\n Page
\n <\/p>\nSECTION 1. Certain Definitions; Participations in
\n Lessor’s Cost of the Aircraft………. 3 <\/p>\n
SECTION 2. Lessee’s Notice of Delivery Date…….. 4<\/p>\n
SECTION 3. Instructions to the Owner Trustee and
\n Indenture Trustee…………………. 5<\/p>\n
SECTION 4. Conditions………………………… 6
\n (a) Conditions Precedent to the
\n Participations in the Aircraft…. 6
\n (b) Conditions Precedent to the
\n Obligations of Lessee…………. 15<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement… 16<\/p>\n
SECTION 6. Extent of Interest of Certificate
\n Holders………………………….. 17 <\/p>\n
SECTION 7. Lessee’s Representations, Warranties
\n and Indemnities
\n (a) In General…………………… 17
\n (b) General Tax Indemnity…………. 22
\n (c) General Indemnity…………….. 34
\n (d) Withholding………………….. 40<\/p>\n
SECTION 8. Representations, Warranties and
\n Covenants………………………… 40<\/p>\n
SECTION 9. [Intentionally Omitted]…………….. 63<\/p>\n
SECTION 10. Other Documents; Amendment………….. 63<\/p>\n
SECTION 11. Certain Covenants of Lessee…………. 64<\/p>\n
SECTION 12. Owner for Income Tax Purposes……….. 65<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction…….. 65<\/p>\n
SECTION 14. Change of Situs of Owner Trust………. 66<\/p>\n
SECTION 15. Miscellaneous……………………… 67<\/p>\n
SECTION 16. Invoices and Payment of Expenses…….. 69<\/p>\n
SECTION 17. Optional Redemption of Certificates….. 70<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
ii<\/p>\n
\n\n Page
\n <\/p>\nSECTION 18. Optimization………………………. 74<\/p>\n
SECTION 19. Nondisclosure…………………….. 75<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
SCHEDULES<\/p>\n
\n\n
\nSCHEDULE I — Names and Addresses<\/p>\nSCHEDULE II — Commitments<\/p>\n
SCHEDULE III — Legal Opinions<\/p>\n
EXHIBIT A-1 — Form of Transferor Opinion Re: Transfer of
\n Owner Participant’s Interest<\/p>\n
EXHIBIT A-2 — Form of Transferee Opinion Re: Transfer of
\n Owner Participant’s Interest<\/p>\n
EXHIBIT B — Form of Assignment and Assumption Agreement<\/p>\n
EXHIBIT C — Form of Guaranty Agreement<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
PARTICIPATION AGREEMENT
\n (1995 777 A)<\/p>\n
THIS PARTICIPATION AGREEMENT (1995 777 A) dated as of May 1, 1995
\namong (i) United Air Lines, Inc., a Delaware corporation (the “Lessee”), (ii)
\n[____________], a corporation organized under the laws of Delaware (the “Owner
\nParticipant”), (iii) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
\ncompany, not in its individual capacity, except as expressly provided herein,
\nbut solely as Owner Trustee under the Trust Agreement (the “Owner Trustee”),
\n(iv) FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
\nassociation, not in its individual capacity, except as otherwise provided
\nherein, but solely as trustee under the Pass Through Trust Agreement (the “Pass
\nThrough Trustee”), dated as of February 1, 1992, as amended and restated as of
\nMay 1, 1995 (the “Basic Agreement”), in each case between the Lessee and STATE
\nSTREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as
\nsupplemented by Trust Supplements Nos. 1995-A1 and 1995-A2, each dated as of May
\n__, 1995 between the Lessee and the Pass Through Trustee creating the 1995-A1
\nPass Through Trust and the 1995-A2 Pass Through Trust, respectively (the Basic
\nAgreement as so supplemented being the “1995-A1 Pass Through Trust Agreement”
\nand the “1995-A2 Pass Through Trust Agreement”, respectively, each of the 1995-
\nA1 Pass Through Trust Agreement and the 1995-A2 Pass Through Trust Agreement
\nbeing a “Pass Through Trust Agreement”) and (v) FIRST SECURITY BANK OF UTAH,
\nNATIONAL ASSOCIATION, a national banking association, in its individual capacity
\nand as Indenture Trustee under the Trust Indenture (the “Indenture Trustee”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, pursuant to the Purchase Agreement between Lessee and the
\nManufacturer, the Manufacturer has agreed to sell to Lessee, among other things,
\ncertain Boeing Model 777-222 aircraft, one of which has been recently purchased
\nfrom the Manufacturer by Lessee and is the subject of this Agreement; and<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement, the Owner Participant is entering into the Trust Agreement pursuant
\nto which Trust Agreement the Owner Trustee agrees, among other things, to hold
\nthe Trust Estate defined in Section 1.01 thereof (the “Trust Estate”) for the
\nuse and benefit of the Owner Participant; and<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement,<\/p>\n
(i) Lessee and the Owner Trustee are entering into the Owner Trustee’s
\n Purchase Agreement and Assignment (1995 777 A) dated as of May 1, 1995 (the
\n “Owner Trustee’s Purchase Agreement”), whereby Lessee agrees to sell the
\n Aircraft to the Owner Trustee and assigns to the Owner Trustee certain
\n rights and interests of Lessee under the Purchase Agreement with respect to
\n the Aircraft; and<\/p>\n
(ii) the Manufacturer has executed the Consent and Agreement (1995
\n 777 A) dated as of May 1, 1995 substantially in the form attached to the
\n Owner Trustee’s Purchase Agreement, with respect to the Owner Trustee’s
\n Purchase Agreement; and<\/p>\n
WHEREAS, the Indenture Trustee and the Owner Trustee concurrently with
\nthe execution and delivery of this Agreement are entering into the Trust
\nIndenture and Mortgage (1995 777 A) dated as of May 1, 1995 pursuant to which
\nthe Owner Trustee agrees, among other things, to issue one or more Loan
\nCertificates in the form set forth in Exhibit A-1 or Exhibit A-2 to the Trust
\nIndenture to each Pass Through Trustee on behalf of the related grantor trusts
\ncreated by the applicable Pass Through Trust Agreement as evidence of the Owner
\nTrustee’s indebtedness to each Pass Through Trustee, which Loan Certificates are
\nto be secured by the mortgage and security interest in the Aircraft created
\npursuant to the Trust Indenture by the Owner Trustee in favor of the Indenture
\nTrustee, and the Owner Trustee shall execute and deliver the Trust Supplement
\ncovering the Aircraft, supplementing the Trust Agreement and the Trust
\nIndenture; and<\/p>\n
WHEREAS, as described in Section 2 hereof, the Owner Trustee and
\nLessee are entering into a Lease Agreement (1995 777 A) dated as of May 1, 1995
\nwhereby, subject to the terms and conditions set forth therein, the Owner
\nTrustee agrees to lease to Lessee, and Lessee agrees to lease from the Owner
\nTrustee, the Aircraft on the Delivery Date; and<\/p>\n
WHEREAS, in connection with the foregoing, each Pass Through Trustee
\nwill issue the Pass Through Certificates substantially in the form of Exhibit A
\nto each Pass Through Trust Agreement; and<\/p>\n
WHEREAS, to facilitate the Owner Trustee’s issuance of the Loan
\nCertificates to the applicable Pass Through Trustee and the purchase of the Loan
\nCertificates by each such Pass Through Trustee, the Lessee has duly authorized
\nthe execution and delivery of each of the two Pass Through Trust Agreements as
\nthe “issuer” thereunder, as such term is defined in and solely for purposes of
\nthe Securities Act of 1933, as amended, and of the Pass Through Certificates
\nbeing issued thereunder as the<\/p>\n
2<\/p>\n
“obligor” thereunder, as such term is defined in and solely for purposes of the
\nTrust Indenture Act of 1939, as amended, with respect to the Pass Through
\nCertificates and is undertaking to perform certain administrative and
\nministerial duties thereunder and is also undertaking to pay the fees and
\nexpenses of the Pass Through Trustees; and<\/p>\n
WHEREAS, certain terms are used herein as defined in Section 1(a)
\nhereof.<\/p>\n
NOW THEREFORE, in consideration of the mutual agreements herein
\ncontained, the parties hereto agree as follows:<\/p>\n
SECTION 1. Certain Definitions; Participations in Lessor’s Cost of
\n ——————————————————-
\nthe Aircraft. (a) The terms “Lessee,” “Owner Participant,” “Pass Through
\n– ————
\nTrustee,” “Owner Trustee” and “Indenture Trustee” shall have the further
\nmeanings attributed thereto in the Lease Agreement referred to above and, except
\nas otherwise defined in this Agreement, terms used herein in capitalized form
\nshall have the meanings attributed thereto in the Lease Agreement referred to
\nabove. Unless the context otherwise requires, any reference herein to any of
\nthe Operative Documents refers to such document as it may be amended from time
\nto time in accordance with its terms and the terms of each other agreement
\nrestricting the amendment thereof.<\/p>\n
(b) Subject to the terms and conditions of this Agreement, (i) each of
\nthe Pass Through Trustees agrees to finance in part, the Owner Trustee’s payment
\nof Lessor’s Cost for the Aircraft by making a secured loan to the Owner Trustee
\n(herein called a “Loan” and collectively, the “Loans”) on a date to be
\ndesignated pursuant to Section 2 hereof, but in no event later than May 31,
\n1995, in the amount in Dollars equal to the amount set forth opposite its name
\non Schedule II hereto and (ii) the Owner Participant hereby agrees, in
\nconnection with its equity investment in the beneficial ownership of the
\nAircraft and the sale of the Aircraft by the Lessee to the Owner Trustee
\npursuant to the Owner Trustee’s Bill of Sale, as contemplated hereby and by the
\nOwner Trustee’s Purchase Agreement, to make its equity investment in the
\nbeneficial ownership of the Aircraft on a date to be designated as set forth
\nabove, but in no event later than May 31, 1995, in an amount in Dollars equal to
\nthe amount set forth opposite its name on Schedule II hereto. To fund its
\nobligations set out in (i) above, each Pass Through Trustee shall, in accordance
\nwith Section 2.01 of the applicable Pass Through Trust Agreement, execute,
\nauthenticate and deliver Pass Through Certificates, dated a date not later than
\nthe Delivery Date and of the maturities, in the principal amounts, bearing the
\ninterest rates and of the other economic terms specified in the request of the
\nCompany (as defined in the Basic Agreement)<\/p>\n
3<\/p>\n
delivered pursuant to such Section 2.01, and deliver such Pass Through
\nCertificates to the Underwriters (as defined in Section 4(a)(xvii) as specified
\nin such request against payment by the Underwriters of an amount equal to the
\naggregate principal amount of its Loan. In the case of the Owner Participant,
\nthe amount of its participation to be made as provided above in the payment of
\nLessor’s Cost and, in the case of each Pass Through Trustee, the amount of its
\nLoan, is hereinafter called such Participant’s “Commitment” for the Aircraft.
\nIn case any Participant shall default in its obligation to make the amount of
\nits Commitment available pursuant to Section 2 hereof in respect of the
\nAircraft, the other Participants shall have no obligation to make any portion of
\nsuch amount available or to increase the amount of its Commitment and the
\nobligation of the nondefaulting Participants shall remain subject to the terms
\nand conditions set forth in this Agreement.<\/p>\n
SECTION 2. Lessee’s Notice of Delivery Date. Lessee agrees to give
\n ——————————–
\nthe Owner Participant, the Owner Trustee, the Pass Through Trustees and the
\nIndenture Trustee at least two Business Days’ prior written notice of the
\nDelivery Date for the Aircraft, which Delivery Date shall be a Business Day not
\nlater than May 31, 1995, which notice shall specify the amount of Lessor’s Cost
\nand the amount of each Participant’s Commitment for the Aircraft. As to each
\nParticipant, the making of its Commitment for such Aircraft available in the
\nmanner required by this Section 2 shall constitute a waiver of such notice. The
\nOwner Trustee and the Indenture Trustee shall be deemed to have waived such
\nnotice if the Indenture Trustee shall have received from the Owner Participant
\nfunds in the full amount of the Owner Participant’s Commitment and the proceeds
\nof the sale of the Loan Certificates in the full amount of the Pass Through
\nTrustees’ Commitments.<\/p>\n
Subject to the terms and conditions of this Agreement, and
\nsimultaneously with receipt by the parties hereto of all amounts to be paid to
\nthem on the Delivery Date pursuant to this Section 2, the Lessee shall transfer
\ntitle to and deliver the Aircraft to the Owner Trustee, the Owner Trustee shall
\npurchase and take title to, and accept delivery of, the Aircraft, and the Owner
\nTrustee shall lease the Aircraft to Lessee, it being understood that the
\ntransactions described in this Section 2 are simultaneous and mutually
\ndependent. On the Delivery Date, subject to the terms and conditions of this
\nAgreement, and in consideration for the transfer of title to the Aircraft to the
\nOwner Trustee, the Owner Trustee and the Indenture Trustee (on behalf of the
\nOwner Trustee) shall pay over the funds made available to it equal to Lessor’s
\nCost to Lessee’s account no. ____________ at First Security Bank of Utah,
\nNational Association. In addition, subject to the terms and conditions of this
\nAgreement, the Owner Trustee shall, on the Delivery Date,<\/p>\n
4<\/p>\n
issue to the Pass Through Trustees the Loan Certificates to evidence the Loans<\/p>\n
The Owner Participant agrees, subject to the terms and conditions of
\nthis Agreement, to make its Commitment available to the Owner Trustee at the
\nOwner Trustee’s account no. ________ at First Security Bank of Utah, National
\nAssociation, and the Pass Through Trustees agree to make their Commitment
\navailable to the Indenture Trustee at the Indenture Trustee’s account no.
\n_________ at First Security Bank of Utah, National Association, at or before
\n10:00 a.m., New York City time, on the Delivery Date specified in Lessee’s
\nnotice referred to in the first paragraph of this Section 2 (such specified
\nDelivery Date being herein called the “Scheduled Delivery Date”).<\/p>\n
SECTION 3. Instructions to the Owner Trustee and Indenture Trustee.
\n ——————————————————-
\nSubject to the terms and conditions of this Agreement, the Owner Trustee and the
\nIndenture Trustee, upon their respective receipts in full of the Owner
\nParticipant’s and the Pass Through Trustees’ Commitments for the Aircraft, as
\nprovided in Section 2 hereof, together with instructions from such Participant
\nor its special counsel to release such funds to Lessee, shall transfer such
\nfunds to the Lessee and the Owner Trustee shall purchase the Aircraft from the
\nLessee and lease the Aircraft to Lessee and such action shall constitute,
\nwithout further act, authorization and direction by the Owner Participant to the
\nOwner Trustee and the Indenture Trustee acting on behalf of the Owner
\nParticipant (in regard to item (a) below) and to the Owner Trustee (in regard to
\nitems (b) – (f) below):<\/p>\n
(a) to pay to Lessee the Lessor’s Cost in the manner set forth in
\nSection 2;<\/p>\n
(b) to the extent not previously accomplished by a prior
\nauthorization, to authorize a representative or representatives of the Owner
\nTrustee (who shall be an employee or employees, or an agent or agents, of Lessee
\ndesignated by Lessee) to accept delivery of the Aircraft on the Delivery Date
\npursuant to the Owner Trustee’s Bill of Sale;<\/p>\n
(c) to accept from the Lessee the Owner Trustee’s Bill of Sale and the
\nOwner Trustee’s FAA Bill of Sale;<\/p>\n
(d) to execute an Aircraft Registration Application, a Lease
\nSupplement and a Trust Supplement, in each case covering the Aircraft;<\/p>\n
(e) to borrow from the Pass Through Trustees amounts equal to their
\nrespective Loans to finance a portion of Lessor’s<\/p>\n
5<\/p>\n
Cost and to issue to the Pass Through Trustees Loan Certificates in the amounts
\nspecified herein; and<\/p>\n
(f) to take such other action as may be required to be taken by the
\nOwner Trustee on the Delivery Date by the terms of any Operative Document.<\/p>\n
SECTION 4. Conditions. (a) Conditions Precedent to the
\n ———- —————————
\nParticipations in the Aircraft. It is agreed that the respective obligations of
\n– ——————————
\nthe Participants to participate in the payments of Lessor’s Cost are subject to
\nthe satisfaction prior to or on the Delivery Date of the following conditions
\nprecedent, except that paragraphs (iii), (xx), (xxiv) (insofar as it relates to
\nthe Pass Through Trustees), (xxv), (xxvi) and (xxviii) shall not be a condition
\nprecedent to the obligation of the Pass Through Trustees, and paragraphs (iv),
\n(x) (insofar as it relates to the Owner Participant), (xiv), (xix) and (xxvii)
\nshall not be a condition precedent to the obligation of the Owner Participant:<\/p>\n
(i) The Participants shall have received due notice with respect
\n to such participation pursuant to Section 2 hereof (or shall have waived
\n such notice either in writing or as provided in Section 2).<\/p>\n
(ii) No change shall have occurred after the date of the execution
\n and delivery of this Agreement in applicable law or regulations thereunder
\n or interpretations thereof by appropriate regulatory or judicial
\n authorities which, in the opinion of the Owner Participant or the Pass
\n Through Trustees, as the case may be, would make it a violation of law or
\n regulations for (x) the Lessee, the Indenture Trustee, any Participant or
\n the Owner Trustee to execute, deliver and perform the Operative Documents
\n to which any of them is a party or (y) the Pass Through Trustees or the
\n Owner Participant to make their respective Commitments available or, in the
\n case of any Pass Through Trustee, to acquire a Loan Certificate or to
\n realize the benefits of the security afforded by the Trust Indenture.<\/p>\n
(iii) In the case of the Owner Participant, the Pass Through
\n Trustees shall have made available the amount of their respective
\n Commitments for the Aircraft in accordance with Section 1 hereof.<\/p>\n
(iv) In the case of the Pass Through Trustees, the Owner
\n Participant shall have made available the amount of its Commitment for the
\n Aircraft in accordance with Section 1 hereof.<\/p>\n
6<\/p>\n
(v) The following documents shall have been duly authorized,
\n executed and delivered by the respective party or parties thereto, shall
\n each be satisfactory in form and substance to the Participants and shall be
\n in full force and effect and executed counterparts shall have been
\n delivered to the Participants, and their respective counsel, provided that
\n only the applicable Pass Through Trustee shall receive an executed original
\n of its Loan Certificate, only the Indenture Trustee, acting on behalf of
\n the Certificate Holders, shall receive the original counterparts of the
\n Lease and the Lease Supplement, only the Owner Participant shall receive a
\n copy of the Purchase Agreement which shall be delivered to and retained by
\n the Owner Trustee (the Owner Trustee and the Owner Participant and their
\n respective counsel may inspect the Purchase Agreement prior to the Delivery
\n Date but thereafter shall not have access to the same until the return of
\n the Aircraft to Lessor (but only to the extent the Purchase Agreement has
\n any continued effectiveness on such return date) or unless a Lease Default
\n or Event of Default shall have occurred and be continuing) and provided
\n further that only the Lessee and the Owner Participant shall receive copies
\n of the Tax Indemnity Agreement:<\/p>\n
(1) the Lease;<\/p>\n
(2) a Lease Supplement covering the Aircraft and dated the
\n Delivery Date;<\/p>\n
(3) the Tax Indemnity Agreement;<\/p>\n
(4) the Trust Agreement;<\/p>\n
(5) a Trust Supplement covering the Aircraft and dated the
\n Delivery Date;<\/p>\n
(6) the Owner Trustee’s Bill of Sale and the Owner Trustee’s
\n FAA Bill of Sale;<\/p>\n
(7) the Owner Trustee’s Purchase Agreement;<\/p>\n
(8) an acceptance certificate covering the Aircraft in the
\n form agreed to by the Participants and Lessee (the “Acceptance
\n Certificate”) duly completed and executed by the Owner Trustee or its
\n agent, which shall be a representative of Lessee, and by such
\n representative on behalf of Lessee;<\/p>\n
(9) the Trust Indenture;<\/p>\n
7<\/p>\n
(10) the Loan Certificates;<\/p>\n
(11) the Consent and Agreement;<\/p>\n
(12) the Purchase Agreement;<\/p>\n
(13) the Owner Participant Parent Guaranty; and<\/p>\n
(14) the Pass Through Trust Agreements.<\/p>\n
(vi) A Uniform Commercial Code financing statement or statements
\n covering all the security interests created by or pursuant to the Granting
\n Clause of the Trust Indenture shall have been executed and delivered by the
\n Owner Trustee and the Indenture Trustee, and such financing statement or
\n statements shall have been duly filed in all places necessary or advisable,
\n and any additional Uniform Commercial Code financing statements deemed
\n advisable by the Owner Participant or the Pass Through Trustees shall have
\n been executed and delivered by Lessee, the Indenture Trustee or the Owner
\n Trustee and duly filed.<\/p>\n
(vii) Each Participant and the Indenture Trustee shall have
\n received the following, in each case in form and substance satisfactory to
\n it, provided that only the Owner Participant shall receive a copy of the
\n Purchase Agreement which shall be delivered to and retained by the Owner
\n Trustee (the Owner Trustee and the Owner Participant and their respective
\n counsel may inspect the Purchase Agreement prior to the Delivery Date but
\n thereafter shall not have access to the same until the return of the
\n Aircraft to Lessor (but only to the extent the Purchase Agreement has any
\n continued effectiveness on such return date) or unless a Lease Default or
\n Event of Default shall have occurred and be continuing):<\/p>\n
(1) a certified copy of the Certificate of Incorporation and
\n By-Laws of Lessee and a copy of resolutions of the board of directors
\n of Lessee or the executive committee thereof, certified by the
\n Secretary or an Assistant Secretary of Lessee, duly authorizing the
\n execution, delivery and performance by Lessee of this Agreement, the
\n Lease, the Owner Trustee’s Purchase Agreement, the Owner Trustee’s
\n Bill of Sale, the Owner Trustee’s FAA Bill of Sale, the Tax Indemnity
\n Agreement and each other document required to be executed and
\n delivered by Lessee on the Delivery Date in accordance with the
\n provisions hereof and thereof;<\/p>\n
8<\/p>\n
(2) such other documents and evidence with respect to
\n Lessee, the Manufacturer, the Owner Trustee, the Indenture Trustee and
\n the Participants, as the Pass Through Trustees or the Owner
\n Participant, or their respective counsel, may reasonably request in
\n order to establish the authority of such parties to consummate the
\n transactions contemplated by this Agreement, the taking of all
\n corporate proceedings in connection therewith and the compliance with
\n the conditions herein set forth;<\/p>\n
(3) a certificate of Lessee (i) as to the Person or Persons
\n authorized to execute and deliver this Agreement, the other Lessee
\n Documents, and any other documents to be executed on behalf of Lessee
\n in connection with the transactions contemplated hereby and as to the
\n signature of such person or persons, and (ii) to the effect that the
\n application of the proceeds from the Pass Through Certificates as
\n provided for herein will not be inconsistent with any of the
\n provisions of the Pass Through Trust Agreements;<\/p>\n
(4) a copy of the Purchase Agreement certified by the
\n Secretary or an Assistant Secretary of Lessee as being a true and
\n accurate copy of the same with all amendments attached thereto that
\n relate to the Manufacturer’s warranties or related obligations or any
\n right in such Agreement assigned by the Lessee to the Owner Trustee
\n pursuant to the Owner Trustee’s Purchase Agreement;<\/p>\n
(5) a copy of the general authorizing resolutions of the
\n boards of directors (or executive committees) or other satisfactory
\n evidence of authorization of the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, certified as of the Delivery Date by the Secretary
\n or an Assistant Secretary of the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, respectively, which authorize the execution,
\n delivery and performance by the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent of all of the Operative Documents to which it is a
\n party, together with such other documents and evidence with respect to
\n the Indenture Trustee, the Owner Trustee, the Pass Through Trustees,
\n the Owner Participant and the Owner Participant Parent as either the
\n Pass Through<\/p>\n
9<\/p>\n
Trustees (or their counsel) or the Owner Participant (or its counsel)
\n may reasonably request in order to establish the consummation of the
\n transactions contemplated by this Agreement, the taking of all
\n corporate proceedings in connection therewith and compliance with the
\n conditions herein set forth; provided, this clause shall not be a
\n condition precedent as to any Participant as to documents to be
\n provided by that Participant; and<\/p>\n
(6) a copy of the excerpts the “United Air Lines 777
\n Maintenance Program” referred to in Section 5 of the Lease.<\/p>\n
(viii) All appropriate action required to have been taken by the
\n Federal Aviation Administration, or any governmental or political agency,
\n subdivision or instrumentality of the United States, on or prior to the
\n Delivery Date in connection with the transactions contemplated by this
\n Agreement shall have been taken, and all orders, permits, waivers,
\n authorizations, exemptions and approvals of such entities required to be in
\n effect on the Delivery Date in connection with the transactions
\n contemplated by this Agreement shall have been issued, and all such orders,
\n permits, waivers, authorizations, exemptions and approvals shall be in full
\n force and effect on the Delivery Date.<\/p>\n
(ix) On the Delivery Date, the following statements shall be true,
\n and the Participants and the Indenture Trustee shall have received evidence
\n satisfactory to each of them to the effect that:<\/p>\n
(1) the Owner Trustee has good and marketable title (subject
\n to filing and recording of the Owner Trustee’s FAA Bill of Sale with
\n the Federal Aviation Administration) to the Aircraft, free and clear
\n of Liens other than the rights of Lessee under the Lease and Lease
\n Supplement covering the Aircraft, the mortgage and security interest
\n created by the Trust Indenture, the rights of the Owner Participant
\n under the Trust Agreement and the Trust Supplement and Liens permitted
\n by clause (iii) (solely for Taxes not yet due) of Section 6 of the
\n Lease;<\/p>\n
(2) application for registration of the Aircraft in the name
\n of the Owner Trustee (together with any required affidavits) and the
\n Owner Trustee’s FAA Bill of Sale have been duly filed with the FAA;<\/p>\n
10<\/p>\n
(3) the Trust Agreement, the Trust Indenture and the Trust
\n Supplement and the Lease and the Lease Supplement have been duly filed
\n with the FAA for recordation;<\/p>\n
(4) the Owner Trustee, as lessor under the Lease, and the
\n Indenture Trustee, as assignee of the Owner Trustee’s rights under the
\n Lease Agreement pursuant to the Trust Indenture, are entitled to the
\n protection of Section 1110 of the Bankruptcy Code in connection with
\n the Owner Trustee’s and the Indenture Trustee’s right to take
\n possession of the Airframe and Engines in the event of a case under
\n Chapter 11 of the Bankruptcy Code in which the Lessee is a debtor; and<\/p>\n
(5) the Aircraft has been duly certified by the FAA as to
\n type and airworthiness in accordance with the terms of the Lease and
\n has a current, valid U.S. standard certificate of airworthiness issued
\n by the FAA.<\/p>\n
(x) On the Delivery Date, (A) the representations and warranties
\n of Lessee, the Owner Participant and the Owner Trustee contained in
\n Sections 7 and 8 of this Agreement and in the Tax Indemnity Agreement and
\n the Owner Participant Parent contained in the Owner Participant Parent
\n Guaranty shall be true and accurate as though made on and as of such date
\n except to the extent that such representations and warranties relate solely
\n to an earlier date (in which case such representations and warranties shall
\n have been true and accurate on and as of such earlier date), (B) no event
\n shall have occurred and be continuing, or would result from the purchase,
\n sale, lease or mortgage of the Aircraft, which constitutes (or would, with
\n the passage of time or the giving of notice or both, constitute) an Event
\n of Default as defined in the Lease or the Trust Indenture, and (C) no event
\n shall have occurred that might have the effect of materially and adversely
\n affecting the ability of Lessee to carry on its business as conducted on
\n December 31, 1994 or to perform its obligations under the Operative
\n Documents.<\/p>\n
(xi) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, and the Owner Trustee from (a)
\n Francesca M. Maher, Vice President-Law, Deputy General Counsel and
\n Corporate Secretary for Lessee, in substantially the form of Schedule III-
\n 1(a) hereto and (b) Vedder, Price, Kaufman & Kammholz, special counsel to
\n the Lessee, in substantially the form of Schedule III-1(b) hereto.<\/p>\n
11<\/p>\n
(xii) The Participants shall have received an opinion addressed to
\n the Participants, the Owner Trustee, the Indenture Trustee and Lessee from
\n counsel to the Manufacturer, in substantially the form of Schedule III-2
\n hereto.<\/p>\n
(xiii) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, the Owner Trustee and Lessee, from
\n Bingham, Dana & Gould, special counsel for the Owner Trustee, in
\n substantially the form of Schedule III-3 hereto.<\/p>\n
(xiv) The Pass Through Trustees shall have received an opinion
\n addressed to the Indenture Trustee, the Pass Through Trustees, the Owner
\n Trustee and Lessee from (a) Dewey Ballantine, special counsel to the Owner
\n Participant and the Owner Participant Parent, in substantially the form of
\n Schedule III-4(a) hereto and (b) Michael Flynn, Vice President-General
\n Counsel and Secretary to the Owner Participant and the Owner Participant
\n Parent in substantially the form of Schedule III-4(b) hereto.<\/p>\n
(xv) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, the Owner Trustee and Lessee, from
\n Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma, in
\n substantially the form of Schedule III-5 hereto.<\/p>\n
(xvi) The Participants shall have received an opinion addressed to
\n the Participants, the Owner Trustee and Lessee from Ray, Quinney & Nebeker,
\n special counsel for the Indenture Trustee and the Pass Through Trustees, in
\n substantially the form of Schedule III-6 hereto.<\/p>\n
(xvii) The Owner Participant shall have received an opinion
\n addressed to it from Vedder, Price, Kaufman & Kammholz, special counsel to
\n the Lessee, substantially to the same effect as the opinion delivered
\n pursuant to Section 5(b)(1) of the Purchase Agreement dated ____________
\n (the “Underwriting Agreement”) among Lessee, Merrill Lynch & Co. and Lehman
\n Brothers (the “Underwriter”).<\/p>\n
(xviii) The Participants and the Indenture Trustee shall have
\n received a certificate signed by the President or any Vice President of
\n Lessee, dated the Delivery Date, addressed to the Participants and the
\n Indenture Trustee and certifying as to the fulfillment of all conditions in
\n this Section 4(a) insofar as they relate to Lessee and as to the matters
\n stated in paragraphs (viii), (x) (insofar as it relates to Lessee), (xxii)
\n and (xxiii) (to the knowledge of<\/p>\n
12<\/p>\n
Lessee, except in regard to matters relating to the Participants, Indenture
\n Trustee or the Owner Trustee, in which event such representation shall be
\n to the knowledge of Lessee without any investigation whatsoever) of this
\n Section 4(a).<\/p>\n
(xix) (a) The Owner Participant shall, by making its Commitment
\n available as provided in Section 1(b)(ii) of this Agreement, (b) the
\n Indenture Trustee shall by authenticating the Loan Certificates issued on
\n the Delivery Date, (c) the Owner Trustee shall, by accepting the Owner
\n Trustee’s Bill of Sale and the Owner Trustee’s FAA Bill of Sale and (d) the
\n Pass Through Trustees shall, by making their respective Commitments
\n available as provided in Section 1(b)(i) of this Agreement, be respectively
\n deemed to have reaffirmed as of the Delivery Date the representations and
\n warranties made by it in Section 8 of this Agreement.<\/p>\n
(xx) The Owner Participant shall have received an opinion, in form
\n and substance reasonably satisfactory to the Owner Participant, from BK
\n Associates, independent aircraft appraisers, or such other recognized
\n aircraft appraiser selected by the Owner Participant, to the effect that
\n (A) on the Delivery Date, the fair market value of the Aircraft is equal to
\n Lessor’s Cost; (B) on the Delivery Date, the Aircraft is expected to have
\n an economic useful life of at least 125% of the aggregate of the Interim
\n Term and the Basic Term; (C) on the Delivery Date, the Aircraft is expected
\n to have a residual value at the end of the Basic Term of at least 20% of
\n Lessor’s Cost (without considering the effects of inflation or deflation
\n and assuming the Aircraft is in compliance with Section 5 of the Lease);
\n (D) on the Delivery Date, the Aircraft is expected to have a fair market
\n value on the EBO Date that does not exceed an amount equal to the EBO
\n Price; (E) the fair market value of each Engine is at least equal to Engine
\n Cost; and (F) the Aircraft is not limited use property.<\/p>\n
(xxi) The Participants and the Indenture Trustee shall have
\n received an independent insurance broker’s report, and certificates of
\n insurance, in form and substance reasonably satisfactory to the
\n Participants, as to the due compliance with the terms of Section 11 of the
\n Lease relating to insurance with respect to the Aircraft.<\/p>\n
(xxii) On the Delivery Date it shall be true that no Event of Loss
\n (or event which with the passage of time would become an Event of Loss)
\n with respect to the Airframe or any Engine has occurred.<\/p>\n
13<\/p>\n
(xxiii) No action or proceeding shall have been instituted nor shall
\n governmental action be threatened before any court or governmental agency,
\n nor shall any order, judgment or decree have been issued or proposed to be
\n issued by any court or governmental agency at the time of the Delivery Date
\n to set aside, restrain, enjoin or prevent the completion and consummation
\n of this Agreement or the transactions contemplated hereby.<\/p>\n
(xxiv) The respective representations and warranties of the
\n Indenture Trustee and the Pass Through Trustees contained in Section 8
\n hereof shall be true and accurate as of the Delivery Date as though made on
\n and as of such date except to the extent that such representations and
\n warranties relate solely to an earlier date (in which event such
\n representations and warranties shall have been true and accurate on and as
\n of such earlier date) and the Lessee and each Participant shall have
\n received a certificate signed by the Chairman of the Board, the President,
\n any Vice President or any Assistant Vice President of the Indenture Trustee
\n and the Pass Through Trustees certifying as to the foregoing matters with
\n respect to the Indenture Trustee and the Pass Through Trustees, as
\n applicable.<\/p>\n
(xxv) The Owner Participant shall have received from Dewey
\n Ballantine, special counsel to the Owner Participant, a favorable opinion,
\n in form and substance satisfactory to the Owner Participant, with respect
\n to certain income tax aspects of the transactions contemplated by the
\n Operative Documents.<\/p>\n
(xxvi) In the opinion of the Owner Participant and its special
\n counsel, no law (including tax laws), regulation or regulatory order or
\n holding applicable to the Owner Participant or the Owner Participant’s
\n participation in the transactions contemplated hereby, shall have been
\n enacted, issued or proposed prior to the Delivery Date that would have a
\n material adverse impact on the Owner Participant.<\/p>\n
(xxvii) The Pass Through Trustees shall have received a letter from
\n BK Associates to the effect that the fair market value of the Aircraft on
\n the Delivery Date is not less than 125% of the aggregate amount of the
\n Loans.<\/p>\n
(xxviii) The Lessee shall have executed and delivered to Owner
\n Participant a letter relating to Lessee’s average cost of capital together
\n with appropriate supporting documentation.<\/p>\n
14<\/p>\n
Promptly upon the registration of the Aircraft and the recording of
\nthe Lease, the Trust Indenture, the Trust Agreement, the Lease Supplement and
\nthe Trust Supplement covering the Aircraft pursuant to the Federal Aviation Act,
\nLessee will cause Crowe & Dunlevy, P.C., special counsel in Oklahoma City,
\nOklahoma, to deliver to the Owner Participant, the Indenture Trustee, the Pass
\nThrough Trustees, the Owner Trustee and Lessee an opinion as to the due and
\nvalid registration of the Aircraft in the name of the Owner Trustee, the due
\nrecording of the Owner Trustee’s FAA Bill of Sale, the Trust Indenture, the
\nLease Supplement, the Trust Supplement, the Lease and the Trust Agreement and
\nthe lack of filing of any intervening documents with respect to the Aircraft.<\/p>\n
(b) Conditions Precedent to the Obligations of Lessee. It is agreed
\n ————————————————-
\nthat the obligations of Lessee (A) to sell the Aircraft to the Owner Trustee,
\n(B) to accept delivery of the Aircraft under the Lease and (C) to enter into its
\nother Operative Documents, are all subject to the fulfillment to the
\nsatisfaction of Lessee prior to or on the Delivery Date of the following
\nconditions precedent:<\/p>\n
(i) The conditions specified in Section 4(a)(iii), 4(a)(iv),
\n 4(a)(viii), 4(a)(xxii) and 4(a)(xxiii) hereof shall have been satisfied,
\n unless such nonsatisfaction is the result of the actions of Lessee.<\/p>\n
(ii) Those documents described in Section 4(a)(v) shall have been
\n duly authorized, executed and delivered by the respective party or parties
\n thereto (other than Lessee) in the manner specified in Section 4(a)(v),
\n shall each be satisfactory in form and substance to Lessee, shall be in
\n full force and effect on the Delivery Date, and an executed counterpart of
\n each thereof (other than the Loan Certificates) shall have been delivered
\n to Lessee or its counsel.<\/p>\n
(iii) Lessee shall have received a copy of the general authorizing
\n resolutions of the boards of directors (or executive committees) or other
\n satisfactory evidence of authorization of the Indenture Trustee, the Owner
\n Trustee, the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, certified as of the Delivery Date by the Secretary or
\n an Assistant Secretary of the Indenture Trustee, the Owner Trustee, the
\n Pass Through Trustees, the Owner Participant and the Owner Participant
\n Parent, respectively, which authorize the execution, delivery and
\n performance by the Indenture Trustee, the Owner Trustee, the Pass Through
\n Trustees, the Owner Participant and the Owner Participant Parent of all the
\n Operative Documents to which<\/p>\n
15<\/p>\n
it is a party, together with such other documents and evidence with respect
\n to the Indenture Trustee, the Owner Trustee, the Pass Through Trustees, the
\n Owner Participant and the Owner Participant Parent as Lessee or its counsel
\n may reasonably request in order to establish the consummation of the
\n transactions contemplated by this Agreement, the taking of all corporate
\n proceedings in connection therewith and compliance with the conditions
\n herein set forth.<\/p>\n
(iv) The representations and warranties of the Participants, the
\n Indenture Trustee and the Owner Trustee contained in Section 8 hereof and
\n the Owner Participant Parent in the Owner Participant Parent Guaranty shall
\n be true and accurate as of the Delivery Date as though made on and as of
\n such date except to the extent that such representations and warranties
\n relate solely to an earlier date (in which event such representations and
\n warranties shall have been true and accurate on and as of such earlier
\n date) and Lessee shall have received a certificate signed by the Chairman
\n of the Board, the President, any Vice President or any Assistant Vice
\n President or other authorized representative of the Indenture Trustee, the
\n Owner Participant, the Pass Through Trustees and the Owner Trustee,
\n respectively, certifying as to the foregoing matters with respect to the
\n Indenture Trustee, the Owner Participant and the Owner Trustee,
\n respectively.<\/p>\n
(v) Lessee shall have received the opinions set forth in Sections
\n 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), and 4(a)(xvi), in each case
\n addressed to Lessee and dated the Delivery Date.<\/p>\n
(vi) No change shall have occurred after the date of the execution
\n and delivery of this Agreement in applicable law or regulations thereunder
\n or interpretations thereof by appropriate regulatory authorities which, in
\n the opinion of Lessee, would make it a violation of law or regulations for
\n Lessee to enter into any transaction contemplated by the Operative
\n Documents.<\/p>\n
(vii) No law (including tax laws), regulation or regulatory order
\n or holding applicable to the Lessee or Lessee’s participation in the
\n transactions contemplated hereby, shall have been enacted, issued, or
\n proposed prior to the Delivery Date that would have a material adverse
\n impact on Lessee.<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement. Lessor, the
\n ————————————-
\nParticipants, and the Indenture Trustee shall keep<\/p>\n
16<\/p>\n
the Purchase Agreement confidential and shall not disclose the same to any
\nPerson, except (A) to prospective and permitted transferees of Lessor’s, a Pass
\nThrough Trustee’s, the Owner Participant’s or the Indenture Trustee’s interest
\nwho agree to hold such information confidential, (B) to the aforementioned
\nprospective and permitted transferees’, Lessor’s, Pass Through Trustees’, the
\nOwner Participant’s or the Indenture Trustee’s counsel or special counsel,
\nindependent insurance brokers or other agents who agree to hold such information
\nconfidential, (C) as may be required by any statute, court or administrative
\norder or decree or governmental ruling or regulation, including Federal or state
\nbanking examiners or tax auditors or (D) as may be necessary or desirable for
\npurposes of protecting the interest of any such Person or for enforcement of the
\nLease by Owner Trustee, the Participants or the Indenture Trustee; provided,
\nhowever, that any and all disclosures of all or any part of the Purchase
\nAgreement which are permitted by (C) or (D) above shall be made only to the
\nextent necessary to meet the specific requirements or needs of the Persons to
\nwhom such disclosures are hereby permitted.<\/p>\n
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
\n —————————————–
\nHolder shall have any further interest in, or other right with respect to, the
\nmortgage and security interests created by the Trust Indenture when and if the
\nOriginal Amount of, Premium, if any, and interest on all Loan Certificates held
\nby such Certificate Holder and all other sums payable to such Certificate Holder
\nhereunder, under the Trust Indenture and under such Loan Certificates shall have
\nbeen paid in full. Each Certificate Holder by its acceptance of a Loan
\nCertificate, agrees that it will look solely to the income and proceeds from the
\nTrust Indenture Estate to the extent available for distribution to such
\nCertificate Holder as provided in Section 2.09 of the Trust Indenture and that
\nneither the Owner Participant nor the Owner Trustee shall be personally liable
\nto any Certificate Holder for any amounts payable under the Loan Certificates,
\nthe Trust Indenture, hereunder, or under any other Operative Documents
\n(including, without limitation, amounts payable as Premium), except as expressly
\nprovided in this Agreement or (in the case of the Owner Trustee) in the Trust
\nIndenture.<\/p>\n
SECTION 7. Lessee’s Representations, Warranties and Indemnities. (a) In
\n —————————————————- —
\nGeneral. Lessee represents and warrants that as of the Delivery Date:
\n– ——- <\/p>\n
(i) Lessee is a corporation duly organized and validly existing
\n in good standing pursuant to the laws of the State of Delaware; is duly
\n qualified to do business as a foreign corporation in each jurisdiction in
\n which its<\/p>\n
17<\/p>\n
operations or the nature of its business requires, except where the failure
\n to be so qualified would not have a material adverse effect on Lessee or
\n its business; is a Citizen of the United States and a Certificated Air
\n Carrier; holds all material licenses, certificates, permits and franchises
\n from the appropriate agencies of the United States of America and\/or all
\n other governmental authorities having jurisdiction, necessary to authorize
\n Lessee to engage in air transport and to carry on scheduled passenger
\n service, in each case as presently conducted; has its chief executive
\n office (as such term is defined in Article 9 of the Uniform Commercial
\n Code) in Elk Grove Township, Illinois; and has the corporate power and
\n authority to conduct its business as it is presently being conducted, to
\n hold under lease the Aircraft and to enter into and perform its obligations
\n under the Lessee Documents;<\/p>\n
(ii) the execution, delivery and performance by Lessee of the
\n Lessee Documents have been duly authorized by all necessary corporate
\n action on the part of Lessee, do not require any stockholder approval, or
\n approval or consent of any trustee or holders of any indebtedness or
\n obligations of Lessee except such as have been duly obtained, and none of
\n such Lessee Documents contravenes any law, judgment, governmental rule,
\n regulation or order binding on Lessee or the certificate of incorporation
\n or by-laws of Lessee or contravenes the provisions of, or constitutes a
\n default under, or results in the creation of any Lien (other than Permitted
\n Liens) upon the property of Lessee under, its certificate of incorporation
\n or bylaws, or any indenture, mortgage, chattel mortgage, deed of trust,
\n conditional sales contract, bank loan or credit agreement or other
\n agreement or instrument to which Lessee is a party or by which it or its
\n properties may be bound or affected;<\/p>\n
(iii) neither the execution and delivery by Lessee of the Lessee
\n Documents nor the performance by Lessee of its obligations thereunder
\n require the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action in respect of any
\n federal, state or foreign government authority or agency, except for (A)
\n the orders, permits, waivers, exemptions, authorizations and approvals of
\n the regulatory authorities having jurisdiction over the operation of the
\n Aircraft by Lessee, which orders, permits, waivers, exemptions,
\n authorizations and approvals have been duly obtained, and are in full force
\n and effect, (B) the registration of the Aircraft referred to in Section
\n 4(a)(ix)(2), (C) any normal periodic and other reporting requirements under
\n the applicable rules and regulations of the FAA to the extent required to
\n be given or obtained only<\/p>\n
18<\/p>\n
after the Delivery Date, (D) the recordings with the FAA described in the
\n opinion referred to in Section 4(a)(xv) and (E) any normal periodic and
\n other reporting requirements under the applicable rules and regulations of
\n the FAA to the extent required to be given or obtained only after the
\n Delivery Date, it being understood that the registration of the issuance
\n and sale of the Pass Through Certificates to be issued pursuant to the
\n provisions of the Pass Through Trust Agreements under the Securities Act of
\n 1933, as amended, and under the securities laws of any state in which the
\n Pass Through Certificates may be offered for sale if the laws of such state
\n require such action has been duly accomplished and the qualification of
\n each Pass Through Trust Agreement under the Trust Indenture Act of 1939, as
\n amended, has been duly obtained;<\/p>\n
(iv) each of the Lessee Documents has been duly executed and
\n delivered by Lessee and constitutes legal, valid and binding obligations of
\n Lessee enforceable against Lessee in accordance with the terms thereof;<\/p>\n
(v) there are no pending or threatened actions or proceedings
\n before any court or administrative agency involving any Lessee Document or
\n the transactions contemplated hereby or which individually (or in the
\n aggregate in the case of any group of related lawsuits) is expected to have
\n a material adverse effect on the financial condition of Lessee or the
\n ability of Lessee to perform its obligations under the Lessee Documents;<\/p>\n
(vi) except for (A) the registration of the Aircraft pursuant to
\n the Federal Aviation Act, (B) the filing for recording pursuant to said Act
\n of the Trust Agreement, the Lease with the Lease Supplement covering the
\n Aircraft, the Trust Indenture and the Trust Supplement attached thereto and
\n made a part thereof, and the Owner Trustee’s FAA Bill of Sale, (C) the
\n filing of financing statements (and continuation statements at periodic
\n intervals) with respect to the security and other interests created by such
\n documents under the Uniform Commercial Code of Illinois (which financing
\n statement Lessee has caused to be presented in due form for filing with the
\n appropriate filing office in the State of Illinois) and such other states
\n as may be specified in the opinions furnished pursuant to Section 4(a)(xi)
\n hereof and (D) the taking of possession by the Indenture Trustee of the
\n original counterparts of the Lease and the Lease Supplement covering the
\n Aircraft, no further action, including any filing or recording of any
\n document (including any financing statement in respect thereof under
\n Article 9 of the Uniform Commercial<\/p>\n
19<\/p>\n
Code of any applicable jurisdiction), is necessary or advisable in order to
\n establish and perfect the Owner Trustee’s title to and interest in the
\n Aircraft as against the Lessee and the Indenture Trustee’s security
\n interest in the Aircraft as against the Owner Trustee, and in each case as
\n against any third parties in any applicable jurisdictions in the United
\n States;<\/p>\n
(vii) there has not occurred any event which constitutes a Default
\n or an Event of Default under the Lease which is presently continuing and
\n there has not occurred any event which constitutes or would, with the
\n passage of time or the giving of notice, or both, constitute an Event of
\n Loss;<\/p>\n
(viii) the statements of financial position of Lessee as of
\n December 31, 1994 and the related statements of earnings and cash flow of
\n Lessee for the year then ended, copies of which have been furnished to the
\n Participants, fairly present the financial condition of Lessee as at such
\n date and the results of operations and cash flow of Lessee for the period
\n ended on such date, in accordance with generally accepted accounting
\n principles consistently applied (except as may be stated in the notes
\n thereto), and since December 31, 1994, there has been no material adverse
\n change in such condition or operations, except for such matters timely
\n disclosed in press releases issued by UAL Corporation or Lessee or in
\n public filings, effective as of the date hereof, with the Securities and
\n Exchange Commission under the Securities Exchange Act of 1934, as amended,
\n by UAL Corporation or Lessee;<\/p>\n
(ix) the Owner Trustee will have received good and marketable
\n title to the Aircraft free and clear of all Liens, except the rights of
\n Lessee under the Lease and the Lease Supplement covering the Aircraft, the
\n Lien of the Trust Indenture, the beneficial interest of the Owner
\n Participant in the Aircraft, and the Liens permitted by clause (iii)
\n (solely for Taxes not yet due) of Section 6 of the Lease;<\/p>\n
(x) none of the proceeds from the issuance of the Loan
\n Certificates or from the acquisition by the Owner Participant of its
\n beneficial interest in the Trust Estate will be used directly or indirectly
\n by Lessee to purchase or carry any “margin stock” as such term is defined
\n in Regulation G or U of the Board of Governors of the Federal Reserve
\n System;<\/p>\n
20<\/p>\n
(xi) neither Lessee nor anyone acting on behalf of Lessee has (A)
\n directly or indirectly offered any interest in the Trust Estate for sale
\n to, or solicited any offer to acquire any of the same from, anyone other
\n than the Owner Participant, and not more than ____________ (__) other
\n institutions believed capable of evaluating and bearing the risks of
\n investment in the transactions contemplated hereby, or (B) offered any
\n interest in the Trust Estate or any Pass Through Certificate or any Loan
\n Certificate in a manner which would violate the Securities Act of 1933, as
\n amended, the regulations thereunder, administrative and judicial
\n interpretation thereof or the securities laws, rules or regulations of any
\n state;<\/p>\n
(xii) Lessee is not in default in the performance of any term or
\n condition of the Owner Trustee’s Purchase Agreement, and is not in default
\n in the performance of any term or condition of the Purchase Agreement which
\n materially adversely impairs the transactions contemplated hereby;<\/p>\n
(xiii) no governmental approval of any kind is required of the
\n Owner Participant, any Pass Through Trustee, the Owner Trustee or the
\n Indenture Trustee for their respective execution of or performance under
\n this Agreement, the Pass Through Trust Agreements or any agreement
\n contemplated hereby solely by reason of any fact or circumstance peculiar
\n to: (a) Lessee, (b) the nature of the Aircraft, or (c) Lessee’s proposed
\n operations or use of the Aircraft;<\/p>\n
(xiv) all sales or use tax then due and for which Lessee is
\n responsible pursuant to Section 7(b)(i) hereof shall have been paid, other
\n than such taxes which are being contested by Lessee in good faith and by
\n appropriate proceedings so long as such proceedings do not involve any
\n material risk of the sale, forfeiture or loss of the Aircraft or any
\n interest therein;<\/p>\n
(xv) The Aircraft has been duly certified by the FAA as to type
\n and airworthiness and such certification remains in full force and effect;<\/p>\n
(xvi) Owner Trustee, as lessor under the Lease, and the Indenture
\n Trustee, as assignee of the Owner Trustee’s rights under the Lease pursuant
\n to the Trust Indenture, are entitled to the protection of Section 1110 of
\n the Bankruptcy Code in connection with the Owner Trustee’s and the
\n Indenture Trustee’s right to take possession of the Airframe and Engines in
\n the event of a case under Chapter 11 of the Bankruptcy Code in which Lessee
\n is a debtor; and<\/p>\n
21<\/p>\n
(xvii) neither Lessee nor any subsidiary of Lessee is an “investment
\n company” or a company “controlled by an investment company” within the
\n meaning of the Investment Company Act of 1940, as amended.<\/p>\n
(b) General Tax Indemnity. (i) Indemnity. Except as provided in
\n ——————— ———
\nSection 7(b)(ii) hereof, whether or not any of the transactions contemplated
\nherein are consummated, Lessee shall pay when due and assume liability for, and
\nprotect, save and shall indemnify and hold harmless each Indemnitee (except
\nthat, for purposes of this Section 7(b)(i), an Indemnitee shall not include any
\nCertificate Holder) from and against (x) any and all Taxes howsoever imposed
\nagainst any Indemnitee, Lessee or all or any part of the Aircraft, the Airframe,
\nthe Engines, the Parts or any part thereof or otherwise by any federal, state or
\nlocal government or other taxing authority in the United States or by any
\nforeign government or any political subdivision or taxing authority thereof or
\nby any territory or possession of the United States or by any international
\nauthority upon or in connection with, relating to, or measured by (A) the
\nassembly, manufacture, construction, substitution, improvement, location,
\nconditioning, installation, financing, refinancing, purchase, acquisition,
\nacceptance, delivery, nondelivery, transport, ownership, registration,
\nreregistration, possession, repossession, control, operation, use, maintenance,
\nrepair, replacement, insuring, sale, return, abandonment, storage, redelivery,
\nleasing, subleasing, modification, rebuilding of, transfer of title to, transfer
\nof registration of, rejection, importation, mortgaging, exportation or
\ndisposition of, or the imposition of any Lien (or the incurrence of any
\nliability to refund or pay over any amount as the result of any Lien) on, the
\nAircraft, the Airframe, the Engines, the Parts or any part thereof, (B) the
\nrentals, receipts or earnings from the Aircraft, the Airframe, the Engines, the
\nParts or any part thereof, (C) any amount paid or payable pursuant to any
\nOperative Documents or any Pass Through Trust Agreement or any document related
\nthereto or the property or the income or other proceeds with respect to any of
\nthe property held in the Trust Estate or the Trust Indenture Estate or the
\nproperty held by each Pass Through Trustee under the respective Pass Through
\nTrust Agreement, (D) the Aircraft, the Airframe, the Engines, the Parts or any
\npart thereof or any contract relating to the manufacture, construction,
\nacquisition or delivery thereof, (E) any or all of the Operative Documents, the
\nPass Through Trust Agreements, or the issuance of the Loan Certificates or the
\nPass Through Certificates (or the refinancing thereof) and any other documents
\ncontemplated hereby or thereby and amendments and supplements hereto and thereto
\nwhich have been approved by Lessee or the execution, delivery, recording or
\nperformance of any thereof or the issuance, acquisition, holding or subsequent
\ntransfer thereof, (F) the payment of the Original<\/p>\n
22<\/p>\n
Amount of, or interest or Premium on, or other amounts payable with respect to,
\nthe Loan Certificates or the payment of principal of, interest on or any other
\namounts payable with respect to the Pass Through Certificates, (G) otherwise
\nwith respect to or in connection with the transactions contemplated by the
\nOperative Documents, or (H) any change in the Owner Trustee or the situs of the
\nTrust Estate made pursuant to Sections 8(c) or 14 hereof; and (y) any reasonable
\nout-of-pocket costs and expenses fairly attributed to any of the foregoing
\nincurred by any Indemnitee.<\/p>\n
(ii) Exclusions from General Tax Indemnity. The provisions of
\n ————————————-
\n Section 7(b)(i) shall not apply:<\/p>\n
(1) in the case of an Indemnitee which is the Owner
\n Participant, the Owner Trustee, the Trust Estate, or a successor,
\n assign, or Affiliate of any thereof, to any Income Tax (as defined in
\n Section 7(b)(xii) hereof) imposed by (A) the United States Federal
\n government, (B) any state or local taxing jurisdiction or authority in
\n the United States to the extent such Income Taxes would not have been
\n imposed if (I) the use, location or operation of the Aircraft, or (II)
\n the activities of the Lessee, to or in such state or local
\n jurisdiction, had been the only connection between the Indemnitee and
\n such jurisdiction, or (C) any foreign government or any political
\n subdivision or taxing authority thereof or by any territory or
\n possession of the United States or by any international authority,
\n except to the extent such Income Taxes are attributable to (I) the
\n use, location or operation of the Aircraft, or (II) the activities of
\n the Lessee, to or in such jurisdiction;<\/p>\n
(2) to any Tax imposed on an Indemnitee which is the Owner
\n Participant, the Owner Trustee, or the Trust Estate, or any successor,
\n assign or Affiliate of any thereof, as a result of a voluntary
\n transfer or disposition by such Indemnitee including, without
\n limitation, the revocation of the trust created by the Trust Agreement
\n or an involuntary transfer or disposition relating to bankruptcy or
\n similar proceedings of all or any portion of its respective equitable
\n or legal ownership interest in the Aircraft, the Airframe, the
\n Engines, the Parts or any part thereof, the Trust Estate or the
\n Operative Documents and each Pass Through Trust Agreement, unless such
\n transfer or disposition, whether or not voluntary or involuntary,
\n shall occur, (A) during a period when an Event of Default has occurred
\n and is continuing under<\/p>\n
23<\/p>\n
the Lease at the time of transfer or disposition and such transfer is
\n as a result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 7, 8, 9, 10 or 19 thereof;<\/p>\n
(3) to any Tax imposed on any Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee or any successor, assign or Affiliate of any thereof, as a
\n result of a voluntary or involuntary transfer or other disposition of
\n all or any portion of its respective equitable or legal interests in
\n the Trust Estate or the Trust Indenture Estate or the Operative
\n Documents and each Pass Through Trust Agreement unless, in each case,
\n such transfer or disposition shall occur (A) during a period when an
\n Event of Default has occurred and is continuing under the Lease at the
\n time of transfer or disposition and such transfer or disposition is a
\n result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 9, 10 or 19 thereof;<\/p>\n
(4) to any Tax imposed on the Owner Participant, Trust
\n Estate or Owner Trustee which results from the willful misconduct or
\n gross negligence of (i) the Owner Participant, to the extent imposed
\n on the Owner Participant, Trust Estate or Owner Trustee, or (ii) to
\n the extent imposed on the Owner Trustee, the Owner Trustee;<\/p>\n
(5) to any Tax imposed on an Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee which results from the willful misconduct or gross negligence
\n of such Indemnitee;<\/p>\n
(6) to any Tax based on or measured by any fees received by
\n the Owner Trustee, the Indenture Trustee or a Pass Through Trustee in
\n connection with any transaction contemplated by the Operative
\n Documents;<\/p>\n
(7) so long as no Event of Default or event which, with the
\n passage of time or the giving of notice or both, would become an Event
\n of Default, shall be continuing, to any Tax imposed with respect to
\n (A) any period after the expiration of the Term and, unless purchased
\n by the Lessee, return of the Aircraft, (B) the earlier discharge in
\n full of Lessee’s obligation to<\/p>\n
24<\/p>\n
pay the Stipulated Loss Value or the Termination Value and all other
\n amounts due under the Lease or (C) placement in storage or parking of
\n the Aircraft pursuant to Section 5(d) of the Lease; provided, however,
\n that this Section 7(b)(ii)(8) shall not apply to any Tax (x) relating
\n to events or conditions occurring or matters arising upon or prior to
\n such expiration, discharge, storage or parking, or (y) imposed on or
\n with respect to any payments of Tax indemnified hereunder which are
\n due after such expiration, discharge, storage or parking until after
\n such payments have been made;<\/p>\n
(8) in the case of an Indemnitee which is the Trust
\n Indenture Estate or any successor, assign or Affiliate thereof, to any
\n Tax in the nature of an intangible or similar tax upon or with respect
\n to the value of the interest of the Trust Indenture Estate or the Pass
\n Through Certificates, as the case may be, in any of the Loan
\n Certificates imposed by any government or taxing authority;<\/p>\n
(9) to any Tax which Lessee or an Indemnitee is contesting
\n in good faith under the provisions of Section 7(b)(iv) hereof until
\n the conclusion of such contest;<\/p>\n
(10) to any Tax imposed on the Owner Trustee or an Owner
\n Participant resulting from, or which would not have occurred but for,
\n a Lessor Lien (including for this purpose Liens that would be Lessor
\n Liens but for the proviso to the definition of Lessor Liens);<\/p>\n
(11) in the case of an Indemnitee which is the Owner
\n Participant or the Owner Trustee, to any Taxes to the extent of the
\n amount of such Taxes that are imposed by any jurisdiction on and with
\n respect to any activities of such Indemnitee in such jurisdiction
\n which activities are unrelated to the transactions contemplated by the
\n Operative Documents and each Pass Through Trust Agreement; and<\/p>\n
(12) to any Tax which has been properly included in the
\n Lessor’s Cost.<\/p>\n
The provisions of this Section 7(b)(ii) shall not apply to any
\n Tax imposed in respect of the receipt or accrual of any indemnity payment
\n made by Lessee pursuant to this Section 7(b) or Section 7(c) hereof or
\n pursuant to the Tax Indemnity Agreement; provided, however, that this
\n clause<\/p>\n
25<\/p>\n
shall not result in any duplication of any amounts of any gross-up payable
\n under Section 7(b)(iii) or Section 7(c) hereof or the Tax Indemnity
\n Agreement.<\/p>\n
Notwithstanding the exclusions set forth in this Section 7(b) or
\n any other provision of the Operative Documents or the Pass Through Trust
\n Agreements, the Lessee hereby agrees to indemnify and hold harmless on a
\n net after-tax basis the Trust Estate, the Owner Trustee and the Owner
\n Participant for any failure to withhold U.S. Federal Income Taxes upon
\n payments of principal, interest, Premium or discount on the Loan
\n Certificates or the Pass Through Certificates, including interest and
\n penalties, unless the Owner Participant has been timely advised by the
\n Lessee in writing that such withholding is required.<\/p>\n
(iii) Calculation of General Tax Indemnity Payments. Any payment
\n ———————————————
\n which Lessee shall be required to make to or for the account of any
\n Indemnitee in connection with any Tax which is subject to indemnification
\n under this Section 7(b) shall be in an amount which, after reduction by the
\n amount of all Taxes required to be paid by such Indemnitee in respect of
\n the receipt or accrual of such amount and after consideration of any
\n current savings of such Indemnitee resulting by way of any deduction,
\n credit or other tax benefit attributable to such indemnified Tax that
\n actually reduces any taxes for which Lessee is not actually required to
\n indemnify such Indemnitee pursuant to Section 7(b) hereof or the Tax
\n Indemnity Agreement shall be equal to the payment otherwise required
\n hereunder.<\/p>\n
If, by reason of any Tax payment made to or for the account of an
\n Indemnitee by Lessee pursuant to this Section 7(b), such Indemnitee
\n subsequently realizes a tax deduction, savings or credit (including any
\n foreign tax credit and any reduction in Taxes) not previously taken into
\n account in computing such payment, such Indemnitee shall promptly pay to
\n Lessee an amount equal to the sum of (I) the actual reduction in Taxes, if
\n any, realized by such Indemnitee which is attributable to such deduction,
\n savings or credit and (II) the actual reduction in Taxes realized by such
\n Indemnitee as a result of any payment made by such Indemnitee pursuant to
\n this sentence; provided, however, that in the case of an Indemnitee which
\n is the Owner Participant or the Owner Trustee, such Indemnitee shall not be
\n obligated to make any payment pursuant to this Section 7(b)(iii) to the
\n extent that the amount calculated pursuant to (I) above would exceed (x)
\n the amount of all prior payments (determined without regard to any amount
\n paid in respect of Taxes required to be paid by such Indemnitee in<\/p>\n
26<\/p>\n
respect of the receipt or accrual of such amounts received by such
\n Indemnitee) from Lessee pursuant to this Section 7(b), less (y) the portion
\n of all prior payments computed pursuant to (I) above by such Indemnitee to
\n Lessee hereunder.<\/p>\n
For purposes of this Section 7(b)(iii), items of foreign Tax of
\n any Indemnitee shall be deemed to be utilized by such Indemnitee as credits
\n or deductions for any taxable year in accordance with the following
\n priorities:<\/p>\n
First, all available foreign Taxes other than those
\n described below in Second; and<\/p>\n
Second, all available foreign Taxes arising out of any
\n equipment leasing transaction to the extent that such Indemnitee was
\n indemnified or held harmless for such Taxes by a lessee on a pari
\n passu basis.<\/p>\n
Any Taxes that are imposed on any Indemnitee as a result of the
\n disallowance or reduction of any tax benefit referred to in this subsection
\n as to which such Indemnitee has made in full the payment to Lessee required
\n hereby (or as to which such Indemnitee would have made its payment but for
\n Section 7(b)(vii) hereof) or which is otherwise taken into account in
\n calculating Lessee’s indemnity obligation, in a taxable year subsequent to
\n the utilization by such Indemnitee (including the expiration of any tax
\n credit carryovers or carrybacks of such Indemnitee that would not otherwise
\n have expired) shall be treated as a Tax for which Lessee is obligated to
\n indemnify such Indemnitee pursuant to the provisions of this Section 7(b)
\n without regard to the provisions of Section 7(b)(ii), 7(b)(iv) or the third
\n paragraph of this Section 7(b)(iii).<\/p>\n
(iv) General Tax Indemnity — Contests. If a written claim shall
\n ———————————
\n be made against any Indemnitee for any Tax for which Lessee is obligated
\n pursuant to this Section 7(b), such Indemnitee shall notify Lessee in
\n writing promptly after receipt thereof (as well as the name of independent
\n tax counsel for purposes of this Section 7(b)(iv)) and, in any event,
\n within 30 days of receipt of such notice and shall provide Lessee such
\n information regarding such claim as Lessee may reasonably request, but the
\n failure to give such notice or to provide such information when required
\n shall not diminish Lessee’s obligation hereunder unless such failure
\n effectively precludes Lessee’s ability to (A) require such Indemnitee to
\n contest the Tax or (B) contest the Tax itself (in a case<\/p>\n
27<\/p>\n
where Lessee cannot require the Indemnitee to contest such Tax).<\/p>\n
If a written claim shall be made for any Tax, other than an
\n Income Tax, for which Lessee is obligated pursuant to this Section 7(b),
\n and under applicable law of the taxing jurisdiction Lessee is allowed to
\n directly contest such Tax and the Tax to be contested is not reflected in a
\n report or return with other Taxes of any Indemnitee and if the Indemnitee
\n determines in good faith that it will not suffer any adverse consequences
\n as a result, then the Lessee shall be permitted, at its expense and in its
\n own name, or, if consented to by the Indemnitee, in the name of such
\n Indemnitee, to contest the imposition of such Tax; provided, however, that
\n Lessee shall not be permitted or entitled to contest any Tax (A) if such
\n contest will result in the risk of an imposition of criminal penalties or a
\n material risk of a sale, forfeiture or loss of the Aircraft, the Airframe,
\n the Engines, the Parts or any part thereof or the creation of any Lien
\n other than Liens for Taxes of Lessee (x) either not yet due or being
\n contested in good faith by appropriate proceedings so long as such
