Document:

e64543897ex4_12.htm

 

Exhibit 4.12

EXECUTION VERSION

________________________________________________________________

NOTE PURCHASE AGREEMENT

Dated as of August 11, 2014

Among

UNITED AIRLINES, INC.,

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Pass Through Trustee under each of the

Pass Through Trust Agreements

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Subordination Agent

U.S. BANK NATIONAL ASSOCIATION,

as Escrow Agent

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Paying Agent

________________________________________________________________

 

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INDEX TO NOTE PURCHASE AGREEMENT

 

Page

 

	
SECTION 1.  Financing of Aircraft

	
3

	
SECTION 2.  Conditions Precedent

	
7

	
SECTION 3.  Representations and Warranties

	
7

	
SECTION 4.  Covenants

	
12

	
SECTION 5.  Notices

	
16

	
SECTION 6.  Expenses

	
16

	
SECTION 7.  Further Assurances

	
17

	
SECTION 8.  Miscellaneous

	
18

	
SECTION 9.  Governing Law

	
19

 

Schedules

 

Schedule I           Eligible Aircraft and Scheduled Delivery Months

Schedule II         Trust Supplements

Schedule III        Required Terms

 

Annex

 

Annex A             Definitions

 

Exhibits

 

	
Exhibit A

	
Form of Closing Notice

	
Exhibit B

	
Form of Participation Agreement

	
Exhibit C

	
Form of Indenture

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NOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE AGREEMENT, dated as of August 11, 2014, among (i)UNITED AIRLINES, INC., a Delaware corporation (the "Company"), (ii)WILMINGTON TRUST, NATIONAL ASSOCIATION ("WTNA"), a national banking association, not in its individual capacity except as otherwise expressly provided herein, but solely as trustee (in such capacity together with its successors in such capacity, the "Pass Through Trustee") under each of the two separate Pass Through Trust Agreements (as defined below), (iii) WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as subordination agent and trustee (in such capacity together with its successors in such capacity, the "Subordination Agent") under the Intercreditor Agreement (as defined below), (iv) U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Escrow Agent (in such capacity together with its successors in such capacity, the "Escrow Agent"), under each of the Escrow and Paying Agent Agreements (as defined below) and (v) WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as Paying Agent (in such capacity together with its successors in such capacity, the "Paying Agent") under each of the Escrow and Paying Agent Agreements.

 

W I T N E S S E T H:

 

WHEREAS, capitalized terms used but not defined herein shall have the meanings ascribed to such terms in Annex A hereto;

 

WHEREAS, the Company has obtained commitments from the Manufacturers pursuant to the applicable Aircraft Purchase Agreement for the delivery of 17 Boeing 737-924ER aircraft, five Boeing 787-9 aircraft and 18 Embraer ERJ 175 LR aircraft listed in Schedule I hereto (together with any aircraft substituted therefor in accordance with the applicable Aircraft Purchase Agreement prior to the delivery thereof, the "Eligible Aircraft");

 

WHEREAS, pursuant to this Agreement the Company wishes to finance 11 Boeing 737-924ER aircraft, four Boeing 787-9 aircraft and 12 Embraer ERJ 175 LR aircraft included in the Eligible Aircraft (such Eligible Aircraft to be financed hereunder, the "Aircraft");

 

WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each of the Trust Supplements set forth in Schedule II hereto, and concurrently with the execution and delivery of this Agreement, separate grantor trusts

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(collectively, the "Pass Through Trusts" and, individually, a "Pass Through Trust") have been created to facilitate certain of the transactions contemplated hereby, including, without limitation, the issuance and sale of pass through certificates pursuant thereto (collectively, the "Certificates") to provide for a portion of the financing of the Aircraft contemplated hereby;

 

WHEREAS, the Company has entered into the Underwriting Agreement, dated as of July 28, 2014 (the "Underwriting Agreement") with the Underwriters named therein (the "Underwriters"), which provides that the Company will cause the Pass Through Trustee under the Class A Pass Through Trust (the "Class A Pass Through Trustee") and the Pass Through Trustee under the Class B Pass Through Trust (the “Class B Pass Through Trustee”) to issue and sell the Class A Certificates and the Class B Certificates, respectively, to the Underwriters on the Issuance Date;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, (i) the Escrow Agent and the Depositary have entered into two Deposit Agreements, dated as of the Issuance Date, one each relating to the Class A and Class B Pass Through Trust (together, the "Deposit Agreements") whereby the Escrow Agent agreed to direct the Underwriters to make certain deposits referred to therein on the Issuance Date (the "Initial Deposits") and to permit the applicable Pass Through Trustees to make additional deposits from time to time thereafter (the Initial Deposits together with such additional deposits are collectively referred to as the "Deposits") and (ii) the applicable Pass Through Trustees, Underwriters, Paying Agents and Escrow Agents have entered into two Escrow and Paying Agent Agreements, dated as of the Issuance Date, one each relating to the Class A and Class B Pass Through Trust (together, the "Escrow and Paying Agent Agreements"), whereby, among other things, (a) the Underwriters agreed to deliver an amount equal to the amount of the Initial Deposits to the Depositary on behalf of the applicable Escrow Agent and (b) the applicable Escrow Agent, upon the Depositary receiving such amount, agreed to deliver escrow receipts to be affixed to each Certificate;

 

WHEREAS, upon receipt of a Closing Notice with respect to an Aircraft, subject to the terms and conditions of this Agreement, the applicable Pass Through Trustees will enter into the applicable Financing Agreements relating to such Aircraft;

 

WHEREAS, upon the financing of each Aircraft, the Class A and Class B Pass Through Trustees each will fund its

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purchase of Equipment Notes with the proceeds of one or more Deposits withdrawn by the applicable Escrow Agent under the related Deposit Agreement bearing the same interest rate as the Certificates issued by the applicable Pass Through Trust (or, if financed on the Issuance Date, with a portion of the proceeds from the offering of the Certificates); and

 

WHEREAS, concurrently with the execution and delivery of this Agreement, (i) BNP Paribas, acting through its New York Branch (the "Liquidity Provider"), has entered into two revolving credit agreements, one each for the benefit of the Certificateholders of the Class A and Class B Pass Through Trusts, in each case, with the Subordination Agent, as agent for the Pass Through Trustee on behalf of each such Pass Through Trust (each such revolving credit agreement with the Liquidity Provider, a "Liquidity Facility") and (ii) the Pass Through Trustees, the Liquidity Provider and the Subordination Agent have entered into the Intercreditor Agreement, dated as of the date hereof (the "Intercreditor Agreement").

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.  Financing of Aircraft.  (a)  The Company confirms that it has entered into each Aircraft Purchase Agreement with the relevant Manufacturer pursuant to which the Company has agreed to purchase, and the relevant Manufacturer has agreed to deliver, the Eligible Aircraft subject thereto in the months specified in Schedule I hereto, all on and subject to terms and conditions specified in such Aircraft Purchase Agreement.  The Company agrees to finance the Aircraft in the manner provided herein, all on and subject to the terms and conditions hereof and of the relevant Financing Agreements.

 

(b)           In furtherance of the foregoing, the Company agrees to give the parties hereto, the Depositary and each of the Rating Agencies not less than two Business Days' prior notice substantially in the form of Exhibit A hereto (a "Closing Notice") of the scheduled closing date (the "Scheduled Closing Date") (or, in the case of a substitute Closing Notice under Section 1(e) or (f) hereof, one Business Day's prior notice) in respect of the financing of each Aircraft under this Agreement, which notice shall:

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(i)    specify the Scheduled Closing Date of such Aircraft (which shall be a Business Day before the Cut-off Date and, except as provided in Section 1(f) hereof, the date (the "Funding Date") on which the financing therefor in the manner provided herein shall be consummated);

 

(ii)   instruct each Pass Through Trustee being requested to purchase Equipment Notes pursuant to such Closing Notice (the "Applicable Pass Through Trustees") to enter into the Participation Agreement included in the Financing Agreements with respect to such Aircraft in such form and at such a time on or before the Funding Date specified in such Closing Notice and to perform its obligations thereunder;

 

(iii)  instruct each of the Class A and Class B Pass Through Trustees to instruct the relevant Escrow Agent to provide a Notice of Purchase Withdrawal to the Depositary with respect to the Equipment Notes to be issued to such Pass Through Trustee in connection with the financing of such Aircraft (except in the case of any such financing on the Issuance Date); and

 

(iv)  specify the aggregate principal amount of each series of Equipment Notes, if any, to be issued, and purchased by the Applicable Pass Through Trustees, in connection with the financing of such Aircraft scheduled on such Funding Date (which shall in all respects comply with the Required Terms).

 

Notwithstanding the foregoing, in the case of any Aircraft to be financed hereunder on the Issuance Date, the Closing Notice therefor may be delivered to the parties hereto on the Issuance Date.

 

(c)           Upon receipt of a Closing Notice, the Applicable Pass Through Trustees shall, and shall cause the Subordination Agent to, enter into and perform their respective obligations under the Participation Agreement specified in such Closing Notice, provided that such Participation Agreement and the Indenture to be entered into pursuant to such Participation Agreement shall be in the forms thereof annexed hereto in all material respects and, if modified in any material respect, as to which Rating Agency Confirmation shall have been obtained from each Rating Agency by the Company (to be delivered by the Company to the Applicable Pass Through Trustees on or before the relevant Funding Date, it being understood that if Rating Agency Confirmation shall have been received with respect to any Financing Agreements and such Financing Agreements are utilized for subsequent Aircraft (or Substitute Aircraft) without

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material modifications, no additional Rating Agency Confirmation shall be required); provided, however, that the relevant Financing Agreements as executed and delivered shall not vary the Required Terms.  Notwithstanding the foregoing, an Indenture may be modified to the extent required for the issuance of Equipment Notes pursuant to Section 4(a)(vi) of this Agreement, subject to the terms of such Section and Section 9.1(c) or 9.1(d) of the Intercreditor Agreement, whichever may be applicable.  The Company shall pay the reasonable costs and expenses of the Rating Agencies in connection with obtaining any such Rating Agency Confirmation.  With respect to each Aircraft, the Company shall cause WTNA (or such other person that meets the eligibility requirements to act as loan trustee under the Indenture) to execute as Loan Trustee the Financing Agreements relating to such Aircraft to which such Loan Trustee is intended to be a party, and shall concurrently therewith execute such Financing Agreements to which the Company is intended to be a party and perform its respective obligations thereunder.  Upon the request of any Rating Agency, the Company shall deliver or cause to be delivered to such Rating Agency a true and complete copy of each Financing Agreement relating to the financing of each Aircraft together with a true and complete set of the closing documentation (including legal opinions) delivered to the related Loan Trustee, Subordination Agent and Pass Through Trustee under the related Participation Agreement.

 

(d)          The Company agrees that all Equipment Notes issued pursuant to any Indenture shall initially be registered in the name of the Subordination Agent on behalf of the Applicable Pass Through Trustee (or, in the case of any Additional Series Equipment Notes, on behalf of the Additional Pass Through Trustee with respect to the corresponding Additional Certificates).

 

(e)           If after giving any Closing Notice, there shall be a delay in the delivery of the Eligible Aircraft referred to therein, or if on the Scheduled Closing Date of the Eligible Aircraft referred to therein the financing thereof in the manner contemplated hereby shall not be consummated for whatever reason, the Company shall give the parties hereto and the Depositary prompt notice thereof.  Concurrently with the giving of such notice of postponement or subsequently, the Company shall give the parties hereto and the Depositary a substitute Closing Notice specifying the date to which the financing of such Eligible Aircraft (or of another Eligible Aircraft of the same model in lieu thereof) shall have been re-scheduled (which shall be a Business Day before the Cut-off Date on which the

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Escrow Agents shall be entitled to withdraw one or more Deposits under each of the applicable Deposit Agreements to enable each of the Class A and Class B Pass Through Trustees to fund its purchase of the related Equipment Notes).  Upon receipt of any such notice of postponement, each Applicable Pass Through Trustee shall comply with its obligations under Section 5.01 of each of the Trust Supplements and thereafter the financing of such Eligible Aircraft, as specified in such substitute Closing Notice, shall take place on the re-scheduled Closing Date therefor (all on and subject to the terms and conditions of the relevant Financing Agreements) unless further postponed as provided herein.

