failure shall continue for the period prescribed in
Section 8.01(a), the Indenture Trustee shall be entitled to recover judgment, in
its own name and as trustee of an express trust upon the Certificates of such
series for the whole amount of such principal or interest, as the case may be,
remaining unpaid.
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SECTION 8.04 WAIVER OF OWNER TRUSTEE
By entering into the Indenture Supplement applicable to the Certificates of
any series, the Owner Trustee applicable to the Certificates of such series
shall be deemed to covenant that, to the extent now or at any time hereafter
enforceable under applicable law, such Owner Trustee will not at any time insist
upon or plead, or in any manner whatsoever claim or take any benefit or
advantage of or from any law now or hereafter in force providing for the
valuation or appraisement of the Indenture Estate applicable to the Certificates
of such series or any part thereof, prior to any sale or sales thereof to be
made pursuant to any provision herein contained, or prior to any applicable
decree, judgment or order of any court of competent jurisdiction; nor, after
such sale or sales, claim or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the property so
sold or any part thereof, and hereby expressly waives for itself and on behalf
of each and every Person, except decree or judgment creditors of such Owner
Trustee acquiring any interest in or title to such Indenture Estate or any part
thereof subsequent to the date of such Indenture Supplement, all benefit and
advantage of any such law or laws, and covenants that it will not invoke or
utilize any such law or laws, but will suffer and permit the execution of every
such power as though no such law or laws had been made or enacted. Nothing in
this Section 8.04 shall be deemed to be a waiver by such Owner Trustee of its
rights under Section 8.03(e).
The Indenture Trustee may maintain such a proceeding even if it does not
possess any of the Certificates or does not produce any of them in the
proceeding. A delay or omission by the Indenture Trustee or any Holder in
exercising any right or remedy accruing upon an Indenture Event of Default with
respect to the Certificates of any series shall not impair the right or remedy
or constitute a waiver of or acquiescence in such Indenture Event of Default.
SECTION 8.05 WAIVER OF EXISTING DEFAULTS
The Holders of a majority in the aggregate principal amount of the
Outstanding Certificates of any series, by notice to the Indenture Trustee, may
waive on behalf of the Holders of the Certificates of such series any existing
Indenture Default or Indenture Event of Default with respect to the Certificates
of such series and its consequences except (i) an Indenture Default or Indenture
Event of Default in the payment of the principal of or Premium, if any, or
interest on any Certificates of such series or (ii) in respect of a covenant or
provision in this Agreement which pursuant to Section 12.02 cannot be amended or
modified without the consent of each Holder affected thereby.
SECTION 8.06 CONTROL BY MAJORITY
The Holders of a majority in aggregate principal amount of the Outstanding
Certificates of any series may direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee or exercising
any trust or
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power conferred on it by this Agreement in respect of the Certificates of such
series. However, the Indenture Trustee may refuse to follow any direction that
conflicts with law or this Agreement, that is unduly prejudicial to the rights
of the Holders so affected, or that would subject the Indenture Trustee to
personal liability.
SECTION 8.07 LIMITATION ON SUITS BY HOLDERS
A Holder of a Certificate of any series may pursue a remedy under this
Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default with respect to the Certificates of
such series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Certificates of such series make a written request to the
Indenture Trust to pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or
expense to be, or which may be, incurred by the Indenture Trustee in
pursuing the remedy;
(4) the Indenture Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Outstanding Certificates of such series do not give
the Indenture Trustee a direction inconsistent with the request.
A Holder of a Certificate of any series may not use this Agreement to
prejudice the rights of another Holder of a Certificate of such series or to
obtain a preference or priority over another Holder of a Certificate of such
series.
SECTION 8.08 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Agreement, the right of any
Holder of a Certificate of any series to receive payment of principal of, and
Premium, if any, and interest on such Certificate on or after the respective due
dates expressed in such Certificate, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 8.09 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM
The Indenture Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and
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of the Holders allowed in any judicial proceedings relating to any obligor on
the Certificates, its creditors, or its property.
SECTION 8.10 UNDERTAKING FOR COSTS
With respect to the Certificates of any series, all parties to this
Indenture agree, and the related Owner Trustee by the entering into of the
Indenture Supplement and each Holder of any Certificate of any series by his
acceptance thereof shall be deemed to have agreed, that in any suit for the
enforcement of any right or remedy under this Indenture and/or such Indenture
Supplement or in any suit against the Indenture Trustee for any action taken or
omitted by it as Indenture Trustee, a court in its discretion may require the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 8.10 does not apply to a suit instituted by
the Indenture Trustee, a suit instituted by a Holder for the enforcement of the
payment of principal of, or Premium, if any, or interest on any Certificate
owned by such Holder, on or after the respective due dates expressed in such
Certificate, or a suit by a Holder or Holders of more than 10% in aggregate
principal amount of Outstanding Certificate of any series.
ARTICLE 9
INDENTURE TRUSTEE
SECTION 9.01 DUTIES OF INDENTURE TRUSTEE
(a) The Indenture Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(b) Subject to the provisions of Section 9.04, the Indenture Trustee shall
not be liable for interest on any money received by it except as the Indenture
Trustee may otherwise agree in writing with the Company. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 9.02 RIGHTS OF INDENTURE TRUSTEE
Subject to the provisions of Section 315 of the Trust Indenture Act:
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
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(b) Before the Indenture Trustee acts or refrains from acting, it may
consult with counsel or require an Officer's Certificate or an Opinion of
Counsel from the Company or any Owner Trustee after which it will take such
action or refrain from acting as it deems appropriate. The Indenture
Trustee shall not be liable for any action it takes or omits to take in
good faith and in accordance herewith in reliance on a resolution of the
Board of Directors of the Company, the written advice of counsel acceptable
to any Owner Trustee, the Company and the Indenture Trustee, officer's
certificates or opinions of counsel provided by the Company or any Owner
Trustee.
(c) The Indenture Trustee may act with respect to the Certificates of
any series through agents and shall not be responsible for the misconduct
or negligence of any such agent appointed with due care; PROVIDED that, so
long as no Lease Event of Default with respect to the Certificates of such
series shall have occurred and be continuing, no such agents shall be
appointed by the Indenture Trustee applicable to the Certificates of such
series without the consent of the Company and the Owner Trustee, which
consent shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers.
To the extent that the provisions of this Section 9.02 are inconsistent with the
duties of the Indenture Trustee as required by Section 315 of the Trust
Indenture Act, the requirements of such Section 315 shall prevail.
SECTION 9.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE
The Indenture Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates and may otherwise deal with any Owner
Trustee, the Company or an Affiliate of any Owner Trustee or the Company or a
subsidiary of any Owner Trustee or the Company with the same rights it would
have if it were not the Indenture Trustee. Any Agent may do the same with like
rights. However, the Indenture Trustee is subject to Sections 9.09 and 9.11
hereof and Sections 310(b) and 311 of the Trust Indenture Act.
SECTION 9.04 FUNDS MAY BE HELD BY INDENTURE TRUSTEE OR PAYING AGENT;
INVESTMENTS
(a) Any monies (including without limitation for purpose of this
Subsection 9.04(a) any cash constituting the proceeds of the maturity, sale or
other disposition of any Permitted Investment) held by the Indenture Trustee or
the Paying Agent hereunder as part of the Indenture Estate applicable to the
Certificates of any series, until paid out by the Indenture Trustee or the
Paying Agent as herein provided, (i) subject to clause (ii) below, may be
carried by the Indenture Trustee or the Paying Agent on deposit
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with itself or on deposit to its account with any bank, trust company or
national banking association incorporated or doing business under the laws of
the United States of America or one of the states thereof having combined
capital and surplus and retained earnings of at least $100,000,000, and neither
the Indenture Trustee nor the Paying Agent shall have any liability for interest
upon any such monies except as otherwise agreed in writing with the Owner
Trustee applicable to the Certificates of such series or the Company, or (ii) at
any time and from time to time, so long as no Lease Event of Default with
respect to the Certificates of such series shall have occurred and be
continuing, at the request (given directly by the Company to the Indenture
Trustee) of the Company acting as the Agent of such Owner Trustee, shall, with
financial institutions of the character described in subsection 9.04(a)(i), be
invested and reinvested in Permitted Investments of the character described in
clause (i), (ii), (iii) or (v) of the definition thereof or in overnight federal
funds of amounts on deposit in the Indenture Trustee's account at State Street
Bank and Trust Company as specified in such request (if such investments are
reasonably available for purchase) and sold, in any case at such prices,
including accrued interest or its equivalent, as are set forth in such request,
and such Permitted Investments shall be held by the Indenture Trustee in trust
as part of the Indenture Estate applicable to the Certificates of such series
until so sold; PROVIDED that the Company, on behalf of such Owner Trustee, as
agent of such Owner Trustee, shall upon demand pay to the Indenture Trustee the
amount of any loss realized upon maturity, sale or other disposition of any such
Permitted Investment and, so long as no such Lease Event of Default shall have
occurred and be continuing, be entitled to receive from the Indenture Trustee,
and the Indenture Trustee shall promptly pay to the Company, on behalf of such
Owner Trustee, any profit, income, interest, dividend or gain realized upon
maturity, sale or other disposition of any Permitted Investment. If any such
Lease Event of Default shall have occurred and be continuing, any net income,
profit, interest, dividend or gain realized upon maturity, sale or other
disposition of any Permitted Investment shall be held as part of such Indenture
Estate and shall be applied by the Indenture Trustee at the same time, on the
same conditions and in the same manner as the amounts in respect of which such
income, profit, interest, dividend or gain was realized are required to be
distributed in accordance with the provisions hereof or of the Lease pursuant to
which such amounts were required to be held. The Indenture Trustee shall not be
responsible for any losses on any investments or sales of Permitted Investments
made pursuant to the procedure specified in this Subsection (a).
(b) At any time and from time to time, so long as no Lease Event of
Default applicable to the Certificates of any series shall have occurred and be
continuing, the Indenture Trustee shall, at the request of the Company acting as
agent for the Owner Trustee applicable to the Certificates of such series
pursuant to the last sentence of this Section 9.04(b), invest and reinvest in
Permitted Investments as specified in such request (if such investments are
reasonably available for purchase) any monies at the time on deposit with the
Indenture Trustee as part of the Indenture Estate applicable to the Certificates
of such series, and sell any Permitted Investments, in either case, at such
prices, including accrued interest, as are set forth in such request, and such
Permitted
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Investments shall be held by the Indenture Trustee in trust as part of such
Indenture Estate until so sold; PROVIDED that the Company, as agent of such
Owner Trustee, shall upon demand pay to the Indenture Trustee the amount of any
loss realized upon maturity, sale or other disposition of any Permitted
Investment. Any net income, profit, interest, dividend or gain realized upon
maturity, sale of other disposition of any Permitted Investment shall be held as
part of such Indenture Estate and shall be applied by the Indenture Trustee at
the same time, on the same conditions and in the same manner as the amounts in
respect of which such income, profit, interest, dividend or gain was realized
are required to be distributed in accordance with the provisions hereof or of
the Lease pursuant to which such amounts were required to be held. The
Indenture Trustee shall not be responsible for any losses on any investments or
sales of Permitted Investments made pursuant to the procedure specified in this
Subsection (b). Together with any such request for investment in, or sale or
disposition of, any Permitted Investments, the Company on behalf of such Owner
Trustee shall furnish the Indenture Trustee with the following:
(1) a certificate of an Appraiser as to the fair value of Permitted
Investments to be sold or disposed of and stating that in the opinion of
such Appraiser the proposed release of such Permitted Investments from the
Lien of this Agreement will not impair the security under this Agreement in
contravention of the provisions hereof, which Appraiser shall be
Independent if the fair value of such Permitted Investments and of all
other property or securities released since the commencement of the then
current calendar year, as set forth in the certificates required by
paragraph (1) of subsection (d) of Section 314 of the Trust Indenture Act,
is 10% or more of the aggregate principal amount of the Certificates of
such series at the time Outstanding; and
(2) a certificate of an Appraiser as to the fair value to the obligor
of Permitted Investments to be purchased or invested in, which Appraiser
shall be Independent if the fair value to the obligor of such Permitted
Investments and all other securities made the basis of the withdrawal of
cash constituting a part of such Indenture Estate or the release of
property or securities subject to the Lien of this Agreement, as set forth
in the certificates required by paragraph (2) of subsection (d) of
Section 314 of the Trust Indenture Act, is 10% or more of the aggregate
principal amount of the Certificates of such series at the time
Outstanding.
The Company and such Owner Trustee, by entering into the Indenture Supplement,
agree that the Company as agent for such Owner Trustee shall submit its
investment instructions directly to the Indenture Trustee and shall provide the
certificates required by this Section 9.04(b)(1) and (2).
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SECTION 9.05 NOTICE OF DEFAULTS
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing and if it is known to the Indenture Trustee, the
Indenture Trustee shall (i) promptly send written notice thereof to the Company,
the Owner Trustee applicable to the Certificates of such series and the Owner
Participant applicable to the Certificates of such series and (ii) within 90
days after it occurs, mail to each Holder of a Certificate of such series notice
of all such Indenture Events of Default which are not cured in the manner and to
the extent provided in Section 13.02(c). Except in the case of a default in the
payment of the principal of, Premium, if any, or interest on, the Certificate of
any series, the Indenture Trustee shall be protected in withholding the notice
required under clause (ii) above if and so long as the executive committee or
trust committee of directors of the Indenture Trustee and/or Responsible
Officers thereof in good faith determines that withholding such notice is in the
interest of the Holders of the Certificates of such series.
SECTION 9.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS
Within 60 days after May 15 of each year commencing with the year 199___,
so long as any Certificates are Outstanding under this Agreement, the Indenture
Trustee shall transmit to the Holders as provided in Section 313(c) of the Trust
Indenture Act a brief report dated as of such May 15 if required by
Section 313(a) of the Trust Indenture Act.
SECTION 9.07 COMPENSATION AND INDEMNITY
(a) The Owner Trustee applicable to the Certificates of each series shall
pay to the Indenture Trustee, from time to time, on demand, (i) reasonable
compensation for its services with respect to the Certificates of such series,
which compensation shall not be limited by any law on compensation of a trustee
of an express trust and (ii) reimbursement for all reasonable out-of-pocket
expenses incurred by the Indenture Trustee in connection with the performance of
its duties under this Agreement with respect to the Certificates of such series
(including the reasonable compensation and expenses of the Indenture Trustee's
counsel and any agent appointed in accordance with Section 9.02(c)) and
(iii) indemnification against any loss or liability incurred by the Indenture
Trustee arising out of or in connection with its acceptance of administration of
the trust or trusts in respect of the Certificates of such series under this
Agreement except (A) as such expenses or loss or liability results from the
negligence or willful misconduct of the Indenture Trustee or the inaccuracy of
any representation or warranty of the Indenture Trustee in its individual
capacity contained in the Participation Agreement applicable to the Certificates
of such series, (B) as otherwise provided in Section 9.11 hereof and (C) as
otherwise excluded by the terms of such Participation Agreement from the
Company's general indemnity; PROVIDED that, so long as the Lease applicable to
the Certificates of such series is in effect, the Indenture Trustee shall not
make any claim under this Section 9.07(a) for any claim or expense indemnified
against by the Company under such Participation Agreement without first making
demand on the Company for payment of such claim or expense. The
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Indenture Trustee shall notify such Owner Trustee and the Company promptly of
any claim against it for which it may seek indemnity. Such Owner Trustee shall
defend the claim and the Indenture Trustee shall cooperate in the defense. The
Indenture Trustee may have separate counsel and such Owner Trustee shall pay the
reasonable fees and expenses of such counsel. Such Owner Trustee need not pay
for any settlement made without its and the Company's consent.
(b) To secure the payment obligations of the Owner Trustee applicable to
the Certificates of each series pursuant to this Section 9.07, the Indenture
Trustee shall have a Lien prior to the Holders of the Certificates of such
series on all money or property held or collected by the Indenture Trustee in
respect of the Certificates of such series, except that held in trust to pay the
principal of, Premium, if any, and interest on, the Certificates of such series.
SECTION 9.08 REPLACEMENT OF INDENTURE TRUSTEE
(a) The resignation or removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee shall become effective only upon
the successor Indenture Trustee's acceptance of appointment as provided in this
Section 9.08.
(b) The Indenture Trustee may resign with respect to the Certificates of
any series by giving at least 30 days' prior written notice to the Company and
the Owner Trustee applicable to the Certificates of such series. The Holders of
a majority in aggregate principal amount of the Outstanding Certificates of such
series may remove the Indenture Trustee with respect to the Certificates of such
series by giving at least 30 days' prior written notice to the Indenture
Trustee, the Owner Trustee applicable to the Certificates of such series and the
Company and may appoint a successor Indenture Trustee within 30 days from the
giving of such notice for the Certificates of such series with such Owner
Trustee's and the Company's consent, in each case, which consent shall not be
unreasonably withheld. The Owner Trustee applicable to the Certificates of such
series (acting solely pursuant to instructions from the Company) may remove the
Indenture Trustee with respect to the Certificates of such series if:
(1) the Indenture Trustee fails to comply with Section 9.10 (or, so
long as __________________________________________ shall be the Indenture
Trustee, the requirement set forth in Section 9.10 hereof specifically
applicable to ____________________________________________________) and
Section 310 of the Trust Indenture Act;
(2) the Indenture Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Indenture
Trustee or its property; or
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(4) the Indenture Trustee becomes incapable of acting.
(c) If the Indenture Trustee resigns or is removed, or if a vacancy exists
in the office of Indenture Trustee with respect to the Certificates of any
series for any reason, and the Holders of Certificates of such series have not
appointed a successor Indenture Trustee pursuant to Section 9.08(b) the Owner
Trustee applicable to the Certificate of such series (acting solely with the
Company's consent (which consent shall not be unreasonably withheld)) shall
promptly appoint a successor Indenture Trustee with respect to the Certificates
of such series.
(d) If a successor Indenture Trustee with respect to the Certificates of
any series does not take office within 30 days after the retiring Indenture
Trustee with respect to the Certificates of such series resigns or is removed,
the retiring Indenture Trustee, the Company, the Owner Trustee applicable to the
Certificates of such series or the Holders of a majority in the aggregate
principal amount of the Outstanding Certificates of such series may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee with respect to the Certificates of such series.
(e) If the Indenture Trustee with respect to the Certificates of any
series fails to comply with Section 9.10, any Holder of Certificates of such
series may petition any court of competent jurisdiction for the removal of such
Indenture Trustee and the appointment of a successor Indenture Trustee with
respect to the Certificates of such series.
(f) A successor Indenture Trustee with respect to the Certificates of any
series shall deliver a written acceptance of its appointment to the retiring
Indenture Trustee, to the Company and to the Owner Trustee applicable to the
Certificates of such series. Thereupon, the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the retiring Indenture
Trustee for which the successor Indenture Trustee is to be acting as Indenture
Trustee under this Agreement. The retiring Indenture Trustee shall promptly
transfer all property and all books and records relating to the administration
of the Indenture Estate held by it as Indenture Trustee to the successor
Indenture Trustee subject to the Lien with respect to the Certificates of such
series provided for in Section 9.07. The Company shall give notice of each
appointment of a successor Indenture Trustee with respect to the Certificates of
any series if there are Certificates of such series Outstanding, by mailing
written notice of such event by first-class mail to the Holders of the
Certificates of such series.
(g) All provisions of this Section 9.08 except subparagraphs (b)(1) and
(e) and the words "subject to the Lien with respect to the Certificates of such
series provided for in Section 9.07" in subparagraph (f) shall apply also to any
Paying Agent.
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SECTION 9.09 SUCCESSOR INDENTURE TRUSTEE; AGENTS BY MERGER, ETC.
If the Indenture Trustee or any Agent consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business
assets to, another corporation, the successor corporation, without any further
act, shall be the successor Indenture Trustee or Agent, as the case may be.
SECTION 9.10 ELIGIBILITY; DISQUALIFICATION
This Agreement shall at all times have an Indenture Trustee which shall be
eligible to act as Trustee under Section 310(a) of the Trust Indenture Act and
(i) shall have a combined capital and surplus of at least $75,000,000 or
(ii) shall have a combined capital and surplus in excess of $5,000,000 (or, so
long as ____________________________________________________ shall be the
Indenture Trustee, $3,000,000) and its obligations, whether now in existence or
hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any state or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000, and, in any case, shall be a "citizen of
the United States" as defined in Section 101(16) of the Federal Aviation Act. If
such corporation publishes reports of conditions at least annually, pursuant to
law or to requirements of federal, state, territorial, or District of Columbia
supervising or examining authority, then for the purposes of this Section 9.10,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
conditions so published.
In case at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Indenture Trustee shall
resign immediately in the manner and with the effect specified in Section 9.08.
SECTION 9.11 TRUSTEE'S LIENS
The Indenture Trustee in its individual capacity agrees that it will at its
own cost and expense promptly take such action as may be necessary to duly
discharge and satisfy in full all Liens ("Trustee's Liens") on the Indenture
Estate applicable to the Certificates of each series which are either
(i) attributable to the Indenture Trustee in its individual capacity and which
are unrelated to the transactions contemplated by the Operative Documents
applicable to the Certificates of such series, or (ii) which are attributable to
the Indenture Trustee as trustee under this Agreement or in its individual
capacity and which arise out of acts or omissions which are not expressly
contemplated by this Agreement.
SECTION 9.12 WITHHOLDING TAXES; INFORMATION REPORTING
The Indenture Trustee shall exclude and withhold from each distribution of
principal of, Premium, if any, and interest on and other amounts due hereunder
or under,
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the Certificates any and all withholding taxes applicable thereto as required by
law (and such exclusions and withholdings shall constitute payment in respect of
such Certificates). The Indenture Trustee agrees to act as such withholding
agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect to the Certificates, to withhold such amounts and timely pay the same
to the appropriate authority in the name of and on behalf of the Holders of the
Certificates, that it will file any necessary withholding tax returns or
statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each Holder of a Certificate appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Holders may reasonably request from time to time.
The Indenture Trustee agrees to file any other information reports as it may be
required to file under the United States law.
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS
SECTION 10.01 SATISFACTION AND DISCHARGE OF AGREEMENT; DEFEASANCE; TERMINATION
OF OBLIGATIONS
Subject to Section 10.02, this Agreement shall cease to be of further
effect with respect to the Certificates of any series, and the Owner Trustee
applicable to the Certificates of such series and the Indenture Trustee shall,
except as herein provided, be deemed to have been discharged from their
respective obligations with respect to the Certificates of such series (and the
Indenture Trustee, on demand and at the expense of such Owner Trustee, shall
execute proper instruments acknowledging satisfaction and discharge of this
Agreement in respect of the Certificates of such series), when
(a) (i) all Certificates of such series theretofore executed and
delivered (other than (A) Certificates of such series which have been
mutilated, destroyed, lost or stolen and which have been replaced or
exchanged as provided in Section 2.07 and (B) Certificates of such series
for the payment of which money held in trust hereunder has been paid and
discharged from such trust, as provided in Section 7.01) have been
delivered to the Indenture Trustee for cancellation; or
(ii) all Certificates of such series not theretofore delivered to the
Indenture Trustee for cancellation have become due and payable (whether
upon stated maturity or as a result of redemption), or will become due and
payable (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to
the date of such deposit) at maturity within one year, and there has been
deposited with the Indenture Trustee in trust for the purpose of paying and
discharging the entire indebtedness on the Certificates of such series not
theretofore cancelled by the Indenture Trustee or delivered to the
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Indenture Trustee for cancellation, an amount sufficient to discharge such
indebtedness, including the principal of, Premium, if any, and interest on
the Certificates of such series to the date of such deposit (in the case of
Certificates which have become due and payable), or to the maturity
thereof, as the case may be; or
(iii) (A) the Owner Trustee applicable to the Certificates of
such series has deposited or caused to be deposited irrevocably (except as
provided in Section 10.04) with the Indenture Trustee as trust funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Certificates of such series, (1) money in an
amount, or (2) U.S. Government Obligations which, through the payment of
interest and principal in respect thereof in accordance with their terms,
will provide (not later than one Business Day before the due date of any
payment referred to below in this paragraph) money in an amount, or (3) a
combination of money and U.S. Government Obligations referred to in the
foregoing clause (2), sufficient, in the opinion of a nationally recognized
firm of independent certificated public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to pay and
discharge each installment of principal of, Premium, if any, and interest
on, the Outstanding Certificates of such series on the dates such payments
of principal, Premium or interest are due (including as a result of
redemption in respect of which irrevocable notice has been given to the
Indenture Trustee on or prior to the date of such deposit), and no Lease
Event of Default applicable to the Certificates of such series which would
give rise to the operation of Section 547 of the Bankruptcy Code shall have
occurred and be continuing on the date of such deposit or at any time
during the period ending on the 91st day after such date;
(B) such deposit will not result in a breach or violation of, or
constitute an Indenture Default or Indenture Event of Default with respect
to the Certificates of such series or a default or event of default under
any other agreement or instrument to which such Owner Trustee or the
Company is a party or by which it is bound;
(C) the Company has delivered to the Indenture Trustee a certificate
of an Independent Appraiser stating the fair value to the Company of such
U.S. Government Obligations and the fair value of all securities and
property included in the Indenture Estate applicable to the Certificates of
such series; and
(D) the Company has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that there has been published by the Internal Revenue
Service a ruling to the effect that Holders of the Certificates of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of the exercise by such Owner Trustee of its option
under this Section 10.01(a)(iii) and
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will be subject to federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such option
had not been exercised;
(b) all other amounts then due and payable under the Certificates of
such series have been paid; and
(c) the Company has delivered to the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the satisfaction and discharge of this
Agreement contemplated by this Section 10.01 have been complied with.
SECTION 10.02 SURVIVAL OF CERTAIN OBLIGATIONS
Notwithstanding the provisions of Section 10.01 as applicable to the
Certificates of any series, the obligations of the Indenture Trustee contained
in Sections 2.01 through 2.09, Section 7.01, Section 10.03 and Section 10.04,
the rights, duties, immunities and privileges hereunder of the Indenture
Trustee, and the obligations of the Company contained in Section 7.01 and, if
and to the extent provided for in the Indenture Supplement applicable to the
Certificates of such series, the obligations of the Company under any general
indemnity or general tax indemnity set forth in the Participation Agreement
applicable to the Certificates of such series, shall survive.
SECTION 10.03 MONIES TO BE HELD IN TRUST
All moneys and U.S. Government Obligations deposited with the Indenture
Trustee pursuant to Section 10.01 in respect of the Certificates of any series
shall be held in trust and applied by it, in accordance with the provisions of
the Certificates of such series and this Agreement, to the payment, either
directly or through any Paying Agent as the Indenture Trustee may determine, to
the Holders of the Certificates of such series, of all sums due and to become
due thereon for principal of, and Premium, if any, interest, but such money need
not be segregated from other funds except to the extent required by law.
SECTION 10.04 MONIES TO BE RETURNED TO OWNER TRUSTEE
The Indenture Trustee and any Paying Agent shall promptly pay or return to
the Owner Trustee as applicable to the Certificates of any series upon request
of such Owner Trustee any money or U.S. Government Obligations held by them at
any time that are not required for the payment of the amounts described above in
Section 10.03 on the Certificates of such series for which money or U.S.
Government obligations have been deposited pursuant to Section 10.01.
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ARTICLE 11
ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE
SECTION 11.01 ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE
Upon any of:
(a) the voluntary termination of the Lease applicable to the
Certificates of any series by the Company on the Lease Termination Date
applicable thereto, and upon payment to the Indenture Trustee of an amount
equal to the estimated Redemption Price applicable to the Certificates of
such series as at the applicable Redemption Date, of all Outstanding
Certificates of such series,
(b) the purchase of the Aircraft applicable to the Certificates of
any series by the Company at its option on any Special Purchase Option Date
applicable thereto (unless the Company shall have elected to assume all of
the rights and obligations of the Owner Trustee applicable to the
Certificates of such series hereunder), and upon payment to the Indenture
Trustee of an amount equal to the Redemption Price applicable to the
Certificates of such series as at the applicable Redemption Date of all
Outstanding Certificates of such series,
(c) the termination of the Lease applicable to the Certificates of
any series on the Lease Loss Payment Date applicable thereto, and upon
payment to the Indenture Trustee of an amount equal to the Redemption Price
applicable to the Certificates of such series as at the applicable
Redemption Date of all Outstanding Certificates of such series, or
(d) the satisfaction, discharge, defeasance and termination of
obligations under this Agreement in accordance with Section 10.01,
the Lien of this Agreement on the Indenture Estate applicable to the
Certificates of such series shall terminate (except for the Lien on funds held
by the Indenture Trustee to pay the Certificates of such series and the Lien on
amounts due from the Company under the Lease applicable to the Certificates of
such series necessary to pay the Certificates of such series or the Indenture
Trustee) and the Indenture Trustee shall execute such instruments as may be
requested by the Company or such Owner Trustee to evidence such termination.
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ARTICLE 12
AMENDMENTS AND WAIVERS
SECTION 12.01 AMENDMENTS TO THIS INDENTURE AND INDENTURE SUPPLEMENT WITHOUT
CONSENT OF HOLDERS
(a) The Owner Trustee applicable to the Certificates of any series, the
Company and the Indenture Trustee may enter into one or more agreements
supplemental hereto and to the Indenture Supplement applicable to the
Certificates of any series without the consent of any Holder of the Certificates
of such series for any of the following purposes:
(1) to cure any ambiguity, defect or inconsistency herein, in such
Indenture Supplement or in the Certificates of such series, or to make any
change not inconsistent with the provisions hereof and of such Indenture
Supplement; PROVIDED that such change does not adversely affect the
interests of any Holder of Certificates of such series in any material
respect;
(2) to evidence the succession of another party as the Owner Trustee
in accordance with the terms of the Trust Agreement applicable to the
Certificates of such series, or to evidence the succession of another
corporation to the Company;
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Indenture Trustee with respect to the Certificates
of such series and to add to or change any of the provisions of this
Indenture and such Indenture Supplement as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than
one trustee;
(4) to establish the form or terms of Certificates of any series as
permitted by Section 2.01;
(5) to supplement any of the provisions of this Agreement to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Certificates pursuant to Section 10.01; PROVIDED
that any such action shall not adversely affect the interests of the
Holders of Certificates of such series or any other series of Certificates
in any material respect;
(6) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee or to make any other provisions with respect
to matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Holders of Certificates of such
series;
(7) to correct or amplify the description of any property at any time
subject to the Lien of this Agreement or better to assure, convey and
confirm unto
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the Indenture Trustee any property subject or required to be subject to the
Lien of this Agreement or subject to the Lien of this Agreement the
Airframe or Engines applicable to the Certificate of such series or
airframe or engines substituted for such Airframe or Engines in accordance
herewith or with the Lease applicable to the Certificates of such series;
PROVIDED that supplements entered into for the purpose of subjecting to the
Lien of this Agreement such Airframe or Engines in accordance with such
Lease need only be executed by such Owner Trustee and the Indenture
Trustee;
(8) to add to the covenants of such Owner Trustee or the Company, for
the benefit of the Holders of the Certificates of such series, or to
surrender any rights or power herein conferred upon such Owner Trustee, the
Owner Participant applicable to the Certificates of such series or the
Company;
(9) to comply with any requirements of the SEC in connection with the
qualification of this Agreement under the Trust Indenture Act;
(10) to add to the rights of the Holders of Certificates of such
series;
(11) to provide for the assumption by the Company of the obligations
of such Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 7.05; and
(12) to include on the Certificates of such series any legend as may
be required by applicable law.