\n proceedings do not involve the risk of an imposition of criminal penalties
\n or the material risk of any sale, forfeiture or loss of the Aircraft, and
\n (y) for the payment of which such reserves, if any, as required to be
\n provided under generally accepted accounting principles have been provided
\n and, to the extent permitted by law, Lessee shall be entitled to withhold
\n payment during pendency of such contest, (B) if an Event of Default shall
\n have occurred and be continuing, unless the Lessee shall have, at the
\n option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, (C) unless in Lessee’s request to the Indemnitee to contest
\n such Tax, Lessee shall have agreed to pay such Indemnitee on demand all
\n costs and expenses that such Indemnitee actually incurs in connection with
\n contesting such claim (including, without limitation, all costs, expenses,
\n losses, reasonable legal and accounting fees, disbursements, penalties,
\n interest and additions to tax) or (D) unless in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee a
\n written acknowledgement of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgement of liability
\n if and<\/p>\n
28<\/p>\n
to the extent that the contest results in a determination which clearly and
\n unambiguously demonstrates that Lessee is not otherwise liable under this
\n Section 7(b) with respect to such Tax.<\/p>\n
If requested by Lessee in writing (A) within 30 days of Lessee’s
\n receipt of notice from an Indemnitee under the first paragraph of this
\n Section 7(b)(iv) and (B) with respect to a Tax for which Lessee is
\n obligated to indemnify pursuant to this Section 7(b) which is not described
\n in the previous paragraph exclusive of the proviso thereto, such Indemnitee
\n shall in good faith at Lessee’s expense contest the imposition of any such
\n Tax. After consulting with Lessee and Lessee’s counsel concerning the
\n forum in which the adjustment is most likely to be favorably resolved, such
\n Indemnitee shall, in its sole discretion, select the forum for such contest
\n and determine whether any such contest shall be by (A) resisting payment of
\n such Tax, (B) paying such Tax under protest or (C) paying such Tax and
\n seeking a refund or other repayment thereof. In no event shall such
\n Indemnitee be requested or required to contest the imposition of any Tax
\n for which Lessee is liable under this Section 7(b) unless (I) in Lessee’s
\n request to the Indemnitee to contest such Tax, Lessee shall have agreed to
\n pay such Indemnitee on demand all reasonable costs and expenses that such
\n Indemnitee actually incurs in connection with contesting such claim
\n (including, without limitation, all costs, expenses, losses, reasonable
\n legal and accounting fees, disbursements, penalties, interest and additions
\n to tax), (II) such action to be taken will not result in the risk of an
\n imposition of criminal penalties or the material risk of any sale,
\n forfeiture or loss of the Aircraft, or the creation of any Lien other than
\n Liens for Taxes of Lessee (x) either not yet due or being contested in good
\n faith by appropriate proceedings so long as such proceedings do not involve
\n the risk of an imposition of criminal penalties or the material risk of any
\n sale, forfeiture or loss of the Aircraft and (y) for the payment of which
\n such reserves, if any, as are required to be provided under generally
\n accepted accounting principles have been provided by Lessee, (III) if such
\n contest shall be conducted in a manner requiring the payment of the claim,
\n Lessee shall have paid the amount required directly to the appropriate
\n authority or made an advance of the amount thereof to such Indemnitee on an
\n interest-free basis and agreed to indemnify the Indemnitee against any
\n additional net after-tax cost to such Indemnitee with respect to such
\n advance or payment, (IV) with regard to an Income Tax on an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee,<\/p>\n
29<\/p>\n
independent tax counsel selected by such Indemnitee and reasonably
\n satisfactory to the Lessee shall furnish an opinion, prepared at the
\n Lessee’s expense, to the effect that there is a reasonable basis to contest
\n such claim and with respect to appeal, to the effect that it is more likely
\n than not such appeal will be successful, (V) in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee a
\n written acknowledgment of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgment of liability
\n if and to the extent that the contest results in a determination which
\n clearly and unambiguously demonstrates that Lessee is not otherwise liable
\n under this Section 7(b) with respect to such Tax, (VI) if an Event of
\n Default shall have occurred and be continuing, the Lessee shall have, at
\n the option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, and (VII) the amount of the indemnity computed under Section
\n 7(b) arising from a claim for Tax exceeds $10,000. In no event shall an
\n Indemnitee be required to appeal or to seek leave to appeal an adverse
\n determination with respect to Taxes contested by, or in the name of, the
\n Indemnitee to the United States Supreme Court.<\/p>\n
If any Indemnitee shall obtain a refund of all or any part of any
\n Tax paid by Lessee such Indemnitee shall pay Lessee an amount equal to the
\n sum of (I) the amount of such refund, including interest received
\n attributable thereto, net of taxes required to be paid by such Indemnitee
\n as a result of any refund and\/or interest received and (II) any tax benefit
\n realized by such Indemnitee as a result of any payment by such Indemnitee
\n made pursuant to this sentence; provided, however, that in the case of any
\n Indemnitee which is the Owner Participant or any successor, assign or
\n Affiliate of the Owner Participant such amount attributable to (I) above
\n shall not be in excess of the amount of such Tax payment (determined
\n without regard to any amount paid in respect of Taxes required to be paid
\n by such Indemnitee in respect of the receipt or accrual of such payment or
\n advance made by Lessee to such Indemnitee) plus interest received, if any,
\n from the relevant taxing authority with respect to such Tax payment (net of
\n Taxes required to be paid by such Indemnitee in connection with the receipt
\n of such interest), it being intended that such Indemnitee shall realize a
\n net<\/p>\n
30<\/p>\n
benefit pursuant to this Section 7(b) only if Lessee shall first have been
\n reimbursed for any payments by it to such Indemnitee pursuant to this
\n Section 7(b) arising from the same Loss. If any Indemnitee shall have paid
\n Lessee any refund of all or part of any Tax paid by Lessee and it is
\n subsequently determined that such Indemnitee was not entitled to the
\n refund, such determination shall be treated as the imposition of a Tax for
\n which Lessee is obligated to indemnify such Indemnitee pursuant to the
\n provisions of this Section 7(b) without regard to Section 7(b)(ii) or
\n Section 7(b)(iv).<\/p>\n
Nothing contained in this Section 7(b)(iv) shall require any
\n Indemnitee to contest, or permit Lessee to contest, a claim with respect to
\n the imposition of any Tax if such Indemnitee shall waive its right to
\n indemnification under this Section 7 with respect to such claim or a claim
\n with respect to which a previous contest pursuant to the provision of this
\n Section 7(b)(iv) shall have been determined adversely to the taxpayer.<\/p>\n
(v) General Tax Indemnity — Reports. Lessee will provide such
\n ——————————–
\n information (including information on the routes and operations of the
\n Aircraft) as may be reasonably requested by an Indemnitee or required to
\n enable an Indemnitee to fulfill its tax filing or audit requirements with
\n respect to the transactions contemplated by the Operative Documents. In
\n the event any return, statement or report is required to be made or filed
\n with respect to any Tax imposed on or indemnified against by Lessee under
\n this Section 7(b) (other than with respect to Income Taxes), Lessee shall
\n notify the Indemnitee of such requirement and (i) to the extent permitted
\n by law, and not otherwise requested by the Indemnitee, or required by law,
\n Lessee shall make and file in its own name (and pay the tax shown due on)
\n such return, statement or report in such manner as will show the ownership
\n of the Aircraft in the Owner Trustee and furnish the Indemnitee with a copy
\n of such return, statement or report; provided, however, that Lessee shall
\n have no obligation under this clause (i) to the extent such Indemnitee
\n after receipt of Lessee’s written request shall have failed to furnish
\n Lessee with such information as is peculiarly within such Indemnitee’s
\n control and is necessary to file such returns, statements or reports, and
\n (ii) in the case of a return, statement or report required (or requested by
\n the Indemnitee) to be in the name of or filed by such Indemnitee, Lessee
\n shall prepare and furnish such return, statement or report for filing by
\n such Indemnitee in such manner as shall be reasonably satisfactory to such
\n Indemnitee and send the same to such Indemnitee for filing<\/p>\n
31<\/p>\n
no later than 10 Business Days prior to the due date; provided, however,
\n that Lessee shall have no obligation under this clause (ii) to the extent
\n such Indemnitee after receipt of Lessee’s written request shall have failed
\n to furnish Lessee with such information as is peculiarly within such
\n Indemnitee’s control and is necessary to prepare such return, statement or
\n report. Lessee shall hold each Indemnitee harmless from and against any
\n liabilities, including, but not limited to penalties, additions to tax,
\n fines and interest, arising out of any insufficiency or inaccuracy in any
\n such return, statement, report or information if such insufficiency or
\n inaccuracy is attributable to Lessee.<\/p>\n
(vi) General Tax Indemnity — Payment. Except as provided in
\n ——————————–
\n Section 7(b)(iv) or (v) hereof, Lessee shall pay any Tax directly to the
\n appropriate taxing authority if legally permissible and upon demand of an
\n Indemnitee shall pay such Tax and any other amounts due hereunder to such
\n Indemnitee within 20 Business Days of such demand, but in no event shall
\n any such payments be made more than 10 Business Days prior to the date the
\n Tax to which any such payment hereunder relates is due (unless Lessee has
\n not received such demand at least 15 Business Days prior to such date in
\n which case within five Business Days after receipt of such demand), in
\n immediately available funds. Any such demand for payment from an
\n Indemnitee shall specify in reasonable detail, the payment and the facts
\n upon which the right to payment is based. Each Indemnitee shall promptly
\n forward to Lessee any notice, bill or advice received by it concerning any
\n Tax indemnified against hereunder. As soon as practicable after each
\n payment by Lessee of any Tax indemnified against hereunder, Lessee shall
\n furnish the appropriate Indemnitee the original or a certified copy of a
\n receipt for Lessee’s payment of such Tax or such other evidence of payment
\n of such Tax as is acceptable to such Indemnitee. Lessee shall also furnish
\n promptly upon request such data as any Indemnitee may reasonably require to
\n enable such Indemnitee to comply with the requirements of any taxing
\n jurisdiction.<\/p>\n
(vii) Application of Payments During Existence of Default or Event
\n ————————————————————
\n of Default. Any amount payable to Lessee pursuant to the terms of this
\n ———-
\n Section 7(b) shall not be paid to or retained by Lessee if at the time of
\n such payment or retention a Default or an Event of Default shall have
\n occurred and be continuing under the Lease. At such time as there shall
\n not be continuing any Default or Event of Default, such amount shall be
\n paid to the Lessee to the extent not previously applied against Lessee’s
\n obligations<\/p>\n
32<\/p>\n
hereunder as and when due after the Owner Trustee shall have declared the
\n Lease in default pursuant to Section 15 thereof.<\/p>\n
(viii) Reimbursements by Indemnitees Generally. If, for any
\n —————————————
\n reason, Lessee is required to make any payment with respect to any Taxes
\n imposed on any Indemnitee in respect of the transactions contemplated by
\n the Operative Documents or on the Aircraft, the Airframe, the Engines, the
\n Parts or any part thereof, which Taxes are not the responsibility of Lessee
\n under this Section 7(b), then such Indemnitee shall pay to Lessee an amount
\n which equals the amount paid by Lessee with respect to such Taxes plus
\n interest thereon, computed from the date of payment by Lessee, at the Base
\n Rate.<\/p>\n
(ix) Forms, etc. Each Indemnitee agrees to furnish to Lessee from
\n ———–
\n time to time, at the Lessee’s request and expense, such duly executed and
\n properly completed forms as may be necessary or appropriate in order to
\n claim any reduction of or exemption from any withholding tax imposed by any
\n taxing authority in respect of any payments otherwise required to be made
\n by Lessee pursuant to the Operative Documents and each Pass Through Trust
\n Agreement, which reduction or exemption may be available to such
\n Indemnitee. In addition, any Indemnitee shall, at Lessee’s expense,
\n execute and deliver any forms or documents which Lessee reasonably requests
\n and which are reasonably related to any indemnified Taxes. Notwithstanding
\n the foregoing, an Indemnitee shall not be required to (A) make available
\n any Income Tax returns; or to (B) execute and deliver any forms or
\n documents which would in the good faith determination of such Indemnitee
\n disadvantage such Indemnitee in the context of its overall filing position
\n or with regard to other Taxes not indemnified under this Agreement or the
\n Tax Indemnity Agreement.<\/p>\n
(x) Non-Parties. If an Indemnitee is not a party to this
\n ———–
\n Agreement, Lessee may require the Indemnitee to agree to the terms of this
\n Section 7(b) prior to making any payment to such Indemnitee under this
\n Section 7(b).<\/p>\n
(xi) Owner Participant. For the purposes of this Section 7(b),
\n —————–
\n the term “Owner Participant” shall mean and include [__________________]
\n (and its permitted successors and assigns) and where appropriate the
\n affiliated group of corporations (and each member thereof) making a
\n consolidated or combined return of which [_____________] (and its permitted
\n successors and assigns) is a member.<\/p>\n
33<\/p>\n
(xii) Income Tax. For purposes of this Section 7, the term Income
\n ———-
\n Tax means any Tax based on or measured by or with respect to net income
\n (including, without limitation, capital gains taxes, minimum taxes, income
\n taxes collected by withholding, and taxes on tax preference items) or net
\n receipts and taxes imposed on gross income or gross receipts which are
\n expressly in lieu of a net income tax (provided, however, that sales, use,
\n value added, rental, license, ad valorem or property Taxes shall not
\n constitute an Income Tax) and Taxes which are capital, doing business,
\n franchise, excess profits, net worth taxes and interest, additions to tax,
\n penalties, or other charges in respect thereof.<\/p>\n
(c) General Indemnity. Lessee hereby agrees to indemnify, on an
\n —————–
\nafter-tax basis, each Indemnitee against, and agrees to protect, save and keep
\nharmless each of them from (whether or not the transactions contemplated herein
\nor in any of the other Operative Documents or the Pass Through Trust Agreements
\nare consummated), any and all Expenses imposed on, incurred by or asserted
\nagainst any Indemnitee, in any way relating to or arising out of (A) the
\nOperative Documents and each Pass Through Trust Agreement (and any amendments
\nthereto), the negotiation and the consummation of the transactions contemplated
\nthereby or any sublease under the Lease Agreement or the enforcement of any of
\nthe terms of any thereof; or (B) the manufacture, design, purchase, resale,
\nacceptance or rejection of the Airframe or any Engine or Parts; or (C) the
\nAircraft (or any portion thereof) or any Engine whether or not installed on the
\nAirframe or any airframe on which an Engine is installed whether or not arising
\nout of the finance, refinance, ownership, delivery, nondelivery, storage, lease,
\nsublease, possession, use, non-use, operation, maintenance, modification,
\nalteration, condition, sale, replacement, substitution, return or other
\ndisposition, registration, reregistration or airworthiness of the Aircraft (or
\nany portion thereof) including, without limitation, latent or other defects,
\nwhether or not discoverable, strict tort liability and any damage to property or
\nthe environment, death or injury to any person and any claim for patent,
\ntrademark or copyright infringement; or (D) the offer, sale, holding, transfer
\nor delivery of the Loan Certificates or the Pass Through Certificates, whether
\nbefore, on or after the Delivery Date (the indemnity in this clause (D) to
\nextend also to any person who controls an Indemnitee, its successors, assigns,
\nemployees, directors, officers, servants and agents within the meaning of
\nSection 15 of the Securities Act of 1933, as amended); or (E) the offer,
\nholding, transfer or sale of any interest in the Trust Estate or the Trust
\nAgreement or any similar interest (a) on or prior to the Delivery Date, or (b)
\nsubsequent to the Delivery Date during the continuation of an Event of Default
\nunder the Lease or in connection with the exercise by the Lessee of its<\/p>\n
34<\/p>\n
purchase options under the Lease or in connection with a refinancing pursuant to
\nSection 17 hereof or in connection with the termination of the Lease or action
\nor direction of Lessee pursuant to Sections 7, 8, 9, 10, or 19 thereof;
\nprovided, that the foregoing indemnity shall not extend to any Expense to the
\nextent resulting from or arising out of one or more of the following: (1) any
\nrepresentation or warranty by such Indemnitee in the Operative Documents or in
\nany Pass Through Trust Agreement being incorrect, or (2) the failure by such
\nIndemnitee to perform or observe any agreement, covenant or condition in any of
\nthe Operative Documents or in any Pass Through Trust Agreement including,
\nwithout limitation, the creation or existence of a Lessor Lien (including for
\nthis purpose Liens that would be Lessor Liens but for the proviso to the
\ndefinition of Lessor Liens), or (3) the willful misconduct or the gross
\nnegligence of such Indemnitee (other than gross negligence imputed to such
\nIndemnitee solely by reason of its interest in the Aircraft), or (4) (A) in the
\ncase of such Indemnitee a disposition (voluntary or involuntary) of all or any
\npart of its interest in the Airframe or any Engine, (B) in the case of a
\nCertificate Holder a disposition (voluntary or involuntary) by such Certificate
\nHolder of all or any part of its interest in any Loan Certificate or (C) in the
\ncase of any Indemnitee a disposition by such Indemnitee of all or any part of
\nsuch Indemnitee’s interest in the Operative Documents or the Pass Through Trust
\nAgreements other than in each of (A), (B) and (C) during the continuance of an
\nEvent of Default under the Lease or pursuant to the exercise by the Lessee of
\nits purchase options under the Lease or in connection with a refinancing
\npursuant to Section 17 hereof or in connection with the termination of the Lease
\nor action or direction of Lessee pursuant to Sections 7, 8, 9, 10 or 19 thereof,
\nor (5) other than to the extent provided in the succeeding paragraph, any Tax
\n(as defined in Section 7(b) hereof) whether or not Lessee is required to
\nindemnify for such Tax pursuant to Section 7(b) hereof (it being understood that
\nSection 7(b) hereof and the Tax Indemnity Agreement and provisions requiring
\npayments to be made on an after-tax basis or expressly providing for additional
\nindemnification by Lessee exclusively provide for Lessee’s liability with
\nrespect to Taxes), or (6) the offer or sale by the Owner Participant after the
\nDelivery Date of any interest in the Trust Estate or the Trust Agreement or any
\nsimilar interest, unless such offer or sale shall occur (A) during a period when
\nan Event of Default has occurred and is continuing under the Lease at the time
\nof such offer or sale or (B) in connection with the exercise by Lessee of its
\npurchase options under the Lease or, (7) in the case of the Owner Participant, a
\nfailure on the part of the Owner Trustee to distribute in accordance with the
\nTrust Agreement any amounts received and distributable by it thereunder or, in
\nthe case of a Certificate Holder, a failure on the part of the Indenture Trustee
\nto distribute in accordance with the Trust<\/p>\n
35<\/p>\n
Indenture any amounts received and distributable by it thereunder to such
\nCertificate Holder or a failure on the part of any Pass Through Trustee to
\ndistribute in accordance with the applicable Pass Through Trust Agreement any
\namounts received and distributable by such Pass Through Trustee under such Pass
\nThrough Trust Agreement, or (8) other than during the continuation of a Default
\nor an Event of Default under the Lease the authorization or giving or
\nwithholding of any future amendments, supplements, waivers or consents with
\nrespect to any of the Operative Documents or any Pass Through Trust Agreement
\nunless such amendments, supplements, waivers or consents (a) are requested by
\nLessee or (b) are required or permitted pursuant to the terms of the Operative
\nDocuments (unless the same results from the actions of an Indemnitee) (provided
\nif Lessee is not responsible for the Expense associated with such amendment,
\nsupplement, waiver or consent, the party requesting the execution of the same
\nshall be responsible for such expense), or (9) other than to the extent provided
\nin the succeeding paragraph any loss of tax benefits or increase in tax
\nliability under any tax law whether or not Lessee is required to indemnify
\ntherefor pursuant to this Agreement or the Tax Indemnity Agreement (it being
\nunderstood that Section 7(b) hereof and the Tax Indemnity Agreement and
\nprovisions requiring payments to be made on an after-tax basis or expressly
\nproviding for additional indemnification by Lessee exclusively provide for
\nLessee’s liability with respect to Taxes), or (10) except to the extent fairly
\nattributable to acts or events occurring on or prior thereto, acts or events
\nwhich occur after the earlier of: (I) the return of possession of the Airframe
\nor any Engine or any Part to the Owner Trustee or its designee pursuant to the
\nterms of the Lease (other than pursuant to Section 15 thereof, in which case
\nLessee’s liability under this Section 7(c) shall survive for so long as Owner
\nTrustee shall be entitled to exercise remedies under such Section 15), (II) the
\ntermination of the Term in accordance with Sections 5, 9 or 19 of the Lease,
\n(III) the last day of the Term if Owner Trustee shall have furnished the notice
\nreferred to in Section 10(d) of the Lease and Lessee shall have failed to return
\npossession to Owner Trustee on such day or (IV) the payment by Lessee of all
\namounts required to be paid under the Lease following an Event of Loss (but
\nexcluding from the terms of this subsection (IV) an Event of Loss followed by
\nthe replacement of the Aircraft).<\/p>\n
Notwithstanding clause 7(c)(5) or (9) above, Lessee further agrees
\nthat any payment or indemnity pursuant to this Section 7(c) in respect of any
\n“Expenses” shall be in an amount which, after deduction of all Taxes required to
\nbe paid by such recipient with respect to such payment or indemnity under the
\nlaws of any federal, state or local government or taxing authority in the United
\nStates, or under the laws of any taxing<\/p>\n
36<\/p>\n
authority or governmental subdivision of a foreign country, or any territory or
\npossession of the United States or any international authority, shall be equal
\nto the excess, if any, of (A) the amount of such Expense over (B) the current
\nnet reduction in Taxes actually required to be paid by such recipient resulting
\nfrom the accrual or payment of such Expense.<\/p>\n
Nothing in this Section 7(c) shall be construed as a guaranty by
\nLessee of payments due pursuant to the Loan Certificates or the Pass Through
\nCertificates or of the residual value of the Aircraft.<\/p>\n
If a claim is made against an Indemnitee involving one or more
\nExpenses and such Indemnitee has notice thereof, such Indemnitee shall promptly
\nafter receiving such notice give notice of such claim to Lessee; provided that
\nthe failure to provide such notice shall not release Lessee from any of its
\nobligations to indemnify hereunder or from any other obligation that the Lessee
\nmay have to such Indemnitee at law or in equity, and no payment by Lessee to an
\nIndemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver
\nor release of any right or remedy which the Lessee may have against such
\nIndemnitee for any actual damages as a result of the failure by such Indemnitee
\nto give Lessee such notice. So long as Lessee has acknowledged its obligation
\nto indemnify pursuant to this Section 7(c), Lessee shall be entitled, at its
\nsole cost and expense, acting through counsel reasonably acceptable to the
\nrespective Indemnitee, (A) in any judicial or administrative proceeding that
\ninvolves solely a claim for one or more Expenses, to assume responsibility for
\nand control thereof, (B) in any judicial or administrative proceeding involving
\na claim for one or more Expenses and other claims related or unrelated to the
\ntransactions contemplated by the Operative Documents, to assume responsibility
\nfor and control of such claim for Expenses to the extent that the same may be
\nand is severed from such other claims (and such Indemnitee shall use reasonable
\nefforts to obtain such severance), and (C) in any other case, to be consulted by
\nsuch Indemnitee with respect to judicial proceedings subject to the control of
\nsuch Indemnitee and to be allowed, at Lessee’s sole expense, to participate
\ntherein. Notwithstanding any of the foregoing to the contrary, Lessee shall not
\nbe entitled to assume responsibility for and control of any such judicial or
\nadministrative proceedings if (i) any Default under Section 14(a), (b), (f) or
\n(g) of the Lease or an Event of Default under the Lease shall have occurred and
\nbe continuing, (ii) if such proceedings will involve a material risk of the
\nsale, forfeiture or loss of, or the creation of any Lien (other than a Permitted
\nLien) on, the Aircraft, the Trust Indenture Estate or the Trust Estate or any
\npart thereof unless Lessee shall have posted a bond or other security reasonably
\nsatisfactory to the relevant Indemnitees in respect to such risk<\/p>\n
37<\/p>\n
or (iii) if such proceedings could, in the good faith opinion of the Indemnitee
\nentail any risk of criminal liability or any material risk of civil liability
\n(unless, in the case of such civil liability, Lessee has agreed to indemnify
\nagainst such civil liability in a manner reasonably acceptable to such
\nIndemnitee). The Indemnitee may participate at its own expense and with its own
\ncounsel in any judicial proceeding controlled by Lessee pursuant to the
\npreceding provisions; provided, however, that if in the written opinion of
\n ——– ——-
\ncounsel to such Indemnitee (which opinion and counsel shall be reasonably
\nacceptable to Lessee) an actual or potential material conflict of interest
\nexists where it is advisable for such Indemnitee to be represented by separate
\ncounsel, the reasonable fees and expenses of such separate counsel shall be
\nborne by Lessee.<\/p>\n
The Indemnitee shall supply Lessee, at Lessee’s expense, with such
\ninformation reasonably requested by Lessee as is necessary or advisable for
\nLessee to control or participate in any proceeding to the extent permitted by
\nthis Section 7(c). Such Indemnitee shall not enter into a settlement or other
\ncompromise with respect to any Expense as to which Lessee has acknowledged its
\nobligation to indemnify (and if Lessee has not so acknowledged only upon 5
\nBusiness Days’ prior written notice to Lessee) without the prior written consent
\nof Lessee (except during the continuance of any Default under Section 14(a),
\n(b), (f) or (g) of the Lease or an Event of Default under the Lease when such
\nconsent shall not be required if such Indemnitee gives 30 days’ prior written
\nnotice to Lessee describing the proposed settlement or compromise), which
\nconsent shall not be unreasonably withheld or delayed, unless such Indemnitee
\nwaives its right to be indemnified with respect to such Expense under this
\nSection 7(c).<\/p>\n
The Lessee shall supply the Indemnitee with such information
\nreasonably requested by the Indemnitee as is necessary or advisable for the
\nIndemnitee to control or participate in any proceeding to the extent permitted
\nby this Section 7(c).<\/p>\n
Upon payment of any Expense pursuant to this Section 7(c), Lessee,
\nwithout any further action, shall be subrogated to any claims the Indemnitee may
\nhave relating thereto other than claims under Section 9.06 of the Trust
\nIndenture or Section 5.03 or 7.01 of the Trust Agreement. The Indemnitee agrees
\nto give such further assurances or agreements and to cooperate with Lessee to
\npermit Lessee to pursue such claims, if any, to the extent reasonably requested
\nby Lessee.<\/p>\n
In the event that Lessee shall have paid an amount to an Indemnitee
\npursuant to this Section 7(c), and such Indemnitee<\/p>\n
38<\/p>\n
subsequently shall be reimbursed in respect of such indemnified amount from any
\nother person, such Indemnitee shall, unless a Default under Section 14(a), (b),
\n(d) (solely with respect to Lessee’s obligations under Section 7(a) or (b)(viii)
\nof the Lease or Section 8 of the Lease), (f) or (g) of the Lease or an Event of
\nDefault under the Lease shall have occurred and be continuing, promptly pay
\nLessee but not before Lessee shall have made all payments then due to such
\nIndemnitee pursuant to this Section 7(c) and any other payments then due under
\nany of the Operative Documents, an amount equal to the sum of (I) the amount of
\nsuch reimbursement, including interest received attributable thereto, net of
\ntaxes required to be paid by such Indemnitee as a result of any reimbursement
\nincluding interest received attributable thereto and (II) any tax benefit
\nactually realized by such Indemnitee as a result of any payment by such
\nIndemnitee made pursuant to this sentence; provided, however, that in the case
\nof any Indemnitee which is the Owner Participant or any successor, assign or
\nAffiliate of the Owner Participant such amount attributable to (I) above shall
\nnot be in excess of the amount of such Expense payment net of any amount paid in
\nrespect of Taxes required to be paid by such Indemnitee in respect of the
\nreceipt or accrual of such payment or advance made by Lessee to such Indemnitee
\nplus interest received, if any, from the relevant taxing authority with respect
\nto any such Expense payment, it being intended that such Indemnitee shall
\nrealize a net benefit pursuant to this Section 7(c) only if Lessee shall first
\nhave been reimbursed for any payments by it to such Indemnitee pursuant to this
\nSection 7(c).<\/p>\n
Lessee agrees to pay the reasonable and continuing fees and expenses
\nof the Indenture Trustee (including, but not limited to, the reasonable fees and
\nexpenses of its counsel and any agent appointed in accordance with Section
\n9.02(c) of the Trust Indenture) and each Pass Through Trustee (including, but
\nnot limited to, the reasonable fees and expenses of its counsel) and, as
\nprovided in Section 6.07 of the Trust Agreement, the Owner Trustee (including,
\nbut not limited to, the reasonable fees and expenses of its counsel), in each
\ncase without cost, on a net after-tax basis, to the Owner Participant, for
\nacting as such, other than such fees and expenses which constitute Transaction
\nExpenses.<\/p>\n
Lessee’s obligations under the indemnities provided for in this
\nAgreement shall be those of a primary obligor, whether or not the Person
\nindemnified shall also be indemnified with respect to the same matter under the
\nterms of any other document or instrument, and the Person seeking
\nindemnification from Lessee pursuant to any provision of this Agreement may
\nproceed directly against Lessee without first seeking to enforce any other right
\nof indemnification.<\/p>\n
39<\/p>\n
To the extent permitted by applicable law, interest at the Past Due
\nRate shall be paid, on demand, on any amount or indemnity not paid when due
\npursuant to this Section 7 until the same shall be paid. Such interest shall be
\npaid in the same manner as the unpaid amount in respect of which such interest
\nis due.<\/p>\n
Any amount which is payable to Lessee by any Person pursuant to this
\nSection 7 shall not be paid to Lessee if a Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(viii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or an Event of
\nDefault under the Lease shall have occurred and be continuing or if any payment
\nis due and owing by Lessee under the Lease or to such Person under any other
\nOperative Document. Any such amount shall be held by such Person and, if such
\nDefault or an Event of Default under the Lease shall have occurred and be
\ncontinuing, shall be applied against Lessee’s obligations hereunder to such
\nPerson as and when due (and, to the extent that Lessee has no obligations
\nhereunder to such Person, such amount shall be paid to Lessee). At such time as
\nthere shall not be continuing any such Default or an Event of Default or there
\nshall not be due and owing any such payment, such amount shall be paid to Lessee
\nto the extent not previously applied in accordance with the immediately
\npreceding sentence.<\/p>\n
(d) Withholding. If Lessee advises the Owner Trustee, the Indenture
\n ———–
\nTrustee and the relevant Certificate Holder in writing that interest on its Loan
\nCertificates is subject to United States withholding tax, then the Owner Trustee
\nshall instruct the Indenture Trustee to, and Indenture Trustee shall, withhold
\nas provided in Section 9.11 of the Trust Indenture.<\/p>\n
SECTION 8. Representations, Warranties and Covenants. (a) The Owner
\n —————————————–
\nParticipant represents that it is acquiring its interest in the Trust Estate for
\ninvestment purposes only and not with a present intent as to any resale or
\ndistribution thereof (subject nonetheless to any requirement of law that the
\ndisposition of its properties shall at all times be and remain within its
\ncontrol) and that neither it nor anyone acting on its behalf (other than for
\npurposes of this paragraph, Lessee and the Underwriter) has directly or
\nindirectly offered any interest in the Trust Estate or any Loan Certificates or
\nPass Through Certificates or any similar securities for sale to, or solicited
\nany offer to acquire any of the same from, anyone in a manner which would result
\nin a violation of the Securities Act of 1933, as amended or the securities laws,
\nrules and regulations of any state.<\/p>\n
40<\/p>\n
(b) Each of the Owner Participant and State Street Bank and Trust
\nCompany, in its individual capacity, represents and warrants to the other
\nparties to this Agreement that it is, and on the Delivery Date will be, a
\nCitizen of the United States. The Owner Participant agrees, solely for the
\nbenefit of Lessee and the Certificate Holders, that if during such time as the
\nAircraft is registered in the United States (or if Lessee desires to register
\nthe Aircraft in the United States) (i) it shall not be a Citizen of the United
\nStates and (ii) the Aircraft shall be, or would therefore become, ineligible for
\nregistration in the name of the Owner Trustee under the Federal Aviation Act and
\nregulations then applicable thereunder, then the Owner Participant shall (at its
\nown expense and without any reimbursement or indemnification from Lessee) as
\nsoon as is reasonably practicable but in any event within 30 days after
\nobtaining Actual Knowledge of such ineligibility and of such loss of citizenship
\n(A) effect voting trust or other similar arrangements or take any other action
\nas may be necessary to prevent any deregistration or to maintain the United
\nStates registration of the Aircraft, or (B) transfer its beneficial interest in
\nthe Trust Estate in accordance with Section 8(l) hereof. It is understood that:
\n(1) the Owner Participant shall be liable to any of the other parties hereto for
\nany damages suffered by any such other party as the result of the representation
\nand warranty of the Owner Participant in the first sentence of this Section 8(b)
\nproving to be untrue as of the Delivery Date; and (2) the Owner Participant
\nshall be liable to Lessee, any Sublessee and any Certificate Holder for any
\ndamages which may be incurred by Lessee, any Sublessee or such Certificate
\nHolder as a result of the Owner Participant’s failure to immediately comply with
\nits obligations pursuant to the second sentence of this Section 8(b) unless such
\nfailure is a result of such party’s breach of its obligations to cooperate set
\nforth in the following sentence (including any damages suffered by any such
\nparty (other than damages suffered by Lessee which Lessee could have mitigated
\nby taking reasonable steps (Lessee having no obligation to restrict the use of
\nthe Aircraft to so mitigate)) at any time after the fifth Business Day following
\nthe Owner Participant’s having obtained Actual Knowledge of such ineligibility
\nor loss of citizenship). Each party hereto agrees, upon the request and at the
\nsole expense of the Owner Participant, to reasonably cooperate with the Owner
\nParticipant in complying with its obligations under the provisions of the second
\nsentence of this Section 8(b) and such request shall not be subject to the
\nindemnity contained in Section 7(c) hereof. State Street Bank and Trust Company
\nin its individual capacity, agrees that if at any time a responsible officer of
\nState Street Bank and Trust Company, shall obtain Actual Knowledge that State
\nStreet Bank and Trust Company has ceased to be a Citizen of the United States,
\nit will promptly resign as Owner Trustee (if and<\/p>\n
41<\/p>\n
so long as such citizenship is necessary under the Federal Aviation Act as in
\neffect at such time or, if it is not necessary, if and so long as the Owner
\nTrustee’s citizenship would have any adverse effect on a Certificate Holder,
\nLessee or the Owner Participant), effective upon the appointment of a successor
\nOwner Trustee in accordance with Section 9.01 of the Trust Agreement. If the
\nOwner Participant or State Street Bank and Trust Company, in its individual
\ncapacity, does not comply with the requirements of this Section 8(b), the Owner
\nTrustee, the Indenture Trustee, the Owner Participant and the Certificate
\nHolders hereby agree that a Default or an Event of Default shall not have
\noccurred and be continuing under the Lease due to noncompliance by Lessee with
\nthe registration requirements in the Lease.<\/p>\n
(c) State Street Bank and Trust Company, in its individual capacity
\nrepresents and warrants that both the principal place of business of the Owner
\nTrustee and the place where the Owner Trustee’s records concerning the Aircraft
\nand all of its interest in, to and under the Operative Documents to which it is
\na party are or will be kept is Boston, Massachusetts (other than such as may be
\nmaintained or held by the Indenture Trustee pursuant to the Trust Indenture) and
\nhas its chief executive office (as such term is used in Article 9 of the Uniform
\nCommercial Code) in the Commonwealth of Massachusetts. State Street Bank and
\nTrust Company, in its individual capacity agrees that it will not change the
\nlocation of such office to a location outside of Boston, Massachusetts, without
\nprior written notice to Lessee, Indenture Trustee and the Owner Participant.<\/p>\n
(d) [Intentionally omitted.]<\/p>\n
(e) The Owner Participant agrees that, if, at any time after the
\nRestricted Period and so long as no Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(vii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or Event of
\nDefault under the Lease shall have occurred or be continuing, Lessee has
\nrequested its consent to the registration of the Aircraft, in the name of the
\nOwner Trustee (or, if appropriate, in the name of Lessee or a Sublessee as a
\n“lessee” or a “sublessee”), at Lessee’s expense, (i) upon 30 days’ prior written
\nnotice in a country listed on Exhibit G to the Lease, with which the United
\nStates maintains diplomatic relations at the time of such request, provided that
\nwith respect to any country listed on Exhibit G to the Lease as a “Restricted
\nCountry” such country must at the time of such registration impose and enforce
\naircraft maintenance standards not materially less stringent than those of the
\nFAA, or the central civil aviation authority of any of Canada, France, Germany,
\nJapan or<\/p>\n
42<\/p>\n
the United Kingdom, or (ii) upon 30 days’ prior written notice in any other
\ncountry with which the United States maintains diplomatic relations at the time
\nof such request and the Owner Participant has not determined, acting reasonably,
\nthat such other country would not provide substantially equivalent protection
\nfor the rights of owner participants, lessors or lenders in similar transactions
\nas provided under United States laws, the Owner Participant will not, in the
\ncase of either (i) or (ii), unreasonably withhold its consent to such change of
\nregistration. In addition, such change of registration to a country listed on
\nExhibit G shall be permitted only if such change will not result in the
\nimposition of, or increase the amount of, any Tax for which Lessee is not
\nrequired to indemnify or is not then willing to enter into a binding agreement
\nto indemnify, in a manner satisfactory in form and substance to the indemnified
\nparty, each party referred to in clause (E) of paragraph (i) below. The Owner
\nParticipant further agrees that the inability of Lessee to deliver to the Owner
\nParticipant and, so long as the Lien of the Trust Indenture has not been
\nreleased, the Indenture Trustee, an opinion (reasonably satisfactory in form and
\nsubstance to the Owner Participant) of counsel reasonably acceptable to the
\nOwner Participant in such country listed on Exhibit G to the Lease to the effect
\nthat the courts of such country would give effect to the Owner Trustee’s title
\nto the Aircraft, to the registry of the Aircraft in the name of the Owner
\nTrustee, and to the priority of the lien under the Trust Indenture substantially
\nto the same extent as provided under United States law, shall constitute the
\nsole reasonable grounds to withhold such consent in regard to a country listed
\nin Exhibit G, and if said opinion is delivered, the Owner Participant will
\ninstruct the Owner Trustee, and the Indenture Trustee, subject only to
\ncompliance with the provisions of Section 7.02 of the Indenture, shall
\ncooperate, to make such change of registration.<\/p>\n
It is further agreed, however, that prior to any such change in the
\ncountry of registry of the Aircraft to a country not listed on Exhibit G to the
\nLease, the Owner Participant, the Owner Trustee in its individual capacity and,
\nso long as the Lien of the Trust Indenture has not been released, the Indenture
\nTrustee shall have received:<\/p>\n
(i) assurances reasonably satisfactory to the Owner Participant
\n and the Owner Trustee in its individual capacity (A) to the effect that the
\n insurance or self-insurance provisions of the Lease have been compiled with
\n after giving effect to such change of registry, (B) of the payment by
\n Lessee on an after-tax basis of any expenses of the Owner Participant, the
\n Owner Trustee and the Indenture Trustee in connection with such change of
\n registry, (C) to the effect that the original indemnities (and any
\n additional<\/p>\n
43<\/p>\n
indemnities for which Lessee is then willing to enter into a binding
\n agreement to indemnify) in favor of the Owner Participant, the Owner
\n Trustee (in its individual capacity and as trustee under the Trust
\n Agreement) and the Indenture Trustee, under this Agreement, the Trust
\n Indenture and the Tax Indemnity Agreement, afford each such party
\n substantially the same protection as provided prior to such change of
\n registry, (D) as to the continuation of the Trust Indenture as a first
\n priority lien on the Aircraft, (E) that such change will not result in the
\n imposition of, or increase in the amount of, any Tax for which Lessee is
\n not required to indemnify, or is not then willing to enter into a binding
\n agreement to indemnify in a manner satisfactory in form and substance to
\n the indemnified party, the Owner Participant, the Indenture Trustee, the
\n Owner Trustee (in its individual capacity and as trustee under the Trust
\n Agreement), or any successor, assign or Affiliate of any thereof, or the
\n Trust Estate pursuant to Section 7(b) hereof; and (F) that such new country
\n of registry imposes and enforces aircraft maintenance standards not
\n materially less stringent than those of the FAA or the central civil
\n aviation authority of Canada, France, Germany, Japan or the United Kingdom;
\n and<\/p>\n
(ii) a favorable opinion of counsel (reasonably satisfactory to
\n the Owner Trustee, in its individual capacity, and to the Owner
\n Participant) in the new jurisdiction of registry to the effect (A) that the
\n terms (including, without limitation, the governing-law, service-of-process
\n and jurisdictional-submission provisions thereof) of the Lease and the
\n Trust Indenture are legal, valid, binding and enforceable in such
\n jurisdiction, (B) that it is not necessary for the Owner Participant, the
\n Owner Trustee or the Indenture Trustee to register or qualify to do
\n business in such jurisdiction, (C) that there is no tort liability of the
\n owner of an aircraft not in possession thereof under the laws of such
\n jurisdiction other than tort liability which might have been imposed on
\n such owner under the laws of the United States or any state thereof (it
\n being understood that, in the event such latter opinion cannot be given in
\n a form satisfactory to the Owner Participant, such opinion shall be waived
\n if insurance reasonably satisfactory to Owner Participant and the Owner
\n Trustee, in its individual capacity, is provided, at Lessee’s expense, to
\n cover such risk), (D) (unless Lessee shall have agreed to provide insurance
\n covering the risk of requisition of use or title of the Aircraft by the
\n government of such jurisdiction so long as the Aircraft is registered under
\n the laws of such jurisdiction) that the laws of such jurisdiction require
\n fair compensation by the government of such jurisdiction<\/p>\n
44<\/p>\n
payable in currency freely convertible into Dollars for the loss of use or
\n title of the Aircraft in the event of the requisition by such government of
\n such use or title, and (E) to such further effect with respect to such
\n other matters as the Owner Trustee, in its individual capacity, or the
\n Owner Participant may reasonably request.<\/p>\n
Upon receipt by the Owner Participant and the Indenture Trustee
\n of an opinion of counsel meeting the foregoing requirements, Exhibit F and
\n Exhibit G to the Lease shall be amended to add such country.<\/p>\n
If, at any time, the Owner Participant delivers an opinion (a
\n “Delisting Opinion”) from a law firm (such opinion and counsel to be
\n reasonably satisfactory to Lessee) in a country then listed on Exhibit F or
\n G to the Lease to the effect that a reputable law firm located in such
\n jurisdiction would not as of the date of such opinion be able to deliver an
\n opinion of counsel as to the matters listed in subsections (A) through (D)
\n of subparagraph (ii) above (provided that in regard to (C) and (D), Lessee
\n is not willing at the time of registration to provide the insurance
\n required by such subsection (C) or (D)), then Exhibits F and G to the Lease
\n shall be amended to delete such country. Lessee shall pay the reasonable
\n costs of the Owner Participant in obtaining the Delisting Opinion provided
\n such opinion is in fact obtained in connection with Lessee’s request to
\n change the registry of the Aircraft to, or to sublease the Aircraft in, a
\n country listed on Exhibit F or G to the Lease.<\/p>\n
Lessee shall pay all reasonable fees and expenses on an after-tax
\n basis of the Owner Participant, the Owner Trustee and the Indenture Trustee
\n in connection with any change of registry of the Aircraft.<\/p>\n
(f) The Owner Participant represents and warrants as follows:<\/p>\n
(i) the Owner Participant is a corporation duly organized and
\n validly existing in good standing under the laws of its jurisdiction of
\n organization, and has the corporate power and authority to carry on its
\n business as now conducted, to own or hold under lease its properties and to
\n enter into and perform its obligations under the Owner Participant
\n Documents;<\/p>\n
(ii) the Owner Participant Documents have been duly authorized by
\n all necessary corporate action on the part of the Owner Participant, do not
\n require any approval<\/p>\n
45<\/p>\n
not already obtained of stockholders of the Owner Participant or any
\n approval or consent not already obtained of any trustee or holders of any
\n indebtedness or obligations of the Owner Participant, and have been duly
\n executed and delivered by the Owner Participant, and neither the execution
\n and delivery thereof by the Owner Participant, nor the consummation of the
\n transactions contemplated thereby by the Owner Participant, nor compliance
\n by the Owner Participant with any of the terms and provisions thereof will
\n contravene any United States federal or state law, judgment, governmental
\n rule, regulation or order applicable to or binding on the Owner Participant
\n (it being understood that no representation or warranty is made with
\n respect to laws, rules or regulations relating to aviation or to the nature
\n of the equipment owned by the Owner Trustee, other than such laws, rules or
\n regulations relating to the citizenship requirements of the Owner
\n Participant under applicable aviation law) or contravene or result in any
\n breach of or constitute any default under, or result in the creation of any
\n Lien (other than Liens provided for or otherwise permitted in the Operative
\n Documents) upon the Trust Estate under, any indenture, mortgage, chattel
\n mortgage, deed of trust, conditional sales contract, bank loan or credit
\n agreement, corporate charter, by-law or other agreement or instrument to
\n which the Owner Participant is a party or by which it or its properties may
\n be bound or affected (it being understood that no representation or
\n warranty is made in this subsection (f)(ii) with respect to ERISA);<\/p>\n
(iii) each of the Owner Participant Documents constitutes a legal,
\n valid and binding obligation of the Owner Participant enforceable against
\n the Owner Participant in accordance with the terms thereof, and the trust
\n intended to be formed by the Trust Agreement has been duly and validly
\n formed;<\/p>\n
(iv) Neither the execution and delivery by the Owner Participant
\n of this Agreement or any other Owner Participant Document, nor the
\n consummation by it of any of the transactions contemplated hereby or
\n thereby, requires the consent or approval of, the giving of notice to, the
\n registration with, the recording or filing of any document with, or the
\n taking of any other action in respect of, any federal or other governmental
\n authority or agency, except those contemplated by the Operative Documents
\n (it being understood that no representation or warranty is made with
\n respect to the laws, rules or regulations relating to aviation or to the
\n nature of the equipment owned by the Owner Trustee, other than such laws,
\n rules or regulations<\/p>\n
46<\/p>\n
relating to the citizenship requirements of the Owner Participant under
\n applicable aviation law);<\/p>\n
(v) there are no pending or, to the knowledge of the Owner
\n Participant, threatened actions or proceedings against the Owner
\n Participant before any court or administrative agency which individually
\n (or in the aggregate in the case of any group of related lawsuits) purports
\n to affect the legality, validity or enforceability of, or which is
\n reasonably likely to materially adversely affect the ability of the Owner
\n Participant to perform its obligations under any of, the Owner Participant
\n Documents; and<\/p>\n
(vi) on the Delivery Date, the Aircraft will be free of Lessor
\n Liens (including for this purpose Liens that would be Lessor Liens but for
\n the proviso to the definition of Lessor Liens) attributable to the Owner
\n Participant.<\/p>\n
(g) Each of State Street Bank and Trust Company in its individual
\ncapacity and the Owner Participant severally covenants and agrees (i) that it
\nshall not cause or permit to exist any Lessor Lien attributable to it with
\nrespect to the Aircraft or any other portion of the Trust Estate, (ii) that it
\nwill promptly, at its own expense, take such action as may be necessary duly to
\ndischarge such Lessor Lien attributable to it and (iii) to make restitution to
\nthe Trust Estate for any actual diminution of the assets of the Trust Estate
\nresulting from such Lessor Liens attributable to it. The Owner Participant
\nagrees to make restitution to the Trust Estate for any actual diminution of the
\nassets of the Trust Estate resulting from any Taxes or Expenses (as such terms
\nare defined in Section 7 hereof) imposed on the Trust Estate against which
\nLessee is not required to indemnify the Trust Estate pursuant to Section 7
\nhereof, but excluding Taxes or Expenses referred to in Section 7(b)(ii)(5) and
\n7(b)(ii)(7) and excluding any diminution of the Trust Estate attributable to or
\ncaused by State Street Bank and Trust Company in its individual capacity;
\nprovided that if the Owner Participant shall make restitution to the Trust
\nEstate on account of any diminution of the Trust Estate attributable to or
\ncaused by State Street Bank and Trust Company in its individual capacity, then
\nState Street Bank and Trust Company, in its individual capacity, shall reimburse
\nthe Owner Participant for such amount together with interest thereon at the Past
\nDue Rate.<\/p>\n
(h) First Security Bank of Utah, National Association, in its
\nindividual capacity, covenants and agrees that it shall not cause or permit to
\nexist any Lien, arising as a result of (i) claims against the Indenture Trustee
\nnot related to its interest in the Aircraft or the administration of the Trust
\nEstate<\/p>\n
47<\/p>\n
pursuant to the Trust Indenture, (ii) acts of the Indenture Trustee not
\npermitted by, or failure of the Indenture Trustee to take any action required
\nby, the Operative Documents to the extent such acts arise or such failure arises
\nfrom or constitutes gross negligence or willful misconduct, (iii) claims against
\nthe Indenture Trustee relating to Taxes or Expenses which are excluded from the
\nindemnification provided by Section 7 pursuant to said Section 7, or (iv) claims
\nagainst the Indenture Trustee arising out of the transfer by the Indenture
\nTrustee of all or any portion of its interest in the Aircraft, the Trust Estate,
\nthe Trust Indenture Estate or the Operative Documents other than (A) a transfer
\nof the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article 5 or 8
\nof the Trust Indenture, (B) any borrowing pursuant to Section 17 hereof or (C) a
\ntransfer of the Aircraft pursuant to Section 15 of the Lease while an Event of
\nDefault is continuing and prior to the time that the Indenture Trustee has
\nreceived all amounts due pursuant to the Trust Indenture.<\/p>\n
(i) [Intentionally omitted.]<\/p>\n
(j) The Indenture Trustee, and by the acceptance of a Loan Certificate
\neach Certificate Holder (and each Pass Through Trustee, so long as the relevant
\nPass Through Trust Agreement is in effect), each hereby waives to the fullest
\nextent permitted by law the benefit of the provisions of Section 1111(b) of
\nTitle 11 of the United States Code with respect to recourse against the Owner
\nTrustee (in its individual capacity) and the Owner Participant on account of any
\namount payable as principal of, Premium, if any, and interest on the Loan
\nCertificates. If (i) all or any part of the Trust Estate becomes the property
\nof, or the Owner Participant becomes, a debtor subject to the reorganization
\nprovisions of the Bankruptcy Code or any successor provision, (ii) pursuant to
\nsuch reorganization provisions the Owner Trustee (in its individual capacity) or
\nthe Owner Participant is required, by reason of the Owner Trustee (in its
\nindividual capacity) or the Owner Participant being held to have recourse
\nliability to a Certificate Holder, a Pass Through Trustee or the Indenture
\nTrustee, directly or indirectly (other than the recourse liability of the Owner
\nParticipant under this Participation Agreement), to make payment on account of
\nany amount payable as principal, Premium, if any, or interest on the Loan
\nCertificates and (iii) such Certificate Holder, such Pass Through Trustee or the
\nIndenture Trustee actually receives any Excess Payment (as hereinafter defined)
\nwhich reflects any payment by the Owner Trustee (in its individual capacity) or
\nthe Owner Participant on account of clause (ii) above, then such Certificate
\nHolder, such Pass Through Trustee or the Indenture Trustee, as the case may be,
\nshall promptly refund to the Owner Trustee or the Owner Participant (whichever
\nshall have made such<\/p>\n
48<\/p>\n
payment) such Excess Payment. For purposes of this Section 8(j), “Excess
\nPayment” means the amount by which such payment exceeds the amount which would
\nhave been received by such Certificate Holder, such Pass Through Trustee or the
\nIndenture Trustee if the Owner Trustee (in its individual capacity) or the Owner
\nParticipant had not become subject to the recourse liability referred to in
\nclause (ii) above. Nothing contained in this Section 8(j) shall prevent any
\nCertificate Holder, any Pass Through Trustee or the Indenture Trustee from
\nenforcing any personal recourse obligation (and retaining the proceeds thereof)
\nof the Owner Trustee (in its individual capacity) or the Owner Participant under
\nthis Participation Agreement or the Trust Indenture (and any exhibits or annexes
\nthereto).<\/p>\n
(k) First Security Bank of Utah, National Association, in its
\nindividual capacity (“FSBU”) and as Indenture Trustee and Pass Through Trustee
\nas provided below, represents as follows:<\/p>\n
(i) it is a Citizen of the United States, that it will notify
\n promptly all parties to this Agreement if in its reasonable opinion its
\n status as a Citizen of the United States is likely to change and that it
\n will resign as Indenture Trustee as provided in Section 9.07 of the Trust
\n Indenture if it should cease to be a Citizen of the United States;<\/p>\n
(ii) it is a national banking association and has the full
\n corporate power, authority and legal right under the laws of the United
\n States of America to enter into and perform its obligations under the Trust
\n Indenture, this Agreement, the Basic Agreement and each Pass Through Trust
\n Agreement and, in its capacity as Indenture Trustee and Pass Through
\n Trustee, respectively, to authenticate the Loan Certificates and the Pass
\n Through Certificates;<\/p>\n
(iii) the Indenture Trustee Documents, and the authentication of
\n the Loan Certificates and the Pass Through Certificates have been duly
\n authorized by all necessary corporate action on the part of FSBU, the
\n Indenture Trustee and the relevant Pass Through Trustee, as it shall be a
\n party thereto in any such capacity, and neither the execution (or, in the
\n case of the Loan Certificates and the Pass Through Certificates, the
\n authentication) and delivery thereof in any such capacity nor the
\n performance by it in any such capacity of any of the terms and provisions
\n thereof will violate any federal or Utah law or regulation relating to the
\n banking or trust powers of FSBU or contravene or result in any breach of,
\n or constitute any default under its charter or by-laws or the provisions of
\n any indenture, mortgage, contract or other agreement to which FSBU, the<\/p>\n
49<\/p>\n
Indenture Trustee or the Pass Through Trustee is a party or by which it or
\n its properties may be bound or affected;<\/p>\n
(iv) each of the Indenture Trustee Documents has been duly
\n executed (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, authenticated) and delivered by FSBU, the Indenture Trustee
\n and the relevant Pass Through Trustee, as it shall be a party thereto in
\n any such capacity, and, assuming that each such agreement is the legal,
\n valid and binding obligation of each other party thereto (other than FSBU,
\n the Indenture Trustee and the relevant Pass Through Trustee), is the legal,
\n valid and binding obligation of FSBU, the Indenture Trustee and the
\n relevant Pass Through Trustee, as it shall be a party thereto in any such
\n capacity, enforceable against it in accordance with its terms;<\/p>\n
(v) neither the execution (or, in the case of the Loan
\n Certificates and the Pass Through Certificates, the authentication) and
\n delivery by FSBU, the Indenture Trustee or any Pass Through Trustee, as it
\n is a party in any such capacity to any of the Indenture Trustee Documents,
\n nor the consummation by it in any such capacity of any of the transactions
\n contemplated hereby, by the Trust Indenture, by the Pass Through Trust
\n Agreements, by the Loan Certificates or by the Pass Through Certificates
\n requires the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action with respect to, any
\n Utah state or federal governmental authority or agency regulating the
\n banking, trust or fiduciary powers of FSBU;<\/p>\n
(vi) there are no Taxes payable by FSBU, the Indenture Trustee or
\n any Pass Through Trustee imposed by the State of Utah or any political
\n subdivision or taxing authority thereof in connection with the execution
\n (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, the authentication) and delivery by it as a party in any such
\n capacity to any Indenture Trustee Document or the performance by it as a
\n party in any such capacity of any Indenture Trustee Document (other than
\n franchise or other taxes based on or measured by any fees or compensation
\n received by FSBU, the Indenture Trustee or any Pass Through Trustee, as the
\n case may be, for services rendered in connection with the transactions
\n contemplated thereby), and there are no Taxes payable by FSBU, the
\n Indenture Trustee or any Pass Through Trustee imposed by the State of Utah
\n or any political subdivision thereof in connection with the acquisition,
\n possession or ownership by any Pass Through Trustee of any of the Loan
\n Certificates (other than franchise or other taxes based on or measured by
\n any fees or<\/p>\n
50<\/p>\n
compensation received by a Pass Through Trustee for services rendered in
\n connection with the transactions contemplated by the respective Pass
\n Through Trust Agreement) and, assuming that the trust created by the
\n respective Pass Through Trust Agreement will not be taxable as a
\n corporation, but, rather, will be characterized as a grantor trust under
\n subpart E, Part I of Subchapter J of the Code, such trust will not be
\n subject to any Taxes imposed by the State of Utah or any political
\n subdivision thereof;<\/p>\n
(vii) there are no pending or threatened actions or proceedings
\n against any of FSBU, the Indenture Trustee, or the Pass Through Trustees
\n before any court or administrative agency which individually (or in the
\n aggregate in the case of any group of related lawsuits) purports to affect
\n the legality, validity or enforceability of, or which is reasonably likely
\n to materially adversely affect the ability of FSBU, the Indenture Trustee,
\n or the Pass Through Trustees to perform its obligations as a party in any
\n such capacity under any Indenture Trustee Document; and<\/p>\n
(viii) except for the issuance and sale pursuant to the respective
\n Pass Through Trust Agreement of the Pass Through Certificates contemplated
\n hereby, neither FSBU nor any Pass Through Trustee has directly or
\n indirectly offered any Loan Certificate for sale to any Person, or
\n solicited any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and neither FSBU nor any
\n Pass Through Trustee has authorized anyone to act on its behalf to offer
\n directly or indirectly any Loan Certificate for sale to any Person, or to
\n solicit any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and no Pass Through
\n Trustee is in default under any respective Pass Through Trust Agreement.<\/p>\n
(l) So long as the Aircraft shall be leased to Lessee under the Lease
\nand so long as the Loan Certificates are outstanding, the Owner Participant will
\nnot sell, assign, convey or otherwise transfer any of its right, title or
\ninterest in and to this Agreement, the Trust Estate or the Trust Agreement to
\nany person or entity, unless (i) the proposed transferee is a “Transferee” (as
\ndefined below) and (ii) the Owner Participant and the Transferee shall have
\ndelivered to the Owner Trustee, the Lessee and the Indenture Trustee opinions
\nsubstantially in the form of Exhibits A-1 and A-2, respectively, hereto (or
\notherwise in form and substance reasonably satisfactory to Lessee and the
\nIndenture Trustee) of counsel reasonably satisfactory to the Indenture Trustee
\nand Lessee. A “Transferee” shall mean either (A) a bank or other financial
\ninstitution with a combined<\/p>\n
51<\/p>\n
capital, surplus and undivided profits of at least $75,000,000 or a corporation
\nwhose net worth is at least $75,000,000, (B) any subsidiary of such a bank,
\nfinancial institution or corporation, provided that such bank, financial
\ninstitution or corporation furnishes to the Owner Trustee, the Indenture Trustee
\nand Lessee a guaranty substantially in the form of Exhibit C hereto with respect
\nto the Owner Participant’s obligations, in the case of the Owner Trustee, under
\nthe Trust Agreement and, in the case of the Indenture Trustee and Lessee, the
\nOwner Participant’s obligations hereunder, or (C) any other entity, provided
\nsuch obligations are guaranteed by the transferor Owner Participant; provided,
\nhowever, that unless otherwise consented to by Lessee no Transferee shall be an
\nairline, a commercial air carrier, an air freight forwarder, an entity engaged
\nin the business of parcel transport by air or other similar person or a
\ncorporation or other entity controlling, controlled by or under common control
\nwith such an airline, a commercial air carrier, an air freight forwarder, an
\nentity engaged in the business of parcel transport by air or other similar
\nperson. Each such transfer to a Transferee shall be subject to the conditions
\nthat (M) upon giving effect to such transfer, the Transferee is a Citizen of the
\nUnited States or the Transferee, at its sole cost and expense on an after-tax
\nbasis (including any continuing costs of the voting trust), shall have entered
\ninto a voting trust or similar arrangement which permits the registration of the
\nAircraft under the Federal Aviation Act in the name of the Owner Trustee, (N)
\nthe Transferee has the full power and authority to enter into and carry out the
\ntransactions contemplated hereby, (O) the Transferee enters into an agreement
\nsubstantially in the form of Exhibit B hereto (or otherwise in form and
\nsubstance reasonably satisfactory to Lessee and the Indenture Trustee), (P) such
\ntransfer does not violate any applicable law including, without limitation, the
\nFederal Aviation Act, or any rules or regulations promulgated thereunder, the
\nSecurities Act of 1933 or the Trust Indenture Act of 1939 (but not including
\nERISA), (Q) the transferor Owner Participant assumes the risk of any loss of
\nInterest Deductions, MACRS Deductions, FSC Benefits or any Inclusion Event (each
\nas defined in the Tax Indemnity Agreement) resulting from such transfer, (R)
\nafter giving effect to such transfer, there shall be no more than three Owner
\nParticipants of record at that time, (S) such transfer will not give rise to a
\nDefault or Event of Default under the Trust Indenture and (T) if such transfer
\nwill result in there being more than one Owner Participant, it shall be a
\ncondition precedent to such transfer that all such Owner Participants shall have
\nagreed in a manner reasonably satisfactory to Lessee that if the provisions of
\nthe Operative Documents require or contemplate the waiver, consent or direction
\nof Owner Participant, such provisions shall be deemed satisfied by the waiver,
\ndirection or consent of Owner Participants holding a majority of the beneficial
\ninterests in<\/p>\n
52<\/p>\n
the Trust Estate. Upon any such transfer by the Owner Participant as above
\nprovided, (i) the Transferee shall be deemed the Owner Participant for all
\npurposes hereof and of the other Operative Documents and each reference herein
\nto the transferor Owner Participant shall thereafter be deemed for all purposes
\nto be to the Transferee and the transferor Owner Participant shall be relieved
\nof all obligations of the transferring Owner Participant under the Owner
\nParticipant Documents arising after the date of such transfer except to the
\nextent fairly attributable to acts or events occurring prior thereto and not
\nassumed by the transferee Owner Participant (in each case, to the extent of the
\nparticipation so transferred) and (ii) Lessee shall acknowledge its consent to
\nsuch transfer to the Transferee, shall represent to the Transferee that no Event
\nof Default or Event of Loss, or circumstance which with the passage of time or
\nthe giving of notice or both would constitute an Event of Default or Event of
\nLoss, then exists and Lessee shall promptly obtain new insurance certificates
\n(consistent with the provisions of Section 11 of the Lease) that reflect the
\ninterests of the Transferee in the Aircraft. If the Owner Participant intends to
\ntransfer any of its interests hereunder, it shall give prior written notice
\nthereof as soon as practicable, but in no event less than 10 days prior thereto,
\nto the Indenture Trustee, the Owner Trustee and Lessee, specifying the name and
\naddress of the proposed Transferee. The Owner Participant shall pay all of the
\nreasonable costs of the other parties hereto, on a net after-tax basis, of any
\nsuch transfer. For purposes of this paragraph, “net worth” shall mean the excess
\nof total tangible assets over total liabilities, each to be determined in
\naccordance with generally accepted accounting principles consistently applied.