 

(f)           Anything in this Section 1 to the contrary notwithstanding, the Company shall have the right to accept delivery of an Aircraft under the applicable Aircraft Purchase Agreement on the Delivery Date thereof by utilization of bridge financing of such Aircraft (including cash provided by the Company) and thereafter give the parties hereto and the Depositary a Closing Notice specifying a Funding Date not later than 90 days after the Delivery Date of such Aircraft and no later than the Cut-off Date and otherwise complying with the provisions of Section 1(b) hereof.  All other terms and conditions of this Note Purchase Agreement shall apply to the financing of any such Aircraft on the re-scheduled Funding Date therefor except the related Financing Agreements shall be amended to reflect the original delivery of such Aircraft to the Company.

 

(g)           If the scheduled delivery date from the Manufacturer for any Eligible Aircraft is delayed more than 30 days beyond the last day of the month set forth opposite such Eligible Aircraft under the heading "Scheduled Delivery Month" in Schedule I hereto, the Company may identify for delivery a substitute aircraft therefor meeting the following conditions (a "Substitute Aircraft"):  (i) a Substitute Aircraft must be of the same model as the Eligible Aircraft being replaced and (ii) the Company shall be obligated to obtain Rating Agency Confirmation in respect of the replacement of any Eligible Aircraft by Substitute Aircraft.  Upon the satisfaction of the conditions set forth above with respect to a Substitute Aircraft, the Eligible Aircraft to be replaced shall cease to be subject to this Agreement and all rights and obligations of the parties hereto concerning such Eligible Aircraft shall cease, and such Substitute Aircraft shall become and thereafter be subject to the terms and conditions of this Agreement to the same extent as such Eligible Aircraft.

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(h)          The Company shall have no liability for the failure of the Pass Through Trustees to purchase Equipment Notes with respect to any Aircraft or Substitute Aircraft.

 

(i)           Anything herein to the contrary notwithstanding, the Company shall not have the right, and shall not be entitled, at any time to request the issuance of Equipment Notes of any series to the Class A or Class B Pass Through Trustee in an aggregate principal amount in excess of the amount of the Deposits then available for withdrawal by the Escrow Agent under and in accordance with the provisions of the related Deposit Agreement.

 

SECTION 2.  Conditions Precedent.  The obligation of the Applicable Pass Through Trustees to enter into, and to cause the Subordination Agent to enter into, any Participation Agreement as directed pursuant to a Closing Notice and to perform its obligations thereunder is subject to satisfaction of the following conditions:

 

(a)          no Triggering Event shall have occurred; and

 

(b)          the Company shall have delivered a certificate to each such Pass Through Trustee and the Liquidity Provider stating (i) that such Participation Agreement and the other Financing Agreements to be entered into pursuant to such Participation Agreement do not vary the Required Terms and (ii) that any substantive modification of such Financing Agreements from the forms of Financing Agreements attached to this Agreement do not materially and adversely affect the Certificateholders or the Liquidity Provider, and such certification shall be true and correct.

 

Anything herein to the contrary notwithstanding, the obligation of each Pass Through Trustee to purchase Equipment Notes shall terminate on the Cut-off Date.

 

SECTION 3.  Representations and Warranties.  (a)  The Company represents and warrants that:

 

(i)  the Company is duly incorporated, validly existing and in good standing under the laws of the State of Delaware and is a "citizen of the United States" as defined in Section 40102(a)(15) of the Act, and has the full corporate power, authority and legal right under the laws of the State of Delaware to execute and deliver this Agreement and each Financing Agreement to which it will be a party and to carry out

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the obligations of the Company under this Agreement and each Financing Agreement to which it will be a party;

 

(ii)  the execution and delivery by the Company of this Agreement and the performance by the Company of its obligations under this Agreement have been duly authorized by the Company and will not violate its Certificate of Incorporation or by-laws or the provisions of any indenture, mortgage, contract or other agreement to which it is a party or by which it is bound; and

 

(iii)  this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, whether considered in a proceeding at law or in equity.

 

(b)           WTNA represents and warrants that:

 

(i)  WTNA is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States and is a "citizen of the United States" as defined in Section 40102(a)(15) of the Act, and has the full corporate power, authority and legal right under the laws of the United States and of the state of the United States in which it is located pertaining to its banking, trust and fiduciary powers to execute and deliver this Agreement and each Financing Agreement to which it will be a party and to carry out the obligations of WTNA, in its capacity as Subordination Agent, Pass Through Trustee or Paying Agent, as the case may be, under this Agreement and each Financing Agreement to which it will be a party;

 

(ii)  the execution and delivery by WTNA, in its capacity as Subordination Agent, Pass Through Trustee or Paying Agent, as the case may be, of this Agreement and the performance by WTNA, in its capacity as Subordination Agent, Pass Through Trustee or Paying Agent, as the case may be, of its obligations under this Agreement have been duly authorized by WTNA, in its capacity as Subordination Agent, Pass Through

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Trustee or Paying Agent, as the case may be, and will not violate its articles of association or by-laws or the provisions of any indenture, mortgage, contract or other agreement to which it is a party or by which it is bound; and

 

(iii)  this Agreement constitutes the legal, valid and binding obligations of WTNA, in its capacity as Subordination Agent, Pass Through Trustee or Paying Agent, as the case may be, enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, whether considered in a proceeding at law or in equity.

 

(c)           The Pass Through Trustee hereby confirms to each of the other parties hereto that its representations and warranties set forth in Section 7.15 of the Basic Pass Through Trust Agreement and Section 5.04 of each Trust Supplement are true and correct as of the date hereof.

 

(d)           The Subordination Agent represents and warrants that:

 

(i)  the Subordination Agent is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States, and has the full corporate power, authority and legal right under the laws of the United States and of the state of the United States in which it is located pertaining to its banking, trust and fiduciary powers to execute and deliver this Agreement and each Financing Agreement to which it is or will be a party and to perform its obligations under this Agreement and each Financing Agreement to which it is or will be a party;

 

(ii)  this Agreement has been duly authorized, executed and delivered by the Subordination Agent; this Agreement constitutes the legal, valid and binding obligations of the Subordination Agent enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors

 

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generally and by general principles of equity, whether considered in a proceeding at law or in equity;

 

(iii)  none of the execution, delivery and performance by the Subordination Agent of this Agreement contravenes any law, rule or regulation of the state of the United States in which it is located or any United States governmental authority or agency regulating the Subordination Agent's banking, trust or fiduciary powers or any judgment or order applicable to or binding on the Subordination Agent and do not contravene the Subordination Agent's articles of association or by-laws or result in any breach of, or constitute a default under, any agreement or instrument to which the Subordination Agent is a party or by which it or any of its properties may be bound;

 

(iv)  neither the execution and delivery by the Subordination Agent of this Agreement nor the consummation by the Subordination Agent of any of the transactions contemplated hereby requires the consent or approval of, the giving of notice to, the registration with, or the taking of any other action with respect to, any governmental authority or agency of the state of the United States in which it is located or any federal governmental authority or agency regulating the Subordination Agent's banking, trust or fiduciary powers;

 

(v)   there are no Taxes payable by the Subordination Agent imposed by any state of the United States in which it is located or any political subdivision or taxing authority thereof in connection with the execution, delivery and performance by the Subordination Agent of this Agreement (other than franchise or other taxes based on or measured by any fees or compensation received by the Subordination Agent for services rendered in connection with the transactions contemplated by the Intercreditor Agreement or any of the Liquidity Facilities), and there are no Taxes payable by the Subordination Agent imposed by any state of the United States in which it is located or any political subdivision thereof in connection with the acquisition, possession or ownership by the Subordination Agent of any of the Equipment Notes (other than franchise or other taxes based on or measured by any fees or compensation received by the Subordination Agent for services

 

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rendered in connection with the transactions contemplated by the Intercreditor Agreement or any of the Liquidity Facilities); and

 

(vi)  there are no pending or threatened actions or proceedings against the Subordination Agent before any court or administrative agency which individually or in the aggregate, if determined adversely to it, would materially adversely affect the ability of the Subordination Agent to perform its obligations under this Agreement.

 

(e)           The Escrow Agent represents and warrants that:

 

(i)    the Escrow Agent is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States and has the full corporate power, authority and legal right under the laws of the United States and the state of the United States in which it is located pertaining to its banking, trust and fiduciary powers to execute and deliver this Agreement, each Deposit Agreement and each Escrow and Paying Agent Agreement (collectively, the "Escrow Agent Agreements") and to carry out the obligations of the Escrow Agent under each of the Escrow Agent Agreements;

 

(ii)   the execution and delivery by the Escrow Agent of each of the Escrow Agent Agreements and the performance by the Escrow Agent of its obligations hereunder and thereunder have been duly authorized by the Escrow Agent and will not violate its articles of association or by-laws or the provisions of any indenture, mortgage, contract or other agreement to which it is a party or by which it is bound; and

 

(iii)  each of the Escrow Agent Agreements constitutes the legal, valid and binding obligations of the Escrow Agent enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, whether considered in a proceeding at law or in equity.

 

(f)           The Paying Agent represents and warrants that:

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(i)    the Paying Agent is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States of America and has the full corporate power, authority and legal right under the laws of the United States and the state of the United States in which it is located pertaining to its banking, trust and fiduciary powers to execute and deliver this Agreement and each Escrow and Paying Agent Agreement (collectively, the "Paying Agent Agreements") and to carry out the obligations of the Paying Agent under each of the Paying Agent Agreements;

 

(ii)   the execution and delivery by the Paying Agent of each of the Paying Agent Agreements and the performance by the Paying Agent of its obligations hereunder and thereunder have been duly authorized by the Paying Agent and will not violate its articles of association or by-laws or the provisions of any indenture, mortgage, contract or other agreement to which it is a party or by which it is bound; and

 

(iii)  each of the Paying Agent Agreements constitutes the legal, valid and binding obligations of the Paying Agent enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, whether considered in a proceeding at law or in equity.

 

SECTION 4.  Covenants.  (a)  The Company covenants with each of the other parties hereto that:

 

(i)  [Intentionally Omitted];

 

(ii)  subject to Section 4(a)(iv) of this Agreement, the Company shall at all times maintain its corporate existence and shall not wind up, liquidate or dissolve or take any action, or fail to take any action, that would have the effect of any of the foregoing;

 

(iii)  the Company shall at all times remain a U.S. Air Carrier (as defined in the Financing Agreements) and shall at all times be otherwise certificated and registered to the extent necessary to entitle the Loan Trustee to the rights

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afforded to secured parties of aircraft equipment under Section 1110;

 

(iv)  Section 4.07 of each Indenture is hereby incorporated by reference herein;

 

(v)  the Company agrees to provide written notice to each of the parties hereto of the occurrence of the Cut-off Date no later than one Business Day after the date thereof, such notice to refer specifically to the Pass Through Trustee's obligation to assign, transfer and deliver all of its right, title and interest to the Trust Property (as defined in each Pass Through Trust Agreement) to the trustee of the Related Trust (as defined in each Pass Through Trust Agreement) in accordance with Section 7.01 of each of the Trust Supplements;

 

(vi)  the Company shall not redeem and re-issue any Series B Equipment Notes or issue (or redeem and reissue) any Additional Series Equipment Notes pursuant to any Indenture, unless it shall have obtained written confirmation from each Rating Agency that the reissuance or issuance of such Equipment Notes, as the case may be, will not result in (1) a reduction of the rating for any Class of Certificates then rated by such Rating Agency that will remain outstanding below the then current rating for such Class of Certificates or (2) a withdrawal or suspension of the rating of any Class of Certificates then rated by such Rating Agency that will remain outstanding.  Any reissuance of the Series B Equipment Notes and issuance (or redemption and reissuance) of Additional Series Equipment Notes shall be subject to the terms of Section 9.1(c) and 9.1(d), respectively, of the Intercreditor Agreement; and

 