(b) The Company and the Indenture Trustee may enter into one or more
agreements supplemental hereto without the consent of any Holder of any series
of Certificates for either of the following purposes:
(1) to change or eliminate any of the provisions of this Indenture;
PROVIDED that any such change or elimination shall become effective only
when there is no Certificate Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; and
(2) to close this Indenture with respect to the authentication and
delivery of additional series of Certificates.
SECTION 12.02 AMENDMENTS TO THIS INDENTURE AND INDENTURE SUPPLEMENT WITH
CONSENT OF HOLDERS
(a) With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Certificates of any series, the Company, the
Owner Trustee applicable to the Certificates of such series and the Indenture
Trustee may enter
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<PAGE>
into such supplemental agreements to add any provisions to or to change or
eliminate any provisions of this Indenture, the Indenture Supplement applicable
to the Certificates of such series or of any such supplemental agreements or to
modify the rights of the Holders of the Certificates of such series; PROVIDED
that, without the consent of each Holder of the Certificates of such series
affected thereby, an amendment under this Section 12.02 may not:
(1) reduce the amount of principal of, or Premium, if any, or
interest on, any Certificate of such series; or
(2) change the date on which any amount of principal of, or Premium,
if any, or interest on any Certificate of such series, is due or payable;
or
(3) create any Lien on the Indenture Estate applicable to the
Certificates of such series prior to or PARI PASSU with the Lien thereon
under this Agreement except such as are permitted hereby or thereby, or
deprive any Holder of the Certificates of such series of the benefit of the
Lien on such Indenture Estate created by this Agreement and such Indenture
Supplement; or
(4) reduce the percentage in principal amount of the Outstanding
Certificates of such series, the consent of whose holders is required for
any such supplemental agreement or the consent of whose holders is required
for any waiver (of compliance with certain provisions of this Agreement or
of certain defaults hereunder or their consequences) provided for in this
Agreement; or
(5) make any change in Sections 8.05, 8.08, or this Section 12.02(a).
(b) It is not necessary under this Section 12.02 for the Holders to
consent to the particular form of any proposed supplemental agreement, but it is
sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner Trustee applicable to the
Certificates of any series, the Company and the Indenture Trustee of any
supplemental agreement pursuant to the provisions of this Section 12.02, the
Company shall transmit by first-class mail a notice, setting forth in general
terms the substance of such supplemental agreement, to all Holders of
Certificates of such series, as the names and addresses of such Holders appear
on the Register. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental agreement.
(d) A supplemental indenture which changes or eliminates any covenant or
other provision of this Agreement which has expressly been included solely for
the benefit of one or more particular series of Certificates, or which modifies
the rights of the Holders of Certificates of such series with respect to such
covenant or other provision, shall be
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<PAGE>
deemed not to affect the rights under this Agreement of the Holders of
Certificates of any other series.
SECTION 12.03 COMPLIANCE WITH TRUST INDENTURE
Every amendment to this Agreement or the Certificates of any series shall
be set forth in a supplemental agreement that complies with the Trust Indenture
Act as then in effect.
SECTION 12.04 NOTATION ON OR EXCHANGE OF CERTIFICATES
The Indenture Trustee may place an appropriate notation about an amendment
or waiver on any Certificate thereafter executed. The Indenture Trustee in
exchange for such Certificates may authenticate new Certificates that reflect
the amendment or waiver.
SECTION 12.05 INDENTURE TRUSTEE PROTECTED
The Indenture Trustee need not sign any supplemental agreement that
adversely affects its rights.
SECTION 12.06 AMENDMENTS, WAIVERS, ETC. OF OTHER OPERATIVE DOCUMENTS
The respective parties to the Participation Agreement, Lease and Trust
Agreement applicable to the Certificates of any series shall not modify, amend
or supplement any of said agreements, or give any consent, waiver, authorization
or approval thereunder, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions thereof or of modifying in
any manner the rights of the respective parties thereunder, except with the
consent, if any, of the Holders of all or such portion of the principal amount
of Outstanding Certificates of such series as is provided for in the Indenture
Supplement applicable to the Certificates of such series.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 TRUST INDENTURE ACT CONTROLS
This Agreement shall be governed by the provisions of the Trust Indenture
Act of 1939, as amended, whether or not subject to the Trust Indenture Act
pursuant to the provisions thereof except as provided in Section 9.04.
SECTION 13.02 NOTICES
(a) Unless otherwise specifically provided herein, all notices required
under the terms and provisions of this Agreement shall be in English and in
writing, and any such
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<PAGE>
notice may be given by United States mail, courier service, telegram, telex,
telemessage, telecopy, telefax, cable or facsimile (confirmed by telephone or in
writing in the case of notice by telegram, telex, telemessage, telecopy,
telefax, cable or facsimile) or any other customary means of communication, and
any such notice shall be effective when delivered, or, if mailed, three days
after deposit in the United States mail with proper postage for ordinary mail
prepaid,
if to the Company, to:
Alaska Airlines, Inc.
19300 Pacific Highway South
Seattle, Washington 98188
Attention: Vice President Finance
Facsimile: (206) _______________
if to the Indenture Trustee, to:
_____________________
______________________
______________________
__________________________
_____________________________
Attention: _____________________
Facsimile: (_____) _________________
Telephone: (_____) _________________
In the case of any such notice to any Owner Trustee or Owner Participant
applicable to the Certificates of any series, such notice shall be to the
address and with respect to the telephone and facsimile numbers specified for
such Person in the Participation Agreement applicable to the Certificates of
such series.
(b) The Company, any Owner Trustee, the Indenture Trustee or any Owner
Participant by notice to the others may designate additional or different
addresses for subsequent notices or communications.
(c) Any notice or communication to Holders of the Certificates shall be
mailed by first-class mail to the addresses for such Holders shown on the
Register kept by the Registrar. Failure so to mail a notice or communication to
any Holder, or any defect in such notice or communication to any Holder, or any
defect in such notice or communication, shall not affect the sufficiency of any
notice or communication to other Holders of the Certificates.
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<PAGE>
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it shall be conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Indenture Trustee and to each Paying Agent at the same
time.
(f) Notwithstanding the foregoing, all communications or notices to the
Indenture Trustee shall be deemed to be given only when received by a
Responsible Officer of the Indenture Trustee.
SECTION 13.03 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS
Every Holder of Certificates, by receiving and holding the same, agrees
with the Company and the Indenture Trustee that neither the Company nor the
Indenture Trustee nor any agent of either of them shall be deemed to be in
violation of any existing law, or of any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Certificates in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Indenture Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Section 312 of the Trust Indenture
Act.
SECTION 13.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company or any Owner Trustee to the
Indenture Trustee to take any action under this Agreement, the Company or such
Owner Trustee, as the case may be, shall furnish to the Indenture Trustee:
(1) a Certificate of a Responsible Company Officer or a Responsible
Officer, as the case may be, stating that, in the opinion of the signer,
all conditions precedent, if any, provided for in this Agreement relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
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<PAGE>
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.06 SEPARABILITY CLAUSE
In case any provision of this Indenture or in any Certificate shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.07 NON-BUSINESS DAYS
If a payment date with respect to the Certificates of any series is not a
Business Day for such series at a place of payment, payment may be made at such
place on the next succeeding day that is such a Business Day for such series,
and no interest shall accrue for the intervening period.
SECTION 13.08 GOVERNING LAW
THIS AGREEMENT AND THE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ____________________.
SECTION 13.09 NO RECOURSE AGAINST OTHERS
No director, officer, employee or stockholder, as such, of the Company, any
Owner Trustee or any Owner Participant, as the case may be, shall have any
liability for any obligations of the Company, such Owner Trustee or such Owner
Participant, as the case may be, under this Agreement or for any claim based on,
in respect of or by reason of such obligations or their creation. Each Holder
by accepting a Certificate waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Certificates.
SECTION 13.10 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
instrument.
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<PAGE>
SECTION 13.11 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders of
the Outstanding Certificates of all series or one or more series, as the case
may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee, the Owner Trustee in question and the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or a
writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Indenture Trustee and the Company and
any agent of the Indenture Trustee or the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Indenture Trustee deems sufficient.
(c) The principal amount and serial numbers of Certificates of any series
held by any Person, and date of holding the same, shall be proved by the
Register. If the Company shall solicit from the Holders of Certificates of any
series any request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, in or pursuant to a Board Resolution,
fix in advance a record date for the determination of Holders of the
Certificates of such series entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding Section 316(c) of the Trust
Indenture Act, such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders of the Certificates of
such series generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of the Certificates
of such series of record at the close of business on such record date shall be
deemed to be Holders of the Certificates of such series for the purposes of
determining whether such Holders of the requisite proportion of Outstanding
Certificates of such series have authorized or
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<PAGE>
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Certificates
of such series shall be computed as of such record date; PROVIDED that no such
authorization, agreement or consent by the Holders of the Certificates of such
series on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Agreement not later than eleven
months after the record date.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate of any series shall bind every
future Holder of the same Certificate of such series and the Holder of every
Certificate of such series issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Indenture Trustee, any Owner Trustee, any Registrar,
any Paying Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
IN WITNESS WHEREOF, the Company and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
ALASKA AIRLINES, INC.
By: ___________________________________
Name:
Title:
_______________________________________
_______________________________________
,
, as Indenture
Trustee
By: ___________________________________
Name:
Title:
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<PAGE>
Exhibit A-1 to
Trust Indenture and
Security Agreement
FORM OF FACE OF INSTALLMENT CERTIFICATES
$____________________ No. ___________
199__ EQUIPMENT TRUST CERTlFICATE, SERIES ____
[NAME OF OWNER TRUSTEE]
NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS OWNER TRUSTEE UNDER THE
TRUST AGREEMENT (199__)
DATED AS OF _____________, 199__
ISSUED IN CONNECTION WITH AIRCRAFT N____
LEASED TO
ALASKA AIRLINES, INC.
INTEREST RATE MATURITY DATE CUSIP
- ------------- ------------- -----
------ ------, ----- -----
[NAME OF OWNER TRUSTEE], not in its individual capacity, but solely as
owner trustee (the "Owner Trustee") under that certain Trust Agreement (199__),
dated as of __________, 199__, between the Owner Trustee in its individual
capacity and the institution referred to therein as the "Owner Participant"
(herein as such Trust Agreement may be amended or supplemented from time to time
called the "Trust Agreement"), for value received, hereby promises to pay to
______________________________ or registered assigns the principal sum of
______________________________ Dollars in installments on each Installment
Payment Date as set forth on the reverse hereof with the final installment due
and payable on the Maturity Date specified above and to pay interest on the
principal amount remaining unpaid from time to time at the rate per annum
specified above from __________, 199__ or from the most recent date to which
interest has been paid or duly provided for, semiannually, on _______________
and _______________ in each year, commencing __________, 199__, until the
principal hereof is paid or made available for payment in full. All amounts
payable by the Owner Trustee hereunder and under the Trust Indenture and
Security Agreement, dated as of ________________, 199__, by and between
__________________________________________ ___________________________, as
Indenture Trustee (the "Indenture Trustee"), and Alaska Airlines, Inc. (the
"Company"), as supplemented by the Indenture Supplement thereto (199__), dated
as of __________, 199__, by and among the Owner Trustee, the Indenture Trustee
and the Company (as so supplemented and as further amended or
A-1-1
<PAGE>
supplemented from time to time referred to herein as the "Indenture," the
defined terms therein not otherwise defined herein being used herein with the
same meanings), shall be made only from the income and proceeds of the Indenture
Estate. Each Holder hereof, by its acceptance of this Certificate, agrees that
(a) it will look solely to the income and proceeds of the Indenture Estate for
payment of such amounts, to the extent available for distribution to the Holder
hereof as provided in the Indenture and (b) none of the Owner Participant, the
Owner Trustee or the Indenture Trustee is or shall be personally liable to the
Holder hereof for any amount payable hereunder or under the Indenture or, except
as provided in the Indenture in the case of the Indenture Trustee and the Owner
Trustee, for any liability under the Indenture.
The interest or Installment Payment Amount (other than that payable on the
Maturity Date hereof) so payable, and punctually paid or duly provided for, on
the applicable Interest Payment Date or Installment Payment Date, as the case
may be, will, as provided in the Indenture, be paid to the Person in whose name
this Certificate (or one or more predecessor Certificates) is registered at the
close of business on the Record Date for payment of such interest or Installment
Payment Amount, which shall be the __________ or __________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date or
Installment Payment Date, as the case may be. Any such interest or Installment
Payment Amount not so punctually paid or duly provided for shall forthwith cease
to be payable to the registered Holder hereof on the such Record Date (or to the
Person in whose name this Certificate is registered upon issuance) and may be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Installment or Defaulted Interest to be fixed
by the Indenture Trustee, notice whereof shall be given to Holders of
Certificates of this series entitled thereto not less than 10 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Certificates may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of, and Premium, if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that payment of interest and Installment Payments Amounts
(other than that payable on the Maturity Date hereof) may be made at the option
of the Indenture Trustee or the Paying Agent by check mailed to the address of
the Holder entitled thereto as such address shall appear on the Register.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-1-2
<PAGE>
This Certificate shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose unless this Certificate has been
executed on behalf of the Owner Trustee by the manual or facsimile signature of
an authorized officer of the Owner Trustee, and authenticated by the Indenture
Trustee by the manual signature of an authorized officer or signatory of the
Indenture Trustee, in each case as specified in Section 2.02 of the Indenture.
This Certificate is one of the 199__ Equipment Trust Certificates, Series
__ issued pursuant to the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be duly
executed under its corporate seal.
[Corporate Seal] [NAME OF OWNER TRUSTEE],
Attest: not in its individual
capacity but solely as
Owner Trustee
____________________________ By __________________________
[Title of Authorized Person] Title:
Issue Date:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
_________________________________
______________________________
, as
Indenture Trustee
By _____________________________
Authorized officer
or signatory
A-1-3
<PAGE>
FORM OF REVERSE OF INSTALLMENT CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates issued
and to be issued under the Indenture, designated as 199__ Equipment Trust
Certificates, Series __.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Owner Trustee, the Company, the Indenture Trustee and
the Holders of the Certificates of this series, and the terms upon which the
Certificates of this series are, and are to be, executed and delivered, as well
as for a statement of the terms and conditions of the trust created by the
Indenture, to all of which terms and conditions in the Indenture each Holder
hereof agrees by its acceptance of this Certificate.
On each Installment Payment Date, the Holder hereof will receive a payment
of principal equal to the Installment Payment Percentage for such Installment
Payment Date multiplied by the initial principal amount of this Certificate
which is set forth on the face hereof.
<TABLE>
<CAPTION>
Installment Installment
Payment Payment
Date Percentage
----------- ----------
<S> <C>
____________, _________ ___________%
____________, _________ ___________%
____________, _________ ___________%
____________, _________ ___________%
</TABLE>
As more fully provided in the Indenture and each related Indenture
Supplement, the Certificates of this series are subject to redemption, on not
less than __ nor more than _____ days' notice by mail, under the circumstances
set forth in the Indenture, at a Redemption Price equal to the unpaid principal
amount thereof plus accrued interest thereon to the Redemption Date, plus, in
certain of such circumstances, a Premium thereon.
If an Indenture Event of Default applicable to the Certificates of this
series shall occur and be continuing, the principal amount remaining unpaid of
the Certificates of this series may be declared due and payable in the manner
and with the effect provided in the Indenture. If, and only if, such an
Indenture Event of Default constitutes a Lease Event of Default under the Lease
applicable to the Certificates of this series, the Indenture Trustee may declare
such Lease to be in default, and may, to the exclusion of the Owner Trustee,
exercise one or more of the remedies of the Owner Trustee provided in such
Lease. Such
A-1-4
<PAGE>
remedies include the right to repossess and use or operate the Aircraft
applicable to the Certificates of this series, to sell or relet such Aircraft
free and clear of the Company's rights and retain the proceeds and to require
the Company to pay as liquidated damages (i) any unpaid Basic Rent plus an
amount equal to the excess of the Stipulated Loss Value of such Aircraft over
the discounted fair market rental value thereof for the remainder of the term
for such Aircraft, (ii) any unpaid Basic Rent plus the excess of the Stipulated
Loss Value of such Aircraft over the fair market sales value thereof or (iii) if
such Aircraft has been sold, any unpaid Basic Rent plus the excess of the
Stipulated Loss Value thereof over the net sales proceeds.
[The Owner Trustee or the Owner Participant may cure any default by the
Company under such Lease arising from the failure of the Company to make any
payment of Basic Rent under such Lease, provided that such failure of the
Company is not the ______ consecutive such failure, or the _______ or subsequent
cumulative such failure. The Owner Trustee or the Owner Participant may (but
need not) cure any other default by the Company in the performance of its
obligations under such Lease which can be cured by the payment of money, by
making such payment on behalf of the Company.]
The right of the Holder of this Certificate to institute action for any
remedy under the Indenture, including the enforcement of payment of any amount
due hereon, is subject to certain restrictions specified in the Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from their
respective obligations in respect of the Certificates of this series (except for
certain matters, including obligations to register the transfer or exchange of
Certificates of this series, replace stolen, lost or mutilated Certificates,
maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Indenture Estate from
the lien of the Indenture, if (a) the Owner Trustee deposits or causes to be
deposited irrevocably with the Indenture Trustee, in trust, or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, Premium, if any, and interest on the Outstanding
Certificates of this series on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the deposit and related defeasance would
not cause the Holders of the Certificates to recognize income, gain or loss for
federal income tax purposes.
As provided in the Indenture and subject to certain limitations therein set
forth, this Certificate is transferable, and upon surrender of this Certificate
for registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly
A-1-5
<PAGE>
authorized in writing, one or more new Certificates of the same series, maturity
and type and of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
The Certificates of this series are issuable only as registered
Certificates. The Certificates of this series are issuable in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Certificates of this series are
exchangeable for a like aggregate principal amount of Certificates of the same
series, maturity and type and of authorized denominations, as requested by the
Holder surrendering the same, upon presentation thereof for such purpose at the
principal corporate trust office of the Registrar, or at an office or agency
maintained for such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this Certificate,
the Owner Trustee, the Indenture Trustee, the Paying Agent, the Registrar and
the Company may deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for the purpose of receiving payment of
the principal of and interest on this Certificate and for all other purposes
whatsoever whether or not this Certificate be overdue, and neither the Owner
Trustee, the Indenture Trustee, the Paying Agent, the Registrar nor the Company
shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
_______________________________.
A-1-6
<PAGE>
Exhibit A-2 to
Trust Indenture and
Security Agreement
FORM OF FACE OF SERIAL CERTIFICATES
$____________________ No. ___________
199__ EQUIPMENT TRUST CERTIFICATE, SERIES ____
[NAME OF OWNER TRUSTEE]
NOT IN ITS INDIVIDUAL CAPACITY
BUT SOLELY AS OWNER TRUSTEE UNDER THE
TRUST AGREEMENT (199__ _______)
DATED AS OF _____________, 199__
ISSUED IN CONNECTION WITH AIRCRAFT N____
LEASED TO
ALASKA AIRLINES, INC.
INTEREST RATE MATURITY DATE CUSIP
- ------------- ------------- -----
------ ------, ----- -----
[NAME OF OWNER TRUSTEE], not in its individual capacity, but solely as
owner trustee (the "Owner Trustee") under that certain Trust Agreement (199__
_____), dated as of ________________, 199__, between the Owner Trustee in its
individual capacity and the institution referred to therein as the "Owner
Participant" (herein as such Trust Agreement may be amended or supplemented from
time to time called the "Trust Agreement"), for value received, hereby promises
to pay to ________________ or registered assigns the principal sum of
_____________ Dollars on the Maturity Date specified above and to pay interest
thereon at the rate per annum specified above from ________, 199__ or from the
most recent date to which interest has been paid or duly provided for,
semiannually, on _________ and __________ in each year, commencing ___________,
199_, until the principal hereof is paid or made available for payment. All
amounts payable by the Owner Trustee hereunder and under the Trust Indenture and
Security Agreement, dated as of ________________, 199__, by and between
____________ _____________________________, as Indenture Trustee (the "Indenture
Trustee"), and Alaska Airlines, Inc. (the "Company"), as supplemented by the
Indenture Supplement thereto (199__ _____),dated as of _________, l99_, by and
among the Owner Trustee, the Indenture Trustee and the Company (as so
supplemented and as further amended or supplemented from time to time referred
to herein as the "Indenture," the defined terms therein not otherwise defined
herein being used herein with the same meanings), shall be made only from the
income and proceeds of the Indenture Estate.
A-2-1
<PAGE>
Each Holder hereof, by its acceptance of this Certificate, agrees that (a) it
will look solely to the income and proceeds of the Indenture Estate for payment
of such amounts, to the extent available for distribution to the Holder hereof
as provided in the Indenture and (b) none of the Owner Participant, the Owner
Trustee or the Indenture Trustee is or shall be personally liable to the Holder
hereof for any amount payable hereunder or under the Indenture or, except as
provided in the Indenture in the case of the Indenture Trustee and the Owner
Trustee, for any liability under the Indenture.
The interest so payable, and punctually paid or duly provided for, on the
applicable Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the __________ or __________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder hereof on the such Record
Date (or to the Person in whose name this Certificate is registered upon
issuance) and may be paid to the Person in whose name this Certificate (or one
or more predecessor Certificates) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Indenture Trustee, notice whereof shall be given to Holders of Certificates
of this series entitled thereto not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Certificates may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of, and Premium, if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Indenture Trustee or the Paying Agent by check mailed to the address of the
Holder entitled thereto as such address shall appear on the Register.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose unless this Certificate has been
executed on behalf of the Owner Trustee by the manual or facsimile signature of
an authorized officer of the Owner Trustee, and authenticated by the Indenture
trustee by the manual signature of an authorized officer or signatory of the
Indenture Trustee, in each case as specified in Section 2.02 of the Indenture.
A-2-2
<PAGE>
This Certificate is one of the 199__ Equipment Trust Certificates,
Series ___ issued pursuant to the Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
duly executed under its corporate seal.
[Corporate Seal] [NAME OF OWNER TRUSTEE],
Attest: not in its individual
capacity but solely as
Owner Trustee
____________________________ By __________________________
[Title of Authorized Person] Title:
Issue Date:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Indenture.
_________________________________
____________________________
, as
Indenture Trustee
By _____________________________
Authorized officer
or signatory
A-2-3
<PAGE>
FORM OF REVERSE OF SERIAL CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates issued
and to be issued under the Indenture, designated as 199__ Equipment Trust
Certificates, Series ___.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Owner Trustee, the Company, the Indenture Trustee and
the Holders of the Certificates of this series, and the terms upon which the
Certificates of this series are, and are to be, executed and delivered, as well
as for a statement of the terms and conditions of the trust created by the
Indenture, to all of which terms and conditions in the Indenture each Holder
hereof agrees by its acceptance of this Certificate.
As more fully provided in the Indenture and each related Indenture
Supplement, the Certificates of this series are subject to redemption, on not
less than __ nor more than _____ days' notice by mail, under the circumstances
set forth in the Indenture, at a Redemption Price equal to the unpaid principal
amount thereof, plus accrued interest thereon to the Redemption Date, plus, in
certain of such circumstances, a Premium thereof.
If an Indenture Event of Default applicable to the Certificates of this
series shall occur and be continuing, the principal of the Certificates of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. If, and only if, such an Indenture Event of Default
constitutes a Lease Event of Default by the Company under the Lease applicable
to the Certificates of this series, the Indenture Trustee may declare such Lease
to be in default, and may, to the exclusion of the Owner Trustee, exercise one
or more of the remedies of the Owner Trustee provided in such Lease. Such
remedies include the right to repossess and use or operate the Aircraft
applicable to the Certificates of this series, to sell or relet such Aircraft
free and clear of the Company's rights and retain the proceeds and to require
the Company to pay as liquidated damages (i) any unpaid Basic Rent plus an
amount equal to the excess of the Stipulated Loss Value of such Aircraft over
the discounted fair market rental value thereof for the remainder of the term
for such Aircraft, (ii) any unpaid Basic Rent plus the excess of the Stipulated
Loss Value of such Aircraft over the fair market sales value thereof or (iii) if
such Aircraft has been sold, any unpaid Basic Rent plus the excess of the
Stipulated Loss Value thereof over the net sales proceeds.
[The Owner Trustee or the Owner Participant may cure any default by the
Company under such Lease arising from the failure of the Company to make any
payment of Basic Rent under such Lease, provided that such failure of the
Company is not the __________ consecutive such failure, or the __________ or
subsequent cumulative such
A-2-4
<PAGE>
failure. The Owner Trustee or the Owner Participant may (but need not) cure any
other default by the Company in the performance of its obligations under such
Lease which can be cured by the payment of money, by making such payment on
behalf of the Company.]
The right of the Holder of this Certificate to institute action for any
remedy under the Indenture, including the enforcement of payment of any amount
due hereon, is subject to certain restrictions specified in the Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from their
respective obligations in respect of the Certificates of this series (except for
certain matters, including obligations to register the transfer or exchange of
Certificates of this series, replace stolen lost or mutilated Certificates,
maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Indenture Estate from
the lien of the Indenture, if (a) the Owner Trustee deposits or causes to be
deposited irrevocably with the Indenture Trustee, in trust, money or U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay principal of, Premium, if any, and interest on the Outstanding
Certificates of this series on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the deposit and related defeasance would
not cause the Holders of the Certificates to recognize income, gain or loss for
federal income tax purposes.
As provided in the Indenture and subject to certain limitations therein set
forth, this Certificate is transferable, and upon surrender of this Certificate
for registration of transfer at the principal corporate trust office of the
Registrar, or at office or agency maintained for such purpose, dully endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly authorized in
writing, one or more new Certificates of the same series, maturity and type and
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates of this series are issuable only as registered
Certificates. The Certificates of this series are issuable in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Certificates of this series are
exchangeable for a like aggregate principal amount of Certificates of the same
series, maturity and type and of authorized denominations, as requested by the
Holder surrendering the same, upon presentation thereof for such purpose at the
principal corporate trust office of the Registrar, or at an office or agency
maintained for such purpose.
A-2-5
<PAGE>
No service charge shall be made for any such registration of transfer or
exchange, but the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this Certificate,
the Owner Trustee, the Indenture Trustee, the Paying Agent, the Registrar and
the Company may deem and treat the person in whose name this Certificate is
registered as the absolute owner hereof for the purpose of receiving payment of
the principal of and interest on this Certificate and for all other purposes
whatsoever whether or not this Certificate be overdue, and neither the Owner
Trustee, the Indenture Trustee, the Paying Agent, the Registrar nor the Company
shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
________________ ___________________.
A-2-6
<PAGE>
EXHIBIT 4(c)(3)
===============================================================================
[OWNED AIRCRAFT]
TRUST INDENTURE
AND SECURITY AGREEMENT
DATED AS OF _________________, 199__
BETWEEN
ALASKA AIRLINES, INC.
AND
___________________________________________________________,
AS INDENTURE TRUSTEE
===============================================================================
<PAGE>
Reconciliation and tie between the Trust Indenture and Security Agreement, dated
as of February 1, 1992, and the Trust Indenture Act of 1939. This
reconciliation section does not constitute part of the Trust Indenture and
Security Agreement.