\nNotwithstanding anything contained in this Section 8(l) to the contrary, each of
\nLessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustees and,
\nby its acceptance of a Loan Certificate, each Certificate Holder agrees that the
\nOwner Participant may pledge its beneficial interest in the Trust Estate created
\npursuant to the Trust Agreement to First Security Bank of Utah, National
\nAssociation, as indenture trustee (the “777B Indenture Trustee”) pursuant to
\nthat certain Trust Indenture and Mortgage (1995 777 B) dated as of May 1, 1995,
\npursuant to a certain letter agreement to be entered into between [____________]
\nand the 777B Indenture Trustee.<\/p>\n
(m) Notwithstanding the provisions of Section 8(r) hereof, unless
\nwaived by each Certificate Holder, Lessee shall not be entitled to terminate the
\nLease or assume the Loan Certificates on a Purchase Option Date if on such
\nPurchase Option Date an Event of Default under the Lease shall have occurred and
\nbe continuing.<\/p>\n
53<\/p>\n
(n) State Street Bank and Trust Company and First Security Bank of
\nUtah, National Association, each in its individual capacity, agrees for the
\nbenefit of Lessee to comply with the terms of the Trust Indenture which it is
\nrequired to comply with in its individual capacity.<\/p>\n
(o) The Owner Participant represents and warrants that no part of the
\nfunds used by it to acquire its interest in the Trust Estate constitutes assets
\nof any “employee benefit plan” as defined in Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”), or of any “plan”
\nwithin the meaning of Section 4975(e)(1) of the Code (such employee benefit
\nplans and plans hereinafter referred to as “ERISA Plans”).<\/p>\n
(p) State Street Bank and Trust Company (A) in its individual capacity
\n(“SSBTC”) represents and warrants that:<\/p>\n
(i) the Trust Agreement and, assuming due authorization,
\n execution and delivery of the Trust Agreement by the Owner Participant,
\n each of the other Owner Trustee Documents has been duly executed and
\n delivered by one of its officers who is duly authorized to execute and
\n deliver such instruments on behalf of the Owner Trustee;<\/p>\n
(ii) the Trust Estate is free and clear of Lessor Liens
\n attributable to SSBTC, and there are no Liens affecting the title of the
\n Owner Trustee to the Aircraft or resulting from any act or claim against
\n SSBTC arising out of any event or condition not related to the ownership,
\n leasing, use or operation of the Aircraft or to any other transaction
\n contemplated by this Agreement or any of the other Operative Documents,
\n including any Lien resulting from the nonpayment by SSBTC of any Taxes
\n imposed or measured by its net income;<\/p>\n
(iii) there has not occurred any event which constitutes (or to
\n the best of its knowledge would, with the passage of time or the giving of
\n notice or both, constitute) an Event of Default as defined in the Trust
\n Indenture which has been caused by or relates to SSBTC and which is
\n presently continuing;<\/p>\n
(iv) it is a Massachusetts trust company duly organized and
\n validly existing in good standing under the laws of the Commonwealth of
\n Massachusetts and (assuming due authorization, execution and delivery of
\n the Trust Agreement by the Owner Participant) has the corporate power and
\n authority to enter into and perform its obligations under the Trust
\n Agreement, and (assuming due authorization,<\/p>\n
54<\/p>\n
execution and delivery of the Trust Agreement by the Owner Participant) has
\n full right, power and authority to enter into and perform its obligations
\n as Owner Trustee pursuant to the Trust Agreement under each of the other
\n Owner Trustee Documents;<\/p>\n
(v) each of the Owner Trustee Documents has been duly authorized
\n by all necessary corporate action on its part, and neither the execution
\n and delivery thereof nor its performance of any of the terms and provisions
\n thereof will violate any federal or Massachusetts Commonwealth law or
\n regulation relating to its banking or trust powers or contravene or result
\n in any breach of, or constitute any default under, its charter or by-laws
\n or the provisions of any indenture, mortgage, contract or other agreement
\n to which it is a party or by which it or its properties may be bound or
\n affected;<\/p>\n
(vi) assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant, each of the Owner Trustee
\n Documents has been duly executed and delivered by it, and each of the Trust
\n Agreement and the Participation Agreement (to the extent executed by the
\n Owner Trustee in its individual capacity) is a legal, valid and binding
\n obligation of SSBTC and as Owner Trustee, as the case may be, enforceable
\n against such party in accordance with the terms thereof;<\/p>\n
(vii) on the Delivery Date, the Owner Trustee shall have received
\n whatever title to the Aircraft as was conveyed to it by the Lessee;<\/p>\n
(viii) it has not offered any interest in the Trust Estate or any
\n Loan Certificates or Pass Through Certificates or any similar securities
\n for sale to, or solicited any offer to acquire the same from, anyone other
\n than the Indenture Trustee, the Pass Through Trustees and the Owner
\n Participant, and no responsible officer or responsible employee of SSBTC
\n has knowledge of any such offer or solicitation, except as set forth in
\n Section 7(a)(xi) hereof;<\/p>\n
(ix) assuming due authorization, execution and delivery of each of
\n the Owner Trustee Documents by each of the parties thereto (other than the
\n Owner Trustee), each of the Owner Trustee Documents is a legal, valid and
\n binding obligation of the Owner Trustee, enforceable against the Owner
\n Trustee in accordance with its respective terms;<\/p>\n
55<\/p>\n
(x) neither the due execution and delivery of the Owner Trustee
\n Documents by SSBTC, in its individual capacity or as Owner Trustee under
\n the Trust Agreement, as the case may be, nor the consummation by it of any
\n of the transactions contemplated thereby require the consent or approval
\n of, the giving of notice to, or the registration with, any federal or
\n Massachusetts Commonwealth governmental authority or agency pursuant to any
\n federal or Massachusetts Commonwealth law governing the banking or trust
\n powers of SSBTC; and<\/p>\n
(B) SSBT solely in its capacity as Owner Trustee further represents
\nand warrants that:<\/p>\n
(i) SSBT is a trust company duly organized and validly existing
\n in good standing under the laws of the Commonwealth of Massachusetts and
\n has the corporate power and authority to enter into this Agreement and to
\n perform its obligations hereunder;<\/p>\n
(ii) assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant, each of the Trust Agreement, this
\n Agreement, the Trust Indenture, the Lease and the Loan Certificates has
\n been, or on the Delivery Date will have been, duly executed and delivered
\n by it, and each of this Agreement, the Trust Agreement, the Lease and the
\n Trust Indenture, on the Delivery Date, will constitute a legal, valid and
\n binding obligation of the Owner Trustee, enforceable against it in
\n accordance with the terms thereof;<\/p>\n
(iii) the Owner Trustee has never directly or indirectly
\n offered any Loan Certificate or any interest in or to the Trust Estate, the
\n Trust Agreement or any similar interest for sale to, or solicited any offer
\n to acquire any of the same from, any Person other than the Indenture
\n Trustee, each of the Pass Through Trustees and the Owner Participant; and
\n it has not authorized any Person to act on its behalf (other than for
\n purposes of this paragrpah, the Lessee and the Underwriters) to offer
\n directly or indirectly any Loan Certificate or any interest in and to the
\n Trust Estate, the Trust Agreement or any similar interest for sale to, or
\n to solicit any offer to acquire any of the same from, any Person; and<\/p>\n
(iv) there are no pending or threatened actions or proceedings
\n against SSBTC or the Owner Trustee before any court or administrative
\n agency which, if determined adversely to it, would materially adversely
\n affect the ability of SSBTC or the Owner Trustee, as the<\/p>\n
56<\/p>\n
case may be, to perform its obligations under any of the Owner Trustee
\n Documents or any other documents executed by the Owner Trustee or SSBTC in
\n connection with the transactions contemplated by the Operative Documents.<\/p>\n
(q) The Owner Participant agrees, solely for the benefit of Lessee,
\nthat it will comply with any obligation expressly required of it under Section
\n9(c) of the Lease. The Owner Participant further covenants and agrees to pay or
\ncause the Owner Trustee to pay those costs and expenses specified to be paid by
\nthe Owner Participant pursuant to the Lease and all costs and expenses that are
\nfor the account of the Lessor pursuant to Sections 5(a), 5(c), 5(d), 5(e) and
\n5(f), 12 and 19(c) of the Lease.<\/p>\n
(r) Subject to compliance by Lessee with all of its obligations under
\nthe Lessee Documents, each of the Owner Trustee, the Indenture Trustee, each
\nCertificate Holder and the Owner Participant covenants and agrees that, at
\nLessee’s expense on a net after-tax basis (including, without limitation,
\nreasonable attorney’s fees and expenses of each of such parties), (i) Lessee may
\nelect to terminate the Lease and to purchase the Aircraft pursuant to Section
\n19(b) of the Lease and that each of such parties will execute and deliver
\nappropriate documentation transferring all right, title and interest in the
\nAircraft to Lessee (without recourse or warranty except as to Lessor Liens
\n(including for this purpose Liens that would be Lessor Liens but for the proviso
\nto the definition of Lessor Liens) with respect to the Owner Participant)
\n(including without limitation, such bills of sale and other instruments and
\ndocuments as Lessee shall reasonably request to evidence (on the public record
\nor otherwise) such transfer and the vesting of all right, title and interest in
\nand to the Aircraft in Lessee), and (ii) Lessee, in connection with such
\npurchase and subject to the provisions of the second paragraph of this Section
\n8(r), may assume (and receive a credit in an amount equal to the principal
\namount of the debt assumed against the purchase price payable by Lessee pursuant
\nto Section 19(b) of the Lease) the obligations of the Owner Trustee pursuant to
\nSection 7.03 of the Trust Indenture and the Loan Certificates (and the Lease, to
\nthe extent that the Owner Trustee’s obligations thereunder are incorporated into
\nthe Trust Indenture or the Loan Certificates), and Lessee shall confirm that its
\nobligations under the Lease shall be direct obligations to the Indenture Trustee
\nas if set forth in the Trust Indenture, and that each of the parties shall
\nexecute and deliver appropriate documentation in form and substance reasonably
\nsatisfactory to such parties under which Lessee will assume such obligations on
\nthe basis of full recourse to Lessee, maintaining the security interest in the
\nAircraft created by the Trust Indenture, releasing the Owner Participant and the
\nOwner Trustee<\/p>\n
57<\/p>\n
from all future obligations in respect of the Loan Certificates, the Trust
\nIndenture and all other Operative Documents and all such other actions
\n(including the furnishing of legal opinions reasonably requested by any party)
\nas are reasonably necessary to permit such assumption by Lessee.<\/p>\n
If Lessee elects to assume the rights and obligations of the Owner Trustee
\nin accordance with Section 7.03 of the Trust Indenture in connection with the
\npurchase by the Lessee of the Aircraft pursuant to Section 19(b) of the Lease
\nand to pay the EBO Price in installments as permitted thereby, then:<\/p>\n
(A) in addition to the provisions contemplated above, the Trust
\n Indenture shall be amended (a) to provide for an additional series of loan
\n certificates (the “EBO Certificates”) to be issued to the Owner Participant
\n on the EBO Date to evidence the payment of the EBO Price in installments on
\n the dates specified in Exhibit H to the Lease (taking into account the
\n credit provided for above), (2) to provide that the Indenture Trustee will
\n make no distributions to the Owner Participant or the Owner Trustee or
\n otherwise in respect of the EBO Certificates prior to the payment in full
\n of all amounts then due and payable to the other Holders or, if an “Event
\n of Default” under the Trust Indenture (an “Indenture Event of Default”) or
\n any payment Default under the Trust Indenture shall have occurred and be
\n continuing, prior (unless such Loan Certificates shall have been purchased
\n by the Owner Trustee) to the payment in full of the principal amount of,
\n and interest accrued on, the Loan Certificates other than the EBO
\n Certificates, (3) to include the failure to pay any installments of the EBO
\n Certificates within 10 calendar days of when due as an Event of Default,
\n (4) to include a right so long as the EBO Certificates shall be outstanding
\n for the Owner Participant to purchase the other Loan Certificates under
\n circumstances similar to, and on the same terms as provided in, Section
\n 8.03(e)(ii) of the Trust Indenture (it being understood that upon any
\n assumption pursuant to Section 7.03 of the Trust Indenture, the provisions
\n of the Trust Indenture intended for the benefit of the Owner Participant
\n (other than provisions concerning, but only to the extent applicable to,
\n Excluded Payments), including, without limitation, Sections 8.03(e)(i) and
\n 8.03(e)(iii) of the Trust Indenture providing the Owner Trustee or the
\n Owner Participant with certain rights, shall be of no further force and
\n effect), (5) to provide that the Owner Participant and the Owner Trustee
\n shall have no voting or consent rights under the Trust Indenture by reason
\n of being the holder of the EBO Certificates or otherwise until all other
\n Loan Certificates have either been paid in full or been purchased by the
\n Owner<\/p>\n
58<\/p>\n
Participant (pursuant to the provisions contemplated by clause (A)(4) of
\n this Section 8(r) by the reference therein to Section 8.03(e)(ii) of the
\n Trust Indenture), except that without the consent of the Owner Participant
\n ——
\n the Trust Indenture could not be amended, modified or supplemented to
\n reduce the amount or extend the time of payment of any amount owing or
\n payable under the EBO Certificates, and (6) to confirm that, although the
\n Owner Participant cannot participate in the exercise of remedies under the
\n Trust Indenture, it shall not be precluded form demanding, collecting,
\n suing for or otherwise receiving and enforcing payment of the EBO
\n Certificates by demand upon Lessee; and<\/p>\n
(B) upon Lessee’s payment in full of all amounts due on or prior to
\n the EBO Date in accordance with Section 19(b) of the Lease and compliance
\n with all of the conditions to such assumption in accordance with this
\n Section 8(r) and Section 7.03 of the Trust Indenture, (1) the Owner Trustee
\n shall assign the right to the remaining installments of the EBO Price to
\n the Owner Participant, (2) the EBO Certificates shall be issued to the
\n Owner Participant in aggregate amount of such remaining installments of the
\n EBO Price and (3) the Owner Trustee (AA) shall transfer to Lessee, without
\n recourse or warranty (except as to the absence of Lessor Liens) and on an
\n “as is” basis, all right, title and interest of the Owner Trustee in and to
\n the Aircraft and (BB) shall furnish to or at the direction of Lessee one or
\n more bills of sale in form and substance reasonably satisfactory to Lessee
\n evidencing such transfer.<\/p>\n
(s) Lessee will not consolidate with or merge into any other
\ncorporation or convey, transfer or lease substantially all of its assets to any
\nPerson unless:<\/p>\n
(i) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall be a
\n Citizen of the United States and shall be a Certificated Air Carrier;<\/p>\n
(ii) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall
\n execute and deliver to the Owner Trustee, the Indenture Trustee, the Owner
\n Participant and the Pass Through Trustees a duly authorized, valid, binding
\n and enforceable agreement in form and substance reasonably satisfactory to
\n the Owner Participant containing an assumption by such successor
\n corporation or Person of the due and punctual performance and observance of<\/p>\n
59<\/p>\n
each covenant and condition of the Operative Documents and the Pass Through
\n Trust Agreements to be performed or observed by Lessee;<\/p>\n
(iii) immediately after giving effect to such transaction, no
\n Event of Default under the Lease shall have occurred and be continuing;<\/p>\n
(iv) Lessee shall have delivered to the Owner Trustee, the
\n Indenture Trustee, the Pass Through Trustees and the Owner Participant a
\n certificate signed by the President or any Vice President and by the
\n Secretary or an Assistant Secretary of Lessee, and an opinion of counsel
\n (which may be Lessee’s General Counsel) reasonably satisfactory to the
\n Owner Participant, each stating that such consolidation, merger,
\n conveyance, transfer or lease and the assumption agreement mentioned in
\n clause (ii) above comply with this Section 8(s) and that all conditions
\n precedent herein provided for relating to such transaction have been
\n complied with; and<\/p>\n
(v) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee, shall make such filings
\n and recordings with the FAA pursuant to the Federal Aviation Act, as shall
\n be necessary or desirable to evidence such consolidation, merger,
\n conveyance, transfer or lease with or to such entity.<\/p>\n
Upon any consolidation or merger, or any conveyance, transfer or lease
\nof substantially all of the assets of Lessee as an entirety in accordance with
\nthis Section 8(s), the successor corporation or Person formed by such
\nconsolidation or into which Lessee is merged or to which such conveyance,
\ntransfer or lease is made shall succeed to, and be substituted for, and may
\nexercise every right and power of, Lessee under this Agreement and under the
\nPass Through Trust Agreements with the same effect as if such successor
\ncorporation or Person had been named as Lessee herein and therein. No such
\nconveyance, transfer or lease of substantially all of the assets of Lessee as an
\nentirety shall have the effect of releasing Lessee or any successor corporation
\nor Person which shall theretofore have become such in the manner prescribed in
\nthis Section 8(s) from its liability in respect of any Operative Document to
\nwhich it is a party or any Pass Through Trust Agreement. Nothing contained
\nherein shall permit any lease, sublease or other arrangement for the use,
\noperation or possession of the Aircraft except in compliance with the applicable
\nprovisions of the Lease.<\/p>\n
60<\/p>\n
(t) Lessee, at its expense, will, at the request of any party hereto,
\ntake, or cause to be taken, such action with respect to the recording, filing,
\nrerecording and refiling of the Trust Agreement, the Lease, the Lease
\nSupplement, the Trust Indenture, the Trust Supplement and any financing
\nstatements or other instruments as are necessary to maintain, so long as the
\nTrust Indenture or the Lease is in effect, the perfection of the security
\ninterests created by the Trust Indenture and any security interest that may be
\nclaimed to have been created by the Lease and the ownership interest of the
\nOwner Trustee in the Aircraft.<\/p>\n
(u) Section 3 of the Lease contemplates that, under certain
\ncircumstances, the Owner Participant will make certain recalculations of Basic
\nRent, Excess Amount, Stipulated Loss Value percentages, Termination Value
\npercentages, Special Termination Value percentages and the EBO Percentage, and
\nthe Owner Participant hereby agrees to make such recalculations as and when
\ncontemplated by the Lease and subject to all the terms and conditions of the
\nLease and promptly to take such further actions as may be necessary or desirable
\nto give effect to and to cause the Owner Trustee to give effect to the
\nprovisions of Section 3 of the Lease.<\/p>\n
(v) The Owner Participant hereby agrees not to revoke the Trust
\nAgreement or the trusts created thereunder without the prior written consent of
\n(i) the Lessee so long as the Lease shall remain in effect and no Event of
\nDefault under the Lease shall have occurred and be continuing and (ii) the
\nIndenture Trustee so long as the Trust Indenture shall be in effect.<\/p>\n
(w) Lessee covenants and agrees with the Owner Participant, the
\nIndenture Trustee and the Owner Trustee that at all times during the Term it
\nwill be a Certificated Air Carrier<\/p>\n
(x) (i) Each Pass Through Trustee hereby agrees that, except as
\notherwise required by applicable law (including, without limitation, any law
\nwhich requires such Pass Through Trustee to act within its own discretion), it
\nshall not, without the prior written consent of the Owner Trustee, direct the
\nIndenture Trustee to take or refrain from taking any action under the Trust
\nIndenture that requires the approval, waiver, authorization, direction or
\nconsent of, or notice from, the Certificate Holders holding a specified
\npercentage in principal amount of Outstanding (as defined in the Trust
\nIndenture) Loan Certificates unless such Pass Through Trustee receives a
\nDirection (as defined in the relevant Pass Through Trust Agreement) to so direct
\nthe Indenture Trustee from Certificate Holders (as defined in the relevant Pass
\nThrough Trust Agreement) holding the same percentage of Certificates (as defined
\nin the<\/p>\n
61<\/p>\n
relevant Pass Through Trust Agreement) evidencing Fractional Undivided Interests
\n(as defined in the relevant Pass Through Trust Agreement) in the Trust (as
\ndefined in the relevant Pass Through Trust Agreement) holding the Loan
\nCertificates.<\/p>\n
(ii) Lessee and each Pass Through Trustee hereby agree that Article X
\n of each Pass Through Trust Agreement (to the extent relating to the
\n Certificates) shall not be amended without the prior written consent of the
\n Owner Participant.<\/p>\n
(iii) Each Pass Through Trustee hereby agrees that, except as
\n otherwise required by applicable law (including, without limitation, any
\n law which requires such Pass Through Trustee to act within its own
\n discretion), if requested to do so by the Owner Trustee or the Owner
\n Participant, such Pass Through Trustee shall request a Direction from the
\n relevant Certificate Holders to establish whether such Pass Through
\n Trustee, in its capacity as a Certificate Holder, may direct the Indenture
\n Trustee to take or refrain from taking any action under the Operative
\n Documents.<\/p>\n
(y) The Owner Trustee agrees that any profit, income, interest,
\ndividend or gain realized upon the maturity, sale or other disposition of any
\nPermitted Investment made by the Indenture Trustee pursuant to Section 9.04 of
\nthe Trust Indenture, and paid to Lessee on behalf of the Owner Trustee by the
\nIndenture Trustee in accordance with the terms of such Section 9.04, shall be
\nentirely for the account of, and the sole property of, Lessee who, for such
\npurposes, shall not be deemed to be acting as agent of the Owner Trustee, and
\nLessee shall have no obligation to pay over such income, interest, dividend or
\ngain to the Owner Trustee, except to the extent the Owner Trustee or Owner
\nParticipant are owed any amounts under the Operative Documents by Lessee and
\nsuch amounts are not paid when due, in which event the Owner Participant may
\ncause the Owner Trustee to distribute and apply such income, interest, dividend
\nor gain in satisfaction or partial satisfaction of the amounts so due.<\/p>\n
(z) The Owner Participant hereby agrees to instruct the Owner Trustee
\nto promptly distribute any money received by it pursuant to Section 7.01 or
\n10.04 of the Trust Indenture to Lessee to the extent such amounts were paid by
\nLessee or on behalf of Lessee and the Owner Trustee or the Owner Participant is
\nnot owed any amounts under any of the Operative Documents by Lessee (and if the
\nOwner Trustee or Owner Participant is owed any such amount, the monies received
\nunder Section 7.01 or 10.04 of the Trust Indenture may be applied in
\nsatisfaction or partial satisfaction thereof). Lessee agrees to hold any money
\nreceived by it pursuant to the foregoing sentence in trust for the benefit of
\nthe Owner Participant and may, in its discretion, invest and<\/p>\n
62<\/p>\n
reinvest all money so held by it in such Permitted Investments as Lessee deems
\nappropriate. Lessee will apply such money to the payment of previously
\nunclaimed payments with respect to the Loan Certificates when and as claims for
\npayment are made by the Holders of such Loan Certificates. As compensation for
\nits services pursuant to this Section 8(z), Lessee shall be entitled to an
\nannual fee from the Owner Participant in an amount to be agreed to at the time
\nby Lessee and the Owner Participant but in no event shall such fee exceed at any
\ntime the amount of earnings on the monies so held in trust distributable at such
\ntime to the Owner Participant. Any net losses on such investment shall be for
\nthe account of Lessee. Any net earnings on such investment shall be distributed
\nfrom time to time by Lessee to the Owner Participant after deducting therefrom
\nany portion of such fee then due and unpaid. Upon the date required by
\napplicable law dealing with unclaimed property, Lessee will distribute to the
\nOwner Participant any amount held by it pursuant to this Section 8(z) and not
\npreviously applied to the payment of the Loan Certificates, after deducting
\ntherefrom any portion of such fee then due and unpaid.<\/p>\n
(aa) The Owner Participant agrees that, at Lessee’s expense
\n(including, without limitation, reasonable attorneys fees and other out-of-
\npocket expense of the Owner Trustee and Owner Participant), upon request of the
\nLessee, the Owner Participant will negotiate promptly in good faith with respect
\nto any arrangements pursuant to which the Trust Indenture may be satisfied and
\ndischarged in respect of the Loan Certificates in accordance with subsection
\n(a)(ii) or (a)(iii) of Section 10.01 of the Trust Indenture, provided, that
\nthere shall be no adverse impact upon the rights or interests of the Owner
\nParticipant or Owner Trustee, and the Owner Trustee agrees to act upon the
\ninstructions of the Owner Participant in connection therewith. The Owner
\nTrustee agrees that it will not, and the Owner Participant agrees that during
\nsuch time as an Event of Default has not occurred under the Lease it will not
\ncause the Owner Trustee to take any action to effect such satisfaction and
\ndischarge except upon the request of the Lessee made pursuant to this Section
\n8(aa).<\/p>\n
SECTION 9. [Intentionally Omitted].<\/p>\n
SECTION 10. Other Documents; Amendment. Each of the Owner
\n ————————–
\nParticipant and the Owner Trustee hereby (A) agrees with Lessee, the Certificate
\nHolders and the Indenture Trustee to comply with all of the terms of the Trust
\nAgreement (as the same may hereafter be amended or supplemented from time to
\ntime in accordance with the terms thereof) applicable to it, to the extent such
\nnon-compliance would be adverse to such party; and (B) agrees with Lessee, the
\nCertificate Holders and the Indenture<\/p>\n
63<\/p>\n
Trustee not to amend, supplement or otherwise modify any provision of the Trust
\nAgreement in a manner adversely affecting such party without the prior written
\nconsent of such party. Notwithstanding the foregoing, unless an Event of
\nDefault shall have occurred and be continuing and so long as the Lease has not
\nbeen terminated, the Indenture Trustee and the Owner Participant hereby agree
\nfor the benefit of Lessee that without the consent of Lessee they will not (and
\nthe Owner Participant agrees that it will not cause the Owner Trustee to) amend,
\nsupplement or otherwise modify any provision of the Trust Indenture in a manner
\nadversely affecting Lessee. The Indenture Trustee and the Owner Trustee agree
\nto promptly furnish to Lessee copies of any supplement, amendment, waiver or
\nmodification of any of the Operative Documents to which Lessee is not a party.
\nEach Certificate Holder agrees that it will not take any action in respect of
\nthe Trust Indenture Estate except through the Indenture Trustee pursuant to the
\nTrust Indenture or as otherwise permitted by the Trust Indenture.<\/p>\n
SECTION 11. Certain Covenants of Lessee. Lessee covenants and agrees
\n —————————
\nwith the Participants, the Indenture Trustee and the Owner Trustee, in its
\ncapacity as such and in its individual capacity as follows:<\/p>\n
(a) Lessee will cause to be done, executed, acknowledged and delivered
\n all and every such further acts, conveyances and assurances as the Owner
\n Trustee, the Indenture Trustee or the Owner Participant shall reasonably
\n require for accomplishing the purposes of this Agreement and the other
\n Operative Documents; provided that any instrument or other document so
\n executed by Lessee will not expand any obligations or limit any rights of
\n Lessee in respect of the transactions contemplated by any Operative
\n Documents. Lessee, forthwith upon delivery of the Aircraft under the Lease
\n shall cause the Aircraft to be duly registered, and at all times thereafter
\n to remain duly registered, in the name of the Owner Trustee, except as
\n otherwise required or permitted hereunder or under the Lease, under the
\n Federal Aviation Act or under the applicable law of another permitted
\n government of registry, or shall furnish to the Owner Trustee such
\n information as may be required to enable the Owner Trustee to make
\n application for such registration (at the expense of Lessee, including,
\n without limitation, reasonable attorney’s fees and expenses), and shall
\n promptly furnish to the Owner Trustee such information as may be required
\n to enable the Owner Trustee to timely file any reports required to be filed
\n by it as the lessor under the Lease or as the owner of the Aircraft with
\n any governmental authority (including tax authorities).<\/p>\n
64<\/p>\n
(b) Lessee, at its expense, will cause the Trust Agreement, the Lease,
\n all Lease Supplements, all amendments to the Lease, the Trust Indenture,
\n and all supplements and amendments to the Trust Indenture to be promptly
\n filed and recorded, or filed for recording, to the extent permitted under
\n the Federal Aviation Act, or required under any other applicable law. Upon
\n the execution and delivery of the Owner Trustee’s FAA Bill of Sale, the
\n Lease Supplement covering the Aircraft and the Trust Supplement, the Lease
\n and the Trust Indenture shall be filed for recording with the Federal
\n Aviation Administration in the following order of priority; first, the
\n —–
\n Owner Trustee’s FAA Bill of Sale, second, the FAA registration application,
\n ——
\n third, the Trust Indenture, with the Trust Agreement and the Trust
\n —–
\n Supplement attached, and fourth, the Lease, with the Lease Supplement
\n ——
\n covering the Aircraft, the Trust Indenture and the Trust Supplement
\n attached. Lessee agrees to furnish the Owner Participant, the Owner
\n Trustee and the Indenture Trustee with copies of the foregoing documents
\n with recording data as promptly as practicable following the issuance of
\n same by the FAA.<\/p>\n
SECTION 12. Owner for Income Tax Purposes. It is hereby agreed among
\n —————————–
\nLessee, the Owner Participant and the Owner Trustee that for income tax purposes
\nthe Owner Participant will be the owner of the Aircraft to be delivered under
\nthe Lease and Lessee will be the lessee thereof, and each party hereto agrees to
\ncharacterize the Lease as a lease for income tax purposes.<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction. (a) All notices,
\n ——————————–
\ndemands, instructions and other communications required or permitted to be given
\nto or made upon any party hereto shall be in writing and shall be personally
\ndelivered or sent by registered or certified mail, postage prepaid, or by
\ntelecopier (with a copy of such notice to follow by registered or certified mail
\nor by prepaid courier), or by prepaid courier service, and shall be deemed to be
\ngiven for purposes of this Agreement on the day that such writing is delivered
\nor received or if given by certified mail, three Business Days after being
\ndeposited in the mails, in accordance with the provisions of this Section 13(a).
\nUnless otherwise specified in a notice sent or delivered in accordance with the
\nforegoing provisions of this Section 13(a), notices, demands, instructions and
\nother communications in writing shall be given to or made upon the respective
\nparties hereto at their respective addresses (or to their respective telecopier
\nnumbers) as follows: (A) if to Lessee, the Owner Trustee, the Indenture
\nTrustee, the Pass Through Trustees or the Owner Participant, to the respective
\naddresses set forth on Schedule I hereto (and in the case of Owner Trustee a
\ncopy shall be sent to the Owner Participant) or<\/p>\n
65<\/p>\n
(B) if to a subsequent Owner Participant, addressed to such subsequent Owner
\nParticipant at such address as such subsequent Owner Participant shall have
\nfurnished by notice to the parties hereto or (C) if to any subsequent
\nCertificate Holder, addressed to such Certificate Holder at its address set
\nforth in the Loan Certificate Register maintained pursuant to Section 2.03 of
\nthe Trust Indenture.<\/p>\n
(b) Each party to this Agreement including each Certificate Holder
\n(individually a “Party” and collectively “Parties”) irrevocably agrees that any
\nlegal suit, action or proceeding brought by any other Party, which arises solely
\nout of or relates solely to the Operative Documents or any of the transactions
\ncontemplated hereby or thereby or any document referred to herein or therein,
\nmay be instituted in the Circuit Court of the State of Illinois, Cook County or
\nthe United States District Court for the Northern District of Illinois and that
\nthey hereby waive the right to trial by jury in any such proceeding; provided,
\nhowever, that the foregoing provisions shall not apply to third party tort
\nclaims (but shall apply to an indemnity claim with respect to such tort claim)
\nand that the foregoing shall not apply to any right a Party may have to seek
\nremoval of such legal suit, action or proceeding to federal court or to seek
\nconsolidation of any separate legal suits, actions or proceedings brought by any
\none or more of the other Parties in the same or different jurisdictions. The
\nagreement set forth in this Section 13(b) is given solely for the benefit of the
\nParties and such agreement is not intended to and shall not inure to the benefit
\nof any other person.<\/p>\n
SECTION 14. Change of Situs of Owner Trust. The Owner Participant
\n ——————————
\nagrees that if, at any time, the Trust Estate becomes subject to any Taxes for
\nwhich it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
\nthereof, Lessee shall request that the situs of the trust be moved to another
\nstate in the United States from the state in which it is then located, the situs
\nof the trust may be moved with the written consent of the Owner Participant
\n(which consent shall not be unreasonably withheld) and the Owner Participant
\nwill take whatever action may be reasonably necessary to accomplish such
\nremoval; provided that (A) Lessee shall provide such additional tax
\nindemnification, as the Owner Participant may reasonably request, (B) the rights
\nand obligations under the Operative Documents of the Owner Participant shall not
\nbe altered as a result of the taking of such action, (C) the lien of the Trust
\nIndenture on the Trust Indenture Estate shall not be adversely affected by such
\naction, and the Lessee shall execute and deliver such documents as may be
\nrequested by the Indenture Trustee to continue the perfection of the lien on the
\nTrust Indenture Estate and (D) the Owner Participant and the Indenture Trustee
\nshall<\/p>\n
66<\/p>\n
have received an opinion or opinions of counsel (reasonably satisfactory to the
\nOwner Participant) in scope, form and substance reasonably satisfactory to the
\nOwner Participant to the effect that (I) the trust, as thus removed, shall
\nremain a validly established trust, (II) any amendments to the Trust Agreement
\nnecessitated by such removal shall have been duly authorized, executed and
\ndelivered by the parties thereto and shall constitute the valid and binding
\nobligations of such parties, enforceable in accordance with their terms, (III)
\nsuch removal will not result in the imposition of, or increase in the amount of,
\nany Tax for which Lessee is not required to indemnify the Owner Participant, the
\nOwner Trustee or the Trust Estate pursuant to Section 7(b) hereof (taking into
\naccount any additional indemnification provided by Lessee pursuant to clause (A)
\nof this sentence), (IV) such removal will not, in the Owner Participant’s
\njudgment, result in any Loss of MACRS Deductions, FSC Benefits, Interest
\nDeductions or an Inclusion Event (as defined in the Tax Indemnity Agreement)
\nwith respect to which Lessee is not required to indemnify the Owner Participant
\npursuant to Section 5 of the Tax Indemnity Agreement (taking into account any
\nadditional indemnification provided by Lessee pursuant to clause (A) of this
\nsentence), and (V) covering such other matters as the Owner Participant may
\nreasonably request, (E) if such removal involves the replacement of the Owner
\nTrustee, the Owner Participant shall have received an opinion of counsel to such
\nsuccessor Owner Trustee in form and substance reasonably satisfactory to the
\nOwner Participant covering the matters set forth in the opinion provided
\npursuant to Section 4(a)(xiii) hereof and (F) Lessee shall indemnify and hold
\nharmless the Owner Participant on a net after-tax basis against any and all
\nreasonable and actual costs and expenses including attorneys’ fees and
\ndisbursements, registration, recording or filing fees and Taxes incurred by the
\nOwner Trustee or Owner Participant, in connection with such change of situs.<\/p>\n
SECTION 15. Miscellaneous. (a) Each of the Participants and the
\n ————-
\nCertificate Holders covenants and agrees that it shall not unreasonably withhold
\nits consent to any consent requested of the Owner Trustee, as Lessor, or the
\nIndenture Trustee under the terms of the Lease, which by its terms is not to be
\nunreasonably withheld by the Owner Trustee, as Lessor, or by the Indenture
\nTrustee.<\/p>\n
(b) The representations, warranties, indemnities and agreements of
\nLessee, the Owner Trustee, the Indenture Trustee, the Participants and the
\nCertificate Holders provided for in this Agreement, and Lessee’s, the Owner
\nTrustee’s, Indenture Trustee’s, the Participants’ and the Certificate Holders’
\nobligations under any and all thereof, shall survive the making available of the
\nrespective Commitments by the Participants, the<\/p>\n
67<\/p>\n
delivery or return of the Aircraft, the transfer of any interest of the Owner
\nParticipant in the Trust Estate or the Aircraft or any Engine or the transfer of
\nany interest by any Certificate Holder in any Loan Certificate or the Trust
\nIndenture Estate and the expiration or other termination of this Agreement or
\nany other Operative Document or any of the Pass Through Trust Agreements.<\/p>\n
(c) This Agreement may be executed by the parties hereto in separate
\ncounterparts, each of which when so executed and delivered shall be an original,
\nbut all such counterparts shall together constitute but one and the same
\ninstrument. Neither this Agreement nor any of the terms hereof may be
\nterminated, amended, supplemented, waived or modified, except by an instrument
\nin writing signed by the party against which the enforcement of the termination,
\namendment, supplement, waiver or modification is sought; and no such
\ntermination, amendment, supplement, waiver or modification shall be effective
\nunless a signed copy thereof shall have been delivered to the Lessee, the
\nIndenture Trustee and the Owner Trustee. The terms of this Agreement shall be
\nbinding upon, and inure to the benefit of and shall be enforceable by, Lessee,
\nthe Participants, the Indenture Trustee, the Certificate Holders and the Owner
\nTrustee. This Agreement shall in all respects be governed by, and construed in
\naccordance with, the internal laws of the State of Illinois, including all
\nmatters of construction, validity and performance. This Agreement is being
\ndelivered in the State of Illinois.<\/p>\n
(d) The parties hereto agree that all of the statements,
\nrepresentations, covenants and agreements made by the Owner Trustee (when made
\nin such capacity) contained in this Agreement and any agreement referred to
\nherein other than the Trust Agreement, unless expressly otherwise stated, are
\nmade and intended only for the purpose of binding the Trust Estate and
\nestablishing the existence of rights and remedies which can be exercised and
\nenforced against the Trust Estate. Therefore, anything contained in this
\nAgreement or such other agreements to the contrary notwithstanding (except for
\nany express provisions that the Owner Trustee is responsible for or is acting in
\nor making representations or agreements in its individual capacity), no recourse
\nshall be had with respect to this Agreement or such other agreements against the
\nOwner Trustee in its individual capacity or against any institution or person
\nwhich becomes a successor trustee or co-trustee or any officer, director,
\ntrustee, servant or direct or indirect parent or controlling person or persons
\nof any of them; provided, however, that this Section 15(d) shall not be
\nconstrued to prohibit any action or proceeding against any party hereto for its
\nown willful misconduct or grossly negligent conduct; and provided, further, that
\nnothing contained in this Section 15(d) shall be construed<\/p>\n
68<\/p>\n
to limit the exercise and enforcement in accordance with the terms of this
\nAgreement or such other agreements of rights and remedies against the Trust
\nEstate. The foregoing provisions of this Section 15(d) shall survive the
\ntermination of this Agreement, the other Operative Documents and the Pass
\nThrough Trust Agreements.<\/p>\n
(e) No Participant shall have any obligation or duty to the Lessee, to
\nany other Participant or to others with respect to the transactions contemplated
\nhereby except those obligations or duties of such Participant expressly set
\nforth in this Agreement and the other Operative Documents and no Participant
\nshall be liable for performance by any other party hereto of such other party’s
\nobligations or duties hereunder. Without limitation of the generality of the
\nforegoing, under no circumstances whatsoever shall any Participant be liable to
\nLessee, nor shall any Participant be liable to any other Participant, for any
\naction or inaction on the part of the Indenture Trustee or the Owner Trustee in
\nconnection with the transactions contemplated herein, whether or not such action
\nor inaction is caused by the willful misconduct or gross negligence of the
\nIndenture Trustee or the Owner Trustee.<\/p>\n
(f) This Agreement shall be binding upon and shall inure to the
\nbenefit of and shall be enforceable against, the parties hereto and their
\nrespective successors and permitted assigns including each successive holder of
\nthe Owner Participant’s interest and each successive holder of any Loan
\nCertificate issued and delivered pursuant to this Agreement or the Trust
\nIndenture whether or not an express assignment to such holder of rights and
\nobligations under this Agreement has been made.<\/p>\n
(g) The Owner Participant hereby consents to the Owner Trustee’s
\nappointment of Lessee as its exclusive agent pursuant to the terms of Section
\n7(a)(4) of the Lease.<\/p>\n
SECTION 16. Invoices and Payment of Expenses. Each of the Owner
\n ——————————–
\nTrustee, the Indenture Trustee, Lessee and the Participants shall promptly
\nsubmit to the Owner Participant and the Lessee for their joint prompt approval
\n(except in the case of Transactions Expenses referred to in clauses (i)(6), (v)
\nand (viii) of the definition thereof which shall be approved solely by the Owner
\nParticipant) copies of invoices of the Transaction Expenses as they are
\nreceived. The Owner Participant agrees to transfer to the Owner Trustee from
\ntime to time promptly upon receipt of invoices of Transaction Expenses such
\namount as shall be necessary in order to enable the Owner Trustee to pay such
\nTransaction Expenses or to pay such amounts directly. To the extent of funds
\nreceived by it, the Owner Trustee agrees to pay<\/p>\n
69<\/p>\n
all invoices of Transaction Expenses that have been so approved promptly upon
\nreceipt thereof. Notwithstanding the foregoing, in the event that the
\ntransactions contemplated hereby shall not be consummated, Lessee shall pay all
\nTransaction Expenses, except that the fees, expenses and disbursements of the
\nOwner Participant (including those relating to its counsel) shall be borne by
\nthe Owner Participant if such failure to consummate the transactions results
\nfrom the failure of the Owner Participant to adhere to the terms and conditions
\nset forth in the letter dated March 2, 1995 addressed to Lessee and Capstar
\nPartners and agreed to by Lessee or to close after all conditions precedent to
\nthe Owner Participant’s funding of its Commitment set forth herein have been
\nsatisfied. To the extent Transaction Expenses exceed [_____%] of Lessor’s Cost,
\nthe Lessee may, in lieu of electing an optimization pursuant to Section 18
\nhereof, promptly reimburse the Owner Trustee or Owner Participant, as
\nappropriate, for all or a portion of the Transaction Expenses described in
\nclause (i)(5) and\/or clause (vi) (excluding any debt placement fees included in
\nsaid clause (vi)) of the definition of Transaction Expenses.<\/p>\n
SECTION 17. Optional Redemption of Certificates. (a) Subject to the
\n ———————————–
\nterms of this Section 17, in the event that at any time Lessee shall have given
\nwritten notice to the Owner Trustee, the Indenture Trustee and the Owner
\nParticipant that there be effected a voluntary redemption of all of the
\noutstanding Loan Certificates by the Owner Trustee as part of a refunding or
\nrefinancing transaction, the Owner Participant agrees to negotiate promptly in a
\ncommercially reasonable manner to conclude an agreement with Lessee as to the
\nterms of such refunding or refinancing transaction (including the terms of any
\ndebt to be issued in connection with such refunding or refinancing transaction
\nand the documentation to be executed in connection therewith), and if after such
\nnegotiation Lessee and the Owner Participant shall have concluded an agreement
\nwith respect to such terms:<\/p>\n
(1) within ten Business Days after the reaching of such
\n agreement, the Owner Participant will deliver to Lessee a certificate of an
\n authorized representative of the Owner Participant (the “Refinancing
\n Certificate”) setting forth (i) the proposed date on which the outstanding
\n Loan Certificates will be redeemed, describing the new debt to be issued
\n and the other aspects of such refunding or refinancing transaction to be
\n consummated (such date, the “Refinancing Date”) and (ii) the following
\n information: (A) the principal amount of debt to be issued by the Owner
\n Trustee on the Refinancing Date, and (B) the proposed revised schedules of
\n Basic Rent, Excess Amount, debt amortization, Stipulated Loss Value
\n percentages, Termination<\/p>\n
70<\/p>\n
Value percentages, Special Termination Value percentages and EBO
\n Percentage. Within ten Business Days of its receipt of the Refinancing
\n Certificate, Lessee may demand a verification pursuant to Exhibit E to the
\n Lease of the information set forth in the Refinancing Certificate. Upon
\n the acceptance by Lessee of the accuracy of the information set forth in
\n the Refinancing Certificate or the determination pursuant to such
\n verification procedures of the revised Basic Rent, Excess Amount, debt
\n amortization, Stipulated Loss Value percentages, Termination Value
\n percentages, Special Termination Value percentages and EBO Percentage and
\n the Debt\/Equity Ratio (such information, the “Refinancing Information”) the
\n appropriate parties will take the actions specified in paragraphs (2)
\n through (6) below;<\/p>\n
(2) the appropriate parties will enter into a financing or loan
\n agreement in form and substance reasonably satisfactory to the Owner
\n Participant, the Owner Trustee and the Lessee (which may involve an
\n underwriting agreement in connection with a public offering of such debt or
\n the purchase of such debt by a publicly funded entity (or entities) or the
\n sale of the Owner Trustee’s interest in the Trust Estate and\/or the
\n Aircraft and its resale to the Owner Trustee) with the institution or
\n institutions to be named therein (A) providing for (i) the issuance and
\n sale by the Owner Trustee to such institution or institutions on the
\n Refinancing Date of debt securities in an aggregate principal amount
\n specified in the Refinancing Information, which amount shall be at least
\n equal to the aggregate principal amount of all Loan Certificates
\n outstanding on the Refinancing Date (such debt securities, the “New Debt”)
\n and (ii) the application of the proceeds of the sale of the New Debt to the
\n redemption of all such Loan Certificates on the Refinancing Date and (B)
\n pursuant to which the parties to the refinancing transaction (including the
\n Owner Participant and Lessee but excluding any public holders of debt) make
\n such representations, warranties and covenants as the Owner Participant or
\n Lessee may reasonably require;<\/p>\n
(3) Lessee and the Owner Trustee will amend the Lease to provide
\n that (i) Basic Rent, Excess Amount and the EBO Percentage in respect of the
\n period from and after the Refinancing Date shall be as provided in the
\n Refinancing Information and (ii) amounts payable in respect of Stipulated
\n Loss Value percentages, Special Termination Value Percentages and
\n Termination Value percentages from and after the Refinancing Date shall be
\n as provided in the Refinancing Information;<\/p>\n
71<\/p>\n
(4) the Owner Trustee will enter into an agreement to provide for
\n the securing thereunder of the New Debt in like manner as the Loan
\n Certificates and will enter into such amendments and supplements to the
\n Trust Indenture (or such new indenture or other security agreement) as may
\n be necessary to effect such refunding or refinancing (which agreements,
\n amendments and supplements shall be reasonably satisfactory to the Owner
\n Participant);<\/p>\n
(5) unless otherwise agreed or required by the Owner Participant,
\n and whether or not such refunding or refinancing transaction is
\n consummated, Lessee, on behalf of Lessor, shall pay on an after-tax basis
\n all of the reasonable Expenses of all parties to such refunding or
\n refinancing, including without limitation, the reasonable fees and expenses
\n of such parties’ counsel and any related loan or commitment fees; and<\/p>\n
(6) subject to compliance by the Owner Trustee with all
\n applicable terms and conditions for voluntary prepayment under the Trust
\n Indenture and this Agreement, each Certificate Holder of a Loan Certificate
\n being refinanced or refunded will transfer to the Owner Trustee the Loan
\n Certificates held by it immediately prior to such refunding or refinancing
\n for cancellation (and the Owner Trustee shall cancel the same), against
\n receipt by such Certificate Holder of the then outstanding principal amount
\n of such Loan Certificates, accrued and unpaid interest thereon, plus
\n Premium, if any, together with payment in full of all other amounts then
\n payable to such Certificate Holder and the Indenture Trustee hereunder or
\n under the Trust Indenture.<\/p>\n
(b) In the case of a refunding or refinancing involving a public
\noffering of the New Debt, the Owner Participant shall have the right (but not
\nthe obligation) to review and approve (which approval shall not be unreasonably
\nwithheld) all offering materials to be employed in connection therewith. It is
\nexpressly understood that the Owner Participant shall have no obligation
\nhereunder to consent thereto if, in its good faith judgment, such refunding or
\nrefinancing (A) increases its, any of its Affiliates (other than any Affiliate
\nwhich is acting as an underwriter) or the Owner Trustee’s exposure to (i)
\nliabilities under federal or state securities laws, (ii) regulation under state
\nor federal securities laws, (iii) the need to publicly disclose information that
\nis not generally available to the public, or (iv) being adversely affected in
\nits respective ability to engage in any other financing transaction, in each
\ncase to a level unacceptable to it in its reasonable, good faith, judgment, or
\n(B) requires the identity of the Owner Participant<\/p>\n
72<\/p>\n
to be disclosed in any offering materials. Lessee shall have the right to
\npurchase such debt securities and apply such securities as a credit against its
\nobligations to pay Rent, provided that (x) in connection with such refunding or
\nrefinancing Lessee shall have agreed to indemnify the Owner Participant with
\nrespect to such right in a manner satisfactory to the Owner Participant, and (y)
\nLessee may not, at any one time hold in the aggregate any such debt securities
\nhaving a face value in excess of that portion of the two next succeeding
\ninstallments of Basic Rent which is required to be paid to the holders of such
\ndebt securities on account of principal and interest. Any trustee of public
\ndebt shall be a bank or trust company having its principal place of business in
\nthe Borough of Manhattan, City and State of New York, Chicago, Illinois,
\nHartford, Connecticut or Boston, Massachusetts and having, or having a parent
\nwilling to guarantee the obligations of such bank or trust company and having, a
\ncombined capital and surplus of at least $100,000,000, if there be such an
\ninstitution willing, able and legally qualified to perform the duties of trustee
\nupon reasonable or customary terms.<\/p>\n
(c) Lessee shall give the Indenture Trustee at least twenty-five (25)
\ndays irrevocable written notice of the proposed date of the optional redemption.<\/p>\n
(d) Notwithstanding the foregoing, the Owner Participant shall have no
\nobligation to proceed with any refunding or refinancing transaction as
\ncontemplated by this Section 17:<\/p>\n
(i) if in the Owner Participant’s good faith judgment, such
\n transaction would have an adverse impact (including, without limitation the
\n risk of adverse tax consequences) on it;<\/p>\n
(ii) unless a third party or parties, unaffiliated with Lessee and
\n Owner Participant, shall have committed to (and shall) provide the entire
\n financing needed to consummate the proposed refunding or refinancing
\n transaction, it being understood that Owner Participant shall have no
\n obligation to locate any such party or parties;<\/p>\n
(iii) unless Lessee indemnifies Owner Trustee and Owner
\n Participant by agreement in form and substance reasonably satisfactory to
\n each of them, for any liability, obligation (other than the obligation to
\n pay principal and interest and related payments in respect of the New
\n Debt), cost or expense (including, without limitation, reasonable
\n attorneys’ fees) related to or arising out of any such refunding or
\n refinancing transaction;<\/p>\n
73<\/p>\n
(iv) unless the New Debt is denominated in Dollars; or<\/p>\n
(v) if the refinancing would increase or decrease the Owner
\n Participant’s Commitment.<\/p>\n
(e) There shall be no more than one redemption permitted under this
\nSection 17.<\/p>\n
(f) No voluntary redemption shall occur pursuant to this Section 17
\nprior to the fifth anniversary of the Delivery Date.<\/p>\n
SECTION 18. Optimization. (a) In the event that: (i) the Delivery
\n ————
\nDate occurs other than on May 15, 1995 or (ii) Transaction Expenses paid by
\nLessor are determined to be other than [____%] of Lessor’s Cost, the Lessee may,
\npursuant to this Section 18 and in accordance with the requirements of Section
\n3(c) of the Lease, optimize the Basic Rent, Excess Amount, Stipulated Loss Value
\npercentages, Termination Value percentages, Special Termination Value
\npercentages and EBO Percentage subject to the proviso set forth in Section
\n3(c)(i) of the Lease. The Owner Participant shall deliver to Lessee and the
\nIndenture Trustee a certificate of an authorized representative of the Owner
\nParticipant (the “Optimization Certificate”) setting forth the proposed revised
\nschedules of Basic Rent, Excess Amount, Stipulated Loss Value percentages,
\nTermination Value percentages, Special Termination Value percentages and EBO
\nPercentage. Within fifteen days of its receipt of the Optimization Certificate,
\nLessee may demand a verification, pursuant to Exhibit E of the Lease, of the
\ninformation set forth in the Optimization Certificate. Upon the acceptance by
\nLessee of the accuracy of the information set forth in the Optimization
\nCertificate or the determination pursuant to such verification procedures of
\nsuch information, the Owner Participant will cause the Lessor (A) to execute an
\namendment to the Lease setting forth the optimized Basic Rent, Excess Amount,
\nStipulated Loss Value percentages, Termination Value percentages, Special
\nTermination Value percentages and EBO Percentage, and (B) the Lessee will
\nexecute such amended Lease necessary to effectuate the foregoing.<\/p>\n
(b) In connection with optimization adjustments of Basic Rent, Excess
\nAmount, Stipulated Loss Value percentages, Termination Value percentages,
\nSpecial Termination Value percentages and EBO Percentage pursuant to this
\nSection 18 and Section 3(c) of the Lease, none of the principal amount,
\namortization schedules or interest rate of the Loan Certificates shall be
\naltered.<\/p>\n
74<\/p>\n
(c) Lessee shall pay on an after-tax basis all of the reasonable
\nExpenses of all parties to such optimization, including, without limitation, the
\nreasonable fees and expenses of such parties’ counsel.<\/p>\n
SECTION 19. Nondisclosure. Each party hereto (other than the Owner
\n ————-
\nParticipant) agrees that it will use its best efforts not to disclose the
\nidentity of the Owner Participant and the terms of the Operative Documents in
\nconnection with the issuance or release for external publication of any article
\nor advertising or publicity matter relating to the terms or conditions of any of
\nthe Operative Documents or the transactions contemplated thereby without the
\nprior written consent of the Owner Participant (except as expressly permitted by
\nthe Operative Documents or (t) with respect to the terms of the Operative
\nDocuments to the extent required in connection with a public placement of the
\ndebt pursuant to Section 17 hereof or (u) to the extent required in connection
\nwith a private placement of the debt pursuant to Section 17 hereof or (v) to the
\nextent required to appropriate regulatory authorities or in response to subpoena
\nor other legal process or as otherwise required by law or (w) to such party’s
\ninsurance agents, auditors and counsel or other agents or (x) in the case of any
\nPass Through Trustee, the Indenture Trustee, the Owner Participant or the Owner
\nTrustee (as the case may be), to prospective transferees or to any successor
\nOwner Trustee (as the case may be), who in turn agree to use their best efforts
\nnot to make such disclosure in breach of this Section 19 or (y) as may be
\nnecessary or desirable in connection with the enforcement by such party of any
\nOperative Document).<\/p>\n
* * *<\/p>\n
75<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
\nbe duly executed by their respective officers thereunto duly authorized as of
\nthe day and year first above written.<\/p>\n
UNITED AIR LINES, INC.,
\n Lessee<\/p>\n
By:_______________________________
\n Vice President and Treasurer<\/p>\n
_____________________________,
\n Owner Participant<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n Indenture Trustee<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
STATE STREET BANK AND TRUST COMPANY, not in its
\n individual capacity, except as expressly provided
\n herein, but solely as Owner Trustee,
\n Owner Trustee<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n in its capacity as Pass Through Trustee under each
\n of the Pass Through Trust Agreements<\/p>\n
By:_______________________________
\n Title:____________________________<\/p>\n
76<\/p>\n
SCHEDULE I<\/p>\n
Names and Addresses<\/p>\n
Lessee:
\n– —— <\/p>\n
U.S. Mail
\n– ———
\nUnited Air Lines, Inc.
\nP.O. Box 66100
\nChicago, Illinois 60666<\/p>\n
Attn: Vice President and
\nTreasurer<\/p>\n
Telecopy: (708) 952-7117<\/p>\n
Owner Participant:
\n– —————– <\/p>\n
_______________________
\n_______________________
\n_______________________<\/p>\n
Attn: ___________________
\nTelecopy: _______________<\/p>\n
Pass Through Trustee:
\n– ——————– <\/p>\n
First Security Bank of Utah,
\nNational Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust Department
\nTelecopy: (801) 246-5053<\/p>\n
Overnight Delivery Service
\n– ————————–
\nUnited Air Lines, Inc.
\n1200 East Algonquin Road
\nElk Grove Township, IL 60007<\/p>\n
Attn: Vice President and
\nTreasurer<\/p>\n
Payment Address
\n– —————<\/p>\n
The Chase Manhattan Bank, N.A.
\nNew York, N.Y.
\nABA #: 021000021<\/p>\n
Account #: 910-2-499093
\nAccount Name:
\nReference: UAL\/1995 777 A<\/p>\n
Indenture Trustee:
\n– —————– <\/p>\n
First Security Bank of Utah,
\nNational Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust Department
\nTelecopy: (801) 246-5053<\/p>\n
Owner Trustee:
\n– ————–<\/p>\n
State Street Bank and Trust
\nCompany
\n225 Franklin Street
\nBoston, Massachusetts 02110
\n(or, if given by overnight
\ndelivery service)
\nTwo International Place
\nBoston, Massachusetts 02110<\/p>\n
Attn: _________________________
\nTelecopy: (617) 664-5367<\/p>\n
I-2<\/p>\n
SCHEDULE II<\/p>\n
Commitments
\n ———–<\/p>\n
\n\n Percentage of
\nCertificate Holder Lessor’s Cost Dollar Amount
\n– —————— ————- ————-
\n
\nFirst Security Bank of Utah,
\nNational Association, in
\nits capacity as Pass Through
\nTrustee under Pass
\nThrough Trust Agreement 1995-A1<\/p>\nFirst Security Bank of Utah,
\nNational Association, in its
\ncapacity as Pass Through
\nTrustee under Pass Through
\nTrust Agreement 1995-A2<\/p>\n
Owner Participant:
\n– —————– <\/p>\n
[__________________________] $<\/p>\n
Total Commitments: 100.00% $
\n================= ======= =<\/p>\n
<\/c><\/c><\/s><\/caption>\n<\/table>\n
Doc. No. 1.01
\n Aircraft N766UA<\/p>\n
– ——————————————————————————–<\/p>\n
PARTICIPATION AGREEMENT
\n (1995 777 B)<\/p>\n
Dated as of May 1, 1995<\/p>\n
Among<\/p>\n
UNITED AIR LINES, INC.,
\n Lessee,<\/p>\n
______________________,
\n Owner Participant,<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n in its capacity as
\n Pass Through Trustee under each of the
\n Pass Through Trust Agreements,<\/p>\n
STATE STREET BANK AND TRUST COMPANY,
\n Not in its Individual Capacity,
\n except as expressly provided herein,
\n but solely as Owner Trustee,<\/p>\n
and<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n In its Individual Capacity and as Indenture Trustee<\/p>\n
—————————<\/p>\n
United Air Lines, Inc.
\n 1995 777 B Equipment Trust
\n One Boeing 777-222 Aircraft<\/p>\n
—————————<\/p>\n
– ——————————————————————————–<\/p>\n
TABLE OF CONTENTS<\/p>\n
\n\n Page
\n —-
\n
\nSECTION 1. Certain Definitions; Participations in
\n Lessor’s Cost of the Aircraft…………………………. 3<\/p>\nSECTION 2. Lessee’s Notice of Delivery Date…………………………. 4<\/p>\n
SECTION 3. Instructions to the Owner Trustee and
\n Indenture Trustee……………………………………. 5<\/p>\n
SECTION 4. Conditions…………………………………………….. 6
\n (a) Conditions Precedent to the
\n Participations in the
\n Aircraft……………………………………….. 6
\n (b) Conditions Precedent to the
\n Obligations of Lessee……………………………. 15<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement…………………….. 16<\/p>\n
SECTION 6. Extent of Interest of Certificate
\n Holders…………………………………………….. 17<\/p>\n
SECTION 7. Lessee’s Representations, Warranties
\n and Indemnities……………………………………… 17
\n (a) In General……………………………………… 17
\n (b) General Tax Indemnity……………………………. 22
\n (c) General Indemnity……………………………….. 34
\n (d) Withholding…………………………………….. 40<\/p>\n
SECTION 8. Representations, Warranties and
\n Covenants…………………………………………… 40<\/p>\n
SECTION 9. [Intentionally Omitted]…………………………………. 63<\/p>\n
SECTION 10. Other Documents; Amendment………………………………. 63<\/p>\n
SECTION 11. Certain Covenants of Lessee……………………………… 64<\/p>\n
SECTION 12. Owner for Income Tax Purposes……………………………. 65<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction…………………………. 65<\/p>\n
SECTION 14. Change of Situs of Owner Trust…………………………… 66<\/p>\n
SECTION 15. Miscellaneous………………………………………….. 67<\/p>\n
SECTION 16. Invoices and Payment of Expenses…………………………. 69<\/p>\n
SECTION 17. Optional Redemption of Certificates………………………. 70
\n<\/c><\/s><\/caption>\n<\/table>\n
ii<\/p>\n
\n\n Page
\n —-
\n
\nSECTION 18. Optimization………………………………………….. 74<\/p>\nSECTION 19. Nondisclosure…………………………………………. 75
\n<\/c><\/s><\/caption>\n<\/table>\n
SCHEDULE<\/p>\n
\n <\/p>\nSCHEDULE I — Names and Addresses<\/p>\n
SCHEDULE II — Commitments<\/p>\n
SCHEDULE III — Legal Opinions<\/p>\n
EXHIBIT A-1 — Form of Transferor Opinion Re: Transfer of
\n Owner Participant’s Interest<\/p>\n
EXHIBIT A-2 — Form of Transferee Opinion Re: Transfer of
\n Owner Participant’s Interest<\/p>\n
EXHIBIT B — Form of Assignment and Assumption Agreement<\/p>\n
EXHIBIT C — Form of Guaranty Agreement<\/p>\n
iii
\n<\/c><\/s><\/table>\n
PARTICIPATION AGREEMENT
\n (1995 777 B)<\/p>\n
THIS PARTICIPATION AGREEMENT (1995 777 B) dated as of May 1, 1995
\namong (i) United Air Lines, Inc., a Delaware corporation (the “Lessee”), (ii)
\n[____________], a corporation organized under the laws of Delaware (the “Owner
\nParticipant”), (iii) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
\ncompany, not in its individual capacity, except as expressly provided herein,
\nbut solely as Owner Trustee under the Trust Agreement (the “Owner Trustee”),
\n(iv) FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
\nassociation, not in its individual capacity, except as otherwise provided
\nherein, but solely as trustee under the Pass Through Trust Agreement (the “Pass
\nThrough Trustee”), dated as of February 1, 1992, as amended and restated as of
\nMay 1, 1995 (the “Basic Agreement”), in each case between the Lessee and STATE
\nSTREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as
\nsupplemented by Trust Supplements Nos. 1995-A1 and 1995-A2, each dated as of May
\n__, 1995 between the Lessee and the Pass Through Trustee creating the 1995-A1
\nPass Through Trust and the 1995-A2 Pass Through Trust, respectively (the Basic
\nAgreement as so supplemented being the “1995-A1 Pass Through Trust Agreement”
\nand the “1995-A2 Pass Through Trust Agreement”, respectively, each of the 1995-
\nA1 Pass Through Trust Agreement and the 1995-A2 Pass Through Trust Agreement
\nbeing a “Pass Through Trust Agreement”) and (v) FIRST SECURITY BANK OF UTAH,
\nNATIONAL ASSOCIATION, a national banking association, in its individual capacity
\nand as Indenture Trustee under the Trust Indenture (the “Indenture Trustee”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, pursuant to the Purchase Agreement between Lessee and the
\nManufacturer, the Manufacturer has agreed to sell to Lessee, among other things,
\ncertain Boeing Model 777-222 aircraft, one of which has been recently purchased
\nfrom the Manufacturer by Lessee and is the subject of this Agreement; and<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement, the Owner Participant is entering into the Trust Agreement pursuant
\nto which Trust Agreement the Owner Trustee agrees, among other things, to hold
\nthe Trust Estate defined in Section 1.01 thereof (the “Trust Estate”) for the
\nuse and benefit of the Owner Participant; and<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement,<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(i) Lessee and the Owner Trustee are entering into the Owner Trustee’s
\n Purchase Agreement and Assignment (1995 777 B) dated as of May 1, 1995 (the
\n “Owner Trustee’s Purchase Agreement”), whereby Lessee agrees to sell the
\n Aircraft to the Owner Trustee and assigns to the Owner Trustee certain
\n rights and interests of Lessee under the Purchase Agreement with respect to
\n the Aircraft; and<\/p>\n
(ii) the Manufacturer has executed the Consent and Agreement (1995
\n 777 B) dated as of May 1, 1995 substantially in the form attached to the
\n Owner Trustee’s Purchase Agreement, with respect to the Owner Trustee’s
\n Purchase Agreement; and<\/p>\n
WHEREAS, the Indenture Trustee and the Owner Trustee concurrently with
\nthe execution and delivery of this Agreement are entering into the Trust
\nIndenture and Mortgage (1995 777 B) dated as of May 1, 1995 pursuant to which
\nthe Owner Trustee agrees, among other things, to issue one or more Loan
\nCertificates in the form set forth in Exhibit A-1 or Exhibit A-2 to the Trust
\nIndenture to each Pass Through Trustee on behalf of the related grantor trusts
\ncreated by the applicable Pass Through Trust Agreement as evidence of the Owner
\nTrustee’s indebtedness to each Pass Through Trustee, which Loan Certificates are
\nto be secured by the mortgage and security interest in the Aircraft created
\npursuant to the Trust Indenture by the Owner Trustee in favor of the Indenture
\nTrustee, and the Owner Trustee shall execute and deliver the Trust Supplement
\ncovering the Aircraft, supplementing the Trust Agreement and the Trust
\nIndenture; and<\/p>\n
WHEREAS, as described in Section 2 hereof, the Owner Trustee and
\nLessee are entering into a Lease Agreement (1995 777 B) dated as of May 1, 1995
\nwhereby, subject to the terms and conditions set forth therein, the Owner
\nTrustee agrees to lease to Lessee, and Lessee agrees to lease from the Owner
\nTrustee, the Aircraft on the Delivery Date; and<\/p>\n
WHEREAS, in connection with the foregoing, each Pass Through Trustee
\nwill issue the Pass Through Certificates substantially in the form of Exhibit A
\nto each Pass Through Trust Agreement; and<\/p>\n
WHEREAS, to facilitate the Owner Trustee’s issuance of the Loan
\nCertificates to the applicable Pass Through Trustee and the purchase of the Loan
\nCertificates by each such Pass Through Trustee, the Lessee has duly authorized
\nthe execution and delivery of each of the two Pass Through Trust Agreements as
\nthe “issuer” thereunder, as such term is defined in and solely for purposes of
\nthe Securities Act of 1933, as amended, and of the Pass Through Certificates
\nbeing issued thereunder as the<\/p>\n
2<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
“obligor” thereunder, as such term is defined in and solely for purposes of the
\nTrust Indenture Act of 1939, as amended, with respect to the Pass Through
\nCertificates and is undertaking to perform certain administrative and
\nministerial duties thereunder and is also undertaking to pay the fees and
\nexpenses of the Pass Through Trustees; and<\/p>\n
WHEREAS, certain terms are used herein as defined in Section 1(a)
\nhereof.<\/p>\n
NOW THEREFORE, in consideration of the mutual agreements herein
\ncontained, the parties hereto agree as follows:<\/p>\n
SECTION 1. Certain Definitions; Participations in Lessor’s Cost of
\nthe Aircraft. (a) The terms “Lessee,” “Owner Participant,” “Pass Through
\nTrustee,” “Owner Trustee” and “Indenture Trustee” shall have the further
\nmeanings attributed thereto in the Lease Agreement referred to above and, except
\nas otherwise defined in this Agreement, terms used herein in capitalized form
\nshall have the meanings attributed thereto in the Lease Agreement referred to
\nabove. Unless the context otherwise requires, any reference herein to any of
\nthe Operative Documents refers to such document as it may be amended from time
\nto time in accordance with its terms and the terms of each other agreement
\nrestricting the amendment thereof.<\/p>\n
(b) Subject to the terms and conditions of this Agreement, (i) each of
\nthe Pass Through Trustees agrees to finance in part, the Owner Trustee’s payment
\nof Lessor’s Cost for the Aircraft by making a secured loan to the Owner Trustee
\n(herein called a “Loan” and collectively, the “Loans”) on a date to be
\ndesignated pursuant to Section 2 hereof, but in no event later than May 31,
\n1995, in the amount in Dollars equal to the amount set forth opposite its name
\non Schedule II hereto and (ii) the Owner Participant hereby agrees, in
\nconnection with its equity investment in the beneficial ownership of the
\nAircraft and the sale of the Aircraft by the Lessee to the Owner Trustee
\npursuant to the Owner Trustee’s Bill of Sale, as contemplated hereby and by the
\nOwner Trustee’s Purchase Agreement, to make its equity investment in the
\nbeneficial ownership of the Aircraft on a date to be designated as set forth
\nabove, but in no event later than May 31, 1995, in an amount in Dollars equal to
\nthe amount set forth opposite its name on Schedule II hereto. To fund its
\nobligations set out in (i) above, each Pass Through Trustee shall, in accordance
\nwith Section 2.01 of the applicable Pass Through Trust Agreement, execute,
\nauthenticate and deliver Pass Through Certificates, dated a date not later than
\nthe Delivery Date and of the maturities, in the principal amounts, bearing the
\ninterest rates and of the other economic terms specified in the request of the
\nCompany (as defined in the Basic Agreement)<\/p>\n
3<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
delivered pursuant to such Section 2.01, and deliver such Pass Through
\nCertificates to the Underwriters (as defined in Section 4(a)(xvii) as specified
\nin such request against payment by the Underwriters of an amount equal to the
\naggregate principal amount of its Loan. In the case of the Owner Participant,
\nthe amount of its participation to be made as provided above in the payment of
\nLessor’s Cost and, in the case of each Pass Through Trustee, the amount of its
\nLoan, is hereinafter called such Participant’s “Commitment” for the Aircraft.