(vii)  If (x) the Depositary’s long-term issuer credit rating by either Standard & Poor’s Ratings Services or Fitch Ratings Ltd. shall at any time fall below A- (such minimum ratings, the "Depositary Threshold Ratings") or any such rating has been withdrawn or suspended or (y) the Company or the Depositary, in its sole discretion, gives written notice to the other of its election that the Depositary be replaced, the Company shall, within 35 days after such event occurring, cause the Depositary to be replaced with a depositary bank (a "Replacement Depositary") on the following terms and preconditions:

 

(A)           the Replacement Depositary must meet the Depositary Threshold Ratings and the Company shall have obtained written confirmation from each Rating Agency that such replacement will not cause a withdrawal, suspension or

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downgrading of any rating then in effect for any Class of Certificates by such Rating Agency (without regard to any withdrawal, suspension or downgrading of any rating of the Depositary being replaced);

 

(B)           the Company shall pay all fees, expenses and other amounts then owing to the replaced Depositary and, except as expressly provided in clause (C) below, the Company shall pay any up-front fee of the Replacement Depositary and (without limitation of the foregoing) all out-of-pocket expenses (including reasonable fees and expenses of legal counsel) of the parties hereto (including without limitation all amounts payable to the Rating Agencies) incurred in connection with such replacement;

 

(C)           solely in the case of the Depositary making an election in its discretion that it be replaced (and without limitation of clause (A) above), (x) the notice given by the Depositary to the Company shall nominate a Replacement Depositary, which shall satisfy all of terms and preconditions of this Section 4(a)(vii) (and the Company shall have the right to utilize such nominee as the Replacement Depositary or to select another Replacement Depositary), (y) the fees, expenses, indemnities and other amounts payable to the Replacement Depositary upon its execution of the Replacement Deposit Agreement or thereafter shall not to any extent exceed those which would have been payable to the Depositary had such replacement not occurred (it being specifically understood and agreed that any up-front fee of the Replacement Depositary shall be paid by the replaced Depositary, provided that, if the Company selects a Replacement Depositary other than the nominee of the replaced Depositary and the upfront fee of such selection exceeds that of such nominee, the Company shall pay such excess), and (without limitation of the foregoing) the Depositary shall pay all out-of-pocket expenses (including reasonable fees and expenses of legal counsel) of the parties hereto (including without limitation all amounts payable to the Rating Agencies) incurred in connection with such replacement, and (z) the Replacement Depositary shall be willing to enter into a Replacement Deposit Agreement for each of the Class A and Class B Certificates with the Escrow Agent having the same terms and conditions (including without limitation as to the interest to be paid on the Deposits) as the Deposit Agreements to which the Depositary is a party; and

 

(D)           the Company or, in the case of the Depositary making an election that it be replaced (unless the Company shall have selected such Replacement Depositary), the Depositary,

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shall cause the Replacement Depositary to enter into a Replacement Deposit Agreement for each of the Class A and Class B Certificates with the Escrow Agent (and, upon request of the Company the Escrow Agent agrees to enter into any such Replacement Deposit Agreement) and shall cause the Replacement Depositary to deliver to the Company and each Rating Agency legal opinions and other closing documentation substantially similar in scope and substance as those that were delivered by the Depositary being replaced in connection with the execution and delivery of the Deposit Agreement being replaced.

 

Upon satisfaction of the foregoing conditions, the Company shall instruct the Class A Pass Through Trustee and the Class B Pass Through Trustee, and each such Pass Through Trustee agrees, to execute and deliver to the Escrow Agent a duly completed Withdrawal Certificate (as defined in the Escrow and Paying Agent Agreements) together with a Notice of Replacement Withdrawal (as defined in the Escrow and Paying Agent Agreements).

 

Each of the parties hereto agrees, at the Company’s request, to enter into any amendments to this Agreement, the Escrow and Paying Agent Agreements and any other Operative Agreements as may be necessary or desirable to give effect to the replacement of the Depositary with the Replacement Depositary and the replacement of the Deposit Agreements with the Replacement Deposit Agreements.

 

Upon the execution and delivery of the Replacement Deposit Agreements, the Replacement Depositary shall be deemed to be the Depositary with all of the rights and obligations of the Depositary hereunder and under the other Operative Agreements and the Replacement Deposit Agreements shall be deemed to be the Deposit Agreements hereunder and under the other Operative Agreements, except that the obligations of the replaced Depositary under its Deposit Agreements resulting from the delivery of any Withdrawal Notice delivered thereunder shall remain in full force and effect notwithstanding the execution and delivery of the Replacement Deposit Agreements.

 

(viii)  Promptly after the occurrence of a Triggering Event or an Indenture Default resulting from the failure of the Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Default shall be continuing, the Company will, at the Subordination Agent’s request from time to time but in any event no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the

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following information with respect to each Aircraft then subject to the lien of an Indenture:  (A) whether the Aircraft are currently in service or parked in storage, (B) the maintenance status of the Aircraft and (C) the location of the Engines (as defined in the respective Indentures to which such Aircraft are subject).  As used in this sentence, the terms "Triggering Event", "Indenture Default", "Regular Distribution Date" shall have the respective meanings set forth in the Intercreditor Agreement as originally executed.

 

(b)           WTNA, in its individual capacity, covenants with each of the other parties to this Agreement that it will, immediately upon obtaining knowledge of any facts that would cast doubt upon its continuing status as a "citizen of the United States" as defined in Section 40102(a)(15) of the Act and promptly upon public disclosure of negotiations in respect of any transaction which would or might adversely affect such status, notify in writing all parties hereto of all relevant matters in connection therewith.  Upon WTNA giving any such notice, WTNA shall, subject to Section 9.01 of any Indenture then entered into, resign as Loan Trustee in respect of such Indenture.

 

SECTION 5.  Notices.  Unless otherwise specifically provided herein, all notices required or permitted by the terms of this Agreement shall be in English and in writing, and any such notice shall become effective upon being delivered personally or, if promptly confirmed by mail, when dispatched by facsimile or other written telecommunication, addressed to such party hereto at its address or facsimile number set forth below the signature of such party at the foot of this Agreement or to such other address or facsimile number as such party may hereafter specify by notice to the other parties.

 

SECTION 6.  Expenses.  (a)  The Company agrees to pay to the Subordination Agent when due an amount or amounts equal to the fees payable to the Liquidity Provider under Section 2.03 of each Liquidity Facility and the related Fee Letter (as defined in the Intercreditor Agreement) multiplied by a fraction the numerator of which shall be the then outstanding aggregate amount of the Deposits under the Deposit Agreements pertaining to the Class A and Class B Pass Through Trusts and the denominator of which shall be the sum of (x) the then outstanding aggregate principal amount of the Series A Equipment Notes and Series B Equipment Notes under all of the Indentures and (y) the then outstanding aggregate amount of the Deposits under the Deposit Agreements pertaining to the Class A and Class B Pass Through Trusts.

Note Purchase Agreement 14-2

  

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(b)           So long as no Equipment Notes have been issued in respect of any Aircraft, the Company agrees to pay (i) to the Subordination Agent when due (A) the amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings while such Downgrade Advance shall be outstanding, (B) the amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings while such Non-Extension Advance shall be outstanding, (C) the amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings from such Special Termination Advance while such Special Termination Advance shall be outstanding, and (D) any other amounts owed to the Liquidity Provider by the Subordination Agent as borrower under each Liquidity Facility (other than amounts due as repayment of advances thereunder or as interest on such advances, except to the extent payable pursuant to clause (A), (B) or (C)), (ii) all compensation and reimbursement of expenses, disbursements and advances payable by the Company under the Pass Through Trust Agreements, (iii) all compensation and reimbursement of expenses and disbursements payable to the Subordination Agent under the Intercreditor Agreement except with respect to any income or franchise taxes incurred by the Subordination Agent in connection with the transactions contemplated by the Intercreditor Agreement and (iv) in the event the Company requests any amendment to any Operative Agreement, all reasonable fees and expenses (including, without limitation, fees and disbursements of counsel) of the Escrow Agent and/or the Paying Agent in connection therewith.  For purposes of this Section 6(b), the terms "Applied Downgrade Advance", "Applied Non-Extension Advance", "Applied Special Termination Advance", "Downgrade Advance", "Investment Earnings", "Non-Extension Advance" and "Special Termination Advance" shall have the meanings specified in each Liquidity Facility.

 

SECTION 7.  Further Assurances.  Each party hereto shall duly execute, acknowledge and deliver, or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, in any case, as any other party hereto shall reasonably request in connection with its administration of, or to carry out more effectually the purposes of, or to better assure and confirm unto it the rights and benefits to be provided under, this Agreement.

Note Purchase Agreement 14-2

  

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SECTION 8.  Miscellaneous.  (a)  Provided that the transactions contemplated hereby have been consummated, in whole or in part, and except as otherwise provided for herein, the representations, warranties and agreements herein of the Company, the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through Trustee, and the Company's, the Subordination Agent's, the Escrow Agent's, the Paying Agent's and the Pass Through Trustee's obligations under any and all thereof, shall survive the expiration or other termination of this Agreement and the other agreements referred to herein.

 

(b)           This Agreement may be executed in any number of counterparts (and each of the parties hereto shall not be required to execute the same counterpart).  Each counterpart of this Agreement, including a signature page executed by each of the parties hereto, shall be an original counterpart of this Agreement, but all of such counterparts together shall constitute one instrument.  Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing signed by the party against which the enforcement of the termination, amendment, supplement, waiver or modification is sought.  The index preceding this Agreement and the headings of the various Sections of this Agreement are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the Company and its successors and permitted assigns, the Pass Through Trustee and its successors as Pass Through Trustee (and any additional trustee appointed) under any of the Pass Through Trust Agreements, the Escrow Agent and its successors as Escrow Agent under the Escrow and Paying Agent Agreements, the Paying Agent and its successors as Paying Agent under the Escrow and Paying Agent Agreement and the Subordination Agent and its successors as Subordination Agent under the Intercreditor Agreement.

 

(c)           This Agreement is not intended to, and shall not, provide any person not a party hereto (other than the Underwriters, each of the beneficiaries of Section 6 hereof and the Depositary as a beneficiary of Section 4(a)(vii)) with any rights of any nature whatsoever against any of the parties hereto, and no person not a party hereto (other than the Underwriters, each of the beneficiaries of Section 6 hereof and the Depositary as a beneficiary of Section 4(a)(vii)) shall have any right, power or privilege in respect of, or have any benefit or interest arising out of, this Agreement.  To the extent that

Note Purchase Agreement 14-2

  

18

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this Agreement expressly confers upon, gives or grants any right, power, privilege, benefit, interest, remedy or claim to any of the beneficiaries of Section 6 hereof (including, but not limited to rights, powers, privileges, benefits, interests, remedies and claims under Section 6) or to the Depositary with respect to Section 4(a)(vii), each such party is hereby recognized as a third party beneficiary hereunder and may enforce any such right, power, privilege, benefit, interest, remedy or claim.

 

SECTION 9.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

Note Purchase Agreement 14-2

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

	  	
UNITED AIRLINES, INC.