TRUST INDENTURE
TRUST INDENTURE ACT AND SECURITY
OF 1939 SECTION AGREEMENT SECTION
------------------------------ -----------------
310 (a)(1). . . . . . . . . . . . . . . 9.10(a)
(a)(2). . . . . . . . . . . . . . . 9.10(a)
312 (a) . . . . . . . . . . . . . . . . 2.06(a)
(c) . . . . . . . . . . . . . . . . 13.03
313 (a) . . . . . . . . . . . . . . . . 9.06
314 (a) . . . . . . . . . . . . . . . . 7.02(a)-(d)
(b) . . . . . . . . . . . . . . . . 7.02(e)
(c)(1). . . . . . . . . . . . . . . 13.04
(c)(2). . . . . . . . . . . . . . . 13.04
(d)(1). . . . . . . . . . . . . . . 5.01(c)
. . . . . . . . . . . . . . . . . . 9.04(b)
(d)(2). . . . . . . . . . . . . . . 9.04(b)
(d)(3). . . . . . . . . . . . . . . 5.01(c)
(e) . . . . . . . . . . . . . . . . 13.05
315 (b) . . . . . . . . . . . . . . . . 9.05
(e) . . . . . . . . . . . . . . . . 8.10
316 (a) (last sentence) . . . . . . . . 1.01(b)
(a)(1)(A) . . . . . . . . . . . . . 8.06
(a)(1)(B) . . . . . . . . . . . . . 8.05
(b) . . . . . . . . . . . . . . . . 8.08
(c) . . . . . . . . . . . . . . . . 13.11(c)
317 (a)(1). . . . . . . . . . . . . . . 8.03(f)
(a)(2). . . . . . . . . . . . . . . 8.09
(b) . . . . . . . . . . . . . . . . 2.09(c)
318 (a) . . . . . . . . . . . . . . . . 13.01
<PAGE>
CONTENTS
Trust Indenture Actof 1939 Section . . . . . . . . . . . . . . . . . . 1
Trust Indenture and Security Agreement Section . . . . . . . . . . . . 1
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 THE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.01 Amount Unlimited; Issuable in Series. . . . . . . . 11
Section 2.02 Execution, Authentication, Delivery and Dating. . . 13
Section 2.03 Temporary Certificates. . . . . . . . . . . . . . . 14
Section 2.04 Registrar and Paying Agent. . . . . . . . . . . . . 14
Section 2.05 Transfer and Exchange . . . . . . . . . . . . . . . 14
Section 2.06 Holder Lists: Ownership of Certificates. . . . . . 15
Section 2.07 Mutilated, Destroyed, Lost or Stolen Certificates . 16
Section 2.08 Cancellation. . . . . . . . . . . . . . . . . . . . 16
Section 2.09 Payment on Certificates: Defaulted Amounts . . . . 16
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN
INDENTURE ESTATE. . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.01 Application of Proceeds of Initial Issuance
of Certificates . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.02 Payment in Case of Redemption of Certificates . . . 23
Section 3.03 Application of Payments When No Indenture
Event of Default Is Continuing. . . . . . . . . . . . . . . . 23
Section 3.04 Application of Certain Payments in Case of
Requisition or Event of Loss. . . . . . . . . . . . . . . . . 23
Section 3.05 Payments During Continuance of Indenture
Event of Default. . . . . . . . . . . . . . . . . . . . . . . 24
-i-
<PAGE>
Section 3.06 Payments for Which No Application Is Otherwise
Provided. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.07 Credit in Respect of Certificates Surrendered
for Cancellation. . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 4 COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . 26
Section 4.01 Registration, Maintenance and Operation of
Aircraft; Possession and Leases; Insignia . . . . . . . . . . 26
Section 4.02 Replacement and Pooling of Parts; Alterations,
Modifications and Additions. . . . . . . . . . . . . . . . . 31
Section 4.03 Insurance . . . . . . . . . . . . . . . . . . . . . 33
Section 4.04 Loss, Destruction, Requisition, Etc.. . . . . . . . 38
Section 4.05 Inspection. . . . . . . . . . . . . . . . . . . . . 42
Section 4.06 Liens . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.07 Certified Air Carrier . . . . . . . . . . . . . . . 43
ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED
IN INDENTURE ESTATE . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.01 Disposition, Substitution and Release of Property
Included in Indenture Estate. . . . . . . . . . . . . . . . . . . 43
ARTICLE 6 REDEMPTION OF CERTIFICATES. . . . . . . . . . . . . . . . . 45
Section 6.01 Redemption of Certificates in the Event of
Nondelivery of Aircraft of Upon Event of Loss . . . . . . . . 45
Section 6.02 Notice of Redemption to Holders . . . . . . . . . . 45
Section 6.03 Deposit of Redemption Price . . . . . . . . . . . . 46
Section 6.04 Certificates Payable on Redemption Date . . . . . . 46
ARTICLE 7 CERTAIN COVENANTS . . . . . . . . . . . . . . . . . . . . . 46
Section 7.01 Repayment of Monies for Certificate Payments
Held by Indenture Trustee . . . . . . . . . . . . . . . . . . 46
Section 7.02 Reports by the Company. . . . . . . . . . . . . . . 47
-ii-
<PAGE>
Section 7.03 Consolidation, Merger, Etc. . . . . . . . . . . . . 48
Section 7.04 Change in Registration. . . . . . . . . . . . . . . 49
ARTICLE 8 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 50
Section 8.01 Indenture Events of Default . . . . . . . . . . . . 50
Section 8.02 Acceleration; Rescission and Annulment. . . . . . . 51
Section 8.03 Other Remedies Available to Indenture Trustee . . . 52
Section 8.04 Waiver of the Company . . . . . . . . . . . . . . . 56
Section 8.05 Waiver of Existing Defaults . . . . . . . . . . . . 56
Section 8.06 Control by Majority . . . . . . . . . . . . . . . . 57
Section 8.07 Limitation on Suits by Holders. . . . . . . . . . . 57
Section 8.08 Rights of Holders to Receive Payment. . . . . . . . 57
Section 8.09 Indenture Trustee May File Proofs of Claim. . . . . 58
Section 8.10 Undertaking for Costs . . . . . . . . . . . . . . . 58
ARTICLE 9 INDENTURE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . 58
Section 9.01 Duties of Indenture Trustee . . . . . . . . . . . . 58
Section 9.02 Rights of Indenture Trustee . . . . . . . . . . . . 59
Section 9.03 Individual Rights of Indenture Trustee. . . . . . . 59
Section 9.04 Funds May Be Held by Indenture Trustee or
Paying Agent; Investments . . . . . . . . . . . . . . . . . . 60
Section 9.05 Notice of Defaults. . . . . . . . . . . . . . . . . 61
Section 9.06 Reports by Indenture Trustee to Holders . . . . . . 62
Section 9.07 Compensation and Indemnity. . . . . . . . . . . . . 62
Section 9.08 Replacement of Indenture Trustee. . . . . . . . . . 63
Section 9.09 Successor Indenture Trustee; Agents by
Merger, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.10 Eligibility; Disqualification . . . . . . . . . . . 65
-iii-
<PAGE>
Section 9.11 Trustee's Liens . . . . . . . . . . . . . . . . . . 65
Section 9.12 Withholding Taxes; Information. . . . . . . . . . . 66
ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE; TERMINATION
OF OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 10.01 Satisfaction and Discharge of Agreement;
Defeasance; Termination of Obligations. . . . . . . . . . . . 66
Section 10.02 Survival of Certain Obligations. . . . . . . . . . 68
Section 10.03 Monies to Be Held in Trust . . . . . . . . . . . . 68
Section 10.04 Monies to Be Returned to the Company . . . . . . . 68
ARTICLE 11 ACTIONS TO BE TAKEN UPON TERMINATION OF INDENTURE. . . . . 68
Section 11.01 Actions to Be Taken Upon Termination of Indenture. 68
ARTICLE 12 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . 69
Section 12.01 Amendments to This Indenture and Indenture
Supplement Without Consent of Holders . . . . . . . . . . . . 69
Section 12.02 Amendments to This Indenture and Indenture
Supplement With Consent of Holders. . . . . . . . . . . . . . 71
Section 12.03 Compliance With Trust Indenture Act. . . . . . . . 72
Section 12.04 Notation on or Exchange of Certificates. . . . . . 72
Section 12.05 Indenture Trustee Protected. . . . . . . . . . . . 72
ARTICLE 13 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 72
Section 13.01 Trust Indenture Act Controls . . . . . . . . . . . 72
Section 13.02 Notices. . . . . . . . . . . . . . . . . . . . . . 72
Section 13.03 Disclosure of Names and Addresses of Holders . . . 73
Section 13.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 13.05 Statements Required in Certificate or Opinion. . . 74
-iv-
<PAGE>
Section 13.06 Separability Clause. . . . . . . . . . . . . . . . 74
Section 13.07 Non-Business Days. . . . . . . . . . . . . . . . . 75
Section 13.08 Governing Law. . . . . . . . . . . . . . . . . . . 75
Section 13.09 No Recourse Against Others . . . . . . . . . . . . 75
Section 13.10 Execution in Counterparts. . . . . . . . . . . . . 75
Section 13.11 Acts of Holders. . . . . . . . . . . . . . . . . . 75
Section 13.12 Initial Transfer of a Certificate. . . . . . . . . 76
Section 13.13 Bankruptcy . . . . . . . . . . . . . . . . . . . . 77
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Exhibit A-1 Form of Installment Certificate
Exhibit A-2 Form of Serial Certificate
Schedule I Schedule of Countries Authorized for Aircraft Registration
Schedule II Schedule of Countries Authorized for Domicile of Permitted
Lessees
-v-
<PAGE>
TRUST INDENTURE AND SECURITY AGREEMENT
This TRUST INDENTURE AND SECURITY AGREEMENT, dated as of
_____________________, 199___, between ALASKA AIRLINES, INC., an Alaska
corporation, and ______________________________________________,
as Indenture Trustee hereunder.
WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its equipment trust
certificates (hereinafter called the "Certificates"), unlimited as to principal
amount, to be issued to finance the acquisition of aircraft in one or more
series, to be secured by a security interest in such aircraft, to bear such
rates of interest, to mature at such times and to have such other provisions as
shall from time to time be fixed as hereinafter provided;
WHEREAS, this Agreement is subject to the provisions of the Trust Indenture
Act of 1939, as amended, that are required to be a part of this Agreement and
shall, to the extent applicable, be governed by such provisions; and
WHEREAS, all things necessary to make this Agreement a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH, for and in consideration of the
premises and the purchase of the Certificates by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Certificates or of any series thereof as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINITIONS
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article 1 have the meanings assigned to
them in this Article 1, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein; except that the "obligor" within the meaning of the
Trust Indenture Act shall be the Company for all purposes of this Agreement;
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(5) all references in this Indenture to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibits of this Indenture; and
(6) with respect to the Certificates of any series or with respect to
an Operative Document related to such series of Certificates, "this Agreement"
means this Indenture as supplemented by the Indenture Supplement applicable to
such series of Certificates.
(b) For all purposes of this Agreement, the following capitalized terms
have the following respective meanings:
"ACCEPTABLE ALTERNATE ENGINE," with respect to the Certificates of any
series, shall have the meaning specified therefor in the Indenture Supplement
applicable to the Certificates of such series.
"ADDITIONAL INSUREDS," with respect to any Aircraft, means the Indenture
Trustee, the Holders and in the case of insurance obtained by the Lessee of the
Aircraft, the Company in its capacity as lessor under any Lease of the Aircraft.
"AFFILIATE," with respect to a specified Person, means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGENT," with respect to the Certificates of any series, means any Paying
Agent or Registrar applicable to the Certificates of such series.
"AIRCRAFT," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Indenture Supplement applicable to the
Certificates of such series.
"AIRFRAME," with respect to the Certificates of any series, shall have the
meaning specified therefor in the Indenture Supplement applicable to the
Certificates of such series.
"APPRAISER" means a Person engaged in the business of making appraisals
and, in the case of the Aircraft, familiar with aviation equipment.
"BANKRUPTCY CODE" means the United States Bankruptcy Code of 1978, as
amended.
-2-
<PAGE>
"BOARD OF DIRECTORS" means the board of directors of the Company or the
executive committee or any other committee of such board duly authorized to act
on behalf of the Company with respect to the financing of aircraft, including
the borrowing of money in respect thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Indenture Trustee.
"BUSINESS DAY," with respect to the Certificates of any series, means any
day other than a Saturday or Sunday or a day on which commercial banks are
required or authorized to close in Chicago, Illinois, New York, New York, or the
city and state in which the principal place of business of the Indenture Trustee
is located or in which the Indenture Trustee receives and disburses funds.
"CERTIFICATE" or "CERTIFICATES" means any Certificate or Certificates
issued under this Agreement.
"COMPANY" means Alaska Airlines, Inc., an Alaska corporation, and, subject
to the provisions hereof, its permitted successors and assigns, or any other
obligor with respect to the Certificates (within the meaning of the Trust
Indenture Act).
"COMPANY REQUEST" means a written request of the Company executed on its
behalf by a Responsible Company Officer.
"CO-REGISTRAR" has the meaning specified therefor in Section 2.04.
"DEBT" means any liability for borrowed money, or any liability for the
payment of money in connection with any letter of credit transaction, or other
liabilities evidenced or to be evidenced by bonds, debentures, notes or other
similar instruments.
"DEFAULTED INSTALLMENT" has the meaning specified therefor in Section 2.09.
"DEFAULTED INTEREST" has the meaning specified therefor in Section 2.09.
"DELIVERY DATE," with respect to any Aircraft, means the date the Aircraft
is subjected to the Lien of this Agreement, which date shall be the date the
Aircraft is sold to the Company by the Manufacturer.
"ENGINE," with respect to any Aircraft, means and includes: (i) each of
the engines initially installed on the Airframe as described in the Indenture
Supplement applicable to the Certificates of such series, whether or not from
time to time thereafter installed on the Airframe or installed on any airframe;
(ii) any engine which may at any time be substituted by the Company pursuant to
Section 4.04 of this Agreement in replacement for an Engine which is the subject
of an Event of Loss; and (iii) any and all appliances, parts, instruments,
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appurtenances, accessories or other equipment of whatever nature, so long as the
same shall be incorporated or installed in or attached to any Engine or so long
as the same shall be removed from such Engine and a replacement therefor has not
yet been substituted pursuant to Section 4.02 of this Agreement. "ENGINES"
shall mean collectively all Engines from time to time subject to the Lien of
this Agreement.
"EVENT OF LOSS," with respect to the Certificates of any series, means any
of the following events with respect to the Aircraft, Airframe or any Engine:
(i) the loss of such property or of the use thereof due to the destruction of or
damage to such property which renders repair uneconomic or which renders such
property permanently unfit for normal use by the Company for any reason
whatsoever; (ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total loss or a
constructive or compromised total loss; (iii) the theft or disappearance of such
property or the confiscation, condemnation, or seizure of, or requisition of
title to, or use of, such property by any governmental or purported governmental
authority (other than a requisition for use by the United States Government or
by any other government of registry of the Aircraft or any agency or
instrumentality of any thereof), which, in the case of any event referred to in
this clause (iii), shall have resulted in the loss of possession of such
property by the Company for a period in excess of 180 consecutive days; and
(iv) as a result of any law, rule, regulation, order or other action by the FAA
or other governmental body of the government of registry of the Aircraft having
jurisdiction, use of such property in the normal course of the business of air
transportation shall have been prohibited for a period of 180 consecutive days,
unless the Company, prior to the expiration of such 180-day period, shall have
undertaken and shall be diligently carrying forward all steps which are
necessary or desirable to permit the normal use of such property by the Company,
but in any event if such use shall have been prohibited for a period of two
consecutive years, PROVIDED that no Event of Loss shall be deemed to have
occurred if such prohibition has been applicable to the Company's entire fleet
of aircraft of the same type and model as the Aircraft registered in the same
jurisdiction as the Aircraft and the Company, prior to the expiration of such
two-year period, shall have conformed at least one such aircraft in its fleet to
the requirements of any such law, rule, regulation, order or other action and
commended regular commercial use of the same in such jurisdiction and shall be
diligently carrying forward, in a manner which does not discriminate against the
Aircraft in so conforming the Aircraft, all steps which are necessary or
desirable to permit the normal use of the Aircraft by the Company. An Event of
Loss with respect to the Aircraft shall be deemed to have occurred if an Event
of Loss occurs with respect to the Airframe.
"FAA BILL OF SALE," with respect to any Aircraft, means a bill of sale on
AC Form 8050-2 or such other form as may then be approved by the FAA on the
Delivery Date for such Aircraft executed by the Manufacturer in favor of the
Company.
"FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958, as amended,
or any similar legislation of the United States enacted to supersede, amend or
supplement such Act.
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"FEDERAL AVIATION ADMINISTRATION" or "FAA" mean the United States Federal
Aviation Administration or any successor thereto administering the functions of
the Federal Aviation Administration under the Federal Aviation Act.
"GUARANTEE" means Alaska Air Group, Inc.'s unconditional guarantee of the
Certificates of one or more series as more fully described in an Indenture
Supplement.
"HOLDER," with respect to the Certificates of any series, means a person in
whose name such a Certificate is registered on the Register for such series.
"INDENTURE" means this Trust Indenture and Security Agreement, as the same
may from time to time be supplemented, amended or modified with effect for all
series of Certificates as are or may be issued pursuant to Article 2.
"INDENTURE DEFAULT," with respect to the Certificates of any series, means
any event which is, or after notice or passage of time, or both, would be, an
Indenture Event of Default applicable to the Certificates of such series.
"INDENTURE ESTATE," with respect to the Certificates of any series, shall
have the meaning specified therefor in the Indenture Supplement entered into in
respect of the Certificates of such series pursuant to Section 2.01.
"INDENTURE EVENT OF DEFAULT," with respect to the Certificates of any
series, shall have the meaning specified therefor in Article 8.
"INDENTURE SUPPLEMENT" means a supplement to this Indenture entered into by
the Company and the Indenture Trustee with respect to the Certificates of a
particular series, as the same may be amended and restated from time to time.
"INDENTURE TRUSTEE" means ________________________________________________
_____________________________________ and each other Person which may from time
to time be acting as Indenture Trustee with respect to the Certificates of any
series in accordance with the provisions of this Agreement.
"INDEPENDENT," when used with respect to an engineer, Appraiser or other
expert, means an engineer, Appraiser or other expert who (i) is in fact
independent, (ii) does not have any direct financial interest or any material
indirect financial interest in the Company or any Affiliate of the Company, and
(iii) is not connected with the Company or any Affiliate of the Company as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"INSTALLMENT CERTIFICATE" means a Certificate substantially in the form of
Exhibit A-1.
"INSTALLMENT PAYMENT AMOUNT," with respect to each Installment Certificate
of any series, means the amount of the installment payment of principal due and
payable on each Installment Payment Date applicable to such Installment
Certificate, which amount shall be
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equal to the product of the original principal amount of such Certificate and
the Installment Payment Percentage for such Installment Payment Date.
"INSTALLMENT PAYMENT DATE," with respect to Installment Certificates of any
series, means each date on which an installment payment of principal is due and
payable on such Installment Certificates, as set forth in the Indenture
Supplement applicable to the Certificates of such series.
"INSTALLMENT PAYMENT PERCENTAGE," with respect to each Installment Payment
Date applicable to the Installment Certificates of any series, means the
percentage set forth opposite such Installment Payment Date in the Indenture
Supplement applicable to the Certificates of such series.
"INTEREST PAYMENT DATE," with respect to the Certificates of any series,
shall have the meaning specified therefor in the Indenture Supplement applicable
to the Certificates of such series.
"LEASE," with respect to any Aircraft, Airframe or any Engine, means any
lease thereof permitted by Section 4.01.
"LESSEE" means any Person for so long, but only so long, as such person is
in possession of the Airframe or any Engine pursuant to Section 4.01.
"LIEN" means any mortgage, pledge, lien, charge, encumbrance, lease,
exercise of rights, security interest or claim.
"LOSS PAYMENT DATE," with respect to the Certificates of any series, has
the meaning specified in Section 4.04(a).
"MANUFACTURER," with respect to the Certificates of any series, shall have
the meaning specified in the Indenture Supplement applicable to the Certificates
of such series.
"MATURITY DATE" means (a) in the case of a Serial Certificate, the date on
which the principal amount thereof is stated to mature and (b) in the case of an
Installment Certificate, the stated final maturity date thereof.
"OFFICERS' CERTIFICATE" means a certificate signed in the case of the
Company, by (i) the Chairman of the Board of Directors, the President, any
Executive Vice President any Senior Vice President or any Vice President of
Finance of the Company, signing alone, or (ii) any Vice President of the Company
signing together with the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company.
"OPERATIVE DOCUMENTS," with respect to the Certificates of any series,
means this Agreement, the Purchase Agreement for the Aircraft and the
Certificates of such series.
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"OPINION OF COUNSEL" means a written opinion of legal counsel for the
Company, who may be (i) a senior attorney employed by the Company, (ii) Perkins
Coie, or (iii) such other counsel designated by the Company and who shall be
reasonably satisfactory to the Indenture Trustee.
"OUTSTANDING," when used with respect to Certificates of any series, means,
as of the date of determination, all Certificates of such series theretofore
executed and delivered under this Agreement other than:
(i) Certificates of such series theretofore canceled by the Indenture
Trustee or delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 or otherwise;
(ii) Certificates of such series for whose payment or redemption,
money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Holders of the Certificates of such
series; PROVIDED that, if the Certificates of such series are to be
redeemed, notice of such redemption has been duly given pursuant to this
Agreement or provision therefor satisfactory to the Indenture Trustee has
been made; and
(iii) Certificates of such series in exchange for or in lieu of
which other Certificates of such series have been executed and delivered
pursuant to this Agreement;
PROVIDED, HOWEVER, that, in determining whether the Holders of the requisite
aggregate principal amount of Outstanding Certificates of any series have given
any request, demand, authorization, declaration, direction, notice, consent or
waiver hereunder, Certificates of such series owned by or pledged to the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, declaration,
direction, notice, consent or waiver, only Certificates which the Indenture
Trustee knows to be so owned or so pledged shall be disregarded. Certificates
of any series owned by the Company which have been pledged in good faith may be
regarded as Outstanding if the Company establishes to the satisfaction of the
Indenture Trustee the pledgee's right to act with respect to such Certificates
and that the pledgee is not the Company or any Affiliate thereof.
"PARTS," with respect to the Certificates of any series, means all
appliances, parts, instruments, appurtenances, accessories, furnishings and
other equipment of whatever nature other than complete Engines or engines, which
are from time to time incorporated or installed in or attached to the Airframe
or any Engine or which have been removed therefrom, but where title to which
remains vested in the Company in accordance with Section 4.02 hereof.
"PAYING AGENT," with respect to the Certificates of any series, means any
person acting as Paying Agent for such series pursuant to Section 2.04.
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"PERMITTED INVESTMENT" means each of (i) obligations of, or guaranteed by,
the United States Government or agencies thereof, (ii) open market commercial
paper of any corporation incorporated under the laws of the United States of
America or any State thereof rated at least P-2 or its equivalent by Moody's
Investors Service, Inc. or at least A-2 or its equivalent by Standard & Poor's
Corporation, (iii) certificates of deposit issued by commercial banks organized
under the laws of the United States or of any political subdivision thereof
having a combined capital and surplus in excess of $500,000,000 which banks or
their holding companies have a rating of A or its equivalent by Moody's
Investors Service, Inc. or Standard & Poor's Corporation; PROVIDED, HOWEVER,
that the aggregate amount at any one time so invested in certificates of deposit
issued by any one bank shall not exceed 5% of such bank's capital and surplus,
(iv) U.S. dollar denominated offshore certificates of deposit issued by, or
offshore time deposits with, any commercial bank described in (iii) or any
subsidiary thereof, and (v) repurchase agreements with any financial institution
having combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (i) through (iv) as collateral.
"PERMITTED LESSEE" shall mean any air carrier domiciled in a country listed
in Schedule II hereto as in effect from time to time.
"PERMITTED LIEN," with respect to the Certificates of any series, means
(a) the rights of the Indenture Trustee as specifically provided herein and the
applicable Indenture Supplement, (b) the rights of other Persons under
agreements or arrangements, to the extent expressly permitted by the terms of
this Agreement, and (c) the following:
(i) Liens for Taxes of the Company either not yet due or being
contested in good faith by appropriate proceedings, so long as such
proceedings do not involve any material risk of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein,
(ii) materialmen's, mechanics', workmen's, repairmen's, employees' or
other like Liens arising in the ordinary course of the Company's business
securing obligations that are not overdue for a period of more than 45 days
or are being contested in good faith by appropriate proceedings so long as
during such 45-day period there is not, or such proceedings do not involve,
any material risk of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein,
(iii) Liens arising out of any judgment or award against the
Company, unless the judgment secured shall not, within 60 days after the
entry thereof, have been discharged, vacated, reversed or execution thereof
stayed pending appeal or shall not have been discharged, vacated or
reversed within 60 days after the expiration of such stay, and
(iv) any other Lien with respect to which the Company (or any Lessee)
shall have provided a bond or other security in an amount and under terms
reasonably satisfactory to the Indenture Trustee.
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"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREMIUM," with respect to the Certificates of any series, has the meaning
specified therefor in the Indenture Supplement applicable to the Certificates of
such series.
"PURCHASE AGREEMENT," with respect to the Certificates of any series, means
the agreement between the Company and the Manufacturer relating to the purchase
by the Company of the Aircraft, as originally executed and as thereafter
modified, amended or supplemented in accordance with the terms thereof, but only
insofar as the foregoing relates to the Aircraft.
"QUALIFIED INSURANCE BROKER" means Rollins, Burdick, Hunter of Illinois,
Inc. or such other insurance broker of nationally recognized standing designated
by the Company.
"RECORD DATE," with respect to the Certificates of any series, shall have
the meaning specified therefor in the Indenture Supplement entered into in
respect of the Certificates of such series pursuant to Section 2.01.
"REDEMPTION DATE," with respect to any redemption of the Certificates of
any series, means the date of such redemption as determined pursuant to
Section 6.01 or pursuant to the provisions of the Indenture Supplement with
respect to such series of Certificates.
"REDEMPTION PRICE," with respect to any redemption of the Certificates of
any series, means the price at which such Certificates are to be redeemed,
determined as of the applicable Redemption Date pursuant to Section 6.01 or
pursuant to the provisions of the Indenture Supplement with respect to such
series of Certificates.
"REGISTER," with respect to the Certificates of any series, has the meaning
specified therefor in Section 2.04.
"REGISTRAR," with respect to the Certificates of any series, means any
person acting as Registrar hereunder pursuant to Section 2.04.
"RESPONSIBLE COMPANY OFFICER" means the Chairman of the Board, the
President, any Executive Vice President any Senior Vice President, the Chief
Financial Officer, any Vice President or the Treasurer of the Company or, with
respect to the Certificates of any series, any other management employee of the
Company (a) working under the direct supervision of such Chairman of the Board,
President, Senior Vice President, Chief Financial Officer, Vice President or
Treasurer and (b) whose responsibilities include the administration of the
transactions and agreements applicable to the Certificates of such series.
"RESPONSIBLE OFFICER" shall mean any officer in the Corporate Trust
Department of the Indenture Trustee or any other officer customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any
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corporate trust matter is referred because of their knowledge of and familiarity
with a particular subject.
"SEC" means the Securities and Exchange Commission.
"SERIAL CERTIFICATE" means a Certificate substantially in the form of
Exhibit A-2.
"TAXES" means any and all fees (including, without limitation, license,
documentation and registration fees), taxes (including, without limitation,
income, gross receipts, sales, rental, use, turnover, value added, property
(tangible and intangible), excise and stamp taxes), licenses, levies, imposts,
duties, recording charges or fees, charges, assessments or withholdings of any
nature whatsoever, together with any assessments, penalties, fines, additions to
tax and interest thereof (each, individually, a "TAX").
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
"TRUSTEE'S LIENS" has the meaning specified therefor in Section 9.11.
"U.S. AIR CARRIER" means any United States air carrier as to which there is
in force a certificate issued pursuant to Section 401 of the Federal Aviation
Act, and as to which there is in force an air carrier operating certificate
issued pursuant to Part 121 of the regulations under such Act, or which may
operate as an air carrier by certification or otherwise under any successor or
substitute provisions therefor.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are direct obligations
of the United States of America or agencies or instrumentalities thereof for the
payment of which the full faith and credit of the United States of America is
pledged which are not callable or redeemable, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt so long as such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
"WARRANTY BILL OF SALE," with respect to any Aircraft, means the full
warranty bill of sale as to such Aircraft delivered to the Company from the
Manufacturer on or before the Delivery Date.
"WET LEASE," with respect to any Aircraft, means any arrangement whereby
the Company agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or engines
(i) shall be operated solely by regular employees of the Company possessing all
current certificates and licenses that would be required under the Federal
Aviation Act (or if the Aircraft is not registered in the United States, all
certificates and licenses required by the laws of the jurisdiction of registry)
for the
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performance by such employees of similar functions within the United States of
America (or such jurisdiction of registry) (it is understood that cabin
attendants need not be employees of the Company) and (ii) shall be maintained by
the Company in accordance with its normal maintenance practices as required
hereby.
ARTICLE 2
THE CERTIFICATES
SECTION 2.01 AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Certificates which may be authenticated
and delivered under this Indenture is unlimited.
The Certificates may be issued in one or more series. The following
matters shall be established with respect to the Certificates of each series
issued hereunder by an Indenture Supplement executed and delivered by and
between the Company and the Indenture Trustee:
(1) the information identifying the Aircraft and Engines in which a
security interest is being granted to secure payment of the Certificates of such
series;
(2) the title of the Certificates of such series (which shall distinguish
the Certificates of such series from all other series of Certificates), and
whether the Certificates of such series are one or both of Serial Certificates
or Installment Certificates;
(3) any limit upon the aggregate principal amount of the Certificates of
the series that may be authenticated and delivered (except for Certificates
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Certificates of such series pursuant to Section 2.03,
205, 207 or 12.04);
(4) if the Certificates of such series are Serial Certificates, the dates
on which the principal of the Certificates of such series shall be payable;
(5) if the Certificates of such series are Installment Certificates, the
Installment Payment Percentages and Installment Payment Dates;
(6) the rate or rates at which the Certificates of such series shall bear
or accrue interest or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest shall be payable and the Record Date, if any, for
the interest payable on such Certificates on each Interest Payment Date or the
method by which such date or dates shall be determined, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve 30-
day months;
(7) the period or periods within which, the price or prices, including the
Premium, if any, at which, the timing of notice and other terms and conditions
upon which Certificates of
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the series may be redeemed, in whole or in part, at the option of the Company,
if the Company is to have the option;
(8) the obligation, if any, of the Company to redeem Certificates of the
series, and the period or periods within which or the date or dates on which,
the price or prices at which, the timing of notice and other terms and
conditions upon which Certificates of such series shall be redeemed pursuant to
such obligation;
(9) if other than the Indenture Trustee, the identity of each Registrar
and/or Paying Agent with respect to the Certificates of such series;
(10) any deletions from, modifications of or additions to the Indenture
Events of Default or covenants of the Company, whether or not such Indenture
Events of Default or covenants are consistent with the Indenture Events of
Default or covenants set forth herein;
(11) whether any Certificates of such series are to be issuable initially
in temporary global form and whether any Certificates of such series are to be
issuable in permanent global form and, if so, whether beneficial owners of
interests in any such permanent global Certificates may exchange such interests
for Certificates of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided in Section 2.05, and, if Certificates of such
series are to be issuable as a global Certificate, the identity of the
depository for such series;
(12) any provisions in modification of, in addition to or in lieu of any of
the provisions of Article 10;
(13) if the Certificates of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Certificate of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(14) any legends that are to be added to the Certificates of such series;
(15) provisions with respect to the terms for which the definitions set
forth in Article 1 hereof permit or require further specification in the
Indenture Supplement and modification of the schedules hereof;
(16) whether Guarantees will be endorsed on the Certificates of the series
and, if so, the terms of the Guarantees; and
(17) any other terms, conditions, rights and preferences (or limitations on
such rights or preferences) relating to the Certificates of such series (which
terms shall not be inconsistent with the requirements of the Trust Indenture Act
or the provisions of this Indenture).
If any of the terms of the Certificates of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s)
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shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Indenture Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the Certificates of such series.
SECTION 2.02 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) At any time and from time to time, the Company may deliver
Certificates of a series, executed by the Company for authentication, together
with a Company Request for the authentication and delivery of such Certificates,
and the Indenture Trustee in accordance with the Company Request shall
authenticate and deliver such Certificates. In authenticating such
Certificates, and accepting the additional responsibilities under this Agreement
in relation to such Certificates, the Indenture Trustee shall be entitled to
receive, and (subject to Section 315(a) through 315(d) of the Trust Indenture
Act) shall be fully protected in relying upon, an Opinion of Counsel of the
Company stating,
(i) that the form or forms of such Certificates have been established
in conformity with the provisions of this Indenture; and
(ii) that the terms of such Certificates have been established in
conformity with the provisions of this Indenture.
The Indenture Trustee shall not be required to authenticate and deliver any
such Certificates if the issue of such Certificates pursuant to this Agreement
will affect the Indenture Trustee's own rights, duties or immunities under the
Certificates and this Agreement or otherwise in a manner which is not reasonably
acceptable to the Indenture Trustee.
(b) Certificates of each series shall be executed on behalf of the Company
by the manual or facsimile signature of its President, Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President, Treasurer,
Secretary, Assistant Secretary or Assistant Treasurer.