\nIn case any Participant shall default in its obligation to make the amount of
\nits Commitment available pursuant to Section 2 hereof in respect of the
\nAircraft, the other Participants shall have no obligation to make any portion of
\nsuch amount available or to increase the amount of its Commitment and the
\nobligation of the nondefaulting Participants shall remain subject to the terms
\nand conditions set forth in this Agreement.<\/p>\n
SECTION 2. Lessee’s Notice of Delivery Date. Lessee agrees to give
\nthe Owner Participant, the Owner Trustee, the Pass Through Trustees and the
\nIndenture Trustee at least two Business Days’ prior written notice of the
\nDelivery Date for the Aircraft, which Delivery Date shall be a Business Day not
\nlater than May 31, 1995, which notice shall specify the amount of Lessor’s Cost
\nand the amount of each Participant’s Commitment for the Aircraft. As to each
\nParticipant, the making of its Commitment for such Aircraft available in the
\nmanner required by this Section 2 shall constitute a waiver of such notice. The
\nOwner Trustee and the Indenture Trustee shall be deemed to have waived such
\nnotice if the Indenture Trustee shall have received from the Owner Participant
\nfunds in the full amount of the Owner Participant’s Commitment and the proceeds
\nof the sale of the Loan Certificates in the full amount of the Pass Through
\nTrustees’ Commitments.<\/p>\n
Subject to the terms and conditions of this Agreement, and
\nsimultaneously with receipt by the parties hereto of all amounts to be paid to
\nthem on the Delivery Date pursuant to this Section 2, the Lessee shall transfer
\ntitle to and deliver the Aircraft to the Owner Trustee, the Owner Trustee shall
\npurchase and take title to, and accept delivery of, the Aircraft, and the Owner
\nTrustee shall lease the Aircraft to Lessee, it being understood that the
\ntransactions described in this Section 2 are simultaneous and mutually
\ndependent. On the Delivery Date, subject to the terms and conditions of this
\nAgreement, and in consideration for the transfer of title to the Aircraft to the
\nOwner Trustee, the Owner Trustee and the Indenture Trustee (on behalf of the
\nOwner Trustee) shall pay over the funds made available to it equal to Lessor’s
\nCost to Lessee’s account no. ____________ at First Security Bank of Utah,
\nNational Association. In addition, subject to the terms and conditions of this
\nAgreement, the Owner Trustee shall, on the Delivery Date,<\/p>\n
4<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
issue to the Pass Through Trustees the Loan Certificates to evidence the Loans<\/p>\n
The Owner Participant agrees, subject to the terms and conditions of
\nthis Agreement, to make its Commitment available to the Owner Trustee at the
\nOwner Trustee’s account no. ________ at First Security Bank of Utah, National
\nAssociation, and the Pass Through Trustees agree to make their Commitment
\navailable to the Indenture Trustee at the Indenture Trustee’s account no.
\n_________ at First Security Bank of Utah, National Association, at or before
\n10:00 a.m., New York City time, on the Delivery Date specified in Lessee’s
\nnotice referred to in the first paragraph of this Section 2 (such specified
\nDelivery Date being herein called the “Scheduled Delivery Date”).<\/p>\n
SECTION 3. Instructions to the Owner Trustee and Indenture Trustee.
\nSubject to the terms and conditions of this Agreement, the Owner Trustee and the
\nIndenture Trustee, upon their respective receipts in full of the Owner
\nParticipant’s and the Pass Through Trustees’ Commitments for the Aircraft, as
\nprovided in Section 2 hereof, together with instructions from such Participant
\nor its special counsel to release such funds to Lessee, shall transfer such
\nfunds to the Lessee and the Owner Trustee shall purchase the Aircraft from the
\nLessee and lease the Aircraft to Lessee and such action shall constitute,
\nwithout further act, authorization and direction by the Owner Participant to the
\nOwner Trustee and the Indenture Trustee acting on behalf of the Owner
\nParticipant (in regard to item (a) below) and to the Owner Trustee (in regard to
\nitems (b) – (f) below):<\/p>\n
(a) to pay to Lessee the Lessor’s Cost in the manner set forth in
\nSection 2;<\/p>\n
(b) to the extent not previously accomplished by a prior
\nauthorization, to authorize a representative or representatives of the Owner
\nTrustee (who shall be an employee or employees, or an agent or agents, of Lessee
\ndesignated by Lessee) to accept delivery of the Aircraft on the Delivery Date
\npursuant to the Owner Trustee’s Bill of Sale;<\/p>\n
(c) to accept from the Lessee the Owner Trustee’s Bill of Sale and the
\nOwner Trustee’s FAA Bill of Sale;<\/p>\n
(d) to execute an Aircraft Registration Application, a Lease
\nSupplement and a Trust Supplement, in each case covering the Aircraft;<\/p>\n
(e) to borrow from the Pass Through Trustees amounts equal to their
\nrespective Loans to finance a portion of Lessor’s<\/p>\n
5<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Cost and to issue to the Pass Through Trustees Loan Certificates in the amounts
\nspecified herein; and<\/p>\n
(f) to take such other action as may be required to be taken by the
\nOwner Trustee on the Delivery Date by the terms of any Operative Document.<\/p>\n
SECTION 4. Conditions. (a) Conditions Precedent to the Participations
\nin the Aircraft. It is agreed that the respective obligations of the
\nParticipants to participate in the payments of Lessor’s Cost are subject to the
\nsatisfaction prior to or on the Delivery Date of the following conditions
\nprecedent, except that paragraphs (iii), (xx), (xxiv) (insofar as it relates to
\nthe Pass Through Trustees), (xxv), (xxvi) and (xxviii) shall not be a condition
\nprecedent to the obligation of the Pass Through Trustees, and paragraphs (iv),
\n(x) (insofar as it relates to the Owner Participant), (xiv), (xix) and (xxvii)
\nshall not be a condition precedent to the obligation of the Owner Participant:<\/p>\n
(i) The Participants shall have received due notice with respect
\n to such participation pursuant to Section 2 hereof (or shall have waived
\n such notice either in writing or as provided in Section 2).<\/p>\n
(ii) No change shall have occurred after the date of the execution
\n and delivery of this Agreement in applicable law or regulations thereunder
\n or interpretations thereof by appropriate regulatory or judicial
\n authorities which, in the opinion of the Owner Participant or the Pass
\n Through Trustees, as the case may be, would make it a violation of law or
\n regulations for (x) the Lessee, the Indenture Trustee, any Participant or
\n the Owner Trustee to execute, deliver and perform the Operative Documents
\n to which any of them is a party or (y) the Pass Through Trustees or the
\n Owner Participant to make their respective Commitments available or, in the
\n case of any Pass Through Trustee, to acquire a Loan Certificate or to
\n realize the benefits of the security afforded by the Trust Indenture.<\/p>\n
(iii) In the case of the Owner Participant, the Pass Through
\n Trustees shall have made available the amount of their respective
\n Commitments for the Aircraft in accordance with Section 1 hereof.<\/p>\n
(iv) In the case of the Pass Through Trustees, the Owner
\n Participant shall have made available the amount of its Commitment for the
\n Aircraft in accordance with Section 1 hereof.<\/p>\n
6<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(v) The following documents shall have been duly authorized,
\n executed and delivered by the respective party or parties thereto, shall
\n each be satisfactory in form and substance to the Participants and shall be
\n in full force and effect and executed counterparts shall have been
\n delivered to the Participants, and their respective counsel, provided that
\n only the applicable Pass Through Trustee shall receive an executed original
\n of its Loan Certificate, only the Indenture Trustee, acting on behalf of
\n the Certificate Holders, shall receive the original counterparts of the
\n Lease and the Lease Supplement, only the Owner Participant shall receive a
\n copy of the Purchase Agreement which shall be delivered to and retained by
\n the Owner Trustee (the Owner Trustee and the Owner Participant and their
\n respective counsel may inspect the Purchase Agreement prior to the Delivery
\n Date but thereafter shall not have access to the same until the return of
\n the Aircraft to Lessor (but only to the extent the Purchase Agreement has
\n any continued effectiveness on such return date) or unless a Lease Default
\n or Event of Default shall have occurred and be continuing) and provided
\n further that only the Lessee and the Owner Participant shall receive copies
\n of the Tax Indemnity Agreement:<\/p>\n
(1) the Lease;<\/p>\n
(2) a Lease Supplement covering the Aircraft and dated the
\n Delivery Date;<\/p>\n
(3) the Tax Indemnity Agreement;<\/p>\n
(4) the Trust Agreement;<\/p>\n
(5) a Trust Supplement covering the Aircraft and dated the
\n Delivery Date;<\/p>\n
(6) the Owner Trustee’s Bill of Sale and the Owner Trustee’s
\n FAA Bill of Sale;<\/p>\n
(7) the Owner Trustee’s Purchase Agreement;<\/p>\n
(8) an acceptance certificate covering the Aircraft in the
\n form agreed to by the Participants and Lessee (the “Acceptance
\n Certificate”) duly completed and executed by the Owner Trustee or its
\n agent, which shall be a representative of Lessee, and by such
\n representative on behalf of Lessee;<\/p>\n
(9) the Trust Indenture;<\/p>\n
7<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(10) the Loan Certificates;<\/p>\n
(11) the Consent and Agreement;<\/p>\n
(12) the Purchase Agreement;<\/p>\n
(13) the Owner Participant Parent Guaranty; and<\/p>\n
(14) the Pass Through Trust Agreements.<\/p>\n
(vi) A Uniform Commercial Code financing statement or statements
\n covering all the security interests created by or pursuant to the Granting
\n Clause of the Trust Indenture shall have been executed and delivered by the
\n Owner Trustee and the Indenture Trustee, and such financing statement or
\n statements shall have been duly filed in all places necessary or advisable,
\n and any additional Uniform Commercial Code financing statements deemed
\n advisable by the Owner Participant or the Pass Through Trustees shall have
\n been executed and delivered by Lessee, the Indenture Trustee or the Owner
\n Trustee and duly filed.<\/p>\n
(vii) Each Participant and the Indenture Trustee shall have
\n received the following, in each case in form and substance satisfactory to
\n it, provided that only the Owner Participant shall receive a copy of the
\n Purchase Agreement which shall be delivered to and retained by the Owner
\n Trustee (the Owner Trustee and the Owner Participant and their respective
\n counsel may inspect the Purchase Agreement prior to the Delivery Date but
\n thereafter shall not have access to the same until the return of the
\n Aircraft to Lessor (but only to the extent the Purchase Agreement has any
\n continued effectiveness on such return date) or unless a Lease Default or
\n Event of Default shall have occurred and be continuing):<\/p>\n
(1) a certified copy of the Certificate of Incorporation and
\n By-Laws of Lessee and a copy of resolutions of the board of directors
\n of Lessee or the executive committee thereof, certified by the
\n Secretary or an Assistant Secretary of Lessee, duly authorizing the
\n execution, delivery and performance by Lessee of this Agreement, the
\n Lease, the Owner Trustee’s Purchase Agreement, the Owner Trustee’s
\n Bill of Sale, the Owner Trustee’s FAA Bill of Sale, the Tax Indemnity
\n Agreement and each other document required to be executed and
\n delivered by Lessee on the Delivery Date in accordance with the
\n provisions hereof and thereof;<\/p>\n
8<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(2) such other documents and evidence with respect to
\n Lessee, the Manufacturer, the Owner Trustee, the Indenture Trustee and
\n the Participants, as the Pass Through Trustees or the Owner
\n Participant, or their respective counsel, may reasonably request in
\n order to establish the authority of such parties to consummate the
\n transactions contemplated by this Agreement, the taking of all
\n corporate proceedings in connection therewith and the compliance with
\n the conditions herein set forth;<\/p>\n
(3) a certificate of Lessee (i) as to the Person or Persons
\n authorized to execute and deliver this Agreement, the other Lessee
\n Documents, and any other documents to be executed on behalf of Lessee
\n in connection with the transactions contemplated hereby and as to the
\n signature of such person or persons, and (ii) to the effect that the
\n application of the proceeds from the Pass Through Certificates as
\n provided for herein will not be inconsistent with any of the
\n provisions of the Pass Through Trust Agreements;<\/p>\n
(4) a copy of the Purchase Agreement certified by the
\n Secretary or an Assistant Secretary of Lessee as being a true and
\n accurate copy of the same with all amendments attached thereto that
\n relate to the Manufacturer’s warranties or related obligations or any
\n right in such Agreement assigned by the Lessee to the Owner Trustee
\n pursuant to the Owner Trustee’s Purchase Agreement;<\/p>\n
(5) a copy of the general authorizing resolutions of the
\n boards of directors (or executive committees) or other satisfactory
\n evidence of authorization of the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, certified as of the Delivery Date by the Secretary
\n or an Assistant Secretary of the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, respectively, which authorize the execution,
\n delivery and performance by the Indenture Trustee, the Owner Trustee,
\n the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent of all of the Operative Documents to which it is a
\n party, together with such other documents and evidence with respect to
\n the Indenture Trustee, the Owner Trustee, the Pass Through Trustees,
\n the Owner Participant and the Owner Participant Parent as either the
\n Pass Through<\/p>\n
9<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Trustees (or their counsel) or the Owner Participant (or its counsel)
\n may reasonably request in order to establish the consummation of the
\n transactions contemplated by this Agreement, the taking of all
\n corporate proceedings in connection therewith and compliance with the
\n conditions herein set forth; provided, this clause shall not be a
\n condition precedent as to any Participant as to documents to be
\n provided by that Participant; and<\/p>\n
(6) a copy of the excerpts the “United Air Lines 777
\n Maintenance Program” referred to in Section 5 of the Lease.<\/p>\n
(viii) All appropriate action required to have been taken by the
\n Federal Aviation Administration, or any governmental or political agency,
\n subdivision or instrumentality of the United States, on or prior to the
\n Delivery Date in connection with the transactions contemplated by this
\n Agreement shall have been taken, and all orders, permits, waivers,
\n authorizations, exemptions and approvals of such entities required to be in
\n effect on the Delivery Date in connection with the transactions
\n contemplated by this Agreement shall have been issued, and all such orders,
\n permits, waivers, authorizations, exemptions and approvals shall be in full
\n force and effect on the Delivery Date.<\/p>\n
(ix) On the Delivery Date, the following statements shall be true,
\n and the Participants and the Indenture Trustee shall have received evidence
\n satisfactory to each of them to the effect that:<\/p>\n
(1) the Owner Trustee has good and marketable title (subject
\n to filing and recording of the Owner Trustee’s FAA Bill of Sale with
\n the Federal Aviation Administration) to the Aircraft, free and clear
\n of Liens other than the rights of Lessee under the Lease and Lease
\n Supplement covering the Aircraft, the mortgage and security interest
\n created by the Trust Indenture, the rights of the Owner Participant
\n under the Trust Agreement and the Trust Supplement and Liens permitted
\n by clause (iii) (solely for Taxes not yet due) of Section 6 of the
\n Lease;<\/p>\n
(2) application for registration of the Aircraft in the name
\n of the Owner Trustee (together with any required affidavits) and the
\n Owner Trustee’s FAA Bill of Sale have been duly filed with the FAA;<\/p>\n
10<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(3) the Trust Agreement, the Trust Indenture and the Trust
\n Supplement and the Lease and the Lease Supplement have been duly filed
\n with the FAA for recordation;<\/p>\n
(4) the Owner Trustee, as lessor under the Lease, and the
\n Indenture Trustee, as assignee of the Owner Trustee’s rights under the
\n Lease Agreement pursuant to the Trust Indenture, are entitled to the
\n protection of Section 1110 of the Bankruptcy Code in connection with
\n the Owner Trustee’s and the Indenture Trustee’s right to take
\n possession of the Airframe and Engines in the event of a case under
\n Chapter 11 of the Bankruptcy Code in which the Lessee is a debtor; and<\/p>\n
(5) the Aircraft has been duly certified by the FAA as to
\n type and airworthiness in accordance with the terms of the Lease and
\n has a current, valid U.S. standard certificate of airworthiness issued
\n by the FAA.<\/p>\n
(x) On the Delivery Date, (A) the representations and warranties
\n of Lessee, the Owner Participant and the Owner Trustee contained in
\n Sections 7 and 8 of this Agreement and in the Tax Indemnity Agreement and
\n the Owner Participant Parent contained in the Owner Participant Parent
\n Guaranty shall be true and accurate as though made on and as of such date
\n except to the extent that such representations and warranties relate solely
\n to an earlier date (in which case such representations and warranties shall
\n have been true and accurate on and as of such earlier date), (B) no event
\n shall have occurred and be continuing, or would result from the purchase,
\n sale, lease or mortgage of the Aircraft, which constitutes (or would, with
\n the passage of time or the giving of notice or both, constitute) an Event
\n of Default as defined in the Lease or the Trust Indenture, and (C) no event
\n shall have occurred that might have the effect of materially and adversely
\n affecting the ability of Lessee to carry on its business as conducted on
\n December 31, 1994 or to perform its obligations under the Operative
\n Documents.<\/p>\n
(xi) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, and the Owner Trustee from (a)
\n Francesca M. Maher, Vice President-Law, Deputy General Counsel and
\n Corporate Secretary for Lessee, in substantially the form of Schedule III-
\n 1(a) hereto and (b) Vedder, Price, Kaufman & Kammholz, special counsel to
\n the Lessee, in substantially the form of Schedule III-1(b) hereto.<\/p>\n
11<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(xii) The Participants shall have received an opinion addressed to
\n the Participants, the Owner Trustee, the Indenture Trustee and Lessee from
\n counsel to the Manufacturer, in substantially the form of Schedule III-2
\n hereto.<\/p>\n
(xiii) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, the Owner Trustee and Lessee, from
\n Bingham, Dana & Gould, special counsel for the Owner Trustee, in
\n substantially the form of Schedule III-3 hereto.<\/p>\n
(xiv) The Pass Through Trustees shall have received an opinion
\n addressed to the Indenture Trustee, the Pass Through Trustees, the Owner
\n Trustee and Lessee from (a) Dewey Ballantine, special counsel to the Owner
\n Participant and the Owner Participant Parent, in substantially the form of
\n Schedule III-4(a) hereto and (b) Michael Flynn, Vice President-General
\n Counsel and Secretary to the Owner Participant and the Owner Participant
\n Parent in substantially the form of Schedule III-4(b) hereto.<\/p>\n
(xv) The Participants shall have received an opinion addressed to
\n the Participants, the Indenture Trustee, the Owner Trustee and Lessee, from
\n Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma, in
\n substantially the form of Schedule III-5 hereto.<\/p>\n
(xvi) The Participants shall have received an opinion addressed to
\n the Participants, the Owner Trustee and Lessee from Ray, Quinney & Nebeker,
\n special counsel for the Indenture Trustee and the Pass Through Trustees, in
\n substantially the form of Schedule III-6 hereto.<\/p>\n
(xvii) The Owner Participant shall have received an opinion
\n addressed to it from Vedder, Price, Kaufman & Kammholz, special counsel to
\n the Lessee, substantially to the same effect as the opinion delivered
\n pursuant to Section 5(b)(1) of the Purchase Agreement dated ____________
\n (the “Underwriting Agreement”) among Lessee, Merrill Lynch & Co. and Lehman
\n Brothers (the “Underwriter”).<\/p>\n
(xviii) The Participants and the Indenture Trustee shall have
\n received a certificate signed by the President or any Vice President of
\n Lessee, dated the Delivery Date, addressed to the Participants and the
\n Indenture Trustee and certifying as to the fulfillment of all conditions in
\n this Section 4(a) insofar as they relate to Lessee and as to the matters
\n stated in paragraphs (viii), (x) (insofar as it relates to Lessee), (xxii)
\n and (xxiii) (to the knowledge of<\/p>\n
12<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Lessee, except in regard to matters relating to the Participants, Indenture
\n Trustee or the Owner Trustee, in which event such representation shall be
\n to the knowledge of Lessee without any investigation whatsoever) of this
\n Section 4(a).<\/p>\n
(xix) (a) The Owner Participant shall, by making its Commitment
\n available as provided in Section 1(b)(ii) of this Agreement, (b) the
\n Indenture Trustee shall by authenticating the Loan Certificates issued on
\n the Delivery Date, (c) the Owner Trustee shall, by accepting the Owner
\n Trustee’s Bill of Sale and the Owner Trustee’s FAA Bill of Sale and (d) the
\n Pass Through Trustees shall, by making their respective Commitments
\n available as provided in Section 1(b)(i) of this Agreement, be respectively
\n deemed to have reaffirmed as of the Delivery Date the representations and
\n warranties made by it in Section 8 of this Agreement.<\/p>\n
(xx) The Owner Participant shall have received an opinion, in form
\n and substance reasonably satisfactory to the Owner Participant, from BK
\n Associates, independent aircraft appraisers, or such other recognized
\n aircraft appraiser selected by the Owner Participant, to the effect that
\n (A) on the Delivery Date, the fair market value of the Aircraft is equal to
\n Lessor’s Cost; (B) on the Delivery Date, the Aircraft is expected to have
\n an economic useful life of at least 125% of the aggregate of the Interim
\n Term and the Basic Term; (C) on the Delivery Date, the Aircraft is expected
\n to have a residual value at the end of the Basic Term of at least 20% of
\n Lessor’s Cost (without considering the effects of inflation or deflation
\n and assuming the Aircraft is in compliance with Section 5 of the Lease);
\n (D) on the Delivery Date, the Aircraft is expected to have a fair market
\n value on the EBO Date that does not exceed an amount equal to the EBO
\n Price; (E) the fair market value of each Engine is at least equal to Engine
\n Cost; and (F) the Aircraft is not limited use property.<\/p>\n
(xxi) The Participants and the Indenture Trustee shall have
\n received an independent insurance broker’s report, and certificates of
\n insurance, in form and substance reasonably satisfactory to the
\n Participants, as to the due compliance with the terms of Section 11 of the
\n Lease relating to insurance with respect to the Aircraft.<\/p>\n
(xxii) On the Delivery Date it shall be true that no Event of Loss
\n (or event which with the passage of time would become an Event of Loss)
\n with respect to the Airframe or any Engine has occurred.<\/p>\n
13<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(xxiii) No action or proceeding shall have been instituted nor shall
\n governmental action be threatened before any court or governmental agency,
\n nor shall any order, judgment or decree have been issued or proposed to be
\n issued by any court or governmental agency at the time of the Delivery Date
\n to set aside, restrain, enjoin or prevent the completion and consummation
\n of this Agreement or the transactions contemplated hereby.<\/p>\n
(xxiv) The respective representations and warranties of the
\n Indenture Trustee and the Pass Through Trustees contained in Section 8
\n hereof shall be true and accurate as of the Delivery Date as though made on
\n and as of such date except to the extent that such representations and
\n warranties relate solely to an earlier date (in which event such
\n representations and warranties shall have been true and accurate on and as
\n of such earlier date) and the Lessee and each Participant shall have
\n received a certificate signed by the Chairman of the Board, the President,
\n any Vice President or any Assistant Vice President of the Indenture Trustee
\n and the Pass Through Trustees certifying as to the foregoing matters with
\n respect to the Indenture Trustee and the Pass Through Trustees, as
\n applicable.<\/p>\n
(xxv) The Owner Participant shall have received from Dewey
\n Ballantine, special counsel to the Owner Participant, a favorable opinion,
\n in form and substance satisfactory to the Owner Participant, with respect
\n to certain income tax aspects of the transactions contemplated by the
\n Operative Documents.<\/p>\n
(xxvi) In the opinion of the Owner Participant and its special
\n counsel, no law (including tax laws), regulation or regulatory order or
\n holding applicable to the Owner Participant or the Owner Participant’s
\n participation in the transactions contemplated hereby, shall have been
\n enacted, issued or proposed prior to the Delivery Date that would have a
\n material adverse impact on the Owner Participant.<\/p>\n
(xxvii) The Pass Through Trustees shall have received a letter from
\n BK Associates to the effect that the fair market value of the Aircraft on
\n the Delivery Date is not less than 125% of the aggregate amount of the
\n Loans.<\/p>\n
(xxviii) The Lessee shall have executed and delivered to Owner
\n Participant a letter relating to Lessee’s average cost of capital together
\n with appropriate supporting documentation.<\/p>\n
14<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Promptly upon the registration of the Aircraft and the recording of
\nthe Lease, the Trust Indenture, the Trust Agreement, the Lease Supplement and
\nthe Trust Supplement covering the Aircraft pursuant to the Federal Aviation Act,
\nLessee will cause Crowe & Dunlevy, P.C., special counsel in Oklahoma City,
\nOklahoma, to deliver to the Owner Participant, the Indenture Trustee, the Pass
\nThrough Trustees, the Owner Trustee and Lessee an opinion as to the due and
\nvalid registration of the Aircraft in the name of the Owner Trustee, the due
\nrecording of the Owner Trustee’s FAA Bill of Sale, the Trust Indenture, the
\nLease Supplement, the Trust Supplement, the Lease and the Trust Agreement and
\nthe lack of filing of any intervening documents with respect to the Aircraft.<\/p>\n
(b) Conditions Precedent to the Obligations of Lessee. It is agreed
\nthat the obligations of Lessee (A) to sell the Aircraft to the Owner Trustee,
\n(B) to accept delivery of the Aircraft under the Lease and (C) to enter into its
\nother Operative Documents, are all subject to the fulfillment to the
\nsatisfaction of Lessee prior to or on the Delivery Date of the following
\nconditions precedent:<\/p>\n
(i) The conditions specified in Section 4(a)(iii), 4(a)(iv),
\n 4(a)(viii), 4(a)(xxii) and 4(a)(xxiii) hereof shall have been satisfied,
\n unless such nonsatisfaction is the result of the actions of Lessee.<\/p>\n
(ii) Those documents described in Section 4(a)(v) shall have been
\n duly authorized, executed and delivered by the respective party or parties
\n thereto (other than Lessee) in the manner specified in Section 4(a)(v),
\n shall each be satisfactory in form and substance to Lessee, shall be in
\n full force and effect on the Delivery Date, and an executed counterpart of
\n each thereof (other than the Loan Certificates) shall have been delivered
\n to Lessee or its counsel.<\/p>\n
(iii) Lessee shall have received a copy of the general authorizing
\n resolutions of the boards of directors (or executive committees) or other
\n satisfactory evidence of authorization of the Indenture Trustee, the Owner
\n Trustee, the Pass Through Trustees, the Owner Participant and the Owner
\n Participant Parent, certified as of the Delivery Date by the Secretary or
\n an Assistant Secretary of the Indenture Trustee, the Owner Trustee, the
\n Pass Through Trustees, the Owner Participant and the Owner Participant
\n Parent, respectively, which authorize the execution, delivery and
\n performance by the Indenture Trustee, the Owner Trustee, the Pass Through
\n Trustees, the Owner Participant and the Owner Participant Parent of all the
\n Operative Documents to which<\/p>\n
15<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
it is a party, together with such other documents and evidence with respect
\n to the Indenture Trustee, the Owner Trustee, the Pass Through Trustees, the
\n Owner Participant and the Owner Participant Parent as Lessee or its counsel
\n may reasonably request in order to establish the consummation of the
\n transactions contemplated by this Agreement, the taking of all corporate
\n proceedings in connection therewith and compliance with the conditions
\n herein set forth.<\/p>\n
(iv) The representations and warranties of the Participants, the
\n Indenture Trustee and the Owner Trustee contained in Section 8 hereof and
\n the Owner Participant Parent in the Owner Participant Parent Guaranty shall
\n be true and accurate as of the Delivery Date as though made on and as of
\n such date except to the extent that such representations and warranties
\n relate solely to an earlier date (in which event such representations and
\n warranties shall have been true and accurate on and as of such earlier
\n date) and Lessee shall have received a certificate signed by the Chairman
\n of the Board, the President, any Vice President or any Assistant Vice
\n President or other authorized representative of the Indenture Trustee, the
\n Owner Participant, the Pass Through Trustees and the Owner Trustee,
\n respectively, certifying as to the foregoing matters with respect to the
\n Indenture Trustee, the Owner Participant and the Owner Trustee,
\n respectively.<\/p>\n
(v) Lessee shall have received the opinions set forth in Sections
\n 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), and 4(a)(xvi), in each case
\n addressed to Lessee and dated the Delivery Date.<\/p>\n
(vi) No change shall have occurred after the date of the execution
\n and delivery of this Agreement in applicable law or regulations thereunder
\n or interpretations thereof by appropriate regulatory authorities which, in
\n the opinion of Lessee, would make it a violation of law or regulations for
\n Lessee to enter into any transaction contemplated by the Operative
\n Documents.<\/p>\n
(vii) No law (including tax laws), regulation or regulatory order
\n or holding applicable to the Lessee or Lessee’s participation in the
\n transactions contemplated hereby, shall have been enacted, issued, or
\n proposed prior to the Delivery Date that would have a material adverse
\n impact on Lessee.<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement. Lessor, the
\nParticipants, and the Indenture Trustee shall keep<\/p>\n
16<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
the Purchase Agreement confidential and shall not disclose the same to any
\nPerson, except (A) to prospective and permitted transferees of Lessor’s, a Pass
\nThrough Trustee’s, the Owner Participant’s or the Indenture Trustee’s interest
\nwho agree to hold such information confidential, (B) to the aforementioned
\nprospective and permitted transferees’, Lessor’s, Pass Through Trustees’, the
\nOwner Participant’s or the Indenture Trustee’s counsel or special counsel,
\nindependent insurance brokers or other agents who agree to hold such information
\nconfidential, (C) as may be required by any statute, court or administrative
\norder or decree or governmental ruling or regulation, including Federal or state
\nbanking examiners or tax auditors or (D) as may be necessary or desirable for
\npurposes of protecting the interest of any such Person or for enforcement of the
\nLease by Owner Trustee, the Participants or the Indenture Trustee; provided,
\nhowever, that any and all disclosures of all or any part of the Purchase
\nAgreement which are permitted by (C) or (D) above shall be made only to the
\nextent necessary to meet the specific requirements or needs of the Persons to
\nwhom such disclosures are hereby permitted.<\/p>\n
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
\nHolder shall have any further interest in, or other right with respect to, the
\nmortgage and security interests created by the Trust Indenture when and if the
\nOriginal Amount of, Premium, if any, and interest on all Loan Certificates held
\nby such Certificate Holder and all other sums payable to such Certificate Holder
\nhereunder, under the Trust Indenture and under such Loan Certificates shall have
\nbeen paid in full. Each Certificate Holder by its acceptance of a Loan
\nCertificate, agrees that it will look solely to the income and proceeds from the
\nTrust Indenture Estate to the extent available for distribution to such
\nCertificate Holder as provided in Section 2.09 of the Trust Indenture and that
\nneither the Owner Participant nor the Owner Trustee shall be personally liable
\nto any Certificate Holder for any amounts payable under the Loan Certificates,
\nthe Trust Indenture, hereunder, or under any other Operative Documents
\n(including, without limitation, amounts payable as Premium), except as expressly
\nprovided in this Agreement or (in the case of the Owner Trustee) in the Trust
\nIndenture.<\/p>\n
SECTION 7. Lessee’s Representations, Warranties and Indemnities. (a) In
\nGeneral. Lessee represents and warrants that as of the Delivery Date:<\/p>\n
(i) Lessee is a corporation duly organized and validly existing
\n in good standing pursuant to the laws of the State of Delaware; is duly
\n qualified to do business as a foreign corporation in each jurisdiction in
\n which its<\/p>\n
17<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
operations or the nature of its business requires, except where the failure
\n to be so qualified would not have a material adverse effect on Lessee or
\n its business; is a Citizen of the United States and a Certificated Air
\n Carrier; holds all material licenses, certificates, permits and franchises
\n from the appropriate agencies of the United States of America and\/or all
\n other governmental authorities having jurisdiction, necessary to authorize
\n Lessee to engage in air transport and to carry on scheduled passenger
\n service, in each case as presently conducted; has its chief executive
\n office (as such term is defined in Article 9 of the Uniform Commercial
\n Code) in Elk Grove Township, Illinois; and has the corporate power and
\n authority to conduct its business as it is presently being conducted, to
\n hold under lease the Aircraft and to enter into and perform its obligations
\n under the Lessee Documents;<\/p>\n
(ii) the execution, delivery and performance by Lessee of the
\n Lessee Documents have been duly authorized by all necessary corporate
\n action on the part of Lessee, do not require any stockholder approval, or
\n approval or consent of any trustee or holders of any indebtedness or
\n obligations of Lessee except such as have been duly obtained, and none of
\n such Lessee Documents contravenes any law, judgment, governmental rule,
\n regulation or order binding on Lessee or the certificate of incorporation
\n or by-laws of Lessee or contravenes the provisions of, or constitutes a
\n default under, or results in the creation of any Lien (other than Permitted
\n Liens) upon the property of Lessee under, its certificate of incorporation
\n or bylaws, or any indenture, mortgage, chattel mortgage, deed of trust,
\n conditional sales contract, bank loan or credit agreement or other
\n agreement or instrument to which Lessee is a party or by which it or its
\n properties may be bound or affected;<\/p>\n
(iii) neither the execution and delivery by Lessee of the Lessee
\n Documents nor the performance by Lessee of its obligations thereunder
\n require the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action in respect of any
\n federal, state or foreign government authority or agency, except for (A)
\n the orders, permits, waivers, exemptions, authorizations and approvals of
\n the regulatory authorities having jurisdiction over the operation of the
\n Aircraft by Lessee, which orders, permits, waivers, exemptions,
\n authorizations and approvals have been duly obtained, and are in full force
\n and effect, (B) the registration of the Aircraft referred to in Section
\n 4(a)(ix)(2), (C) any normal periodic and other reporting requirements under
\n the applicable rules and regulations of the FAA to the extent required to
\n be given or obtained only<\/p>\n
18<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
after the Delivery Date, (D) the recordings with the FAA described in the
\n opinion referred to in Section 4(a)(xv) and (E) any normal periodic and
\n other reporting requirements under the applicable rules and regulations of
\n the FAA to the extent required to be given or obtained only after the
\n Delivery Date, it being understood that the registration of the issuance
\n and sale of the Pass Through Certificates to be issued pursuant to the
\n provisions of the Pass Through Trust Agreements under the Securities Act of
\n 1933, as amended, and under the securities laws of any state in which the
\n Pass Through Certificates may be offered for sale if the laws of such state
\n require such action has been duly accomplished and the qualification of
\n each Pass Through Trust Agreement under the Trust Indenture Act of 1939, as
\n amended, has been duly obtained;<\/p>\n
(iv) each of the Lessee Documents has been duly executed and
\n delivered by Lessee and constitutes legal, valid and binding obligations of
\n Lessee enforceable against Lessee in accordance with the terms thereof;<\/p>\n
(v) there are no pending or threatened actions or proceedings
\n before any court or administrative agency involving any Lessee Document or
\n the transactions contemplated hereby or which individually (or in the
\n aggregate in the case of any group of related lawsuits) is expected to have
\n a material adverse effect on the financial condition of Lessee or the
\n ability of Lessee to perform its obligations under the Lessee Documents;<\/p>\n
(vi) except for (A) the registration of the Aircraft pursuant to
\n the Federal Aviation Act, (B) the filing for recording pursuant to said Act
\n of the Trust Agreement, the Lease with the Lease Supplement covering the
\n Aircraft, the Trust Indenture and the Trust Supplement attached thereto and
\n made a part thereof, and the Owner Trustee’s FAA Bill of Sale, (C) the
\n filing of financing statements (and continuation statements at periodic
\n intervals) with respect to the security and other interests created by such
\n documents under the Uniform Commercial Code of Illinois (which financing
\n statement Lessee has caused to be presented in due form for filing with the
\n appropriate filing office in the State of Illinois) and such other states
\n as may be specified in the opinions furnished pursuant to Section 4(a)(xi)
\n hereof and (D) the taking of possession by the Indenture Trustee of the
\n original counterparts of the Lease and the Lease Supplement covering the
\n Aircraft, no further action, including any filing or recording of any
\n document (including any financing statement in respect thereof under
\n Article 9 of the Uniform Commercial<\/p>\n
19<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Code of any applicable jurisdiction), is necessary or advisable in order to
\n establish and perfect the Owner Trustee’s title to and interest in the
\n Aircraft as against the Lessee and the Indenture Trustee’s security
\n interest in the Aircraft as against the Owner Trustee, and in each case as
\n against any third parties in any applicable jurisdictions in the United
\n States;<\/p>\n
(vii) there has not occurred any event which constitutes a Default
\n or an Event of Default under the Lease which is presently continuing and
\n there has not occurred any event which constitutes or would, with the
\n passage of time or the giving of notice, or both, constitute an Event of
\n Loss;<\/p>\n
(viii) the statements of financial position of Lessee as of
\n December 31, 1994 and the related statements of earnings and cash flow of
\n Lessee for the year then ended, copies of which have been furnished to the
\n Participants, fairly present the financial condition of Lessee as at such
\n date and the results of operations and cash flow of Lessee for the period
\n ended on such date, in accordance with generally accepted accounting
\n principles consistently applied (except as may be stated in the notes
\n thereto), and since December 31, 1994, there has been no material adverse
\n change in such condition or operations, except for such matters timely
\n disclosed in press releases issued by UAL Corporation or Lessee or in
\n public filings, effective as of the date hereof, with the Securities and
\n Exchange Commission under the Securities Exchange Act of 1934, as amended,
\n by UAL Corporation or Lessee;<\/p>\n
(ix) the Owner Trustee will have received good and marketable
\n title to the Aircraft free and clear of all Liens, except the rights of
\n Lessee under the Lease and the Lease Supplement covering the Aircraft, the
\n Lien of the Trust Indenture, the beneficial interest of the Owner
\n Participant in the Aircraft, and the Liens permitted by clause (iii)
\n (solely for Taxes not yet due) of Section 6 of the Lease;<\/p>\n
(x) none of the proceeds from the issuance of the Loan
\n Certificates or from the acquisition by the Owner Participant of its
\n beneficial interest in the Trust Estate will be used directly or indirectly
\n by Lessee to purchase or carry any “margin stock” as such term is defined
\n in Regulation G or U of the Board of Governors of the Federal Reserve
\n System;<\/p>\n
20<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(xi) neither Lessee nor anyone acting on behalf of Lessee has (A)
\n directly or indirectly offered any interest in the Trust Estate for sale
\n to, or solicited any offer to acquire any of the same from, anyone other
\n than the Owner Participant, and not more than ____________ (__) other
\n institutions believed capable of evaluating and bearing the risks of
\n investment in the transactions contemplated hereby, or (B) offered any
\n interest in the Trust Estate or any Pass Through Certificate or any Loan
\n Certificate in a manner which would violate the Securities Act of 1933, as
\n amended, the regulations thereunder, administrative and judicial
\n interpretation thereof or the securities laws, rules or regulations of any
\n state;<\/p>\n
(xii) Lessee is not in default in the performance of any term or
\n condition of the Owner Trustee’s Purchase Agreement, and is not in default
\n in the performance of any term or condition of the Purchase Agreement which
\n materially adversely impairs the transactions contemplated hereby;<\/p>\n
(xiii) no governmental approval of any kind is required of the
\n Owner Participant, any Pass Through Trustee, the Owner Trustee or the
\n Indenture Trustee for their respective execution of or performance under
\n this Agreement, the Pass Through Trust Agreements or any agreement
\n contemplated hereby solely by reason of any fact or circumstance peculiar
\n to: (a) Lessee, (b) the nature of the Aircraft, or (c) Lessee’s proposed
\n operations or use of the Aircraft;<\/p>\n
(xiv) all sales or use tax then due and for which Lessee is
\n responsible pursuant to Section 7(b)(i) hereof shall have been paid, other
\n than such taxes which are being contested by Lessee in good faith and by
\n appropriate proceedings so long as such proceedings do not involve any
\n material risk of the sale, forfeiture or loss of the Aircraft or any
\n interest therein;<\/p>\n
(xv) The Aircraft has been duly certified by the FAA as to type
\n and airworthiness and such certification remains in full force and effect;<\/p>\n
(xvi) Owner Trustee, as lessor under the Lease, and the Indenture
\n Trustee, as assignee of the Owner Trustee’s rights under the Lease pursuant
\n to the Trust Indenture, are entitled to the protection of Section 1110 of
\n the Bankruptcy Code in connection with the Owner Trustee’s and the
\n Indenture Trustee’s right to take possession of the Airframe and Engines in
\n the event of a case under Chapter 11 of the Bankruptcy Code in which Lessee
\n is a debtor; and<\/p>\n
21<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(xvii) neither Lessee nor any subsidiary of Lessee is an
\n “investment company” or a company “controlled by an investment company”
\n within the meaning of the Investment Company Act of 1940, as amended.<\/p>\n
(b) General Tax Indemnity. (i) Indemnity. Except as provided in
\nSection 7(b)(ii) hereof, whether or not any of the transactions contemplated
\nherein are consummated, Lessee shall pay when due and assume liability for, and
\nprotect, save and shall indemnify and hold harmless each Indemnitee (except
\nthat, for purposes of this Section 7(b)(i), an Indemnitee shall not include any
\nCertificate Holder) from and against (x) any and all Taxes howsoever imposed
\nagainst any Indemnitee, Lessee or all or any part of the Aircraft, the Airframe,
\nthe Engines, the Parts or any part thereof or otherwise by any federal, state or
\nlocal government or other taxing authority in the United States or by any
\nforeign government or any political subdivision or taxing authority thereof or
\nby any territory or possession of the United States or by any international
\nauthority upon or in connection with, relating to, or measured by (A) the
\nassembly, manufacture, construction, substitution, improvement, location,
\nconditioning, installation, financing, refinancing, purchase, acquisition,
\nacceptance, delivery, nondelivery, transport, ownership, registration,
\nreregistration, possession, repossession, control, operation, use, maintenance,
\nrepair, replacement, insuring, sale, return, abandonment, storage, redelivery,
\nleasing, subleasing, modification, rebuilding of, transfer of title to, transfer
\nof registration of, rejection, importation, mortgaging, exportation or
\ndisposition of, or the imposition of any Lien (or the incurrence of any
\nliability to refund or pay over any amount as the result of any Lien) on, the
\nAircraft, the Airframe, the Engines, the Parts or any part thereof, (B) the
\nrentals, receipts or earnings from the Aircraft, the Airframe, the Engines, the
\nParts or any part thereof, (C) any amount paid or payable pursuant to any
\nOperative Documents or any Pass Through Trust Agreement or any document related
\nthereto or the property or the income or other proceeds with respect to any of
\nthe property held in the Trust Estate or the Trust Indenture Estate or the
\nproperty held by each Pass Through Trustee under the respective Pass Through
\nTrust Agreement, (D) the Aircraft, the Airframe, the Engines, the Parts or any
\npart thereof or any contract relating to the manufacture, construction,
\nacquisition or delivery thereof, (E) any or all of the Operative Documents, the
\nPass Through Trust Agreements, or the issuance of the Loan Certificates or the
\nPass Through Certificates (or the refinancing thereof) and any other documents
\ncontemplated hereby or thereby and amendments and supplements hereto and thereto
\nwhich have been approved by Lessee or the execution, delivery, recording or
\nperformance of any thereof or the issuance, acquisition, holding or subsequent
\ntransfer thereof, (F) the payment of the Original<\/p>\n
22<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Amount of, or interest or Premium on, or other amounts payable with respect to,
\nthe Loan Certificates or the payment of principal of, interest on or any other
\namounts payable with respect to the Pass Through Certificates, (G) otherwise
\nwith respect to or in connection with the transactions contemplated by the
\nOperative Documents, or (H) any change in the Owner Trustee or the situs of the
\nTrust Estate made pursuant to Sections 8(c) or 14 hereof; and (y) any reasonable
\nout-of-pocket costs and expenses fairly attributed to any of the foregoing
\nincurred by any Indemnitee.<\/p>\n
(ii) Exclusions from General Tax Indemnity. The provisions of
\n Section 7(b)(i) shall not apply:<\/p>\n
(1) in the case of an Indemnitee which is the Owner
\n Participant, the Owner Trustee, the Trust Estate, or a successor,
\n assign, or Affiliate of any thereof, to any Income Tax (as defined in
\n Section 7(b)(xii) hereof) imposed by (A) the United States Federal
\n government, (B) any state or local taxing jurisdiction or authority in
\n the United States to the extent such Income Taxes would not have been
\n imposed if (I) the use, location or operation of the Aircraft, or (II)
\n the activities of the Lessee, to or in such state or local
\n jurisdiction, had been the only connection between the Indemnitee and
\n such jurisdiction, or (C) any foreign government or any political
\n subdivision or taxing authority thereof or by any territory or
\n possession of the United States or by any international authority,
\n except to the extent such Income Taxes are attributable to (I) the
\n use, location or operation of the Aircraft, or (II) the activities of
\n the Lessee, to or in such jurisdiction;<\/p>\n
(2) to any Tax imposed on an Indemnitee which is the Owner
\n Participant, the Owner Trustee, or the Trust Estate, or any successor,
\n assign or Affiliate of any thereof, as a result of a voluntary
\n transfer or disposition by such Indemnitee including, without
\n limitation, the revocation of the trust created by the Trust Agreement
\n or an involuntary transfer or disposition relating to bankruptcy or
\n similar proceedings of all or any portion of its respective equitable
\n or legal ownership interest in the Aircraft, the Airframe, the
\n Engines, the Parts or any part thereof, the Trust Estate or the
\n Operative Documents and each Pass Through Trust Agreement, unless such
\n transfer or disposition, whether or not voluntary or involuntary,
\n shall occur, (A) during a period when an Event of Default has occurred
\n and is continuing under<\/p>\n
23<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
the Lease at the time of transfer or disposition and such transfer is
\n as a result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 7, 8, 9, 10 or 19 thereof;<\/p>\n
(3) to any Tax imposed on any Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee or any successor, assign or Affiliate of any thereof, as a
\n result of a voluntary or involuntary transfer or other disposition of
\n all or any portion of its respective equitable or legal interests in
\n the Trust Estate or the Trust Indenture Estate or the Operative
\n Documents and each Pass Through Trust Agreement unless, in each case,
\n such transfer or disposition shall occur (A) during a period when an
\n Event of Default has occurred and is continuing under the Lease at the
\n time of transfer or disposition and such transfer or disposition is a
\n result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 9, 10 or 19 thereof;<\/p>\n
(4) to any Tax imposed on the Owner Participant, Trust
\n Estate or Owner Trustee which results from the willful misconduct or
\n gross negligence of (i) the Owner Participant, to the extent imposed
\n on the Owner Participant, Trust Estate or Owner Trustee, or (ii) to
\n the extent imposed on the Owner Trustee, the Owner Trustee;<\/p>\n
(5) to any Tax imposed on an Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee which results from the willful misconduct or gross negligence
\n of such Indemnitee;<\/p>\n
(6) to any Tax based on or measured by any fees received by
\n the Owner Trustee, the Indenture Trustee or a Pass Through Trustee in
\n connection with any transaction contemplated by the Operative
\n Documents;<\/p>\n
(7) so long as no Event of Default or event which, with the
\n passage of time or the giving of notice or both, would become an Event
\n of Default, shall be continuing, to any Tax imposed with respect to
\n (A) any period after the expiration of the Term and, unless purchased
\n by the Lessee, return of the Aircraft, (B) the earlier discharge in
\n full of Lessee’s obligation to<\/p>\n
24<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
pay the Stipulated Loss Value or the Termination Value and all other
\n amounts due under the Lease or (C) placement in storage or parking of
\n the Aircraft pursuant to Section 5(d) of the Lease; provided, however,
\n that this Section 7(b)(ii)(8) shall not apply to any Tax (x) relating
\n to events or conditions occurring or matters arising upon or prior to
\n such expiration, discharge, storage or parking, or (y) imposed on or
\n with respect to any payments of Tax indemnified hereunder which are
\n due after such expiration, discharge, storage or parking until after
\n such payments have been made;<\/p>\n
(8) in the case of an Indemnitee which is the Trust
\n Indenture Estate or any successor, assign or Affiliate thereof, to any
\n Tax in the nature of an intangible or similar tax upon or with respect
\n to the value of the interest of the Trust Indenture Estate or the Pass
\n Through Certificates, as the case may be, in any of the Loan
\n Certificates imposed by any government or taxing authority;<\/p>\n
(9) to any Tax which Lessee or an Indemnitee is contesting
\n in good faith under the provisions of Section 7(b)(iv) hereof until
\n the conclusion of such contest;<\/p>\n
(10) to any Tax imposed on the Owner Trustee or an Owner
\n Participant resulting from, or which would not have occurred but for,
\n a Lessor Lien (including for this purpose Liens that would be Lessor
\n Liens but for the proviso to the definition of Lessor Liens);<\/p>\n
(11) in the case of an Indemnitee which is the Owner
\n Participant or the Owner Trustee, to any Taxes to the extent of the
\n amount of such Taxes that are imposed by any jurisdiction on and with
\n respect to any activities of such Indemnitee in such jurisdiction
\n which activities are unrelated to the transactions contemplated by the
\n Operative Documents and each Pass Through Trust Agreement; and<\/p>\n
(12) to any Tax which has been properly included in the
\n Lessor’s Cost.<\/p>\n
The provisions of this Section 7(b)(ii) shall not apply to any
\n Tax imposed in respect of the receipt or accrual of any indemnity payment
\n made by Lessee pursuant to this Section 7(b) or Section 7(c) hereof or
\n pursuant to the Tax Indemnity Agreement; provided, however, that this
\n clause<\/p>\n
25<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
shall not result in any duplication of any amounts of any gross-up payable
\n under Section 7(b)(iii) or Section 7(c) hereof or the Tax Indemnity
\n Agreement.<\/p>\n
Notwithstanding the exclusions set forth in this Section 7(b) or
\n any other provision of the Operative Documents or the Pass Through Trust
\n Agreements, the Lessee hereby agrees to indemnify and hold harmless on a
\n net after-tax basis the Trust Estate, the Owner Trustee and the Owner
\n Participant for any failure to withhold U.S. Federal Income Taxes upon
\n payments of principal, interest, Premium or discount on the Loan
\n Certificates or the Pass Through Certificates, including interest and
\n penalties, unless the Owner Participant has been timely advised by the
\n Lessee in writing that such withholding is required.<\/p>\n
(iii) Calculation of General Tax Indemnity Payments. Any payment
\n which Lessee shall be required to make to or for the account of any
\n Indemnitee in connection with any Tax which is subject to indemnification
\n under this Section 7(b) shall be in an amount which, after reduction by the
\n amount of all Taxes required to be paid by such Indemnitee in respect of
\n the receipt or accrual of such amount and after consideration of any
\n current savings of such Indemnitee resulting by way of any deduction,
\n credit or other tax benefit attributable to such indemnified Tax that
\n actually reduces any taxes for which Lessee is not actually required to
\n indemnify such Indemnitee pursuant to Section 7(b) hereof or the Tax
\n Indemnity Agreement shall be equal to the payment otherwise required
\n hereunder.<\/p>\n
If, by reason of any Tax payment made to or for the account of an
\n Indemnitee by Lessee pursuant to this Section 7(b), such Indemnitee
\n subsequently realizes a tax deduction, savings or credit (including any
\n foreign tax credit and any reduction in Taxes) not previously taken into
\n account in computing such payment, such Indemnitee shall promptly pay to
\n Lessee an amount equal to the sum of (I) the actual reduction in Taxes, if
\n any, realized by such Indemnitee which is attributable to such deduction,
\n savings or credit and (II) the actual reduction in Taxes realized by such
\n Indemnitee as a result of any payment made by such Indemnitee pursuant to
\n this sentence; provided, however, that in the case of an Indemnitee which
\n is the Owner Participant or the Owner Trustee, such Indemnitee shall not be
\n obligated to make any payment pursuant to this Section 7(b)(iii) to the
\n extent that the amount calculated pursuant to (I) above would exceed (x)
\n the amount of all prior payments (determined without regard to any amount
\n paid in respect of Taxes required to be paid by such Indemnitee in<\/p>\n
26<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
respect of the receipt or accrual of such amounts received by such
\n Indemnitee) from Lessee pursuant to this Section 7(b), less (y) the portion
\n of all prior payments computed pursuant to (I) above by such Indemnitee to
\n Lessee hereunder.<\/p>\n
For purposes of this Section 7(b)(iii), items of foreign Tax of
\n any Indemnitee shall be deemed to be utilized by such Indemnitee as credits
\n or deductions for any taxable year in accordance with the following
\n priorities:<\/p>\n
First, all available foreign Taxes other than those
\n described below in Second; and<\/p>\n
Second, all available foreign Taxes arising out of any
\n equipment leasing transaction to the extent that such Indemnitee was
\n indemnified or held harmless for such Taxes by a lessee on a pari
\n passu basis.<\/p>\n
Any Taxes that are imposed on any Indemnitee as a result of the
\n disallowance or reduction of any tax benefit referred to in this subsection
\n as to which such Indemnitee has made in full the payment to Lessee required
\n hereby (or as to which such Indemnitee would have made its payment but for
\n Section 7(b)(vii) hereof) or which is otherwise taken into account in
\n calculating Lessee’s indemnity obligation, in a taxable year subsequent to
\n the utilization by such Indemnitee (including the expiration of any tax
\n credit carryovers or carrybacks of such Indemnitee that would not otherwise
\n have expired) shall be treated as a Tax for which Lessee is obligated to
\n indemnify such Indemnitee pursuant to the provisions of this Section 7(b)
\n without regard to the provisions of Section 7(b)(ii), 7(b)(iv) or the third
\n paragraph of this Section 7(b)(iii).<\/p>\n
(iv) General Tax Indemnity — Contests. If a written claim shall
\n be made against any Indemnitee for any Tax for which Lessee is obligated
\n pursuant to this Section 7(b), such Indemnitee shall notify Lessee in
\n writing promptly after receipt thereof (as well as the name of independent
\n tax counsel for purposes of this Section 7(b)(iv)) and, in any event,
\n within 30 days of receipt of such notice and shall provide Lessee such
\n information regarding such claim as Lessee may reasonably request, but the
\n failure to give such notice or to provide such information when required
\n shall not diminish Lessee’s obligation hereunder unless such failure
\n effectively precludes Lessee’s ability to (A) require such Indemnitee to
\n contest the Tax or (B) contest the Tax itself (in a case<\/p>\n
27<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
where Lessee cannot require the Indemnitee to contest such Tax).<\/p>\n
If a written claim shall be made for any Tax, other than an
\n Income Tax, for which Lessee is obligated pursuant to this Section 7(b),
\n and under applicable law of the taxing jurisdiction Lessee is allowed to
\n directly contest such Tax and the Tax to be contested is not reflected in a
\n report or return with other Taxes of any Indemnitee and if the Indemnitee
\n determines in good faith that it will not suffer any adverse consequences
\n as a result, then the Lessee shall be permitted, at its expense and in its
\n own name, or, if consented to by the Indemnitee, in the name of such
\n Indemnitee, to contest the imposition of such Tax; provided, however, that
\n Lessee shall not be permitted or entitled to contest any Tax (A) if such
\n contest will result in the risk of an imposition of criminal penalties or a
\n material risk of a sale, forfeiture or loss of the Aircraft, the Airframe,
\n the Engines, the Parts or any part thereof or the creation of any Lien
\n other than Liens for Taxes of Lessee (x) either not yet due or being
\n contested in good faith by appropriate proceedings so long as such
\n proceedings do not involve the risk of an imposition of criminal penalties
\n or the material risk of any sale, forfeiture or loss of the Aircraft, and
\n (y) for the payment of which such reserves, if any, as required to be
\n provided under generally accepted accounting principles have been provided
\n and, to the extent permitted by law, Lessee shall be entitled to withhold
\n payment during pendency of such contest, (B) if an Event of Default shall
\n have occurred and be continuing, unless the Lessee shall have, at the
\n option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, (C) unless in Lessee’s request to the Indemnitee to contest
\n such Tax, Lessee shall have agreed to pay such Indemnitee on demand all
\n costs and expenses that such Indemnitee actually incurs in connection with
\n contesting such claim (including, without limitation, all costs, expenses,
\n losses, reasonable legal and accounting fees, disbursements, penalties,
\n interest and additions to tax) or (D) unless in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee a
\n written acknowledgement of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgement of liability
\n if and<\/p>\n
28<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
to the extent that the contest results in a determination which clearly and
\n unambiguously demonstrates that Lessee is not otherwise liable under this
\n Section 7(b) with respect to such Tax.<\/p>\n
If requested by Lessee in writing (A) within 30 days of Lessee’s
\n receipt of notice from an Indemnitee under the first paragraph of this
\n Section 7(b)(iv) and (B) with respect to a Tax for which Lessee is
\n obligated to indemnify pursuant to this Section 7(b) which is not described
\n in the previous paragraph exclusive of the proviso thereto, such Indemnitee
\n shall in good faith at Lessee’s expense contest the imposition of any such
\n Tax. After consulting with Lessee and Lessee’s counsel concerning the
\n forum in which the adjustment is most likely to be favorably resolved, such
\n Indemnitee shall, in its sole discretion, select the forum for such contest
\n and determine whether any such contest shall be by (A) resisting payment of
\n such Tax, (B) paying such Tax under protest or (C) paying such Tax and
\n seeking a refund or other repayment thereof. In no event shall such
\n Indemnitee be requested or required to contest the imposition of any Tax
\n for which Lessee is liable under this Section 7(b) unless (I) in Lessee’s
\n request to the Indemnitee to contest such Tax, Lessee shall have agreed to
\n pay such Indemnitee on demand all reasonable costs and expenses that such
\n Indemnitee actually incurs in connection with contesting such claim
\n (including, without limitation, all costs, expenses, losses, reasonable
\n legal and accounting fees, disbursements, penalties, interest and additions
\n to tax), (II) such action to be taken will not result in the risk of an
\n imposition of criminal penalties or the material risk of any sale,
\n forfeiture or loss of the Aircraft, or the creation of any Lien other than
\n Liens for Taxes of Lessee (x) either not yet due or being contested in good
\n faith by appropriate proceedings so long as such proceedings do not involve
\n the risk of an imposition of criminal penalties or the material risk of any
\n sale, forfeiture or loss of the Aircraft and (y) for the payment of which
\n such reserves, if any, as are required to be provided under generally
\n accepted accounting principles have been provided by Lessee, (III) if such
\n contest shall be conducted in a manner requiring the payment of the claim,
\n Lessee shall have paid the amount required directly to the appropriate
\n authority or made an advance of the amount thereof to such Indemnitee on an
\n interest-free basis and agreed to indemnify the Indemnitee against any
\n additional net after-tax cost to such Indemnitee with respect to such
\n advance or payment, (IV) with regard to an Income Tax on an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee,<\/p>\n
29<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
independent tax counsel selected by such Indemnitee and reasonably
\n satisfactory to the Lessee shall furnish an opinion, prepared at the
\n Lessee’s expense, to the effect that there is a reasonable basis to contest
\n such claim and with respect to appeal, to the effect that it is more likely
\n than not such appeal will be successful, (V) in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee a
\n written acknowledgment of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgment of liability
\n if and to the extent that the contest results in a determination which
\n clearly and unambiguously demonstrates that Lessee is not otherwise liable
\n under this Section 7(b) with respect to such Tax, (VI) if an Event of
\n Default shall have occurred and be continuing, the Lessee shall have, at
\n the option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, and (VII) the amount of the indemnity computed under Section
\n 7(b) arising from a claim for Tax exceeds $10,000. In no event shall an
\n Indemnitee be required to appeal or to seek leave to appeal an adverse
\n determination with respect to Taxes contested by, or in the name of, the
\n Indemnitee to the United States Supreme Court.<\/p>\n
If any Indemnitee shall obtain a refund of all or any part of any
\n Tax paid by Lessee such Indemnitee shall pay Lessee an amount equal to the
\n sum of (I) the amount of such refund, including interest received
\n attributable thereto, net of taxes required to be paid by such Indemnitee
\n as a result of any refund and\/or interest received and (II) any tax benefit
\n realized by such Indemnitee as a result of any payment by such Indemnitee
\n made pursuant to this sentence; provided, however, that in the case of any
\n Indemnitee which is the Owner Participant or any successor, assign or
\n Affiliate of the Owner Participant such amount attributable to (I) above
\n shall not be in excess of the amount of such Tax payment (determined
\n without regard to any amount paid in respect of Taxes required to be paid
\n by such Indemnitee in respect of the receipt or accrual of such payment or
\n advance made by Lessee to such Indemnitee) plus interest received, if any,
\n from the relevant taxing authority with respect to such Tax payment (net of
\n Taxes required to be paid by such Indemnitee in connection with the receipt
\n of such interest), it being intended that such Indemnitee shall realize a
\n net<\/p>\n
30<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
benefit pursuant to this Section 7(b) only if Lessee shall first have been
\n reimbursed for any payments by it to such Indemnitee pursuant to this
\n Section 7(b) arising from the same Loss. If any Indemnitee shall have paid
\n Lessee any refund of all or part of any Tax paid by Lessee and it is
\n subsequently determined that such Indemnitee was not entitled to the
\n refund, such determination shall be treated as the imposition of a Tax for
\n which Lessee is obligated to indemnify such Indemnitee pursuant to the
\n provisions of this Section 7(b) without regard to Section 7(b)(ii) or
\n Section 7(b)(iv).<\/p>\n
Nothing contained in this Section 7(b)(iv) shall require any
\n Indemnitee to contest, or permit Lessee to contest, a claim with respect to
\n the imposition of any Tax if such Indemnitee shall waive its right to
\n indemnification under this Section 7 with respect to such claim or a claim
\n with respect to which a previous contest pursuant to the provision of this
\n Section 7(b)(iv) shall have been determined adversely to the taxpayer.<\/p>\n
(v) General Tax Indemnity — Reports. Lessee will provide such
\n information (including information on the routes and operations of the
\n Aircraft) as may be reasonably requested by an Indemnitee or required to
\n enable an Indemnitee to fulfill its tax filing or audit requirements with
\n respect to the transactions contemplated by the Operative Documents. In
\n the event any return, statement or report is required to be made or filed
\n with respect to any Tax imposed on or indemnified against by Lessee under
\n this Section 7(b) (other than with respect to Income Taxes), Lessee shall
\n notify the Indemnitee of such requirement and (i) to the extent permitted
\n by law, and not otherwise requested by the Indemnitee, or required by law,
\n Lessee shall make and file in its own name (and pay the tax shown due on)
\n such return, statement or report in such manner as will show the ownership
\n of the Aircraft in the Owner Trustee and furnish the Indemnitee with a copy
\n of such return, statement or report; provided, however, that Lessee shall
\n have no obligation under this clause (i) to the extent such Indemnitee
\n after receipt of Lessee’s written request shall have failed to furnish
\n Lessee with such information as is peculiarly within such Indemnitee’s
\n control and is necessary to file such returns, statements or reports, and
\n (ii) in the case of a return, statement or report required (or requested by
\n the Indemnitee) to be in the name of or filed by such Indemnitee, Lessee
\n shall prepare and furnish such return, statement or report for filing by
\n such Indemnitee in such manner as shall be reasonably satisfactory to such
\n Indemnitee and send the same to such Indemnitee for filing<\/p>\n
31<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
no later than 10 Business Days prior to the due date; provided, however,
\n that Lessee shall have no obligation under this clause (ii) to the extent
\n such Indemnitee after receipt of Lessee’s written request shall have failed
\n to furnish Lessee with such information as is peculiarly within such
\n Indemnitee’s control and is necessary to prepare such return, statement or
\n report. Lessee shall hold each Indemnitee harmless from and against any
\n liabilities, including, but not limited to penalties, additions to tax,
\n fines and interest, arising out of any insufficiency or inaccuracy in any
\n such return, statement, report or information if such insufficiency or
\n inaccuracy is attributable to Lessee.<\/p>\n
(vi) General Tax Indemnity — Payment. Except as provided in
\n Section 7(b)(iv) or (v) hereof, Lessee shall pay any Tax directly to the
\n appropriate taxing authority if legally permissible and upon demand of an
\n Indemnitee shall pay such Tax and any other amounts due hereunder to such
\n Indemnitee within 20 Business Days of such demand, but in no event shall
\n any such payments be made more than 10 Business Days prior to the date the
\n Tax to which any such payment hereunder relates is due (unless Lessee has
\n not received such demand at least 15 Business Days prior to such date in
\n which case within five Business Days after receipt of such demand), in
\n immediately available funds. Any such demand for payment from an
\n Indemnitee shall specify in reasonable detail, the payment and the facts
\n upon which the right to payment is based. Each Indemnitee shall promptly
\n forward to Lessee any notice, bill or advice received by it concerning any
\n Tax indemnified against hereunder. As soon as practicable after each
\n payment by Lessee of any Tax indemnified against hereunder, Lessee shall
\n furnish the appropriate Indemnitee the original or a certified copy of a
\n receipt for Lessee’s payment of such Tax or such other evidence of payment
\n of such Tax as is acceptable to such Indemnitee. Lessee shall also furnish
\n promptly upon request such data as any Indemnitee may reasonably require to
\n enable such Indemnitee to comply with the requirements of any taxing
\n jurisdiction.<\/p>\n
(vii) Application of Payments During Existence of Default or Event
\n of Default. Any amount payable to Lessee pursuant to the terms of this
\n Section 7(b) shall not be paid to or retained by Lessee if at the time of
\n such payment or retention a Default or an Event of Default shall have
\n occurred and be continuing under the Lease. At such time as there shall not
\n be continuing any Default or Event of Default, such amount shall be paid to
\n the Lessee to the extent not previously applied against Lessee’s
\n obligations<\/p>\n
32<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
hereunder as and when due after the Owner Trustee shall have declared the
\n Lease in default pursuant to Section 15 thereof.<\/p>\n
(viii) Reimbursements by Indemnitees Generally. If, for any
\n reason, Lessee is required to make any payment with respect to any Taxes
\n imposed on any Indemnitee in respect of the transactions contemplated by
\n the Operative Documents or on the Aircraft, the Airframe, the Engines, the
\n Parts or any part thereof, which Taxes are not the responsibility of Lessee
\n under this Section 7(b), then such Indemnitee shall pay to Lessee an amount
\n which equals the amount paid by Lessee with respect to such Taxes plus
\n interest thereon, computed from the date of payment by Lessee, at the Base
\n Rate.<\/p>\n
(ix) Forms, etc. Each Indemnitee agrees to furnish to Lessee from
\n time to time, at the Lessee’s request and expense, such duly executed and
\n properly completed forms as may be necessary or appropriate in order to
\n claim any reduction of or exemption from any withholding tax imposed by any
\n taxing authority in respect of any payments otherwise required to be made
\n by Lessee pursuant to the Operative Documents and each Pass Through Trust
\n Agreement, which reduction or exemption may be available to such
\n Indemnitee. In addition, any Indemnitee shall, at Lessee’s expense,
\n execute and deliver any forms or documents which Lessee reasonably requests
\n and which are reasonably related to any indemnified Taxes. Notwithstanding
\n the foregoing, an Indemnitee shall not be required to (A) make available
\n any Income Tax returns; or to (B) execute and deliver any forms or
\n documents which would in the good faith determination of such Indemnitee
\n disadvantage such Indemnitee in the context of its overall filing position
\n or with regard to other Taxes not indemnified under this Agreement or the
\n Tax Indemnity Agreement.<\/p>\n
(x) Non-Parties. If an Indemnitee is not a party to this
\n Agreement, Lessee may require the Indemnitee to agree to the terms of this
\n Section 7(b) prior to making any payment to such Indemnitee under this
\n Section 7(b).<\/p>\n
(xi) Owner Participant. For the purposes of this Section 7(b),
\n the term “Owner Participant” shall mean and include [__________________]
\n (and its permitted successors and assigns) and where appropriate the
\n affiliated group of corporations (and each member thereof) making a
\n consolidated or combined return of which [_____________] (and its permitted
\n successors and assigns) is a member.<\/p>\n
33<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(xii) Income Tax. For purposes of this Section 7, the term Income
\n Tax means any Tax based on or measured by or with respect to net income
\n (including, without limitation, capital gains taxes, minimum taxes, income
\n taxes collected by withholding, and taxes on tax preference items) or net
\n receipts and taxes imposed on gross income or gross receipts which are
\n expressly in lieu of a net income tax (provided, however, that sales, use,
\n value added, rental, license, ad valorem or property Taxes shall not
\n constitute an Income Tax) and Taxes which are capital, doing business,
\n franchise, excess profits, net worth taxes and interest, additions to tax,
\n penalties, or other charges in respect thereof.<\/p>\n
(c) General Indemnity. Lessee hereby agrees to indemnify, on an
\nafter-tax basis, each Indemnitee against, and agrees to protect, save and keep
\nharmless each of them from (whether or not the transactions contemplated herein
\nor in any of the other Operative Documents or the Pass Through Trust Agreements
\nare consummated), any and all Expenses imposed on, incurred by or asserted
\nagainst any Indemnitee, in any way relating to or arising out of (A) the
\nOperative Documents and each Pass Through Trust Agreement (and any amendments
\nthereto), the negotiation and the consummation of the transactions contemplated
\nthereby or any sublease under the Lease Agreement or the enforcement of any of
\nthe terms of any thereof; or (B) the manufacture, design, purchase, resale,
\nacceptance or rejection of the Airframe or any Engine or Parts; or (C) the
\nAircraft (or any portion thereof) or any Engine whether or not installed on the
\nAirframe or any airframe on which an Engine is installed whether or not arising
\nout of the finance, refinance, ownership, delivery, nondelivery, storage, lease,
\nsublease, possession, use, non-use, operation, maintenance, modification,
\nalteration, condition, sale, replacement, substitution, return or other
\ndisposition, registration, reregistration or airworthiness of the Aircraft (or
\nany portion thereof) including, without limitation, latent or other defects,
\nwhether or not discoverable, strict tort liability and any damage to property or
\nthe environment, death or injury to any person and any claim for patent,
\ntrademark or copyright infringement; or (D) the offer, sale, holding, transfer
\nor delivery of the Loan Certificates or the Pass Through Certificates, whether
\nbefore, on or after the Delivery Date (the indemnity in this clause (D) to
\nextend also to any person who controls an Indemnitee, its successors, assigns,
\nemployees, directors, officers, servants and agents within the meaning of
\nSection 15 of the Securities Act of 1933, as amended); or (E) the offer,
\nholding, transfer or sale of any interest in the Trust Estate or the Trust
\nAgreement or any similar interest (a) on or prior to the Delivery Date, or (b)
\nsubsequent to the Delivery Date during the continuation of an Event of Default
\nunder the Lease or in connection with the exercise by the Lessee of its<\/p>\n
34<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
purchase options under the Lease or in connection with a refinancing pursuant to
\nSection 17 hereof or in connection with the termination of the Lease or action
\nor direction of Lessee pursuant to Sections 7, 8, 9, 10, or 19 thereof;
\nprovided, that the foregoing indemnity shall not extend to any Expense to the
\nextent resulting from or arising out of one or more of the following: (1) any
\nrepresentation or warranty by such Indemnitee in the Operative Documents or in
\nany Pass Through Trust Agreement being incorrect, or (2) the failure by such
\nIndemnitee to perform or observe any agreement, covenant or condition in any of
\nthe Operative Documents or in any Pass Through Trust Agreement including,
\nwithout limitation, the creation or existence of a Lessor Lien (including for
\nthis purpose Liens that would be Lessor Liens but for the proviso to the
\ndefinition of Lessor Liens), or (3) the willful misconduct or the gross
\nnegligence of such Indemnitee (other than gross negligence imputed to such
\nIndemnitee solely by reason of its interest in the Aircraft), or (4) (A) in the
\ncase of such Indemnitee a disposition (voluntary or involuntary) of all or any
\npart of its interest in the Airframe or any Engine, (B) in the case of a
\nCertificate Holder a disposition (voluntary or involuntary) by such Certificate
\nHolder of all or any part of its interest in any Loan Certificate or (C) in the
\ncase of any Indemnitee a disposition by such Indemnitee of all or any part of
\nsuch Indemnitee’s interest in the Operative Documents or the Pass Through Trust
\nAgreements other than in each of (A), (B) and (C) during the continuance of an
\nEvent of Default under the Lease or pursuant to the exercise by the Lessee of
\nits purchase options under the Lease or in connection with a refinancing