	  	  
	  	  
	  	
By

	
/s/ Gerald Laderman

	  
	  	
Name:

	
Gerald Laderman

	  
	  	
Title:

	
Senior Vice President Finance, Procurement and Treasurer

	  
	  	  	  	  
	  	
Address:

	
233 S. Wacker Drive

Chicago, IL 60606

Attention:  Treasurer

Facsimile:  (872) 825-0316

	  

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as otherwise provided herein, but solely as Pass Through Trustee

	  	  
	  	  
	  	
By

	
/s/ Jacqueline E. Solone

	  
	  	
Name:

	
Jacqueline E. Solone

	  
	  	
Title:

	
Assistant Vice President

	  
	  	  	  	  
	  	
Address:

	
1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile:  (302) 636-4140

	  

Note Purchase Agreement 14-2

  

20

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WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as otherwise provided herein, but solely as Subordination Agent

	  	  
	  	  
	  	
By

	
/s/ Jacqueline E. Solone

	  
	  	
Name:

	
Jacqueline E. Solone

	  
	  	
Title:

	
Assistant Vice President

	  
	  	  	  	  
	  	
Address:

	
1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile:  (302) 636-4140

	  

	  	
U.S. BANK NATIONAL ASSOCIATION,

as Escrow Agent

	  	  
	  	  
	  	
By

	
/s/ David W. Doucette

	  
	  	
Name:

	
David W. Doucette

	  
	  	
Title:

	
Vice President

	  
	  	  	  	  
	  	
Address:

	
Boston, MA Office

One Federal Street, 3rd Floor

EX-MA-FED

Boston, MA 02110

Attention: David W. Doucette

Facsimile: (617) 603-6672

	  

Note Purchase Agreement 14-2

  

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WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Paying Agent

	  	  
	  	  
	  	
By

	
/s/ Jacqueline E. Solone

	  
	  	
Name:

	
Jacqueline E. Solone

	  
	  	
Title:

	
Assistant Vice President

	  
	  	  	  	  
	  	
Address:

	
1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile:  (302) 636-4140

	  

Note Purchase Agreement 14-2

  

22

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SCHEDULE I to

Note Purchase Agreement

ELIGIBLE AIRCRAFT AND SCHEDULED DELIVERY MONTHS

	

Aircraft Type

	

Expected

Registration

Number

	

Expected Manufacturer’s

Serial Number

	

Scheduled Delivery

Month

	  	  	  	  
	
Boeing 737-924ER

	
N66841

	
42181

	
January 2015

	
Boeing 737-924ER

	
N68842

	
42182

	
January 2015

	
Boeing 737-924ER

	
N68843

	
42183

	
January 2015

	
Boeing 737-924ER

	
N69840

	
60317

	
February 2015

	
Boeing 737-924ER

	
N64844

	
42184

	
February 2015

	
Boeing 737-924ER

	
N67845

	
42185

	
February 2015

	
Boeing 737-924ER

	
N67846

	
42186

	
February 2015

	
Boeing 737-924ER

	
N69847

	
42187

	
March 2015

	
Boeing 737-924ER

	
N66848

	
42188

	
March 2015

	
Boeing 737-924ER

	
N62849

	
42199

	
April 2015

	
Boeing 737-924ER

	
N68850

	
42204

	
April 2015

	
Boeing 737-924ER

	
N62851

	
42200

	
May 2015

	
Boeing 737-924ER

	
N62852

	
42201

	
May 2015

	
Boeing 737-924ER

	
N64853

	
42202

	
June 2015

	
Boeing 737-924ER

	
N64854

	
42203

	
June 2015

	
Boeing 737-924ER

	
N61855

	
42189

	
July 2015

	
Boeing 737-924ER

	
N64856

	
42190

	
July 2015

	
Boeing 787-9

	
N26952

	
36403

	
January 2015

	
Boeing 787-9

	
N35953

	
36404

	
March 2015

	
Boeing 787-9

	
N13954

	
36405

	
March 2015

	
Boeing 787-9

	
N38955

	
37814

	
May 2015

	
Boeing 787-9

	
N45956

	
40918

	
July 2015

	
Embraer ERJ 175 LR

	
N89313

	
17000432

	
November 2014

	
Embraer ERJ 175 LR

	
N82314

	
17000433

	
November 2014

	
Embraer ERJ 175 LR

	
N89315

	
17000436

	
November 2014

	
Embraer ERJ 175 LR

	
N86316

	
17000437

	
December 2014

	
Embraer ERJ 175 LR

	
N89317

	
17000438

	
December 2014

	
Embraer ERJ 175 LR

	
N87318

	
17000442

	
December 2014

	
Embraer ERJ 175 LR

	
N87319

	
17000443

	
December 2014

	
Embraer ERJ 175 LR

	
N85320

	
17000448

	
February 2015

	
Embraer ERJ 175 LR

	
N89321

	
TBD

	
March 2015

	
Embraer ERJ 175 LR

	
N86322

	
TBD

	
April 2015

	
Embraer ERJ 175 LR

	
N85323

	
TBD

	
April 2015

	
Embraer ERJ 175 LR

	
N86324

	
TBD

	
April 2015

	
Embraer ERJ 175 LR

	
N88325

	
TBD

	
May 2015

	
Embraer ERJ 175 LR

	
N88326

	
TBD

	
May 2015

	
Embraer ERJ 175 LR

	
N88327

	
TBD

	
June 2015

	
Embraer ERJ 175 LR

	
N88328

	
TBD

	
June 2015

	
Embraer ERJ 175 LR

	
N83329

	
TBD

	
July 2015

	
Embraer ERJ 175 LR

	
N88330

	
TBD

	
July 2015

Note Purchase Agreement 14-2

  

  

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SCHEDULE II to

Note Purchase Agreement

 

TRUST SUPPLEMENTS

 

Trust Supplement dated as of the Issuance Date between the Company and the Pass Through Trustee in respect of United Airlines Pass Through Trust, Series 2014-2A-O.

Trust Supplement dated as of the Issuance Date between the Company and the Pass Through Trustee in respect of United Airlines Pass Through Trust, Series 2014-2B-O.

Note Purchase Agreement 14-2

  

  

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SCHEDULE III to

Note Purchase Agreement

 

REQUIRED TERMS

 

 

Equipment Notes

 

Obligor:     United

 

Maximum Principal Amount:

 

The initial principal amount and amortization schedule of the Series A and B Equipment Notes issued with respect to an Aircraft shall be as set forth in the following table for that Aircraft or, in the case of the last six scheduled deliveries of the Boeing 737-924ER Eligible Aircraft, the last scheduled delivery of the Boeing 787-9 Eligible Aircraft, and the last six scheduled deliveries of the Embraer ERJ 175 LR Eligible Aircraft, as set forth in the applicable table below for an Eligible Aircraft of the same model that has not been and will not be financed under the Note Purchase Agreement:

 

Boeing 737-924ER

 

	  	

N66841

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance

	
$28,684,000.00

	
$8,309,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
September 3, 2015

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
March 3, 2016

	
27,950,736.96

	
7,940,730.59

	
733,263.04

	
368,269.41

	
September 3, 2016

	
27,191,590.53

	
7,565,125.23

	
759,146.43

	
375,605.36

	
March 3, 2017

	
26,432,434.55

	
7,189,512.50

	
759,155.98

	
375,612.73

	
September 3, 2017

	
25,673,268.57

	
6,813,892.03

	
759,165.98

	
375,620.47

	
March 3, 2018

	
24,914,092.09

	
6,438,263.45

	
759,176.48

	
375,628.58

	
September 3, 2018

	
24,154,904.59

	
6,062,626.33

	
759,187.50

	
375,637.12

	
March 3, 2019

	
23,395,705.49

	
5,686,980.25

	
759,199.10

	
375,646.08

	
September 3, 2019

	
22,636,494.19

	
5,311,324.74

	
759,211.30

	
375,655.51

	
March 3, 2020

	
21,877,270.05

	
4,935,659.30

	
759,224.14

	
375,665.44

	
September 3, 2020

	
21,118,032.38

	
4,559,983.39

	
759,237.67

	
375,675.91

	
March 3, 2021

	
20,358,780.43

	
4,184,296.44

	
759,251.95

	
375,686.95

	
September 3, 2021

	
19,599,513.40

	
3,808,597.82

	
759,267.03

	
375,698.62

	
March 3, 2022

	
18,840,230.43

	
3,432,886.89

	
759,282.97

	
375,710.93

	
September 3, 2022

	
18,080,930.60

	
0.00

	
759,299.83

	
3,432,886.89

	
March 3, 2023

	
17,321,612.90

	
0.00

	
759,317.70

	
0.00

	
September 3, 2023

	
16,562,276.26

	
0.00

	
759,336.64

	
0.00

	
March 3, 2024

	
15,802,919.50

	
0.00

	
759,356.76

	
0.00

	
September 3, 2024

	
15,043,541.37

	
0.00

	
759,378.13

	
0.00

	
March 3, 2025

	
14,284,140.47

	
0.00

	
759,400.90

	
0.00

	
September 3, 2025

	
13,524,715.32

	
0.00

	
759,425.15

	
0.00

	
March 3, 2026

	
12,765,264.29

	
0.00

	
759,451.03

	
0.00

	
September 3, 2026

	
0.00

	
0.00

	
12,765,264.29

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

2

	  	

N68842

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,684,000.00

	
$8,309,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,950,736.96

	
7,940,730.59

	
733,263.04

	
368,269.41

	
September 3, 2016                                                    

	
27,191,590.53

	
7,565,125.23

	
759,146.43

	
375,605.36

	
March 3, 2017                                                    

	
26,432,434.55

	
7,189,512.50

	
759,155.98

	
375,612.73

	
September 3, 2017                                                    

	
25,673,268.57

	
6,813,892.03

	
759,165.98

	
375,620.47

	
March 3, 2018                                                    

	
24,914,092.09

	
6,438,263.45

	
759,176.48

	
375,628.58

	
September 3, 2018                                                    

	
24,154,904.59

	
6,062,626.33

	
759,187.50

	
375,637.12

	
March 3, 2019                                                    

	
23,395,705.49

	
5,686,980.25

	
759,199.10

	
375,646.08

	
September 3, 2019                                                    

	
22,636,494.19

	
5,311,324.74

	
759,211.30

	
375,655.51

	
March 3, 2020                                                    

	
21,877,270.05

	
4,935,659.30

	
759,224.14

	
375,665.44

	
September 3, 2020                                                    

	
21,118,032.38

	
4,559,983.39

	
759,237.67

	
375,675.91

	
March 3, 2021                                                    

	
20,358,780.43

	
4,184,296.44

	
759,251.95

	
375,686.95

	
September 3, 2021                                                    

	
19,599,513.40

	
3,808,597.82

	
759,267.03

	
375,698.62

	
March 3, 2022                                                    

	
18,840,230.43

	
3,432,886.89

	
759,282.97

	
375,710.93

	
September 3, 2022                                                    

	
18,080,930.60

	
0.00

	
759,299.83

	
3,432,886.89

	
March 3, 2023                                                    

	
17,321,612.90

	
0.00

	
759,317.70

	
0.00

	
September 3, 2023                                                    

	
16,562,276.26

	
0.00

	
759,336.64

	
0.00

	
March 3, 2024                                                    

	
15,802,919.50

	
0.00

	
759,356.76

	
0.00

	
September 3, 2024                                                    

	
15,043,541.37

	
0.00

	
759,378.13

	
0.00

	
March 3, 2025                                                    

	
14,284,140.47

	
0.00

	
759,400.90

	
0.00

	
September 3, 2025                                                    

	
13,524,715.32

	
0.00

	
759,425.15

	
0.00

	
March 3, 2026                                                    

	
12,765,264.29

	
0.00

	
759,451.03

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,765,264.29

	
0.00

	  	

N68843

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,684,000.00

	
$8,309,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,684,000.00

	
8,309,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,950,736.96

	
7,940,730.59

	
733,263.04

	
368,269.41

	
September 3, 2016                                                    

	
27,191,590.53

	
7,565,125.23

	
759,146.43

	
375,605.36

	
March 3, 2017                                                    

	
26,432,434.55

	
7,189,512.50

	
759,155.98

	
375,612.73

	
September 3, 2017                                                    

	
25,673,268.57

	
6,813,892.03

	
759,165.98

	
375,620.47

	
March 3, 2018                                                    

	
24,914,092.09

	
6,438,263.45

	
759,176.48

	
375,628.58

	
September 3, 2018                                                    

	
24,154,904.59

	
6,062,626.33

	
759,187.50

	
375,637.12

	
March 3, 2019                                                    

	
23,395,705.49

	
5,686,980.25

	
759,199.10

	
375,646.08

	
September 3, 2019                                                    

	
22,636,494.19

	
5,311,324.74

	
759,211.30

	
375,655.51

	
March 3, 2020                                                    

	
21,877,270.05

	
4,935,659.30

	
759,224.14

	
375,665.44

	
September 3, 2020                                                    

	
21,118,032.38

	
4,559,983.39

	
759,237.67

	
375,675.91

	
March 3, 2021                                                    

	
20,358,780.43

	
4,184,296.44

	
759,251.95

	
375,686.95

	
September 3, 2021                                                    

	
19,599,513.40

	
3,808,597.82

	
759,267.03

	
375,698.62

	
March 3, 2022                                                    

	
18,840,230.43

	
3,432,886.89

	
759,282.97

	
375,710.93

	
September 3, 2022                                                    

	
18,080,930.60

	
0.00

	
759,299.83

	
3,432,886.89

	
March 3, 2023                                                    

	
17,321,612.90

	
0.00

	
759,317.70

	
0.00

	
September 3, 2023                                                    

	
16,562,276.26

	
0.00

	
759,336.64

	
0.00

	
March 3, 2024                                                    

	
15,802,919.50

	
0.00

	
759,356.76

	
0.00

	
September 3, 2024                                                    

	
15,043,541.37

	
0.00

	
759,378.13

	
0.00

	
March 3, 2025                                                    

	
14,284,140.47

	
0.00

	
759,400.90

	
0.00

	
September 3, 2025                                                    

	
13,524,715.32

	
0.00

	
759,425.15

	
0.00

	
March 3, 2026                                                    

	
12,765,264.29

	
0.00

	
759,451.03

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,765,264.29

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

3

	  	