(c) If any officer of the Company executing any Certificate no longer
holds that office at the time the Certificate is authenticated on behalf of the
Indenture Trustee and issued, the Certificate shall be valid nevertheless.
(d) At any time and from time to time after the execution of the
Certificates of any series, the Company may deliver such Certificates to the
Indenture Trustee for authentication and the Indenture Trustee shall
authenticate the Certificates by manual signature upon written orders of the
Company. Certificates shall be authenticated on behalf of the Indenture Trustee
by any authorized officer or signatory of the Indenture Trustee.
(e) A Certificate of any series shall not be valid or obligatory for any
purpose or entitled to any security or benefit hereunder until executed on
behalf of the Company by the manual or facsimile signature of the officer of the
Company specified in the first sentence of Section 2.02(b) and until
authenticated on behalf of the Indenture Trustee by the manual signature of the
officer or signatory of the Indenture Trustee specified in the second sentence
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of Section 2.02(d). Such signatures shall be conclusive evidence that such
Certificate has been duly executed, authenticated and issued under this
Agreement.
(f) Each Certificate shall be issued in registered form only and shall be
dated the date of its authentication.
SECTION 2.03 TEMPORARY CERTIFICATES
Until definitive Certificates are ready for delivery, the Indenture Trustee
may prepare, and the Company may execute, temporary Certificates. Temporary
Certificates shall be substantially in the form of definitive Certificates but
may have variations that the Indenture Trustee considers appropriate for
temporary Certificates. Every temporary Certificate shall be executed by the
Company, and authenticated by the Indenture Trustee, and registered by the
Registrar upon the same conditions, and with like effect, as a definitive
Certificate. The Company shall execute, and the Indenture Trustee shall
authenticate, definitive Certificates in exchange for temporary Certificates
without unreasonable delay.
SECTION 2.04 REGISTRAR AND PAYING AGENT
The Indenture Trustee shall maintain an office or agency where the
Certificates of each series may be presented for registration or transfer or for
exchange (the "Registrar") and an office of agency where (subject to
Sections 2.05 and 2.09) the Certificates of each series may be presented for
payment or for exchange (the "Paying Agent"). The Registrar shall keep a
register (the "Register") with respect to the Certificates of such series and
their transfer and exchange. The Indenture Trustee may appoint one or more co-
registrars (the "Co-Registrars") and one or more additional Paying Agents for
the Certificates and the Indenture Trustee may terminate the appointment of any
Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and Paying Agent for
the Certificates of each series.
SECTION 2.05 TRANSFER AND EXCHANGE
At the option of the Holder thereof, Certificates of any series may be
exchanged for an equal aggregate principal amount of other Certificates of the
same series and maturity and of any authorized denominations upon surrender of
the Certificates to be exchanged at the principal corporate trust office of the
Indenture Trustee, or at any office or agency maintained for such purpose
pursuant to Section 2.04. Whenever the Certificates of any series are so
surrendered for exchange, the Company shall execute, and the Indenture Trustee
shall authenticate and deliver, the replacement Certificates of such series
which the Holder making the exchange is entitled to receive. Upon surrender for
registration of transfer of Certificates of any series at the principal
corporate trust office of the Indenture Trustee, or at any office or agency
maintained for such purpose pursuant to Section 2.04, the Company shall execute,
and
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the Indenture Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, and equal aggregate principal amount of
other Certificates of the same series and maturity and of any authorized
denominations.
All Certificates of any series issued upon any registration of transfer or
exchange of Certificates shall be the valid obligations of the Company
applicable to the Certificates of such series, evidencing the same obligations,
and entitled to the same security and benefits under this Agreement, as the
Certificates of such series surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made to a holder for any registration of
transfer or exchange of Certificates, but the Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates,
other than exchanges pursuant to Section 2.03 not involving any transfer.
The Registrar shall not be required to register the transfer of or to
exchange any Certificate called for redemption pursuant to Section 6.01 or the
provisions of the Indenture Supplement applicable to the Certificates of such
series.
SECTION 2.06 HOLDER LISTS: OWNERSHIP OF CERTIFICATES
(a) The Indenture Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders of the Certificates of each series, which list shall be
available to the Company for inspection. If the Indenture Trustee is not the
Registrar, the Registrar shall furnish (and the Company shall cause the
Registrar to furnish) to the Indenture Trustee semi-annually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the possession
or control of the Registrar as to the names and addresses of Holders of the
Certificates of each series.
(b) Ownership of the Certificates of each series shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration of
transfer of a Certificate of any series, the Indenture Trustee, the Paying
Agent, the Registrar and the Company may deem and treat the Person in whose name
such Certificate is registered as the absolute owner of such Certificate for the
purpose of receiving payments of principal of, Premium, if any, and interest on
such Certificate and for all other purposes whatsoever, whether or not such
Certificate is overdue, and none of the Indenture Trustee, the Paying Agent, the
Registrar or the Company shall be affected by notice to the contrary.
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SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES
If a Certificate of any series shall become mutilated, destroyed, lost or
stolen, the Company shall, upon the written request of the Holder of such
Certificate, issue and execute, and the Indenture Trustee shall authenticate and
deliver, in replacement thereof, as applicable, a new Certificate of the same
series and maturity, payable to the same Holder in the same principal amount as
the Certificate so mutilated, destroyed, lost or stolen. If the Certificate
being replaced has become mutilated, such Certificate shall be surrendered to
the Indenture Trustee. If the Certificate being replaced has been destroyed,
lost or stolen, the Holder of such Certificate shall furnish to the Company and
the Indenture Trustee such security or indemnity as may be required by it to
save the Company and the Indenture Trustee harmless and evidence satisfactory to
the Company and the Indenture Trustee of the destruction, loss or theft of such
Certificate and of the ownership thereof.
SECTION 2.08 CANCELLATION
The Registrar and any Paying Agent shall forward to the Indenture Trustee
all Certificates surrendered to them for replacement, redemption, registration
of transfer, exchange or payment. The Indenture Trustee shall cancel all
Certificates surrendered for replacement, redemption, registration of transfer,
exchange, payment or cancellation and shall destroy canceled Certificates.
SECTION 2.09 PAYMENT ON CERTIFICATES: DEFAULTED AMOUNTS
(a) The Indenture Trustee will arrange directly with any Paying Agent for
the payment, or the Indenture Trustee will make payment of the principal of
(including Installment Payment Amounts), and Premium, if any, and interest
payable on or in respect of each Certificate. Payment on Serial Certificates of
each series and Installment Certificates of each series in respect of interest,
and payment on Installment Certificates of each series in respect of Installment
Payment Amounts (other than the final Installment Payment Amount), shall be paid
in lawful currency of the United States on each Interest Payment Date or
Installment Payment Date (other than the final Installment Payment Date), as the
case may be, to the Holder thereof at the close of business on the relevant
Record Date at the principal corporate trust office of the Indenture Trustee or
at any office or agency maintained for such purpose pursuant to Section 2.04;
PROVIDED that the Paying Agent will, at the request of the Indenture Trustee and
may, at its option, pay such interest and Installment Payment Amounts by check
mailed to such Holder's address as it appears on the Register. Principal of any
Serial Certificates, the final Installment Payment Amount payable on any
Installment Certificates, and Premium, if any, payable on any Certificates,
shall be payable in U.S. currency only against presentation and surrender
thereof at the principal corporate trust office of the Indenture Trustee or at
the office or agency maintained for such purpose pursuant to Section 2.04.
A Holder of a Certificate of any series shall have no further interest in,
or other right with respect to, the Indenture Estate applicable to the
Certificates of such series when and if the principal amount of and Premium, if
any, and interest on all Certificates of such series held
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by such Holder and all other sums payable to such Holder hereunder, shall have
been paid in full.
(b) Any Installment Payment Amount payable in respect of any Installment
Certificate of any series on an Installment Payment Date (other than the final
Installment Payment Amount) which is not punctually paid on such Installment
Payment Date or any interest payable in respect of any Serial or Installment
Certificate of any series on any Interest Payment Date which is not punctually
paid on such Interest Payment Date, as the case may be (herein called,
respectively, a "Defaulted Installment" and "Defaulted Interest"), shall
forthwith cease to be payable to the Holder on the relevant Record Date by
virtue of his having been such Holder; and such Defaulted Installment or
Defaulted Interest may be paid by the Indenture Trustee, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Indenture Trustee may elect to make payment of any Defaulted
Installment or Defaulted Interest, as the case may be, to the Person in
whose name any such Certificate is registered at the close of business on a
special record date for the payment of such Defaulted Installment or
Defaulted Interest, as the case may be, which shall be fixed in the
following manner. The Indenture Trustee shall notify the Paying Agent in
writing of the amount of Defaulted Installment or Defaulted Interest, as
the case may be, proposed to be paid on each such Certificate and the date
of the proposed payment, and at the same time the Indenture Trustee shall
make arrangements to set aside an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Installment or
Defaulted Interest, as the case may be, prior to the date of the proposed
payment, to be held in trust for the benefit of the Persons entitled to
such Defaulted Installment or Defaulted Interest, as the case may be, as
this clause provides and shall fix a special record date for the payment of
such Defaulted Installment or Defaulted Interest, as the case may be, which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment. The Indenture Trustee shall promptly notify the
Company and the Registrar of such special record date and shall cause
notice of the proposed payment of such Defaulted Installment or Defaulted
Interest, as the case may be, and the special record date therefor to be
mailed, first class postage prepaid, to each Holder of a Certificate of
such series at its address as it appears in the Register, not less than 10
days prior to such special record date. Notice of the proposed payment of
such Defaulted Installment or Defaulted Interest, as the case may be, and
the special record date therefor having been mailed, as aforesaid, such
Defaulted Installment or Defaulted Interest, as the case may be, shall be
paid to the Persons in whose names the applicable Certificates are
registered on such special record date and shall no longer be payable
pursuant to the following clause (2).
(2) The Indenture Trustee may make, or cause to be made, payment of
any Defaulted Installment or Defaulted Interest, as the case may be, in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which Certificates of the series in question may be
listed, and upon such notice as may be
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required by such exchange, if such payment shall be deemed practicable by
the Indenture Trustee.
(c) The Indenture Trustee shall require each Paying Agent to agree in
writing that such Paying Agent will hold in trust, for the benefit of each
Holder of a Certificate of any series and the Indenture Trustee, all money held
by the Paying Agent for the payment of the principal of and Premium, if any, and
interest on the Certificates of such series and for all other amounts payable
hereunder and will give to the Indenture Trustee notice of any default by any
obligor upon the Certificates of such series in the making of any such payment
upon the Certificates of such series. The Indenture Trustee at any time may
require a Paying Agent to repay to the Indenture Trustee all money held by it.
Upon so doing the Paying Agent shall have no further liability for the money so
paid.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN INDENTURE ESTATE
SECTION 3.01 APPLICATION OF PROCEEDS OF INITIAL ISSUANCE OF CERTIFICATES
(a) The Indenture Trustee shall apply the proceeds of the issuance of
Certificates of any series as follows:
(i) if such proceeds are received on the Delivery Date applicable to
the Certificates of such series, the Indenture Trustee shall apply such
proceeds in accordance with clause (x) of the last sentence of this
Section 3.01; or
(ii) if such proceeds are not applied in accordance with clause (i),
the Indenture Trustee shall deposit such proceeds in an account to be held
as part of the Indenture Estate applicable to the Certificates of such
series, to be invested and reinvested as provided in Section 9.04, and to
be distributed and applied as provided in this Article 3.
On the Delivery Date of the Aircraft applicable to the Certificates of such
series, upon execution by the Indenture Trustee and the Company of the Indenture
Supplement applicable to the Certificates of such series, and subject to
fulfillment to the satisfaction of or waiver by the Indenture Trustee of the
conditions thereto specified in the Indenture Supplement applicable to the
Certificates of such series and satisfaction of the additional conditions
specified in Section 3.01(b), the Indenture Trustee shall (x) make available an
amount equal to the proceeds to the Indenture Trustee from the sale of the
Certificates of such series to the Company to finance the acquisition of the
Aircraft applicable to the Certificates of such series in accordance with such
Indenture Supplement and (y) pay to the Company an amount equal to any net
income or net gain, if any, realized from the investment by the Indenture
Trustee of any funds held in the Indenture Estate applicable to the Certificates
of such series for the period
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from the date of issuance of the Certificates of such series to and including
the date immediately preceding such Delivery Date.
(b) The payment by the Indenture Trustee specified in the last sentence of
Section 3.01(a) shall be subject to the additional conditions that on the
Delivery Date applicable to the Certificates of any series:
(i) The Indenture Trustee shall have received a certificate of an
Independent Appraiser with respect to the fair value of the Aircraft as at
such Delivery Date applicable to the Certificates of such series;
(ii) The following documents shall have been duly authorized, executed
and delivered by the respective party or parties thereto, shall each be
satisfactory in form and substance to the Indenture Trustee and shall be in
full force and effect, and copies thereof shall have been delivered to the
Indenture Trustee (provided by the Purchase Agreement with respect to a
series of Certificates shall be delivered to the Indenture Trustee prior to
the Delivery Date for such Aircraft):
(1) the Warranty Bill of Sale and the FAA Bill of Sale;
(2) the Purchase Agreement; and
(3) an acceptance certificate covering the Aircraft (the
"Acceptance Certificate") duly completed and executed by the Company;
(iii) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to this
Agreement shall have been executed and delivered by the Company and the
Indenture Trustee, and such financing statement or statements shall have
been duly filed in all places necessary or advisable;
(iv) The Indenture Trustee shall have received the following, in each
case in form and substance satisfactory to it:
(1) a certified copy of the Certificate of Incorporation and By-
Laws of the Company and a copy of resolutions of the board of
directors of the Company or the executive committee thereof, certified
by the Secretary or an Assistant Secretary of the Company, duly
authorizing the execution, delivery and performance by the Company of
this Indenture, the Indenture Supplement with respect to the
Certificates of any series, such Certificates and each other document
required to be executed and delivered by the Company on the Delivery
Date in accordance with the provisions hereof;
(2) a certificate of the Company as to the Person or Persons
authorized to execute and deliver this Agreement and the Certificates,
and any other documents to be executed on behalf of the Company in
connection
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with the transactions contemplated hereby and as to the signature of
such Person or Persons;
(v) All appropriate action required to have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, prior to the Delivery
Date in connection with the transactions contemplated by this Agreement
shall have been taken, and all orders, permits, waivers, authorizations,
exemptions and approvals of such entities required to be in effect on the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and effect
on the Delivery Date.
(vi) On the Delivery Date, the following statements shall be true, and
the Indenture Trustee shall have received evidence satisfactory to it to
the effect that:
(1) the Company has good and marketable title (subject to the
filing and recording of the FAA Bill of Sale with the Federal Aviation
Administration) to the Aircraft, free and clear of Liens other than
Permitted Liens;
(2) application for registration of such Aircraft in the name of
the Company and the FAA Bill of Sale have been duly filed with the
FAA; and
(3) this Agreement with respect to such Aircraft has been duly
filed with the FAA for recordation.
(vii) On the Delivery Date, (A) the representations and warranties
of the Company contained in a certificate in form and substance
satisfactory to the Indenture Trustee shall be true and accurate as though
made on and as of such date except to the extent that such representations
and warranties relate solely to an earlier date (in which case such
representations and warranties shall be true and accurate on and as of such
earlier date) and such representations and warranties shall be deemed
incorporated by reference herein as if such representations and warranties
were set forth herein and (B) no event shall have occurred and be
continuing, or would result from the purchase, sale or mortgage of the
Aircraft related to such series of Certificates, which constitutes (or
would, with the passage of time or the giving of notice or both,
constitute) an Event of Default.
(viii) The Indenture Trustee shall have received an opinion
addressed to the Indenture Trustee from (a) a senior attorney employed by
the Company, in form and substance satisfactory to the Indenture Trustee,
and (b) Perkins Coie, special counsel to the Company, in form and substance
satisfactory to the Indenture Trustee.
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(ix) The Indenture Trustee shall have received an opinion addressed to
the Indenture Trustee and the Company from counsel to the Manufacturer, in
form and substance satisfactory to the Indenture Trustee.
(x) The Indenture Trustee shall have received an opinion addressed to
the Indenture Trustee and the Company, from Crowe & Dunlevy, P.C., special
counsel in Oklahoma City, Oklahoma, in form and substance satisfactory to
the Indenture Trustee.
(xi) The Indenture Trustee shall have received an opinion addressed to
the Company from __________________________________, special counsel for
the Indenture Trustee, in form and substance satisfactory to the Indenture
Trustee.
(xii) The Indenture Trustee shall have received an independent
insurance broker's report, and certificates of insurance, in form and
substance reasonably satisfactory to the Indenture Trustee, as to the due
compliance with the terms of Section 4.03 hereof relating to insurance with
respect to the applicable Aircraft.
(xiii) On the Delivery Date, it shall be true that no Event of Loss
(or event which with the passage of time would become an Event of Loss)
with respect to the Airframe or any Engine has occurred.
(xiv) The Indenture Trustee shall have received an invoice from
the Manufacturer indicating that the net purchase price to the Company for
the Aircraft (i.e., the Aircraft purchase price, excluding buyer-furnished
equipment, less the amount of all Manufacturer or engine manufacturer
credit memoranda available to be applied in payment of the Aircraft
purchase price (whether or not so applied)) is equal to or greater than the
proceeds from the sale of the Certificates.
(xv) An Officer's Certificate of the Company to the effect that such
payment will not be inconsistent with any of the provisions of this
Agreement and the applicable Indenture Supplement related to the
Certificates of such series and that all conditions precedent to such
payment have been satisfied;
(xvi) An Opinion of Counsel of the Company addressed to the
Indenture Trustee stating that the certificates, opinions and other
instruments which have been or are therewith delivered to the Indenture
Trustee conform to the requirements of this Agreement and such Indenture
Supplement and that all conditions precedent herein provided for relating
to the release of funds provided for in Section 3.01(a) have been complied
with;
(xvii) such other documents, certificates, opinions and other
evidence with respect to the Company, the Manufacturer of such Aircraft and
the consummation of the transactions contemplated hereunder as the
Indenture Trustee may reasonably request or as may be provided for in the
Indenture Supplement.
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Promptly upon the registration of the Aircraft and the recording of this
Indenture and the Indenture Supplement covering the Aircraft pursuant to the
Federal Aviation Act, the Company will cause __________________________________
_________________, special counsel in Oklahoma City, Oklahoma, to deliver to the
Indenture Trustee and the Company an opinion as to the due and valid
registration of the Aircraft in the name of the Company, the due recording of
the FAA Bill of Sale, this Indenture and the Indenture Supplement and the lack
of filing of any intervening documents with respect to the Aircraft.
(c) The obligations of the Company to enter into an Indenture Supplement
with respect to an Aircraft, are all subject to the fulfillment to the
satisfaction of the Company prior to or in the Delivery Date of the following
conditions precedent:
(i) The conditions specified in Sections 3.01(b)(i) and 3.01(b)(xiii)
hereof shall have been satisfied, unless such nonsatisfaction is the result
of the actions of the Company.
(ii) Those documents described in Section 3.01(b)(ii) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than the Company) in the manner specified in such Section,
shall each be satisfactory in form and substance to the Company, shall be
in full force and effect on the Delivery Date, and an executed counterpart
of each thereof shall have been delivered to the Company or its counsel.
(iii) The Company shall have received a copy of the general
authorizing resolutions of the board of directors or executive committees
or other satisfactory evidence of authorization of the Indenture Trustee,
certified as of the Delivery Date by the Secretary or an Assistant
Secretary of the Indenture Trustee, which authorize the execution, delivery
and performance by the Indenture Trustee of this Indenture and the
Indenture Supplement together with such other documents and evidence with
respect to the Indenture Trustee, as the Company or its counsel may
reasonably request in order to establish the consummation of the
transactions contemplated by this Indenture and the Indenture Supplement,
the taking of all corporate proceedings in connection therewith and
compliance with the conditions herein set forth; in addition, the Company
shall have received from the parent of the Indenture Trustee a guaranty, in
form and substance reasonably satisfactory to the Company, of the Indenture
Trustee's obligations under the Operative Documents.
(iv) The Company shall have received the opinions set forth in
Sections 3.01(b)(ix), 3.01(b)(x) and 3.01(b)(xi), in each case addressed to
the Company and dated the Delivery Date.
(v) The Aircraft shall have been ready for delivery by the
Manufacturer on or before the date set for redemption of the Certificates
of such series in the event the Aircraft is not subject to the Lien of this
Agreement.
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SECTION 3.02 PAYMENT IN CASE OF REDEMPTION OF CERTIFICATES
In the event the Certificates of any series are redeemed in accordance with
the provisions of Section 6.01 or the provisions of the related Indenture
Supplement, the Indenture Trustee shall apply on the applicable Redemption Date
any amounts then held by it in the Indenture Estate applicable to the
Certificates of such series in the following order of priority:
FIRST, so much of such amount as shall be required to pay the
Redemption Price of the Outstanding Certificates of such series pursuant to
Section 6.01 or the related Indenture Supplement, as the case may be, on
the applicable Redemption Date shall be applied to the redemption of the
Certificates of such series on such Redemption Date; and
SECOND, the balance , if any, of such amount remaining thereafter
shall be distributed to the Company.
SECTION 3.03 APPLICATION OF PAYMENTS WHEN NO INDENTURE EVENT OF DEFAULT IS
CONTINUING
Each payment applicable to the Certificates of any series received by the
Indenture Trustee from the Company shall, except as otherwise provided in
Section 3.02, 3.04 or 3.05, be distributed by the Indenture Trustee in the
following order of priority:
FIRST, so much of such amount as shall be required to pay in full
the principal of, and Premium, if any, and interest then due on all
Outstanding Certificates of such series shall be distributed to the Persons
entitled thereto; and
SECOND, so much of such amount remaining thereafter as shall be
required to pay any amount due the Indenture Trustee pursuant to Section
9.07 in respect of the Certificates of such series shall be applied to pay
the Indenture Trustee such amount.
SECTION 3.04 APPLICATION OF CERTAIN PAYMENTS IN CASE OF REQUISITION OR EVENT OF
LOSS
Except as otherwise provided in Sections 3.05 and 4.03(b), any amounts
received directly or through the Company from any governmental authority or
other party pursuant to this Agreement applicable to the Certificates of any
series as the result of an Event of Loss, to the extent that such amounts are
not at the time required to be paid to the Company pursuant to this Agreement,
and any amounts of insurance proceeds for damage to the Indenture Estate
applicable to the Certificates of such series received directly or through the
Company from any insurer pursuant to this Agreement as the result of such Event
of Loss, to the extent such amounts are not at the time required to be paid to
the Company pursuant to this Agreement, shall be applied in reduction of the
Company's obligations hereunder.
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SECTION 3.05 PAYMENTS DURING CONTINUANCE OF INDENTURE EVENT OF DEFAULT
All payments received and amounts held or realized by the Indenture Trustee
after an Indenture Event of Default applicable to the Certificates of any series
shall have occurred and be continuing (including any amounts realized by the
Indenture Trustee from the exercise of any remedies in respect of the
Certificates of such series pursuant to Article 8), as well as all payments or
amounts then held or thereafter received by the Indenture Trustee as part of the
Indenture Estate applicable to the Certificates of such series while such
Indenture Event of Default shall be continuing, shall be distributed by the
Indenture Trustee in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to pay
the Indenture Trustee any amount then due it pursuant to Section 9.07 in
respect of the Certificates of such series shall be applied to pay the
Indenture Trustee such amount;
SECOND, so much of such payments or amounts remaining as shall be
required to pay the expenses incurred (including unbilled expenses in
respect of property delivered or contracted for or services rendered or
contracted for if the amount of such expenses is liquidated) in using,
operating, storing, leasing, controlling or managing such Indenture Estate,
and of all maintenance, insurance, repairs, replacements, alterations,
additions and improvements of and to such Indenture Estate and to make all
payments which the Indenture Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon such
Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine and make reports upon the properties, books and
records of the Company), all in accordance with Section 8.03(c), shall be
applied for such purposes;
THIRD, so much of such payments or amounts remaining as shall be
required to pay the principal of, and accrued interest on, all Outstanding
Certificates of such series then due, whether upon redemption, by
declaration of acceleration pursuant to Section 8.02 or otherwise, shall be
applied ratably to the payment of such principal and interest; and in case
such payments or amounts shall be insufficient to pay in full the whole
amount so due and unpaid, then to the payment of such principal and
interest, without any preference or priority of one Certificate of such
series over another, ratably according to the aggregate amount so due for
principal and interest at the date fixed by the Indenture Trustee for the
distribution of such payments or amounts; and
FOURTH, the balance, if any, of such payments or amounts remaining
thereafter shall be held by the Indenture Trustee as collateral security
for the obligations secured hereby until such time as no Indenture Event of
Default applicable to the Certificates of such series shall be continuing
hereunder or the Certificates of such series have been accelerated and all
amounts due thereon have been paid, at which time such payments or amounts
shall be distributed to the Company.
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SECTION 3.06 PAYMENTS FOR WHICH NO APPLICATION IS OTHERWISE PROVIDED
Except as otherwise provided in Section 3.05:
(a) any payment in respect of the Certificates of any series received
by the Indenture Trustee for which no provision as to the application
thereof is made elsewhere in this Agreement applicable to the Certificates
of such series, and
(b) any payment in respect of the Certificates of such series
received and amounts realized by the Indenture Trustee with respect to the
Aircraft applicable to the Certificates of such series, to the extent
received or realized at any time after the conditions set forth in
Article 10 for the satisfaction and discharge of this Agreement as
applicable to the Certificates of such series or for the defeasance of the
Certificates of such series shall have been satisfied, as well as any other
amounts remaining as part of the Indenture Estate applicable to the
Certificates of such series after such satisfaction,
shall be distributed by the Indenture Trustee in the following order of
priority:
FIRST, so much of such amount as shall be required to pay the
Indenture Trustee any amount then due it pursuant to Section 9.07 in
respect of the Certificates of such series shall be applied to pay the
Indenture Trustee such amount; and
SECOND, the balance, if any, of such amount remaining thereafter shall
be distributed to the Company.
SECTION 3.07 CREDIT IN RESPECT OF CERTIFICATES SURRENDERED FOR CANCELLATION
(a) In satisfaction of the obligation of the Company to pay all or any
part of principal of, and Premium, if any, and interest on, the Certificates of
such series due on any date, the Company may surrender, or cause to be
surrendered, Certificates of such series the principal of which is or will be
due on such date to the Indenture Trustee for cancellation pursuant to
Section 2.08 not later than 10 Business Days prior to such date, in which case
there shall be credited against the amounts so payable by the Company in respect
of the Certificates of such series as of such date the aggregate principal
amount as of such date of the Certificates of such series so surrendered, the
Premium, if any, thereon as of such date and the amount of interest which would
have been payable on the Certificates of such series so surrendered on such date
had they not been surrendered for cancellation and had they remained
Outstanding; PROVIDED that an Installment Certificate may be surrendered only
after the penultimate Installment Payment Date for credit in accordance with the
provisions of this Section 3.07(a).
(b) In satisfaction of the obligation of the Company to pay the Redemption
Price upon a redemption of the Certificates of such series pursuant to
Section 6.01 or the related Indenture Supplement, the Company may surrender
Certificates of such series the principal of which is or will be due on the
applicable Redemption Date to the Indenture Trustee for cancellation pursuant to
Section 2.08 not later than 10 Business Days prior to such date, in
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which case there shall be credited against the amount so payable by the Company
in respect of the Certificates of such series as of such date, the principal
amount as of such date of the Certificates of such series so surrendered, the
Premium, if any, thereon as of such date and the amount of the interest which
would have been payable on the Certificates of such series so surrendered on
such date had they not been surrendered for cancellation and had they remained
Outstanding.
ARTICLE 4
COVENANTS OF THE COMPANY
SECTION 4.01 REGISTRATION, MAINTENANCE AND OPERATION OF AIRCRAFT; POSSESSION
AND LEASES; INSIGNIA
(A) REGISTRATION AND MAINTENANCE
With respect to any Aircraft, the Company, at its own cost and expense,
shall (or shall cause any Lessee to): (i) upon delivery of the Aircraft, cause
the Aircraft to be duly registered in the name of the Company, and, subject to
Section 4.01(c), to remain duly registered in the name of the Company under the
Federal Aviation Act (except as otherwise required by applicable law) and cause
this Indenture and the Indenture Supplement to be duly recorded and maintained
of record as a first mortgage on the Aircraft; (ii) maintain, service, repair,
and overhaul (or cause to be maintained, serviced, repaired, and overhauled) the
Aircraft (and any engine which is not an Engine but which is installed on the
Aircraft) (x) so as to keep the Aircraft in good operating condition and in such
condition as may be necessary to enable the airworthiness certification for the
Aircraft to be maintained in good standing at all times (other than during
temporary periods of storage in accordance with applicable regulations) under
(I) the Federal Aviation Act, except when all of the Company's aircraft of the
same type as such Aircraft (powered by engines of the same type as those with
which such Airframe shall be equipped at the time of such grounding) registered
in the United States have been grounded by the FAA, or (II) the applicable laws
of any other jurisdiction in which the Aircraft may then be registered from time
to time, except when all of the Company's aircraft of the same type as such
Aircraft (powered by engines of the same type as those with which such Airframe
shall be equipped at the time of such grounding) registered in such jurisdiction
have been grounded by the aeronautical authorities of such jurisdiction and
(y) in substantially the same manner as the Company (or any Lessee) maintains,
services, repairs or overhauls similar aircraft operated by the Company (or such
Lessee) in similar circumstances and without in any way discriminating against
the Aircraft, whether by reason of its owned status or otherwise, or such other
manner as shall have been approved by the Indenture Trustee, which approval
shall not be unreasonably withheld; and (iii) maintain or cause to be maintained
all records, logs and other materials required to be maintained in respect of
the Aircraft by the FAA or the applicable regulatory agency or body of any other
jurisdiction in which the Aircraft may then be registered.
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(B) OPERATION
With respect to any Aircraft, the Company will not (nor permit any Lessee
to) maintain, use, service, repair, overhaul or operate the Aircraft in
violation of any law or any rule, regulation, order or certificate of any
government or governmental authority (domestic or foreign) having jurisdiction,
or in violation of any airworthiness certificate, license or registration
relating to the Aircraft issued by any such authority, except that, after
providing the Indenture Trustee with a certificate of its President or any Vice
President and the Treasurer or any Assistant Treasurer stating all relevant
facts with respect thereto, the Company or any Lessee may contest in good faith
the validity or application of any such law, rule, regulation, order,
certificate, license, registration or violation in any reasonable manner which
does not materially adversely affect the Indenture Trustee or any Holder. If
the indemnities or insurance from the United State Government specified in
Section 4.03(f) or some combination thereof in amounts equal to amounts required
by Section 4.03(f), have not been obtained, the Company will not operate the
Aircraft, or suffer or permit any Lessee to operate the Aircraft, in or to any
area excluded from coverage by any insurance required to be maintained by the
terms of Section 4.03; PROVIDED that the failure of the Company to comply with
the provisions of this sentence shall not give rise to an Indenture Event of
Default where such failure is attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other like
occurrence.