\npursuant to Section 17 hereof or in connection with the termination of the Lease
\nor action or direction of Lessee pursuant to Sections 7, 8, 9, 10 or 19 thereof,
\nor (5) other than to the extent provided in the succeeding paragraph, any Tax
\n(as defined in Section 7(b) hereof) whether or not Lessee is required to
\nindemnify for such Tax pursuant to Section 7(b) hereof (it being understood that
\nSection 7(b) hereof and the Tax Indemnity Agreement and provisions requiring
\npayments to be made on an after-tax basis or expressly providing for additional
\nindemnification by Lessee exclusively provide for Lessee’s liability with
\nrespect to Taxes), or (6) the offer or sale by the Owner Participant after the
\nDelivery Date of any interest in the Trust Estate or the Trust Agreement or any
\nsimilar interest, unless such offer or sale shall occur (A) during a period when
\nan Event of Default has occurred and is continuing under the Lease at the time
\nof such offer or sale or (B) in connection with the exercise by Lessee of its
\npurchase options under the Lease or, (7) in the case of the Owner Participant, a
\nfailure on the part of the Owner Trustee to distribute in accordance with the
\nTrust Agreement any amounts received and distributable by it thereunder or, in
\nthe case of a Certificate Holder, a failure on the part of the Indenture Trustee
\nto distribute in accordance with the Trust<\/p>\n
35<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Indenture any amounts received and distributable by it thereunder to such
\nCertificate Holder or a failure on the part of any Pass Through Trustee to
\ndistribute in accordance with the applicable Pass Through Trust Agreement any
\namounts received and distributable by such Pass Through Trustee under such Pass
\nThrough Trust Agreement, or (8) other than during the continuation of a Default
\nor an Event of Default under the Lease the authorization or giving or
\nwithholding of any future amendments, supplements, waivers or consents with
\nrespect to any of the Operative Documents or any Pass Through Trust Agreement
\nunless such amendments, supplements, waivers or consents (a) are requested by
\nLessee or (b) are required or permitted pursuant to the terms of the Operative
\nDocuments (unless the same results from the actions of an Indemnitee) (provided
\nif Lessee is not responsible for the Expense associated with such amendment,
\nsupplement, waiver or consent, the party requesting the execution of the same
\nshall be responsible for such expense), or (9) other than to the extent provided
\nin the succeeding paragraph any loss of tax benefits or increase in tax
\nliability under any tax law whether or not Lessee is required to indemnify
\ntherefor pursuant to this Agreement or the Tax Indemnity Agreement (it being
\nunderstood that Section 7(b) hereof and the Tax Indemnity Agreement and
\nprovisions requiring payments to be made on an after-tax basis or expressly
\nproviding for additional indemnification by Lessee exclusively provide for
\nLessee’s liability with respect to Taxes), or (10) except to the extent fairly
\nattributable to acts or events occurring on or prior thereto, acts or events
\nwhich occur after the earlier of: (I) the return of possession of the Airframe
\nor any Engine or any Part to the Owner Trustee or its designee pursuant to the
\nterms of the Lease (other than pursuant to Section 15 thereof, in which case
\nLessee’s liability under this Section 7(c) shall survive for so long as Owner
\nTrustee shall be entitled to exercise remedies under such Section 15), (II) the
\ntermination of the Term in accordance with Sections 5, 9 or 19 of the Lease,
\n(III) the last day of the Term if Owner Trustee shall have furnished the notice
\nreferred to in Section 10(d) of the Lease and Lessee shall have failed to return
\npossession to Owner Trustee on such day or (IV) the payment by Lessee of all
\namounts required to be paid under the Lease following an Event of Loss (but
\nexcluding from the terms of this subsection (IV) an Event of Loss followed by
\nthe replacement of the Aircraft).<\/p>\n
Notwithstanding clause 7(c)(5) or (9) above, Lessee further agrees
\nthat any payment or indemnity pursuant to this Section 7(c) in respect of any
\n“Expenses” shall be in an amount which, after deduction of all Taxes required to
\nbe paid by such recipient with respect to such payment or indemnity under the
\nlaws of any federal, state or local government or taxing authority in the United
\nStates, or under the laws of any taxing<\/p>\n
36<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
authority or governmental subdivision of a foreign country, or any territory or
\npossession of the United States or any international authority, shall be equal
\nto the excess, if any, of (A) the amount of such Expense over (B) the current
\nnet reduction in Taxes actually required to be paid by such recipient resulting
\nfrom the accrual or payment of such Expense.<\/p>\n
Nothing in this Section 7(c) shall be construed as a guaranty by
\nLessee of payments due pursuant to the Loan Certificates or the Pass Through
\nCertificates or of the residual value of the Aircraft.<\/p>\n
If a claim is made against an Indemnitee involving one or more
\nExpenses and such Indemnitee has notice thereof, such Indemnitee shall promptly
\nafter receiving such notice give notice of such claim to Lessee; provided that
\nthe failure to provide such notice shall not release Lessee from any of its
\nobligations to indemnify hereunder or from any other obligation that the Lessee
\nmay have to such Indemnitee at law or in equity, and no payment by Lessee to an
\nIndemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver
\nor release of any right or remedy which the Lessee may have against such
\nIndemnitee for any actual damages as a result of the failure by such Indemnitee
\nto give Lessee such notice. So long as Lessee has acknowledged its obligation
\nto indemnify pursuant to this Section 7(c), Lessee shall be entitled, at its
\nsole cost and expense, acting through counsel reasonably acceptable to the
\nrespective Indemnitee, (A) in any judicial or administrative proceeding that
\ninvolves solely a claim for one or more Expenses, to assume responsibility for
\nand control thereof, (B) in any judicial or administrative proceeding involving
\na claim for one or more Expenses and other claims related or unrelated to the
\ntransactions contemplated by the Operative Documents, to assume responsibility
\nfor and control of such claim for Expenses to the extent that the same may be
\nand is severed from such other claims (and such Indemnitee shall use reasonable
\nefforts to obtain such severance), and (C) in any other case, to be consulted by
\nsuch Indemnitee with respect to judicial proceedings subject to the control of
\nsuch Indemnitee and to be allowed, at Lessee’s sole expense, to participate
\ntherein. Notwithstanding any of the foregoing to the contrary, Lessee shall not
\nbe entitled to assume responsibility for and control of any such judicial or
\nadministrative proceedings if (i) any Default under Section 14(a), (b), (f) or
\n(g) of the Lease or an Event of Default under the Lease shall have occurred and
\nbe continuing, (ii) if such proceedings will involve a material risk of the
\nsale, forfeiture or loss of, or the creation of any Lien (other than a Permitted
\nLien) on, the Aircraft, the Trust Indenture Estate or the Trust Estate or any
\npart thereof unless Lessee shall have posted a bond or other security reasonably
\nsatisfactory to the relevant Indemnitees in respect to such risk<\/p>\n
37<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
or (iii) if such proceedings could, in the good faith opinion of the Indemnitee
\nentail any risk of criminal liability or any material risk of civil liability
\n(unless, in the case of such civil liability, Lessee has agreed to indemnify
\nagainst such civil liability in a manner reasonably acceptable to such
\nIndemnitee). The Indemnitee may participate at its own expense and with its own
\ncounsel in any judicial proceeding controlled by Lessee pursuant to the
\npreceding provisions; provided, however, that if in the written opinion of
\ncounsel to such Indemnitee (which opinion and counsel shall be reasonably
\nacceptable to Lessee) an actual or potential material conflict of interest
\nexists where it is advisable for such Indemnitee to be represented by separate
\ncounsel, the reasonable fees and expenses of such separate counsel shall be
\nborne by Lessee.<\/p>\n
The Indemnitee shall supply Lessee, at Lessee’s expense, with such
\ninformation reasonably requested by Lessee as is necessary or advisable for
\nLessee to control or participate in any proceeding to the extent permitted by
\nthis Section 7(c). Such Indemnitee shall not enter into a settlement or other
\ncompromise with respect to any Expense as to which Lessee has acknowledged its
\nobligation to indemnify (and if Lessee has not so acknowledged only upon 5
\nBusiness Days’ prior written notice to Lessee) without the prior written consent
\nof Lessee (except during the continuance of any Default under Section 14(a),
\n(b), (f) or (g) of the Lease or an Event of Default under the Lease when such
\nconsent shall not be required if such Indemnitee gives 30 days’ prior written
\nnotice to Lessee describing the proposed settlement or compromise), which
\nconsent shall not be unreasonably withheld or delayed, unless such Indemnitee
\nwaives its right to be indemnified with respect to such Expense under this
\nSection 7(c).<\/p>\n
The Lessee shall supply the Indemnitee with such information
\nreasonably requested by the Indemnitee as is necessary or advisable for the
\nIndemnitee to control or participate in any proceeding to the extent permitted
\nby this Section 7(c).<\/p>\n
Upon payment of any Expense pursuant to this Section 7(c), Lessee,
\nwithout any further action, shall be subrogated to any claims the Indemnitee may
\nhave relating thereto other than claims under Section 9.06 of the Trust
\nIndenture or Section 5.03 or 7.01 of the Trust Agreement. The Indemnitee agrees
\nto give such further assurances or agreements and to cooperate with Lessee to
\npermit Lessee to pursue such claims, if any, to the extent reasonably requested
\nby Lessee.<\/p>\n
In the event that Lessee shall have paid an amount to an Indemnitee
\npursuant to this Section 7(c), and such Indemnitee<\/p>\n
38<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
subsequently shall be reimbursed in respect of such indemnified amount from any
\nother person, such Indemnitee shall, unless a Default under Section 14(a), (b),
\n(d) (solely with respect to Lessee’s obligations under Section 7(a) or (b)(viii)
\nof the Lease or Section 8 of the Lease), (f) or (g) of the Lease or an Event of
\nDefault under the Lease shall have occurred and be continuing, promptly pay
\nLessee but not before Lessee shall have made all payments then due to such
\nIndemnitee pursuant to this Section 7(c) and any other payments then due under
\nany of the Operative Documents, an amount equal to the sum of (I) the amount of
\nsuch reimbursement, including interest received attributable thereto, net of
\ntaxes required to be paid by such Indemnitee as a result of any reimbursement
\nincluding interest received attributable thereto and (II) any tax benefit
\nactually realized by such Indemnitee as a result of any payment by such
\nIndemnitee made pursuant to this sentence; provided, however, that in the case
\nof any Indemnitee which is the Owner Participant or any successor, assign or
\nAffiliate of the Owner Participant such amount attributable to (I) above shall
\nnot be in excess of the amount of such Expense payment net of any amount paid in
\nrespect of Taxes required to be paid by such Indemnitee in respect of the
\nreceipt or accrual of such payment or advance made by Lessee to such Indemnitee
\nplus interest received, if any, from the relevant taxing authority with respect
\nto any such Expense payment, it being intended that such Indemnitee shall
\nrealize a net benefit pursuant to this Section 7(c) only if Lessee shall first
\nhave been reimbursed for any payments by it to such Indemnitee pursuant to this
\nSection 7(c).<\/p>\n
Lessee agrees to pay the reasonable and continuing fees and expenses
\nof the Indenture Trustee (including, but not limited to, the reasonable fees and
\nexpenses of its counsel and any agent appointed in accordance with Section
\n9.02(c) of the Trust Indenture) and each Pass Through Trustee (including, but
\nnot limited to, the reasonable fees and expenses of its counsel) and, as
\nprovided in Section 6.07 of the Trust Agreement, the Owner Trustee (including,
\nbut not limited to, the reasonable fees and expenses of its counsel), in each
\ncase without cost, on a net after-tax basis, to the Owner Participant, for
\nacting as such, other than such fees and expenses which constitute Transaction
\nExpenses.<\/p>\n
Lessee’s obligations under the indemnities provided for in this
\nAgreement shall be those of a primary obligor, whether or not the Person
\nindemnified shall also be indemnified with respect to the same matter under the
\nterms of any other document or instrument, and the Person seeking
\nindemnification from Lessee pursuant to any provision of this Agreement may
\nproceed directly against Lessee without first seeking to enforce any other right
\nof indemnification.<\/p>\n
39<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
To the extent permitted by applicable law, interest at the Past Due
\nRate shall be paid, on demand, on any amount or indemnity not paid when due
\npursuant to this Section 7 until the same shall be paid. Such interest shall be
\npaid in the same manner as the unpaid amount in respect of which such interest
\nis due.<\/p>\n
Any amount which is payable to Lessee by any Person pursuant to this
\nSection 7 shall not be paid to Lessee if a Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(viii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or an Event of
\nDefault under the Lease shall have occurred and be continuing or if any payment
\nis due and owing by Lessee under the Lease or to such Person under any other
\nOperative Document. Any such amount shall be held by such Person and, if such
\nDefault or an Event of Default under the Lease shall have occurred and be
\ncontinuing, shall be applied against Lessee’s obligations hereunder to such
\nPerson as and when due (and, to the extent that Lessee has no obligations
\nhereunder to such Person, such amount shall be paid to Lessee). At such time as
\nthere shall not be continuing any such Default or an Event of Default or there
\nshall not be due and owing any such payment, such amount shall be paid to Lessee
\nto the extent not previously applied in accordance with the immediately
\npreceding sentence.<\/p>\n
(d) Withholding. If Lessee advises the Owner Trustee, the Indenture
\nTrustee and the relevant Certificate Holder in writing that interest on its Loan
\nCertificates is subject to United States withholding tax, then the Owner Trustee
\nshall instruct the Indenture Trustee to, and Indenture Trustee shall, withhold
\nas provided in Section 9.11 of the Trust Indenture.<\/p>\n
SECTION 8. Representations, Warranties and Covenants. (a) The Owner
\nParticipant represents that it is acquiring its interest in the Trust Estate for
\ninvestment purposes only and not with a present intent as to any resale or
\ndistribution thereof (subject nonetheless to any requirement of law that the
\ndisposition of its properties shall at all times be and remain within its
\ncontrol) and that neither it nor anyone acting on its behalf (other than for
\npurposes of this paragraph, Lessee and the Underwriter) has directly or
\nindirectly offered any interest in the Trust Estate or any Loan Certificates or
\nPass Through Certificates or any similar securities for sale to, or solicited
\nany offer to acquire any of the same from, anyone in a manner which would result
\nin a violation of the Securities Act of 1933, as amended or the securities laws,
\nrules and regulations of any state.<\/p>\n
40<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(b) Each of the Owner Participant and State Street Bank and Trust
\nCompany, in its individual capacity, represents and warrants to the other
\nparties to this Agreement that it is, and on the Delivery Date will be, a
\nCitizen of the United States. The Owner Participant agrees, solely for the
\nbenefit of Lessee and the Certificate Holders, that if during such time as the
\nAircraft is registered in the United States (or if Lessee desires to register
\nthe Aircraft in the United States) (i) it shall not be a Citizen of the United
\nStates and (ii) the Aircraft shall be, or would therefore become, ineligible for
\nregistration in the name of the Owner Trustee under the Federal Aviation Act and
\nregulations then applicable thereunder, then the Owner Participant shall (at its
\nown expense and without any reimbursement or indemnification from Lessee) as
\nsoon as is reasonably practicable but in any event within 30 days after
\nobtaining Actual Knowledge of such ineligibility and of such loss of citizenship
\n(A) effect voting trust or other similar arrangements or take any other action
\nas may be necessary to prevent any deregistration or to maintain the United
\nStates registration of the Aircraft, or (B) transfer its beneficial interest in
\nthe Trust Estate in accordance with Section 8(l) hereof. It is understood that:
\n(1) the Owner Participant shall be liable to any of the other parties hereto for
\nany damages suffered by any such other party as the result of the representation
\nand warranty of the Owner Participant in the first sentence of this Section 8(b)
\nproving to be untrue as of the Delivery Date; and (2) the Owner Participant
\nshall be liable to Lessee, any Sublessee and any Certificate Holder for any
\ndamages which may be incurred by Lessee, any Sublessee or such Certificate
\nHolder as a result of the Owner Participant’s failure to immediately comply with
\nits obligations pursuant to the second sentence of this Section 8(b) unless such
\nfailure is a result of such party’s breach of its obligations to cooperate set
\nforth in the following sentence (including any damages suffered by any such
\nparty (other than damages suffered by Lessee which Lessee could have mitigated
\nby taking reasonable steps (Lessee having no obligation to restrict the use of
\nthe Aircraft to so mitigate)) at any time after the fifth Business Day following
\nthe Owner Participant’s having obtained Actual Knowledge of such ineligibility
\nor loss of citizenship). Each party hereto agrees, upon the request and at the
\nsole expense of the Owner Participant, to reasonably cooperate with the Owner
\nParticipant in complying with its obligations under the provisions of the second
\nsentence of this Section 8(b) and such request shall not be subject to the
\nindemnity contained in Section 7(c) hereof. State Street Bank and Trust Company
\nin its individual capacity, agrees that if at any time a responsible officer of
\nState Street Bank and Trust Company, shall obtain Actual Knowledge that State
\nStreet Bank and Trust Company has ceased to be a Citizen of the United States,
\nit will promptly resign as Owner Trustee (if and<\/p>\n
41<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
so long as such citizenship is necessary under the Federal Aviation Act as in
\neffect at such time or, if it is not necessary, if and so long as the Owner
\nTrustee’s citizenship would have any adverse effect on a Certificate Holder,
\nLessee or the Owner Participant), effective upon the appointment of a successor
\nOwner Trustee in accordance with Section 9.01 of the Trust Agreement. If the
\nOwner Participant or State Street Bank and Trust Company, in its individual
\ncapacity, does not comply with the requirements of this Section 8(b), the Owner
\nTrustee, the Indenture Trustee, the Owner Participant and the Certificate
\nHolders hereby agree that a Default or an Event of Default shall not have
\noccurred and be continuing under the Lease due to noncompliance by Lessee with
\nthe registration requirements in the Lease.<\/p>\n
(c) State Street Bank and Trust Company, in its individual capacity
\nrepresents and warrants that both the principal place of business of the Owner
\nTrustee and the place where the Owner Trustee’s records concerning the Aircraft
\nand all of its interest in, to and under the Operative Documents to which it is
\na party are or will be kept is Boston, Massachusetts (other than such as may be
\nmaintained or held by the Indenture Trustee pursuant to the Trust Indenture) and
\nhas its chief executive office (as such term is used in Article 9 of the Uniform
\nCommercial Code) in the Commonwealth of Massachusetts. State Street Bank and
\nTrust Company, in its individual capacity agrees that it will not change the
\nlocation of such office to a location outside of Boston, Massachusetts, without
\nprior written notice to Lessee, Indenture Trustee and the Owner Participant.<\/p>\n
(d) [Intentionally omitted.]<\/p>\n
(e) The Owner Participant agrees that, if, at any time after the
\nRestricted Period and so long as no Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(vii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or Event of
\nDefault under the Lease shall have occurred or be continuing, Lessee has
\nrequested its consent to the registration of the Aircraft, in the name of the
\nOwner Trustee (or, if appropriate, in the name of Lessee or a Sublessee as a
\n“lessee” or a “sublessee”), at Lessee’s expense, (i) upon 30 days’ prior written
\nnotice in a country listed on Exhibit G to the Lease, with which the United
\nStates maintains diplomatic relations at the time of such request, provided that
\nwith respect to any country listed on Exhibit G to the Lease as a “Restricted
\nCountry” such country must at the time of such registration impose and enforce
\naircraft maintenance standards not materially less stringent than those of the
\nFAA, or the central civil aviation authority of any of Canada, France, Germany,
\nJapan or<\/p>\n
42<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
the United Kingdom, or (ii) upon 30 days’ prior written notice in any other
\ncountry with which the United States maintains diplomatic relations at the time
\nof such request and the Owner Participant has not determined, acting reasonably,
\nthat such other country would not provide substantially equivalent protection
\nfor the rights of owner participants, lessors or lenders in similar transactions
\nas provided under United States laws, the Owner Participant will not, in the
\ncase of either (i) or (ii), unreasonably withhold its consent to such change of
\nregistration. In addition, such change of registration to a country listed on
\nExhibit G shall be permitted only if such change will not result in the
\nimposition of, or increase the amount of, any Tax for which Lessee is not
\nrequired to indemnify or is not then willing to enter into a binding agreement
\nto indemnify, in a manner satisfactory in form and substance to the indemnified
\nparty, each party referred to in clause (E) of paragraph (i) below. The Owner
\nParticipant further agrees that the inability of Lessee to deliver to the Owner
\nParticipant and, so long as the Lien of the Trust Indenture has not been
\nreleased, the Indenture Trustee, an opinion (reasonably satisfactory in form and
\nsubstance to the Owner Participant) of counsel reasonably acceptable to the
\nOwner Participant in such country listed on Exhibit G to the Lease to the effect
\nthat the courts of such country would give effect to the Owner Trustee’s title
\nto the Aircraft, to the registry of the Aircraft in the name of the Owner
\nTrustee, and to the priority of the lien under the Trust Indenture substantially
\nto the same extent as provided under United States law, shall constitute the
\nsole reasonable grounds to withhold such consent in regard to a country listed
\nin Exhibit G, and if said opinion is delivered, the Owner Participant will
\ninstruct the Owner Trustee, and the Indenture Trustee, subject only to
\ncompliance with the provisions of Section 7.02 of the Indenture, shall
\ncooperate, to make such change of registration.<\/p>\n
It is further agreed, however, that prior to any such change in the
\ncountry of registry of the Aircraft to a country not listed on Exhibit G to the
\nLease, the Owner Participant, the Owner Trustee in its individual capacity and,
\nso long as the Lien of the Trust Indenture has not been released, the Indenture
\nTrustee shall have received:<\/p>\n
(i) assurances reasonably satisfactory to the Owner Participant
\n and the Owner Trustee in its individual capacity (A) to the effect that the
\n insurance or self-insurance provisions of the Lease have been compiled with
\n after giving effect to such change of registry, (B) of the payment by
\n Lessee on an after-tax basis of any expenses of the Owner Participant, the
\n Owner Trustee and the Indenture Trustee in connection with such change of
\n registry, (C) to the effect that the original indemnities (and any
\n additional<\/p>\n
43<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
indemnities for which Lessee is then willing to enter into a binding
\n agreement to indemnify) in favor of the Owner Participant, the Owner
\n Trustee (in its individual capacity and as trustee under the Trust
\n Agreement) and the Indenture Trustee, under this Agreement, the Trust
\n Indenture and the Tax Indemnity Agreement, afford each such party
\n substantially the same protection as provided prior to such change of
\n registry, (D) as to the continuation of the Trust Indenture as a first
\n priority lien on the Aircraft, (E) that such change will not result in the
\n imposition of, or increase in the amount of, any Tax for which Lessee is
\n not required to indemnify, or is not then willing to enter into a binding
\n agreement to indemnify in a manner satisfactory in form and substance to
\n the indemnified party, the Owner Participant, the Indenture Trustee, the
\n Owner Trustee (in its individual capacity and as trustee under the Trust
\n Agreement), or any successor, assign or Affiliate of any thereof, or the
\n Trust Estate pursuant to Section 7(b) hereof; and (F) that such new country
\n of registry imposes and enforces aircraft maintenance standards not
\n materially less stringent than those of the FAA or the central civil
\n aviation authority of Canada, France, Germany, Japan or the United Kingdom;
\n and<\/p>\n
(ii) a favorable opinion of counsel (reasonably satisfactory to
\n the Owner Trustee, in its individual capacity, and to the Owner
\n Participant) in the new jurisdiction of registry to the effect (A) that the
\n terms (including, without limitation, the governing-law, service-of-process
\n and jurisdictional-submission provisions thereof) of the Lease and the
\n Trust Indenture are legal, valid, binding and enforceable in such
\n jurisdiction, (B) that it is not necessary for the Owner Participant, the
\n Owner Trustee or the Indenture Trustee to register or qualify to do
\n business in such jurisdiction, (C) that there is no tort liability of the
\n owner of an aircraft not in possession thereof under the laws of such
\n jurisdiction other than tort liability which might have been imposed on
\n such owner under the laws of the United States or any state thereof (it
\n being understood that, in the event such latter opinion cannot be given in
\n a form satisfactory to the Owner Participant, such opinion shall be waived
\n if insurance reasonably satisfactory to Owner Participant and the Owner
\n Trustee, in its individual capacity, is provided, at Lessee’s expense, to
\n cover such risk), (D) (unless Lessee shall have agreed to provide insurance
\n covering the risk of requisition of use or title of the Aircraft by the
\n government of such jurisdiction so long as the Aircraft is registered under
\n the laws of such jurisdiction) that the laws of such jurisdiction require
\n fair compensation by the government of such jurisdiction<\/p>\n
44<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
payable in currency freely convertible into Dollars for the loss of use or
\n title of the Aircraft in the event of the requisition by such government of
\n such use or title, and (E) to such further effect with respect to such
\n other matters as the Owner Trustee, in its individual capacity, or the
\n Owner Participant may reasonably request.<\/p>\n
Upon receipt by the Owner Participant and the Indenture Trustee
\n of an opinion of counsel meeting the foregoing requirements, Exhibit F and
\n Exhibit G to the Lease shall be amended to add such country.<\/p>\n
If, at any time, the Owner Participant delivers an opinion (a
\n “Delisting Opinion”) from a law firm (such opinion and counsel to be
\n reasonably satisfactory to Lessee) in a country then listed on Exhibit F or
\n G to the Lease to the effect that a reputable law firm located in such
\n jurisdiction would not as of the date of such opinion be able to deliver an
\n opinion of counsel as to the matters listed in subsections (A) through (D)
\n of subparagraph (ii) above (provided that in regard to (C) and (D), Lessee
\n is not willing at the time of registration to provide the insurance
\n required by such subsection (C) or (D)), then Exhibits F and G to the Lease
\n shall be amended to delete such country. Lessee shall pay the reasonable
\n costs of the Owner Participant in obtaining the Delisting Opinion provided
\n such opinion is in fact obtained in connection with Lessee’s request to
\n change the registry of the Aircraft to, or to sublease the Aircraft in, a
\n country listed on Exhibit F or G to the Lease.<\/p>\n
Lessee shall pay all reasonable fees and expenses on an after-tax
\n basis of the Owner Participant, the Owner Trustee and the Indenture Trustee
\n in connection with any change of registry of the Aircraft.<\/p>\n
(f) The Owner Participant represents and warrants as follows:<\/p>\n
(i) the Owner Participant is a corporation duly organized and
\n validly existing in good standing under the laws of its jurisdiction of
\n organization, and has the corporate power and authority to carry on its
\n business as now conducted, to own or hold under lease its properties and to
\n enter into and perform its obligations under the Owner Participant
\n Documents;<\/p>\n
(ii) the Owner Participant Documents have been duly authorized by
\n all necessary corporate action on the part of the Owner Participant, do not
\n require any approval<\/p>\n
45<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
not already obtained of stockholders of the Owner Participant or any
\n approval or consent not already obtained of any trustee or holders of any
\n indebtedness or obligations of the Owner Participant, and have been duly
\n executed and delivered by the Owner Participant, and neither the execution
\n and delivery thereof by the Owner Participant, nor the consummation of the
\n transactions contemplated thereby by the Owner Participant, nor compliance
\n by the Owner Participant with any of the terms and provisions thereof will
\n contravene any United States federal or state law, judgment, governmental
\n rule, regulation or order applicable to or binding on the Owner Participant
\n (it being understood that no representation or warranty is made with
\n respect to laws, rules or regulations relating to aviation or to the nature
\n of the equipment owned by the Owner Trustee, other than such laws, rules or
\n regulations relating to the citizenship requirements of the Owner
\n Participant under applicable aviation law) or contravene or result in any
\n breach of or constitute any default under, or result in the creation of any
\n Lien (other than Liens provided for or otherwise permitted in the Operative
\n Documents) upon the Trust Estate under, any indenture, mortgage, chattel
\n mortgage, deed of trust, conditional sales contract, bank loan or credit
\n agreement, corporate charter, by-law or other agreement or instrument to
\n which the Owner Participant is a party or by which it or its properties may
\n be bound or affected (it being understood that no representation or
\n warranty is made in this subsection (f)(ii) with respect to ERISA);<\/p>\n
(iii) each of the Owner Participant Documents constitutes a legal,
\n valid and binding obligation of the Owner Participant enforceable against
\n the Owner Participant in accordance with the terms thereof, and the trust
\n intended to be formed by the Trust Agreement has been duly and validly
\n formed;<\/p>\n
(iv) Neither the execution and delivery by the Owner Participant
\n of this Agreement or any other Owner Participant Document, nor the
\n consummation by it of any of the transactions contemplated hereby or
\n thereby, requires the consent or approval of, the giving of notice to, the
\n registration with, the recording or filing of any document with, or the
\n taking of any other action in respect of, any federal or other governmental
\n authority or agency, except those contemplated by the Operative Documents
\n (it being understood that no representation or warranty is made with
\n respect to the laws, rules or regulations relating to aviation or to the
\n nature of the equipment owned by the Owner Trustee, other than such laws,
\n rules or regulations<\/p>\n
46<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
relating to the citizenship requirements of the Owner Participant under
\n applicable aviation law);<\/p>\n
(v) there are no pending or, to the knowledge of the Owner
\n Participant, threatened actions or proceedings against the Owner
\n Participant before any court or administrative agency which individually
\n (or in the aggregate in the case of any group of related lawsuits) purports
\n to affect the legality, validity or enforceability of, or which is
\n reasonably likely to materially adversely affect the ability of the Owner
\n Participant to perform its obligations under any of, the Owner Participant
\n Documents; and<\/p>\n
(vi) on the Delivery Date, the Aircraft will be free of Lessor
\n Liens (including for this purpose Liens that would be Lessor Liens but for
\n the proviso to the definition of Lessor Liens) attributable to the Owner
\n Participant.<\/p>\n
(g) Each of State Street Bank and Trust Company in its individual
\ncapacity and the Owner Participant severally covenants and agrees (i) that it
\nshall not cause or permit to exist any Lessor Lien attributable to it with
\nrespect to the Aircraft or any other portion of the Trust Estate, (ii) that it
\nwill promptly, at its own expense, take such action as may be necessary duly to
\ndischarge such Lessor Lien attributable to it and (iii) to make restitution to
\nthe Trust Estate for any actual diminution of the assets of the Trust Estate
\nresulting from such Lessor Liens attributable to it. The Owner Participant
\nagrees to make restitution to the Trust Estate for any actual diminution of the
\nassets of the Trust Estate resulting from any Taxes or Expenses (as such terms
\nare defined in Section 7 hereof) imposed on the Trust Estate against which
\nLessee is not required to indemnify the Trust Estate pursuant to Section 7
\nhereof, but excluding Taxes or Expenses referred to in Section 7(b)(ii)(5) and
\n7(b)(ii)(7) and excluding any diminution of the Trust Estate attributable to or
\ncaused by State Street Bank and Trust Company in its individual capacity;
\nprovided that if the Owner Participant shall make restitution to the Trust
\nEstate on account of any diminution of the Trust Estate attributable to or
\ncaused by State Street Bank and Trust Company in its individual capacity, then
\nState Street Bank and Trust Company, in its individual capacity, shall reimburse
\nthe Owner Participant for such amount together with interest thereon at the Past
\nDue Rate.<\/p>\n
(h) First Security Bank of Utah, National Association, in its
\nindividual capacity, covenants and agrees that it shall not cause or permit to
\nexist any Lien, arising as a result of (i) claims against the Indenture Trustee
\nnot related to its interest in the Aircraft or the administration of the Trust
\nEstate<\/p>\n
47<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
pursuant to the Trust Indenture, (ii) acts of the Indenture Trustee not
\npermitted by, or failure of the Indenture Trustee to take any action required
\nby, the Operative Documents to the extent such acts arise or such failure arises
\nfrom or constitutes gross negligence or willful misconduct, (iii) claims against
\nthe Indenture Trustee relating to Taxes or Expenses which are excluded from the
\nindemnification provided by Section 7 pursuant to said Section 7, or (iv) claims
\nagainst the Indenture Trustee arising out of the transfer by the Indenture
\nTrustee of all or any portion of its interest in the Aircraft, the Trust Estate,
\nthe Trust Indenture Estate or the Operative Documents other than (A) a transfer
\nof the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article 5 or 8
\nof the Trust Indenture, (B) any borrowing pursuant to Section 17 hereof or (C) a
\ntransfer of the Aircraft pursuant to Section 15 of the Lease while an Event of
\nDefault is continuing and prior to the time that the Indenture Trustee has
\nreceived all amounts due pursuant to the Trust Indenture.<\/p>\n
(i) [Intentionally omitted.]<\/p>\n
(j) The Indenture Trustee, and by the acceptance of a Loan Certificate
\neach Certificate Holder (and each Pass Through Trustee, so long as the relevant
\nPass Through Trust Agreement is in effect), each hereby waives to the fullest
\nextent permitted by law the benefit of the provisions of Section 1111(b) of
\nTitle 11 of the United States Code with respect to recourse against the Owner
\nTrustee (in its individual capacity) and the Owner Participant on account of any
\namount payable as principal of, Premium, if any, and interest on the Loan
\nCertificates. If (i) all or any part of the Trust Estate becomes the property
\nof, or the Owner Participant becomes, a debtor subject to the reorganization
\nprovisions of the Bankruptcy Code or any successor provision, (ii) pursuant to
\nsuch reorganization provisions the Owner Trustee (in its individual capacity) or
\nthe Owner Participant is required, by reason of the Owner Trustee (in its
\nindividual capacity) or the Owner Participant being held to have recourse
\nliability to a Certificate Holder, a Pass Through Trustee or the Indenture
\nTrustee, directly or indirectly (other than the recourse liability of the Owner
\nParticipant under this Participation Agreement), to make payment on account of
\nany amount payable as principal, Premium, if any, or interest on the Loan
\nCertificates and (iii) such Certificate Holder, such Pass Through Trustee or the
\nIndenture Trustee actually receives any Excess Payment (as hereinafter defined)
\nwhich reflects any payment by the Owner Trustee (in its individual capacity) or
\nthe Owner Participant on account of clause (ii) above, then such Certificate
\nHolder, such Pass Through Trustee or the Indenture Trustee, as the case may be,
\nshall promptly refund to the Owner Trustee or the Owner Participant (whichever
\nshall have made such<\/p>\n
48<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
payment) such Excess Payment. For purposes of this Section 8(j), “Excess
\nPayment” means the amount by which such payment exceeds the amount which would
\nhave been received by such Certificate Holder, such Pass Through Trustee or the
\nIndenture Trustee if the Owner Trustee (in its individual capacity) or the Owner
\nParticipant had not become subject to the recourse liability referred to in
\nclause (ii) above. Nothing contained in this Section 8(j) shall prevent any
\nCertificate Holder, any Pass Through Trustee or the Indenture Trustee from
\nenforcing any personal recourse obligation (and retaining the proceeds thereof)
\nof the Owner Trustee (in its individual capacity) or the Owner Participant under
\nthis Participation Agreement or the Trust Indenture (and any exhibits or annexes
\nthereto).<\/p>\n
(k) First Security Bank of Utah, National Association, in its
\nindividual capacity (“FSBU”) and as Indenture Trustee and Pass Through Trustee
\nas provided below, represents as follows:<\/p>\n
(i) it is a Citizen of the United States, that it will notify
\n promptly all parties to this Agreement if in its reasonable opinion its
\n status as a Citizen of the United States is likely to change and that it
\n will resign as Indenture Trustee as provided in Section 9.07 of the Trust
\n Indenture if it should cease to be a Citizen of the United States;<\/p>\n
(ii) it is a national banking association and has the full
\n corporate power, authority and legal right under the laws of the United
\n States of America to enter into and perform its obligations under the Trust
\n Indenture, this Agreement, the Basic Agreement and each Pass Through Trust
\n Agreement and, in its capacity as Indenture Trustee and Pass Through
\n Trustee, respectively, to authenticate the Loan Certificates and the Pass
\n Through Certificates;<\/p>\n
(iii) the Indenture Trustee Documents, and the authentication of
\n the Loan Certificates and the Pass Through Certificates have been duly
\n authorized by all necessary corporate action on the part of FSBU, the
\n Indenture Trustee and the relevant Pass Through Trustee, as it shall be a
\n party thereto in any such capacity, and neither the execution (or, in the
\n case of the Loan Certificates and the Pass Through Certificates, the
\n authentication) and delivery thereof in any such capacity nor the
\n performance by it in any such capacity of any of the terms and provisions
\n thereof will violate any federal or Utah law or regulation relating to the
\n banking or trust powers of FSBU or contravene or result in any breach of,
\n or constitute any default under its charter or by-laws or the provisions of
\n any indenture, mortgage, contract or other agreement to which FSBU, the<\/p>\n
49<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Indenture Trustee or the Pass Through Trustee is a party or by which it or
\n its properties may be bound or affected;<\/p>\n
(iv) each of the Indenture Trustee Documents has been duly
\n executed (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, authenticated) and delivered by FSBU, the Indenture Trustee
\n and the relevant Pass Through Trustee, as it shall be a party thereto in
\n any such capacity, and, assuming that each such agreement is the legal,
\n valid and binding obligation of each other party thereto (other than FSBU,
\n the Indenture Trustee and the relevant Pass Through Trustee), is the legal,
\n valid and binding obligation of FSBU, the Indenture Trustee and the
\n relevant Pass Through Trustee, as it shall be a party thereto in any such
\n capacity, enforceable against it in accordance with its terms;<\/p>\n
(v) neither the execution (or, in the case of the Loan
\n Certificates and the Pass Through Certificates, the authentication) and
\n delivery by FSBU, the Indenture Trustee or any Pass Through Trustee, as it
\n is a party in any such capacity to any of the Indenture Trustee Documents,
\n nor the consummation by it in any such capacity of any of the transactions
\n contemplated hereby, by the Trust Indenture, by the Pass Through Trust
\n Agreements, by the Loan Certificates or by the Pass Through Certificates
\n requires the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action with respect to, any
\n Utah state or federal governmental authority or agency regulating the
\n banking, trust or fiduciary powers of FSBU;<\/p>\n
(vi) there are no Taxes payable by FSBU, the Indenture Trustee or
\n any Pass Through Trustee imposed by the State of Utah or any political
\n subdivision or taxing authority thereof in connection with the execution
\n (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, the authentication) and delivery by it as a party in any such
\n capacity to any Indenture Trustee Document or the performance by it as a
\n party in any such capacity of any Indenture Trustee Document (other than
\n franchise or other taxes based on or measured by any fees or compensation
\n received by FSBU, the Indenture Trustee or any Pass Through Trustee, as the
\n case may be, for services rendered in connection with the transactions
\n contemplated thereby), and there are no Taxes payable by FSBU, the
\n Indenture Trustee or any Pass Through Trustee imposed by the State of Utah
\n or any political subdivision thereof in connection with the acquisition,
\n possession or ownership by any Pass Through Trustee of any of the Loan
\n Certificates (other than franchise or other taxes based on or measured by
\n any fees or<\/p>\n
50<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
compensation received by a Pass Through Trustee for services rendered in
\n connection with the transactions contemplated by the respective Pass
\n Through Trust Agreement) and, assuming that the trust created by the
\n respective Pass Through Trust Agreement will not be taxable as a
\n corporation, but, rather, will be characterized as a grantor trust under
\n subpart E, Part I of Subchapter J of the Code, such trust will not be
\n subject to any Taxes imposed by the State of Utah or any political
\n subdivision thereof;<\/p>\n
(vii) there are no pending or threatened actions or proceedings
\n against any of FSBU, the Indenture Trustee, or the Pass Through Trustees
\n before any court or administrative agency which individually (or in the
\n aggregate in the case of any group of related lawsuits) purports to affect
\n the legality, validity or enforceability of, or which is reasonably likely
\n to materially adversely affect the ability of FSBU, the Indenture Trustee,
\n or the Pass Through Trustees to perform its obligations as a party in any
\n such capacity under any Indenture Trustee Document; and<\/p>\n
(viii) except for the issuance and sale pursuant to the respective
\n Pass Through Trust Agreement of the Pass Through Certificates contemplated
\n hereby, neither FSBU nor any Pass Through Trustee has directly or
\n indirectly offered any Loan Certificate for sale to any Person, or
\n solicited any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and neither FSBU nor any
\n Pass Through Trustee has authorized anyone to act on its behalf to offer
\n directly or indirectly any Loan Certificate for sale to any Person, or to
\n solicit any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and no Pass Through
\n Trustee is in default under any respective Pass Through Trust Agreement.<\/p>\n
(l) So long as the Aircraft shall be leased to Lessee under the Lease
\nand so long as the Loan Certificates are outstanding, the Owner Participant will
\nnot sell, assign, convey or otherwise transfer any of its right, title or
\ninterest in and to this Agreement, the Trust Estate or the Trust Agreement to
\nany person or entity, unless (i) the proposed transferee is a “Transferee” (as
\ndefined below) and (ii) the Owner Participant and the Transferee shall have
\ndelivered to the Owner Trustee, the Lessee and the Indenture Trustee opinions
\nsubstantially in the form of Exhibits A-1 and A-2, respectively, hereto (or
\notherwise in form and substance reasonably satisfactory to Lessee and the
\nIndenture Trustee) of counsel reasonably satisfactory to the Indenture Trustee
\nand Lessee. A “Transferee” shall mean either (A) a bank or other financial
\ninstitution with a combined<\/p>\n
51<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
capital, surplus and undivided profits of at least $75,000,000 or a corporation
\nwhose net worth is at least $75,000,000, (B) any subsidiary of such a bank,
\nfinancial institution or corporation, provided that such bank, financial
\ninstitution or corporation furnishes to the Owner Trustee, the Indenture Trustee
\nand Lessee a guaranty substantially in the form of Exhibit C hereto with respect
\nto the Owner Participant’s obligations, in the case of the Owner Trustee, under
\nthe Trust Agreement and, in the case of the Indenture Trustee and Lessee, the
\nOwner Participant’s obligations hereunder, or (C) any other entity, provided
\nsuch obligations are guaranteed by the transferor Owner Participant; provided,
\nhowever, that unless otherwise consented to by Lessee no Transferee shall be an
\nairline, a commercial air carrier, an air freight forwarder, an entity engaged
\nin the business of parcel transport by air or other similar person or a
\ncorporation or other entity controlling, controlled by or under common control
\nwith such an airline, a commercial air carrier, an air freight forwarder, an
\nentity engaged in the business of parcel transport by air or other similar
\nperson. Each such transfer to a Transferee shall be subject to the conditions
\nthat (M) upon giving effect to such transfer, the Transferee is a Citizen of the
\nUnited States or the Transferee, at its sole cost and expense on an after-tax
\nbasis (including any continuing costs of the voting trust), shall have entered
\ninto a voting trust or similar arrangement which permits the registration of the
\nAircraft under the Federal Aviation Act in the name of the Owner Trustee, (N)
\nthe Transferee has the full power and authority to enter into and carry out the
\ntransactions contemplated hereby, (O) the Transferee enters into an agreement
\nsubstantially in the form of Exhibit B hereto (or otherwise in form and
\nsubstance reasonably satisfactory to Lessee and the Indenture Trustee), (P) such
\ntransfer does not violate any applicable law including, without limitation, the
\nFederal Aviation Act, or any rules or regulations promulgated thereunder, the
\nSecurities Act of 1933 or the Trust Indenture Act of 1939 (but not including
\nERISA), (Q) the transferor Owner Participant assumes the risk of any loss of
\nInterest Deductions, MACRS Deductions, FSC Benefits or any Inclusion Event (each
\nas defined in the Tax Indemnity Agreement) resulting from such transfer, (R)
\nafter giving effect to such transfer, there shall be no more than three Owner
\nParticipants of record at that time, (S) such transfer will not give rise to a
\nDefault or Event of Default under the Trust Indenture and (T) if such transfer
\nwill result in there being more than one Owner Participant, it shall be a
\ncondition precedent to such transfer that all such Owner Participants shall have
\nagreed in a manner reasonably satisfactory to Lessee that if the provisions of
\nthe Operative Documents require or contemplate the waiver, consent or direction
\nof Owner Participant, such provisions shall be deemed satisfied by the waiver,
\ndirection or consent of Owner Participants holding a majority of the beneficial
\ninterests in<\/p>\n
52<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
the Trust Estate. Upon any such transfer by the Owner Participant as above
\nprovided, (i) the Transferee shall be deemed the Owner Participant for all
\npurposes hereof and of the other Operative Documents and each reference herein
\nto the transferor Owner Participant shall thereafter be deemed for all purposes
\nto be to the Transferee and the transferor Owner Participant shall be relieved
\nof all obligations of the transferring Owner Participant under the Owner
\nParticipant Documents arising after the date of such transfer except to the
\nextent fairly attributable to acts or events occurring prior thereto and not
\nassumed by the transferee Owner Participant (in each case, to the extent of the
\nparticipation so transferred) and (ii) Lessee shall acknowledge its consent to
\nsuch transfer to the Transferee, shall represent to the Transferee that no Event
\nof Default or Event of Loss, or circumstance which with the passage of time or
\nthe giving of notice or both would constitute an Event of Default or Event of
\nLoss, then exists and Lessee shall promptly obtain new insurance certificates
\n(consistent with the provisions of Section 11 of the Lease) that reflect the
\ninterests of the Transferee in the Aircraft. If the Owner Participant intends to
\ntransfer any of its interests hereunder, it shall give prior written notice
\nthereof as soon as practicable, but in no event less than 10 days prior thereto,
\nto the Indenture Trustee, the Owner Trustee and Lessee, specifying the name and
\naddress of the proposed Transferee. The Owner Participant shall pay all of the
\nreasonable costs of the other parties hereto, on a net after-tax basis, of any
\nsuch transfer. For purposes of this paragraph, “net worth” shall mean the
\nexcess of total tangible assets over total liabilities, each to be determined in
\naccordance with generally accepted accounting principles consistently applied.
\nNotwithstanding anything contained in this Section 8(l) to the contrary, each of
\nLessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustees and,
\nby its acceptance of a Loan Certificate, each Certificate Holder agrees that the
\nOwner Participant may pledge its beneficial interest in the Trust Estate created
\npursuant to the Trust Agreement to First Security Bank of Utah, National
\nAssociation, as indenture trustee (the “777B Indenture Trustee”) pursuant to
\nthat certain Trust Indenture and Mortgage (1995 777 B) dated as of May 1, 1995,
\npursuant to a certain letter agreement to be entered into between [____________]
\nand the 777B Indenture Trustee.<\/p>\n
(m) Notwithstanding the provisions of Section 8(r) hereof, unless
\nwaived by each Certificate Holder, Lessee shall not be entitled to terminate the
\nLease or assume the Loan Certificates on a Purchase Option Date if on such
\nPurchase Option Date an Event of Default under the Lease shall have occurred and
\nbe continuing.<\/p>\n
53<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(n) State Street Bank and Trust Company and First Security Bank of
\nUtah, National Association, each in its individual capacity, agrees for the
\nbenefit of Lessee to comply with the terms of the Trust Indenture which it is
\nrequired to comply with in its individual capacity.<\/p>\n
(o) The Owner Participant represents and warrants that no part of the
\nfunds used by it to acquire its interest in the Trust Estate constitutes assets
\nof any “employee benefit plan” as defined in Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”), or of any “plan”
\nwithin the meaning of Section 4975(e)(1) of the Code (such employee benefit
\nplans and plans hereinafter referred to as “ERISA Plans”).<\/p>\n
(p) State Street Bank and Trust Company (A) in its individual capacity
\n(“SSBTC”) represents and warrants that:<\/p>\n
(i) the Trust Agreement and, assuming due authorization,
\n execution and delivery of the Trust Agreement by the Owner Participant,
\n each of the other Owner Trustee Documents has been duly executed and
\n delivered by one of its officers who is duly authorized to execute and
\n deliver such instruments on behalf of the Owner Trustee;<\/p>\n
(ii) the Trust Estate is free and clear of Lessor Liens
\n attributable to SSBTC, and there are no Liens affecting the title of the
\n Owner Trustee to the Aircraft or resulting from any act or claim against
\n SSBTC arising out of any event or condition not related to the ownership,
\n leasing, use or operation of the Aircraft or to any other transaction
\n contemplated by this Agreement or any of the other Operative Documents,
\n including any Lien resulting from the nonpayment by SSBTC of any Taxes
\n imposed or measured by its net income;<\/p>\n
(iii) there has not occurred any event which constitutes (or to
\n the best of its knowledge would, with the passage of time or the giving of
\n notice or both, constitute) an Event of Default as defined in the Trust
\n Indenture which has been caused by or relates to SSBTC and which is
\n presently continuing;<\/p>\n
(iv) it is a Massachusetts trust company duly organized and
\n validly existing in good standing under the laws of the Commonwealth of
\n Massachusetts and (assuming due authorization, execution and delivery of
\n the Trust Agreement by the Owner Participant) has the corporate power and
\n authority to enter into and perform its obligations under the Trust
\n Agreement, and (assuming due authorization,<\/p>\n
54<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
execution and delivery of the Trust Agreement by the Owner Participant) has
\n full right, power and authority to enter into and perform its obligations
\n as Owner Trustee pursuant to the Trust Agreement under each of the other
\n Owner Trustee Documents;<\/p>\n
(v) each of the Owner Trustee Documents has been duly authorized
\n by all necessary corporate action on its part, and neither the execution
\n and delivery thereof nor its performance of any of the terms and provisions
\n thereof will violate any federal or Massachusetts Commonwealth law or
\n regulation relating to its banking or trust powers or contravene or result
\n in any breach of, or constitute any default under, its charter or by-laws
\n or the provisions of any indenture, mortgage, contract or other agreement
\n to which it is a party or by which it or its properties may be bound or
\n affected;<\/p>\n
(vi) assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant, each of the Owner Trustee
\n Documents has been duly executed and delivered by it, and each of the Trust
\n Agreement and the Participation Agreement (to the extent executed by the
\n Owner Trustee in its individual capacity) is a legal, valid and binding
\n obligation of SSBTC and as Owner Trustee, as the case may be, enforceable
\n against such party in accordance with the terms thereof;<\/p>\n
(vii) on the Delivery Date, the Owner Trustee shall have received
\n whatever title to the Aircraft as was conveyed to it by the Lessee;<\/p>\n
(viii) it has not offered any interest in the Trust Estate or any
\n Loan Certificates or Pass Through Certificates or any similar securities
\n for sale to, or solicited any offer to acquire the same from, anyone other
\n than the Indenture Trustee, the Pass Through Trustees and the Owner
\n Participant, and no responsible officer or responsible employee of SSBTC
\n has knowledge of any such offer or solicitation, except as set forth in
\n Section 7(a)(xi) hereof;<\/p>\n
(ix) assuming due authorization, execution and delivery of each of
\n the Owner Trustee Documents by each of the parties thereto (other than the
\n Owner Trustee), each of the Owner Trustee Documents is a legal, valid and
\n binding obligation of the Owner Trustee, enforceable against the Owner
\n Trustee in accordance with its respective terms;<\/p>\n
55<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(x) neither the due execution and delivery of the Owner Trustee
\n Documents by SSBTC, in its individual capacity or as Owner Trustee under
\n the Trust Agreement, as the case may be, nor the consummation by it of any
\n of the transactions contemplated thereby require the consent or approval
\n of, the giving of notice to, or the registration with, any federal or
\n Massachusetts Commonwealth governmental authority or agency pursuant to any
\n federal or Massachusetts Commonwealth law governing the banking or trust
\n powers of SSBTC; and<\/p>\n
(B) SSBT solely in its capacity as Owner Trustee further represents
\nand warrants that:<\/p>\n
(i) SSBT is a trust company duly organized and validly existing
\n in good standing under the laws of the Commonwealth of Massachusetts and
\n has the corporate power and authority to enter into this Agreement and to
\n perform its obligations hereunder;<\/p>\n
(ii) assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant, each of the Trust Agreement, this
\n Agreement, the Trust Indenture, the Lease and the Loan Certificates has
\n been, or on the Delivery Date will have been, duly executed and delivered
\n by it, and each of this Agreement, the Trust Agreement, the Lease and the
\n Trust Indenture, on the Delivery Date, will constitute a legal, valid and
\n binding obligation of the Owner Trustee, enforceable against it in
\n accordance with the terms thereof;<\/p>\n
(iii) the Owner Trustee has never directly or indirectly
\n offered any Loan Certificate or any interest in or to the Trust Estate, the
\n Trust Agreement or any similar interest for sale to, or solicited any offer
\n to acquire any of the same from, any Person other than the Indenture
\n Trustee, each of the Pass Through Trustees and the Owner Participant; and
\n it has not authorized any Person to act on its behalf (other than for
\n purposes of this paragrpah, the Lessee and the Underwriters) to offer
\n directly or indirectly any Loan Certificate or any interest in and to the
\n Trust Estate, the Trust Agreement or any similar interest for sale to, or
\n to solicit any offer to acquire any of the same from, any Person; and<\/p>\n
(iv) there are no pending or threatened actions or proceedings
\n against SSBTC or the Owner Trustee before any court or administrative
\n agency which, if determined adversely to it, would materially adversely
\n affect the ability of SSBTC or the Owner Trustee, as the case may be,<\/p>\n
56<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
to perform its obligations under any of the Owner Trustee Documents or any
\n other documents executed by the Owner Trustee or SSBTC in connection with
\n the transactions contemplated by the Operative Documents.<\/p>\n
(q) The Owner Participant agrees, solely for the benefit of Lessee,
\nthat it will comply with any obligation expressly required of it under Section
\n9(c) of the Lease. The Owner Participant further covenants and agrees to pay or
\ncause the Owner Trustee to pay those costs and expenses specified to be paid by
\nthe Owner Participant pursuant to the Lease and all costs and expenses that are
\nfor the account of the Lessor pursuant to Sections 5(a), 5(c), 5(d), 5(e) and
\n5(f), 12 and 19(c) of the Lease.<\/p>\n
(r) Subject to compliance by Lessee with all of its obligations under
\nthe Lessee Documents, each of the Owner Trustee, the Indenture Trustee, each
\nCertificate Holder and the Owner Participant covenants and agrees that, at
\nLessee’s expense on a net after-tax basis (including, without limitation,
\nreasonable attorney’s fees and expenses of each of such parties), (i) Lessee may
\nelect to terminate the Lease and to purchase the Aircraft pursuant to Section
\n19(b) of the Lease and that each of such parties will execute and deliver
\nappropriate documentation transferring all right, title and interest in the
\nAircraft to Lessee (without recourse or warranty except as to Lessor Liens
\n(including for this purpose Liens that would be Lessor Liens but for the proviso
\nto the definition of Lessor Liens) with respect to the Owner Participant)
\n(including without limitation, such bills of sale and other instruments and
\ndocuments as Lessee shall reasonably request to evidence (on the public record
\nor otherwise) such transfer and the vesting of all right, title and interest in
\nand to the Aircraft in Lessee), and (ii) Lessee, in connection with such
\npurchase and subject to the provisions of the second paragraph of this Section
\n8(r), may assume (and receive a credit in an amount equal to the principal
\namount of the debt assumed against the purchase price payable by Lessee pursuant
\nto Section 19(b) of the Lease) the obligations of the Owner Trustee pursuant to
\nSection 7.03 of the Trust Indenture and the Loan Certificates (and the Lease, to
\nthe extent that the Owner Trustee’s obligations thereunder are incorporated into
\nthe Trust Indenture or the Loan Certificates), and Lessee shall confirm that its
\nobligations under the Lease shall be direct obligations to the Indenture Trustee
\nas if set forth in the Trust Indenture, and that each of the parties shall
\nexecute and deliver appropriate documentation in form and substance reasonably
\nsatisfactory to such parties under which Lessee will assume such obligations on
\nthe basis of full recourse to Lessee, maintaining the security interest in the
\nAircraft created by the Trust Indenture, releasing the Owner Participant and the
\nOwner Trustee<\/p>\n
57<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
from all future obligations in respect of the Loan Certificates, the Trust
\nIndenture and all other Operative Documents and all such other actions
\n(including the furnishing of legal opinions reasonably requested by any party)
\nas are reasonably necessary to permit such assumption by Lessee.<\/p>\n
If Lessee elects to assume the rights and obligations of the Owner Trustee
\nin accordance with Section 7.03 of the Trust Indenture in connection with the
\npurchase by the Lessee of the Aircraft pursuant to Section 19(b) of the Lease
\nand to pay the EBO Price in installments as permitted thereby, then:<\/p>\n
(A) in addition to the provisions contemplated above, the Trust
\n Indenture shall be amended (a) to provide for an additional series of loan
\n certificates (the “EBO Certificates”) to be issued to the Owner Participant
\n on the EBO Date to evidence the payment of the EBO Price in installments on
\n the dates specified in Exhibit H to the Lease (taking into account the
\n credit provided for above), (2) to provide that the Indenture Trustee will
\n make no distributions to the Owner Participant or the Owner Trustee or
\n otherwise in respect of the EBO Certificates prior to the payment in full
\n of all amounts then due and payable to the other Holders or, if an “Event
\n of Default” under the Trust Indenture (an “Indenture Event of Default”) or
\n any payment Default under the Trust Indenture shall have occurred and be
\n continuing, prior (unless such Loan Certificates shall have been purchased
\n by the Owner Trustee) to the payment in full of the principal amount of,
\n and interest accrued on, the Loan Certificates other than the EBO
\n Certificates, (3) to include the failure to pay any installments of the EBO
\n Certificates within 10 calendar days of when due as an Event of Default,
\n (4) to include a right so long as the EBO Certificates shall be outstanding
\n for the Owner Participant to purchase the other Loan Certificates under
\n circumstances similar to, and on the same terms as provided in, Section
\n 8.03(e)(ii) of the Trust Indenture (it being understood that upon any
\n assumption pursuant to Section 7.03 of the Trust Indenture, the provisions
\n of the Trust Indenture intended for the benefit of the Owner Participant
\n (other than provisions concerning, but only to the extent applicable to,
\n Excluded Payments), including, without limitation, Sections 8.03(e)(i) and
\n 8.03(e)(iii) of the Trust Indenture providing the Owner Trustee or the
\n Owner Participant with certain rights, shall be of no further force and
\n effect), (5) to provide that the Owner Participant and the Owner Trustee
\n shall have no voting or consent rights under the Trust Indenture by reason
\n of being the holder of the EBO Certificates or otherwise until all other
\n Loan Certificates have either been paid in full or been purchased by the
\n Owner<\/p>\n
58<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Participant (pursuant to the provisions contemplated by clause (A)(4) of
\n this Section 8(r) by the reference therein to Section 8.03(e)(ii) of the
\n Trust Indenture), except that without the consent of the Owner Participant
\n the Trust Indenture could not be amended, modified or supplemented to
\n reduce the amount or extend the time of payment of any amount owing or
\n payable under the EBO Certificates, and (6) to confirm that, although the
\n Owner Participant cannot participate in the exercise of remedies under the
\n Trust Indenture, it shall not be precluded form demanding, collecting,
\n suing for or otherwise receiving and enforcing payment of the EBO
\n Certificates by demand upon Lessee; and<\/p>\n
(B) upon Lessee’s payment in full of all amounts due on or prior to
\n the EBO Date in accordance with Section 19(b) of the Lease and compliance
\n with all of the conditions to such assumption in accordance with this
\n Section 8(r) and Section 7.03 of the Trust Indenture, (1) the Owner Trustee
\n shall assign the right to the remaining installments of the EBO Price to
\n the Owner Participant, (2) the EBO Certificates shall be issued to the
\n Owner Participant in aggregate amount of such remaining installments of the
\n EBO Price and (3) the Owner Trustee (AA) shall transfer to Lessee, without
\n recourse or warranty (except as to the absence of Lessor Liens) and on an
\n “as is” basis, all right, title and interest of the Owner Trustee in and to
\n the Aircraft and (BB) shall furnish to or at the direction of Lessee one or
\n more bills of sale in form and substance reasonably satisfactory to Lessee
\n evidencing such transfer.<\/p>\n
(s) Lessee will not consolidate with or merge into any other
\ncorporation or convey, transfer or lease substantially all of its assets to any
\nPerson unless:<\/p>\n
(i) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall be a
\n Citizen of the United States and shall be a Certificated Air Carrier;<\/p>\n
(ii) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall
\n execute and deliver to the Owner Trustee, the Indenture Trustee, the Owner
\n Participant and the Pass Through Trustees a duly authorized, valid, binding
\n and enforceable agreement in form and substance reasonably satisfactory to
\n the Owner Participant containing an assumption by such successor
\n corporation or Person of the due and punctual performance and observance of<\/p>\n
59<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
each covenant and condition of the Operative Documents and the Pass Through
\n Trust Agreements to be performed or observed by Lessee;<\/p>\n
(iii) immediately after giving effect to such transaction, no
\n Event of Default under the Lease shall have occurred and be continuing;<\/p>\n
(iv) Lessee shall have delivered to the Owner Trustee, the
\n Indenture Trustee, the Pass Through Trustees and the Owner Participant a
\n certificate signed by the President or any Vice President and by the
\n Secretary or an Assistant Secretary of Lessee, and an opinion of counsel
\n (which may be Lessee’s General Counsel) reasonably satisfactory to the
\n Owner Participant, each stating that such consolidation, merger,
\n conveyance, transfer or lease and the assumption agreement mentioned in
\n clause (ii) above comply with this Section 8(s) and that all conditions
\n precedent herein provided for relating to such transaction have been
\n complied with; and<\/p>\n
(v) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee, shall make such filings
\n and recordings with the FAA pursuant to the Federal Aviation Act, as shall
\n be necessary or desirable to evidence such consolidation, merger,
\n conveyance, transfer or lease with or to such entity.<\/p>\n
Upon any consolidation or merger, or any conveyance, transfer or lease
\nof substantially all of the assets of Lessee as an entirety in accordance with
\nthis Section 8(s), the successor corporation or Person formed by such
\nconsolidation or into which Lessee is merged or to which such conveyance,
\ntransfer or lease is made shall succeed to, and be substituted for, and may
\nexercise every right and power of, Lessee under this Agreement and under the
\nPass Through Trust Agreements with the same effect as if such successor
\ncorporation or Person had been named as Lessee herein and therein. No such
\nconveyance, transfer or lease of substantially all of the assets of Lessee as an
\nentirety shall have the effect of releasing Lessee or any successor corporation
\nor Person which shall theretofore have become such in the manner prescribed in
\nthis Section 8(s) from its liability in respect of any Operative Document to
\nwhich it is a party or any Pass Through Trust Agreement. Nothing contained
\nherein shall permit any lease, sublease or other arrangement for the use,
\noperation or possession of the Aircraft except in compliance with the applicable
\nprovisions of the Lease.<\/p>\n
60<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(t) Lessee, at its expense, will, at the request of any party hereto,
\ntake, or cause to be taken, such action with respect to the recording, filing,
\nrerecording and refiling of the Trust Agreement, the Lease, the Lease
\nSupplement, the Trust Indenture, the Trust Supplement and any financing
\nstatements or other instruments as are necessary to maintain, so long as the
\nTrust Indenture or the Lease is in effect, the perfection of the security
\ninterests created by the Trust Indenture and any security interest that may be
\nclaimed to have been created by the Lease and the ownership interest of the
\nOwner Trustee in the Aircraft.<\/p>\n
(u) Section 3 of the Lease contemplates that, under certain
\ncircumstances, the Owner Participant will make certain recalculations of Basic
\nRent, Excess Amount, Stipulated Loss Value percentages, Termination Value
\npercentages, Special Termination Value percentages and the EBO Percentage, and
\nthe Owner Participant hereby agrees to make such recalculations as and when
\ncontemplated by the Lease and subject to all the terms and conditions of the
\nLease and promptly to take such further actions as may be necessary or desirable
\nto give effect to and to cause the Owner Trustee to give effect to the
\nprovisions of Section 3 of the Lease.<\/p>\n
(v) The Owner Participant hereby agrees not to revoke the Trust
\nAgreement or the trusts created thereunder without the prior written consent of
\n(i) the Lessee so long as the Lease shall remain in effect and no Event of
\nDefault under the Lease shall have occurred and be continuing and (ii) the
\nIndenture Trustee so long as the Trust Indenture shall be in effect.<\/p>\n
(w) Lessee covenants and agrees with the Owner Participant, the
\nIndenture Trustee and the Owner Trustee that at all times during the Term it
\nwill be a Certificated Air Carrier<\/p>\n
(x) (i) Each Pass Through Trustee hereby agrees that, except as
\notherwise required by applicable law (including, without limitation, any law
\nwhich requires such Pass Through Trustee to act within its own discretion), it
\nshall not, without the prior written consent of the Owner Trustee, direct the
\nIndenture Trustee to take or refrain from taking any action under the Trust
\nIndenture that requires the approval, waiver, authorization, direction or
\nconsent of, or notice from, the Certificate Holders holding a specified
\npercentage in principal amount of Outstanding (as defined in the Trust
\nIndenture) Loan Certificates unless such Pass Through Trustee receives a
\nDirection (as defined in the relevant Pass Through Trust Agreement) to so direct
\nthe Indenture Trustee from Certificate Holders (as defined in the relevant Pass
\nThrough Trust Agreement) holding the same percentage of Certificates (as defined
\nin the<\/p>\n
61<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
relevant Pass Through Trust Agreement) evidencing Fractional Undivided Interests
\n(as defined in the relevant Pass Through Trust Agreement) in the Trust (as
\ndefined in the relevant Pass Through Trust Agreement) holding the Loan
\nCertificates.<\/p>\n
(ii) Lessee and each Pass Through Trustee hereby agree that Article X
\n of each Pass Through Trust Agreement (to the extent relating to the
\n Certificates) shall not be amended without the prior written consent of the
\n Owner Participant.<\/p>\n
(iii) Each Pass Through Trustee hereby agrees that, except as
\n otherwise required by applicable law (including, without limitation, any
\n law which requires such Pass Through Trustee to act within its own
\n discretion), if requested to do so by the Owner Trustee or the Owner
\n Participant, such Pass Through Trustee shall request a Direction from the
\n relevant Certificate Holders to establish whether such Pass Through
\n Trustee, in its capacity as a Certificate Holder, may direct the Indenture
\n Trustee to take or refrain from taking any action under the Operative
\n Documents.<\/p>\n
(y) The Owner Trustee agrees that any profit, income, interest,
\ndividend or gain realized upon the maturity, sale or other disposition of any
\nPermitted Investment made by the Indenture Trustee pursuant to Section 9.04 of
\nthe Trust Indenture, and paid to Lessee on behalf of the Owner Trustee by the
\nIndenture Trustee in accordance with the terms of such Section 9.04, shall be
\nentirely for the account of, and the sole property of, Lessee who, for such
\npurposes, shall not be deemed to be acting as agent of the Owner Trustee, and
\nLessee shall have no obligation to pay over such income, interest, dividend or
\ngain to the Owner Trustee, except to the extent the Owner Trustee or Owner
\nParticipant are owed any amounts under the Operative Documents by Lessee and
\nsuch amounts are not paid when due, in which event the Owner Participant may
\ncause the Owner Trustee to distribute and apply such income, interest, dividend
\nor gain in satisfaction or partial satisfaction of the amounts so due.<\/p>\n
(z) The Owner Participant hereby agrees to instruct the Owner Trustee
\nto promptly distribute any money received by it pursuant to Section 7.01 or
\n10.04 of the Trust Indenture to Lessee to the extent such amounts were paid by
\nLessee or on behalf of Lessee and the Owner Trustee or the Owner Participant is
\nnot owed any amounts under any of the Operative Documents by Lessee (and if the
\nOwner Trustee or Owner Participant is owed any such amount, the monies received
\nunder Section 7.01 or 10.04 of the Trust Indenture may be applied in
\nsatisfaction or partial satisfaction thereof). Lessee agrees to hold any money
\nreceived by it pursuant to the foregoing sentence in trust for the benefit of
\nthe Owner Participant and may, in its discretion, invest and<\/p>\n
62<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
reinvest all money so held by it in such Permitted Investments as Lessee deems
\nappropriate. Lessee will apply such money to the payment of previously
\nunclaimed payments with respect to the Loan Certificates when and as claims for
\npayment are made by the Holders of such Loan Certificates. As compensation for
\nits services pursuant to this Section 8(z), Lessee shall be entitled to an
\nannual fee from the Owner Participant in an amount to be agreed to at the time
\nby Lessee and the Owner Participant but in no event shall such fee exceed at any
\ntime the amount of earnings on the monies so held in trust distributable at such
\ntime to the Owner Participant. Any net losses on such investment shall be for
\nthe account of Lessee. Any net earnings on such investment shall be distributed
\nfrom time to time by Lessee to the Owner Participant after deducting therefrom
\nany portion of such fee then due and unpaid. Upon the date required by
\napplicable law dealing with unclaimed property, Lessee will distribute to the
\nOwner Participant any amount held by it pursuant to this Section 8(z) and not
\npreviously applied to the payment of the Loan Certificates, after deducting
\ntherefrom any portion of such fee then due and unpaid.<\/p>\n
(aa) The Owner Participant agrees that, at Lessee’s expense
\n(including, without limitation, reasonable attorneys fees and other out-of-
\npocket expense of the Owner Trustee and Owner Participant), upon request of the
\nLessee, the Owner Participant will negotiate promptly in good faith with respect
\nto any arrangements pursuant to which the Trust Indenture may be satisfied and
\ndischarged in respect of the Loan Certificates in accordance with subsection
\n(a)(ii) or (a)(iii) of Section 10.01 of the Trust Indenture, provided, that
\nthere shall be no adverse impact upon the rights or interests of the Owner
\nParticipant or Owner Trustee, and the Owner Trustee agrees to act upon the
\ninstructions of the Owner Participant in connection therewith. The Owner
\nTrustee agrees that it will not, and the Owner Participant agrees that during
\nsuch time as an Event of Default has not occurred under the Lease it will not
\ncause the Owner Trustee to take any action to effect such satisfaction and
\ndischarge except upon the request of the Lessee made pursuant to this Section
\n8(aa).<\/p>\n
SECTION 9. [Intentionally Omitted].<\/p>\n
SECTION 10. Other Documents; Amendment. Each of the Owner
\nParticipant and the Owner Trustee hereby (A) agrees with Lessee, the Certificate
\nHolders and the Indenture Trustee to comply with all of the terms of the Trust
\nAgreement (as the same may hereafter be amended or supplemented from time to
\ntime in accordance with the terms thereof) applicable to it, to the extent such
\nnon-compliance would be adverse to such party; and (B) agrees with Lessee, the
\nCertificate Holders and the Indenture<\/p>\n
63<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Trustee not to amend, supplement or otherwise modify any provision of the Trust
\nAgreement in a manner adversely affecting such party without the prior written
\nconsent of such party. Notwithstanding the foregoing, unless an Event of
\nDefault shall have occurred and be continuing and so long as the Lease has not
\nbeen terminated, the Indenture Trustee and the Owner Participant hereby agree
\nfor the benefit of Lessee that without the consent of Lessee they will not (and
\nthe Owner Participant agrees that it will not cause the Owner Trustee to) amend,
\nsupplement or otherwise modify any provision of the Trust Indenture in a manner
\nadversely affecting Lessee. The Indenture Trustee and the Owner Trustee agree
\nto promptly furnish to Lessee copies of any supplement, amendment, waiver or
\nmodification of any of the Operative Documents to which Lessee is not a party.