N69840

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,708,000.00

	
$8,316,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,973,622.87

	
7,947,232.41

	
734,377.13

	
368,767.59

	
September 3, 2016                                                    

	
27,213,854.85

	
7,571,319.52

	
759,768.02

	
375,912.89

	
March 3, 2017                                                    

	
26,454,077.28

	
7,195,399.23

	
759,777.57

	
375,920.29

	
September 3, 2017                                                    

	
25,694,289.70

	
6,819,471.21

	
759,787.58

	
375,928.02

	
March 3, 2018                                                    

	
24,934,491.61

	
6,443,535.06

	
759,798.09

	
375,936.15

	
September 3, 2018                                                    

	
24,174,682.49

	
6,067,590.38

	
759,809.12

	
375,944.68

	
March 3, 2019                                                    

	
23,414,861.76

	
5,691,636.72

	
759,820.73

	
375,953.66

	
September 3, 2019                                                    

	
22,655,028.83

	
5,315,673.62

	
759,832.93

	
375,963.10

	
March 3, 2020                                                    

	
21,895,183.04

	
4,939,700.59

	
759,845.79

	
375,973.03

	
September 3, 2020                                                    

	
21,135,323.71

	
4,563,717.08

	
759,859.33

	
375,983.51

	
March 3, 2021                                                    

	
20,375,450.08

	
4,187,722.51

	
759,873.63

	
375,994.57

	
September 3, 2021                                                    

	
19,615,561.37

	
3,811,716.28

	
759,888.71

	
376,006.23

	
March 3, 2022                                                    

	
18,855,656.71

	
3,435,697.71

	
759,904.66

	
376,018.57

	
September 3, 2022                                                    

	
18,095,735.16

	
0.00

	
759,921.55

	
3,435,697.71

	
March 3, 2023                                                    

	
17,335,795.74

	
0.00

	
759,939.42

	
0.00

	
September 3, 2023                                                    

	
16,575,837.36

	
0.00

	
759,958.38

	
0.00

	
March 3, 2024                                                    

	
15,815,858.85

	
0.00

	
759,978.51

	
0.00

	
September 3, 2024                                                    

	
15,055,858.93

	
0.00

	
759,999.92

	
0.00

	
March 3, 2025                                                    

	
14,295,836.25

	
0.00

	
760,022.68

	
0.00

	
September 3, 2025                                                    

	
13,535,789.29

	
0.00

	
760,046.96

	
0.00

	
March 3, 2026                                                    

	
12,775,716.42

	
0.00

	
760,072.87

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,775,716.42

	
0.00

	  	

N64844

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,708,000.00

	
$8,316,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,973,622.87

	
7,947,232.41

	
734,377.13

	
368,767.59

	
September 3, 2016                                                    

	
27,213,854.85

	
7,571,319.52

	
759,768.02

	
375,912.89

	
March 3, 2017                                                    

	
26,454,077.28

	
7,195,399.23

	
759,777.57

	
375,920.29

	
September 3, 2017                                                    

	
25,694,289.70

	
6,819,471.21

	
759,787.58

	
375,928.02

	
March 3, 2018                                                    

	
24,934,491.61

	
6,443,535.06

	
759,798.09

	
375,936.15

	
September 3, 2018                                                    

	
24,174,682.49

	
6,067,590.38

	
759,809.12

	
375,944.68

	
March 3, 2019                                                    

	
23,414,861.76

	
5,691,636.72

	
759,820.73

	
375,953.66

	
September 3, 2019                                                    

	
22,655,028.83

	
5,315,673.62

	
759,832.93

	
375,963.10

	
March 3, 2020                                                    

	
21,895,183.04

	
4,939,700.59

	
759,845.79

	
375,973.03

	
September 3, 2020                                                    

	
21,135,323.71

	
4,563,717.08

	
759,859.33

	
375,983.51

	
March 3, 2021                                                    

	
20,375,450.08

	
4,187,722.51

	
759,873.63

	
375,994.57

	
September 3, 2021                                                    

	
19,615,561.37

	
3,811,716.28

	
759,888.71

	
376,006.23

	
March 3, 2022                                                    

	
18,855,656.71

	
3,435,697.71

	
759,904.66

	
376,018.57

	
September 3, 2022                                                    

	
18,095,735.16

	
0.00

	
759,921.55

	
3,435,697.71

	
March 3, 2023                                                    

	
17,335,795.74

	
0.00

	
759,939.42

	
0.00

	
September 3, 2023                                                    

	
16,575,837.36

	
0.00

	
759,958.38

	
0.00

	
March 3, 2024                                                    

	
15,815,858.85

	
0.00

	
759,978.51

	
0.00

	
September 3, 2024                                                    

	
15,055,858.93

	
0.00

	
759,999.92

	
0.00

	
March 3, 2025                                                    

	
14,295,836.25

	
0.00

	
760,022.68

	
0.00

	
September 3, 2025                                                    

	
13,535,789.29

	
0.00

	
760,046.96

	
0.00

	
March 3, 2026                                                    

	
12,775,716.42

	
0.00

	
760,072.87

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,775,716.42

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

4

	  	

N67845

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,708,000.00

	
$8,316,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,973,622.87

	
7,947,232.41

	
734,377.13

	
368,767.59

	
September 3, 2016                                                    

	
27,213,854.85

	
7,571,319.52

	
759,768.02

	
375,912.89

	
March 3, 2017                                                    

	
26,454,077.28

	
7,195,399.23

	
759,777.57

	
375,920.29

	
September 3, 2017                                                    

	
25,694,289.70

	
6,819,471.21

	
759,787.58

	
375,928.02

	
March 3, 2018                                                    

	
24,934,491.61

	
6,443,535.06

	
759,798.09

	
375,936.15

	
September 3, 2018                                                    

	
24,174,682.49

	
6,067,590.38

	
759,809.12

	
375,944.68

	
March 3, 2019                                                    

	
23,414,861.76

	
5,691,636.72

	
759,820.73

	
375,953.66

	
September 3, 2019                                                    

	
22,655,028.83

	
5,315,673.62

	
759,832.93

	
375,963.10

	
March 3, 2020                                                    

	
21,895,183.04

	
4,939,700.59

	
759,845.79

	
375,973.03

	
September 3, 2020                                                    

	
21,135,323.71

	
4,563,717.08

	
759,859.33

	
375,983.51

	
March 3, 2021                                                    

	
20,375,450.08

	
4,187,722.51

	
759,873.63

	
375,994.57

	
September 3, 2021                                                    

	
19,615,561.37

	
3,811,716.28

	
759,888.71

	
376,006.23

	
March 3, 2022                                                    

	
18,855,656.71

	
3,435,697.71

	
759,904.66

	
376,018.57

	
September 3, 2022                                                    

	
18,095,735.16

	
0.00

	
759,921.55

	
3,435,697.71

	
March 3, 2023                                                    

	
17,335,795.74

	
0.00

	
759,939.42

	
0.00

	
September 3, 2023                                                    

	
16,575,837.36

	
0.00

	
759,958.38

	
0.00

	
March 3, 2024                                                    

	
15,815,858.85

	
0.00

	
759,978.51

	
0.00

	
September 3, 2024                                                    

	
15,055,858.93

	
0.00

	
759,999.92

	
0.00

	
March 3, 2025                                                    

	
14,295,836.25

	
0.00

	
760,022.68

	
0.00

	
September 3, 2025                                                    

	
13,535,789.29

	
0.00

	
760,046.96

	
0.00

	
March 3, 2026                                                    

	
12,775,716.42

	
0.00

	
760,072.87

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,775,716.42

	
0.00

	  	

N67846

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,708,000.00

	
$8,316,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,708,000.00

	
8,316,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,973,622.87

	
7,947,232.41

	
734,377.13

	
368,767.59

	
September 3, 2016                                                    

	
27,213,854.85

	
7,571,319.52

	
759,768.02

	
375,912.89

	
March 3, 2017                                                    

	
26,454,077.28

	
7,195,399.23

	
759,777.57

	
375,920.29

	
September 3, 2017                                                    

	
25,694,289.70

	
6,819,471.21

	
759,787.58

	
375,928.02

	
March 3, 2018                                                    

	
24,934,491.61

	
6,443,535.06

	
759,798.09

	
375,936.15

	
September 3, 2018                                                    

	
24,174,682.49

	
6,067,590.38

	
759,809.12

	
375,944.68

	
March 3, 2019                                                    

	
23,414,861.76

	
5,691,636.72

	
759,820.73

	
375,953.66

	
September 3, 2019                                                    

	
22,655,028.83

	
5,315,673.62

	
759,832.93

	
375,963.10

	
March 3, 2020                                                    

	
21,895,183.04

	
4,939,700.59

	
759,845.79

	
375,973.03

	
September 3, 2020                                                    

	
21,135,323.71

	
4,563,717.08

	
759,859.33

	
375,983.51

	
March 3, 2021                                                    

	
20,375,450.08

	
4,187,722.51

	
759,873.63

	
375,994.57

	
September 3, 2021                                                    

	
19,615,561.37

	
3,811,716.28

	
759,888.71

	
376,006.23

	
March 3, 2022                                                    

	
18,855,656.71

	
3,435,697.71

	
759,904.66

	
376,018.57

	
September 3, 2022                                                    

	
18,095,735.16

	
0.00

	
759,921.55

	
3,435,697.71

	
March 3, 2023                                                    

	
17,335,795.74

	
0.00

	
759,939.42

	
0.00

	
September 3, 2023                                                    

	
16,575,837.36

	
0.00

	
759,958.38

	
0.00

	
March 3, 2024                                                    

	
15,815,858.85

	
0.00

	
759,978.51

	
0.00

	
September 3, 2024                                                    

	
15,055,858.93

	
0.00

	
759,999.92

	
0.00

	
March 3, 2025                                                    

	
14,295,836.25

	
0.00

	
760,022.68

	
0.00

	
September 3, 2025                                                    

	
13,535,789.29

	
0.00

	
760,046.96

	
0.00

	
March 3, 2026                                                    

	
12,775,716.42

	
0.00

	
760,072.87

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,775,716.42

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

5

	  	