(c) REREGISTRATION
With respect to any Aircraft, the Company may, at the sole expense of the
Company, change the country of registration of the Aircraft; PROVIDED that,
prior to the date of any such change, the following conditions have been
satisfied: (i) such new registration shall be in the name of the Company, in
its capacity as owner of the Aircraft, or a Lessee, in its capacity as lessee of
the Aircraft; (ii) the Indenture Trustee shall have consented in writing to such
change of registration, which consent shall not be unreasonably withheld (it
being agreed that the inability to deliver the opinion described in
Section 7.04(c) or satisfy the conditions set forth in 7.04(b) shall constitute
the sole reasonable grounds to withhold such consent in regard to a country
listed on Schedule I hereto); and (iii) if such proposed country of registry is
neither the United States nor a country listed on Schedule I hereto, the
Indenture Trustee shall have received:
(A) assurances reasonably satisfactory to it (v) to the effect that
the insurance or self-insurance provisions hereof have been complied with
after giving effect to such change of registry, (w) of the payment by the
Company of any expenses of the Indenture Trustee in connection with such
change of registry, (x) to the effect that the original indemnities (and
any additional indemnities that the Company is then willing to enter into)
in favor of the Indenture Trustee and the Holders under this Agreement and
the other Operative Documents afford each such party substantially the same
protection as provided prior to such change of registry, (y) that such
change will not result in the imposition of, or increase in the amount of,
any Tax for which the Company is not required to indemnify, or is not then
willing to enter into a binding
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agreement to indemnify, the Holders or the Indenture Trustee (or any
successor or assign thereof), and (z) that such new country of registry
imposes aircraft maintenance standards not materially less stringent than
those of the FAA or the civil aviation authority of the United Kingdom,
France, Germany, Japan or Canada; and
(B) a favorable opinion of counsel (reasonably satisfactory to the
Indenture Trustee) in the new jurisdiction of registry to the effect
(w) that the terms (including, without limitation, the governing law and,
to the extent applicable, the service-of-process and jurisdictional
submission provisions thereof) of the Certificates and this Agreement are
legal, valid, binding and enforceable in such jurisdiction, (x) that it is
not necessary for the Indenture Trustee or the Holders to register or
qualify to do business in such jurisdiction, (y) (unless the Company shall
have agreed to provide insurance covering the risk of requisition of use of
the Aircraft by the government of such jurisdiction) that the laws of such
jurisdiction require fair compensation by the government of such
jurisdiction payable in a currency freely convertible into United States
dollars for the loss of use of the Aircraft in the event of the requisition
by such government of such use, and (z) to such further effect with respect
to such other matters as the Indenture Trustee may reasonably request.
Upon receipt of the foregoing opinion of counsel by the Indenture Trustee,
Schedule I hereto shall be amended to add such country.
(D) POSSESSION AND LEASES
With respect to any Aircraft, the Company will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe; PROVIDED that, so long as no Section 8.01(a), (d) or (e) Indenture
Default or any Indenture Event of Default shall have occurred and be continuing
at the time of such lease, delivery, transfer or relinquishment of possession or
installation, and so long as the action to be taken shall not deprive the
Indenture Trustee of the Lien of this Agreement on the Airframe or any Engine
and the Company (or any Lessee) shall continue to comply with the provisions of
Section 4.01(A), the Company may, without the prior written consent of the
Indenture Trustee:
(i) subject the Airframe and the Engines or engines then installed
thereon to normal interchange agreements or any Engine to normal pooling or
similar arrangements, in each case customary in the airline industry and
entered into by the Company (or any Lessee) in the ordinary course of its
business, and in the case of the Airframe, with a U.S. Air Carrier, or an
air carrier domiciled in a country listed on Schedule II hereto or any
other air carrier approved by the Indenture Trustee, which approval shall
not be unreasonably withheld; PROVIDED that (A) no such agreement or
arrangement contemplates or requires the transfer of title to the Airframe
and (B) if the Company's title to any Engine shall be divested under any
such agreement or arrangement, such divestiture shall be deemed to be an
Event of Loss with respect to
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such Engine and the Company shall (or shall cause such Lessee to) comply
with Section 4.04(b) hereof in respect thereof;
(ii) deliver possession of the Airframe or any Engine to the
manufacturer thereof or to any other Person for testing, service, repair,
maintenance or overhaul work on the Airframe or Engine or any Part of any
thereof or for alterations or modifications in or additions to such
Airframe or Engine to the extent required or permitted by the terms of
Section 4.02(c) hereof;
(iii) install an Engine on an airframe owned by the Company (or
any Lessee) which airframe is free and clear of all Liens, except:
(A) Permitted Liens and those which apply only to the engines (other than
Engines), appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment (other than Parts) installed on such
airframe (but not to such airframe as an entirety), (B) the rights of third
parties under interchange agreements which would be permitted under
clause (i) above, PROVIDED that the Company's title to such Engine shall
not be divested as a result thereof, and (C) mortgage Liens or other
security interests, PROVIDED that (as regards this clause (iii)), such
mortgage Liens or other security interests effectively provide that such
Engine shall not become subject to the Lien of such mortgage or security
interest, notwithstanding the installation thereof on such airframe;
(iv) install an Engine on an airframe leased to the Company (or any
Lessee) or purchased by the Company (or any Lessee) subject to a
conditional sale or other security agreement, PROVIDED that (x) such
airframe is free and clear of all Liens, except: (A) the rights of the
parties to the lease or conditional sale or other security agreement
covering such airframe, or their assignees, and (B) Liens of the type
permitted by subparagraph (iii) of this Section 4.01(d) and (y) such lease,
conditional sale or other security agreement effectively provides that such
Engine shall not become subject to the Lien of such lease, conditional sale
or other security agreement, notwithstanding the installation thereof on
such airframe;
(v) install an Engine on an airframe owned by the Company (or any
Lessee), leased to the Company (or any Lessee) or purchased by the Company
(or any Lessee) subject to a conditional sale or other security agreement
under circumstances where neither subparagraph (iii) nor subparagraph (iv)
of this Section 4.01(d) is applicable; PROVIDED that such installation
shall be deemed an Event of Loss with respect to such Engine and the
Company shall (or shall cause any Lessee to) comply with Section 4.04(b) in
respect thereof, the Indenture Trustee not intending hereby to waive any
right or interest it may have to or in such Engine under applicable law
until compliance by the Company with such Section 4.04(b);
(vi) transfer (or permit any Lessee to transfer) possession of the
Airframe or any Engine to the United States of America or any
instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet
Program so long as the Company (or any Lessee) shall promptly notify the
Indenture Trustee upon transferring possession of the
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Airframe or any Engine to the United States of America or any agency or
instrumentality thereof pursuant to the Civil Reserve Air Fleet Program;
(vii) transfer possession of the Airframe or any Engine to the
United States of America or any instrumentality or agency thereof pursuant
to a contract, a copy of which shall be provided to the Indenture Trustee;
or
(viii) so long as the Lessee is not subject to a proceeding or
final order under applicable bankruptcy, insolvency or reorganization laws
on the date the lease is entered into, the Company may, at any time, in its
sole discretion, enter into a lease with (1) a U.S. Air Carrier, (2) any
Permitted Lessee, or (3) any other Person approved in writing by the
Indenture Trustee, which approval shall not be unreasonably withheld;
PROVIDED, HOWEVER, that concurrently with entering into such lease, the
Company shall provide assurances reasonably satisfactory to the Indenture
Trustee to the effect that the provisions of Section 4.03 have been
complied with after giving effect to such lease.
The rights of any Lessee or other transferee who receives possession by
reason of a transfer permitted by this Section 4.01(d) (other than the transfer
of an Engine which is deemed an Event of Loss) shall be subject and subordinate
to, and any lease permitted by this Section 4.01(d) shall include Lessee's
consent to the assignment of such lease to the Indenture Trustee as security for
the performance of the Company's obligations hereunder (and such Lease shall be
so assigned; provided that such assignment shall provide that all rent paid
under such Lease shall be paid to the Company prior to the occurrence and
continuation of an Indenture Event of Default) and shall be made expressly
subject and subordinate to, all the terms of this Agreement, including, without
limitation, the Indenture Trustee's rights to repossession pursuant to
Section 8.03 hereof, and the Company shall remain primarily liable under this
Agreement for the performance of all of the terms of this Agreement, and the
terms of any such lease shall not permit any Lessee to take any action not
permitted to be taken by the Company in this Agreement with respect to the
Aircraft. No pooling agreement, lease or other relinquishment of possession of
the Airframe or any Engine shall in any way discharge or diminish any of the
Company's obligations to the Indenture Trustee under this Agreement or
constitute a waiver of the Indenture Trustee's rights or remedies under this
Agreement. The Indenture Trustee agrees, for the benefit of the Company (and
any Lessee) and for the benefit of any mortgagee or other holder of a security
interest in any engine owned by the Company (or any Lessee), any lessor of any
engine leased to the Company (or any Lessee) and any conditional vendor of any
engine purchased by the Company (or any Lessee) subject to a conditional sale
agreement or any other security agreement, that no interest shall be created
under this Agreement in any engine so owned, leased or purchased and that
neither the Indenture Trustee nor its successors or assigns will acquire or
claim, as against the Company (or any Lessee) or any such mortgagee, lessor or
conditional vendor or other holder of a security interest or any successor or
assignee of any thereof, any right, title or interest in such engine as the
result of such engine being installed on the Airframe. The Company shall give
the Indenture Trustee written notice of any lease entered into pursuant to the
terms hereof.
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The Company shall provide the Indenture Trustee with a copy of any lease
hereunder which has a term of more than one year.
The Indenture Trustee acknowledges that any Wet Lease or similar
arrangement under which the Company maintains operational control of the
Aircraft shall not constitute a delivery, transfer or relinquishment of
possession for purposes of this Section 4.01(d). The Indenture Trustee
acknowledges that any consolidation or merger of the Company or conveyance,
transfer or lease of all or substantially all of the Company's assets permitted
by the Operative Documents shall not be prohibited by this Section 4.01(d).
No lease permitted pursuant to this section shall permit any subleasing of
the Aircraft.
(E) INSIGNIA
On or prior to the Delivery Date as to any Aircraft, or as soon thereafter
as practicable, the Company agrees to affix and maintain (or cause to be affixed
and maintained) in the cockpit of the Airframe adjacent to the registration
certificate therein and on each Engine related thereto a nameplate bearing the
inscription:
Mortgaged To:
_________________________________________________________________
________________________, as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Indenture Trustee, in each case as permitted under the
Operative Documents).
Except as above provided, the Company will not allow the name of any
person, association or corporation to be placed on the Airframe or on any
related Engine as a designation that might be interpreted as a claim of
ownership; provided that nothing herein contained shall prohibit the Company (or
any Lessee) from placing its customary colors and insignia on such Airframe or
any related Engine.
SECTION 4.02 REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND
ADDITIONS
(A) REPLACEMENT OF PARTS
With respect to any Aircraft, the Company, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time to
time become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use for any reason whatsoever,
except as otherwise provided in Section 4.02(c). All replacement Parts shall be
owned by the Company free and clear of all Liens (except Permitted Liens,
pooling arrangements permitted by Section 4.02(b) and replacement Parts
temporarily installed on an emergency basis) and shall be in as good an
operating condition as and shall have a value and utility substantially equal to
the Parts replaced assuming such replaced Parts
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were in the condition and repair required to be maintained by the terms hereof.
All Parts (other than Obsolete Parts, as defined below) at any time removed from
the Airframe or any Engine shall remain the property of the Company, no matter
where located, until such time as such Parts shall be replaced by Parts which
meet the requirements for replacement Parts specified above. Immediately upon
any replacement Part becoming incorporated or installed in or attached to the
Airframe or any Engine, without further act (subject only to Permitted Liens and
any pooling arrangement permitted by Section 4.02(b) and except replacement
Parts temporarily installed on an emergency basis), (i) such replacement Part
shall become the property of the Company and shall become subject to the Lien of
this Agreement and the Indenture Supplement and be deemed a Part for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in or attached to the Airframe or such Engine and (ii) the replaced
Part shall no longer be deemed a Part hereunder.
(B) POOLING OF PARTS
Any Part removed from the Airframe or any Engine as provided in
Section 4.02(a) may be subjected by the Company (or any Lessee) to a pooling
arrangement of the type which is permitted by Section 4.01(d); PROVIDED that the
Part replacing such removed Part shall be incorporated or installed in or
attached to such Airframe or Engine in accordance with Section 4.02(a) as
promptly as practicable after the removal of such removed Part. In addition,
any replacement Part may be owned by any third party subject to such a pooling
arrangement; PROVIDED, that the Company (or any Lessee), at its expense, as
promptly thereafter as practicable, either (i) causes such replacement Part to
become the property of the Company free and clear of all Liens other than
Permitted Liens or (ii) replaces such replacement Part with a further
replacement Part owned by the Company (or any Lessee) which shall become the
property of the Company, free and clear of all Liens other than Permitted Liens.
(C) ALTERATIONS, MODIFICATIONS AND ADDITIONS
With respect to any Aircraft, the Company, at its own expense, will make
(or cause to be made) such alterations and modifications in and additions to the
Airframe and Engines as may be required to meet the applicable standards of the
FAA or any applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered; PROVIDED that, after providing the
Indenture Trustee with a certificate of its President or any Vice President and
its Treasurer or any Assistant Treasurer stating all relevant facts with respect
thereto, the Company or any Lessee may, in good faith, contest the validity or
application of any such law, rule, regulation or order in any reasonable manner
which does not materially adversely affect the Indenture Trustee or any Holder.
In addition, the Company (or any Lessee), at its own expense, may from time to
time make such alterations and modifications in and additions to the Airframe or
any Engine as the Company (or any Lessee) may deem desirable in the proper
conduct of its business, including removal of Parts which the Company (or any
Lessee) deems to be obsolete or no longer suitable or appropriate for use on the
Airframe or such Engine (such parts, "Obsolete Parts"); PROVIDED that no such
alteration, modification, removal or addition materially impairs the condition
or airworthiness of the
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Airframe or such Engine, or materially diminishes the value or utility of the
Airframe or such Engine below the value or utility thereof immediately prior to
such alteration, modification, removal or addition assuming the Airframe or such
Engine was then in the condition required to be maintained by the terms of this
Agreement. In addition, the value (but not the utility) of the Airframe or any
Engine may be reduced by the value of Obsolete Parts which shall have been
removed so long as the aggregate value of all Obsolete Parts which shall have
been removed and not replaced shall not exceed $____________ with respect to a
_________________ Airframe, $___________ with respect to a ________________
Airframe, $____________ with respect to a _______________ Airframe or such other
amount as may be set forth in the Indenture Supplement. All Parts incorporated
or installed in or attached or added to the Airframe or an Engine as the result
of such alteration, modification or addition (except those parts which the
Company has leased from others and which may be removed by the Company pursuant
to the next sentence) (the "Additional Parts") shall, without further act,
become subject to the Lien of this Agreement. Notwithstanding the foregoing
sentence, the Company (or any Lessee) may, so long as no Indenture Event of
Default shall have occurred and be continuing, remove or suffer to be removed
any Additional Part, provided that such Additional Part (i) is in addition to,
and not in replacement of or substitution for, any Part originally incorporated
or installed in or attached to such Airframe or any Engine at the time of
delivery thereof or any Part in replacement of or substitution for any such
Part, (ii) is not required to be incorporated or installed in or attached or
added to the Airframe or any Engine pursuant to the terms of Section 4.01 hereof
or the first sentence of this Section 4.02(c) and (iii) can be removed from the
Airframe or such Engine without impairing the airworthiness or diminishing the
value or utility of the Airframe or such Engine which the Airframe or such
Engine would have had at such time had such alteration, modification or addition
not occurred. Upon the removal thereof as provided above, such Additional Part
shall no longer be subject to the Lien of this Agreement or deemed part of the
Airframe or Engine from which it was removed.
SECTION 4.03 INSURANCE
(A) PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE
(1) With respect to any Aircraft, except as provided in clause (2) of
this Section 4.03(a), and subject to self-insurance to the extent permitted by
Section 4.03(d), the Company will carry or cause to be carried at its or any
Lessee's expense (i) comprehensive airline liability (including, without
limitation, passenger, contractual, bodily injury and property damage liability)
insurance (exclusive of manufacturer's product liability insurance) and
(ii) cargo liability insurance with respect to each Aircraft, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline liability
insurance from time to time are applicable to aircraft owned or operated by the
Company of the same type as such Aircraft and (y) $_____________ with respect to
a ________________ Airframe, $_____________ with respect to a _____________
Airframe, $_____________ with respect to a ____________ Airframe, or such other
amount as may be set forth on an Indenture Supplement per occurrence, (B) of the
type and covering the same risks as from time to time are applicable to aircraft
owned or operated by the Company of the same type as such Aircraft, and
(C) which is
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maintained in effect with insurers of recognized responsibility; PROVIDED that
the Company need not maintain cargo liability insurance, or may maintain such
insurance in an amount less than $___________ with respect to a _____________
Airframe, $__________ with respect to a _____________ Airframe, $____________
with respect to a _____________ Airframe, or such other amount as may be set
forth on an Indenture Supplement per occurrence, as long as the amount of cargo
liability insurance, if any, maintained with respect to such Aircraft is the
same as the cargo liability insurance, if any, maintained for other aircraft of
the same type and model as such Aircraft owned or operated by the Company.
(2) During any period that the Aircraft is on the ground and not in
operation, the Company may carry or cause to be carried, in lieu of insurance
required by clause (1) above, and subject to self-insurance to the extent
permitted by Section 4.03(d), insurance by insurers of recognized responsibility
otherwise conforming with the provisions of said clause (1) except that (A) the
amounts of coverage shall not be required to exceed the amounts of comprehensive
airline liability insurance from time to time applicable to aircraft owned or
operated by the Company of the same type as the Aircraft and which are on the
ground and not in operation, and (B) the scope of the risks covered and the type
of insurance shall be the same as from time to time shall be applicable to
aircraft owned or operated by the Company of the same type as the Aircraft and
which are on the ground and not in operation.
(B) INSURANCE AGAINST LOSS OR DAMAGE TO THE AIRCRAFT
(1) With respect to any Aircraft, except as provided in clause (2) of
this Section 4.03(b), and subject to the provisions of Section 4.03(d)
permitting self-insurance, the Company shall maintain or cause to be maintained
in effect, at its or any Lessee's expense, with insurers of recognized
responsibility, all-risk aircraft hull insurance covering each Aircraft and fire
and extended coverage and all-risk property damage insurance covering Engines
and Parts while temporarily removed from such Aircraft and not replaced by
similar components (including aircraft hull war risk, governmental confiscation
and expropriation (other than by the United States Government or any government
of registry of the Aircraft) and hijacking insurance, but only if and to the
extent any of such aircraft hull war risk, governmental confiscation and
expropriation and hijacking insurance is maintained by the Company (or any
Lessee) with respect to other aircraft owned or operated by the Company (or such
Lessee) on the same or similar geographic routes); PROVIDED that such insurance
shall at all times while such Aircraft is subject to the Lien of this Agreement
be for an amount (taking into account self-insurance to the extent permitted by
Section 4.03(d)) not less than the aggregate outstanding principal amount of the
Certificates of such series together with accrued interest thereon to the date
of determination; and PROVIDED FURTHER that all-risk property damage insurance
covering Engines and Parts while temporarily removed from such Aircraft and not
replaced by similar components need be obtained only to the extent available at
reasonable cost. In the case of a loss with respect to an engine (other than an
Engine) installed on such Airframe the Indenture Trustee shall promptly remit
any payment made to it of any insurance proceeds in respect of such loss to the
Company or any other third party that is entitled to receive such proceeds.
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Except during a period when a Section 8.01(a), (d) or (e) Indenture Default
or any Indenture Event of Default has occurred and is continuing, all losses
will be adjusted by the Company with the insurers. As between the Indenture
Trustee and the Company, it is agreed that all insurance payments received as
the result of the occurrence of an Event of Loss will be applied as follows:
(x) if such payments are received with respect to the Airframe (or
the Airframe and the Engines installed thereon), (i) unless such property
is replaced pursuant to the penultimate paragraph of Section 4.04(a), so
much of such payments remaining, after reimbursement of the Indenture
Trustee for reasonable costs and expenses, as shall not exceed the
aggregate principal amount of the Certificates together with accrued
interest thereon shall be applied toward payment of the Certificates, and
the balance, if any, of such payments remaining thereafter will be paid
over to, or retained by, the Company (or if directed by the Company, any
Lessee); or (ii) if such property is replaced pursuant to the penultimate
paragraph of Section 4.04(a), such payments shall be paid over to, or
retained by, the Company (or if directed by the Company, any Lessee),
PROVIDED that the Company shall have fully performed or, concurrently
therewith, will fully perform the terms of the penultimate paragraph of
Section 4.04(a) with respect to the Event of Loss for which such payments
are made; and
(y) if such payments are received with respect to an Engine under the
circumstances contemplated by Section 4.04(b) hereof, so much of such
payments, remaining after reimbursement of the Indenture Trustee for
reasonable costs and expenses, shall be paid over to, or retained by, the
Company (or if directed by the Company, any Lessee) provided that the
Company shall have fully performed or, concurrently therewith, will fully
perform the terms of Section 4.04(b) with respect to the Event of Loss for
which such payments are made.
(2) During any period that the Aircraft is on the ground and not in
operation, the Company may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to the
extent permitted by Section 4.03(d), insurance otherwise conforming with the
provisions of said clause (1) except that the scope of the risks and the type of
insurance shall be the same as from time to time is applicable to aircraft owned
or operated by the Company of the same type as the Aircraft similarly on the
ground and not in operation, provided that, subject to self-insurance to the
extent permitted by Section 4.03(d), the Company shall maintain insurance
against risk of loss or damage to the Aircraft in an amount at least equal to
the aggregate outstanding principal amount of the Certificates of such series
together with accrued interest thereon to the date of determination during such
period that the Aircraft is on the ground and not in operation.
(C) REPORTS, ETC.
With respect to any Aircraft, the Company will furnish, or cause to be
furnished to the Indenture Trustee, on or before the Delivery Date and each
anniversary of the Delivery Date, a
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report, signed by a Qualified Insurance Broker, which broker may be in the
regular employ of the Company, describing in reasonable detail the hull and
liability insurance (and property insurance for detached engines and parts) then
carried and maintained with respect to the Aircraft and stating the opinion of
such firm that such insurance complies with the terms hereof; PROVIDED that all
information contained in the foregoing report shall not be made available by the
Indenture Trustee to anyone except (A) to prospective and permitted transferees
of the Indenture Trustee's interest or its counsel, independent certified public
accountants, independent insurance brokers or other agents, who agree to hold
such information confidential, (B) the Indenture Trustee's or any such
transferee's counsel or independent certified public accountants, independent
insurance brokers or other agents who agree to hold such information
confidential, or (C) as may be required by any statute, court or administrative
order or decree or governmental ruling or regulation. The Company will cause
such Qualified Insurance Broker to agree to advise the Indenture Trustee in
writing of any default in the payment of any premium and of any other act or
omission on the part of the Company of which it has knowledge and which might
invalidate or render unenforceable, in whole or in part, any insurance on the
Aircraft and to advise such Persons in writing at least 30 days (seven days in
the case of war risk and allied perils coverage) prior to the cancellation (but
not scheduled expiration) or material adverse change of any insurance maintained
pursuant to this Section 4.03, provided that if the notice period specified
above is not reasonably obtainable, such Qualified Insurance Broker shall
provide for as long a period of prior notice as shall then be reasonably
obtained. In addition, the Company will also cause such Qualified Insurance
Broker to deliver to the Indenture Trustee, on or prior to the date of
expiration of any insurance policy referenced in a previously delivered
certificate of insurance, a new certificate of insurance, substantially in the
same form as delivered by the Company to such parties on the Delivery Date
except for changes in the report or the coverage consistent with the terms
hereof. In the event that the Company or any Lessee shall fail to maintain or
cause to be maintained insurance as herein provided, the Indenture Trustee may
at its sole option provide such insurance and, in such event, the Company shall,
upon demand, reimburse the Indenture Trustee for the cost thereof to the
Indenture Trustee, without waiver of any other rights the Indenture Trustee may
have.
(D) SELF-INSURANCE
With respect to any Aircraft, the Company may self-insure the risks
required to be insured against pursuant to this Section 4.03 on the same terms
and conditions as applicable generally to similar aircraft owned or operated by
the Company, but in no case shall the aggregate amount of such self-insurance in
regard to Section 4.03(a) and Section 4.03(b) exceed for any calendar year, with
respect to all aircraft in the Company's fleet (including, without limitation,
the Aircraft) the lesser of (A) 50% of the highest replacement value of any
single aircraft in the Company's fleet or (b) 1-1/2% of the average aggregate
insurable value (during the preceding calendar year) of all aircraft (including,
without limitation, the Aircraft) on which the Company carries insurance. In
addition to the foregoing right to self-insure, the Company shall have the right
to self-insure to the extent of any applicable minimum per aircraft (or, if
applicable, per annum or other period) hull or liability insurance deductible
imposed by the aircraft hull or liability insurers.
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(E) ADDITIONAL INSURANCE BY INDENTURE TRUSTEE AND THE COMPANY
The Company (and any Lessee) may at its own expense carry insurance with
respect to its interest in the Aircraft in amounts in excess of that required to
be maintained by this Section 4.03; the Indenture Trustee may carry for its own
account at its sole cost and expense insurance with respect to its interest in
the Aircraft, PROVIDED that such insurance does not prevent the Company (or any
Lessee) from carrying the insurance required or permitted by this Section 4.03
or adversely affect such insurance or the cost thereof.
(F) INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE
With respect to any Aircraft, notwithstanding any provisions of this
Section 4.03 requiring insurance, the Indenture Trustee agrees to accept, in
lieu of insurance against any risk with respect to the Aircraft, indemnification
from, or insurance provided by, the United States Government or any agency or
instrumentality thereof the obligations of which are supported by the full faith
and credit of the United States Government, against such risk in an amount
which, when added to the amount of insurance against such risk maintained by the
Company (or any Lessee) shall be at least equal to the amount of insurance
against such risk otherwise required by this Section 4.03 (taking into account
self-insurance permitted by Section 4.03(d)).
(G) TERMS OF INSURANCE POLICIES
With respect to any Aircraft, any policies carried in accordance with
Sections 4.03(a) and 4.03(b), and any policies taken out in substitution or
replacement for any such policies, (A) shall name the Additional Insureds as
additional insureds, or, if appropriate, loss payees, as their respective
interests may appear (but without imposing on any such party liability to pay
premiums with respect to such insurance), (B) may provide for self-insurance to
the extent permitted in Section 4.03(d), (C) shall provide that, if the insurers
cancel such insurance for any reason whatever, or if any material change is made
in the insurance which adversely affects the interest of any Additional Insured,
such cancellation or change shall not be effective as to any Additional Insured
for thirty days (seven days in the case of war risk and allied perils coverage)
after receipt by such Additional Insured of written notice from such insurers of
such cancellation or change; PROVIDED that if any notice period specified above
is not reasonably obtainable, such policies shall provide for as long a period
of prior notice as shall then be reasonably obtainable, (D) shall provide that,
in respect of the respective interests of each Additional Insured in such
policies, the insurance shall not be invalidated by any action or inaction of
the Company (or any Lessee) and shall insure the respective interests of the
Additional Insured, as they appear, regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Company (or
any Lessee), (E) shall be primarily without any right of contribution from any
other insurance which is carried by any Additional Insured, (F) shall waive any
right of the insurers to set-off or counterclaim or other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional Insured,
and (G) shall provide that (i) in the event of a loss involving the Aircraft,
Airframe, or an Engine for which proceeds are in excess of $_____________ with
respect to a ____________ Airframe, $____________ with respect to a ____________
Airframe,
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$____________ with respect to a ____________ Airframe, or such other amount as
may be set forth in an Indenture Supplement (or, if the Aircraft is then under a
Lease, in excess of $__________ with respect to a ________________ Airframe,
$_________ with respect to a ________________ Airframe, $___________ with
respect to a _____________ Airframe, or such other amount as may be set forth in
an Indenture Supplement), the proceeds in respect of such loss up to the
aggregate principal amount of the Certificates of such Series together with
accrued interest thereon shall be payable to the Indenture Trustee, it being
understood and agreed that in the case of any payment of the Indenture Trustee
otherwise than in respect of an Event of Loss, the Indenture Trustee shall, upon
receipt of evidence reasonably satisfactory to it that the damage giving rise to
such payment shall have been repaired or that such payment shall then be
required to pay for repairs then being made, pay the amount of such payment, and
any interest or income earned thereon, to the Company or its order, and (ii) the
entire amount of any such loss for which proceeds are $____________ with respect
to a _______________ Airframe, $___________ with respect to a _______________
Airframe, $__________ with respect to a ______________ Airframe or such other
amount as may be set forth in an Indenture Supplement (or, if the Aircraft is
then under a Lease, are $___________ with respect to a ______________ Airframe,
$___________ with respect to a ______________ Airframe, $___________ with
respect to a ______________ Airframe or such other amount as may be set forth in
an Indenture Supplement) or less or the amount of any proceeds of any such loss
in excess of the aggregate principal amount of the Certificates of such series
together with accrued interest thereon shall be paid to the Company or its order
unless an Indenture Default or Indenture Event of Default shall have occurred
and be continuing and the insurers have been notified thereon by the Indenture
Trustee.
SECTION 4.04 LOSS, DESTRUCTION, REQUISITION, ETC.
(A) EVENT OF LOSS WITH RESPECT TO THE AIRCRAFT
Upon the occurrence of an Event of Loss with respect to the Airframe or the
Airframe and the Engines and/or engines then installed thereon, the Company
shall (1) forthwith (and in any event, within fifteen days after such
occurrence) give the Indenture Trustee written notice of such Event of Loss and
(2) within 60 days after such occurrence, give the Indenture Trustee written
notice of its election to perform one of the following options (it being
understood that the failure to give such notice shall be deemed to be an
election of the option set forth in clause (i) below). On a date (the "Loss
Payment Date") designated by the Company upon 45 days' irrevocable notice to the
Indenture Trustee, but in no event later than 120 days following the occurrence
of the Event of Loss, the Company shall:
(i) to the extent not previously paid to the Indenture Trustee, as
insurance proceeds, pay or cause to be paid to the Indenture Trustee the
outstanding principal amount of the Certificates of such series and all
accrued and unpaid interest thereon, together with all other amounts due
and owing under this Agreement or any other Operative Document; or
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(ii) provided that no Indenture Event of Default shall have occurred
and be continuing, substitute an aircraft or an airframe or an airframe and
one or more engines, as the case may be, in accordance with the terms of
this Section 4.04(a), PROVIDED that if the Company shall have elected to
make a substitution under this clause (ii) and shall fail for any reason to
make such substitution in accordance with the terms hereof, the Company
shall make the payments required by clause (i) above as and when due
thereunder.