\nEach Certificate Holder agrees that it will not take any action in respect of
\nthe Trust Indenture Estate except through the Indenture Trustee pursuant to the
\nTrust Indenture or as otherwise permitted by the Trust Indenture.<\/p>\n
SECTION 11. Certain Covenants of Lessee. Lessee covenants and agrees
\nwith the Participants, the Indenture Trustee and the Owner Trustee, in its
\ncapacity as such and in its individual capacity as follows:<\/p>\n
(a) Lessee will cause to be done, executed, acknowledged and delivered
\n all and every such further acts, conveyances and assurances as the Owner
\n Trustee, the Indenture Trustee or the Owner Participant shall reasonably
\n require for accomplishing the purposes of this Agreement and the other
\n Operative Documents; provided that any instrument or other document so
\n executed by Lessee will not expand any obligations or limit any rights of
\n Lessee in respect of the transactions contemplated by any Operative
\n Documents. Lessee, forthwith upon delivery of the Aircraft under the Lease
\n shall cause the Aircraft to be duly registered, and at all times thereafter
\n to remain duly registered, in the name of the Owner Trustee, except as
\n otherwise required or permitted hereunder or under the Lease, under the
\n Federal Aviation Act or under the applicable law of another permitted
\n government of registry, or shall furnish to the Owner Trustee such
\n information as may be required to enable the Owner Trustee to make
\n application for such registration (at the expense of Lessee, including,
\n without limitation, reasonable attorney’s fees and expenses), and shall
\n promptly furnish to the Owner Trustee such information as may be required
\n to enable the Owner Trustee to timely file any reports required to be filed
\n by it as the lessor under the Lease or as the owner of the Aircraft with
\n any governmental authority (including tax authorities).<\/p>\n
64<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(b) Lessee, at its expense, will cause the Trust Agreement, the Lease,
\n all Lease Supplements, all amendments to the Lease, the Trust Indenture,
\n and all supplements and amendments to the Trust Indenture to be promptly
\n filed and recorded, or filed for recording, to the extent permitted under
\n the Federal Aviation Act, or required under any other applicable law. Upon
\n the execution and delivery of the Owner Trustee’s FAA Bill of Sale, the
\n Lease Supplement covering the Aircraft and the Trust Supplement, the Lease
\n and the Trust Indenture shall be filed for recording with the Federal
\n Aviation Administration in the following order of priority; first, the
\n Owner Trustee’s FAA Bill of Sale, second, the FAA registration application,
\n third, the Trust Indenture, with the Trust Agreement and the Trust
\n Supplement attached, and fourth, the Lease, with the Lease Supplement
\n covering the Aircraft, the Trust Indenture and the Trust Supplement
\n attached. Lessee agrees to furnish the Owner Participant, the Owner
\n Trustee and the Indenture Trustee with copies of the foregoing documents
\n with recording data as promptly as practicable following the issuance of
\n same by the FAA.<\/p>\n
SECTION 12. Owner for Income Tax Purposes. It is hereby agreed among
\nLessee, the Owner Participant and the Owner Trustee that for income tax purposes
\nthe Owner Participant will be the owner of the Aircraft to be delivered under
\nthe Lease and Lessee will be the lessee thereof, and each party hereto agrees to
\ncharacterize the Lease as a lease for income tax purposes.<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction. (a) All notices,
\ndemands, instructions and other communications required or permitted to be given
\nto or made upon any party hereto shall be in writing and shall be personally
\ndelivered or sent by registered or certified mail, postage prepaid, or by
\ntelecopier (with a copy of such notice to follow by registered or certified mail
\nor by prepaid courier), or by prepaid courier service, and shall be deemed to be
\ngiven for purposes of this Agreement on the day that such writing is delivered
\nor received or if given by certified mail, three Business Days after being
\ndeposited in the mails, in accordance with the provisions of this Section 13(a).
\nUnless otherwise specified in a notice sent or delivered in accordance with the
\nforegoing provisions of this Section 13(a), notices, demands, instructions and
\nother communications in writing shall be given to or made upon the respective
\nparties hereto at their respective addresses (or to their respective telecopier
\nnumbers) as follows: (A) if to Lessee, the Owner Trustee, the Indenture
\nTrustee, the Pass Through Trustees or the Owner Participant, to the respective
\naddresses set forth on Schedule I hereto (and in the case of Owner Trustee a
\ncopy shall be sent to the Owner Participant) or<\/p>\n
65<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(B) if to a subsequent Owner Participant, addressed to such subsequent Owner
\nParticipant at such address as such subsequent Owner Participant shall have
\nfurnished by notice to the parties hereto or (C) if to any subsequent
\nCertificate Holder, addressed to such Certificate Holder at its address set
\nforth in the Loan Certificate Register maintained pursuant to Section 2.03 of
\nthe Trust Indenture.<\/p>\n
(b) Each party to this Agreement including each Certificate Holder
\n(individually a “Party” and collectively “Parties”) irrevocably agrees that any
\nlegal suit, action or proceeding brought by any other Party, which arises solely
\nout of or relates solely to the Operative Documents or any of the transactions
\ncontemplated hereby or thereby or any document referred to herein or therein,
\nmay be instituted in the Circuit Court of the State of Illinois, Cook County or
\nthe United States District Court for the Northern District of Illinois and that
\nthey hereby waive the right to trial by jury in any such proceeding; provided,
\nhowever, that the foregoing provisions shall not apply to third party tort
\nclaims (but shall apply to an indemnity claim with respect to such tort claim)
\nand that the foregoing shall not apply to any right a Party may have to seek
\nremoval of such legal suit, action or proceeding to federal court or to seek
\nconsolidation of any separate legal suits, actions or proceedings brought by any
\none or more of the other Parties in the same or different jurisdictions. The
\nagreement set forth in this Section 13(b) is given solely for the benefit of the
\nParties and such agreement is not intended to and shall not inure to the benefit
\nof any other person.<\/p>\n
SECTION 14. Change of Situs of Owner Trust. The Owner Participant
\nagrees that if, at any time, the Trust Estate becomes subject to any Taxes for
\nwhich it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
\nthereof, Lessee shall request that the situs of the trust be moved to another
\nstate in the United States from the state in which it is then located, the situs
\nof the trust may be moved with the written consent of the Owner Participant
\n(which consent shall not be unreasonably withheld) and the Owner Participant
\nwill take whatever action may be reasonably necessary to accomplish such
\nremoval; provided that (A) Lessee shall provide such additional tax
\nindemnification, as the Owner Participant may reasonably request, (B) the rights
\nand obligations under the Operative Documents of the Owner Participant shall not
\nbe altered as a result of the taking of such action, (C) the lien of the Trust
\nIndenture on the Trust Indenture Estate shall not be adversely affected by such
\naction, and the Lessee shall execute and deliver such documents as may be
\nrequested by the Indenture Trustee to continue the perfection of the lien on the
\nTrust Indenture Estate and (D) the Owner Participant and the Indenture Trustee
\nshall<\/p>\n
66<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
have received an opinion or opinions of counsel (reasonably satisfactory to the
\nOwner Participant) in scope, form and substance reasonably satisfactory to the
\nOwner Participant to the effect that (I) the trust, as thus removed, shall
\nremain a validly established trust, (II) any amendments to the Trust Agreement
\nnecessitated by such removal shall have been duly authorized, executed and
\ndelivered by the parties thereto and shall constitute the valid and binding
\nobligations of such parties, enforceable in accordance with their terms, (III)
\nsuch removal will not result in the imposition of, or increase in the amount of,
\nany Tax for which Lessee is not required to indemnify the Owner Participant, the
\nOwner Trustee or the Trust Estate pursuant to Section 7(b) hereof (taking into
\naccount any additional indemnification provided by Lessee pursuant to clause (A)
\nof this sentence), (IV) such removal will not, in the Owner Participant’s
\njudgment, result in any Loss of MACRS Deductions, FSC Benefits, Interest
\nDeductions or an Inclusion Event (as defined in the Tax Indemnity Agreement)
\nwith respect to which Lessee is not required to indemnify the Owner Participant
\npursuant to Section 5 of the Tax Indemnity Agreement (taking into account any
\nadditional indemnification provided by Lessee pursuant to clause (A) of this
\nsentence), and (V) covering such other matters as the Owner Participant may
\nreasonably request, (E) if such removal involves the replacement of the Owner
\nTrustee, the Owner Participant shall have received an opinion of counsel to such
\nsuccessor Owner Trustee in form and substance reasonably satisfactory to the
\nOwner Participant covering the matters set forth in the opinion provided
\npursuant to Section 4(a)(xiii) hereof and (F) Lessee shall indemnify and hold
\nharmless the Owner Participant on a net after-tax basis against any and all
\nreasonable and actual costs and expenses including attorneys’ fees and
\ndisbursements, registration, recording or filing fees and Taxes incurred by the
\nOwner Trustee or Owner Participant, in connection with such change of situs.<\/p>\n
SECTION 15. Miscellaneous. (a) Each of the Participants and the
\nCertificate Holders covenants and agrees that it shall not unreasonably withhold
\nits consent to any consent requested of the Owner Trustee, as Lessor, or the
\nIndenture Trustee under the terms of the Lease, which by its terms is not to be
\nunreasonably withheld by the Owner Trustee, as Lessor, or by the Indenture
\nTrustee.<\/p>\n
(b) The representations, warranties, indemnities and agreements of
\nLessee, the Owner Trustee, the Indenture Trustee, the Participants and the
\nCertificate Holders provided for in this Agreement, and Lessee’s, the Owner
\nTrustee’s, Indenture Trustee’s, the Participants’ and the Certificate Holders’
\nobligations under any and all thereof, shall survive the making available of the
\nrespective Commitments by the Participants, the<\/p>\n
67<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
delivery or return of the Aircraft, the transfer of any interest of the Owner
\nParticipant in the Trust Estate or the Aircraft or any Engine or the transfer of
\nany interest by any Certificate Holder in any Loan Certificate or the Trust
\nIndenture Estate and the expiration or other termination of this Agreement or
\nany other Operative Document or any of the Pass Through Trust Agreements.<\/p>\n
(c) This Agreement may be executed by the parties hereto in separate
\ncounterparts, each of which when so executed and delivered shall be an original,
\nbut all such counterparts shall together constitute but one and the same
\ninstrument. Neither this Agreement nor any of the terms hereof may be
\nterminated, amended, supplemented, waived or modified, except by an instrument
\nin writing signed by the party against which the enforcement of the termination,
\namendment, supplement, waiver or modification is sought; and no such
\ntermination, amendment, supplement, waiver or modification shall be effective
\nunless a signed copy thereof shall have been delivered to the Lessee, the
\nIndenture Trustee and the Owner Trustee. The terms of this Agreement shall be
\nbinding upon, and inure to the benefit of and shall be enforceable by, Lessee,
\nthe Participants, the Indenture Trustee, the Certificate Holders and the Owner
\nTrustee. This Agreement shall in all respects be governed by, and construed in
\naccordance with, the internal laws of the State of Illinois, including all
\nmatters of construction, validity and performance. This Agreement is being
\ndelivered in the State of Illinois.<\/p>\n
(d) The parties hereto agree that all of the statements,
\nrepresentations, covenants and agreements made by the Owner Trustee (when made
\nin such capacity) contained in this Agreement and any agreement referred to
\nherein other than the Trust Agreement, unless expressly otherwise stated, are
\nmade and intended only for the purpose of binding the Trust Estate and
\nestablishing the existence of rights and remedies which can be exercised and
\nenforced against the Trust Estate. Therefore, anything contained in this
\nAgreement or such other agreements to the contrary notwithstanding (except for
\nany express provisions that the Owner Trustee is responsible for or is acting in
\nor making representations or agreements in its individual capacity), no recourse
\nshall be had with respect to this Agreement or such other agreements against the
\nOwner Trustee in its individual capacity or against any institution or person
\nwhich becomes a successor trustee or co-trustee or any officer, director,
\ntrustee, servant or direct or indirect parent or controlling person or persons
\nof any of them; provided, however, that this Section 15(d) shall not be
\nconstrued to prohibit any action or proceeding against any party hereto for its
\nown willful misconduct or grossly negligent conduct; and provided, further, that
\nnothing contained in this Section 15(d) shall be construed<\/p>\n
68<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
to limit the exercise and enforcement in accordance with the terms of this
\nAgreement or such other agreements of rights and remedies against the Trust
\nEstate. The foregoing provisions of this Section 15(d) shall survive the
\ntermination of this Agreement, the other Operative Documents and the Pass
\nThrough Trust Agreements.<\/p>\n
(e) No Participant shall have any obligation or duty to the Lessee, to
\nany other Participant or to others with respect to the transactions contemplated
\nhereby except those obligations or duties of such Participant expressly set
\nforth in this Agreement and the other Operative Documents and no Participant
\nshall be liable for performance by any other party hereto of such other party’s
\nobligations or duties hereunder. Without limitation of the generality of the
\nforegoing, under no circumstances whatsoever shall any Participant be liable to
\nLessee, nor shall any Participant be liable to any other Participant, for any
\naction or inaction on the part of the Indenture Trustee or the Owner Trustee in
\nconnection with the transactions contemplated herein, whether or not such action
\nor inaction is caused by the willful misconduct or gross negligence of the
\nIndenture Trustee or the Owner Trustee.<\/p>\n
(f) This Agreement shall be binding upon and shall inure to the
\nbenefit of and shall be enforceable against, the parties hereto and their
\nrespective successors and permitted assigns including each successive holder of
\nthe Owner Participant’s interest and each successive holder of any Loan
\nCertificate issued and delivered pursuant to this Agreement or the Trust
\nIndenture whether or not an express assignment to such holder of rights and
\nobligations under this Agreement has been made.<\/p>\n
(g) The Owner Participant hereby consents to the Owner Trustee’s
\nappointment of Lessee as its exclusive agent pursuant to the terms of Section
\n7(a)(4) of the Lease.<\/p>\n
SECTION 16. Invoices and Payment of Expenses. Each of the Owner
\nTrustee, the Indenture Trustee, Lessee and the Participants shall promptly
\nsubmit to the Owner Participant and the Lessee for their joint prompt approval
\n(except in the case of Transactions Expenses referred to in clauses (i)(6), (v)
\nand (viii) of the definition thereof which shall be approved solely by the Owner
\nParticipant) copies of invoices of the Transaction Expenses as they are
\nreceived. The Owner Participant agrees to transfer to the Owner Trustee from
\ntime to time promptly upon receipt of invoices of Transaction Expenses such
\namount as shall be necessary in order to enable the Owner Trustee to pay such
\nTransaction Expenses or to pay such amounts directly. To the extent of funds
\nreceived by it, the Owner Trustee agrees to pay<\/p>\n
69<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
all invoices of Transaction Expenses that have been so approved promptly upon
\nreceipt thereof. Notwithstanding the foregoing, in the event that the
\ntransactions contemplated hereby shall not be consummated, Lessee shall pay all
\nTransaction Expenses, except that the fees, expenses and disbursements of the
\nOwner Participant (including those relating to its counsel) shall be borne by
\nthe Owner Participant if such failure to consummate the transactions results
\nfrom the failure of the Owner Participant to adhere to the terms and conditions
\nset forth in the letter dated March 2, 1995 addressed to Lessee and Capstar
\nPartners and agreed to by Lessee or to close after all conditions precedent to
\nthe Owner Participant’s funding of its Commitment set forth herein have been
\nsatisfied. To the extent Transaction Expenses exceed [_____%] of Lessor’s Cost,
\nthe Lessee may, in lieu of electing an optimization pursuant to Section 18
\nhereof, promptly reimburse the Owner Trustee or Owner Participant, as
\nappropriate, for all or a portion of the Transaction Expenses described in
\nclause (i)(5) and\/or clause (vi) (excluding any debt placement fees included in
\nsaid clause (vi)) of the definition of Transaction Expenses.<\/p>\n
SECTION 17. Optional Redemption of Certificates. (a) Subject to the
\nterms of this Section 17, in the event that at any time Lessee shall have given
\nwritten notice to the Owner Trustee, the Indenture Trustee and the Owner
\nParticipant that there be effected a voluntary redemption of all of the
\noutstanding Loan Certificates by the Owner Trustee as part of a refunding or
\nrefinancing transaction, the Owner Participant agrees to negotiate promptly in a
\ncommercially reasonable manner to conclude an agreement with Lessee as to the
\nterms of such refunding or refinancing transaction (including the terms of any
\ndebt to be issued in connection with such refunding or refinancing transaction
\nand the documentation to be executed in connection therewith), and if after such
\nnegotiation Lessee and the Owner Participant shall have concluded an agreement
\nwith respect to such terms:<\/p>\n
(1) within ten Business Days after the reaching of such
\n agreement, the Owner Participant will deliver to Lessee a certificate of an
\n authorized representative of the Owner Participant (the “Refinancing
\n Certificate”) setting forth (i) the proposed date on which the outstanding
\n Loan Certificates will be redeemed, describing the new debt to be issued
\n and the other aspects of such refunding or refinancing transaction to be
\n consummated (such date, the “Refinancing Date”) and (ii) the following
\n information: (A) the principal amount of debt to be issued by the Owner
\n Trustee on the Refinancing Date, and (B) the proposed revised schedules of
\n Basic Rent, Excess Amount, debt amortization, Stipulated Loss Value
\n percentages, Termination<\/p>\n
70<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Value percentages, Special Termination Value percentages and EBO
\n Percentage. Within ten Business Days of its receipt of the Refinancing
\n Certificate, Lessee may demand a verification pursuant to Exhibit E to the
\n Lease of the information set forth in the Refinancing Certificate. Upon
\n the acceptance by Lessee of the accuracy of the information set forth in
\n the Refinancing Certificate or the determination pursuant to such
\n verification procedures of the revised Basic Rent, Excess Amount, debt
\n amortization, Stipulated Loss Value percentages, Termination Value
\n percentages, Special Termination Value percentages and EBO Percentage and
\n the Debt\/Equity Ratio (such information, the “Refinancing Information”) the
\n appropriate parties will take the actions specified in paragraphs (2)
\n through (6) below;<\/p>\n
(2) the appropriate parties will enter into a financing or loan
\n agreement in form and substance reasonably satisfactory to the Owner
\n Participant, the Owner Trustee and the Lessee (which may involve an
\n underwriting agreement in connection with a public offering of such debt or
\n the purchase of such debt by a publicly funded entity (or entities) or the
\n sale of the Owner Trustee’s interest in the Trust Estate and\/or the
\n Aircraft and its resale to the Owner Trustee) with the institution or
\n institutions to be named therein (A) providing for (i) the issuance and
\n sale by the Owner Trustee to such institution or institutions on the
\n Refinancing Date of debt securities in an aggregate principal amount
\n specified in the Refinancing Information, which amount shall be at least
\n equal to the aggregate principal amount of all Loan Certificates
\n outstanding on the Refinancing Date (such debt securities, the “New Debt”)
\n and (ii) the application of the proceeds of the sale of the New Debt to the
\n redemption of all such Loan Certificates on the Refinancing Date and (B)
\n pursuant to which the parties to the refinancing transaction (including the
\n Owner Participant and Lessee but excluding any public holders of debt) make
\n such representations, warranties and covenants as the Owner Participant or
\n Lessee may reasonably require;<\/p>\n
(3) Lessee and the Owner Trustee will amend the Lease to provide
\n that (i) Basic Rent, Excess Amount and the EBO Percentage in respect of the
\n period from and after the Refinancing Date shall be as provided in the
\n Refinancing Information and (ii) amounts payable in respect of Stipulated
\n Loss Value percentages, Special Termination Value Percentages and
\n Termination Value percentages from and after the Refinancing Date shall be
\n as provided in the Refinancing Information;<\/p>\n
71<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(4) the Owner Trustee will enter into an agreement to provide for
\n the securing thereunder of the New Debt in like manner as the Loan
\n Certificates and will enter into such amendments and supplements to the
\n Trust Indenture (or such new indenture or other security agreement) as may
\n be necessary to effect such refunding or refinancing (which agreements,
\n amendments and supplements shall be reasonably satisfactory to the Owner
\n Participant);<\/p>\n
(5) unless otherwise agreed or required by the Owner Participant,
\n and whether or not such refunding or refinancing transaction is
\n consummated, Lessee, on behalf of Lessor, shall pay on an after-tax basis
\n all of the reasonable Expenses of all parties to such refunding or
\n refinancing, including without limitation, the reasonable fees and expenses
\n of such parties’ counsel and any related loan or commitment fees; and<\/p>\n
(6) subject to compliance by the Owner Trustee with all
\n applicable terms and conditions for voluntary prepayment under the Trust
\n Indenture and this Agreement, each Certificate Holder of a Loan Certificate
\n being refinanced or refunded will transfer to the Owner Trustee the Loan
\n Certificates held by it immediately prior to such refunding or refinancing
\n for cancellation (and the Owner Trustee shall cancel the same), against
\n receipt by such Certificate Holder of the then outstanding principal amount
\n of such Loan Certificates, accrued and unpaid interest thereon, plus
\n Premium, if any, together with payment in full of all other amounts then
\n payable to such Certificate Holder and the Indenture Trustee hereunder or
\n under the Trust Indenture.<\/p>\n
(b) In the case of a refunding or refinancing involving a public
\noffering of the New Debt, the Owner Participant shall have the right (but not
\nthe obligation) to review and approve (which approval shall not be unreasonably
\nwithheld) all offering materials to be employed in connection therewith. It is
\nexpressly understood that the Owner Participant shall have no obligation
\nhereunder to consent thereto if, in its good faith judgment, such refunding or
\nrefinancing (A) increases its, any of its Affiliates (other than any Affiliate
\nwhich is acting as an underwriter) or the Owner Trustee’s exposure to (i)
\nliabilities under federal or state securities laws, (ii) regulation under state
\nor federal securities laws, (iii) the need to publicly disclose information that
\nis not generally available to the public, or (iv) being adversely affected in
\nits respective ability to engage in any other financing transaction, in each
\ncase to a level unacceptable to it in its reasonable, good faith, judgment, or
\n(B) requires the identity of the Owner Participant<\/p>\n
72<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
to be disclosed in any offering materials. Lessee shall have the right to
\npurchase such debt securities and apply such securities as a credit against its
\nobligations to pay Rent, provided that (x) in connection with such refunding or
\nrefinancing Lessee shall have agreed to indemnify the Owner Participant with
\nrespect to such right in a manner satisfactory to the Owner Participant, and (y)
\nLessee may not, at any one time hold in the aggregate any such debt securities
\nhaving a face value in excess of that portion of the two next succeeding
\ninstallments of Basic Rent which is required to be paid to the holders of such
\ndebt securities on account of principal and interest. Any trustee of public
\ndebt shall be a bank or trust company having its principal place of business in
\nthe Borough of Manhattan, City and State of New York, Chicago, Illinois,
\nHartford, Connecticut or Boston, Massachusetts and having, or having a parent
\nwilling to guarantee the obligations of such bank or trust company and having, a
\ncombined capital and surplus of at least $100,000,000, if there be such an
\ninstitution willing, able and legally qualified to perform the duties of trustee
\nupon reasonable or customary terms.<\/p>\n
(c) Lessee shall give the Indenture Trustee at least twenty-five (25)
\ndays irrevocable written notice of the proposed date of the optional redemption.<\/p>\n
(d) Notwithstanding the foregoing, the Owner Participant shall have no
\nobligation to proceed with any refunding or refinancing transaction as
\ncontemplated by this Section 17:<\/p>\n
(i) if in the Owner Participant’s good faith judgment, such
\n transaction would have an adverse impact (including, without limitation the
\n risk of adverse tax consequences) on it;<\/p>\n
(ii) unless a third party or parties, unaffiliated with Lessee and
\n Owner Participant, shall have committed to (and shall) provide the entire
\n financing needed to consummate the proposed refunding or refinancing
\n transaction, it being understood that Owner Participant shall have no
\n obligation to locate any such party or parties;<\/p>\n
(iii) unless Lessee indemnifies Owner Trustee and Owner
\n Participant by agreement in form and substance reasonably satisfactory to
\n each of them, for any liability, obligation (other than the obligation to
\n pay principal and interest and related payments in respect of the New
\n Debt), cost or expense (including, without limitation, reasonable
\n attorneys’ fees) related to or arising out of any such refunding or
\n refinancing transaction;<\/p>\n
73<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(iv) unless the New Debt is denominated in Dollars; or<\/p>\n
(v) if the refinancing would increase or decrease the Owner
\n Participant’s Commitment.<\/p>\n
(e) There shall be no more than one redemption permitted under this
\nSection 17.<\/p>\n
(f) No voluntary redemption shall occur pursuant to this Section 17
\nprior to the fifth anniversary of the Delivery Date.<\/p>\n
SECTION 18. Optimization. (a) In the event that: (i) the Delivery
\nDate occurs other than on May 15, 1995 or (ii) Transaction Expenses paid by
\nLessor are determined to be other than [____%] of Lessor’s Cost, the Lessee may,
\npursuant to this Section 18 and in accordance with the requirements of Section
\n3(c) of the Lease, optimize the Basic Rent, Excess Amount, Stipulated Loss Value
\npercentages, Termination Value percentages, Special Termination Value
\npercentages and EBO Percentage subject to the proviso set forth in Section
\n3(c)(i) of the Lease. The Owner Participant shall deliver to Lessee and the
\nIndenture Trustee a certificate of an authorized representative of the Owner
\nParticipant (the “Optimization Certificate”) setting forth the proposed revised
\nschedules of Basic Rent, Excess Amount, Stipulated Loss Value percentages,
\nTermination Value percentages, Special Termination Value percentages and EBO
\nPercentage. Within fifteen days of its receipt of the Optimization Certificate,
\nLessee may demand a verification, pursuant to Exhibit E of the Lease, of the
\ninformation set forth in the Optimization Certificate. Upon the acceptance by
\nLessee of the accuracy of the information set forth in the Optimization
\nCertificate or the determination pursuant to such verification procedures of
\nsuch information, the Owner Participant will cause the Lessor (A) to execute an
\namendment to the Lease setting forth the optimized Basic Rent, Excess Amount,
\nStipulated Loss Value percentages, Termination Value percentages, Special
\nTermination Value percentages and EBO Percentage, and (B) the Lessee will
\nexecute such amended Lease necessary to effectuate the foregoing.<\/p>\n
(b) In connection with optimization adjustments of Basic Rent, Excess
\nAmount, Stipulated Loss Value percentages, Termination Value percentages,
\nSpecial Termination Value percentages and EBO Percentage pursuant to this
\nSection 18 and Section 3(c) of the Lease, none of the principal amount,
\namortization schedules or interest rate of the Loan Certificates shall be
\naltered.<\/p>\n
74<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
(c) Lessee shall pay on an after-tax basis all of the reasonable
\nExpenses of all parties to such optimization, including, without limitation, the
\nreasonable fees and expenses of such parties’ counsel.<\/p>\n
SECTION 19. Nondisclosure. Each party hereto (other than the Owner
\nParticipant) agrees that it will use its best efforts not to disclose the
\nidentity of the Owner Participant and the terms of the Operative Documents in
\nconnection with the issuance or release for external publication of any article
\nor advertising or publicity matter relating to the terms or conditions of any of
\nthe Operative Documents or the transactions contemplated thereby without the
\nprior written consent of the Owner Participant (except as expressly permitted by
\nthe Operative Documents or (t) with respect to the terms of the Operative
\nDocuments to the extent required in connection with a public placement of the
\ndebt pursuant to Section 17 hereof or (u) to the extent required in connection
\nwith a private placement of the debt pursuant to Section 17 hereof or (v) to the
\nextent required to appropriate regulatory authorities or in response to subpoena
\nor other legal process or as otherwise required by law or (w) to such party’s
\ninsurance agents, auditors and counsel or other agents or (x) in the case of any
\nPass Through Trustee, the Indenture Trustee, the Owner Participant or the Owner
\nTrustee (as the case may be), to prospective transferees or to any successor
\nOwner Trustee (as the case may be), who in turn agree to use their best efforts
\nnot to make such disclosure in breach of this Section 19 or (y) as may be
\nnecessary or desirable in connection with the enforcement by such party of any
\nOperative Document).<\/p>\n
* * *<\/p>\n
75<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
\nbe duly executed by their respective officers thereunto duly authorized as of
\nthe day and year first above written.<\/p>\n
UNITED AIR LINES, INC.,
\n Lessee<\/p>\n
By:_______________________________
\n Vice President and Treasurer<\/p>\n
______________________________,
\n Owner Participant<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n Indenture Trustee<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
STATE STREET BANK AND TRUST COMPANY, not in its
\n individual capacity, except as expressly provided
\n herein, but solely as Owner Trustee,
\n Owner Trustee<\/p>\n
By: ______________________________
\n Title:____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n in its capacity as Pass Through Trustee under each
\n of the Pass Through Trust Agreements<\/p>\n
By:_______________________________
\n Title:____________________________<\/p>\n
76<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
SCHEDULE I<\/p>\n
Names and Addresses<\/p>\n
Lessee:
\n– —— <\/p>\n
U.S. Mail Overnight Delivery Service
\n– ——— ————————–
\nUnited Air Lines, Inc. United Air Lines, Inc.
\nP.O. Box 66100 1200 East Algonquin Road
\nChicago, Illinois 60666 Elk Grove Township, IL 60007 <\/p>\n
Attn: Vice President and Attn: Vice President and
\nTreasurer Treasurer <\/p>\n
Telecopy: (708) 952-7117
\n Payment Address
\n —————
\nOwner Participant:
\n– —————– The Chase Manhattan Bank, N.A.
\n New York, N.Y.
\n_______________________ ABA #: 021000021
\n_______________________
\n_______________________ Account #: 910-2-499093
\n_______________________ Account Name:
\n Reference: UAL\/1995 777 B
\nAttn: ______________________
\nTelecopy: __________________<\/p>\n
Pass Through Trustee:
\n– ——————– <\/p>\n
First Security Bank of Utah,
\nNational Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust
\nDepartment
\nTelecopy: (801) 246-5053<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
Indenture Trustee:
\n– —————– <\/p>\n
First Security Bank of Utah, National Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust Department
\nTelecopy: (801) 246-5053<\/p>\n
Owner Trustee:
\n– ————–<\/p>\n
State Street Bank and Trust Company
\n225 Franklin Street
\nBoston, Massachusetts 02110
\n(or, if given by overnight
\ndelivery service)
\nTwo International Place
\nBoston, Massachusetts 02110<\/p>\n
Attn: _________________________
\nTelecopy: (617) 664-5367<\/p>\n
I-2<\/p>\n
[Participation Agreement (1995 777 B)]<\/p>\n
SCHEDULE II<\/p>\n
Commitments
\n ———–<\/p>\n
Percentage of
\nCertificate Holder Lessor’s Cost Dollar Amount
\n– —————— ————- ————-<\/p>\n
First Security Bank of Utah,
\nNational Association, in
\nits capacity as Pass Through
\nTrustee under Pass
\nThrough Trust Agreement 1995-A1<\/p>\n
First Security Bank of Utah,
\nNational Association, in its
\ncapacity as Pass Through
\nTrustee under Pass Through
\nTrust Agreement 1995-A2<\/p>\n
Owner Participant:
\n– —————– <\/p>\n
[__________________________] $<\/p>\n
Total Commitments: 100.00% $
\n================= ======= =<\/p>\n
Doc. No. 1.01
\n Aircraft N189UA<\/p>\n
– ——————————————————————————–<\/p>\n
FIRST AMENDED AND RESTATED PARTICIPATION AGREEMENT
\n (1993 747 A)<\/p>\n
Dated as of May 1, 1995<\/p>\n
Among<\/p>\n
UNITED AIR LINES, INC.,
\n Lessee,<\/p>\n
___________________,
\n Owner Participant,<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n in its capacity as
\n Pass Through Trustee under each of the
\n Pass Through Trust Agreements,<\/p>\n
STATE STREET BANK AND TRUST COMPANY,
\n Not in its Individual Capacity,
\n except as expressly provided herein,
\n but solely as Owner Trustee,<\/p>\n
and<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n In its Individual Capacity and as Indenture Trustee<\/p>\n
—————————<\/p>\n
United Air Lines, Inc.
\n 1993 747 A Equipment Trust
\n One Boeing 747-422 Aircraft<\/p>\n
—————————<\/p>\n
– ——————————————————————————–<\/p>\n
TABLE OF CONTENTS<\/p>\n
\n\n Page
\n
\nSECTION 1. Certain Definitions; Participations in Lessor’s
\n Cost of the Aircraft…………………………………………… 3<\/p>\nSECTION 2. Lessee’s Notice of Delivery Date………………………….. 4<\/p>\n
SECTION 3. Instructions to the Owner Trustee and Indenture
\n Trustee………………………………………………………. 4<\/p>\n
SECTION 4. Conditions……………………………………………… 4
\n (a) Conditions Precedent to the Participations in the Aircraft…….. 4
\n (b) Conditions Precedent to the Obligations of Lessee…………….. 4<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement……………………… 5<\/p>\n
SECTION 6. Extent of Interest of Certificate Holders………………….. 5<\/p>\n
SECTION 7. Lessee’s Representations, Warranties and Indemnities………… 6
\n (a) In General……………………………………………….. 6
\n (b) General Tax Indemnity……………………………………… 10
\n (c) General Indemnity…………………………………………. 22
\n (d) Withholding………………………………………………. 28<\/p>\n
SECTION 8. Representations, Warranties and Covenants…………………… 29<\/p>\n
SECTION 9. [Intentionally Omitted]………………………………….. 51<\/p>\n
SECTION 10. Other Documents; Amendment………………………………. 51<\/p>\n
SECTION 11. Certain Covenants of Lessee……………………………… 51<\/p>\n
SECTION 12. Owner for Income Tax Purposes……………………………. 52<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction…………………………. 52<\/p>\n
SECTION 14. Change of Situs of Owner Trust…………………………… 53<\/p>\n
SECTION 15. Miscellaneous………………………………………….. 55<\/p>\n
SECTION 16. Invoices and Payment of Expenses…………………………. 57<\/p>\n
SECTION 17. Optional Redemption of Certificates………………………. 57<\/p>\n
SECTION 18. Optimization…………………………………………… 61<\/p>\n
SECTION 19. Nondisclosure………………………………………….. 62<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
ii<\/p>\n
SCHEDULES<\/p>\n
\n <\/p>\nSCHEDULE I – Names and Addresses<\/p>\n
SCHEDULE II – Commitments<\/p>\n
SCHEDULE III – Legal Opinions<\/p>\n
EXHIBIT A-1 – Form of Transferor Opinion Re: Transfer of
\n Owner Participant’s Interest <\/p>\n
EXHIBIT A-2 – Form of Transferee Opinion Re: Transfer of
\n Owner Participant’s Interest <\/p>\n
EXHIBIT B – Form of Assignment and Assumption Agreement
\n<\/c><\/s><\/table>\n
iii<\/p>\n
FIRST AMENDED AND RESTATED PARTICIPATION AGREEMENT
\n (1993 747 A)<\/p>\n
THIS FIRST AMENDED AND RESTATED PARTICIPATION AGREEMENT (1993 747 A)
\ndated as of May 1, 1995 (this “Agreement”) among (i) United Air Lines, Inc., a
\nDelaware corporation (the “Lessee”), (ii) _________________, a corporation
\norganized under the laws of Delaware (the “Owner Participant”), (iii) STATE
\nSTREET BANK AND TRUST COMPANY, a Massachusetts trust company, not in its
\nindividual capacity, except as expressly provided herein, but solely as Owner
\nTrustee under the Trust Agreement (the “Owner Trustee”) as successor to the
\nOriginal Owner Trustee (as defined below), (iv) FIRST SECURITY BANK OF UTAH,
\nNATIONAL ASSOCIATION, a national banking association, not in its individual
\ncapacity, except as otherwise provided herein, but solely as trustee under the
\nPass Through Trust Agreement (the “Pass Through Trustee”), dated as of February
\n1, 1992, as amended and restated as of May 1, 1995 (the “Basic Agreement”), in
\neach case between the Lessee and STATE STREET BANK AND TRUST COMPANY OF
\nCONNECTICUT, NATIONAL ASSOCIATION, as supplemented by Trust Supplements Nos.
\n1995-A1 and 1995-A2, each dated as of May __, 1995 between the Lessee and the
\nPass Through Trustee creating the 1995-A1 Pass Through Trust and the 1995-A2
\nPass Through Trust, respectively (the Basic Agreement as so supplemented being
\nthe “1995-A1 Pass Through Trust Agreement” and the “1995-A2 Pass Through Trust
\nAgreement”, respectively, each of the 1995-A1 Pass Through Trust Agreement and
\nthe 1995-A2 Pass Through Trust Agreement being a “Pass Through Trust Agreement”)
\nand (v) FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
\nassociation, in its individual capacity and as Indenture Trustee under the Trust
\nIndenture (the “Indenture Trustee”) as successor to the Original Indenture
\nTrustee (as defined below), amends and restates that certain Participation
\nAgreement (1993 747 A) dated as of April 1, 1993 among Lessee, the Owner
\nParticipant, Wilmington Trust Company, not in its individual capacity except as
\nexpressly provided therein (the “Original Owner Trustee”), State Street Bank and
\nTrust Company of Connecticut, National Association, as Indenture Trustee (the
\n“Original Indenture Trustee”) and The Chase Manhattan Bank, N.A., as an Original
\nLoan Participant, as amended by that certain First Amendment to Participation
\nAgreement (1993 747 A) dated as of December 1, 1993 among Lessee, the Owner
\nParticipant, the Original Owner Trustee, the Original Indenture Trustee and The
\nChase Manhattan Bank. N.A., Berliner Handels Und Frankfurter Bank and NBD Bank,
\nN.A., as Original Loan Participants (collectively, the “Original Loan
\nParticipants”), as further amended by that certain Second Amendment to
\nParticipation Agreement (1993 747 A) dated as of July 1, 1994 among Lessee, the
\nOwner Participant, the Original Owner Trustee, the Original<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Indenture Trustee and The Mitsubishi Trust and Banking Corporation, New York
\nBranch (the “Successor Original Loan Participant”) (such Participation
\nAgreement, as amended as set forth above, being referred to herein as the
\n“Original Participation Agreement”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, except as otherwise defined in this Agreement, capitalized
\nterms used herein shall have the meanings attributed thereto in Section 1
\nhereof;<\/p>\n
WHEREAS, as contemplated by Section 20 of the Original Participation
\nAgreement, the outstanding Loan Certificates held by the Successor Original Loan
\nParticipant are, concurrently with the execution and delivery of this Amendment,
\nbeing refinanced by the issuance to each Pass Through Trustee of new Loan
\nCertificates in the aggregate principal amount of $_________ and the proceeds
\nof such issuance are, concurrently with the execution and delivery of this
\nAgreement, being applied to the payment of all the unpaid principal on such
\noutstanding Loan Certificates in an amount equal to $____________; and<\/p>\n
WHEREAS, the parties hereto desire to amend and restate the Original
\nParticipation Agreement in its entirety and the parties hereto desire and intend
\nthat the terms, provisions and agreements herein set forth shall have the same
\nforce and effect as though originally executed and delivered in the place of the
\nOriginal Participation Agreement; and<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement, the Owner Participant is entering into the First Amended and Restated
\nTrust Agreement (1993 747 A) (the “Trust Agreement”) pursuant to which Trust
\nAgreement the Owner Trustee agrees, among other things, to hold the Trust Estate
\ndefined in Section 1.01 thereof (the “Trust Estate”) for the use and benefit of
\nthe Owner Participant; and<\/p>\n
WHEREAS, the Indenture Trustee and the Owner Trustee concurrently with
\nthe execution and delivery of this Agreement are entering into the Third Amended
\nand Restated Trust Indenture and Mortgage (1993 747 A) dated as of May 1, 1995
\n(the “Trust Indenture”) pursuant to which the Owner Trustee agrees, among other
\nthings, to issue one or more Loan Certificates in the form set forth in Exhibit
\nA-1 or Exhibit A-2 to the Trust Indenture to each Pass Through Trustee on behalf
\nof the related grantor trusts created by the applicable Pass Through Trust
\nAgreement as evidence of the Owner Trustee’s indebtedness to each Pass Through<\/p>\n
2<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Trustee, which Loan Certificates are to be secured by the mortgage and security
\ninterest in the Aircraft created pursuant to the Trust Indenture by the Owner
\nTrustee in favor of the Indenture Trustee, and the Owner Trustee shall execute
\nand deliver the Trust Supplement covering the Aircraft, supplementing the Trust
\nAgreement and the Trust Indenture; and<\/p>\n
WHEREAS, as described in Section 2 hereof, the Owner Trustee and
\nLessee are entering into the Second Amended and Restated Lease Agreement (1993
\n747 A) dated as of May 1, 1995 (the “Lease Agreement”) whereby, subject to the
\nterms and conditions set forth therein, the Owner Trustee agrees to lease to
\nLessee, and Lessee agrees to lease from the Owner Trustee, the Aircraft on the
\nDelivery Date; and<\/p>\n
WHEREAS, in connection with the foregoing, each Pass Through Trustee
\nwill issue the Pass Through Certificates substantially in the form of Exhibit A
\nto each Pass Through Trust Agreement; and<\/p>\n
WHEREAS, to facilitate the Owner Trustee’s issuance of the Loan
\nCertificates to the applicable Pass Through Trustee and the purchase of the Loan
\nCertificates by each such Pass Through Trustee, the Lessee has duly authorized
\nthe execution and delivery of each of the two Pass Through Trust Agreements as
\nthe “issuer” thereunder, as such term is defined in and solely for purposes of
\nthe Securities Act of 1933, as amended, and of the Pass Through Certificates
\nbeing issued thereunder as the “obligor” thereunder, as such term is defined in
\nand solely for purposes of the Trust Indenture Act of 1939, as amended, with
\nrespect to the Pass Through Certificates and is undertaking to perform certain
\nadministrative and ministerial duties thereunder and is also undertaking to pay
\nthe fees and expenses of the Pass Through Trustees; and<\/p>\n
WHEREAS, certain terms are used herein as defined in Section 1(a)
\nhereof.<\/p>\n
NOW THEREFORE, in consideration of the mutual agreements herein
\ncontained, the parties hereto agree as follows:<\/p>\n
SECTION 1. Certain Definitions; Participations in Lessor’s Cost of
\nthe Aircraft. (a) The terms “Lessee,” “Owner Participant,” “Pass Through
\nTrustee,” “Owner Trustee” and “Indenture Trustee” shall have the further
\nmeanings attributed thereto in the Lease Agreement referred to above and, except
\nas otherwise defined in this Agreement, terms used herein in capitalized form
\nshall have the meanings attributed thereto in the Lease Agreement referred to
\nabove. Unless the context<\/p>\n
3<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
otherwise requires, any reference herein to any of the Operative Documents
\nrefers to such document as it may be amended from time to time in accordance
\nwith its terms and the terms of each other agreement restricting the amendment
\nthereof.<\/p>\n
(b) Subject to the terms and conditions of the Original Participation
\nAgreement, (i) the Original Loan Participant agreed to finance, in part, the
\nOwner Trustee’s payment of Lessor’s Cost for the Aircraft by making a secured
\nloan to the Owner Trustee (herein called the “Loan”) on a date designated
\npursuant to Section 2 thereof, but in no event later than May 15, 1993, in the
\namount in Dollars equal to the percentage of Lessor’s Cost set forth opposite
\nits name on Schedule II thereto and (ii) the Owner Participant agreed, in
\nconnection with its equity investment in the beneficial ownership of the
\nAircraft and the sale of the Aircraft by the Lessee to the Owner Trustee
\npursuant to the Owner Trustee’s Bill of Sale, as contemplated thereby and by the
\nOwner Trustee’s Purchase Agreement, to make its equity investment in the
\nbeneficial ownership of the Aircraft on a date designated as set forth above,
\nbut in no event later than May 15, 1993, in an amount in Dollars equal to the
\npercentage of Lessor’s Cost set forth opposite its name on Schedule II thereto.<\/p>\n
SECTION 2. Lessee’s Notice of Delivery Date. <\/p>\n
[Intentionally Omitted].<\/p>\n
SECTION 3. Instructions to the Owner Trustee and Indenture Trustee.<\/p>\n
[Intentionally Omitted].<\/p>\n
SECTION 4. Conditions. (a) Conditions Precedent to the
\nParticipations in the Aircraft. It is agreed that the respective obligations of
\nthe Original Loan Participant and the Owner Participant to participate in the
\npayments of Lessor’s Cost were subject to the satisfaction prior to or on the
\nDelivery Date of the conditions precedent set forth in Section 4(a) of the
\nOriginal Participation Agreement and the respective obligations of the OP and
\nthe Pass Through Trustees to enter into a refinancing are set forth in the
\nRedemption and Refinancing Agreement.<\/p>\n
(b) Conditions Precedent to the Obligations of Lessee. It is agreed
\nthat the obligations of Lessee (A) to sell the Aircraft to the Owner Trustee,
\n(B) to accept delivery of the Aircraft under the Lease and (C) to enter into its
\nother Operative Documents, were all subject to the fulfillment to the
\nsatisfaction of Lessee prior to or on the Delivery Date of the conditions
\nprecedent set forth in the Original Participation Agreement and the obligations
\nof Lessee to enter into a<\/p>\n
4<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
refinancing transaction are set forth in the Redemption and Refinancing
\nAgreement.<\/p>\n
SECTION 5. Confidentiality of Purchase Agreement. Lessor, the
\nParticipants, and the Indenture Trustee shall keep the Purchase Agreement
\nconfidential and shall not disclose the same to any Person, except (A) to
\nprospective and permitted transferees of Lessor’s, a Pass Through Trustee’s, the
\nOwner Participant’s or the Indenture Trustee’s interest who agree to hold such
\ninformation confidential, (B) to the aforementioned prospective and permitted
\ntransferees’, Lessor’s, Pass Through Trustees’, the Owner Participant’s or the
\nIndenture Trustee’s counsel or special counsel, independent insurance brokers or
\nother agents who agree to hold such information confidential, (C) as may be
\nrequired by any statute, court or administrative order or decree or governmental
\nruling or regulation, including Federal or state banking examiners or tax
\nauditors or (D) as may be necessary or desirable for purposes of protecting the
\ninterest of any such Person or for enforcement of the Lease by Owner Trustee,
\nthe Participants or the Indenture Trustee; provided, however, that any and all
\ndisclosures of all or any part of the Purchase Agreement which are permitted by
\n(C) or (D) above shall be made only to the extent necessary to meet the specific
\nrequirements or needs of the Persons to whom such disclosures are hereby
\npermitted.<\/p>\n
SECTION 6. Extent of Interest of Certificate Holders. No Certificate
\nHolder shall have any further interest in, or other right with respect to, the
\nmortgage and security interests created by the Trust Indenture when and if the
\nOriginal Amount of, Premium, if any, and interest on all Loan Certificates held
\nby such Certificate Holder and all other sums payable to such Certificate Holder
\nhereunder, under the Trust Indenture and under such Loan Certificates shall have
\nbeen paid in full. Each Certificate Holder by its acceptance of a Loan
\nCertificate, agrees that it will look solely to the income and proceeds from the
\nTrust Indenture Estate to the extent available for distribution to such
\nCertificate Holder as provided in Section 2.09 of the Trust Indenture and that
\nneither the Owner Participant nor the Owner Trustee shall be personally liable
\nto any Certificate Holder for any amounts payable under the Loan Certificates,
\nthe Trust Indenture, hereunder, or under any other Operative Documents
\n(including, without limitation, amounts payable as Premium), except as expressly
\nprovided in this Agreement or (in the case of the Owner Trustee) in the Trust
\nIndenture.<\/p>\n
5<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
SECTION 7. Lessee’s Representations, Warranties and Indemnities. <\/p>\n
(a) In General. Lessee represents and warrants that as of the
\nDelivery Date:<\/p>\n
(i) Lessee is a corporation duly organized and validly existing
\n in good standing pursuant to the laws of the State of Delaware; is duly
\n qualified to do business as a foreign corporation in each jurisdiction in
\n which its operations or the nature of its business requires, except where
\n the failure to be so qualified would not have a material adverse effect on
\n Lessee or its business; is a Citizen of the United States and a
\n Certificated Air Carrier; holds all material licenses, certificates,
\n permits and franchises from the appropriate agencies of the United States
\n of America and\/or all other governmental authorities having jurisdiction,
\n necessary to authorize Lessee to engage in air transport and to carry on
\n scheduled passenger service, in each case as presently conducted; has its
\n chief executive office (as such term is defined in Article 9 of the Uniform
\n Commercial Code) in Elk Grove Township, Illinois; and has the corporate
\n power and authority to conduct its business as it is presently being
\n conducted, to hold under lease the Aircraft and to enter into and perform
\n its obligations under the Lessee Documents;<\/p>\n
(ii) the execution, delivery and performance by Lessee of the
\n Lessee Documents have been duly authorized by all necessary corporate
\n action on the part of Lessee, do not require any stockholder approval, or
\n approval or consent of any trustee or holders of any indebtedness or
\n obligations of Lessee except such as have been duly obtained, and none of
\n such Lessee Documents contravenes any law, judgment, governmental rule,
\n regulation or order binding on Lessee or the certificate of incorporation
\n or by-laws of Lessee or contravenes the provisions of, or constitutes a
\n default under, or results in the creation of any Lien (other than Permitted
\n Liens) upon the property of Lessee under, its certificate of incorporation
\n or bylaws, or any indenture, mortgage, chattel mortgage, deed of trust,
\n conditional sales contract, bank loan or credit agreement or other
\n agreement or instrument to which Lessee is a party or by which it or its
\n properties may be bound or affected;<\/p>\n
(iii) neither the execution and delivery by Lessee of the Lessee
\n Documents nor the performance by Lessee of its obligations thereunder
\n require the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action in respect of any
\n federal, state or foreign government authority or agency, except for (A)<\/p>\n
6<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
the orders, permits, waivers, exemptions, authorizations and approvals of
\n the regulatory authorities having jurisdiction over the operation of the
\n Aircraft by Lessee, which orders, permits, waivers, exemptions,
\n authorizations and approvals have been duly obtained, and are in full force
\n and effect, (B) the registration of the Aircraft referred to in Section
\n 4(a)(ix)(2) and (C) any normal periodic and other reporting requirements
\n under the applicable rules and regulations of the FAA to the extent
\n required to be given or obtained only after the Delivery Date;<\/p>\n
(iv) each of the Lessee Documents has been duly executed and
\n delivered by Lessee and constitutes legal, valid and binding obligations of
\n Lessee enforceable against Lessee in accordance with the terms thereof;<\/p>\n
(v) there are no pending or threatened actions or proceedings
\n before any court or administrative agency involving any Lessee Document or
\n the transactions contemplated hereby or which individually (or in the
\n aggregate in the case of any group of related lawsuits) is expected to have
\n a material adverse effect on the financial condition of Lessee or the
\n ability of Lessee to perform its obligations under the Lessee Documents;<\/p>\n
(vi) except for (A) the registration of the Aircraft pursuant to
\n the Federal Aviation Act, (B) the filing for recording pursuant to said Act
\n of the Trust Agreement, the Lease with the Lease Supplement covering the
\n Aircraft, the Trust Indenture and the Trust Supplement attached thereto and
\n made a part thereof, and the Owner Trustee’s FAA Bill of Sale, (C) the
\n filing of financing statements (and continuation statements at periodic
\n intervals) with respect to the security and other interests created by such
\n documents under the Uniform Commercial Code of Illinois (which financing
\n statement Lessee has caused to be presented in due form for filing with the
\n appropriate filing office in the State of Illinois) and such other states
\n as may be specified in the opinions furnished pursuant to Section 4(a)(xi)
\n hereof and (D) the taking of possession by the Indenture Trustee of the
\n original counterparts of the Lease and the Lease Supplement covering the
\n Aircraft, no further action, including any filing or recording of any
\n document (including any financing statement in respect thereof under
\n Article 9 of the Uniform Commercial Code of any applicable jurisdiction),
\n is necessary or advisable in order to establish and perfect the Owner
\n Trustee’s title to and interest in the Aircraft as against the Lessee and
\n the Indenture Trustee’s security interest in<\/p>\n
7<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
the Aircraft as against the Owner Trustee, and in each case as against any
\n third parties in any applicable jurisdictions in the United States;<\/p>\n
(vii) there has not occurred any event which constitutes a Default
\n or an Event of Default under the Lease which is presently continuing and
\n there has not occurred any event which constitutes or would, with the
\n passage of time or the giving of notice, or both, constitute an Event of
\n Loss;<\/p>\n
(viii) the statements of financial position of Lessee as of
\n December 31, 1992 and the related statements of earnings and cash flow of
\n Lessee for the year then ended, copies of which have been furnished to the
\n Participants, fairly present the financial condition of Lessee as at such
\n date and the results of operations and cash flow of Lessee for the period
\n ended on such date, in accordance with generally accepted accounting
\n principles consistently applied (except as may be stated in the notes
\n thereto), and since December 31, 1992, there has been no material adverse
\n change in such condition or operations, except for such matters timely
\n disclosed in press releases issued by UAL Corporation or Lessee or in
\n public filings, effective as of the date hereof, with the Securities and
\n Exchange Commission under the Securities Exchange Act of 1934, as amended,
\n by UAL Corporation or Lessee;<\/p>\n
(ix) the Owner Trustee will have received good and marketable
\n title to the Aircraft free and clear of all Liens, except the rights of
\n Lessee under the Lease and the Lease Supplement covering the Aircraft, the
\n Lien of the Trust Indenture, the beneficial interest of the Owner
\n Participant in the Aircraft, and the Liens permitted by clause (iii)
\n (solely for Taxes not yet due) of Section 6 of the Lease;<\/p>\n
(x) none of the proceeds from the issuance of the Loan
\n Certificates or from the acquisition by the Owner Participant of its
\n beneficial interest in the Trust Estate will be used directly or indirectly
\n by Lessee to purchase or carry any “margin stock” as such term is defined
\n in Regulation G or U of the Board of Governors of the Federal Reserve
\n System;<\/p>\n
(xi) neither Lessee nor anyone acting on behalf of Lessee has (A)
\n directly or indirectly offered any interest in the Trust Estate for sale
\n to, or solicited any offer to acquire any of the same from, anyone other
\n than the Owner<\/p>\n
8<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Participant, and not more than twenty-five (25) other institutions believed
\n capable of evaluating and bearing the risks of investment in the
\n transactions contemplated hereby, or (B) offered any interest in the Trust
\n Estate or any Pass Through Certificate or any Loan Certificate in a manner
\n which would violate the Securities Act of 1933, as amended, the regulations
\n thereunder, administrative and judicial interpretation thereof or the
\n securities laws, rules or regulations of any state;<\/p>\n
(xii) Lessee is not in default in the performance of any term or
\n condition of the Owner Trustee’s Purchase Agreement, and is not in default
\n in the performance of any term or condition of the Purchase Agreement which
\n materially adversely impairs the transactions contemplated hereby;<\/p>\n
(xiii) no governmental approval of any kind is required of the
\n Owner Participant, the Original Loan Participant, the Owner Trustee or the
\n Indenture Trustee for their respective execution of or performance under
\n this Agreement, the Pass Through Trust Agreements or any agreement
\n contemplated hereby solely by reason of any fact or circumstance peculiar
\n to: (a) Lessee, (b) the nature of the Aircraft, or (c) Lessee’s proposed
\n operations or use of the Aircraft;<\/p>\n
(xiv) all sales or use tax then due and for which Lessee is
\n responsible pursuant to Section 7(b)(i) hereof shall have been paid, other
\n than such taxes which are being contested by Lessee in good faith and by
\n appropriate proceedings so long as such proceedings do not involve any
\n material risk of the sale, forfeiture or loss of the Aircraft or any