N69847

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,733,000.00

	
$8,323,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,733,000.00

	
8,323,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,733,000.00

	
8,323,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,998,269.23

	
7,954,234.38

	
734,730.77

	
368,765.62

	
September 3, 2016                                                    

	
27,237,831.81

	
7,577,990.28

	
760,437.42

	
376,244.10

	
March 3, 2017                                                    

	
26,477,384.84

	
7,201,738.79

	
760,446.97

	
376,251.49

	
September 3, 2017                                                    

	
25,716,927.84

	
6,825,479.56

	
760,457.00

	
376,259.23

	
March 3, 2018                                                    

	
24,956,460.33

	
6,449,212.18

	
760,467.51

	
376,267.38

	
September 3, 2018                                                    

	
24,195,981.77

	
6,072,936.27

	
760,478.56

	
376,275.91

	
March 3, 2019                                                    

	
23,435,491.60

	
5,696,651.38

	
760,490.17

	
376,284.89

	
September 3, 2019                                                    

	
22,674,989.21

	
5,320,357.04

	
760,502.39

	
376,294.34

	
March 3, 2020                                                    

	
21,914,473.95

	
4,944,052.75

	
760,515.26

	
376,304.29

	
September 3, 2020                                                    

	
21,153,945.14

	
4,567,737.97

	
760,528.81

	
376,314.78

	
March 3, 2021                                                    

	
20,393,402.02

	
4,191,412.14

	
760,543.12

	
376,325.83

	
September 3, 2021                                                    

	
19,632,843.80

	
3,815,074.62

	
760,558.22

	
376,337.52

	
March 3, 2022                                                    

	
18,872,269.62

	
3,438,724.76

	
760,574.18

	
376,349.86

	
September 3, 2022                                                    

	
18,111,678.54

	
0.00

	
760,591.08

	
3,438,724.76

	
March 3, 2023                                                    

	
17,351,069.57

	
0.00

	
760,608.97

	
0.00

	
September 3, 2023                                                    

	
16,590,441.62

	
0.00

	
760,627.95

	
0.00

	
March 3, 2024                                                    

	
15,829,793.52

	
0.00

	
760,648.10

	
0.00

	
September 3, 2024                                                    

	
15,069,124.01

	
0.00

	
760,669.51

	
0.00

	
March 3, 2025                                                    

	
14,308,431.70

	
0.00

	
760,692.31

	
0.00

	
September 3, 2025                                                    

	
13,547,715.09

	
0.00

	
760,716.61

	
0.00

	
March 3, 2026                                                    

	
12,786,972.56

	
0.00

	
760,742.53

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,786,972.56

	
0.00

	  	

N66848

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,733,000.00

	
$8,323,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,733,000.00

	
8,323,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,733,000.00

	
8,323,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
27,998,269.23

	
7,954,234.38

	
734,730.77

	
368,765.62

	
September 3, 2016                                                    

	
27,237,831.81

	
7,577,990.28

	
760,437.42

	
376,244.10

	
March 3, 2017                                                    

	
26,477,384.84

	
7,201,738.79

	
760,446.97

	
376,251.49

	
September 3, 2017                                                    

	
25,716,927.84

	
6,825,479.56

	
760,457.00

	
376,259.23

	
March 3, 2018                                                    

	
24,956,460.33

	
6,449,212.18

	
760,467.51

	
376,267.38

	
September 3, 2018                                                    

	
24,195,981.77

	
6,072,936.27

	
760,478.56

	
376,275.91

	
March 3, 2019                                                    

	
23,435,491.60

	
5,696,651.38

	
760,490.17

	
376,284.89

	
September 3, 2019                                                    

	
22,674,989.21

	
5,320,357.04

	
760,502.39

	
376,294.34

	
March 3, 2020                                                    

	
21,914,473.95

	
4,944,052.75

	
760,515.26

	
376,304.29

	
September 3, 2020                                                    

	
21,153,945.14

	
4,567,737.97

	
760,528.81

	
376,314.78

	
March 3, 2021                                                    

	
20,393,402.02

	
4,191,412.14

	
760,543.12

	
376,325.83

	
September 3, 2021                                                    

	
19,632,843.80

	
3,815,074.62

	
760,558.22

	
376,337.52

	
March 3, 2022                                                    

	
18,872,269.62

	
3,438,724.76

	
760,574.18

	
376,349.86

	
September 3, 2022                                                    

	
18,111,678.54

	
0.00

	
760,591.08

	
3,438,724.76

	
March 3, 2023                                                    

	
17,351,069.57

	
0.00

	
760,608.97

	
0.00

	
September 3, 2023                                                    

	
16,590,441.62

	
0.00

	
760,627.95

	
0.00

	
March 3, 2024                                                    

	
15,829,793.52

	
0.00

	
760,648.10

	
0.00

	
September 3, 2024                                                    

	
15,069,124.01

	
0.00

	
760,669.51

	
0.00

	
March 3, 2025                                                    

	
14,308,431.70

	
0.00

	
760,692.31

	
0.00

	
September 3, 2025                                                    

	
13,547,715.09

	
0.00

	
760,716.61

	
0.00

	
March 3, 2026                                                    

	
12,786,972.56

	
0.00

	
760,742.53

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,786,972.56

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

6

	  	

N62849

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,793,000.00

	
$8,340,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,793,000.00

	
8,340,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,793,000.00

	
8,340,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
28,056,364.23

	
7,970,739.02

	
736,635.77

	
369,260.98

	
September 3, 2016                                                    

	
27,294,348.95

	
7,593,714.23

	
762,015.28

	
377,024.79

	
March 3, 2017                                                    

	
26,532,324.08

	
7,216,682.04

	
762,024.87

	
377,032.19

	
September 3, 2017                                                    

	
25,770,289.18

	
6,839,642.08

	
762,034.90

	
377,039.96

	
March 3, 2018                                                    

	
25,008,243.73

	
6,462,593.98

	
762,045.45

	
377,048.10

	
September 3, 2018                                                    

	
24,246,187.21

	
6,085,537.31

	
762,056.52

	
377,056.67

	
March 3, 2019                                                    

	
23,484,119.06

	
5,708,471.64

	
762,068.15

	
377,065.67

	
September 3, 2019                                                    

	
22,722,038.67

	
5,331,396.51

	
762,080.39

	
377,075.13

	
March 3, 2020                                                    

	
21,959,945.38

	
4,954,311.41

	
762,093.29

	
377,085.10

	
September 3, 2020                                                    

	
21,197,838.51

	
4,577,215.80

	
762,106.87

	
377,095.61

	
March 3, 2021                                                    

	
20,435,717.31

	
4,200,109.11

	
762,121.20

	
377,106.69

	
September 3, 2021                                                    

	
19,673,580.97

	
3,822,990.71

	
762,136.34

	
377,118.40

	
March 3, 2022                                                    

	
18,911,428.63

	
3,445,859.94

	
762,152.34

	
377,130.77

	
September 3, 2022                                                    

	
18,149,259.36

	
0.00

	
762,169.27

	
3,445,859.94

	
March 3, 2023                                                    

	
17,387,072.16

	
0.00

	
762,187.20

	
0.00

	
September 3, 2023                                                    

	
16,624,865.95

	
0.00

	
762,206.21

	
0.00

	
March 3, 2024                                                    

	
15,862,639.55

	
0.00

	
762,226.40

	
0.00

	
September 3, 2024                                                    

	
15,100,391.68

	
0.00

	
762,247.87

	
0.00

	
March 3, 2025                                                    

	
14,338,120.97

	
0.00

	
762,270.71

	
0.00

	
September 3, 2025                                                    

	
13,575,825.92

	
0.00

	
762,295.05

	
0.00

	
March 3, 2026                                                    

	
12,813,504.88

	
0.00

	
762,321.04

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,813,504.88

	
0.00

	  	

N68850

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$28,793,000.00

	
$8,340,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
28,793,000.00

	
8,340,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
28,793,000.00

	
8,340,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
28,056,364.23

	
7,970,739.02

	
736,635.77

	
369,260.98

	
September 3, 2016                                                    

	
27,294,348.95

	
7,593,714.23

	
762,015.28

	
377,024.79

	
March 3, 2017                                                    

	
26,532,324.08

	
7,216,682.04

	
762,024.87

	
377,032.19

	
September 3, 2017                                                    

	
25,770,289.18

	
6,839,642.08

	
762,034.90

	
377,039.96

	
March 3, 2018                                                    

	
25,008,243.73

	
6,462,593.98

	
762,045.45

	
377,048.10

	
September 3, 2018                                                    

	
24,246,187.21

	
6,085,537.31

	
762,056.52

	
377,056.67

	
March 3, 2019                                                    

	
23,484,119.06

	
5,708,471.64

	
762,068.15

	
377,065.67

	
September 3, 2019                                                    

	
22,722,038.67

	
5,331,396.51

	
762,080.39

	
377,075.13

	
March 3, 2020                                                    

	
21,959,945.38

	
4,954,311.41

	
762,093.29

	
377,085.10

	
September 3, 2020                                                    

	
21,197,838.51

	
4,577,215.80

	
762,106.87

	
377,095.61

	
March 3, 2021                                                    

	
20,435,717.31

	
4,200,109.11

	
762,121.20

	
377,106.69

	
September 3, 2021                                                    

	
19,673,580.97

	
3,822,990.71

	
762,136.34

	
377,118.40

	
March 3, 2022                                                    

	
18,911,428.63

	
3,445,859.94

	
762,152.34

	
377,130.77

	
September 3, 2022                                                    

	
18,149,259.36

	
0.00

	
762,169.27

	
3,445,859.94

	
March 3, 2023                                                    

	
17,387,072.16

	
0.00

	
762,187.20

	
0.00

	
September 3, 2023                                                    

	
16,624,865.95

	
0.00

	
762,206.21

	
0.00

	
March 3, 2024                                                    

	
15,862,639.55

	
0.00

	
762,226.40

	
0.00

	
September 3, 2024                                                    

	
15,100,391.68

	
0.00

	
762,247.87

	
0.00

	
March 3, 2025                                                    

	
14,338,120.97

	
0.00

	
762,270.71

	
0.00

	
September 3, 2025                                                    

	
13,575,825.92

	
0.00

	
762,295.05

	
0.00

	
March 3, 2026                                                    

	
12,813,504.88

	
0.00

	
762,321.04

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
12,813,504.88

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

7

Boeing 787-9

 

	  	

N26952

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$78,624,000.00

	
$22,775,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
78,624,000.00

	
22,775,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
78,624,000.00

	
22,775,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
76,613,221.75

	
21,765,614.06

	
2,010,778.25

	
1,009,385.94

	
September 3, 2016                                                    

	
74,532,394.54

	
20,736,076.40

	
2,080,827.21

	
1,029,537.66

	
March 3, 2017                                                    

	
72,451,541.18

	
19,706,518.52

	
2,080,853.36

	
1,029,557.88

	
September 3, 2017                                                    

	
70,370,660.39

	
18,676,939.44

	
2,080,880.79

	
1,029,579.08

	
March 3, 2018                                                    

	
68,289,750.82

	
17,647,338.10

	
2,080,909.57

	
1,029,601.34

	
September 3, 2018                                                    

	
66,208,811.03

	
16,617,713.38

	
2,080,939.79

	
1,029,624.72

	
March 3, 2019                                                    

	
64,127,839.46

	
15,588,064.09

	
2,080,971.57

	
1,029,649.29

	
September 3, 2019                                                    

	
62,046,834.46

	
14,558,388.95

	
2,081,005.00

	
1,029,675.14

	
March 3, 2020                                                    

	
59,965,794.26

	
13,528,686.59

	
2,081,040.20

	
1,029,702.36

	
September 3, 2020                                                    

	
57,884,716.96

	
12,498,955.54

	
2,081,077.30

	
1,029,731.05

	
March 3, 2021                                                    

	
55,803,600.52

	
11,469,194.22

	
2,081,116.44

	
1,029,761.32

	
September 3, 2021                                                    

	
53,722,442.75

	
10,439,400.94

	
2,081,157.77

	
1,029,793.28

	
March 3, 2022                                                    

	
51,641,241.29

	
9,409,573.87

	
2,081,201.46

	
1,029,827.07

	
September 3, 2022                                                    

	
49,559,993.61

	
0.00

	
2,081,247.68

	
9,409,573.87

	
March 3, 2023                                                    

	
47,478,696.97

	
0.00

	
2,081,296.64

	
0.00

	
September 3, 2023                                                    

	
45,397,348.39

	
0.00

	
2,081,348.58

	
0.00

	
March 3, 2024                                                    

	
43,315,944.69

	
0.00

	
2,081,403.70

	
0.00

	
September 3, 2024                                                    

	
41,234,482.38

	
0.00

	
2,081,462.31

	
0.00

	
March 3, 2025                                                    

	
39,152,957.69

	
0.00

	
2,081,524.69

	
0.00

	
September 3, 2025                                                    

	
37,071,366.52

	
0.00

	
2,081,591.17

	
0.00

	
March 3, 2026                                                    

	
34,989,704.40

	
0.00

	
2,081,662.12

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
34,989,704.40

	
0.00

	  	