At such time as the Indenture Trustee shall have received the amount
specified in subparagraph (i) above, together with all other amounts that then
may be due hereunder, (1) the Lien of this Indenture and the Indenture
Supplement shall terminate and (2) the Company will be subrogated to all claims
of the Indenture Trustee, if any, against third parties to the extent the same
relate to physical damage to or loss of the Airframe and any Engines which were
subject to such Event of Loss.
In the event the Company shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) the Company
shall, at its sole cost and expense, (A) purchase or allocate hereto from its
fleet of aircraft owned by the Company an aircraft (or an airframe or an
airframe and one or more engines, as the case may be, which, together with the
Engines or Engine constituting a part of the Aircraft but not installed thereon
at the time of such Event of Loss, constitute the Aircraft) free and clear of
all Liens (other than Permitted Liens) and having at least the value and utility
of the Aircraft subject to such Event of Loss assuming that the Aircraft had
been maintained in accordance with this Agreement, and (B) prior to or at the
time of any such substitution, the Company (or any Lessee), at its own expense,
will (1) furnish to the Indenture Trustee a copy of a full warranty bill of sale
and an FAA bill of sale, in form and substance reasonably satisfactory to the
Indenture Trustee, evidencing title thereto in the name of the Company,
(2) amend and restate the Indenture Supplement and record such amended and
restated Indenture Supplement pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Airframe was registered at the time of such Event of Loss, (3) furnish the
Indenture Trustee with such evidence of compliance with the insurance provisions
of Section 4.03 with respect to such substituted property as the Indenture
Trustee may reasonably request, (4) provide to the Indenture Trustee an
Officer's Certificate of the Company stating the following:
(x) with respect to the replacement of any Airframe:
(i) a description of the Airframe which shall be identified
by manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(ii) a description of the replacement airframe to be received
(including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number)
in replacement of the Airframe to be released;
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(iii) that on the date of such amended and restated Indenture
Supplement relating to the replacement airframe the Company will be
the legal owner of such replacement airframe free and clear of all
Liens except Permitted Liens, that such replacement airframe will on
such date be in good working order and condition, that such
replacement airframe has been or, substantially concurrently with such
replacement, will be duly registered in the name of the Company (or,
if applicable, in the name of a Lessee) under the Federal Aviation Act
or under the law then applicable to the registration of the Airframe,
that an airworthiness certificate has been duly issued under the
Federal Aviation Act (or such other applicable law) with respect to
such replacement airframe, that such registration and certificate are
in full force and effect and that the Company or any Lessee will have
the full right and authority to use such replacement airframe;
(iv) that the replacement airframe is of the same or an
improved model as the Airframe requested to be released from the Lien
of this Agreement and the Indenture Supplement;
(v) the fair market value of the replacement airframe as of
the date of such certificate (which value shall be not less than the
fair market value of the Airframe requested to be released immediately
prior to such Event of Loss, assuming such Airframe was in the
condition and repair required to be maintained under this Agreement);
(vi) the fair market value of the Airframe to be released
immediately prior to the date such Airframe suffered an Event of Loss;
(vii) that the release of the Airframe will not impair the
security of the Lien of this Agreement and the Indenture Supplement or
be in contravention of any of the provisions of this Agreement; and
(y) with respect to the replacement of any Engine:
(ix) a description of the Engine, which shall be identified by
manufacturer's serial number;
(x) a description of the replacement engine (including the
manufacturer's name and serial number) in replacement of the Engine to
be released;
(xi) that on the date of the Indenture Supplement relating to
the replacement engine the Company will be the legal owner of such
replacement engine free and clear of all Liens except Permitted Liens,
that such replacement engine will on such date be in good working
order and condition and that such
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replacement engine is the same as or an improved model of the Engine
to be released;
(xii) the fair market value of the replacement engine as of the
date of such certificate (which value shall not be less than the fair
market value of the Engine to be released immediately prior to such
Event of Loss, assuming such Engine was in the condition and repair
required to be maintained under this Agreement);
(xiii) the fair market value of the Engine to be released
(immediately prior to the Event of Loss suffered by such Engine);
(xiv) that the release of the Engine so to be released will not
impair the security of the Lien of this Agreement and the Indenture
Supplement or be in contravention of any of the provisions of this
Agreement.
and (5) provide an opinion of counsel, which counsel shall be reasonably
acceptable to the Indenture Trustee, to the effect that the Indenture Trustee
shall be entitled to the benefits and protections of Section 1110 of the
Bankruptcy Reform Act of 1978 with respect to the aircraft substituted
hereunder; PROVIDED that such opinion need not be delivered to the extent that
the benefits of Section 1110 of the Bankruptcy Code were not, by reason of a
change of law or governmental interpretation thereof, available to the Indenture
Trustee with respect to the Aircraft immediately prior to such substitution.
Upon the conditions as set forth above, the Company will be subrogated to
all claims of the Indenture Trustee, if any, against third parties to the extent
the same relate to physical damage to or loss of the Airframe and any Engine
which were subject to such Event of Loss. For all purposes hereof, the property
so substituted shall be deemed part of the Indenture Estate hereunder and shall
be deemed an "Aircraft," "Airframe" and "Engine," as the case may be, as defined
herein.
(B) EVENT OF LOSS WITH RESPECT TO AN ENGINE
Upon the occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect to
the Airframe, the Company shall forthwith (and, in any event, within fifteen
days after such occurrence) give the Indenture Trustee written notice thereof
and shall, within 60 days after the occurrence of such Event of Loss,
(A) purchase or allocate hereto from engines owned by the Company, as
replacement for the Engine with respect to which such Event of Loss occurred, an
Acceptable Alternate Engine free and clear of all Liens (other than Permitted
Liens, which engine may become subject to any and all Permitted Liens) and
(B) at its own expense (i) furnish to the Indenture Trustee a copy of a warranty
(as to title) bill of sale, in form and substance reasonably satisfactory to the
Indenture Trustee, with respect to such replacement engine, (ii) amend and
restate an Indenture Supplement (or otherwise appropriately modify this
Agreement) and record such Indenture Supplement (or other document) pursuant to
the
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Federal Aviation Act, or the applicable laws, rules and regulations of any other
jurisdiction in which the Airframe may then be registered, (iii) furnish the
Indenture Trustee with such evidence of compliance with the insurance provisions
of Section 4.03 hereof with respect to such replacement engine as the Indenture
Trustee may reasonably request, and (iv) provide to the Indenture Trustee all
the documentation required to be provided by it pursuant to Section 4.04(a)(ii)
satisfactory in form and substance to the Indenture Trustee. For all purposes
hereof, each such replacement engine shall be deemed part of the Indenture
Estate hereunder, and shall be deemed an "Engine."
(C) REQUISITION FOR USE OF THE AIRCRAFT BY THE UNITED STATES GOVERNMENT OR
GOVERNMENT OF REGISTRY OF THE AIRCRAFT
With respect to any Aircraft, in the event of the requisition for use of
the Airframe and the Engines or engines installed on the Airframe by the United
States Government or any other government of registry of the Aircraft or any
instrumentality or agency thereof, the Company shall promptly notify the
Indenture Trustee of such requisition, and all of the Company's rights and
obligations under this Agreement and the Indenture Supplement with respect to
the Aircraft shall continue to the same extent as if such requisition had not
occurred. All payments received by the Indenture Trustee or the Company from
the United States Government or any other government of registry of the Aircraft
or any instrumentality or agency thereof for the use of such Airframe and
Engines or engines shall be paid over to, or retained by, the Company (or, if
directed by the Company, any Lessee).
(D) REQUISITION FOR USE OF AN ENGINE BY THE UNITED STATES GOVERNMENT OR
THE GOVERNMENT OF REGISTRY OF THE AIRCRAFT
With respect to any Aircraft, in the event of the requisition for use of an
Engine by the United States Government or any other government of registry of
the Aircraft or any agency or instrumentality thereof (other than in the
circumstances contemplated by Section 4.04(c)), the Company shall replace (or
cause any Lessee to replace) such Engine hereunder and the Indenture Trustee and
the Company (or Lessee, as the case may be) shall comply with the terms of
Section 4.04(b) to the same extent as if an Event of Loss had occurred with
respect to such Engine. Upon compliance with Section 4.04(b) hereof, any
payments received by the Indenture Trustee or the Company from such government
with respect to such requisition shall be paid over to, or retained by, the
Company.
SECTION 4.05 INSPECTION
With respect to any Aircraft, at reasonable times, and upon at least
10 days' prior written notice, the Indenture Trustee, or its authorized
representative, may inspect the Aircraft (PROVIDED, HOWEVER, such inspections
shall be limited to one inspection of the Aircraft during any consecutive
twelve-month period except during the continuance of an Indenture Event of
Default, when such inspection right shall not be so limited) and inspect and
make copies (at Indenture Trustee's risk and expense) of the FAA (or the then-
applicable government of registry) required books and records of the Company and
any Lessee relating to the
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maintenance of the Aircraft and shall keep any information or copies obtained
thereby confidential and shall not disclose the same to any Person, except
(A) to prospective and permitted transferees of the Indenture Trustee's interest
who agree to hold such information confidential, (B) to the Indenture Trustee's
or any such transferee's counsel, independent insurance advisors or other agents
who agree to hold such information confidential, or (C) as may be required by
any statute, court or administrative order or decree or governmental ruling or
regulation. Any such inspection of the Aircraft shall be subject to the
Company's safety and security rules applicable at the location of the Aircraft,
shall be a visual, walk-around inspection (including an on-board inspection) and
shall not include opening any panels, bays or the like (except when such panels,
bays or the like are otherwise required to be open) without the express consent
of the Company, which consent the Company may in its sole discretion withhold;
PROVIDED that no exercise of such inspection right shall interfere with the
normal operation or maintenance of the Aircraft by, or the business of, the
Company (or any Lessee).
SECTION 4.06 LIENS
With respect to the Certificates of any series, the Company will not
directly or indirectly create, incur, assume or suffer to exist any Lien on or
with respect to the Aircraft or title thereto except for Permitted Liens.
SECTION 4.07 CERTIFIED AIR CARRIER
With respect to the Certificates of any series, the Company covenants and
agrees with the Indenture Trustee that so long as any such Certificate remains
Outstanding, it will be an "air carrier" within the meaning of the Federal
Aviation Act operating under certificates issued pursuant to Section 401 of such
Act.
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN INDENTURE ESTATE
SECTION 5.01 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN
INDENTURE ESTATE
With respect to the Certificates of any series so long as this Agreement is
in effect:
(A) PARTS
The Indenture Trustee shall from time to time execute an appropriate
written instrument or instruments to confirm the release of the security
interest of the Indenture Trustee in any Part removed in accordance with
Section 4.02, in each case upon receipt by the Indenture Trustee of a Company
Request stating that said action was duly taken by the Company in conformity
with this Section 5.01 and that the execution of such written instrument or
instruments is appropriate to evidence such release of a security interest under
this Section 5.01.
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(B) SUBSTITUTION UPON AN EVENT OF LOSS OCCURRING TO AIRFRAME OR
ENGINES
Upon the occurrence of a substitution of an Airframe or an Engine and the
satisfaction of all conditions to such substitution specified in Section 4.04
and the additional condition specified in Section 5.01(c), if applicable, the
Indenture Trustee shall release all of its right, interest and Lien in and to
such Airframe or Engine in accordance with the provisions of the following two
sentences. The Indenture Trustee shall execute and deliver to the Company an
instrument releasing its Lien in and to such Airframe or Engine and shall
execute for recording in public offices, at the expense of the Company, such
instruments in writing as the Company shall reasonably request and as shall be
reasonably acceptable to the Indenture Trustee in order to make clear upon
public records that such Lien has been released under the laws of the applicable
jurisdiction. The Company hereby waives and releases any and all rights
existing or that may be acquired to any penalties, forfeit or damages from or
against the Indenture Trustee for failure to execute and deliver any document in
connection with the release of any Lien or to file any certificate in compliance
with any law or statute requiring the filing of the same in connection with the
release of any Lien, except for failure by the Indenture Trustee to execute and
deliver any document or to file any certificate as may be specifically requested
in writing by the Company.
(C) CONDITION TO RELEASE
The Indenture Trustee's release of all of its right, interest and Lien in
and to an Airframe or Engine applicable to the Certificates of any series, as
provided for in Section 5.01(b), shall be subject to the condition that the
Indenture Trustee shall have received (i) a certificate of an Independent
Appraiser reasonably acceptable to the Indenture Trustee, following a physical
inspection, stating the fair value to the Company of the airframe or engine to
be substituted for such Airframe or Engine and the value, utility and, solely
with respect to an Airframe, useful life thereof, and (ii) a certificate of an
Appraiser as to the fair value of such Airframe or Engine, as the case may be,
to be released from such Lien and stating that in the opinion of such Appraiser
the proposed release will not impair the security under this Agreement in
contravention of the provisions hereof, which certificate shall be prepared by
an Independent Appraiser if the fair value of such Airframe or Engine, as the
case may be, to be released from the Lien of this Agreement and of all other
property and securities released since the commencement of the then current
calendar year, as set forth in the certificates required by Section 314(d)(1) of
the Trust Indenture Act, is 10% or more of the aggregate principal amount of the
Certificates of such series at the time Outstanding.
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ARTICLE 6
REDEMPTION OF CERTIFICATES
SECTION 6.01 REDEMPTION OF CERTIFICATES IN THE EVENT OF NONDELIVERY OF AIRCRAFT
OF UPON EVENT OF LOSS
(a) In the event that the Aircraft applicable to the Certificates of any
series is not subjected to the Lien of this Agreement prior to the date therefor
specified in such Indenture Supplement, each Outstanding Certificate of the
series shall be redeemed in whole at a Redemption Price equal to 100% of the
outstanding principal amount of the Certificate plus accrued and unpaid interest
thereon to but excluding the applicable Redemption Date, without Premium. The
Redemption Date for Certificates redeemed pursuant to this Section 6.01(a) shall
be the date specified therefor in the Indenture Supplement.
(b) Upon the occurrence of an Event of Loss to the Aircraft applicable to
the Certificates of any series, if such Aircraft is not replaced pursuant to
Section 4.04, each Outstanding Certificate of such series shall be redeemed in
whole at a Redemption Price equal to 100% of the outstanding principal amount of
such Certificate plus accrued and unpaid interest thereon to but excluding the
applicable Redemption Date, without Premium. The Redemption Date for
Certificates redeemed pursuant to this Section 6.01(b) shall be the Loss Payment
Date applicable to the Certificates of such series.
(c) All other events of redemption and the details thereof shall be
specified in the Indenture Supplement, including the Redemption Date and the
Redemption Price.
SECTION 6.02 NOTICE OF REDEMPTION TO HOLDERS
Notice of redemption with respect to Certificates of any series shall be
given by first-class mail, postage prepaid, mailed not less than the minimum nor
more than the maximum number of days specified in the Indenture Supplement prior
to the Redemption Date, to each Holder of such Certificates to be redeemed, at
such Holder's address appearing in the Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the applicable basis for determining the Redemption Price,
(3) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Certificate, and that interest on such
Certificate shall cease to accrue on and after such Redemption Date, and
(4) the place or places where such Certificates are to be surrendered
for payment of the Redemption Price.
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Notice of redemption of such Certificates to be released shall be given by the
Indenture Trustee.
SECTION 6.03 DEPOSIT OF REDEMPTION PRICE
On or before the Redemption Date for the Certificates of any series, the
Company shall, to the extent an amount equal to the Redemption Price for such
Certificates shall not then be held in the Indenture Estate applicable to the
Certificates of such series, deposit or cause to be deposited with the Indenture
Trustee or the Paying Agent by 12:00 noon in immediately available funds an
amount equal to such Redemption Price
SECTION 6.04 CERTIFICATES PAYABLE ON REDEMPTION DATE
Notice of redemption of the Certificates of any series having been given as
aforesaid, such Certificates shall, on the Redemption Date, become due and
payable at the principal corporate trust office of the Indenture Trustee or at
any office or agency maintained for such purposes pursuant to Section 2.04, and
from and after such Redemption Date (unless there shall be a default in the
payment of the Redemption Price) any such Certificates then Outstanding shall
cease to bear interest. Upon surrender of any such Certificates for redemption
in accordance with said notice such Certificates shall be redeemed at the
Redemption Price.
If any Certificate of any series called for redemption shall not be so paid
upon surrender thereof for redemption, the principal amount thereof shall, until
paid, continue to bear interest from the applicable Redemption Date at the
interest rate applicable to such Certificate.
ARTICLE 7
CERTAIN COVENANTS
SECTION 7.01 REPAYMENT OF MONIES FOR CERTIFICATE PAYMENTS HELD BY INDENTURE
TRUSTEE
Any money held by the Indenture Trustee or any Paying Agent in trust for
any payment of the principal of, or Premium, if any, or interest on the
Certificates of any series (including, without limitation, any money deposited
pursuant to Article 10) and remaining unclaimed for two years and eleven months
after the due date for such payment, shall be paid to the Company; and the
Holders of any Outstanding Certificates of such series shall thereafter, as
unsecured general creditors, look only to the Company for payment thereof, and
all liability of the Indenture Trustee or any such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be mailed to each Holder of a Certificate of
such series notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of
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mailing, any unclaimed balance of such money then remaining will be repaid to
the Company as provided herein.
SECTION 7.02 REPORTS BY THE COMPANY
The Company shall:
(a) file with the Indenture Trustee, within 30 days after the Company
is required to file the same with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended;
or, if the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Indenture Trustee and
the SEC, in accordance with rules and regulations prescribed by the SEC, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national securities
exchange as may be prescribed in such rules and regulations,
(b) file with the Indenture Trustee and the SEC, in accordance with
the rules and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Agreement, as may be required by
such rules and regulations, including, in the case of annual reports, if
required by such rules and regulations, certificates or opinions of independent
public accountants, conforming to the requirements of Section 13.05;
(c) transmit to all Holders, in the manner and to the extent provided
in Section 313(c) of the Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 7.02 as may be required by rules and
regulations prescribed by the SEC;
(d) furnish to the Indenture Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Agreement (it
being understood that for purposes of this paragraph (d), such compliance shall
be determined without regard to any period of grace or requirement of notice
provided under this Agreement); and
(e) furnish to the Indenture Trustee:
(1) promptly after the execution and delivery of each Indenture
Supplement, an Opinion of Counsel either stating that in the opinion
of such counsel such Indenture Supplement has been properly recorded
and filed so as to make effective the Lien intended to be created
thereby, and reciting the
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details of such action, or stating that in the opinion of such counsel
no such action is necessary to make such Lien effective; and
(2) at least annually after the execution and delivery of this
Agreement, an Opinion of Counsel either stating that in the opinion of
such counsel such action has been taken with respect to the recording,
filing, re-recording, and refiling of this Agreement and each
Indenture Supplement entered into hereunder as is necessary to
maintain the Lien of this Agreement, and reciting the details of such
action, or stating that in the opinion of such counsel no such action
is necessary to maintain such Lien.
SECTION 7.03 CONSOLIDATION, MERGER, ETC.
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease substantially all its assets as an entirety to any
Person unless:
(i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all the assets of the Company as an entirety shall be
(i) a citizen of the United States as defined in Section 101(16) of the
Federal Aviation Act and (ii) a United States certificated air carrier;
(ii) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Indenture Trustee a duly authorized, valid,
binding and enforceable agreement in form and substance reasonably
satisfactory to the Indenture Trustee containing an assumption by such
successor corporation or Person of the due and punctual performance and
observance of each covenant and condition of the Operative Documents
applicable to the Certificates of each series to be performed or observed
by the Company;
(iii) immediately after giving effect to such transaction, no
Indenture Event of Default applicable to the Certificates of each series or
event which is, or after notice or passage of time, or both, would be, such
an Indenture Event of Default shall have occurred and be continuing; and
(iv) the Company shall have delivered to the Indenture Trustee an
Officers' Certificate of the Company and an Opinion of Counsel of the
Company reasonably satisfactory to the Indenture Trustee, each stating that
such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (ii) above comply with this
Section 7.03 and that all conditions precedent herein provided for relating
to such transaction have been complied with.
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Upon any consolidation or merger, or any conveyance, transfer or lease of
substantially all the assets of the Company as an entirety in accordance with
this Section 7.03, the successor corporation or Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement and the
Indenture Supplement applicable to the Certificates of each series with the same
effect as if such successor corporation or Person had been named as the Company
herein. No such conveyance, transfer or lease of substantially all the assets
of the Company as an entirety shall have the effect of releasing the Company or
any successor corporation or Person which shall theretofore have become such in
the manner prescribed in this Section 7.03 from its liability in respect of any
Operative Document applicable to the Certificates of such series to which it is
a party.
SECTION 7.04 CHANGE IN REGISTRATION
The Indenture Trustee shall, upon the request of the Company, consent to
the deregistration of the Aircraft applicable to the Certificates of any series
under the laws of the jurisdiction in which it is at the time registered and the
registration of such Aircraft under the laws of another jurisdiction (herein
called a "change in registration") provided that the following conditions are
met:
(a) such change in registration complies with the provisions of
Section 4.01(c);
(b) no Indenture Event of Default applicable to the Certificates of
such series and no event which, with lapse of time or the giving of notice, or
both, would become such an Indenture Event of Default shall have occurred and be
continuing at the effective date of the change in registration, provided that it
shall not be necessary to comply with this condition (b) if the change in
registration results in the registration of such Aircraft under the laws of the
United States of America or if the Indenture Trustee in its discretion believes
the change in registration would be advantageous to the Holders of the
Certificates of such series; and
(c) the Indenture Trustee shall have received an Opinion of Counsel
of the Company reasonably satisfactory to the Indenture Trustee to the effect
that:
(i) after giving effect to the change in registration, the Lien on
such Aircraft and the other property included in the Indenture Estate
applicable to the Certificates of such series shall continue as a fully
perfected Lien and that all filing, recording or other action necessary to
perfect and protect the Lien of this Agreement has been accomplished (or,
if such opinion cannot be given on or prior to the effective date of such
change in registration, (x) such opinion shall be to the effect that such
filing, recording or other action as is feasible on or prior to such
effective date (detailing the same) has been accomplished and that such
filing, recording or other action as must be accomplished subsequently
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(detailing the same) is of a routine nature and (y) the Indenture Trustee
shall have received an Officer's Certificate of the Company that all
possible preparations to accomplish such subsequent filing, recording and
other action shall have been done, and such filing, recording and other
action will be accomplished (the Company agreeing to deliver an Opinion of
Counsel of the Company as promptly as possible subsequent to such effective
date confirming that all such filing, recording and other action has been
taken; and
(ii) the terms of this Agreement (including the governing law clauses)
being legal, valid and binding and enforceable in such jurisdiction, except
as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally, and by general principles of equity and except as
limited by applicable laws which may affect the remedies provided in this
Agreement, respectively, which laws, however, do not in the opinion of such
counsel make the remedies provided in this Agreement, respectively,
inadequate for the practical realization of the rights and benefits
provided thereby.
The Indenture Trustee shall execute such documents as the Company shall
reasonably request in order to satisfy the above conditions and, upon
satisfaction of such conditions, to effect the change in registration.
ARTICLE 8
DEFAULTS AND REMEDIES
SECTION 8.01 INDENTURE EVENTS OF DEFAULT
"Indenture Event of Default," with respect to the Certificates of any
series, means one or more of the following events (whether any such event shall
be voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) any amount of principal of, or Premium, if any, or interest on
the Certificates of such series shall not be paid when due and payable (whether
upon redemption, final maturity, acceleration or otherwise) and such default in
payment shall continue for more than seven Business Days (or such other period
as may be specified in the Indenture Supplement) applicable to the Certificates
of such series after such amount shall have become due and payable; or
(b) default on the part of the Company in the due observance or
performance of any other covenant or agreement to be observed or performed under
this Agreement, or the Certificates of such series, and any such default shall
continue uncured for a period of 30 days (or such other period as may be
specified in the Indenture Supplement) after
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written notice from the Indenture Trustee to the Company specifying the default
and demanding the same to be remedied; PROVIDED that if the Company shall have
undertaken to cure any such failure and, notwithstanding the reasonable
diligence of the Company in attempting to cure such failure, such failure is not
cured within such cure period but is curable with future due diligence, there
shall exist no Indenture Event of Default under this Article 8 so long as the
Company is proceeding with due diligence to cure such failure and such failure
is in fact cured within 180 days (or such other period as may be specified in
the Indenture Supplement); or
(c) any representation or warranty made by the Company herein or in
the Officer's Certificate required pursuant to Section 3.01(b)(vii) or in any
document or certificate furnished by the Company in connection herewith or
pursuant hereto shall prove to have been incorrect in any material respect at
the time made and shall remain material at the time in question; PROVIDED such
incorrectness shall constitute an Indenture Event of Default hereunder only if
such incorrectness shall remain uncured for 30 days (or such other period as may
be specified in the Indenture Supplement) after the receipt by the Company of a
written notice from the Indenture Trustee advising the Company of the existence
of such incorrectness; or
(d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in any involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or take any corporate action to authorize any of the foregoing; or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its Property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 days;
PROVIDED that, notwithstanding anything to the contrary contained in this
Article 8, any failure of the Company to perform or observe any covenant,
condition, agreement or any error in a representation or warranty shall not
constitute an Indenture Event of Default if such failure or error is caused
solely by reason of any event that constitutes an Event of Loss so long as the
Company is continuing to comply with all of the terms of Section 4.04 hereunder.
SECTION 8.02 ACCELERATION; RESCISSION AND ANNULMENT
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing, the Indenture Trustee, by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of
Outstanding Certificates of such series, by notice to the
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Company and the Indenture Trustee, may declare the principal of all the
Certificates of such series to be due and payable. Upon such declaration, the
principal of all Certificates of such series together with accrued interest
thereon from the date in respect of which interest was last paid hereunder to
the date payment of such principal is made or duly provided for, shall be
immediately due and payable and no Premium shall be payable in connection with
any redemption of such Certificates as a consequence of such acceleration. At
any time after such declaration and prior to the sale or disposition of the
Indenture Estate applicable to the Certificates of such series, the Holders of a
majority in aggregate principal amount all the Outstanding Certificates of such
series, by notice to the Indenture Trustee and the Company may rescind such a
declaration and thereby annul its consequences if (i) an amount sufficient to
pay all principal of any Certificates of such series which have become due
otherwise than by such declaration and any interest thereon and interest due or
past due, if any, and all other sums due and payable to the Indenture Trustee in
respect of the Certificates of such series have been deposited with the
Indenture Trustee, (ii) the rescission would not conflict with any judgment or
decree, and (iii) all existing Indenture Defaults applicable to the Certificates
of such series and Indenture Events of Default applicable to the Certificates of
such series under this Agreement have been cured or waived (except nonpayment of
amounts of principal of, and interest on, the Certificates of such series that
have become due solely because of such acceleration).
SECTION 8.03 OTHER REMEDIES AVAILABLE TO INDENTURE TRUSTEE
(a) After an Indenture Event of Default with respect to the Certificates
of any series shall have occurred and so long as such Indenture Event of Default
shall be continuing, then and in every such case the Indenture Trustee, as
trustee of an express trust and as holder of a security interest in the Aircraft
or Engines may, and when required pursuant to the provisions of Article 9 shall,
do one or more of the following with respect to all or any part of the related
Airframe or any related Engine to the extent permitted by, and subject to
compliance with any mandatory requirements of, applicable law then in effect;
PROVIDED that during any period the Aircraft is subject to the Civil Reserve Air
Fleet Program in accordance with the provisions of Section 4.01(d) and in the
possession of the United States Government or an instrumentality or agency
thereof, the Indenture Trustee shall not, on account of any Indenture Event of
Default, be entitled to do any of the following in such manner as to limit the
Company's control (or any Lessee's control under any Lease) of any Airframe or
any Engines, unless at least 60 days' (or such lessor period as may then be
applicable under the Military Airlift Command program of the United States
government) prior written notice of default hereunder shall have been given by
the Indenture Trustee by registered or certified mail to the Company (and any
Lessee) with a copy addressed to the Contracting Office Representative for the
Military Airlift Command of the United States Air Force under any contract with
the Company (or any Lessee) relating to the Aircraft:
(i) cause the Company, upon the written demand of the Indenture
Trustee and at the Company's expense, to return promptly, and the Company
shall return promptly, all or such part of any Airframe or any Engine as
the Indenture Trustee may so demand to the Indenture Trustee or its order
or the Indenture Trustee, at its option,
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may enter upon the premises where all or any part of such Airframe or any
Engine are located and take immediate possession of and remove the same
(together with any engine which is not an Engine but which is installed on
the Airframe, subject to all of the rights of the owner, lessor, lienor or
secured party of such engine; PROVIDED that the Airframe with an engine
(which is not an Engine) installed thereon may be flown or returned only to
a location within the continental United States, and such engine shall be
held for the account of any such owner, lessor, lienor or secured party or,
if owned by the Company, may, at the option of the Indenture Trustee, be
exchanged with the Company for an Engine, all without liability accruing to
the Indenture Trustee for or by reason of such entry or taking of
possession or removal, whether for the restoration of damage to property
caused by such taking or otherwise; or
(ii) sell all or any part of any Airframe and any Engine as provided
in Section 8.03(b), or otherwise dispose of, hold, use, operate, lease to
others or keep idle all or any part of such Airframe or such Engine as
provided in Section 8.03(c), all free and clear of any rights of the
Company and without any duty to account to the Company with respect to such
action or inaction or for any proceeds with respect thereto.