\n interest therein;<\/p>\n
(xv) The Aircraft has been duly certified by the FAA as to type
\n and airworthiness and such certification remains in full force and effect;<\/p>\n
(xvi) Owner Trustee, as lessor under the Lease, and the Indenture
\n Trustee, as assignee of the Owner Trustee’s rights under the Lease pursuant
\n to the Trust Indenture, are entitled to the protection of Section 1110 of
\n the Bankruptcy Code in connection with the Owner Trustee’s and the
\n Indenture Trustee’s right to take possession of the Airframe and Engines in
\n the event of a case under Chapter 11 of the Bankruptcy Code in which Lessee
\n is a debtor; and<\/p>\n
(xvii) neither Lessee nor any subsidiary of Lessee is an
\n “investment company” or a company “controlled by an<\/p>\n
9<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
investment company” within the meaning of the Investment Company Act of
\n 1940, as amended.<\/p>\n
(b) General Tax Indemnity. (i) Indemnity. Except as provided in
\nSection 7(b)(ii) hereof, whether or not any of the transactions contemplated
\nherein are consummated, Lessee shall pay when due and assume liability for, and
\nprotect, save and shall indemnify and hold harmless each Indemnitee (except
\nthat, for purposes of this Section 7(b)(i), an Indemnitee shall not include any
\nCertificate Holder) from and against (x) any and all Taxes howsoever imposed
\nagainst any Indemnitee, Lessee or all or any part of the Aircraft, the Airframe,
\nthe Engines, the Parts or any part thereof or otherwise by any federal, state or
\nlocal government or other taxing authority in the United States or by any
\nforeign government or any political subdivision or taxing authority thereof or
\nby any territory or possession of the United States or by any international
\nauthority upon or in connection with, relating to, or measured by (A) the
\nassembly, manufacture, construction, substitution, improvement, location,
\nconditioning, installation, financing, refinancing, purchase, acquisition,
\nacceptance, delivery, nondelivery, transport, ownership, registration,
\nreregistration, possession, repossession, control, operation, use, maintenance,
\nrepair, replacement, insuring, sale, return, abandonment, storage, redelivery,
\nleasing, subleasing, modification, rebuilding of, transfer of title to, transfer
\nof registration of, rejection, importation, mortgaging, exportation or
\ndisposition of, or the imposition of any Lien (or the incurrence of any
\nliability to refund or pay over any amount as the result of any Lien) on, the
\nAircraft, the Airframe, the Engines, the Parts or any part thereof, (B) the
\nrentals, receipts or earnings from the Aircraft, the Airframe, the Engines, the
\nParts or any part thereof, (C) any amount paid or payable pursuant to any
\nOperative Documents or any Pass Through Trust Agreement or any document related
\nthereto or the property or the income or other proceeds with respect to any of
\nthe property held in the Trust Estate or the Trust Indenture Estate or the
\nproperty held by each Pass Through Trustee under the respective Pass Through
\nTrust Agreement, (D) the Aircraft, the Airframe, the Engines, the Parts or any
\npart thereof or any contract relating to the manufacture, construction,
\nacquisition or delivery thereof, (E) any or all of the Operative Documents, the
\nPass Through Trust Agreements, or the issuance of the Loan Certificates or the
\nPass Through Certificates (or the refinancing thereof) and any other documents
\ncontemplated hereby or thereby and amendments and supplements hereto and thereto
\nwhich have been approved by Lessee or the execution, delivery, recording or
\nperformance of any thereof or the issuance, acquisition, holding or subsequent
\ntransfer thereof, (F) the payment of the Original Amount of, or interest or
\nPremium on, or other amounts payable<\/p>\n
10<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
with respect to, the Loan Certificates or the payment of principal of, interest
\non or any other amounts payable with respect to the Pass Through Certificates,
\n(G) otherwise with respect to or in connection with the transactions
\ncontemplated by the Operative Documents, or (H) any change in the Owner Trustee
\nor the situs of the Trust Estate made pursuant to Sections 8(c) or 14 hereof;
\nand (y) any reasonable out-of-pocket costs and expenses fairly attributed to any
\nof the foregoing incurred by any Indemnitee.<\/p>\n
(ii) Exclusions from General Tax Indemnity. The provisions of
\n Section 7(b)(i) shall not apply:<\/p>\n
(1) in the case of an Indemnitee which is the Owner
\n Participant, the Owner Trustee, the Trust Estate, or a successor,
\n assign, or Affiliate of any thereof, to any Income Tax (as defined in
\n Section 7(b)(xii) hereof) imposed by (A) the United States Federal
\n government, (B) any state or local taxing jurisdiction or authority in
\n the United States to the extent such Income Taxes would not have been
\n imposed if (I) the use, location or operation of the Aircraft, or (II)
\n the activities of the Lessee, to or in such state or local
\n jurisdiction, had been the only connection between the Indemnitee and
\n such jurisdiction, or (C) any foreign government or any political
\n subdivision or taxing authority thereof or by any territory or
\n possession of the United States or by any international authority,
\n except to the extent such Income Taxes are attributable to (I) the
\n use, location or operation of the Aircraft, or (II) the activities of
\n the Lessee, to or in such jurisdiction;<\/p>\n
(2) to any Tax imposed on an Indemnitee which is the Owner
\n Participant, the Owner Trustee, or the Trust Estate, or any successor,
\n assign or Affiliate of any thereof, as a result of a voluntary
\n transfer or disposition by such Indemnitee including, without
\n limitation, the revocation of the trust created by the Trust Agreement
\n or an involuntary transfer or disposition relating to bankruptcy or
\n similar proceedings of all or any portion of its respective equitable
\n or legal ownership interest in the Aircraft, the Airframe, the
\n Engines, the Parts or any part thereof, the Trust Estate or the
\n Operative Documents and each Pass Through Trust Agreement, unless such
\n transfer or disposition, whether or not voluntary or involuntary,
\n shall occur, (A) during a period when an Event of Default has occurred
\n and is continuing under<\/p>\n
11<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
the Lease at the time of transfer or disposition and such transfer is
\n as a result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 7, 8, 9, 10 or 19 thereof;<\/p>\n
(3) to any Tax imposed on any Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee or any successor, assign or Affiliate of any thereof, as a
\n result of a voluntary or involuntary transfer or other disposition of
\n all or any portion of its respective equitable or legal interests in
\n the Trust Estate or the Trust Indenture Estate or the Operative
\n Documents and each Pass Through Trust Agreement unless, in each case,
\n such transfer or disposition shall occur (A) during a period when an
\n Event of Default has occurred and is continuing under the Lease at the
\n time of transfer or disposition and such transfer or disposition is a
\n result of such Event of Default, or (B) in connection with the
\n termination of the Lease or action or direction of the Lessee pursuant
\n to Sections 9, 10 or 19 thereof;<\/p>\n
(4) to any Tax imposed on the Owner Participant, Trust
\n Estate or Owner Trustee which results from the willful misconduct or
\n gross negligence of (i) the Owner Participant, to the extent imposed
\n on the Owner Participant, Trust Estate or Owner Trustee, or (ii) to
\n the extent imposed on the Owner Trustee, the Owner Trustee;<\/p>\n
(5) to any Tax imposed on an Indemnitee which is the
\n Indenture Trustee, the Trust Indenture Estate or a Pass Through
\n Trustee which results from the willful misconduct or gross negligence
\n of such Indemnitee;<\/p>\n
(6) to any Tax based on or measured by any fees received by
\n the Owner Trustee, the Indenture Trustee or a Pass Through Trustee in
\n connection with any transaction contemplated by the Operative
\n Documents;<\/p>\n
(7) so long as no Event of Default or event which, with the
\n passage of time or the giving of notice or both, would become an Event
\n of Default, shall be continuing, to any Tax imposed with respect to
\n (A) any period after the expiration of the Term and, unless purchased
\n by the Lessee, return of the Aircraft, (B)<\/p>\n
12<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
the earlier discharge in full of Lessee’s obligation to pay the
\n Stipulated Loss Value or the Termination Value and all other amounts
\n due under the Lease or (C) placement in storage or parking of the
\n Aircraft pursuant to Section 5(d) of the Lease; provided, however,
\n that this Section 7(b)(ii)(8) shall not apply to any Tax (x) relating
\n to events or conditions occurring or matters arising upon or prior to
\n such expiration, discharge, storage or parking, or (y) imposed on or
\n with respect to any payments of Tax indemnified hereunder which are
\n due after such expiration, discharge, storage or parking until after
\n such payments have been made;<\/p>\n
(8) in the case of an Indemnitee which is the Trust
\n Indenture Estate or any successor, assign or Affiliate thereof, to any
\n Tax in the nature of an intangible or similar tax upon or with respect
\n to the value of the interest of the Trust Indenture Estate or the Pass
\n Through Certificates, as the case may be, in any of the Loan
\n Certificates imposed by any government or taxing authority;<\/p>\n
(9) to any Tax which Lessee or an Indemnitee is contesting
\n in good faith under the provisions of Section 7(b)(iv) hereof until
\n the conclusion of such contest;<\/p>\n
(10) to any Tax imposed on the Owner Trustee or an Owner
\n Participant resulting from, or which would not have occurred but for,
\n a Lessor Lien (including for this purpose Liens that would be Lessor
\n Liens but for the proviso to the definition of Lessor Liens);<\/p>\n
(11) in the case of an Indemnitee which is the Owner
\n Participant or the Owner Trustee, to any Taxes to the extent of the
\n amount of such Taxes that are imposed by any jurisdiction on and with
\n respect to any activities of such Indemnitee in such jurisdiction
\n which activities are unrelated to the transactions contemplated by the
\n Operative Documents and each Pass Through Trust Agreement; and<\/p>\n
(12) to any Tax which has been properly included in the
\n Lessor’s Cost.<\/p>\n
The provisions of this Section 7(b)(ii) shall not apply to any
\n Tax imposed in respect of the receipt or accrual of any indemnity payment
\n made by Lessee pursuant to<\/p>\n
13<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
this Section 7(b) or Section 7(c) hereof or pursuant to the Tax Indemnity
\n Agreement; provided, however, that this clause shall not result in any
\n duplication of any amounts of any gross-up payable under Section 7(b)(iii)
\n or Section 7(c) hereof or the Tax Indemnity Agreement.<\/p>\n
Notwithstanding the exclusions set forth in this Section 7(b) or
\n any other provision of the Operative Documents or the Pass Through Trust
\n Agreements, the Lessee hereby agrees to indemnify and hold harmless on a
\n net after-tax basis the Trust Estate, the Owner Trustee and the Owner
\n Participant for any failure to withhold U.S. Federal Income Taxes upon
\n payments of principal, interest, Premium or discount on the Loan
\n Certificates or the Pass Through Certificates, including interest and
\n penalties, unless the Owner Participant has been timely advised by the
\n Lessee in writing that such withholding is required.<\/p>\n
(iii) Calculation of General Tax Indemnity Payments. Any payment
\n which Lessee shall be required to make to or for the account of any
\n Indemnitee in connection with any Tax which is subject to indemnification
\n under this Section 7(b) shall be in an amount which, after reduction by the
\n amount of all Taxes required to be paid by such Indemnitee in respect of
\n the receipt or accrual of such amount and after consideration of any
\n current savings of such Indemnitee resulting by way of any deduction,
\n credit or other tax benefit attributable to such indemnified Tax that
\n actually reduces any taxes for which Lessee is not actually required to
\n indemnify such Indemnitee pursuant to Section 7(b) hereof or the Tax
\n Indemnity Agreement shall be equal to the payment otherwise required
\n hereunder.<\/p>\n
If, by reason of any Tax payment made to or for the account of an
\n Indemnitee by Lessee pursuant to this Section 7(b), such Indemnitee
\n subsequently realizes a tax deduction, savings or credit (including any
\n foreign tax credit and any reduction in Taxes) not previously taken into
\n account in computing such payment, such Indemnitee shall promptly pay to
\n Lessee an amount equal to the sum of (I) the actual reduction in Taxes, if
\n any, realized by such Indemnitee which is attributable to such deduction,
\n savings or credit and (II) the actual reduction in Taxes realized by such
\n Indemnitee as a result of any payment made by such Indemnitee pursuant to
\n this sentence; provided, however, that in the case of an Indemnitee which
\n is the Owner Participant or the Owner Trustee, such Indemnitee shall not be
\n obligated to make any payment pursuant to this Section 7(b)(iii) to the
\n extent that the amount calculated pursuant<\/p>\n
14<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
to (I) above would exceed (x) the amount of all prior payments (determined
\n without regard to any amount paid in respect of Taxes required to be paid
\n by such Indemnitee in respect of the receipt or accrual of such amounts
\n received by such Indemnitee) from Lessee pursuant to this Section 7(b),
\n less (y) the portion of all prior payments computed pursuant to (I) above
\n by such Indemnitee to Lessee hereunder.<\/p>\n
For purposes of this Section 7(b)(iii), items of foreign Tax of
\n any Indemnitee shall be deemed to be utilized by such Indemnitee as credits
\n or deductions for any taxable year in accordance with the following
\n priorities:<\/p>\n
First, all available foreign Taxes other than those
\n described below in Second; and<\/p>\n
Second, all available foreign Taxes arising out of any
\n equipment leasing transaction to the extent that such Indemnitee was
\n indemnified or held harmless for such Taxes by a lessee on a pari
\n passu basis.<\/p>\n
Any Taxes that are imposed on any Indemnitee as a result of the
\n disallowance or reduction of any tax benefit referred to in this subsection
\n as to which such Indemnitee has made in full the payment to Lessee required
\n hereby (or as to which such Indemnitee would have made its payment but for
\n Section 7(b)(vii) hereof) or which is otherwise taken into account in
\n calculating Lessee’s indemnity obligation, in a taxable year subsequent to
\n the utilization by such Indemnitee (including the expiration of any tax
\n credit carryovers or carrybacks of such Indemnitee that would not otherwise
\n have expired) shall be treated as a Tax for which Lessee is obligated to
\n indemnify such Indemnitee pursuant to the provisions of this Section 7(b)
\n without regard to the provisions of Section 7(b)(ii), 7(b)(iv) or the third
\n paragraph of this Section 7(b)(iii).<\/p>\n
(iv) General Tax Indemnity — Contests. If a written claim shall
\n be made against any Indemnitee for any Tax for which Lessee is obligated
\n pursuant to this Section 7(b), such Indemnitee shall notify Lessee in
\n writing promptly after receipt thereof (as well as the name of independent
\n tax counsel for purposes of this Section 7(b)(iv)) and, in any event,
\n within 30 days of receipt of such notice and shall provide Lessee such
\n information regarding such claim as Lessee may reasonably request, but the
\n failure to give such notice or to provide such information when required
\n shall not diminish Lessee’s<\/p>\n
15<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
obligation hereunder unless such failure effectively precludes Lessee’s
\n ability to (A) require such Indemnitee to contest the Tax or (B) contest
\n the Tax itself (in a case where Lessee cannot require the Indemnitee to
\n contest such Tax).<\/p>\n
If a written claim shall be made for any Tax, other than an
\n Income Tax, for which Lessee is obligated pursuant to this Section 7(b),
\n and under applicable law of the taxing jurisdiction Lessee is allowed to
\n directly contest such Tax and the Tax to be contested is not reflected in a
\n report or return with other Taxes of any Indemnitee and if the Indemnitee
\n determines in good faith that it will not suffer any adverse consequences
\n as a result, then the Lessee shall be permitted, at its expense and in its
\n own name, or, if consented to by the Indemnitee, in the name of such
\n Indemnitee, to contest the imposition of such Tax; provided, however, that
\n Lessee shall not be permitted or entitled to contest any Tax (A) if such
\n contest will result in the risk of an imposition of criminal penalties or a
\n material risk of a sale, forfeiture or loss of the Aircraft, the Airframe,
\n the Engines, the Parts or any part thereof or the creation of any Lien
\n other than Liens for Taxes of Lessee (x) either not yet due or being
\n contested in good faith by appropriate proceedings so long as such
\n proceedings do not involve the risk of an imposition of criminal penalties
\n or the material risk of any sale, forfeiture or loss of the Aircraft, and
\n (y) for the payment of which such reserves, if any, as required to be
\n provided under generally accepted accounting principles have been provided
\n and, to the extent permitted by law, Lessee shall be entitled to withhold
\n payment during pendency of such contest, (B) if an Event of Default shall
\n have occurred and be continuing, unless the Lessee shall have, at the
\n option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, (C) unless in Lessee’s request to the Indemnitee to contest
\n such Tax, Lessee shall have agreed to pay such Indemnitee on demand all
\n costs and expenses that such Indemnitee actually incurs in connection with
\n contesting such claim (including, without limitation, all costs, expenses,
\n losses, reasonable legal and accounting fees, disbursements, penalties,
\n interest and additions to tax) or (D) unless in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee<\/p>\n
16<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
a written acknowledgement of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgement of liability
\n if and to the extent that the contest results in a determination which
\n clearly and unambiguously demonstrates that Lessee is not otherwise liable
\n under this Section 7(b) with respect to such Tax.<\/p>\n
If requested by Lessee in writing (A) within 30 days of Lessee’s
\n receipt of notice from an Indemnitee under the first paragraph of this
\n Section 7(b)(iv) and (B) with respect to a Tax for which Lessee is
\n obligated to indemnify pursuant to this Section 7(b) which is not described
\n in the previous paragraph exclusive of the proviso thereto, such Indemnitee
\n shall in good faith at Lessee’s expense contest the imposition of any such
\n Tax. After consulting with Lessee and Lessee’s counsel concerning the
\n forum in which the adjustment is most likely to be favorably resolved, such
\n Indemnitee shall, in its sole discretion, select the forum for such contest
\n and determine whether any such contest shall be by (A) resisting payment of
\n such Tax, (B) paying such Tax under protest or (C) paying such Tax and
\n seeking a refund or other repayment thereof. In no event shall such
\n Indemnitee be requested or required to contest the imposition of any Tax
\n for which Lessee is liable under this Section 7(b) unless (I) in Lessee’s
\n request to the Indemnitee to contest such Tax, Lessee shall have agreed to
\n pay such Indemnitee on demand all reasonable costs and expenses that such
\n Indemnitee actually incurs in connection with contesting such claim
\n (including, without limitation, all costs, expenses, losses, reasonable
\n legal and accounting fees, disbursements, penalties, interest and additions
\n to tax), (II) such action to be taken will not result in the risk of an
\n imposition of criminal penalties or the material risk of any sale,
\n forfeiture or loss of the Aircraft, or the creation of any Lien other than
\n Liens for Taxes of Lessee (x) either not yet due or being contested in good
\n faith by appropriate proceedings so long as such proceedings do not involve
\n the risk of an imposition of criminal penalties or the material risk of any
\n sale, forfeiture or loss of the Aircraft and (y) for the payment of which
\n such reserves, if any, as are required to be provided under generally
\n accepted accounting principles have been provided by Lessee, (III) if such
\n contest shall be conducted in a manner requiring the payment of the claim,
\n Lessee shall have paid the amount required directly to the appropriate
\n authority or made an advance of the amount thereof to such Indemnitee on an
\n interest-free basis and agreed to indemnify the Indemnitee<\/p>\n
17<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
against any additional net after-tax cost to such Indemnitee with respect
\n to such advance or payment, (IV) with regard to an Income Tax on an
\n Indemnitee which is the Owner Participant or the Owner Trustee, or a
\n successor, assign or Affiliate of the Owner Participant or the Owner
\n Trustee, independent tax counsel selected by such Indemnitee and reasonably
\n satisfactory to the Lessee shall furnish an opinion, prepared at the
\n Lessee’s expense, to the effect that there is a reasonable basis to contest
\n such claim and with respect to appeal, to the effect that it is more likely
\n than not such appeal will be successful, (V) in the case of an Indemnitee
\n which is the Owner Participant or the Owner Trustee, or a successor, assign
\n or Affiliate of the Owner Participant or the Owner Trustee, prior to the
\n commencement of a contest Lessee shall have delivered to such Indemnitee a
\n written acknowledgment of Lessee’s obligation to indemnify fully such
\n Indemnitee to the extent that the contest is not successful; provided,
\n however, that Lessee will not be bound by its acknowledgment of liability
\n if and to the extent that the contest results in a determination which
\n clearly and unambiguously demonstrates that Lessee is not otherwise liable
\n under this Section 7(b) with respect to such Tax, (VI) if an Event of
\n Default shall have occurred and be continuing, the Lessee shall have, at
\n the option of the Owner Participant, either (i) provided security for its
\n obligations hereunder reasonably satisfactory to the Owner Participant by
\n placing in escrow sufficient funds to cover any such contested Tax or (ii)
\n paid such Tax, and (VII) the amount of the indemnity computed under Section
\n 7(b) arising from a claim for Tax exceeds $10,000. In no event shall an
\n Indemnitee be required to appeal or to seek leave to appeal an adverse
\n determination with respect to Taxes contested by, or in the name of, the
\n Indemnitee to the United States Supreme Court.<\/p>\n
If any Indemnitee shall obtain a refund of all or any part of any
\n Tax paid by Lessee such Indemnitee shall pay Lessee an amount equal to the
\n sum of (I) the amount of such refund, including interest received
\n attributable thereto, net of taxes required to be paid by such Indemnitee
\n as a result of any refund and\/or interest received and (II) any tax benefit
\n realized by such Indemnitee as a result of any payment by such Indemnitee
\n made pursuant to this sentence; provided, however, that in the case of any
\n Indemnitee which is the Owner Participant or any successor, assign or
\n Affiliate of the Owner Participant such amount attributable to (I) above
\n shall not be in excess of the amount of such Tax payment (determined
\n without regard to any amount paid in respect of Taxes required to be paid
\n by such Indemnitee in<\/p>\n
18<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
respect of the receipt or accrual of such payment or advance made by Lessee
\n to such Indemnitee) plus interest received, if any, from the relevant
\n taxing authority with respect to such Tax payment (net of Taxes required to
\n be paid by such Indemnitee in connection with the receipt of such
\n interest), it being intended that such Indemnitee shall realize a net
\n benefit pursuant to this Section 7(b) only if Lessee shall first have been
\n reimbursed for any payments by it to such Indemnitee pursuant to this
\n Section 7(b) arising from the same Loss. If any Indemnitee shall have paid
\n Lessee any refund of all or part of any Tax paid by Lessee and it is
\n subsequently determined that such Indemnitee was not entitled to the
\n refund, such determination shall be treated as the imposition of a Tax for
\n which Lessee is obligated to indemnify such Indemnitee pursuant to the
\n provisions of this Section 7(b) without regard to Section 7(b)(ii) or
\n Section 7(b)(iv).<\/p>\n
Nothing contained in this Section 7(b)(iv) shall require any
\n Indemnitee to contest, or permit Lessee to contest, a claim with respect to
\n the imposition of any Tax if such Indemnitee shall waive its right to
\n indemnification under this Section 7 with respect to such claim or a claim
\n with respect to which a previous contest pursuant to the provision of this
\n Section 7(b)(iv) shall have been determined adversely to the taxpayer.<\/p>\n
(v) General Tax Indemnity — Reports. Lessee will provide such
\n information (including information on the routes and operations of the
\n Aircraft) as may be reasonably requested by an Indemnitee or required to
\n enable an Indemnitee to fulfill its tax filing or audit requirements with
\n respect to the transactions contemplated by the Operative Documents. In
\n the event any return, statement or report is required to be made or filed
\n with respect to any Tax imposed on or indemnified against by Lessee under
\n this Section 7(b) (other than with respect to Income Taxes), Lessee shall
\n notify the Indemnitee of such requirement and (i) to the extent permitted
\n by law, and not otherwise requested by the Indemnitee, or required by law,
\n Lessee shall make and file in its own name (and pay the tax shown due on)
\n such return, statement or report in such manner as will show the ownership
\n of the Aircraft in the Owner Trustee and furnish the Indemnitee with a copy
\n of such return, statement or report; provided, however, that Lessee shall
\n have no obligation under this clause (i) to the extent such Indemnitee
\n after receipt of Lessee’s written request shall have failed to furnish
\n Lessee with such information as is peculiarly within such Indemnitee’s
\n control and is necessary<\/p>\n
19<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
to file such returns, statements or reports, and (ii) in the case of a
\n return, statement or report required (or requested by the Indemnitee) to be
\n in the name of or filed by such Indemnitee, Lessee shall prepare and
\n furnish such return, statement or report for filing by such Indemnitee in
\n such manner as shall be reasonably satisfactory to such Indemnitee and send
\n the same to such Indemnitee for filing no later than 10 Business Days prior
\n to the due date; provided, however, that Lessee shall have no obligation
\n under this clause (ii) to the extent such Indemnitee after receipt of
\n Lessee’s written request shall have failed to furnish Lessee with such
\n information as is peculiarly within such Indemnitee’s control and is
\n necessary to prepare such return, statement or report. Lessee shall hold
\n each Indemnitee harmless from and against any liabilities, including, but
\n not limited to penalties, additions to tax, fines and interest, arising out
\n of any insufficiency or inaccuracy in any such return, statement, report or
\n information if such insufficiency or inaccuracy is attributable to Lessee.<\/p>\n
(vi) General Tax Indemnity — Payment. Except as provided in
\n Section 7(b)(iv) or (v) hereof, Lessee shall pay any Tax directly to the
\n appropriate taxing authority if legally permissible and upon demand of an
\n Indemnitee shall pay such Tax and any other amounts due hereunder to such
\n Indemnitee within 20 Business Days of such demand, but in no event shall
\n any such payments be made more than 10 Business Days prior to the date the
\n Tax to which any such payment hereunder relates is due (unless Lessee has
\n not received such demand at least 15 Business Days prior to such date in
\n which case within five Business Days after receipt of such demand), in
\n immediately available funds. Any such demand for payment from an
\n Indemnitee shall specify in reasonable detail, the payment and the facts
\n upon which the right to payment is based. Each Indemnitee shall promptly
\n forward to Lessee any notice, bill or advice received by it concerning any
\n Tax indemnified against hereunder. As soon as practicable after each
\n payment by Lessee of any Tax indemnified against hereunder, Lessee shall
\n furnish the appropriate Indemnitee the original or a certified copy of a
\n receipt for Lessee’s payment of such Tax or such other evidence of payment
\n of such Tax as is acceptable to such Indemnitee. Lessee shall also furnish
\n promptly upon request such data as any Indemnitee may reasonably require to
\n enable such Indemnitee to comply with the requirements of any taxing
\n jurisdiction.<\/p>\n
20<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(vii) Application of Payments During Existence of Default or Event
\n of Default. Any amount payable to Lessee pursuant to the terms of this
\n Section 7(b) shall not be paid to or retained by Lessee if at the time of
\n such payment or retention a Default or an Event of Default shall have
\n occurred and be continuing under the Lease. At such time as there shall
\n not be continuing any Default or Event of Default, such amount shall be
\n paid to the Lessee to the extent not previously applied against Lessee’s
\n obligations hereunder as and when due after the Owner Trustee shall have
\n declared the Lease in default pursuant to Section 15 thereof.<\/p>\n
(viii) Reimbursements by Indemnitees Generally. If, for any
\n reason, Lessee is required to make any payment with respect to any Taxes
\n imposed on any Indemnitee in respect of the transactions contemplated by
\n the Operative Documents or on the Aircraft, the Airframe, the Engines, the
\n Parts or any part thereof, which Taxes are not the responsibility of Lessee
\n under this Section 7(b), then such Indemnitee shall pay to Lessee an amount
\n which equals the amount paid by Lessee with respect to such Taxes plus
\n interest thereon, computed from the date of payment by Lessee, at the Base
\n Rate.<\/p>\n
(ix) Forms, etc. Each Indemnitee agrees to furnish to Lessee from
\n time to time, at the Lessee’s request and expense, such duly executed and
\n properly completed forms as may be necessary or appropriate in order to
\n claim any reduction of or exemption from any withholding tax imposed by any
\n taxing authority in respect of any payments otherwise required to be made
\n by Lessee pursuant to the Operative Documents and each Pass Through Trust
\n Agreement, which reduction or exemption may be available to such
\n Indemnitee. In addition, any Indemnitee shall, at Lessee’s expense,
\n execute and deliver any forms or documents which Lessee reasonably requests
\n and which are reasonably related to any indemnified Taxes. Notwithstanding
\n the foregoing, an Indemnitee shall not be required to (A) make available
\n any Income Tax returns; or to (B) execute and deliver any forms or
\n documents which would in the good faith determination of such Indemnitee
\n disadvantage such Indemnitee in the context of its overall filing position
\n or with regard to other Taxes not indemnified under this Agreement or the
\n Tax Indemnity Agreement.<\/p>\n
(x) Non-Parties. If an Indemnitee is not a party to this
\n Agreement, Lessee may require the Indemnitee to<\/p>\n
21<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
agree to the terms of this Section 7(b) prior to making any payment to such
\n Indemnitee under this Section 7(b).<\/p>\n
(xi) Owner Participant. For the purposes of this Section 7(b),
\n the term “Owner Participant” shall mean and include ____________________
\n (and its permitted successors and assigns) and where appropriate the
\n affiliated group of corporations (and each member thereof) making a
\n consolidated or combined return of which _________________ (and its
\n permitted successors and assigns) is a member.<\/p>\n
(xii) Income Tax. For purposes of this Section 7, the term Income
\n Tax means any Tax based on or measured by or with respect to net income
\n (including, without limitation, capital gains taxes, minimum taxes, income
\n taxes collected by withholding, and taxes on tax preference items) or net
\n receipts and taxes imposed on gross income or gross receipts which are
\n expressly in lieu of a net income tax (provided, however, that sales, use,
\n value added, rental, license, ad valorem or property Taxes shall not
\n constitute an Income Tax) and Taxes which are capital, doing business,
\n franchise, excess profits, net worth taxes and interest, additions to tax,
\n penalties, or other charges in respect thereof.<\/p>\n
(c) General Indemnity. Lessee hereby agrees to indemnify, on an
\nafter-tax basis, each Indemnitee against, and agrees to protect, save and keep
\nharmless each of them from (whether or not the transactions contemplated herein
\nor in any of the other Operative Documents or the Pass Through Trust Agreements
\nare consummated), any and all Expenses imposed on, incurred by or asserted
\nagainst any Indemnitee, in any way relating to or arising out of (A) the
\nOperative Documents and each Pass Through Trust Agreement (and any amendments
\nthereto), the negotiation and the consummation of the transactions contemplated
\nthereby or any sublease under the Lease Agreement or the enforcement of any of
\nthe terms of any thereof; or (B) the manufacture, design, purchase, resale,
\nacceptance or rejection of the Airframe or any Engine or Parts; or (C) the
\nAircraft (or any portion thereof) or any Engine whether or not installed on the
\nAirframe or any airframe on which an Engine is installed whether or not arising
\nout of the finance, refinance, ownership, delivery, nondelivery, storage, lease,
\nsublease, possession, use, non-use, operation, maintenance, modification,
\nalteration, condition, sale, replacement, substitution, return or other
\ndisposition, registration, reregistration or airworthiness of the Aircraft (or
\nany portion thereof) including, without limitation, latent or other defects,
\nwhether or not discoverable, strict tort liability and any damage to property or
\nthe environment, death or injury to any person and any claim for patent,
\ntrademark or<\/p>\n
22<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
copyright infringement; or (D) the offer, sale, holding, transfer or delivery of
\nthe Loan Certificates or the Pass Through Certificates, whether before, on or
\nafter the Delivery Date (the indemnity in this clause (D) to extend also to any
\nperson who controls an Indemnitee, its successors, assigns, employees,
\ndirectors, officers, servants and agents within the meaning of Section 15 of the
\nSecurities Act of 1933, as amended); or (E) the offer, holding, transfer or sale
\nof any interest in the Trust Estate or the Trust Agreement or any similar
\ninterest (a) on or prior to the Delivery Date, or (b) subsequent to the Delivery
\nDate during the continuation of an Event of Default under the Lease or in
\nconnection with the exercise by the Lessee of its purchase options under the
\nLease or in connection with a refinancing pursuant to Section 17 hereof or in
\nconnection with the termination of the Lease or action or direction of Lessee
\npursuant to Sections 7, 8, 9, 10, or 19 thereof; provided, that the foregoing
\nindemnity shall not extend to any Expense to the extent resulting from or
\narising out of one or more of the following: (1) any representation or warranty
\nby such Indemnitee in the Operative Documents or in any Pass Through Trust
\nAgreement being incorrect, or (2) the failure by such Indemnitee to perform or
\nobserve any agreement, covenant or condition in any of the Operative Documents
\nor in any Pass Through Trust Agreement including, without limitation, the
\ncreation or existence of a Lessor Lien (including for this purpose Liens that
\nwould be Lessor Liens but for the proviso to the definition of Lessor Liens), or
\n(3) the willful misconduct or the gross negligence of such Indemnitee (other
\nthan gross negligence imputed to such Indemnitee solely by reason of its
\ninterest in the Aircraft), or (4) (A) in the case of such Indemnitee a
\ndisposition (voluntary or involuntary) of all or any part of its interest in the
\nAirframe or any Engine, (B) in the case of a Certificate Holder a disposition
\n(voluntary or involuntary) by such Certificate Holder of all or any part of its
\ninterest in any Loan Certificate or (C) in the case of any Indemnitee a
\ndisposition by such Indemnitee of all or any part of such Indemnitee’s interest
\nin the Operative Documents or the Pass Through Trust Agreements other than in
\neach of (A), (B) and (C) during the continuance of an Event of Default under the
\nLease or pursuant to the exercise by the Lessee of its purchase options under
\nthe Lease or in connection with a refinancing pursuant to Section 17 hereof or
\nin connection with the termination of the Lease or action or direction of Lessee
\npursuant to Sections 7, 8, 9, 10 or 19 thereof, or (5) other than to the extent
\nprovided in the succeeding paragraph, any Tax (as defined in Section 7(b)
\nhereof) whether or not Lessee is required to indemnify for such Tax pursuant to
\nSection 7(b) hereof (it being understood that Section 7(b) hereof and the Tax
\nIndemnity Agreement and provisions requiring payments to be made on an after-tax
\nbasis or expressly providing for additional<\/p>\n
23<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
indemnification by Lessee exclusively provide for Lessee’s liability with
\nrespect to Taxes), or (6) the offer or sale by the Owner Participant after the
\nDelivery Date of any interest in the Trust Estate or the Trust Agreement or any
\nsimilar interest, unless such offer or sale shall occur (A) during a period when
\nan Event of Default has occurred and is continuing under the Lease at the time
\nof such offer or sale or (B) in connection with the exercise by Lessee of its
\npurchase options under the Lease or, (7) in the case of the Owner Participant, a
\nfailure on the part of the Owner Trustee to distribute in accordance with the
\nTrust Agreement any amounts received and distributable by it thereunder or, in
\nthe case of a Certificate Holder, a failure on the part of the Indenture Trustee
\nto distribute in accordance with the Trust Indenture any amounts received and
\ndistributable by it thereunder to such Certificate Holder or a failure on the
\npart of any Pass Through Trustee to distribute in accordance with the applicable
\nPass Through Trust Agreement any amounts received and distributable by such Pass
\nThrough Trustee under such Pass Through Trust Agreement, or (8) other than
\nduring the continuation of a Default or an Event of Default under the Lease the
\nauthorization or giving or withholding of any future amendments, supplements,
\nwaivers or consents with respect to any of the Operative Documents or any Pass
\nThrough Trust Agreement unless such amendments, supplements, waivers or consents
\n(a) are requested by Lessee or (b) are required or permitted pursuant to the
\nterms of the Operative Documents (unless the same results from the actions of an
\nIndemnitee) (provided if Lessee is not responsible for the Expense associated
\nwith such amendment, supplement, waiver or consent, the party requesting the
\nexecution of the same shall be responsible for such expense), or (9) other than
\nto the extent provided in the succeeding paragraph any loss of tax benefits or
\nincrease in tax liability under any tax law whether or not Lessee is required to
\nindemnify therefor pursuant to this Agreement or the Tax Indemnity Agreement (it
\nbeing understood that Section 7(b) hereof and the Tax Indemnity Agreement and
\nprovisions requiring payments to be made on an after-tax basis or expressly
\nproviding for additional indemnification by Lessee exclusively provide for
\nLessee’s liability with respect to Taxes), or (10) except to the extent fairly
\nattributable to acts or events occurring on or prior thereto, acts or events
\nwhich occur after the earlier of: (I) the return of possession of the Airframe
\nor any Engine or any Part to the Owner Trustee or its designee pursuant to the
\nterms of the Lease (other than pursuant to Section 15 thereof, in which case
\nLessee’s liability under this Section 7(c) shall survive for so long as Owner
\nTrustee shall be entitled to exercise remedies under such Section 15), (II) the
\ntermination of the Term in accordance with Sections 5, 9 or 19 of the Lease,
\n(III) the last day of the Term if Owner Trustee shall have furnished the notice<\/p>\n
24<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
referred to in Section 10(d) of the Lease and Lessee shall have failed to return
\npossession to Owner Trustee on such day or (IV) the payment by Lessee of all
\namounts required to be paid under the Lease following an Event of Loss (but
\nexcluding from the terms of this subsection (IV) an Event of Loss followed by
\nthe replacement of the Aircraft).<\/p>\n
Notwithstanding clause 7(c)(5) or (9) above, Lessee further agrees
\nthat any payment or indemnity pursuant to this Section 7(c) in respect of any
\n“Expenses” shall be in an amount which, after deduction of all Taxes required to
\nbe paid by such recipient with respect to such payment or indemnity under the
\nlaws of any federal, state or local government or taxing authority in the United
\nStates, or under the laws of any taxing authority or governmental subdivision of
\na foreign country, or any territory or possession of the United States or any
\ninternational authority, shall be equal to the excess, if any, of (A) the amount
\nof such Expense over (B) the current net reduction in Taxes actually required to
\nbe paid by such recipient resulting from the accrual or payment of such Expense.<\/p>\n
Nothing in this Section 7(c) shall be construed as a guaranty by
\nLessee of payments due pursuant to the Loan Certificates or the Pass Through
\nCertificates or of the residual value of the Aircraft.<\/p>\n
If a claim is made against an Indemnitee involving one or more
\nExpenses and such Indemnitee has notice thereof, such Indemnitee shall promptly
\nafter receiving such notice give notice of such claim to Lessee; provided that
\nthe failure to provide such notice shall not release Lessee from any of its
\nobligations to indemnify hereunder or from any other obligation that the Lessee
\nmay have to such Indemnitee at law or in equity, and no payment by Lessee to an
\nIndemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver
\nor release of any right or remedy which the Lessee may have against such
\nIndemnitee for any actual damages as a result of the failure by such Indemnitee
\nto give Lessee such notice. So long as Lessee has acknowledged its obligation
\nto indemnify pursuant to this Section 7(c), Lessee shall be entitled, at its
\nsole cost and expense, acting through counsel reasonably acceptable to the
\nrespective Indemnitee, (A) in any judicial or administrative proceeding that
\ninvolves solely a claim for one or more Expenses, to assume responsibility for
\nand control thereof, (B) in any judicial or administrative proceeding involving
\na claim for one or more Expenses and other claims related or unrelated to the
\ntransactions contemplated by the Operative Documents, to assume responsibility
\nfor and control of such claim for Expenses to the extent that the same may be
\nand is severed from such other claims (and such Indemnitee shall use<\/p>\n
25<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
reasonable efforts to obtain such severance), and (C) in any other case, to be
\nconsulted by such Indemnitee with respect to judicial proceedings subject to the
\ncontrol of such Indemnitee and to be allowed, at Lessee’s sole expense, to
\nparticipate therein. Notwithstanding any of the foregoing to the contrary,
\nLessee shall not be entitled to assume responsibility for and control of any
\nsuch judicial or administrative proceedings if (i) any Default under Section
\n14(a), (b), (f) or (g) of the Lease or an Event of Default under the Lease shall
\nhave occurred and be continuing, (ii) if such proceedings will involve a
\nmaterial risk of the sale, forfeiture or loss of, or the creation of any Lien
\n(other than a Permitted Lien) on, the Aircraft, the Trust Indenture Estate or
\nthe Trust Estate or any part thereof unless Lessee shall have posted a bond or
\nother security reasonably satisfactory to the relevant Indemnitees in respect to
\nsuch risk or (iii) if such proceedings could, in the good faith opinion of the
\nIndemnitee entail any risk of criminal liability or any material risk of civil
\nliability (unless, in the case of such civil liability, Lessee has agreed to
\nindemnify against such civil liability in a manner reasonably acceptable to such
\nIndemnitee). The Indemnitee may participate at its own expense and with its own
\ncounsel in any judicial proceeding controlled by Lessee pursuant to the
\npreceding provisions; provided, however, that if in the written opinion of
\ncounsel to such Indemnitee (which opinion and counsel shall be reasonably
\nacceptable to Lessee) an actual or potential material conflict of interest
\nexists where it is advisable for such Indemnitee to be represented by separate
\ncounsel, the reasonable fees and expenses of such separate counsel shall be
\nborne by Lessee.<\/p>\n
The Indemnitee shall supply Lessee, at Lessee’s expense, with such
\ninformation reasonably requested by Lessee as is necessary or advisable for
\nLessee to control or participate in any proceeding to the extent permitted by
\nthis Section 7(c). Such Indemnitee shall not enter into a settlement or other
\ncompromise with respect to any Expense as to which Lessee has acknowledged its
\nobligation to indemnify (and if Lessee has not so acknowledged only upon 5
\nBusiness Days’ prior written notice to Lessee) without the prior written consent
\nof Lessee (except during the continuance of any Default under Section 14(a),
\n(b), (f) or (g) of the Lease or an Event of Default under the Lease when such
\nconsent shall not be required if such Indemnitee gives 30 days’ prior written
\nnotice to Lessee describing the proposed settlement or compromise), which
\nconsent shall not be unreasonably withheld or delayed, unless such Indemnitee
\nwaives its right to be indemnified with respect to such Expense under this
\nSection 7(c).<\/p>\n
26<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
The Lessee shall supply the Indemnitee with such information
\nreasonably requested by the Indemnitee as is necessary or advisable for the
\nIndemnitee to control or participate in any proceeding to the extent permitted
\nby this Section 7(c).<\/p>\n
Upon payment of any Expense pursuant to this Section 7(c), Lessee,
\nwithout any further action, shall be subrogated to any claims the Indemnitee may
\nhave relating thereto other than claims under Section 9.06 of the Trust
\nIndenture or Section 5.03 or 7.01 of the Trust Agreement. The Indemnitee agrees
\nto give such further assurances or agreements and to cooperate with Lessee to
\npermit Lessee to pursue such claims, if any, to the extent reasonably requested
\nby Lessee.<\/p>\n
In the event that Lessee shall have paid an amount to an Indemnitee
\npursuant to this Section 7(c), and such Indemnitee subsequently shall be
\nreimbursed in respect of such indemnified amount from any other person, such
\nIndemnitee shall, unless a Default under Section 14(a), (b), (d) (solely with
\nrespect to Lessee’s obligations under Section 7(a) or (b)(viii) of the Lease or
\nSection 8 of the Lease), (f) or (g) of the Lease or an Event of Default under
\nthe Lease shall have occurred and be continuing, promptly pay Lessee but not
\nbefore Lessee shall have made all payments then due to such Indemnitee pursuant
\nto this Section 7(c) and any other payments then due under any of the Operative
\nDocuments, an amount equal to the sum of (I) the amount of such reimbursement,
\nincluding interest received attributable thereto, net of taxes required to be
\npaid by such Indemnitee as a result of any reimbursement including interest
\nreceived attributable thereto and (II) any tax benefit actually realized by such
\nIndemnitee as a result of any payment by such Indemnitee made pursuant to this
\nsentence; provided, however, that in the case of any Indemnitee which is the
\nOwner Participant or any successor, assign or Affiliate of the Owner Participant
\nsuch amount attributable to (I) above shall not be in excess of the amount of
\nsuch Expense payment net of any amount paid in respect of Taxes required to be
\npaid by such Indemnitee in respect of the receipt or accrual of such payment or
\nadvance made by Lessee to such Indemnitee plus interest received, if any, from
\nthe relevant taxing authority with respect to any such Expense payment, it being
\nintended that such Indemnitee shall realize a net benefit pursuant to this
\nSection 7(c) only if Lessee shall first have been reimbursed for any payments by
\nit to such Indemnitee pursuant to this Section 7(c).<\/p>\n
Lessee agrees to pay the reasonable and continuing fees and expenses
\nof the Indenture Trustee (including, but not limited to, the reasonable fees and
\nexpenses of its counsel and any agent<\/p>\n
27<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
appointed in accordance with Section 9.02(c) of the Trust Indenture) and each
\nPass Through Trustee (including, but not limited to, the reasonable fees and
\nexpenses of its counsel) and, as provided in Section 6.07 of the Trust
\nAgreement, the Owner Trustee (including, but not limited to, the reasonable fees
\nand expenses of its counsel), in each case without cost, on a net after-tax
\nbasis, to the Owner Participant, for acting as such, other than such fees and
\nexpenses which constitute Transaction Expenses.<\/p>\n
Lessee’s obligations under the indemnities provided for in this
\nAgreement shall be those of a primary obligor, whether or not the Person
\nindemnified shall also be indemnified with respect to the same matter under the
\nterms of any other document or instrument, and the Person seeking
\nindemnification from Lessee pursuant to any provision of this Agreement may
\nproceed directly against Lessee without first seeking to enforce any other right
\nof indemnification.<\/p>\n
To the extent permitted by applicable law, interest at the Past Due
\nRate shall be paid, on demand, on any amount or indemnity not paid when due
\npursuant to this Section 7 until the same shall be paid. Such interest shall be
\npaid in the same manner as the unpaid amount in respect of which such interest
\nis due.<\/p>\n
Any amount which is payable to Lessee by any Person pursuant to this
\nSection 7 shall not be paid to Lessee if a Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(viii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or an Event of
\nDefault under the Lease shall have occurred and be continuing or if any payment
\nis due and owing by Lessee under the Lease or to such Person under any other
\nOperative Document. Any such amount shall be held by such Person and, if such
\nDefault or an Event of Default under the Lease shall have occurred and be
\ncontinuing, shall be applied against Lessee’s obligations hereunder to such
\nPerson as and when due (and, to the extent that Lessee has no obligations
\nhereunder to such Person, such amount shall be paid to Lessee). At such time as
\nthere shall not be continuing any such Default or an Event of Default or there
\nshall not be due and owing any such payment, such amount shall be paid to Lessee
\nto the extent not previously applied in accordance with the immediately
\npreceding sentence.<\/p>\n
(d) Withholding. If Lessee advises the Owner Trustee, the Indenture
\nTrustee and the relevant Certificate Holder in writing that interest on its Loan
\nCertificates is subject to United States withholding tax, then the Owner Trustee
\nshall<\/p>\n
28<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
instruct the Indenture Trustee to, and Indenture Trustee shall, withhold as
\nprovided in Section 9.11 of the Trust Indenture.<\/p>\n
SECTION 8. Representations, Warranties and Covenants. (a) The Owner
\nParticipant represents that it is acquiring its interest in the Trust Estate for
\ninvestment purposes only and not with a present intent as to any resale or
\ndistribution thereof (subject nonetheless to any requirement of law that the
\ndisposition of its properties shall at all times be and remain within its
\ncontrol) and that neither it nor anyone acting on its behalf (other than for
\npurposes of this paragraph, Lessee and the Underwriter) has directly or
\nindirectly offered any interest in the Trust Estate or any Loan Certificates or
\nPass Through Certificates or any similar securities for sale to, or solicited
\nany offer to acquire any of the same from, anyone in a manner which would result
\nin a violation of the Securities Act of 1933, as amended or the securities laws,
\nrules and regulations of any state.<\/p>\n
(b) Each of the Owner Participant and State Street Bank and Trust
\nCompany, in its individual capacity, represents and warrants to the other
\nparties to this Agreement that it is, and on the Delivery Date will be, a
\nCitizen of the United States. The Owner Participant agrees, solely for the
\nbenefit of Lessee and the Certificate Holders, that if during such time as the
\nAircraft is registered in the United States (or if Lessee desires to register
\nthe Aircraft in the United States) (i) it shall not be a Citizen of the United
\nStates and (ii) the Aircraft shall be, or would therefore become, ineligible for
\nregistration in the name of the Owner Trustee under the Federal Aviation Act and
\nregulations then applicable thereunder, then the Owner Participant shall (at its
\nown expense and without any reimbursement or indemnification from Lessee) as
\nsoon as is reasonably practicable but in any event within 30 days after
\nobtaining Actual Knowledge of such ineligibility and of such loss of citizenship
\n(A) effect voting trust or other similar arrangements or take any other action
\nas may be necessary to prevent any deregistration or to maintain the United
\nStates registration of the Aircraft, or (B) transfer its beneficial interest in
\nthe Trust Estate in accordance with Section 8(l) hereof. It is understood that:
\n(1) the Owner Participant shall be liable to any of the other parties hereto for
\nany damages suffered by any such other party as the result of the representation
\nand warranty of the Owner Participant in the first sentence of this Section 8(b)
\nproving to be untrue as of the Delivery Date; and (2) the Owner Participant
\nshall be liable to Lessee, any Sublessee and any Certificate Holder for any
\ndamages which may be incurred by Lessee, any Sublessee or such Certificate
\nHolder as a result of the Owner Participant’s failure<\/p>\n
29<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
to immediately comply with its obligations pursuant to the second sentence of
\nthis Section 8(b) unless such failure is a result of such party’s breach of its
\nobligations to cooperate set forth in the following sentence (including any
\ndamages suffered by any such party (other than damages suffered by Lessee which
\nLessee could have mitigated by taking reasonable steps (Lessee having no
\nobligation to restrict the use of the Aircraft to so mitigate)) at any time
\nafter the fifth Business Day following the Owner Participant’s having obtained
\nActual Knowledge of such ineligibility or loss of citizenship). Each party
\nhereto agrees, upon the request and at the sole expense of the Owner
\nParticipant, to reasonably cooperate with the Owner Participant in complying
\nwith its obligations under the provisions of the second sentence of this Section
\n8(b) and such request shall not be subject to the indemnity contained in Section
\n7(c) hereof. State Street Bank and Trust Company in its individual capacity,
\nagrees that if at any time a responsible officer of State Street Bank and Trust
\nCompany, shall obtain Actual Knowledge that State Street Bank and Trust Company
\nhas ceased to be a Citizen of the United States, it will promptly resign as
\nOwner Trustee (if and so long as such citizenship is necessary under the Federal
\nAviation Act as in effect at such time or, if it is not necessary, if and so
\nlong as the Owner Trustee’s citizenship would have any adverse effect on a
\nCertificate Holder, Lessee or the Owner Participant), effective upon the
\nappointment of a successor Owner Trustee in accordance with Section 9.01 of the
\nTrust Agreement. If the Owner Participant or State Street Bank and Trust
\nCompany, in its individual capacity, does not comply with the requirements of
\nthis Section 8(b), the Owner Trustee, the Indenture Trustee, the Owner
\nParticipant and the Certificate Holders hereby agree that a Default or an Event
\nof Default shall not have occurred and be continuing under the Lease due to
\nnoncompliance by Lessee with the registration requirements in the Lease.<\/p>\n
(c) State Street Bank and Trust Company, in its individual capacity
\nrepresents and warrants that both the principal place of business of the Owner
\nTrustee and the place where the Owner Trustee’s records concerning the Aircraft
\nand all of its interest in, to and under the Operative Documents to which it is
\na party are or will be kept is Boston, Massachusetts (other than such as may be
\nmaintained or held by the Indenture Trustee pursuant to the Trust Indenture) and
\nhas its chief executive office (as such term is used in Article 9 of the Uniform
\nCommercial Code) in the Commonwealth of Massachusetts. State Street Bank and
\nTrust Company, in its individual capacity agrees that it will not change the
\nlocation of such office to a location outside of Boston, Massachusetts, without
\nprior written notice to Lessee, Indenture Trustee and the Owner Participant.<\/p>\n
30<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(d) [Intentionally omitted.]<\/p>\n
(e) The Owner Participant agrees that, if, at any time after the
\nRestricted Period and so long as no Default under Section 14(a), (b), (d)
\n(solely with respect to Lessee’s obligations under Section 7(a) or (b)(vii) of
\nthe Lease or Section 8 of the Lease), (f) or (g) of the Lease or Event of
\nDefault under the Lease shall have occurred or be continuing, Lessee has
\nrequested its consent to the registration of the Aircraft, in the name of the
\nOwner Trustee (or, if appropriate, in the name of Lessee or a Sublessee as a
\n“lessee” or a “sublessee”), at Lessee’s expense, (i) upon 30 days’ prior written
\nnotice in a country listed on Exhibit G to the Lease, with which the United
\nStates maintains diplomatic relations at the time of such request, provided that
\nwith respect to any country listed on Exhibit G to the Lease as a “Restricted
\nCountry” such country must at the time of such registration impose and enforce
\naircraft maintenance standards not materially less stringent than those of the
\nFAA, or the central civil aviation authority of any of Canada, France, Germany,
\nJapan or the United Kingdom, or (ii) upon 30 days’ prior written notice in any
\nother country with which the United States maintains diplomatic relations at the
\ntime of such request and the Owner Participant has not determined, acting
\nreasonably, that such other country would not provide substantially equivalent
\nprotection for the rights of owner participants, lessors or lenders in similar
\ntransactions as provided under United States laws, the Owner Participant will
\nnot, in the case of either (i) or (ii), unreasonably withhold its consent to
\nsuch change of registration. In addition, such change of registration to a
\ncountry listed on Exhibit G shall be permitted only if such change will not
\nresult in the imposition of, or increase the amount of, any Tax for which Lessee
\nis not required to indemnify or is not then willing to enter into a binding
\nagreement to indemnify, in a manner satisfactory in form and substance to the
\nindemnified party, each party referred to in clause (E) of paragraph (i) below.