N35953

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$78,754,000.00

	
$22,813,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
78,754,000.00

	
22,813,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
78,754,000.00

	
22,813,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
76,739,974.48

	
21,801,624.17

	
2,014,025.52

	
1,011,375.83

	
September 3, 2016                                                    

	
74,655,704.64

	
20,770,383.20

	
2,084,269.84

	
1,031,240.97

	
March 3, 2017                                                    

	
72,571,408.61

	
19,739,121.97

	
2,084,296.03

	
1,031,261.23

	
September 3, 2017                                                    

	
70,487,085.11

	
18,707,839.49

	
2,084,323.50

	
1,031,282.48

	
March 3, 2018                                                    

	
68,402,732.79

	
17,676,534.73

	
2,084,352.32

	
1,031,304.76

	
September 3, 2018                                                    

	
66,318,350.18

	
16,645,206.55

	
2,084,382.61

	
1,031,328.18

	
March 3, 2019                                                    

	
64,233,935.75

	
15,613,853.76

	
2,084,414.43

	
1,031,352.79

	
September 3, 2019                                                    

	
62,149,487.83

	
14,582,475.07

	
2,084,447.92

	
1,031,378.69

	
March 3, 2020                                                    

	
60,065,004.66

	
13,551,069.12

	
2,084,483.17

	
1,031,405.95

	
September 3, 2020                                                    

	
57,980,484.32

	
12,519,634.43

	
2,084,520.34

	
1,031,434.69

	
March 3, 2021                                                    

	
55,895,924.77

	
11,488,169.42

	
2,084,559.55

	
1,031,465.01

	
September 3, 2021                                                    

	
53,811,323.83

	
10,456,672.40

	
2,084,600.94

	
1,031,497.02

	
March 3, 2022                                                    

	
51,726,679.13

	
9,425,141.54

	
2,084,644.70

	
1,031,530.86

	
September 3, 2022                                                    

	
49,641,988.13

	
0.00

	
2,084,691.00

	
9,425,141.54

	
March 3, 2023                                                    

	
47,557,248.09

	
0.00

	
2,084,740.04

	
0.00

	
September 3, 2023                                                    

	
45,472,456.03

	
0.00

	
2,084,792.06

	
0.00

	
March 3, 2024                                                    

	
43,387,608.74

	
0.00

	
2,084,847.29

	
0.00

	
September 3, 2024                                                    

	
41,302,702.76

	
0.00

	
2,084,905.98

	
0.00

	
March 3, 2025                                                    

	
39,217,734.29

	
0.00

	
2,084,968.47

	
0.00

	
September 3, 2025                                                    

	
37,132,699.23

	
0.00

	
2,085,035.06

	
0.00

	
March 3, 2026                                                    

	
35,047,593.11

	
0.00

	
2,085,106.12

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
35,047,593.11

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

8

	  	

N13954

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$78,754,000.00

	
$22,813,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
78,754,000.00

	
22,813,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
78,754,000.00

	
22,813,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
76,739,974.48

	
21,801,624.17

	
2,014,025.52

	
1,011,375.83

	
September 3, 2016                                                    

	
74,655,704.64

	
20,770,383.20

	
2,084,269.84

	
1,031,240.97

	
March 3, 2017                                                    

	
72,571,408.61

	
19,739,121.97

	
2,084,296.03

	
1,031,261.23

	
September 3, 2017                                                    

	
70,487,085.11

	
18,707,839.49

	
2,084,323.50

	
1,031,282.48

	
March 3, 2018                                                    

	
68,402,732.79

	
17,676,534.73

	
2,084,352.32

	
1,031,304.76

	
September 3, 2018                                                    

	
66,318,350.18

	
16,645,206.55

	
2,084,382.61

	
1,031,328.18

	
March 3, 2019                                                    

	
64,233,935.75

	
15,613,853.76

	
2,084,414.43

	
1,031,352.79

	
September 3, 2019                                                    

	
62,149,487.83

	
14,582,475.07

	
2,084,447.92

	
1,031,378.69

	
March 3, 2020                                                    

	
60,065,004.66

	
13,551,069.12

	
2,084,483.17

	
1,031,405.95

	
September 3, 2020                                                    

	
57,980,484.32

	
12,519,634.43

	
2,084,520.34

	
1,031,434.69

	
March 3, 2021                                                    

	
55,895,924.77

	
11,488,169.42

	
2,084,559.55

	
1,031,465.01

	
September 3, 2021                                                    

	
53,811,323.83

	
10,456,672.40

	
2,084,600.94

	
1,031,497.02

	
March 3, 2022                                                    

	
51,726,679.13

	
9,425,141.54

	
2,084,644.70

	
1,031,530.86

	
September 3, 2022                                                    

	
49,641,988.13

	
0.00

	
2,084,691.00

	
9,425,141.54

	
March 3, 2023                                                    

	
47,557,248.09

	
0.00

	
2,084,740.04

	
0.00

	
September 3, 2023                                                    

	
45,472,456.03

	
0.00

	
2,084,792.06

	
0.00

	
March 3, 2024                                                    

	
43,387,608.74

	
0.00

	
2,084,847.29

	
0.00

	
September 3, 2024                                                    

	
41,302,702.76

	
0.00

	
2,084,905.98

	
0.00

	
March 3, 2025                                                    

	
39,217,734.29

	
0.00

	
2,084,968.47

	
0.00

	
September 3, 2025                                                    

	
37,132,699.23

	
0.00

	
2,085,035.06

	
0.00

	
March 3, 2026                                                    

	
35,047,593.11

	
0.00

	
2,085,106.12

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
35,047,593.11

	
0.00

	  	

N38955

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$79,022,000.00

	
$22,890,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
79,022,000.00

	
22,890,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
79,022,000.00

	
22,890,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
77,000,521.76

	
21,875,644.97

	
2,021,478.24

	
1,014,355.03

	
September 3, 2016                                                    

	
74,909,175.41

	
20,840,902.72

	
2,091,346.35

	
1,034,742.25

	
March 3, 2017                                                    

	
72,817,802.79

	
19,806,140.16

	
2,091,372.62

	
1,034,762.56

	
September 3, 2017                                                    

	
70,726,402.60

	
18,771,356.28

	
2,091,400.19

	
1,034,783.88

	
March 3, 2018                                                    

	
68,634,973.49

	
17,736,550.03

	
2,091,429.11

	
1,034,806.25

	
September 3, 2018                                                    

	
66,543,514.00

	
16,701,720.29

	
2,091,459.49

	
1,034,829.74

	
March 3, 2019                                                    

	
64,452,022.57

	
15,666,865.86

	
2,091,491.43

	
1,034,854.43

	
September 3, 2019                                                    

	
62,360,497.54

	
14,631,985.44

	
2,091,525.03

	
1,034,880.42

	
March 3, 2020                                                    

	
60,268,937.14

	
13,597,077.66

	
2,091,560.40

	
1,034,907.78

	
September 3, 2020                                                    

	
58,177,339.44

	
12,562,141.05

	
2,091,597.70

	
1,034,936.61

	
March 3, 2021                                                    

	
56,085,702.41

	
11,527,174.01

	
2,091,637.03

	
1,034,967.04

	
September 3, 2021                                                    

	
53,994,023.84

	
10,492,174.86

	
2,091,678.57

	
1,034,999.15

	
March 3, 2022                                                    

	
51,902,301.36

	
9,457,141.75

	
2,091,722.48

	
1,035,033.11

	
September 3, 2022                                                    

	
49,810,532.43

	
0.00

	
2,091,768.93

	
9,457,141.75

	
March 3, 2023                                                    

	
47,718,714.28

	
0.00

	
2,091,818.15

	
0.00

	
September 3, 2023                                                    

	
45,626,843.94

	
0.00

	
2,091,870.34

	
0.00

	
March 3, 2024                                                    

	
43,534,918.19

	
0.00

	
2,091,925.75

	
0.00

	
September 3, 2024                                                    

	
41,442,933.54

	
0.00

	
2,091,984.65

	
0.00

	
March 3, 2025                                                    

	
39,350,886.20

	
0.00

	
2,092,047.34

	
0.00

	
September 3, 2025                                                    

	
37,258,772.03

	
0.00

	
2,092,114.17

	
0.00

	
March 3, 2026                                                    

	
35,166,586.56

	
0.00

	
2,092,185.47

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
35,166,586.56

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

9

Embraer ERJ 175 LR

 

	  	

N89313

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,956,000.00

	
$4,622,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,306,000.00

	
4,246,471.20

	
650,000.00

	
375,528.80

	
September 3, 2016                                                    

	
14,652,467.95

	
4,010,003.56

	
653,532.05

	
236,467.64

	
March 3, 2017                                                    

	
14,002,106.33

	
3,775,987.67

	
650,361.62

	
234,015.89

	
September 3, 2017                                                    

	
13,355,069.56

	
3,544,542.91

	
647,036.77

	
231,444.76

	
March 3, 2018                                                    

	
12,831,109.12

	
3,315,796.56

	
523,960.44

	
228,746.35

	
September 3, 2018                                                    

	
12,310,813.69

	
3,089,884.42

	
520,295.43

	
225,912.14

	
March 3, 2019                                                    

	
11,794,370.89

	
2,866,951.56

	
516,442.80

	
222,932.86

	
September 3, 2019                                                    

	
11,281,981.34

	
2,647,153.14

	
512,389.55

	
219,798.42

	
March 3, 2020                                                    

	
10,773,859.86

	
2,430,655.26

	
508,121.48

	
216,497.88

	
September 3, 2020                                                    

	
10,270,236.67

	
2,217,635.98

	
503,623.19

	
213,019.28

	
March 3, 2021                                                    

	
9,771,358.92

	
2,008,286.42

	
498,877.75

	
209,349.56

	
September 3, 2021                                                    

	
9,277,492.15

	
1,802,811.93

	
493,866.77

	
205,474.49

	
March 3, 2022                                                    

	
8,788,922.14

	
1,601,433.47

	
488,570.01

	
201,378.46

	
September 3, 2022                                                    

	
8,305,956.77

	
0.00

	
482,965.37

	
1,601,433.47

	
March 3, 2023                                                    

	
7,828,928.27

	
0.00

	
477,028.50

	
0.00

	
September 3, 2023                                                    

	
7,358,195.68

	
0.00

	
470,732.59

	
0.00

	
March 3, 2024                                                    

	
6,894,147.55

	
0.00

	
464,048.13

	
0.00

	
September 3, 2024                                                    

	
6,437,205.12

	
0.00

	
456,942.43

	
0.00

	
March 3, 2025                                                    

	
5,987,825.73

	
0.00

	
449,379.39

	
0.00

	
September 3, 2025                                                    

	
5,546,506.86

	
0.00

	
441,318.87

	
0.00

	
March 3, 2026                                                    

	
5,113,790.61

	
0.00

	
432,716.25

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,113,790.61

	
0.00

	  	

N82314

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,956,000.00

	
$4,622,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,306,000.00

	
4,246,471.20

	
650,000.00

	
375,528.80

	
September 3, 2016                                                    

	
14,652,467.95

	
4,010,003.56

	
653,532.05

	
236,467.64

	
March 3, 2017                                                    

	
14,002,106.33

	
3,775,987.67

	
650,361.62

	
234,015.89

	
September 3, 2017                                                    

	
13,355,069.56

	
3,544,542.91

	
647,036.77

	
231,444.76

	
March 3, 2018                                                    

	
12,831,109.12

	
3,315,796.56

	
523,960.44

	
228,746.35

	
September 3, 2018                                                    

	
12,310,813.69

	
3,089,884.42

	
520,295.43

	
225,912.14

	
March 3, 2019                                                    

	
11,794,370.89

	
2,866,951.56

	
516,442.80

	
222,932.86

	
September 3, 2019                                                    

	
11,281,981.34

	
2,647,153.14

	
512,389.55

	
219,798.42

	
March 3, 2020                                                    

	
10,773,859.86

	
2,430,655.26

	
508,121.48

	
216,497.88

	
September 3, 2020                                                    

	
10,270,236.67

	
2,217,635.98

	
503,623.19

	
213,019.28

	
March 3, 2021                                                    

	
9,771,358.92

	
2,008,286.42

	
498,877.75

	
209,349.56

	
September 3, 2021                                                    

	
9,277,492.15

	
1,802,811.93

	
493,866.77

	
205,474.49

	
March 3, 2022                                                    

	
8,788,922.14

	
1,601,433.47

	
488,570.01

	
201,378.46

	
September 3, 2022                                                    

	
8,305,956.77

	
0.00

	
482,965.37

	
1,601,433.47

	
March 3, 2023                                                    

	
7,828,928.27

	
0.00

	
477,028.50

	
0.00

	
September 3, 2023                                                    

	
7,358,195.68

	
0.00

	
470,732.59

	
0.00

	
March 3, 2024                                                    

	
6,894,147.55

	
0.00

	
464,048.13

	
0.00

	
September 3, 2024                                                    

	
6,437,205.12

	
0.00

	
456,942.43

	
0.00

	
March 3, 2025                                                    

	
5,987,825.73

	
0.00

	
449,379.39

	
0.00

	
September 3, 2025                                                    

	
5,546,506.86

	
0.00

	
441,318.87

	
0.00

	
March 3, 2026                                                    

	
5,113,790.61

	
0.00

	
432,716.25

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,113,790.61

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

10

	  	