(b) The Indenture Trustee may, if at the time such action is lawful and
always subject to compliance with any mandatory legal requirements, either with
or without taking possession, and either before or after taking possession, and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered mail to the Company once at least 30 days
prior to the date of such sale, and any other notice which may be required by
law, sell and dispose of the Indenture Estate applicable to the Certificates of
such series, or any part thereof, or interest therein, at public auction to the
highest bidder, in one lot as an entirety or in separate lots, and either for
cash or on credit and on such terms as the Indenture Trustee may determine, and
at any place (whether or not it be the location of such Indenture Estate or any
part thereof) and time designated in the notice above referred to; Uprovided
that notwithstanding any provision herein to the contrary, the Indenture Trustee
shall not sell any of such Indenture Estate unless a declaration of acceleration
of the Certificates of such series has been made pursuant to Section 8.02. Any
such sale or sales may be adjourned from time to time by announcement at the
time and place appointed for such sale or sales, or for any such adjourned sale
or sales, without further notice, and the Indenture Trustee and the Holder or
Holders of any Certificates of such series, or any interest therein, may bid and
become the purchaser at any such sale. The Indenture Trustee may exercise such
right without possession or production of the Certificates of such series or
proof of ownership thereof, and as representative of the Holders may exercise
such right without notice to the Holders or including the Holders as parties to
any suit or proceeding relating to foreclosure of any property in such Indenture
Estate. By entering into an Indenture Supplement applicable to the Certificates
of such series, the Company irrevocably constitutes the Indenture Trustee the
true and lawful attorney-in-fact of the Company (in the name of the Company or
otherwise) for the purpose of effectuating any sale, assignment, transfer or
delivery for enforcement of the Lien created under this Agreement, whether
pursuant to foreclosure or power of sale or otherwise, to execute and deliver
all such bills of sale, assignments and other instruments as the Indenture
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Trustee may consider necessary or appropriate, with full power of substitution,
the Company, by so entering into such Indenture Supplement, thereby ratifying
and confirming all that such attorney or any substitute shall lawfully do by
virtue hereof. Nevertheless, if so requested by the Indenture Trustee or any
purchaser, the Company shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Indenture Trustee or
such purchaser all bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be designated in
any such request.
(c) If an Indenture Event of Default with respect to the Certificates of
any series has occurred and is continuing, the Company shall, at the request of
the Indenture Trustee, promptly execute and deliver to the Indenture Trustee
such instruments of title or other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any part of the Indenture Estate applicable to the Certificates of such
series. If the Company shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee shall be entitled, in a proceeding to which the Company will
be a necessary party, to a judgment for specific performance of the covenants
contained in the foregoing sentence, conferring upon the Indenture Trustee the
right to immediate possession and requiring the Company to execute and deliver
such instruments and documents to the Indenture Trustee. The Indenture Trustee
shall also be entitled to pursue all or any part of such Indenture Estate
wherever it may be found and may enter any of the premises of the Company or any
other Person wherever such Indenture Estate may be or be supposed to be and
search for such Indenture Estate and take possession of any item of such
Indenture Estate pursuant to this Section 8.03(c). The Indenture Trustee may,
from time to time, at the expense of such Indenture Estate, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of such Indenture Estate, as it may deem
proper. In each such case, the Indenture Trustee shall have the right to use,
operate, store, lease, control or manage such Indenture Estate, and to exercise
all rights and powers of the Company relating to such Indenture Estate as the
Indenture Trustee shall deem appropriate, including the right to enter into any
and all such agreements with respect to the use, operation, storage, leasing,
control or management of such Indenture Estate or any part thereof; and the
Indenture Trustee shall be entitled to collect and receive directly all tolls,
rents, issues, profits, products, revenues and other income of such Indenture
Estate and every part thereof, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Agreement applicable to the
Certificates of such series to collect and receive all cash held by, or required
to be deposited with, the Indenture Trustee hereunder. In accordance with the
terms of this Section 8.03(c), such tolls, rents, issues, profits, products,
revenues and other income shall be applied to pay the expenses of using,
operating, storing, leasing, controlling or managing such Indenture Estate, and
of all maintenance, insurance, repairs, replacements, alterations, additions and
improvements, and to make all payments which the Indenture Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon such Indenture Estate or any part thereof (including
the employment of engineers and accountants to examine, inspect and make reports
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upon the properties and books and records of the Company), and all other
payments which the Indenture Trustee may be required or authorized to make under
any provision of this Agreement, including this Section 8.03(c), as well as just
and reasonable compensation for the services of the Indenture Trustee, and of
all persons properly engaged and employed by the Indenture Trustee.
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing and the Indenture Trustee shall have obtained
possession of or title to the Aircraft applicable to the Certificates of such
series, the Indenture Trustee shall not be obligated to use or operate such
Aircraft or cause such Aircraft to be used or operated directly or indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of such Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its discretion
to protect the Indenture Estate applicable to the Certificates of such series
and the Indenture Trustee, as trustee and individually, against any and all
liability for loss or damage to such Aircraft and for public liability and
property damage resulting from use or operation of such Aircraft and (ii) funds
are available in such Indenture Estate to pay for such insurance or, in lieu of
such insurance, the Indenture Trustee is furnished with indemnification from the
Holders of the Certificates of such series or any other Person upon terms and in
amounts satisfactory to the Indenture Trustee in its discretion to protect such
Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all such liabilities.
(d) The Indenture Trustee may proceed to protect and enforce this
Agreement, and the Certificates of such series by suit or suits or proceedings
in equity, at law or in bankruptcy, and whether for the specific performance of
any covenant or agreement herein contained or in execution or aid of any power
herein granted; or for foreclosure hereunder, or for the appointment of a
receiver or receivers for the Indenture Estate applicable to the Certificates of
such series or any part thereof, or for the recovery of judgment for the
indebtedness secured by the Lien created under this Agreement or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
(e) With respect to the Certificates of any series, each and every right,
power and remedy herein given to the Indenture Trustee specifically or otherwise
in this Agreement shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given or now or hereafter existing
at law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often in such order as may be deemed expedient by the
Indenture Trustee, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or power
or in pursuing any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Company or to be an
acquiescence therein.
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(f) Notwithstanding any other provision hereof, if any payment of
principal of the Certificates of any series shall not be made when and as the
same shall become due and payable, or if any payment of interest on the
Certificates of any series shall not be made when the same shall become due and
payable and such failure shall continue for the period prescribed in Section
8.01(a), the Indenture Trustee shall be entitled to recover judgment, in its own
name and as trustee of an express trust upon the Certificates of such series for
the whole amount of such principal or interest, as the case may be, remaining
unpaid.
SECTION 8.04 WAIVER OF THE COMPANY
The Company shall not, to the extent now or at any time hereafter
enforceable under applicable law, at any time insist upon or plead, or in any
manner whatsoever claim or take any benefit or advantage of or from any law now
or hereafter in force providing for the valuation or appraisement of the
Indenture Estate applicable to the Certificates of such series or any part
thereof, prior to any sale or sales thereof to be made pursuant to any provision
herein contained, or prior to any applicable decree, judgment or order of any
court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Company acquiring any interest in or
title to such Indenture Estate or any part thereof subsequent to the date of
such Indenture Supplement, all benefit and advantage of any such law or laws,
and covenants that it will not invoke or utilize any such law or laws, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted.
The Indenture Trustee may maintain such a proceeding even if it does not
possess any of the Certificates or does not produce any of them in the
proceeding. A delay or omission by the Indenture Trustee or any Holder in
exercising any right or remedy accruing upon an Indenture Event of Default with
respect to the Certificates of any series shall not impair the right or remedy
or constitute a waiver of or acquiescence in such Indenture Event of Default.
SECTION 8.05 WAIVER OF EXISTING DEFAULTS
The Holders of a majority in the aggregate principal amount of the
Outstanding Certificates of any series, by notice to the Indenture Trustee, may
waive on behalf of the Holders of the Certificates of such series any existing
Indenture Default or Indenture Event of Default with respect to the Certificates
of such series and its consequences except (i) an Indenture Default or Indenture
Event of Default in the payment of the principal or of Premium, if any, or
interest on any Certificates of such series or (ii) in respect of a covenant or
provision in this Agreement which pursuant to Section 12.02 cannot be amended or
modified without the consent of each Holder affected thereby.
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SECTION 8.06 CONTROL BY MAJORITY
The Holders of a majority in aggregate principal amount of the Outstanding
Certificates of any series may direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee or exercising
any trust or power conferred on it by this Agreement in respect of the
Certificates of such series. However, the Indenture Trustee may refuse to
follow any direction that conflicts with law or this Agreement, that is unduly
prejudicial to the rights of the Holders so affected, or that would subject the
Indenture Trustee to personal liability.
SECTION 8.07 LIMITATION ON SUITS BY HOLDERS
A Holder of a Certificate of any series may pursue a remedy under this
Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default with respect to the Certificates of
such series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Certificates of such series make a written request to the
Indenture Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or
expense to be, or which may be, incurred by the Indenture Trustee in
pursuing the remedy;
(4) the Indenture Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Outstanding Certificates of such series do not give
the Indenture Trustee a direction inconsistent with the request.
A Holder of a Certificate of any series may not use this Agreement to
prejudice the rights of another Holder of a Certificate of such series or to
obtain a preference or priority over another Holder of a Certificate of such
series.
SECTION 8.08 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Agreement, the right of any
Holder of a Certificate of any series to receive payment of principal of, and
Premium, if any, and interest on such Certificate on or after the respective due
dates expressed in such Certificate, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
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SECTION 8.09 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM
The Indenture Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and of the Holders allowed in any judicial proceedings
relating to any obligor on the Certificates, its creditors, or its property.
SECTION 8.10 UNDERTAKING FOR COSTS
With respect to the Certificates of any series, all parties to this
Agreement agree, and each Holder of any Certificate of any series by his
acceptance thereof shall be deemed to have agreed, that in any suit for the
enforcement of any right or remedy under this Agreement or in any suit against
the Indenture Trustee for any action taken or omitted by it as Indenture
Trustee, a court in its discretion may require the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 8.10 does not apply to a suit instituted by the Indenture Trustee, a
suit instituted by a Holder for the enforcement of the payment of principal of,
or Premium, if any, or interest on any Certificate owned by such Holder, on or
after the respective due dates expressed in such Certificate, or a suit by a
Holder or Holders of more than 10% in aggregate principal amount of Outstanding
Certificates of any series.
ARTICLE 9
INDENTURE TRUSTEE
SECTION 9.01 DUTIES OF INDENTURE TRUSTEE
(a) The Indenture Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(b) Subject to the provisions of Section 9.04, the Indenture Trustee shall
not be liable for interest on any money received by it except as the Indenture
Trustee may otherwise agree in writing with the Company. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to the
extent required by law.
(c) The Indenture Trustee shall keep the Purchase Agreement confidential
in accordance with the terms hereof and shall not disclose the same to any
Person, except (A) to prospective and permitted transferees of the Indenture
Trustee's interest who agree to hold such information confidential or such
prospective transferee's counsel or special counsel, independent certified
public accountants, independent insurance brokers or other similar agents who
agree to hold such information confidential, (B) as may be required by any
statute, court or administrative order or decree or governmental ruling or
regulation, including federal or state banking examiners, or (C) as may be
necessary for purposes of enforcement of this
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Agreement by the Indenture Trustee; PROVIDED that any and all disclosures of all
or any part of the Purchase Agreement which are permitted by (C) above shall be
made only to the extent necessary to meet the specific requirements or needs of
the Persons to whom such disclosures are hereby permitted.
SECTION 9.02 RIGHTS OF INDENTURE TRUSTEE
Subject to the provisions of Section 315 of the Trust Indenture Act:
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed and presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
consult with counsel or require an Officer's Certificate or an Opinion of
Counsel from the Company after which it will take such action or refrain from
acting as it deems appropriate. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith and in accordance herewith in
reliance on a resolution of the Board of Directors of the Company, the written
advice of counsel acceptable to the Company and the Indenture Trustee, officer's
certificates or opinions of counsel provided by the Company.
(c) The Indenture Trustee may act with respect to the Certificates of
any series through agents and shall not be responsible for the misconduct or
negligence of any such agent appointed with due care; PROVIDED that, so long as
no Indenture Event of Default with respect to the Certificates of such series
shall have occurred and be continuing, no such agents shall be appointed by the
Indenture Trustee applicable to the Certificates of such series without the
consent of the Company, which consent shall not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers.
To the extent that the provisions of this Section 9.02 are inconsistent with the
duties of the Indenture Trustee as required by Section 315 of the Trust
Indenture Act, the requirements of such Section 315 shall prevail.
SECTION 9.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE
The Indenture Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates and may otherwise deal with the Company or
an Affiliate of the Company or a subsidiary of the Company with the same rights
it would have if it were not the Indenture Trustee. Any Agent may do the same
with like rights. However, the Indenture Trustee is subject to Sections 9.09
and 9.11 hereof and Section 310(b) and 311 of the Trust Indenture Act.
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SECTION 9.04 FUNDS MAY BE HELD BY INDENTURE TRUSTEE OR PAYING AGENT;
INVESTMENTS
(a) Any monies (including, without limitation, for purposes of this
Subsection 9.04(a), any cash constituting the proceeds of the maturity, sale or
other disposition of any Permitted Investment) held by the Indenture Trustee or
the Paying Agent hereunder as part of the Indenture Estate applicable to the
Certificates of any series, until paid out by the Indenture Trustee or the
Paying Agent as herein provided, (i) subject to clause (ii) below, may be
carried by the Indenture Trustee or the Paying Agent on deposit with itself or
on deposit to its account with any bank, trust company or national banking
association incorporated or doing business under the laws of the United States
of America or one of the States thereof having combined capital and surplus and
retained earnings of at least $100,000,000, and neither the Indenture Trustee
nor the Paying Agent shall have any liability for interest upon any such monies
except as otherwise agreed in writing with the Company, or (ii) at any time and
from time to time, so long as no Indenture Event of Default with respect to the
Certificates of such series shall have occurred and be continuing, at the
request of the Company shall, with financial institutions of the character
described in Subsection 9.04(a)(i), be invested and reinvested in Permitted
Investments of the character described in clause (i), (ii), (iii) or (v) of the
definition thereof or in overnight federal funds of amounts on deposit in the
Indenture Trustee's account at State Street Bank and Trust Company as specified
in such request (if such investments are reasonably available for purchase) and
sold, in any case at such prices, including accrued interest or its equivalent,
as are set forth in such request, and such Permitted Investments shall be held
by the Indenture Trustee in trust as part of the Indenture Estate applicable to
the Certificates of such series until so sold; PROVIDED that the Company shall
upon demand pay to the Indenture Trustee the amount of any loss realized upon
maturity, sale or other disposition of any such Permitted Investment and, so
long as no such Indenture Event of Default shall have occurred and be
continuing, be entitled to receive from the Indenture Trustee, and the Indenture
Trustee shall promptly pay to the Company, any profit, income, interest,
dividend or gain realized upon maturity, sale or other disposition of any
Permitted Investment. If any such Indenture Event of Default shall have
occurred and be continuing, any net income, profit, interest, dividend or gain
realized upon maturity, sale or other disposition of any Permitted Investment
shall be held as part of such Indenture Estate and shall be applied by the
Indenture Trustee at the same time, on the same conditions and in the same
manner as the amounts in respect of which such income, profit, interest,
dividend or gain was realized are required to be distributed in accordance with
the provisions hereof pursuant to which such amounts were required to be held.
The Indenture Trustee shall not be responsible for any losses on any investments
or sales of Permitted Investments made pursuant to the procedure specified in
this Subsection (a).
(b) At any time and from time to time, so long as no Indenture Event of
Default applicable to the Certificates of any series shall have occurred and be
continuing, the Indenture Trustee shall, at the request of the Company, invest
and reinvest in Permitted Investments as specified in such request (if such
investments are reasonably available for purchase) any monies at the time on
deposit with the Indenture Trustee as part of the Indenture Estate applicable to
the Certificates of such series, and sell any Permitted Investments, in either
case, at such prices,
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including accrued interest, as are set forth in such request, and such Permitted
Investments shall be held by the Indenture Trustee in trust as part of such
Indenture Estate until so sold; PROVIDED that the Company shall upon demand pay
to the Indenture Trustee the amount of any loss realized upon maturity, sale or
other disposition of any Permitted Investment. Any net income, profit,
interest, dividend or gain realized upon maturity, sale or other disposition of
any Permitted Investment shall be held as part of such Indenture Estate and
shall be applied by the Indenture Trustee at the same time, on the same
conditions and in the same manner as the amounts in respect of which such
income, profit, interest, dividend or gain was realized are required to be
distributed in accordance with the provisions hereof. The Indenture Trustee
shall not be responsible for any losses on any investments or sales of Permitted
Investments made pursuant to the procedure specified in this Subsection (b).
Together with any such request for investment in, or sale or disposition of, any
Permitted Investments, the Company shall furnish the Indenture Trustee with the
following:
(1) a certificate of an Appraiser as to the fair value of Permitted
Investments to be sold or disposed of and stating that in the opinion of
such Appraiser the proposed release of such Permitted Investments from the
Lien of this Agreement will not impair the security under this Agreement in
contravention of the provisions hereof, which Appraiser shall be
Independent if the fair value of such Permitted Investments and of all
other property or securities released since the commencement of the then
current calendar year, as set forth in the certificates required by
paragraph (1) of subsection (d) of Section 314 of the Trust Indenture Act,
is 10% or more of the aggregate principal amount of the Certificates of
such series at the time Outstanding; and
(2) a certificate of an Appraiser as to the fair value to the obligor
of Permitted Investments to be purchased or invested in, which Appraiser
shall be Independent if the fair value to the obligor of such Permitted
Investments and all other securities made the basis of the withdrawal of
cash constituting a part of such Indenture Estate or the release of
property or securities subject to the Lien of this Agreement, as set forth
in the certificates required by paragraph (2) of subsection (d) of
Section 314 of the Trust Indenture Act, is 10% or more of the aggregate
principal amount of the Certificates of such series at the time
Outstanding.
SECTION 9.05 NOTICE OF DEFAULTS
If an Indenture Event of Default with respect to the Certificates of any
series occurs and is continuing and if it is known to the Indenture Trustee, the
Indenture Trustee shall (i) promptly send written notice thereof to the Company
and (ii) within 90 days after it occurs, mail to each Holder of a Certificate of
such series notice of all such Indenture Events of Default which are not cured
in the manner and to the extent provided in Section 13.02(c). Except in the
case of a default in the payment of the principal of, Premium, if any, or
interest on, the Certificates of any series, the Indenture Trustee shall be
protected in withholding the notice required under clause (ii) above if and so
long as the executive committee or trust committee of directors of the Indenture
Trustee and/or Responsible Officers thereof in good
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faith determines that withholding such notice is in the interest of the Holders
of the Certificates of such series. In addition, if on any day when the
Indenture Trustee is required to make any payment on or in respect of the
Certificates of any series of the character described in Section 8.01(a) and on
such day does not or is unable to make the full amount of such payment, the
Indenture Trustee shall on the next following Business Day give notice thereof
to the Company, and if any other Indenture Default with respect to the
Certificates of such series occurs and is continuing and if it is known to the
Indenture Trustee, the Indenture Trustee shall promptly send written notice
thereof to the Company.
SECTION 9.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS
Within 60 days after May 15 of each year commencing with the year 199__, so
long as any Certificates are Outstanding under this Agreement, the Indenture
Trustee shall transmit to the Holders as provided in Section 313(c) of the Trust
Indenture Act a brief report dated as of such May 15 if required by
Section 313(a) of the Trust Indenture Act.
SECTION 9.07 COMPENSATION AND INDEMNITY
(a) The Company shall pay to the Indenture Trustee, from time to time, on
demand, (i) reasonable compensation for its services with respect to the
Certificates of such series, which compensation shall not be limited by any law
on compensation of a trustee of an express trust, and (ii) reimbursement for all
reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement with respect
to the Certificates of such series (including the reasonable compensation and
expenses of the Indenture Trustee's counsel and any agent appointed in
accordance with Section 9.02(c)).
(b) The Company hereby agrees to indemnify the Indenture Trustee and each
of its respective affiliates, directors, officers, agents, servants, successors
and permitted assigns and each Holder of a Certificate of any series (each an
"Indemnitee") against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein are consummated),
any and all liabilities, obligations, losses, damages, claims, actions, suits,
out-of-pocket costs, expenses and disbursements (collectively, "Expenses")
imposed on, incurred by or asserted against any Indemnitee, in any way relating
to or arising out of or which would not have occurred but for (A) this Agreement
or any Certificate of any series (including any misrepresentations or breach of
warranty of the Company contained herein or in any document or certificate
delivered pursuant hereto and the breach by the Company of any covenant or
agreement contained in this Agreement or in any Certificate of any series) or
the enforcement of any of the terms of any thereof; (B) the manufacture,
purchase, acceptance or rejection of the Airframe or any Engine; (C) the
Aircraft (or any portion thereof) or any Engine installed on an airframe or any
engine installed on the Airframe whether or not arising out of the finance,
ownership, delivery, nondelivery, storage, lease, sublease, possession, use,
nonuse, operation, maintenance, modification, alteration, condition,
replacement, repair, substitution, sale, return or other disposition,
registration, reregistration or airworthiness of the Aircraft, including,
without limitation, latent or other defects, whether or not discoverable, strict
tort
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liability and any claim for patent, trademark or copyright infringement; or
(D) the offer, sale or delivery of any series of Certificates, whether before or
after the Delivery Date (the indemnity in this clause (D) to extend also to any
person who controls an Indemnitee, its successors, assigns, employees, servants
and agents within the meaning of Section 15 of the Securities Act of 1933, as
amended); PROVIDED that the foregoing indemnity shall not extend to any Expense
to the extent attributable to (1) any representation or warranty by such
Indemnitee in the Operative Documents being incorrect, or (2) the failure by
such Indemnitee to perform or observe any agreement, covenant or condition in
this Agreement, or (3) the willful misconduct or the negligence of such
Indemnitee (other than negligence imputed to such Indemnitee solely by reason of
its interest in the Aircraft), or (4) a failure on the part of the Indenture
Trustee to distribute in accordance with this Agreement any amounts received and
distributable by it thereunder, or (5) other than during the continuation of an
Indenture Event of Default, the authorization or giving or withholding of any
future amendments, supplements, waivers or consents with respect to this
Agreement unless such amendments, supplements, waivers or consents (a) are
requested by the Company or (b) are required pursuant to the terms of this
Agreement (unless such requirement results from the actions of an Indemnitee),
or (6) except to the extent fairly attributable to acts or events occurring
prior thereto, acts or events which occur after the payment by the Company of
all amounts payable by the Company pursuant hereto and pursuant to this
Agreement, or (7)(A) a disposition by such Indemnitee (voluntary or involuntary)
of all or any part of its interest in the Airframe or any Engine other than as
contemplated or permitted by this Agreement, (B) a disposition (voluntary or
involuntary) by such Indemnitee of all or any part of its interest in any
Certificate, or (C) a disposition by such Indemnitee of all or any part of such
Indemnitee's interest in the Operative Documents other than in each of (A), (B)
and (C) during the continuance of an Indenture Event of Default, or (8) any and
all Taxes other than as specifically indemnified in an Operative Document. The
Indemnitee shall notify the Company promptly of any claim against it for which
it may seek indemnity. The Company shall defend the claim and the Indemnitee
shall cooperate in the defense. The Company need not pay for any settlement
made without its consent.
(c) To secure the payment obligations of the Company pursuant to this
Section 9.07, the Indenture Trustee shall have a lien prior to the Holders of
the Certificates of such series on all money or property held or collected by
the Indenture Trustee in respect of the Certificates of such series, except that
held in trust to pay the principal of, Premium, if any, and interest on, the
Certificates of such series.
SECTION 9.08 REPLACEMENT OF INDENTURE TRUSTEE
(a) The resignation or removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee shall become effective only upon
the successor Indenture Trustee's acceptance of appointment as provided in this
Section 9.08.
(b) The Indenture Trustee may resign with respect to the Certificates of
any series by giving at least 30 days' prior written notice to the Company. The
Holders of a majority in aggregate principal amount of the Outstanding
Certificates of such series may remove the Indenture Trustee with respect to the
Certificates of such series by giving at least 30 days' prior
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written notice to the Indenture Trustee and the Company and may appoint a
successor Indenture Trustee within 30 days from the giving of such notice for
the Certificates of such series with the Company's consent, which consent shall
not be unreasonably withheld. The Company may remove the Indenture Trustee with
respect to the Certificates of such series if:
(1) the Indenture Trustee fails to comply with Section 9.10 (or, so
long as ________________________________ shall be the Indenture Trustee,
the requirement set forth in Section 9.10 hereof specifically applicable to
____________________________________________________________) and
Section 310 of the Trust Indenture Act;
(2) the Indenture Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Indenture
Trustee or its property; or
(4) the Indenture Trustee becomes incapable of acting.
(c) If the Indenture Trustee resigns or is removed, or if a vacancy exists
in the office of Indenture Trustee with respect to the Certificates of any
series for any reason, and the Holders of Certificates of such series have not
appointed a successor Indenture Trustee pursuant to Section 9.08(b), the Company
shall promptly appoint a successor Indenture Trustee with respect to the
Certificates of such series.
(d) If a successor Indenture Trustee with respect to the Certificates of
any series does not take office within 30 days after the retiring Indenture
Trustee with respect to the Certificates of such series resigns or is removed,
the retiring Indenture Trustee, the Company or the Holders of a majority in
aggregate principal amount of the Outstanding Certificates of such series may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee with respect to the Certificates of such series.
(e) If the Indenture Trustee with respect to the Certificates of any
series fails to comply with Section 9.10, any Holder of Certificates of such
series may petition any court of competent jurisdiction for the removal of such
Indenture Trustee and the appointment of a successor Indenture Trustee with
respect to the Certificates of such series.
(f) A successor Indenture Trustee with respect to the Certificates of any
series shall deliver a written acceptance of its appointment to the retiring
Indenture Trustee and the Company. Thereupon, the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the retiring Indenture
Trustee for which the successor Indenture Trustee is to be acting as Indenture
Trustee under this Agreement. The retiring Indenture Trustee shall promptly
transfer all property and all books and records relating to the administration
of the Indenture Estate held by it as Indenture Trustee to the successor
Indenture Trustee subject to the Lien with respect to the Certificates of such
series provided for in Section 9.07. The
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Company shall give notice of each appointment of a successor Indenture Trustee
with respect to the Certificates of any series if there are Certificates of such
series Outstanding, by mailing written notice of such event by first-class mail
to the Holders of the Certificates of such series.
(g) All provisions of this Section 9.08 except subparagraphs (b)(1) and
(e) and the words "subject to the Lien with respect to the Certificates of such
series provided for in Section 9.07" in subparagraph (f) shall apply also to any
Paying Agent.
SECTION 9.09 SUCCESSOR INDENTURE TRUSTEE; AGENTS BY MERGER, ETC.
If the Indenture Trustee or any Agent consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business
assets to, another corporation, the successor corporation, without any further
act, shall be the successor Indenture Trustee or Agent, as the case may be.
SECTION 9.10 ELIGIBILITY; DISQUALIFICATION
This Agreement shall at all times have an Indenture Trustee which shall be
eligible to act as Trustee under Section 310(a) of the Trust Indenture Act and
(i) shall have a combined capital and surplus of at least $75,000,000 or
(ii) shall have a combined capital and surplus in excess of $5,000,000 (or, so
long as _______________________________________________________________________
shall be the Indenture Trustee, $3,000,000) its obligations, whether now in
existence or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States,
any State or Territory thereof or of the District of Columbia and having a
combined capital and surplus of at least $75,000,000, and, in any case, shall be
a "citizen of the United States" as defined in Section 101(16) of the Federal
Aviation Act. If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of federal, state, territorial,
or District of Columbia supervising or examining authority, then for the
purposes of this Section 9.10, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Indenture Trustee shall
resign immediately in the manner and with the effect specified in Section 9.08.
SECTION 9.11 TRUSTEE'S LIENS
The Indenture Trustee in its individual capacity agrees that it will at its
own cost and expense promptly take such action as may be necessary to duly
discharge and satisfy in full all liens ("Trustee's Liens") on the Indenture
Estate applicable to the Certificates of each series which are either
(i) attributable to the Indenture Trustee in its individual capacity and which
are unrelated to the transactions contemplated by the Operative Documents
applicable to the Certificates of such series, or (ii) which are attributable to
the Indenture Trustee as trustee
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hereunder or in its individual capacity and which arise out of acts or omissions
which are not expressly contemplated by this Agreement or the Indenture
Supplement applicable to the Certificates of such series.
SECTION 9.12 WITHHOLDING TAXES; INFORMATION
The Indenture Trustee shall exclude and withhold from each distribution of
principal of, Premium, if any, and interest on and other amounts due hereunder
or under, the Certificates any and all withholding taxes applicable thereto as
required by law (and such exclusions and withholdings shall constitute payment
in respect of such Certificates). The Indenture Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect to the Certificates, to withhold such amounts and timely pay
the same to the appropriate authority in the name of and on behalf of the
Holders of the Certificates, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each Holder of a Certificate appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Holders may reasonably request from time to time.
The Indenture Trustee agrees to file any other information reports as it may be
required to file under United States law.
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS
SECTION 10.01 SATISFACTION AND DISCHARGE OF AGREEMENT; DEFEASANCE;
TERMINATION OF OBLIGATIONS
Subject to Section 10.02, this Agreement shall cease to be of further
effect with respect to the Certificates of such series, and the Company and the
Indenture Trustee shall, except as herein provided, be deemed to have been
discharged from their respective obligations with respect to the Certificates of
such series (and the Indenture Trustee, on demand and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Agreement in respect of the Certificates of such series), when
(a) (i) all Certificates of such series theretofore executed and
delivered (other than (A) Certificates of such series which have been
mutilated, destroyed, lost or stolen and which have been replaced or
exchanged as provided in Section 2.07 and (B) Certificates of such series
for the payment of which money held in trust hereunder has been paid and
discharged from such trust, as provided in Section 7.01) have been
delivered to the Indenture Trustee for cancellation; or
(ii) all Certificates of such series not theretofore delivered to
the Indenture Trustee for cancellation have become due and payable (whether
upon stated
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maturity or as a result of redemption), or will become due and payable
(including as a result of redemption in respect of which irrevocable notice
has been given to the Indenture Trustee on or prior to the date of such
deposit) at maturity within one year, and there has been deposited with the
Indenture Trustee in trust for the purpose of paying and discharging the
entire indebtedness on the Certificates of such series not theretofore
cancelled by the Indenture Trustee or delivered to the Indenture Trustee
for cancellation, an amount sufficient to discharge such indebtedness,
including the principal of, Premium, if any, and interest on the
Certificates of such series to the date of such deposit (in the case of
Certificates which have become due and payable), or to the maturity
thereof, as the case may be; or
(iii) (A) the company has deposited or caused to be
deposited irrevocably (except as provided in Section 10.04) with the
Indenture Trustee as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of the
Certificates of such series, (1) money in an amount, or (2) U.S. Government
Obligations which, through the payment of interest and principal in respect
thereof in accordance with their terms, will provide (not later than one
Business Day before the due date of any payment referred to below in this
paragraph) money in an amount, or (3) a combination of money and U.S.