\nThe Owner Participant further agrees that the inability of Lessee to deliver to
\nthe Owner Participant and, so long as the Lien of the Trust Indenture has not
\nbeen released, the Indenture Trustee, an opinion (reasonably satisfactory in
\nform and substance to the Owner Participant) of counsel reasonably acceptable to
\nthe Owner Participant in such country listed on Exhibit G to the Lease to the
\neffect that the courts of such country would give effect to the Owner Trustee’s
\ntitle to the Aircraft, to the registry of the Aircraft in the name of the Owner
\nTrustee, and to the priority of the lien under the Trust Indenture substantially
\nto the same extent as provided under United States law, shall constitute the
\nsole reasonable grounds to withhold such consent in regard to a country listed
\nin Exhibit<\/p>\n
31<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
G, and if said opinion is delivered, the Owner Participant will instruct the
\nOwner Trustee, and the Indenture Trustee, subject only to compliance with the
\nprovisions of Section 7.02 of the Indenture, shall cooperate, to make such
\nchange of registration.<\/p>\n
It is further agreed, however, that prior to any such change in the
\ncountry of registry of the Aircraft to a country not listed on Exhibit G to the
\nLease, the Owner Participant, the Owner Trustee in its individual capacity and,
\nso long as the Lien of the Trust Indenture has not been released, the Indenture
\nTrustee shall have received:<\/p>\n
(i) assurances reasonably satisfactory to the Owner Participant
\n and the Owner Trustee in its individual capacity (A) to the effect that the
\n insurance or self-insurance provisions of the Lease have been compiled with
\n after giving effect to such change of registry, (B) of the payment by
\n Lessee on an after-tax basis of any expenses of the Owner Participant, the
\n Owner Trustee and the Indenture Trustee in connection with such change of
\n registry, (C) to the effect that the original indemnities (and any
\n additional indemnities for which Lessee is then willing to enter into a
\n binding agreement to indemnify) in favor of the Owner Participant, the
\n Owner Trustee (in its individual capacity and as trustee under the Trust
\n Agreement) and the Indenture Trustee, under this Agreement, the Trust
\n Indenture and the Tax Indemnity Agreement, afford each such party
\n substantially the same protection as provided prior to such change of
\n registry, (D) as to the continuation of the Trust Indenture as a first
\n priority lien on the Aircraft, (E) that such change will not result in the
\n imposition of, or increase in the amount of, any Tax for which Lessee is
\n not required to indemnify, or is not then willing to enter into a binding
\n agreement to indemnify in a manner satisfactory in form and substance to
\n the indemnified party, the Owner Participant, the Indenture Trustee, the
\n Owner Trustee (in its individual capacity and as trustee under the Trust
\n Agreement), or any successor, assign or Affiliate of any thereof, or the
\n Trust Estate pursuant to Section 7(b) hereof; and (F) that such new country
\n of registry imposes and enforces aircraft maintenance standards not
\n materially less stringent than those of the FAA or the central civil
\n aviation authority of Canada, France, Germany, Japan or the United Kingdom;
\n and<\/p>\n
(ii) a favorable opinion of counsel (reasonably satisfactory to
\n the Owner Trustee, in its individual capacity, and to the Owner
\n Participant) in the new jurisdiction of registry to the effect (A) that the
\n terms<\/p>\n
32<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(including, without limitation, the governing-law, service-of-process and
\n jurisdictional-submission provisions thereof) of the Lease and the Trust
\n Indenture are legal, valid, binding and enforceable in such jurisdiction,
\n (B) that it is not necessary for the Owner Participant, the Owner Trustee
\n or the Indenture Trustee to register or qualify to do business in such
\n jurisdiction, (C) that there is no tort liability of the owner of an
\n aircraft not in possession thereof under the laws of such jurisdiction
\n other than tort liability which might have been imposed on such owner under
\n the laws of the United States or any state thereof (it being understood
\n that, in the event such latter opinion cannot be given in a form
\n satisfactory to the Owner Participant, such opinion shall be waived if
\n insurance reasonably satisfactory to Owner Participant and the Owner
\n Trustee, in its individual capacity, is provided, at Lessee’s expense, to
\n cover such risk), (D) (unless Lessee shall have agreed to provide insurance
\n covering the risk of requisition of use or title of the Aircraft by the
\n government of such jurisdiction so long as the Aircraft is registered under
\n the laws of such jurisdiction) that the laws of such jurisdiction require
\n fair compensation by the government of such jurisdiction payable in
\n currency freely convertible into Dollars for the loss of use of the
\n Aircraft in the event of the requisition by such government of such use or
\n title, and (E) to such further effect with respect to such other matters as
\n the Owner Trustee, in its individual capacity, or the Owner Participant may
\n reasonably request.<\/p>\n
Upon receipt by the Owner Participant and the Indenture Trustee
\n of an opinion of counsel meeting the foregoing requirements, Exhibit F and
\n Exhibit G to the Lease shall be amended to add such country.<\/p>\n
If, at any time, the Owner Participant delivers an opinion (a
\n “Delisting Opinion”) from a law firm (such opinion and counsel to be
\n reasonably satisfactory to Lessee) in a country then listed on Exhibit F or
\n G to the Lease to the effect that a reputable law firm located in such
\n jurisdiction would not as of the date of such opinion be able to deliver an
\n opinion of counsel as to the matters listed in subsections (A) through (D)
\n of subparagraph (ii) above (provided that in regard to (C) and (D), Lessee
\n is not willing at the time of registration to provide the insurance
\n required by such subsection (C) or (D)), then Exhibits F and G to the Lease
\n shall be amended to delete such country. Lessee shall pay the reasonable
\n costs of the Owner Participant in obtaining the Delisting Opinion provided
\n such opinion is in fact obtained in connection with Lessee’s<\/p>\n
33<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
request to change the registry of the Aircraft to, or to sublease the
\n Aircraft in, a country listed on Exhibit F or G to the Lease.<\/p>\n
Lessee shall pay all reasonable fees and expenses on an after-tax
\n basis of the Owner Participant, the Owner Trustee and the Indenture Trustee
\n in connection with any change of registry of the Aircraft.<\/p>\n
(f) The Owner Participant represents and warrants as follows:<\/p>\n
(i) the Owner Participant is a corporation duly organized and
\n validly existing in good standing under the laws of its jurisdiction of
\n organization, and has the corporate power and authority to carry on its
\n business as now conducted, to own or hold under lease its properties and to
\n enter into and perform its obligations under the Owner Participant
\n Documents;<\/p>\n
(ii) the Owner Participant Documents have been duly authorized by
\n all necessary corporate action on the part of the Owner Participant, do not
\n require any approval not already obtained of stockholders of the Owner
\n Participant or any approval or consent not already obtained of any trustee
\n or holders of any indebtedness or obligations of the Owner Participant, and
\n have been duly executed and delivered by the Owner Participant, and neither
\n the execution and delivery thereof by the Owner Participant, nor the
\n consummation of the transactions contemplated thereby by the Owner
\n Participant, nor compliance by the Owner Participant with any of the terms
\n and provisions thereof will contravene any United States federal or state
\n law, judgment, governmental rule, regulation or order applicable to or
\n binding on the Owner Participant (it being understood that no
\n representation or warranty is made with respect to laws, rules or
\n regulations relating to aviation or to the nature of the equipment owned by
\n the Owner Trustee, other than such laws, rules or regulations relating to
\n the citizenship requirements of the Owner Participant under applicable
\n aviation law) or contravene or result in any breach of or constitute any
\n default under, or result in the creation of any Lien (other than Liens
\n provided for or otherwise permitted in the Operative Documents) upon the
\n Trust Estate under, any indenture, mortgage, chattel mortgage, deed of
\n trust, conditional sales contract, bank loan or credit agreement, corporate
\n charter, by-law or other agreement or instrument to which the Owner
\n Participant is a party or by which it or its properties may be bound or<\/p>\n
34<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
affected (it being understood that no representation or warranty is made in
\n this subsection (f)(ii) with respect to ERISA);<\/p>\n
(iii) each of the Owner Participant Documents constitutes a legal,
\n valid and binding obligation of the Owner Participant enforceable against
\n the Owner Participant in accordance with the terms thereof, and the trust
\n intended to be formed by the Trust Agreement has been duly and validly
\n formed;<\/p>\n
(iv) Neither the execution and delivery by the Owner Participant
\n of this Agreement or any other Owner Participant Document, nor the
\n consummation by it of any of the transactions contemplated hereby or
\n thereby, requires the consent or approval of, the giving of notice to, the
\n registration with, the recording or filing of any document with, or the
\n taking of any other action in respect of, any federal or other governmental
\n authority or agency, except those contemplated by the Operative Documents
\n (it being understood that no representation or warranty is made with
\n respect to the laws, rules or regulations relating to aviation or to the
\n nature of the equipment owned by the Owner Trustee, other than such laws,
\n rules or regulations relating to the citizenship requirements of the Owner
\n Participant under applicable aviation law);<\/p>\n
(v) there are no pending or, to the knowledge of the Owner
\n Participant, threatened actions or proceedings against the Owner
\n Participant before any court or administrative agency which individually
\n (or in the aggregate in the case of any group of related lawsuits) purports
\n to affect the legality, validity or enforceability of, or which is
\n reasonably likely to materially adversely affect the ability of the Owner
\n Participant to perform its obligations under any of, the Owner Participant
\n Documents; and<\/p>\n
(vi) on the Delivery Date, the Aircraft will be free of Lessor
\n Liens (including for this purpose Liens that would be Lessor Liens but for
\n the proviso to the definition of Lessor Liens) attributable to the Owner
\n Participant.<\/p>\n
(g) Each of State Street Bank and Trust Company in its individual
\ncapacity and the Owner Participant severally covenants and agrees (i) that it
\nshall not cause or permit to exist any Lessor Lien attributable to it with
\nrespect to the Aircraft or any other portion of the Trust Estate, (ii) that it
\nwill promptly, at its own expense, take such action as may be<\/p>\n
35<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
necessary duly to discharge such Lessor Lien attributable to it and (iii) to
\nmake restitution to the Trust Estate for any actual diminution of the assets of
\nthe Trust Estate resulting from such Lessor Liens attributable to it. The Owner
\nParticipant agrees to make restitution to the Trust Estate for any actual
\ndiminution of the assets of the Trust Estate resulting from any Taxes or
\nExpenses (as such terms are defined in Section 7 hereof) imposed on the Trust
\nEstate against which Lessee is not required to indemnify the Trust Estate
\npursuant to Section 7 hereof, but excluding Taxes or Expenses referred to in
\nSection 7(b)(ii)(5) and 7(b)(ii)(7) and excluding any diminution of the Trust
\nEstate attributable to or caused by State Street Bank and Trust Company in its
\nindividual capacity; provided that if the Owner Participant shall make
\nrestitution to the Trust Estate on account of any diminution of the Trust Estate
\nattributable to or caused by State Street Bank and Trust Company in its
\nindividual capacity, then State Street Bank and Trust Company, in its individual
\ncapacity, shall reimburse the Owner Participant for such amount together with
\ninterest thereon at the Past Due Rate.<\/p>\n
(h) First Security Bank of Utah, National Association, in its
\nindividual capacity, covenants and agrees that it shall not cause or permit to
\nexist any Lien, arising as a result of (i) claims against the Indenture Trustee
\nnot related to its interest in the Aircraft or the administration of the Trust
\nEstate pursuant to the Trust Indenture, (ii) acts of the Indenture Trustee not
\npermitted by, or failure of the Indenture Trustee to take any action required
\nby, the Operative Documents to the extent such acts arise or such failure arises
\nfrom or constitutes gross negligence or willful misconduct, (iii) claims against
\nthe Indenture Trustee relating to Taxes or Expenses which are excluded from the
\nindemnification provided by Section 7 pursuant to said Section 7, or (iv) claims
\nagainst the Indenture Trustee arising out of the transfer by the Indenture
\nTrustee of all or any portion of its interest in the Aircraft, the Trust Estate,
\nthe Trust Indenture Estate or the Operative Documents other than (A) a transfer
\nof the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article 5 or 8
\nof the Trust Indenture, (B) any borrowing pursuant to Section 17 hereof or (C) a
\ntransfer of the Aircraft pursuant to Section 15 of the Lease while an Event of
\nDefault is continuing and prior to the time that the Indenture Trustee has
\nreceived all amounts due pursuant to the Trust Indenture.<\/p>\n
(i) [Intentionally omitted.]<\/p>\n
(j) The Indenture Trustee, and by the acceptance of a Loan Certificate
\neach Certificate Holder (and each Pass Through Trustee, so long as the relevant
\nPass Through Trust Agreement is<\/p>\n
36<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
in effect), each hereby waives to the fullest extent permitted by law the
\nbenefit of the provisions of Section 1111(b) of Title 11 of the United States
\nCode with respect to recourse against the Owner Trustee (in its individual
\ncapacity) and the Owner Participant on account of any amount payable as
\nprincipal of, Premium, if any, and interest on the Loan Certificates. If (i)
\nall or any part of the Trust Estate becomes the property of, or the Owner
\nParticipant becomes, a debtor subject to the reorganization provisions of the
\nBankruptcy Code or any successor provision, (ii) pursuant to such reorganization
\nprovisions the Owner Trustee (in its individual capacity) or the Owner
\nParticipant is required, by reason of the Owner Trustee (in its individual
\ncapacity) or the Owner Participant being held to have recourse liability to a
\nCertificate Holder, a Pass Through Trustee or the Indenture Trustee, directly or
\nindirectly (other than the recourse liability of the Owner Participant under
\nthis Participation Agreement), to make payment on account of any amount payable
\nas principal, Premium, if any, or interest on the Loan Certificates and (iii)
\nsuch Certificate Holder, such Pass Through Trustee or the Indenture Trustee
\nactually receives any Excess Payment (as hereinafter defined) which reflects any
\npayment by the Owner Trustee (in its individual capacity) or the Owner
\nParticipant on account of clause (ii) above, then such Certificate Holder, such
\nPass Through Trustee or the Indenture Trustee, as the case may be, shall
\npromptly refund to the Owner Trustee or the Owner Participant (whichever shall
\nhave made such payment) such Excess Payment. For purposes of this Section 8(j),
\n“Excess Payment” means the amount by which such payment exceeds the amount which
\nwould have been received by such Certificate Holder, such Pass Through Trustee
\nor the Indenture Trustee if the Owner Trustee (in its individual capacity) or
\nthe Owner Participant had not become subject to the recourse liability referred
\nto in clause (ii) above. Nothing contained in this Section 8(j) shall prevent
\nany Certificate Holder, any Pass Through Trustee or the Indenture Trustee from
\nenforcing any personal recourse obligation (and retaining the proceeds thereof)
\nof the Owner Trustee (in its individual capacity) or the Owner Participant under
\nthis Participation Agreement or the Trust Indenture (and any exhibits or annexes
\nthereto).<\/p>\n
(k) First Security Bank of Utah, National Association, in its
\nindividual capacity (“FSBU”) and as Indenture Trustee and Pass Through Trustee
\nas provided below, represents as follows:<\/p>\n
(i) it is a Citizen of the United States, that it will notify
\n promptly all parties to this Agreement if in its reasonable opinion its
\n status as a Citizen of the United States is likely to change and that it
\n will resign as Indenture Trustee as provided in Section 9.07 of the Trust<\/p>\n
37<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Indenture if it should cease to be a Citizen of the United States;<\/p>\n
(ii) it is a national banking association and has the full
\n corporate power, authority and legal right under the laws of the United
\n States of America to enter into and perform its obligations under the Trust
\n Indenture, this Agreement, the Basic Agreement and each Pass Through Trust
\n Agreement and, in its capacity as Indenture Trustee and Pass Through
\n Trustee, respectively, to authenticate the Loan Certificates and the Pass
\n Through Certificates;<\/p>\n
(iii) the Indenture Trustee Documents, and the authentication of
\n the Loan Certificates and the Pass Through Certificates have been duly
\n authorized by all necessary corporate action on the part of FSBU, the
\n Indenture Trustee and the relevant Pass Through Trustee, as it shall be a
\n party thereto in any such capacity, and neither the execution (or, in the
\n case of the Loan Certificates and the Pass Through Certificates, the
\n authentication) and delivery thereof in any such capacity nor the
\n performance by it in any such capacity of any of the terms and provisions
\n thereof will violate any federal or Utah law or regulation relating to the
\n banking or trust powers of FSBU or contravene or result in any breach of,
\n or constitute any default under its charter or by-laws or the provisions of
\n any indenture, mortgage, contract or other agreement to which FSBU, the
\n Indenture Trustee or the Pass Through Trustee is a party or by which it or
\n its properties may be bound or affected;<\/p>\n
(iv) each of the Indenture Trustee Documents has been duly
\n executed (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, authenticated) and delivered by FSBU, the Indenture Trustee
\n and the relevant Pass Through Trustee, as it shall be a party thereto in
\n any such capacity, and, assuming that each such agreement is the legal,
\n valid and binding obligation of each other party thereto (other than FSBU,
\n the Indenture Trustee and the relevant Pass Through Trustee), is the legal,
\n valid and binding obligation of FSBU, the Indenture Trustee and the
\n relevant Pass Through Trustee, as it shall be a party thereto in any such
\n capacity, enforceable against it in accordance with its terms;<\/p>\n
(v) neither the execution (or, in the case of the Loan
\n Certificates and the Pass Through Certificates, the authentication) and
\n delivery by FSBU, the Indenture Trustee or any Pass Through Trustee, as it
\n is a party in any such capacity to any of the Indenture Trustee Documents,
\n nor the<\/p>\n
38<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
consummation by it in any such capacity of any of the transactions
\n contemplated hereby, by the Trust Indenture, by the Pass Through Trust
\n Agreements, by the Loan Certificates or by the Pass Through Certificates
\n requires the consent or approval of, the giving of notice to, or the
\n registration with, or the taking of any other action with respect to, any
\n Utah state or federal governmental authority or agency regulating the
\n banking, trust or fiduciary powers of FSBU;<\/p>\n
(vi) there are no Taxes payable by FSBU, the Indenture Trustee or
\n any Pass Through Trustee imposed by the State of Utah or any political
\n subdivision or taxing authority thereof in connection with the execution
\n (or, in the case of the Loan Certificates and the Pass Through
\n Certificates, the authentication) and delivery by it as a party in any such
\n capacity to any Indenture Trustee Document or the performance by it as a
\n party in any such capacity of any Indenture Trustee Document (other than
\n franchise or other taxes based on or measured by any fees or compensation
\n received by FSBU, the Indenture Trustee or any Pass Through Trustee, as the
\n case may be, for services rendered in connection with the transactions
\n contemplated thereby), and there are no Taxes payable by FSBU, the
\n Indenture Trustee or any Pass Through Trustee imposed by the State of Utah
\n or any political subdivision thereof in connection with the acquisition,
\n possession or ownership by any Pass Through Trustee of any of the Loan
\n Certificates (other than franchise or other taxes based on or measured by
\n any fees or compensation received by a Pass Through Trustee for services
\n rendered in connection with the transactions contemplated by the respective
\n Pass Through Trust Agreement) and, assuming that the trust created by the
\n respective Pass Through Trust Agreement will not be taxable as a
\n corporation, but, rather, will be characterized as a grantor trust under
\n subpart E, Part I of Subchapter J of the Code, such trust will not be
\n subject to any Taxes imposed by the State of Utah or any political
\n subdivision thereof;<\/p>\n
(vii) there are no pending or threatened actions or proceedings
\n against any of FSBU, the Indenture Trustee, or the Pass Through Trustees
\n before any court or administrative agency which individually (or in the
\n aggregate in the case of any group of related lawsuits) purports to affect
\n the legality, validity or enforceability of, or which is reasonably likely
\n to materially adversely affect the ability of FSBU, the Indenture Trustee,
\n or the Pass Through Trustees to perform its obligations as a party in any
\n such capacity under any Indenture Trustee Document; and<\/p>\n
39<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(viii) except for the issuance and sale pursuant to the respective
\n Pass Through Trust Agreement of the Pass Through Certificates contemplated
\n hereby, neither FSBU nor any Pass Through Trustee has directly or
\n indirectly offered any Loan Certificate for sale to any Person, or
\n solicited any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and neither FSBU nor any
\n Pass Through Trustee has authorized anyone to act on its behalf to offer
\n directly or indirectly any Loan Certificate for sale to any Person, or to
\n solicit any offer to acquire any Loan Certificate from any Person other
\n than the Owner Trustee and the Owner Participant, and no Pass Through
\n Trustee is in default under any respective Pass Through Trust Agreement.<\/p>\n
(l) So long as the Aircraft shall be leased to Lessee under the Lease
\nand so long as the Loan Certificates are outstanding, the Owner Participant will
\nnot sell, assign, convey or otherwise transfer any of its right, title or
\ninterest in and to this Agreement, the Trust Estate or the Trust Agreement to
\nany person or entity, unless (i) the proposed transferee is a “Transferee” (as
\ndefined below) and (ii) the Owner Participant and the Transferee shall have
\ndelivered to the Owner Trustee, the Lessee and the Indenture Trustee opinions
\nsubstantially in the form of Exhibits A-1 and A-2, respectively, hereto (or
\notherwise in form and substance reasonably satisfactory to Lessee and the
\nIndenture Trustee) of counsel reasonably satisfactory to the Indenture Trustee
\nand Lessee. A “Transferee” shall mean either (A) a bank or other financial
\ninstitution with a combined capital, surplus and undivided profits of at least
\n$75,000,000 or a corporation whose net worth is at least $75,000,000, (B) any
\nsubsidiary of such a bank, financial institution or corporation, provided that
\nsuch bank, financial institution or corporation furnishes to the Owner Trustee,
\nthe Indenture Trustee and Lessee a guaranty substantially in the form of Exhibit
\nC hereto with respect to the Owner Participant’s obligations, in the case of the
\nOwner Trustee, under the Trust Agreement and, in the case of the Indenture
\nTrustee and Lessee, the Owner Participant’s obligations hereunder, or (C) any
\nother entity, provided such obligations are guaranteed by the transferor Owner
\nParticipant; provided, however, that unless otherwise consented to by Lessee no
\nTransferee shall be an airline, a commercial air carrier, an air freight
\nforwarder, an entity engaged in the business of parcel transport by air or other
\nsimilar person or a corporation or other entity controlling, controlled by or
\nunder common control with such an airline, a commercial air carrier, an air
\nfreight forwarder, an entity engaged in the business of parcel transport by air
\nor other similar person. Each such transfer to a Transferee shall be subject to
\nthe conditions that (M) upon<\/p>\n
40<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
giving effect to such transfer, the Transferee is a Citizen of the United States
\nor the Transferee, at its sole cost and expense on an after-tax basis (including
\nany continuing costs of the voting trust), shall have entered into a voting
\ntrust or similar arrangement which permits the registration of the Aircraft
\nunder the Federal Aviation Act in the name of the Owner Trustee, (N) the
\nTransferee has the full power and authority to enter into and carry out the
\ntransactions contemplated hereby, (O) the Transferee enters into an agreement
\nsubstantially in the form of Exhibit B hereto (or otherwise in form and
\nsubstance reasonably satisfactory to Lessee and the Indenture Trustee), (P) such
\ntransfer does not violate any applicable law including, without limitation, the
\nFederal Aviation Act, or any rules or regulations promulgated thereunder, the
\nSecurities Act of 1933 or the Trust Indenture Act of 1939 (but not including
\nERISA), (Q) the transferor Owner Participant assumes the risk of any loss of
\nInterest Deductions, MACRS Deductions, FSC Benefits or any Inclusion Event (each
\nas defined in the Tax Indemnity Agreement) resulting from such transfer, (R)
\nafter giving effect to such transfer, there shall be no more than three Owner
\nParticipants of record at that time, (S) such transfer will not give rise to a
\nDefault or Event of Default under the Trust Indenture and (T) if such transfer
\nwill result in there being more than one Owner Participant, it shall be a
\ncondition precedent to such transfer that all such Owner Participants shall have
\nagreed in a manner reasonably satisfactory to Lessee that if the provisions of
\nthe Operative Documents require or contemplate the waiver, consent or direction
\nof Owner Participant, such provisions shall be deemed satisfied by the waiver,
\ndirection or consent of Owner Participants holding a majority of the beneficial
\ninterests in the Trust Estate. Upon any such transfer by the Owner Participant
\nas above provided, (i) the Transferee shall be deemed the Owner Participant for
\nall purposes hereof and of the other Operative Documents and each reference
\nherein to the transferor Owner Participant shall thereafter be deemed for all
\npurposes to be to the Transferee and the transferor Owner Participant shall be
\nrelieved of all obligations of the transferring Owner Participant under the
\nOwner Participant Documents arising after the date of such transfer except to
\nthe extent fairly attributable to acts or events occurring prior thereto and not
\nassumed by the transferee Owner Participant (in each case, to the extent of the
\nparticipation so transferred) and (ii) Lessee shall acknowledge its consent to
\nsuch transfer to the Transferee, shall represent to the Transferee that no Event
\nof Default or Event of Loss, or circumstance which with the passage of time or
\nthe giving of notice or both would constitute an Event of Default or Event of
\nLoss, then exists and Lessee shall promptly obtain new insurance certificates
\n(consistent with the provisions of Section 11 of the Lease) that reflect the
\ninterests of the Transferee in<\/p>\n
41<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
the Aircraft. If the Owner Participant intends to transfer any of its interests
\nhereunder, it shall give prior written notice thereof as soon as practicable,
\nbut in no event less than 10 days prior thereto, to the Indenture Trustee, the
\nOwner Trustee and Lessee, specifying the name and address of the proposed
\nTransferee. The Owner Participant shall pay all of the reasonable costs of the
\nother parties hereto, on a net after-tax basis, of any such transfer. For
\npurposes of this paragraph, “net worth” shall mean the excess of total tangible
\nassets over total liabilities, each to be determined in accordance with
\ngenerally accepted accounting principles consistently applied. Notwithstanding
\nanything contained in this Section 8(l) to the contrary, each of Lessee, the
\nOwner Trustee, the Indenture Trustee, the Pass Through Trustees and, by its
\nacceptance of a Loan Certificate, each Certificate Holder agrees that the Owner
\nParticipant may pledge its beneficial interest in the Trust Estate created
\npursuant to the Trust Agreement to First Security Bank of Utah, National
\nAssociation, as indenture trustee (the “777A Indenture Trustee”) pursuant to
\nthat certain Trust Indenture and Mortgage (1995 777 A) dated as of May 1, 1995,
\npursuant to a certain letter agreement to be entered into between _____________
\n_____________ and the 777A Indenture Trustee.<\/p>\n
(m) Notwithstanding the provisions of Section 8(r) hereof, unless
\nwaived by each Certificate Holder, Lessee shall not be entitled to terminate the
\nLease or assume the Loan Certificates on a Purchase Option Date if on such
\nPurchase Option Date an Event of Default under the Lease shall have occurred and
\nbe continuing.<\/p>\n
(n) State Street Bank and Trust Company and First Security Bank of
\nUtah, National Association, each in its individual capacity, agrees for the
\nbenefit of Lessee to comply with the terms of the Trust Indenture which it is
\nrequired to comply with in its individual capacity.<\/p>\n
(o) The Owner Participant represents and warrants that no part of the
\nfunds used by it to acquire its interest in the Trust Estate constitutes assets
\nof any “employee benefit plan” as defined in Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”), or of any “plan”
\nwithin the meaning of Section 4975(e)(1) of the Code (such employee benefit
\nplans and plans hereinafter referred to as “ERISA Plans”).<\/p>\n
(p) State Street Bank and Trust Company in its individual capacity
\n(“SSBTC”) represents and warrants that:<\/p>\n
42<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(i) the Trust Agreement and, assuming due authorization,
\n execution and delivery of the Trust Agreement by the Owner Participant,
\n each of the other Owner Trustee Documents has been duly executed and
\n delivered by one of its officers who is duly authorized to execute and
\n deliver such instruments on behalf of the Owner Trustee;<\/p>\n
(ii) the Trust Estate is free and clear of Lessor Liens
\n attributable to SSBTC, and there are no Liens affecting the title of the
\n Owner Trustee to the Aircraft or resulting from any act or claim against
\n SSBTC arising out of any event or condition not related to the ownership,
\n leasing, use or operation of the Aircraft or to any other transaction
\n contemplated by this Agreement or any of the other Operative Documents,
\n including any Lien resulting from the nonpayment by SSBTC of any Taxes
\n imposed or measured by its net income;<\/p>\n
(iii) there has not occurred any event which constitutes (or to
\n the best of its knowledge would, with the passage of time or the giving of
\n notice or both, constitute) an Event of Default as defined in the Trust
\n Indenture which has been caused by or relates to SSBTC and which is
\n presently continuing;<\/p>\n
(iv) it is a Massachusetts trust company duly organized and
\n validly existing in good standing under the laws of the Commonwealth of
\n Massachusetts and (assuming due authorization, execution and delivery of
\n the Trust Agreement by the Owner Participant) has the corporate power and
\n authority to enter into and perform its obligations under the Trust
\n Agreement, and (assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant) has full right, power and
\n authority to enter into and perform its obligations as Owner Trustee
\n pursuant to the Trust Agreement under each of the other Owner Trustee
\n Documents;<\/p>\n
(v) each of the Owner Trustee Documents has been duly authorized
\n by all necessary corporate action on its part, and neither the execution
\n and delivery thereof nor its performance of any of the terms and provisions
\n thereof will violate any federal or Massachusetts Commonwealth law or
\n regulation relating to its banking or trust powers or contravene or result
\n in any breach of, or constitute any default under, its charter or by-laws
\n or the provisions of any indenture, mortgage, contract or other agreement
\n to which it is a party or by which it or its properties may be bound or
\n affected;<\/p>\n
43<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(vi) assuming due authorization, execution and delivery of the
\n Trust Agreement by the Owner Participant, each of the Owner Trustee
\n Documents has been duly executed and delivered by it, and each of the Trust
\n Agreement and the Participation Agreement (to the extent executed by the
\n Owner Trustee in its individual capacity) is a legal, valid and binding
\n obligation of SSBTC and as Owner Trustee, as the case may be, enforceable
\n against such party in accordance with the terms thereof;<\/p>\n
(vii) on the Delivery Date, the Owner Trustee shall have received
\n whatever title to the Aircraft as was conveyed to it by the Lessee;<\/p>\n
(viii) it has not offered any interest in the Trust Estate or any
\n Loan Certificates or Pass Through Certificates or any similar securities
\n for sale to, or solicited any offer to acquire the same from, anyone other
\n than the Indenture Trustee, the Pass Through Trustees and the Owner
\n Participant, and no responsible officer or responsible employee of SSBTC
\n has knowledge of any such offer or solicitation, except as set forth in
\n Section 7(a)(xi) hereof;<\/p>\n
(ix) assuming due authorization, execution and delivery of each of
\n the Owner Trustee Documents by each of the parties thereto (other than the
\n Owner Trustee), each of the Owner Trustee Documents is a legal, valid and
\n binding obligation of the Owner Trustee, enforceable against the Owner
\n Trustee in accordance with its respective terms;<\/p>\n
(x) neither the due execution and delivery of the Owner Trustee
\n Documents by SSBTC, in its individual capacity or as Owner Trustee under
\n the Trust Agreement, as the case may be, nor the consummation by it of any
\n of the transactions contemplated thereby require the consent or approval
\n of, the giving of notice to, or the registration with, any federal or
\n Massachusetts Commonwealth governmental authority or agency pursuant to any
\n federal or Massachusetts Commonwealth law governing the banking or trust
\n powers of SSBTC;<\/p>\n
(xi) no consent, approval, order or authorization of, giving of
\n notice to, or registration or filing with (including the filing of any
\n financing statement under Article 9 of the Uniform Commercial Code as in
\n effect in the Commonwealth of Massachusetts), or taking of any other action
\n in respect of, any Massachusetts Commonwealth or local governmental
\n authority or agency or any United States<\/p>\n
44<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
federal governmental authority or agency regulating the banking or trust
\n powers of SSBTC is required for the execution and delivery of, or the
\n carrying out by, SSBTC or the Owner Trustee, as the case may be, of any of
\n the transactions contemplated by the Owner Trustee Documents or of any of
\n the transactions contemplated by any other of the Operative Documents to
\n which SSBTC or the Owner Trustee is or is to be a party, other than any
\n such consent, approval, order, authorization, registration, notice or
\n action as has been duly obtained, given or taken (and other than the filing
\n of continuation statements required to be filed at periodic intervals under
\n Article 9 of the Uniform Commercial Code as in effect in the State of
\n Illinois and the Commonwealth of Massachusetts);<\/p>\n
(xii) except for the filing of a financing statement in the
\n office of the Secretary of State of the Commonwealth of Massachusetts
\n naming the Owner Trustee as debtor and the Indenture Trustee as secured
\n party and describing the Trust Indenture Estate accurately and completely,
\n which financing statement has been duly filed, and the timely filing in the
\n future of continuation statements with respect to such financing statement,
\n no other filing is required in the Commonwealth of Massachusetts in order
\n to perfect the mortgage and security interests created by the Trust
\n Indenture; and<\/p>\n
(xiii) there are no pending or threatened actions or proceedings
\n against SSBTC or the Owner Trustee before any court or administrative
\n agency which, if determined adversely to it, would materially adversely
\n affect the ability of SSBTC or the Owner Trustee, as the case may be, to
\n perform its obligations under any of the Owner Trustee Documents or any
\n other documents executed by the Owner Trustee or SSBTC in connection with
\n the transactions contemplated by the Operative Documents.<\/p>\n
(q) The Owner Participant agrees, solely for the benefit of Lessee,
\nthat it will comply with any obligation expressly required of it under Section
\n9(c) of the Lease. The Owner Participant further covenants and agrees to pay or
\ncause the Owner Trustee to pay those costs and expenses specified to be paid by
\nthe Owner Participant pursuant to the Lease and all costs and expenses that are
\nfor the account of the Lessor pursuant to Sections 5(a), 5(c), 5(d), 5(e) and
\n5(f), 12 and 19(c) of the Lease.<\/p>\n
(r) Subject to compliance by Lessee with all of its obligations under
\nthe Lessee Documents, each of the Owner<\/p>\n
45<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Trustee, the Indenture Trustee, each Certificate Holder and the Owner
\nParticipant covenants and agrees that, at Lessee’s expense on a net after-tax
\nbasis (including, without limitation, reasonable attorney’s fees and expenses of
\neach of such parties), (i) Lessee may elect to terminate the Lease and to
\npurchase the Aircraft pursuant to Section 19(b) of the Lease and that each of
\nsuch parties will execute and deliver appropriate documentation transferring all
\nright, title and interest in the Aircraft to Lessee (without recourse or
\nwarranty except as to Lessor Liens (including for this purpose Liens that would
\nbe Lessor Liens but for the proviso to the definition of Lessor Liens) with
\nrespect to the Owner Participant) (including without limitation, such bills of
\nsale and other instruments and documents as Lessee shall reasonably request to
\nevidence (on the public record or otherwise) such transfer and the vesting of
\nall right, title and interest in and to the Aircraft in Lessee), and (ii)
\nLessee, in connection with such purchase and may assume (and receive a credit in
\nan amount equal to the principal amount of the debt assumed against the purchase
\nprice payable by Lessee pursuant to Section 19(b) of the Lease) the obligations
\nof the Owner Trustee pursuant to Section 7.03 of the Trust Indenture and the
\nLoan Certificates (and the Lease, to the extent that the Owner Trustee’s
\nobligations thereunder are incorporated into the Trust Indenture or the Loan
\nCertificates), and Lessee shall confirm that its obligations under the Lease
\nshall be direct obligations to the Indenture Trustee as if set forth in the
\nTrust Indenture, and that each of the parties shall execute and deliver
\nappropriate documentation in form and substance reasonably satisfactory to such
\nparties under which Lessee will assume such obligations on the basis of full
\nrecourse to Lessee, maintaining the security interest in the Aircraft created by
\nthe Trust Indenture, releasing the Owner Participant and the Owner Trustee from
\nall future obligations in respect of the Loan Certificates, the Trust Indenture
\nand all other Operative Documents and all such other actions (including the
\nfurnishing of legal opinions reasonably requested by any party) as are
\nreasonably necessary to permit such assumption by Lessee.<\/p>\n
(s) Lessee will not consolidate with or merge into any other
\ncorporation or convey, transfer or lease substantially all of its assets to any
\nPerson unless:<\/p>\n
(i) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall be a
\n Citizen of the United States and shall be a Certificated Air Carrier;<\/p>\n
46<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(ii) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee as an entirety shall
\n execute and deliver to the Owner Trustee, the Indenture Trustee, the Owner
\n Participant and the Pass Through Trustees a duly authorized, valid, binding
\n and enforceable agreement in form and substance reasonably satisfactory to
\n the Owner Participant containing an assumption by such successor
\n corporation or Person of the due and punctual performance and observance of
\n each covenant and condition of the Operative Documents and the Pass Through
\n Trust Agreements to be performed or observed by Lessee;<\/p>\n
(iii) immediately after giving effect to such transaction, no
\n Event of Default under the Lease shall have occurred and be continuing;<\/p>\n
(iv) Lessee shall have delivered to the Owner Trustee, the
\n Indenture Trustee, the Pass Through Trustees and the Owner Participant a
\n certificate signed by the President or any Vice President and by the
\n Secretary or an Assistant Secretary of Lessee, and an opinion of counsel
\n (which may be Lessee’s General Counsel) reasonably satisfactory to the
\n Owner Participant, each stating that such consolidation, merger,
\n conveyance, transfer or lease and the assumption agreement mentioned in
\n clause (ii) above comply with this Section 8(s) and that all conditions
\n precedent herein provided for relating to such transaction have been
\n complied with; and<\/p>\n
(v) the corporation formed by such consolidation or into which
\n Lessee is merged or the Person which acquires by conveyance, transfer or
\n lease substantially all of the assets of Lessee, shall make such filings
\n and recordings with the FAA pursuant to the Federal Aviation Act, as shall
\n be necessary or desirable to evidence such consolidation, merger,
\n conveyance, transfer or lease with or to such entity.<\/p>\n
Upon any consolidation or merger, or any conveyance, transfer or lease
\nof substantially all of the assets of Lessee as an entirety in accordance with
\nthis Section 8(s), the successor corporation or Person formed by such
\nconsolidation or into which Lessee is merged or to which such conveyance,
\ntransfer or lease is made shall succeed to, and be substituted for, and may
\nexercise every right and power of, Lessee under this Agreement and under the
\nPass Through Trust Agreements with the same effect as if such successor
\ncorporation or Person had been named as<\/p>\n
47<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Lessee herein and therein. No such conveyance, transfer or lease of
\nsubstantially all of the assets of Lessee as an entirety shall have the effect
\nof releasing Lessee or any successor corporation or Person which shall
\ntheretofore have become such in the manner prescribed in this Section 8(s) from
\nits liability in respect of any Operative Document to which it is a party or any
\nPass Through Trust Agreement. Nothing contained herein shall permit any lease,
\nsublease or other arrangement for the use, operation or possession of the
\nAircraft except in compliance with the applicable provisions of the Lease.<\/p>\n
(t) Lessee, at its expense, will, at the request of any party hereto,
\ntake, or cause to be taken, such action with respect to the recording, filing,
\nrerecording and refiling of the Trust Agreement, the Lease, the Lease
\nSupplement, the Trust Indenture, the Trust Supplement and any financing
\nstatements or other instruments as are necessary to maintain, so long as the
\nTrust Indenture or the Lease is in effect, the perfection of the security
\ninterests created by the Trust Indenture and any security interest that may be
\nclaimed to have been created by the Lease and the ownership interest of the
\nOwner Trustee in the Aircraft.<\/p>\n
(u) Section 3 of the Lease contemplates that, under certain
\ncircumstances, the Owner Participant will make certain recalculations of Basic
\nRent, Excess Amount, Stipulated Loss Value percentages, Termination Value
\npercentages, Special Termination Value percentages and the EBO Percentage, and
\nthe Owner Participant hereby agrees to make such recalculations as and when
\ncontemplated by the Lease and subject to all the terms and conditions of the
\nLease and promptly to take such further actions as may be necessary or desirable
\nto give effect to and to cause the Owner Trustee to give effect to the
\nprovisions of Section 3 of the Lease.<\/p>\n
(v) The Owner Participant hereby agrees not to revoke the Trust
\nAgreement or the trusts created thereunder without the prior written consent of
\n(i) the Lessee so long as the Lease shall remain in effect and no Event of
\nDefault under the Lease shall have occurred and be continuing and (ii) the
\nIndenture Trustee so long as the Trust Indenture shall be in effect.<\/p>\n
(w) Lessee covenants and agrees with the Owner Participant, the
\nIndenture Trustee and the Owner Trustee that at all times during the Term it
\nwill be a Certificated Air Carrier<\/p>\n
(x) (i) Each Pass Through Trustee hereby agrees that, except as
\notherwise required by applicable law (including, without limitation, any law
\nwhich requires such Pass Through<\/p>\n
48<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Trustee to act within its own discretion), it shall not, without the prior
\nwritten consent of the Owner Trustee, direct the Indenture Trustee to take or
\nrefrain from taking any action under the Trust Indenture that requires the
\napproval, waiver, authorization, direction or consent of, or notice from, the
\nCertificate Holders holding a specified percentage in principal amount of
\nOutstanding (as defined in the Trust Indenture) Loan Certificates unless such
\nPass Through Trustee receives a Direction (as defined in the relevant Pass
\nThrough Trust Agreement) to so direct the Indenture Trustee from Certificate
\nHolders (as defined in the relevant Pass Through Trust Agreement) holding the
\nsame percentage of Certificates (as defined in the relevant Pass Through Trust
\nAgreement) evidencing Fractional Undivided Interests (as defined in the relevant
\nPass Through Trust Agreement) in the Trust (as defined in the relevant Pass
\nThrough Trust Agreement) holding the Loan Certificates.<\/p>\n
(ii) Lessee and each Pass Through Trustee hereby agree that
\n Article X of each Pass Through Trust Agreement (to the extent relating to
\n the Certificates) shall not be amended without the prior written consent of
\n the Owner Participant.<\/p>\n
(iii) Each Pass Through Trustee hereby agrees that, except as
\n otherwise required by applicable law (including, without limitation, any
\n law which requires such Pass Through Trustee to act within its own
\n discretion), if requested to do so by the Owner Trustee or the Owner
\n Participant, such Pass Through Trustee shall request a Direction from the
\n relevant Certificate Holders to establish whether such Pass Through
\n Trustee, in its capacity as a Certificate Holder, may direct the Indenture
\n Trustee to take or refrain from taking any action under the Operative
\n Documents.<\/p>\n
(y) The Owner Trustee agrees that any profit, income, interest,
\ndividend or gain realized upon the maturity, sale or other disposition of any
\nPermitted Investment made by the Indenture Trustee pursuant to Section 9.04 of
\nthe Trust Indenture, and paid to Lessee on behalf of the Owner Trustee by the
\nIndenture Trustee in accordance with the terms of such Section 9.04, shall be
\nentirely for the account of, and the sole property of, Lessee who, for such
\npurposes, shall not be deemed to be acting as agent of the Owner Trustee, and
\nLessee shall have no obligation to pay over such income, interest, dividend or
\ngain to the Owner Trustee, except to the extent the Owner Trustee or Owner
\nParticipant are owed any amounts under the Operative Documents by Lessee and
\nsuch amounts are not paid when due, in which event the Owner Participant may
\ncause the Owner Trustee to distribute and apply such income, interest, dividend
\nor gain in satisfaction or partial satisfaction of the amounts so due.<\/p>\n
49<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(z) The Owner Participant hereby agrees to instruct the Owner Trustee
\nto promptly distribute any money received by it pursuant to Section 7.01 or
\n10.04 of the Trust Indenture to Lessee to the extent such amounts were paid by
\nLessee or on behalf of Lessee and the Owner Trustee or the Owner Participant is
\nnot owed any amounts under any of the Operative Documents by Lessee (and if the
\nOwner Trustee or Owner Participant is owed any such amount, the monies received
\nunder Section 7.01 or 10.04 of the Trust Indenture may be applied in
\nsatisfaction or partial satisfaction thereof). Lessee agrees to hold any money
\nreceived by it pursuant to the foregoing sentence in trust for the benefit of
\nthe Owner Participant and may, in its discretion, invest and reinvest all money
\nso held by it in such Permitted Investments as Lessee deems appropriate. Lessee
\nwill apply such money to the payment of previously unclaimed payments with
\nrespect to the Loan Certificates when and as claims for payment are made by the
\nHolders of such Loan Certificates. As compensation for its services pursuant to
\nthis Section 8(z), Lessee shall be entitled to an annual fee from the Owner
\nParticipant in an amount to be agreed to at the time by Lessee and the Owner
\nParticipant but in no event shall such fee exceed at any time the amount of
\nearnings on the monies so held in trust distributable at such time to the Owner
\nParticipant. Any net losses on such investment shall be for the account of
\nLessee. Any net earnings on such investment shall be distributed from time to
\ntime by Lessee to the Owner Participant after deducting therefrom any portion of
\nsuch fee then due and unpaid. Upon the date required by applicable law dealing
\nwith unclaimed property, Lessee will distribute to the Owner Participant any
\namount held by it pursuant to this Section 8(z) and not previously applied to
\nthe payment of the Loan Certificates, after deducting therefrom any portion of
\nsuch fee then due and unpaid.<\/p>\n
(aa) The Owner Participant agrees that, at Lessee’s expense
\n(including, without limitation, reasonable attorneys fees and other out-of-
\npocket expense of the Owner Trustee and Owner Participant), upon request of the
\nLessee, the Owner Participant will negotiate promptly in good faith with respect
\nto any arrangements pursuant to which the Trust Indenture may be satisfied and
\ndischarged in respect of the Loan Certificates in accordance with subsection
\n(a)(ii) or (a)(iii) of Section 10.01 of the Trust Indenture, provided, that
\nthere shall be no material adverse impact upon the rights or interests of the
\nOwner Participant or Owner Trustee, and the Owner Trustee agrees to act upon the
\ninstructions of the Owner participant in connection therewith. The Owner
\nTrustee agrees that it will not, and the Owner Participant agrees that during
\nsuch time as an Event of Default has not occurred under the Lease it will not
\ncause the Owner Trustee to take any action to effect such satisfaction and<\/p>\n
50<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
discharge except upon the request of the Lessee made pursuant to this Section
\n8(aa).<\/p>\n
SECTION 9. [Intentionally Omitted].<\/p>\n
SECTION 10. Other Documents; Amendment. Each of the Owner
\nParticipant and the Owner Trustee hereby (A) agrees with Lessee, the Certificate
\nHolders and the Indenture Trustee to comply with all of the terms of the Trust
\nAgreement (as the same may hereafter be amended or supplemented from time to
\ntime in accordance with the terms thereof) applicable to it, to the extent such
\nnon-compliance would be adverse to such party; and (B) agrees with Lessee, the
\nCertificate Holders and the Indenture Trustee not to amend, supplement or
\notherwise modify any provision of the Trust Agreement in a manner adversely
\naffecting such party without the prior written consent of such party.
\nNotwithstanding the foregoing, unless an Event of Default shall have occurred
\nand be continuing and so long as the Lease has not been terminated, the
\nIndenture Trustee and the Owner Participant hereby agree for the benefit of
\nLessee that without the consent of Lessee they will not (and the Owner
\nParticipant agrees that it will not cause the Owner Trustee to) amend,
\nsupplement or otherwise modify any provision of the Trust Indenture in a manner
\nadversely affecting Lessee. The Indenture Trustee and the Owner Trustee agree
\nto promptly furnish to Lessee copies of any supplement, amendment, waiver or
\nmodification of any of the Operative Documents to which Lessee is not a party.
\nEach Certificate Holder agrees that it will not take any action in respect of
\nthe Trust Indenture Estate except through the Indenture Trustee pursuant to the
\nTrust Indenture or as otherwise permitted by the Trust Indenture.<\/p>\n
SECTION 11. Certain Covenants of Lessee. Lessee covenants and agrees
\nwith the Participants, the Indenture Trustee and the Owner Trustee, in its
\ncapacity as such and in its individual capacity as follows:<\/p>\n
(a) Lessee will cause to be done, executed, acknowledged and delivered
\n all and every such further acts, conveyances and assurances as the Owner
\n Trustee, the Indenture Trustee or the Owner Participant shall reasonably
\n require for accomplishing the purposes of this Agreement and the other
\n Operative Documents; provided that any instrument or other document so
\n executed by Lessee will not expand any obligations or limit any rights of
\n Lessee in respect of the transactions contemplated by any Operative
\n Documents. Lessee, forthwith upon delivery of the Aircraft under the Lease
\n shall cause the Aircraft to be duly registered, and at all times thereafter
\n to remain duly registered, in the name<\/p>\n
51<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
of the Owner Trustee, except as otherwise required or permitted hereunder
\n or under the Lease, under the Federal Aviation Act or under the applicable
\n law of another permitted government of registry, or shall furnish to the
\n Owner Trustee such information as may be required to enable the Owner
\n Trustee to make application for such registration (at the expense of
\n Lessee, including, without limitation, reasonable attorney’s fees and
\n expenses), and shall promptly furnish to the Owner Trustee such information
\n as may be required to enable the Owner Trustee to timely file any reports
\n required to be filed by it as the lessor under the Lease or as the owner of
\n the Aircraft with any governmental authority (including tax authorities).<\/p>\n
(b) Lessee, at its expense, will cause the Trust Agreement, the Lease,
\n all Lease Supplements, all amendments to the Lease, the Trust Indenture,
\n and all supplements and amendments to the Trust Indenture to be promptly
\n filed and recorded, or filed for recording, to the extent permitted under
\n the Federal Aviation Act, or required under any other applicable law. Upon
\n the execution and delivery of the Owner Trustee’s FAA Bill of Sale, the
\n Lease Supplement covering the Aircraft and the Trust Supplement, the Lease
\n and the Trust Indenture shall be filed for recording with the Federal
\n Aviation Administration in the following order of priority; first, the
\n Owner Trustee’s FAA Bill of Sale, second, the FAA registration application,
\n third, the Trust Indenture, with the Trust Agreement and the Trust
\n Supplement attached, and fourth, the Lease, with the Lease Supplement
\n covering the Aircraft, the Trust Indenture and the Trust Supplement
\n attached. Lessee agrees to furnish the Owner Participant, the Owner
\n Trustee and the Indenture Trustee with copies of the foregoing documents
\n with recording data as promptly as practicable following the issuance of
\n same by the FAA.<\/p>\n
SECTION 12. Owner for Income Tax Purposes. It is hereby agreed among
\nLessee, the Owner Participant and the Owner Trustee that for income tax purposes
\nthe Owner Participant will be the owner of the Aircraft to be delivered under
\nthe Lease and Lessee will be the lessee thereof, and each party hereto agrees to
\ncharacterize the Lease as a lease for income tax purposes.<\/p>\n
SECTION 13. Notices; Consent to Jurisdiction. (a) All notices,
\ndemands, instructions and other communications required or permitted to be given
\nto or made upon any party hereto shall be in writing and shall be personally
\ndelivered or sent by registered or certified mail, postage prepaid, or by
\ntelecopier (with a copy of such notice to follow by registered or<\/p>\n
52<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
certified mail), or by prepaid courier service, and shall be deemed to be given
\nfor purposes of this Agreement on the day that such writing is delivered or
\nreceived or if given by certified mail, three Business Days after being
\ndeposited in the mails, in accordance with the provisions of this Section 13(a).
\nUnless otherwise specified in a notice sent or delivered in accordance with the
\nforegoing provisions of this Section 13(a), notices, demands, instructions and
\nother communications in writing shall be given to or made upon the respective
\nparties hereto at their respective addresses (or to their respective telecopier
\nnumbers) as follows: (A) if to Lessee, the Owner Trustee, the Indenture
\nTrustee, the Pass Through Trustees or the Owner Participant, to the respective
\naddresses set forth on Schedule I hereto (and in the case of Owner Trustee a
\ncopy shall be sent to the Owner Participant) or (B) if to a subsequent Owner
\nParticipant, addressed to such subsequent Owner Participant at such address as
\nsuch subsequent Owner Participant shall have furnished by notice to the parties
\nhereto or (C) if to any subsequent Certificate Holder, addressed to such
\nCertificate Holder at its address set forth in the Loan Certificate Register
\nmaintained pursuant to Section 2.03 of the Trust Indenture.<\/p>\n
(b) Each party to this Agreement including each Certificate Holder
\n(individually a “Party” and collectively “Parties”) irrevocably agrees that any
\nlegal suit, action or proceeding brought by any other Party, which arises solely
\nout of or relates solely to the Operative Documents or any of the transactions
\ncontemplated hereby or thereby or any document referred to herein or therein,
\nmay be instituted in the Circuit Court of the State of Illinois, Cook County or
\nthe United States District Court for the Northern District of Illinois and that
\nthey hereby waive the right to trial by jury in any such proceeding; provided,
\nhowever, that the foregoing provisions shall not apply to third party tort
\nclaims (but shall apply to an indemnity claim with respect to such tort claim)
\nand that the foregoing shall not apply to any right a Party may have to seek
\nremoval of such legal suit, action or proceeding to federal court or to seek
\nconsolidation of any separate legal suits, actions or proceedings brought by any
\none or more of the other Parties in the same or different jurisdictions. The
\nagreement set forth in this Section 13(b) is given solely for the benefit of the
\nParties and such agreement is not intended to and shall not inure to the benefit
\nof any other person.<\/p>\n
SECTION 14. Change of Situs of Owner Trust. The Owner Participant
\nagrees that if, at any time, the Trust Estate becomes subject to any Taxes for
\nwhich it is indemnified pursuant to Section 7(b) hereof and if, as a consequence
\nthereof, Lessee shall request that the situs of the trust be moved to another<\/p>\n
53<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
state in the United States from the state in which it is then located, the situs
\nof the trust may be moved with the written consent of the Owner Participant
\n(which consent shall not be unreasonably withheld) and the Owner Participant
\nwill take whatever action may be reasonably necessary to accomplish such
\nremoval; provided that (A) Lessee shall provide such additional tax
\nindemnification, as the Owner Participant may reasonably request, (B) the rights
\nand obligations under the Operative Documents of the Owner Participant shall not
\nbe altered as a result of the taking of such action, (C) the lien of the Trust
\nIndenture on the Trust Indenture Estate shall not be adversely affected by such
\naction, and the Lessee shall execute and deliver such documents as may be
\nrequested by the Indenture Trustee to continue the perfection of the lien on the
\nTrust Indenture Estate and (D) the Owner Participant and the Indenture Trustee
\nshall have received an opinion or opinions of counsel (reasonably satisfactory
\nto the Owner Participant) in scope, form and substance reasonably satisfactory
\nto the Owner Participant to the effect that (I) the trust, as thus removed,
\nshall remain a validly established trust, (II) any amendments to the Trust
\nAgreement necessitated by such removal shall have been duly authorized, executed
\nand delivered by the parties thereto and shall constitute the valid and binding
\nobligations of such parties, enforceable in accordance with their terms, (III)
\nsuch removal will not result in the imposition of, or increase in the amount of,
\nany Tax for which Lessee is not required to indemnify the Owner Participant, the
\nOwner Trustee or the Trust Estate pursuant to Section 7(b) hereof (taking into
\naccount any additional indemnification provided by Lessee pursuant to clause (A)
\nof this sentence), (IV) such removal will not, in the Owner Participant’s
\njudgment, result in any Loss of MACRS Deductions, FSC Benefits, Interest
\nDeductions or an Inclusion Event (as defined in the Tax Indemnity Agreement)
\nwith respect to which Lessee is not required to indemnify the Owner Participant
\npursuant to Section 5 of the Tax Indemnity Agreement (taking into account any
\nadditional indemnification provided by Lessee pursuant to clause (A) of this
\nsentence), and (V) covering such other matters as the Owner Participant may
\nreasonably request, (E) if such removal involves the replacement of the Owner
\nTrustee, the Owner Participant shall have received an opinion of counsel to such
\nsuccessor Owner Trustee in form and substance reasonably satisfactory to the
\nOwner Participant covering the matters set forth in the opinion provided
\npursuant to Section 4(a)(xiii) hereof and (F) Lessee shall indemnify and hold
\nharmless the Owner Participant on a net after-tax basis against any and all
\nreasonable and actual costs and expenses including attorneys’ fees and
\ndisbursements, registration, recording or filing fees and Taxes incurred by the
\nOwner Trustee or Owner Participant, in connection with such change of situs.<\/p>\n
54<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
SECTION 15. Miscellaneous. (a) Each of the Participants and the
\nCertificate Holders covenants and agrees that it shall not unreasonably withhold
\nits consent to any consent requested of the Owner Trustee, as Lessor, or the
\nIndenture Trustee under the terms of the Lease, which by its terms is not to be
\nunreasonably withheld by the Owner Trustee, as Lessor, or by the Indenture
\nTrustee.<\/p>\n
(b) The representations, warranties, indemnities and agreements of
\nLessee, the Owner Trustee, the Indenture Trustee, the Participants and the
\nCertificate Holders provided for in this Agreement, and Lessee’s, the Owner
\nTrustee’s, Indenture Trustee’s, the Participants’ and the Certificate Holders’
\nobligations under any and all thereof, shall survive the making available of the
\nrespective Commitments by the Participants, the delivery or return of the
\nAircraft, the transfer of any interest of the Owner Participant in the Trust
\nEstate or the Aircraft or any Engine or the transfer of any interest by any
\nCertificate Holder in any Loan Certificate or the Trust Indenture Estate and the
\nexpiration or other termination of this Agreement or any other Operative
\nDocument or any of the Pass Through Trust Agreements.<\/p>\n
(c) This Agreement may be executed by the parties hereto in separate
\ncounterparts, each of which when so executed and delivered shall be an original,
\nbut all such counterparts shall together constitute but one and the same
\ninstrument. Neither this Agreement nor any of the terms hereof may be
\nterminated, amended, supplemented, waived or modified, except by an instrument
\nin writing signed by the party against which the enforcement of the termination,
\namendment, supplement, waiver or modification is sought; and no such
\ntermination, amendment, supplement, waiver or modification shall be effective
\nunless a signed copy thereof shall have been delivered to the Lessee, the
\nIndenture Trustee and the Owner Trustee. The terms of this Agreement shall be
\nbinding upon, and inure to the benefit of and shall be enforceable by, Lessee,
\nthe Participants, the Indenture Trustee, the Certificate Holders and the Owner
\nTrustee. This Agreement shall in all respects be governed by, and construed in
\naccordance with, the internal laws of the State of Illinois, including all
\nmatters of construction, validity and performance. This Agreement is being
\ndelivered in the State of Illinois.<\/p>\n
(d) The parties hereto agree that all of the statements,
\nrepresentations, covenants and agreements made by the Owner Trustee (when made
\nin such capacity) contained in this Agreement and any agreement referred to
\nherein other than the Trust Agreement, unless expressly otherwise stated, are
\nmade and intended only for the purpose of binding the Trust Estate and<\/p>\n
55<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
establishing the existence of rights and remedies which can be exercised and
\nenforced against the Trust Estate. Therefore, anything contained in this
\nAgreement or such other agreements to the contrary notwithstanding (except for
\nany express provisions that the Owner Trustee is responsible for or is acting in
\nor making representations or agreements in its individual capacity), no recourse
\nshall be had with respect to this Agreement or such other agreements against the
\nOwner Trustee in its individual capacity or against any institution or person
\nwhich becomes a successor trustee or co-trustee or any officer, director,
\ntrustee, servant or direct or indirect parent or controlling person or persons
\nof any of them; provided, however, that this Section 15(d) shall not be
\nconstrued to prohibit any action or proceeding against any party hereto for its
\nown willful misconduct or grossly negligent conduct; and provided, further, that
\nnothing contained in this Section 15(d) shall be construed to limit the exercise
\nand enforcement in accordance with the terms of this Agreement or such other
\nagreements of rights and remedies against the Trust Estate. The foregoing
\nprovisions of this Section 15(d) shall survive the termination of this
\nAgreement, the other Operative Documents and the Pass Through Trust Agreements.<\/p>\n
(e) No Participant shall have any obligation or duty to the Lessee, to
\nany other Participant or to others with respect to the transactions contemplated
\nhereby except those obligations or duties of such Participant expressly set
\nforth in this Agreement and the other Operative Documents and no Participant
\nshall be liable for performance by any other party hereto of such other party’s
\nobligations or duties hereunder. Without limitation of the generality of the
\nforegoing, under no circumstances whatsoever shall any Participant be liable to
\nLessee, nor shall any Participant be liable to any other Participant, for any
\naction or inaction on the part of the Indenture Trustee or the Owner Trustee in
\nconnection with the transactions contemplated herein, whether or not such action
\nor inaction is caused by the willful misconduct or gross negligence of the
\nIndenture Trustee or the Owner Trustee.<\/p>\n
(f) This Agreement shall be binding upon and shall inure to the
\nbenefit of and shall be enforceable against, the parties hereto and their
\nrespective successors and permitted assigns including each successive holder of
\nthe Owner Participant’s interest and each successive holder of any Loan
\nCertificate issued and delivered pursuant to this Agreement or the Trust
\nIndenture whether or not an express assignment to such holder of rights and
\nobligations under this Agreement has been made.<\/p>\n
56<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
(g) The Owner Participant hereby consents to the Owner Trustee’s
\nappointment of Lessee as its exclusive agent pursuant to the terms of Section
\n7(a)(4) of the Lease.<\/p>\n
SECTION 16. Invoices and Payment of Expenses. Each of the Owner
\nTrustee, the Indenture Trustee, Lessee and the Participants shall promptly
\nsubmit to the Owner Participant and the Lessee for their joint prompt approval
\n(except in the case of Transactions Expenses referred to in clauses (i)(6), (v)
\nand (viii) of the definition thereof which shall be approved solely by the Owner
\nParticipant) copies of invoices of the Transaction Expenses as they are
\nreceived. The Owner Participant agrees to transfer to the Owner Trustee from
\ntime to time promptly upon receipt of invoices of Transaction Expenses such
\namount as shall be necessary in order to enable the Owner Trustee to pay such
\nTransaction Expenses or to pay such amounts directly. To the extent of funds
\nreceived by it, the Owner Trustee agrees to pay all invoices of Transaction
\nExpenses that have been so approved promptly upon receipt thereof.
\nNotwithstanding the foregoing, in the event that the transactions contemplated
\nhereby shall not be consummated, Lessee shall pay all Transaction Expenses,
\nexcept that the fees, expenses and disbursements of the Owner Participant
\n(including those relating to its counsel) shall be borne by the Owner
\nParticipant if such failure to consummate the transactions results from the
\nfailure of the Owner Participant to adhere to the terms and conditions set forth
\nin the term sheet relating to the transactions contemplated hereby agreed to by
\nLessee and the Owner Participant or the terms and conditions set forth in the
\nletter dated January 14, 1993, as amended as of April 14, 1993, from the Owner
\nParticipant (and, in the case of the amendment dated as of April 14, 1993, from
\nNCC FSC IV, Inc.) to Capstar Partners and agreed to by Lessee or to close after
\nall conditions precedent to the Owner Participant’s funding of its Commitment
\nset forth herein have been satisfied. To the extent Transaction Expenses exceed
\n[_____%] of Lessor’s Cost, the Lessee may, in lieu of electing an optimization
\npursuant to Section 18 hereof, promptly reimburse the Owner Trustee or Owner
\nParticipant, as appropriate, for all or a portion of the Transaction Expenses
\ndescribed in clause (i)(5) and\/or clause (vi) (excluding any debt placement fees
\nincluded in said clause (vi)) of the definition of Transaction Expenses.<\/p>\n
SECTION 17. Optional Redemption of Certificates. (a) Subject to the
\nterms of this Section 17, in the event that at any time Lessee shall have given
\nwritten notice to the Owner Trustee, the Indenture Trustee and the Owner
\nParticipant that there be effected a voluntary redemption of all of the
\noutstanding Loan Certificates by the Owner Trustee as part of a refunding or
\nrefinancing transaction, the Owner Participant<\/p>\n
57<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
agrees to negotiate promptly in a commercially reasonable manner to conclude an
\nagreement with Lessee as to the terms of such refunding or refinancing
\ntransaction (including the terms of any debt to be issued in connection with
\nsuch refunding or refinancing transaction and the documentation to be executed
\nin connection therewith), and if after such negotiation Lessee and the Owner
\nParticipant shall have concluded an agreement with respect to such terms:<\/p>\n
(1) within ten Business Days after the reaching of such
\n agreement, the Owner Participant will deliver to Lessee a certificate of an
\n authorized representative of the Owner Participant (the “Refinancing
\n Certificate”) setting forth (i) the proposed date on which the outstanding
\n Loan Certificates will be redeemed, describing the new debt to be issued
\n and the other aspects of such refunding or refinancing transaction to be
\n consummated (such date, the “Refinancing Date”) and (ii) the following
\n information: (A) the principal amount of debt to be issued by the Owner
\n Trustee on the Refinancing Date, and (B) the proposed revised schedules of
\n Basic Rent, Excess Amount, debt amortization, Stipulated Loss Value
\n percentages, Termination Value percentages, Special Termination Value
\n percentages and EBO Percentage. Within ten Business Days of its receipt of
\n the Refinancing Certificate, Lessee may demand a verification pursuant to
\n Exhibit E to the Lease of the information set forth in the Refinancing
\n Certificate. Upon the acceptance by Lessee of the accuracy of the
\n information set forth in the Refinancing Certificate or the determination
\n pursuant to such verification procedures of the revised Basic Rent, Excess
\n Amount, debt amortization, Stipulated Loss Value percentages, Termination
\n Value percentages, Special Termination Value percentages and EBO Percentage
\n and the Debt\/Equity Ratio (such information, the “Refinancing Information”)
\n the appropriate parties will take the actions specified in paragraphs (2)
\n through (6) below;<\/p>\n
(2) the appropriate parties will enter into a financing or loan
\n agreement in form and substance reasonably satisfactory to the Owner
\n Participant, the Owner Trustee and the Lessee (which may involve an
\n underwriting agreement in connection with a public offering of such debt or
\n the purchase of such debt by a publicly funded entity (or entities) or the
\n sale of the Owner Trustee’s interest in the Trust Estate and\/or the
\n Aircraft and its resale to the Owner Trustee) with the institution or
\n institutions to be named therein (A) providing for (i) the issuance and
\n sale by the Owner Trustee to such institution or institutions on the
\n Refinancing Date of debt securities in an aggregate<\/p>\n
58<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
principal amount specified in the Refinancing Information, which amount
\n shall be at least equal to the aggregate principal amount of all Loan
\n Certificates outstanding on the Refinancing Date (such debt securities, the
\n “New Debt”) and (ii) the application of the proceeds of the sale of the New
\n Debt to the redemption of all such Loan Certificates on the Refinancing
\n Date and (B) pursuant to which the parties to the refinancing transaction
\n (including the Owner Participant and Lessee but excluding any public
\n holders of debt) make such representations, warranties and covenants as the
\n Owner Participant or Lessee may reasonably require;<\/p>\n
(3) Lessee and the Owner Trustee will amend the Lease to provide
\n that (i) Basic Rent, Excess Amount and the EBO Percentage in respect of the
\n period from and after the Refinancing Date shall be as provided in the
\n Refinancing Information and (ii) amounts payable in respect of Stipulated
\n Loss Value percentages, Special Termination Value Percentages and
\n Termination Value from and after the Refinancing Date shall be as provided
\n in the Refinancing Information;<\/p>\n
(4) the Owner Trustee will enter into an agreement to provide for
\n the securing thereunder of the New Debt in like manner as the Loan
\n Certificates and will enter into such amendments and supplements to the
\n Trust Indenture (or such new indenture or other security agreement) as may
\n be necessary to effect such refunding or refinancing (which agreements,
\n amendments and supplements shall be reasonably satisfactory to the Owner
\n Participant);<\/p>\n
(5) unless otherwise agreed or required by the Owner Participant,
\n and whether or not such refunding or refinancing transaction is
\n consummated, Lessee, on behalf of Lessor, shall pay on an after-tax basis
\n all of the reasonable Expenses of all parties to such refunding or
\n refinancing, including without limitation, the reasonable fees and expenses
\n of such parties’ counsel and any related loan or commitment fees; and<\/p>\n
(6) subject to compliance by the Owner Trustee with all
\n applicable terms and conditions for voluntary prepayment under the Trust
\n Indenture and this Agreement, each Certificate Holder of a Loan Certificate
\n being refinanced or refunded will transfer to the Owner Trustee the Loan
\n Certificates held by it immediately prior to such refunding or refinancing
\n for cancellation (and the Owner Trustee shall cancel the same), against
\n receipt by such Certificate Holder of the then outstanding principal amount<\/p>\n
59<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
of such Loan Certificates, accrued and unpaid interest thereon, plus
\n Premium, if any, together with payment in full of all other amounts then
\n payable to such Certificate Holder and the Indenture Trustee hereunder or
\n under the Trust Indenture.<\/p>\n
(b) In the case of a refunding or refinancing involving a public
\noffering of the New Debt, the Owner Participant shall have the right (but not
\nthe obligation) to review and approve (which approval shall not be unreasonably
\nwithheld) all offering materials to be employed in connection therewith. It is
\nexpressly understood that the Owner Participant shall have no obligation
\nhereunder to consent thereto if, in its good faith judgment, such refunding or
\nrefinancing (A) increases its, any of its Affiliates (other than any Affiliate
\nwhich is acting as an underwriter) or the Owner Trustee’s exposure to (i)
\nliabilities under federal or state securities laws, (ii) regulation under state
\nor federal securities laws, (iii) the need to publicly disclose information that
\nis not generally available to the public, or (iv) being adversely affected in
\nits respective ability to engage in any other financing transaction, in each
\ncase to a level unacceptable to it in its reasonable, good faith, judgment, or
\n(B) requires the identity of the Owner Participant to be disclosed in any
\noffering materials. Lessee shall have the right to purchase such debt
\nsecurities and apply such securities as a credit against its obligations to pay
\nRent, provided that (x) in connection with such refunding or refinancing Lessee
\nshall have agreed to indemnify the Owner Participant with respect to such right
\nin a manner satisfactory to the Owner Participant, and (y) Lessee may not, at
\nany one time hold in the aggregate any such debt securities having a face value
\nin excess of that portion of the two next succeeding installments of Basic Rent
\nwhich is required to be paid to the holders of such debt securities on account
\nof principal and interest. Any trustee of public debt shall be a bank or trust
\ncompany having its principal place of business in the Borough of Manhattan, City
\nand State of New York, Chicago, Illinois, Hartford, Connecticut or Boston,
\nMassachusetts and having, or having a parent willing to guarantee the
\nobligations of such bank or trust company and having, a combined capital and
\nsurplus of at least $100,000,000, if there be such an institution willing, able
\nand legally qualified to perform the duties of trustee upon reasonable or
\ncustomary terms.<\/p>\n
(c) Lessee shall give the Indenture Trustee at least twenty-five (25)
\ndays irrevocable written notice of the proposed date of the optional redemption.<\/p>\n
(d) Notwithstanding the foregoing, the Owner Participant shall have no
\nobligation to proceed with any<\/p>\n
60<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
refunding or refinancing transaction as contemplated by this Section 17:<\/p>\n
(i) if in the Owner Participant’s good faith judgment, such
\n transaction would have an adverse impact (including, without limitation the
\n risk of adverse tax consequences) on it;<\/p>\n
(ii) unless a third party or parties, unaffiliated with Lessee and
\n Owner Participant, shall have committed to (and shall) provide the entire
\n financing needed to consummate the proposed refunding or refinancing
\n transaction, it being understood that Owner Participant shall have no
\n obligation to locate any such party or parties;<\/p>\n
(iii) unless Lessee indemnifies Owner Trustee and Owner
\n Participant by agreement in form and substance reasonably satisfactory to
\n each of them, for any liability, obligation (other than the obligation to
\n pay principal and interest and related payments in respect of the New
\n Debt), cost or expense (including, without limitation, reasonable
\n attorneys’ fees) related to or arising out of any such refunding or
\n refinancing transaction;<\/p>\n
(iv) unless the New Debt is denominated in Dollars; or<\/p>\n
(v) if the refinancing would increase or decrease the Owner
\n Participant’s Commitment.<\/p>\n
(e) There shall be no more than one redemption permitted under this
\nSection 17.<\/p>\n
(f) No voluntary redemption shall occur pursuant to this Section 17
\nprior to May 15, 2000.<\/p>\n
SECTION 18. Optimization. (a) In the event that: (i) the Delivery
\nDate occurs other than on April 20, 1993 or (ii) Transaction Expenses paid by
\nLessor are determined to be other than [____%] of Lessor’s Cost (it being
\nunderstood that Transaction Expenses equal to 1.00% of Lessor’s Cost will be
\ndeemed to have been paid on the Delivery Date with the remainder of such
\nTransaction Expenses not paid on the Delivery Date will be deemed to have been
\npaid on May 15, 1995), the Lessee may, pursuant to this Section 18 and in
\naccordance with the requirements of Section 3(c) of the Lease, optimize the
\nBasic Rent, Excess Amount, Stipulated Loss Value percentages, Termination Value
\npercentages, Special Termination Value<\/p>\n
61<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
percentages and EBO Percentage subject to the proviso set forth in Section
\n3(c)(i) of the Lease. The Owner Participant shall deliver to Lessee and the
\nIndenture Trustee a certificate of an authorized representative of the Owner
\nParticipant (the “Optimization Certificate”) setting forth the proposed revised
\nschedules of Basic Rent, Excess Amount, Stipulated Loss Value percentages,
\nTermination Value percentages, Special Termination Value percentages and EBO
\nPercentage. Within fifteen days of its receipt of the Optimization Certificate,
\nLessee may demand a verification, pursuant to Exhibit E of the Lease, of the
\ninformation set forth in the Optimization Certificate. Upon the acceptance by
\nLessee of the accuracy of the information set forth in the Optimization
\nCertificate or the determination pursuant to such verification procedures of
\nsuch information, the Owner Participant will cause the Lessor (A) to execute an
\namendment to the Lease setting forth the optimized Basic Rent, Excess Amount,
\nStipulated Loss Value percentages, Termination Value percentages, Special
\nTermination Value percentages and EBO Percentage, and (B) the Lessee will
\nexecute such amended Lease necessary to effectuate the foregoing.<\/p>\n
(b) In connection with optimization adjustments of Basic Rent, Excess
\nAmount, Stipulated Loss Value percentages, Termination Value percentages,
\nSpecial Termination Value percentages and EBO Percentage pursuant to this
\nSection 18 and Section 3(c) of the Lease, none of the principal amount,
\namortization schedules or interest rate of the Loan Certificates shall be
\naltered.<\/p>\n
(c) Lessee shall pay on an after-tax basis all of the reasonable
\nExpenses of all parties to such optimization, including, without limitation, the
\nreasonable fees and expenses of such parties’ counsel.<\/p>\n
SECTION 19. Nondisclosure. Each party hereto (other than the Owner
\nParticipant) agrees that it will use its best efforts not to disclose the
\nidentity of the Owner Participant and the terms of the Operative Documents in
\nconnection with the issuance or release for external publication of any article
\nor advertising or publicity matter relating to the terms or conditions of any of
\nthe Operative Documents or the transactions contemplated thereby without the
\nprior written consent of the Owner Participant (except as expressly permitted by
\nthe Operative Documents or (t) with respect to the terms of the Operative
\nDocuments to the extent required in connection with a public placement of the
\ndebt pursuant to Section 17 hereof or (u) to the extent required in connection
\nwith a private placement of the debt pursuant to Section 17 hereof or (v) to the
\nextent required to appropriate regulatory authorities or in response to subpoena<\/p>\n
62<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
or other legal process or as otherwise required by law or (w) to such party’s
\ninsurance agents, auditors and counsel or other agents or (x) in the case of any
\nPass Through Trustee, the Indenture Trustee, the Owner Participant or the Owner
\nTrustee (as the case may be), to prospective transferees or to any successor
\nOwner Trustee (as the case may be), who in turn agree to use their best efforts
\nnot to make such disclosure in breach of this Section 19 or (y) as may be
\nnecessary or desirable in connection with the enforcement by such party of any
\nOperative Document).<\/p>\n
* * *<\/p>\n
63<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this First Amended
\nand Restated Participation Agreement to be duly executed by their respective
\nofficers thereunto duly authorized as of the day and year first above written.<\/p>\n
UNITED AIR LINES, INC.,
\n Lessee<\/p>\n
By: _______________________________
\n Vice President and Treasurer<\/p>\n
______________________,
\n Owner Participant<\/p>\n
By: _______________________________<\/p>\n
Title: ____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n Indenture Trustee<\/p>\n
By: _______________________________<\/p>\n
Title: ____________________________<\/p>\n
STATE STREET BANK AND TRUST COMPANY, not in its
\n individual capacity, except as expressly provided
\n herein, but solely as Owner Trustee,
\n Owner Trustee<\/p>\n
By: _______________________________<\/p>\n
Title: ____________________________<\/p>\n
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
\n in its capacity as Pass Through Trustee under each
\n of the Pass Through Trust Agreements<\/p>\n
By: _______________________________<\/p>\n
Title: ____________________________<\/p>\n
64<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
SCHEDULE I<\/p>\n
Names and Addresses<\/p>\n
Lessee:
\n– —— <\/p>\n
U.S. Mail Overnight Delivery Service
\n– ——— ————————–
\nUnited Air Lines, Inc. United Air Lines, Inc.
\nP.O. Box 66100 1200 East Algonquin Road
\nChicago, Illinois 60666 Elk Grove Township, IL 60007 <\/p>\n
Attn: Vice President and Treasurer Attn: Vice President and Treasurer<\/p>\n
Telecopy: (708) 952-7117 <\/p>\n
Payment Address
\n —————
\nOwner Participant:
\n– —————– The Chase Manhattan Bank, N.A.
\n New York, N.Y.
\n____________________ ABA #: 021000021
\n____________________
\n____________________ Account #: 910-2-499093
\n____________________ Account Name:
\n Reference: UAL\/1993 747 A <\/p>\n
Attn: __________________<\/p>\n
Telecopy: ______________<\/p>\n
Pass Through Trustee:
\n– ——————– <\/p>\n
First Security Bank of Utah,
\nNational Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust Department<\/p>\n
Telecopy: (801) 246-5053<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
Indenture Trustee:
\n– —————– <\/p>\n
First Security Bank of Utah, National Association
\n79 South Main Street
\nSalt Lake City, Utah 84111<\/p>\n
Attn: Corporate Trust Department<\/p>\n
Telecopy: (801) 246-5053<\/p>\n
Owner Trustee:
\n– ————–<\/p>\n
State Street Bank and Trust Company
\n225 Franklin Street
\nBoston, Massachusetts 02110
\n(or, if given by overnight delivery service)
\nTwo International Place
\nBoston, Massachusetts 02110<\/p>\n
Attn: _________________________<\/p>\n
Telecopy: (617) 664-5367<\/p>\n
I-2<\/p>\n
[First Amended and Restated
\n Participation Agreement (1993 747 A)]<\/p>\n
SCHEDULE II<\/p>\n
Commitments
\n ———–<\/p>\n
Percentage of
\nCertificate Holder Lessor’s Cost Dollar Amount
\n– —————— ————- ————-<\/p>\n
First Security Bank of Utah, National
\nAssociation, in its capacity as Pass
\nThrough Trustee under Pass Through
\nTrust Agreement 1995-A1<\/p>\n
First Security Bank of Utah, National
\nAssociation, in its capacity as Pass
\nThrough Trustee under Pass Through
\nTrust Agreement 1995-A2<\/p>\n
Owner Participant:
\n– —————– <\/p>\n
____________________ $<\/p>\n
Total Commitments: 100.00% $
\n================= ======= =<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8935,9136,9312],"corporate_contracts_industries":[9521,9415],"corporate_contracts_types":[9613,9614],"class_list":["post-42100","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-state-street-corp","corporate_contracts_companies-ual-corp","corporate_contracts_companies-wells-fargo---co","corporate_contracts_industries-transportation__air","corporate_contracts_industries-financial__banks","corporate_contracts_types-operations","corporate_contracts_types-operations__equipment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42100"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42100"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42100"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}