Government Obligations referred to in the foregoing clause (2), sufficient,
in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered
to the Indenture Trustee, to pay and discharge each installment of
principal of, Premium, if any, and interest on, the Outstanding
Certificates of such series on the dates such payments of principal,
Premium or interest are due (including as a result of redemption in respect
of which irrevocable notice has been given to the Indenture Trustee on or
prior to the date of such deposit), and no Indenture Event of Default which
would give rise to the operation of section 547 of the Bankruptcy Code
shall have occurred and be continuing on the date of such deposit or at any
time during the period ending on the 91st day after such date;
(B) such deposit will not result in a breach or violation
of, or constitute an Indenture Default or Indenture Event of Default with
respect to, the Certificates of such series or a default or event of
default under any other agreement or instrument to which the Company is a
party or by which it is bound;
(C) the Company has delivered to the Indenture Trustee a
certificate of an Independent Appraiser stating the fair value to the
Company of such U.S. Government Obligations and the fair value of all
securities and property included in the Indenture Estate applicable to the
Certificates of such series; and
(D) the Company has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that there has been published by the
Internal Revenue Service a ruling to the effect that Holders of the
Certificates of such series will not recognize income, gain or loss for
federal income tax purposes as a result of the exercise by the Company of
its option under this Section 10.01(a)(iii) and will be
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subject to federal income tax on the same amount and in the same manner and
at the same times, as would have been the case if such option had not been
exercised;
(b) all other amounts then due and payable under the Certificates of
such series have been paid; and
(c) the Company has delivered to the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the satisfaction and discharge of this
Agreement contemplated by this Section 10.01 have been complied with.
SECTION 10.02 SURVIVAL OF CERTAIN OBLIGATIONS
Notwithstanding the provisions of Section 10.01 as applicable to the
Certificates of any series, the obligations of the Indenture Trustee contained
in Sections 2.01 through 2.09, Section 7.01, Section 10.03 and Section 10.04,
the rights, duties, immunities and privileges hereunder of the Indenture
Trustee, and the obligations of the Company contained in Section 7.01 and
Section 9.07(b) shall survive.
SECTION 10.03 MONIES TO BE HELD IN TRUST
All moneys and U.S. Government Obligations deposited with the Indenture
Trustee pursuant to Section 10.01 in respect of the Certificates of any series
shall be held in trust and applied by it, in accordance with the provisions of
the Certificates of such series and this Agreement, to the payment, either
directly or through any Paying Agent as the Indenture Trustee may determine, to
the Holders of the Certificates of such series, of all sums due and to become
due thereon for principal of, and Premium, if any, interest, but such money need
not be segregated from other funds except to the extent required by law.
SECTION 10.04 MONIES TO BE RETURNED TO THE COMPANY
The Indenture Trustee and any Paying Agent shall promptly pay or return to
the Company upon request of the Company any money or U.S. Government Obligations
held by them at any time that are not required for the payment of the amounts
described above in Section 10.03 on the Certificates of such series for which
money or U.S. Government Obligations have been deposited pursuant to
Section 10.01.
ARTICLE 11
ACTIONS TO BE TAKEN UPON TERMINATION OF INDENTURE
SECTION 11.01 ACTIONS TO BE TAKEN UPON TERMINATION OF INDENTURE
Upon any of:
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(a) a redemption of the Certificates of such series pursuant to the
Indenture Supplement related thereto and upon payment to the Indenture
Trustee of an amount equal to the Redemption Price applicable to the
Certificates of such series as at the applicable Redemption Date of all
Outstanding Certificates of such series,
(b) an Event of Loss suffered by the Airframe applicable to the
Certificates of any series under circumstances where the Company does not
exercise its option to substitute a replacement airframe therefor, and upon
payment to the Indenture Trustee of an amount equal to the Redemption Price
applicable to the Certificates of such series as at the applicable
Redemption Date of all Outstanding Certificates of such series, or
(c) the satisfaction, discharge, defeasance and termination of
obligations under this Agreement in accordance with Section 10.01,
the Lien of this Agreement on the Indenture Estate applicable to the
Certificates of such series shall terminate (except for the Lien on funds held
by the Indenture Trustee to pay the Certificates of such series and the Lien on
amounts due from the Company necessary to pay the Certificates of such series or
the Indenture Trustee) and the Indenture Trustee shall execute such instruments
as may be requested by the Company to evidence such termination.
ARTICLE 12
AMENDMENTS AND WAIVERS
SECTION 12.01 AMENDMENTS TO THIS INDENTURE AND INDENTURE SUPPLEMENT WITHOUT
CONSENT OF HOLDERS
(a) The Company and the Indenture Trustee may enter into one or more
agreements supplemental hereto and to the Indenture Supplement applicable to the
Certificates of any series without consent of any Holder of the Certificates of
such series for any of the following purposes:
(1) to cure any ambiguity, defect or inconsistency herein, in such
Indenture Supplement or in the Certificates of such series, or to make any
change not inconsistent with the provisions hereof and of such Indenture
Supplement; PROVIDED that such change does not adversely affect the
interests of any Holder of Certificates of such series in any material
respect;
(2) to evidence the succession of another corporation to the Company;
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Indenture Trustee with respect to the Certificates
of such series and to add to or change any of the provisions of this
Indenture and such Indenture Supplement as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than
one trustee;
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(4) to establish the form or terms of Certificates of any series as
permitted by Section 2.01;
(5) to supplement any of the provisions of this Agreement to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Certificates pursuant to Section 10.01; PROVIDED
that any such action shall not adversely affect the interests of the
Holders of Certificates of such series or any other series of Certificates
in any material respect;
(6) to convey transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Holders of Certificates of such
series;
(7) to correct or amplify the description of any property at any time
subject to the Lien of this Agreement or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Agreement or subject to the Lien of this
Agreement the Airframe or Engines applicable to the Certificates of such
series or airframe or engines substituted for such Airframe or Engines in
accordance herewith;
(8) to add to the covenants of the Company, for the benefit of the
Holders of the Certificates of such series, or to surrender any rights or
power herein conferred upon the Company;
(9) to comply with any requirements of the SEC in connection with the
qualification of this Agreement under the Trust Indenture Act;
(10) to add to the rights of the Holders of Certificates of such
series; and
(11) to include on the Certificates of such series any legend as may
be required by applicable law.
(b) The Company and the Indenture Trustee may enter into one or more
agreements supplemental hereto without the consent of any Holder of any series
of Certificates for either of the following purposes:
(1) to change or eliminate any of the provisions of this Indenture;
PROVIDED that any such change or elimination shall become effective only
when there is no Certificate Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; and
(2) to close this Indenture with respect to the authentication and
delivery of additional series of Certificates.
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SECTION 12.02 AMENDMENTS TO THIS INDENTURE AND INDENTURE SUPPLEMENT WITH
CONSENT OF HOLDERS
(a) With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Certificates of any series, the Company and
the Indenture Trustee may enter into such supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Indenture, the
Indenture Supplement applicable to the Certificates of such series or of any
such supplemental agreements or to modify the rights of the Holders of the
Certificates of such series; PROVIDED that, without the consent of each Holder
of the Certificates of such series affected thereby, an amendment under this
Section 12.02 may not:
(1) reduce the amount of principal of, or Premium, if any, or
interest on, any Certificate of such series; or
(2) change the date on which any amount of principal of, or Premium,
if any, or interest on any Certificate of such series, is due or payable;
or
(3) create any Lien on the Indenture Estate applicable to the
Certificates of such series prior to or PARI PASSU with the Lien thereon
under this Agreement except such as are permitted hereby or thereby, or
deprive any Holder of the Certificates of such series of the benefit of the
Lien on such Indenture Estate created by this Agreement; or
(4) reduce the percentage in principal amount of the Outstanding
Certificates of such series, the consent of whose holders is required for
any such supplemental agreement, or the consent of whose holders is
required for any waiver (of compliance with certain provisions of this
Agreement or of certain defaults hereunder or their consequences) provided
for in this Agreement; or
(5) make any change in Sections 8.05, 8.08, or this Section 12.02(a).
(b) It is not necessary under this Section 12.02 for the Holders to
consent to the particular form of any proposed supplemental agreement, but it is
sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Company and the Indenture Trustee
of any supplemental agreement pursuant to the provisions of this Section 12.02,
the Company shall transmit by first-class mail a notice, setting forth in
general terms the substance of such supplemental agreement, to all Holders of
Certificates of such series, as the names and addresses of such Holders appear
on the Register. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental agreement.
(d) A supplemental indenture which changes or eliminates any covenant or
other provision of this Agreement which has expressly been included solely for
the benefit of one or
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more particular series of Certificates, or which modifies the rights of the
Holders of Certificates of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Agreement of the
Holders of Certificates of any other series.
SECTION 12.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Agreement or the Certificates of any series shall
be set forth in a supplemental agreement that complies with the Trust Indenture
Act as then in effect.
SECTION 12.04 NOTATION ON OR EXCHANGE OF CERTIFICATES
The Indenture Trustee may place an appropriate notation about an amendment
or waiver on any Certificate thereafter executed. The Indenture Trustee in
exchange for such Certificates may authenticate new Certificates that reflect
the amendment or waiver.
SECTION 12.05 INDENTURE TRUSTEE PROTECTED
The Indenture Trustee need not sign any supplemental agreement that
adversely affects its rights.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01 TRUST INDENTURE ACT CONTROLS
This Agreement shall be governed by the provisions of the Trust Indenture
Act of 1939, as amended, whether or not subject to the Trust Indenture Act
pursuant to the provisions thereof except as provided in Section 9.04.
SECTION 13.02 NOTICES
(a) Unless otherwise specifically provided herein, all notices required
under the terms and provisions of this Agreement shall be in English and in
writing, and any such notice may be given by United States mail, courier
service, telegram, telex, telemessage, telecopy, telefax, cable or facsimile
(confirmed by telephone or in writing in the case of notice by telegram, telex,
telemessage, telecopy, telefax, cable or facsimile) or any other customary means
of communication, and any such notice shall be effective when delivered, or, if
mailed, three days after deposit in the United States mail with proper postage
for ordinary mail prepaid,
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if to the Company, to:
Alaska Airlines, Inc.
19300 Pacific Highway South
Seattle, Washington 98188
Attention: Vice President-Finance
Facsimile: (206) _________________
if to the Indenture Trustee, to:
___________________________________
___________________________________
__________________________________________________
_____________
____________________Attention: ________
Facsimile: (_____) _____________
Telephone: (_____) _____________
(b) The Company and the Indenture Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to Holders of the Certificates shall be
mailed by first-class mail to the addresses for such Holders shown on the
Register kept by the Registrar. Failure so to mail a notice or communication to
any Holder, or any defect in such notice or communication, shall not affect the
sufficiency of any notice or communication to other Holders of the Certificates.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it shall be conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Indenture Trustee and to each paying Agent at the same
time.
(f) Notwithstanding the foregoing, all communications or notices to the
Indenture Trustee shall be deemed to be given only when received by a
Responsible Officer of the Indenture Trustee.
SECTION 13.03 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS
Every Holder of Certificates, by receiving and holding the same, agrees
with the Company and the Indenture Trustee that neither the Company nor the
Indenture Trustee nor any agent of either of them shall be deemed to be in
violation of any existing law, or of any law
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hereafter enacted which does not specifically refer to Section 312 of the Trust
Indenture Act, by reason of the disclosure of any such information as to the
names and addresses of the Holders of Certificates in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, and that the Indenture Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 312 of the Trust Indenture Act.
SECTION 13.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company to the Indenture Trustee to
take any action under this Agreement, the Company shall furnish to the Indenture
Trustee:
(1) a Certificate of a Responsible Company Officer stating that, in
the opinion of the signer, all conditions precedent, if any, provided for
in this Agreement relating to the proposed action have been complied with
and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.06 SEPARABILITY CLAUSE
In case any provision of this Indenture or in any Certificate shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 13.07 NON-BUSINESS DAYS
If a payment date with respect to the Certificates of any series is not a
Business Day at a place of payment, payment may be made at such place on the
next succeeding day that is such a Business Day, and no interest shall accrue
for the intervening period.
SECTION 13.08 GOVERNING LAW
THIS AGREEMENT AND THE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ___________________.
SECTION 13.09 NO RECOURSE AGAINST OTHERS
No director, officer, employee or stockholder, as such, of the Company,
shall have any liability for any obligations of the Company, under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Certificate waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Certificates.
SECTION 13.10 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
instrument.
SECTION 13.11 ACTS OF HOLDERS
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders of
the Outstanding Certificates of all series or one or more series, as the case
may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee and the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Indenture Trustee and the Company and any agent of the Indenture Trustee or the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The
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fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Indenture Trustee deems sufficient.
(c) The principal amount and serial numbers of Certificates of any series
held by any Person, and date of holding the same, shall be proved by the
Register. If the Company shall solicit from the Holders of Certificates of any
series any request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, in or pursuant to a Board Resolution,
fix in advance a record date for the determination of Holders of the
Certificates of such series entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding Section 316(c) of the Trust
Indenture Act, such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders of the Certificates of
such series generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of the Certificates
of such series of record at the close of business on such record date shall be
deemed to be Holders of the Certificates of such series for the purposes of
determining whether Holders of the Certificates of such series of the requisite
proportion of Outstanding Certificates of such series have authorized or agreed
or consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Certificates of such
series shall be computed as of such record date; PROVIDED that no such
authorization, agreement or consent by the Holders of the Certificates of such
series on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Agreement not later than eleven
months after the record date.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate of any series shall bind every
future Holder of the same Certificate of such series and the Holder of every
Certificate of such series issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Indenture Trustee, any Registrar, any Paying Agent or
the Company in reliance thereon, whether or not notation of such action is made
upon such Certificate.
SECTION 13.12 INITIAL TRANSFER OF A CERTIFICATE
(a) Notwithstanding any provision hereof to the contrary, with respect to
the Certificates of any series, the initial holder of the Certificates of any
series agrees to transfer, assign and deliver its Certificates, and transfer and
assign all rights of such initial holder under the Operative Documents (other
than those that have accrued prior to the Transfer Date), to any transferee or
transferees (collectively, the "Transferees") designated by the Company, on any
date designated by the Company (the "Transfer Date"), in each case at least two
Business Days prior to the Transfer Date against payment
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<PAGE>
(1) from the Transferees of the then outstanding principal amount of
such Certificates and
(2) from the Company of the accrued and unpaid interest on such
Certificates through the Transfer Date plus the amount of premium, if any,
due to such initial holder as a result of the payments pursuant to
clause (1) plus any other amount payable to such initial holder under the
Operative Documents.
(b) On or before the Transfer Date, the Company shall notify the Indenture
Trustee of the terms of the Certificates including, without limitation,
maturity, interest rate, Interest Payment Dates, Installment Payment Dates,
whether such Certificate is a Serial Certificate or an Installment Certificate
and any legends on such series of Certificates as may be agreed between the
Company, the Indenture Trustee and the Transferee.
SECTION 13.13 BANKRUPTCY
It is the intention of the parties that the Indenture Trustee shall be
granted pursuant to this Indenture a "purchase-money equipment security
interest," as the same is used in Section 1110 of the Bankruptcy Code, with
respect to each Aircraft and as a consequence thereof the Indenture Trustee
shall be entitled (on behalf of the Holders of the Certificates of the series
with respect to such Aircraft) to the benefits of Section 1110 of the Bankruptcy
Code with respect to the right to repossess such Aircraft as provided in this
Indenture, and in any circumstances where more than one construction of the
terms and conditions of this Indenture is possible, a construction which would
preserve such benefits shall control over any construction which would not
preserve such benefits or would render them doubtful.
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IN WITNESS WHEREOF, the Company and the Indenture Trustee have caused this
Indenture to be fully executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
ALASKA AIRLINES, INC.
By: ___________________________________
Name:
Title:
________________________________________
______________________________________
, as Indenture Trustee
By: ___________________________________
Name:
Title:
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<PAGE>
Exhibit A-1 to Trust Indenture
and Security Agreement
FORM OF FACE OF INSTALLMENT CERTIFICATES
$_______________ No.____________________
199_ EQUIPMENT TRUST CERTIFICATE, SERIES __
ALASKA AIRLINES, INC.
ISSUED IN CONNECTION WITH AIRCRAFT N__________
INTEREST RATE MATURITY DATE CUSIP
------------- ------------- ------
------ __________, ___ ----
ALASKA AIRLINES, INC. (the "Company"), for value received, hereby promises
to pay to ______________________________________ or registered assigns the
principal sum of _______________________________________ Dollars in installments
on each Installment Payment Date as set forth on the reverse hereof with the
final installment due and payable on the Maturity Date specified above and to
pay interest on the principal amount remaining unpaid from time to time at the
rate per annum specified above from __________, 199__ or from the most recent
date to which interest has been paid or duly provided for, semiannually, on
_______________ and _______________ in each year, commencing __________, 199__,
until the principal hereof is paid or made available for payment in full.
The interest or Installment Payment Amount (other than that payable on the
Maturity Date hereof) so payable and punctually paid or duly provided for, on
the applicable Interest Payment Date or Installment Payment Date, as the case
may be, will, as provided in the Indenture, be paid to the Person in whose name
this Certificate (or one or more predecessor Certificates) is registered at the
close of business on the Record Date for payment of such interest or Installment
Payment Amount, which shall be the __________ or __________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date or
Installment Payment Date, as the case may be. Any such interest or Installment
Payment Amount not so punctually paid or duly provided for shall forthwith cease
to be payable to the registered Holder hereof on the such Record Date (or to the
Person in whose name this Certificate is registered upon issuance) and may be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Installment or Defaulted Interest to be fixed
by the Indenture Trustee, notice whereof shall be given to Holders of
Certificates of
A-1-1
<PAGE>
this series entitled thereto not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Certificates may
be listed and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
Payment of the principal of, and Premium, if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that payment of interest and Installment Payments Amounts
(other than that payable on the Maturity Date hereof) may be made at the option
of the Indenture Trustee or the Paying Agent by check mailed to the address of
the Holder entitled thereto as such address shall appear on the Register.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose unless this Certificate has been
executed on behalf of the Company by the manual or facsimile signature of an
authorized officer of the Company, and authenticated by the Indenture Trustee by
the manual signature of an authorized officer or signatory of the Indenture
Trustee, in each case as specified in Section 2.02 of the Indenture.
This Certificate is one of the 199_ Equipment Trust Certificates, Series __
issued pursuant to the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ALASKA AIRLINES, INC.
[Corporate Seal]
Attest:
____________________________ By_________________________________
[Title of Authorized Person] Title:_____________________________
Issue Date:_________________
A-1-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
___________________________________
_________________________________
,
as Indenture Trustee
By _________________________________
Authorized officer or signatory
A-1-3
<PAGE>
FORM OF REVERSE OF INSTALLMENT CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates issued
and to be issued under the Indenture, designated as 199_ Equipment Trust
Certificates, Series __.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Company, the Indenture Trustee and the Holders of the
Certificates of this series, and the terms upon which the Certificates of this
series are, and are to be, executed and delivered, as well as for a statement of
the terms and conditions of the trust created by the Indenture, to all of which
terms and conditions in the Indenture each Holder hereof agrees by its
acceptance of this Certificate.
On each Installment Payment Date, the Holder hereof will receive a payment
of principal equal to the Installment Payment Percentage for such Installment
Payment Date multiplied by the initial principal amount of this Certificate
which is set forth on the face hereof.
Installment Payment Date Installment Payment Percentage
__________, _____ ___%
__________, _____ ___%
__________, _____ ___%
__________, _____ ___%
As more fully provided in the Indenture, the Certificates of this series
are subject to redemption, on not less than __ nor more than ___ days' notice by
mail, under the circumstances set forth in the Indenture, at a Redemption Price
equal to the unpaid principal amount thereof plus accrued interest thereon to
the Redemption Date, plus, in certain of such circumstances, a Premium thereon.
If an Indenture Event of Default applicable to the Certificates of this
series shall occur and be continuing, the principal amount remaining unpaid of
the Certificates of this series may be declared due and payable in the manner
and with the effect provided in the Indenture. Upon an Indenture Event of
Default, the Indenture Trustee may exercise one or more of the remedies provided
in the Indenture. Such remedies include the right to repossess and use or
operate the Aircraft applicable to the Certificates of this series, to sell or
relet such Aircraft free and clear of the Company's rights and retain the
proceeds.
The right of the Holder of this Certificate to institute action for any
remedy under the Indenture, including the enforcement of payment of any amount
due hereon, is subject to certain restrictions specified in the Indenture.
A-1-4
<PAGE>
The Company and the Indenture Trustee will be discharged from their
respective obligations in respect of the Certificates of this series (except for
certain matters, including obligations to register the transfer or exchange of
Certificates of this series, replace stolen, lost or mutilated Certificates,
maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Indenture Estate from
the lien of the Indenture, if (a) the Company deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, Premium, if any, and interest on the Outstanding
Certificates of this series on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the deposit and related defeasance would
not cause the Holders of the Certificates to recognize income, gain or loss for
federal income tax purposes.
As provided in the Indenture and subject to certain limitations therein set
forth, this Certificate is transferable, and upon surrender of this Certificate
for registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly authorized in
writing, one or more new Certificates of the same series, maturity and type and
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates of this series are issuable only as registered
Certificates. The Certificates of this series are issuable in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Certificates of this series are
exchangeable for a like aggregate principal amount of Certificates of the same
series, maturity and type and of authorized denominations, as requested by the
Holder surrendering the same, upon presentation thereof for such purpose at the
principal corporate trust office of the Registrar, or at an office or agency
maintained for such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this Certificate,
the Indenture Trustee, the Paying Agent, the Registrar and the Company may deem
and treat the person in whose name this Certificate is registered as the
absolute owner hereof for the purpose of receiving payment of the principal of
and interest on this Certificate and for all other purposes whatsoever whether
or not this Certificate be overdue, and neither the Indenture Trustee, the
Paying Agent, the Registrar nor the Company shall be affected by notice to the
contrary.
A-1-5
<PAGE>
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
____________________.
A-1-6
<PAGE>
Exhibit A-2 to Trust Indenture
and Security Agreement
FORM OF FACE OF SERIAL CERTIFICATES
$_______________ No. ____________
199_ EQUIPMENT TRUST CERTIFICATE, SERIES __
ALASKA AIRLINES, INC.
ISSUED IN CONNECTION WITH AIRCRAFT N_____
INTEREST RATE MATURITY DATE CUSIP
- ------------- ------------- -----
------ ___________, ____ -----
ALASKA AIRLINES, INC. (the "Company"), for value received, hereby promises
to pay to ______________________________ or registered assigns the principal sum
of __________________________ Dollars on the Maturity Date specified above and
to pay interest thereon at the rate per annum specified above from __________,
199_ or from the most recent date to which interest has been paid or duly
provided for, semiannually, on ________________ and ______________ in each year,
commencing __________, 199_, until the principal hereof is paid or made
available for payment.
The interest so payable, and punctually paid or duly provided for, on the
applicable Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the _____________ or _____________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder hereof
on the such Record Date (or to the Person in whose name this Certificate is
registered upon issuance) and may be paid to the Person in whose name this
Certificate (or one or more predecessor Certificates) is registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Indenture Trustee, notice whereof shall be given to Holders
of Certificates of this series entitled thereto not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Certificates may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Payment of the principal of, and Premium, if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency
A-2-1
<PAGE>
maintained by the Indenture Trustee for such purpose, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; PROVIDED, HOWEVER, that payment of interest
may be made at the option of the Indenture Trustee or the Paying Agent by check
mailed to the address of the Holder entitled thereto as such address shall
appear on the Register.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose unless this Certificate has been
executed on behalf of the Company by the manual or facsimile signature of an
authorized officer of the Company, and authenticated by the Indenture Trustee by
the manual signature of an authorized officer or signatory of the Indenture
Trustee, in each case as specified in Section 2.02 of the Indenture.
This Certificate is one of the 199_ Equipment Trust Certificates, Series __
issued pursuant to the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
ALASKA AIRLINES, INC.
[Corporate Seal] .
Attest:
- ------------------------------ By ----------------------------
[Title of Authorized Person] Title:
Issue Date:
A-2-2
<PAGE>
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
_____________________________________
_____________________________________
, as
Indenture Trustee
By __________________________________
Authorized Officer or Signatory
A-2-3
<PAGE>
FORM OF REVERSE OF SERIAL CERTIFICATES
This Certificate is one of a duly authorized issue of Certificates issued
and to be issued under the Indenture designated as 199_ Equipment Trust
Certificates, Series __.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Company, the Indenture Trustee and the Holders of the
Certificates of this series, and the terms upon which the Certificates of this
series are, and are to be, executed and delivered, as well as for a statement of
the terms and conditions of the trust created by the Indenture, to all of which
terms and conditions in the Indenture each Holder hereof agrees by its
acceptance of this Certificate.
As more fully provided in the Indenture, the Certificates of this series
are subject to redemption, on not less than __ nor more than __ days' notice by
mail, under the circumstances set forth in the Indenture, at a Redemption Price
equal to the unpaid principal amount thereof, plus accrued interest thereon to
the Redemption Date, plus, in certain of such circumstances, a Premium thereof.
If an Indenture Event of Default applicable to the Certificates of this
series shall occur and be continuing, the principal of the Certificates of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon an Indenture Event of Default, the Indenture
Trustee may exercise one or more of the remedies provided in the Indenture.
Such remedies include the right to repossess and use or operate the Aircraft
applicable to the Certificates of this series, to sell or relet such Aircraft
free and clear of the Company's rights and retain the proceeds.
The right of the Holder of this Certificate to institute action for any
remedy under the Indenture, including the enforcement of payment of any amount
due hereon, is subject to certain restrictions specified in the Indenture.
The Company and the Indenture Trustee will be discharged from their
respective obligations in respect of the Certificates of this series (except for
certain matters, including obligations to register the transfer or exchange of
Certificates of this series, replace stolen, lost or mutilated Certificates,
maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Indenture Estate from
the lien of the Indenture, if (a) the Company deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, Premium, if any, and interest on the Outstanding
Certificates of this series on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the
A-2-4
<PAGE>
deposit and related defeasance would not cause the Holders of the Certificates
to recognize income, gain or loss for federal income tax purposes.
As provided in the Indenture and subject to certain limitations therein set
forth, this Certificate is transferable, and upon surrender of this Certificate
for registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly authorized in
writing, one or more new Certificates of the same series, maturity and type and
of authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates of this series are issuable only as registered
Certificates. The Certificates of this series are issuable in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Certificates of this series are
exchangeable for a like aggregate principal amount of Certificates of the same
series, maturity and type and of authorized denominations, as requested by the
Holder surrendering the same, upon presentation thereof for such purpose at the
principal corporate trust office of the Registrar, or at an office or agency
maintained for such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this Certificate,
the Indenture Trustee, the Paying Agent, the Registrar and the Company may deem
and treat the person in whose name this Certificate is registered as the
absolute owner hereof for the purpose of receiving payment of the principal of
and interest on this Certificate and for all other purposes whatsoever whether
or not this Certificate be overdue, and neither the Indenture Trustee, the
Paying Agent, the Registrar nor the Company shall be affected by notice to the
contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
_______________.
A-2-5
<PAGE>
SCHEDULE I
TO
TRUST INDENTURE AND
SECURITY AGREEMENT
SCHEDULE OF COUNTRIES AUTHORIZED
FOR AIRCRAFT REGISTRATION
[Australia Malaysia
Austria Malta
Bahamas Mexico
Belgium Netherlands
Brazil New Zealand
Canada Norway
Denmark People's Republic of China
Finland Philippines
France Portugal
Germany Republic of China (Taiwan)
Greece Singapore
Grenada South Korea
Iceland Spain
India Sweden
Indonesia Switzerland
Ireland Thailand
Italy Trinidad and Tobago
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela]
<PAGE>
SCHEDULE II
TO
TRUST INDENTURE AND
SECURITY AGREEMENT
SCHEDULE OF COUNTRIES AUTHORIZED
FOR DOMICILE OF PERMITTED LESSEES
[Australia Malaysia
Austria Malta
Bahamas Mexico
Belgium Netherlands
Brazil New Zealand
Canada Norway
Denmark People's Republic of China
Finland Philippines
France Portugal
Germany Republic of China (Taiwan)
Greece Singapore
Grenada South Korea
Iceland Spain
India Sweden
Indonesia Switzerland
Ireland Thailand
Italy Trinidad and Tobago
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela]
<PAGE>
EXHIBIT 5(A)
Perkins Coie
1201 Third Avenue, Suite 4000
Seattle, Washington 98101
March 11, 1994
Alaska Air Group, Inc.
19300 Pacific Highway South
Seattle, Washington 98188
Alaska Airlines, Inc.
19300 Pacific Highway South
Seattle, Washington 98188
Re: REGISTRATION OF $200,000,000 OF DEBT SECURITIES OF
ALASKA AIR GROUP, INC. AND ALASKA AIRLINES, INC.
Gentlemen and Ladies:
This opinion is furnished in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of $200,000,000 aggregate
principal amount of (i) convertible debt securities of Alaska Air Group, Inc., a
Delaware corporation ("Air Group"), and common stock of Air Group issuable upon
the conversion thereof, (ii) debt securities of Alaska Airlines, Inc., an Alaska
corporation ("Alaska"), and associated guarantees of Air Group, and (iii)
equipment trust certificates of Alaska and associated guarantees of Air Group
(collectively, the "Securities").
We have examined the Registration Statement on Form S-3 of Air Group and
Alaska with respect to the Securities (the "Registration Statement"), the
indentures relating to the Securities (each an "Indenture") and such corporate
records, certificates and other documents and such questions of law as we have
considered necessary or appropriate for the purposes of this opinion.
Based on the foregoing, with respect to each series of the Securities, we
advise you that in our opinion, when the following events have occurred:
(a) The Registration Statement has become effective under the Act;
(b) The terms of the series of Securities and their issue and sale
have been duly established in conformity with the Indenture related thereto
so as not to violate any applicable law, agreement or instrument then
binding on the issuer of such series;
<PAGE>
Alaska Air Group, Inc.
Alaska Airlines, Inc.
March 11, 1994
Page 2
(c) The Securities of such series have been duly executed,
authenticated and delivered to the Trustee and authenticated by the
Trustee, all in accordance with the Indenture related thereto; and
(d) The Securities of such series have been issued and sold as
contemplated in the Registration Statement and in accordance with corporate
and governmental authorities;
the Securities of such series will constitute in the hands of the holders
thereof binding obligations of Air Group or Alaska, whichever shall be the
issuer of such Securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Opinions" in the related Prospectus for each of the Securities. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
<PAGE>
Exhibit 23(e)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in Amendment No. 1 to the Registration Statement (No. 33-52265)
of Alaska Airlines, Inc. and Alaska Air Group, Inc. of our report dated
January 25, 1994 included in Alaska Airlines, Inc.'s Form 10-K for the year
ended December 31, 1993 and our report dated January 25, 1994 included in Alaska
Air Group, Inc.'s Form 10-K for the year ended December 31, 1993 and to all
references to our Firm included in Amendment No. 1 to the Registration
Statement.
Seattle, Washington ARTHUR ANDERSEN & CO.
March 11, 1994