N89315

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,956,000.00

	
$4,622,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,956,000.00

	
4,622,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,306,000.00

	
4,246,471.20

	
650,000.00

	
375,528.80

	
September 3, 2016                                                    

	
14,652,467.95

	
4,010,003.56

	
653,532.05

	
236,467.64

	
March 3, 2017                                                    

	
14,002,106.33

	
3,775,987.67

	
650,361.62

	
234,015.89

	
September 3, 2017                                                    

	
13,355,069.56

	
3,544,542.91

	
647,036.77

	
231,444.76

	
March 3, 2018                                                    

	
12,831,109.12

	
3,315,796.56

	
523,960.44

	
228,746.35

	
September 3, 2018                                                    

	
12,310,813.69

	
3,089,884.42

	
520,295.43

	
225,912.14

	
March 3, 2019                                                    

	
11,794,370.89

	
2,866,951.56

	
516,442.80

	
222,932.86

	
September 3, 2019                                                    

	
11,281,981.34

	
2,647,153.14

	
512,389.55

	
219,798.42

	
March 3, 2020                                                    

	
10,773,859.86

	
2,430,655.26

	
508,121.48

	
216,497.88

	
September 3, 2020                                                    

	
10,270,236.67

	
2,217,635.98

	
503,623.19

	
213,019.28

	
March 3, 2021                                                    

	
9,771,358.92

	
2,008,286.42

	
498,877.75

	
209,349.56

	
September 3, 2021                                                    

	
9,277,492.15

	
1,802,811.93

	
493,866.77

	
205,474.49

	
March 3, 2022                                                    

	
8,788,922.14

	
1,601,433.47

	
488,570.01

	
201,378.46

	
September 3, 2022                                                    

	
8,305,956.77

	
0.00

	
482,965.37

	
1,601,433.47

	
March 3, 2023                                                    

	
7,828,928.27

	
0.00

	
477,028.50

	
0.00

	
September 3, 2023                                                    

	
7,358,195.68

	
0.00

	
470,732.59

	
0.00

	
March 3, 2024                                                    

	
6,894,147.55

	
0.00

	
464,048.13

	
0.00

	
September 3, 2024                                                    

	
6,437,205.12

	
0.00

	
456,942.43

	
0.00

	
March 3, 2025                                                    

	
5,987,825.73

	
0.00

	
449,379.39

	
0.00

	
September 3, 2025                                                    

	
5,546,506.86

	
0.00

	
441,318.87

	
0.00

	
March 3, 2026                                                    

	
5,113,790.61

	
0.00

	
432,716.25

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,113,790.61

	
0.00

	  	

N86316

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,984,000.00

	
$4,630,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,333,894.92

	
4,356,319.07

	
650,105.08

	
273,680.93

	
September 3, 2016                                                    

	
14,794,751.09

	
4,116,130.86

	
539,143.83

	
240,188.21

	
March 3, 2017                                                    

	
14,258,646.00

	
3,878,292.53

	
536,105.09

	
237,838.33

	
September 3, 2017                                                    

	
13,725,727.60

	
3,642,918.53

	
532,918.40

	
235,374.00

	
March 3, 2018                                                    

	
13,196,153.64

	
3,410,130.83

	
529,573.96

	
232,787.70

	
September 3, 2018                                                    

	
12,670,092.43

	
3,180,059.59

	
526,061.21

	
230,071.24

	
March 3, 2019                                                    

	
12,147,723.78

	
2,952,843.85

	
522,368.65

	
227,215.74

	
September 3, 2019                                                    

	
11,629,240.00

	
2,728,632.34

	
518,483.78

	
224,211.51

	
March 3, 2020                                                    

	
11,114,846.95

	
2,507,584.25

	
514,393.05

	
221,048.09

	
September 3, 2020                                                    

	
10,604,765.33

	
2,289,870.23

	
510,081.62

	
217,714.02

	
March 3, 2021                                                    

	
10,099,232.00

	
2,075,673.47

	
505,533.33

	
214,196.76

	
September 3, 2021                                                    

	
9,598,501.46

	
1,865,190.78

	
500,730.54

	
210,482.69

	
March 3, 2022                                                    

	
9,102,847.62

	
1,658,633.98

	
495,653.84

	
206,556.80

	
September 3, 2022                                                    

	
8,612,565.57

	
0.00

	
490,282.05

	
1,658,633.98

	
March 3, 2023                                                    

	
8,127,973.76

	
0.00

	
484,591.81

	
0.00

	
September 3, 2023                                                    

	
7,649,416.29

	
0.00

	
478,557.47

	
0.00

	
March 3, 2024                                                    

	
7,177,265.57

	
0.00

	
472,150.72

	
0.00

	
September 3, 2024                                                    

	
6,711,925.33

	
0.00

	
465,340.24

	
0.00

	
March 3, 2025                                                    

	
6,253,833.93

	
0.00

	
458,091.40

	
0.00

	
September 3, 2025                                                    

	
5,803,468.18

	
0.00

	
450,365.75

	
0.00

	
March 3, 2026                                                    

	
5,361,347.64

	
0.00

	
442,120.54

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,361,347.64

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

11

	  	

N89317

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,984,000.00

	
$4,630,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,333,894.92

	
4,356,319.07

	
650,105.08

	
273,680.93

	
September 3, 2016                                                    

	
14,794,751.09

	
4,116,130.86

	
539,143.83

	
240,188.21

	
March 3, 2017                                                    

	
14,258,646.00

	
3,878,292.53

	
536,105.09

	
237,838.33

	
September 3, 2017                                                    

	
13,725,727.60

	
3,642,918.53

	
532,918.40

	
235,374.00

	
March 3, 2018                                                    

	
13,196,153.64

	
3,410,130.83

	
529,573.96

	
232,787.70

	
September 3, 2018                                                    

	
12,670,092.43

	
3,180,059.59

	
526,061.21

	
230,071.24

	
March 3, 2019                                                    

	
12,147,723.78

	
2,952,843.85

	
522,368.65

	
227,215.74

	
September 3, 2019                                                    

	
11,629,240.00

	
2,728,632.34

	
518,483.78

	
224,211.51

	
March 3, 2020                                                    

	
11,114,846.95

	
2,507,584.25

	
514,393.05

	
221,048.09

	
September 3, 2020                                                    

	
10,604,765.33

	
2,289,870.23

	
510,081.62

	
217,714.02

	
March 3, 2021                                                    

	
10,099,232.00

	
2,075,673.47

	
505,533.33

	
214,196.76

	
September 3, 2021                                                    

	
9,598,501.46

	
1,865,190.78

	
500,730.54

	
210,482.69

	
March 3, 2022                                                    

	
9,102,847.62

	
1,658,633.98

	
495,653.84

	
206,556.80

	
September 3, 2022                                                    

	
8,612,565.57

	
0.00

	
490,282.05

	
1,658,633.98

	
March 3, 2023                                                    

	
8,127,973.76

	
0.00

	
484,591.81

	
0.00

	
September 3, 2023                                                    

	
7,649,416.29

	
0.00

	
478,557.47

	
0.00

	
March 3, 2024                                                    

	
7,177,265.57

	
0.00

	
472,150.72

	
0.00

	
September 3, 2024                                                    

	
6,711,925.33

	
0.00

	
465,340.24

	
0.00

	
March 3, 2025                                                    

	
6,253,833.93

	
0.00

	
458,091.40

	
0.00

	
September 3, 2025                                                    

	
5,803,468.18

	
0.00

	
450,365.75

	
0.00

	
March 3, 2026                                                    

	
5,361,347.64

	
0.00

	
442,120.54

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,361,347.64

	
0.00

	  	

N87318

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,984,000.00

	
$4,630,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,333,894.92

	
4,356,319.07

	
650,105.08

	
273,680.93

	
September 3, 2016                                                    

	
14,794,751.09

	
4,116,130.86

	
539,143.83

	
240,188.21

	
March 3, 2017                                                    

	
14,258,646.00

	
3,878,292.53

	
536,105.09

	
237,838.33

	
September 3, 2017                                                    

	
13,725,727.60

	
3,642,918.53

	
532,918.40

	
235,374.00

	
March 3, 2018                                                    

	
13,196,153.64

	
3,410,130.83

	
529,573.96

	
232,787.70

	
September 3, 2018                                                    

	
12,670,092.43

	
3,180,059.59

	
526,061.21

	
230,071.24

	
March 3, 2019                                                    

	
12,147,723.78

	
2,952,843.85

	
522,368.65

	
227,215.74

	
September 3, 2019                                                    

	
11,629,240.00

	
2,728,632.34

	
518,483.78

	
224,211.51

	
March 3, 2020                                                    

	
11,114,846.95

	
2,507,584.25

	
514,393.05

	
221,048.09

	
September 3, 2020                                                    

	
10,604,765.33

	
2,289,870.23

	
510,081.62

	
217,714.02

	
March 3, 2021                                                    

	
10,099,232.00

	
2,075,673.47

	
505,533.33

	
214,196.76

	
September 3, 2021                                                    

	
9,598,501.46

	
1,865,190.78

	
500,730.54

	
210,482.69

	
March 3, 2022                                                    

	
9,102,847.62

	
1,658,633.98

	
495,653.84

	
206,556.80

	
September 3, 2022                                                    

	
8,612,565.57

	
0.00

	
490,282.05

	
1,658,633.98

	
March 3, 2023                                                    

	
8,127,973.76

	
0.00

	
484,591.81

	
0.00

	
September 3, 2023                                                    

	
7,649,416.29

	
0.00

	
478,557.47

	
0.00

	
March 3, 2024                                                    

	
7,177,265.57

	
0.00

	
472,150.72

	
0.00

	
September 3, 2024                                                    

	
6,711,925.33

	
0.00

	
465,340.24

	
0.00

	
March 3, 2025                                                    

	
6,253,833.93

	
0.00

	
458,091.40

	
0.00

	
September 3, 2025                                                    

	
5,803,468.18

	
0.00

	
450,365.75

	
0.00

	
March 3, 2026                                                    

	
5,361,347.64

	
0.00

	
442,120.54

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,361,347.64

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

12

	  	

N87319

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$15,984,000.00

	
$4,630,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
15,984,000.00

	
4,630,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,333,894.92

	
4,356,319.07

	
650,105.08

	
273,680.93

	
September 3, 2016                                                    

	
14,794,751.09

	
4,116,130.86

	
539,143.83

	
240,188.21

	
March 3, 2017                                                    

	
14,258,646.00

	
3,878,292.53

	
536,105.09

	
237,838.33

	
September 3, 2017                                                    

	
13,725,727.60

	
3,642,918.53

	
532,918.40

	
235,374.00

	
March 3, 2018                                                    

	
13,196,153.64

	
3,410,130.83

	
529,573.96

	
232,787.70

	
September 3, 2018                                                    

	
12,670,092.43

	
3,180,059.59

	
526,061.21

	
230,071.24

	
March 3, 2019                                                    

	
12,147,723.78

	
2,952,843.85

	
522,368.65

	
227,215.74

	
September 3, 2019                                                    

	
11,629,240.00

	
2,728,632.34

	
518,483.78

	
224,211.51

	
March 3, 2020                                                    

	
11,114,846.95

	
2,507,584.25

	
514,393.05

	
221,048.09

	
September 3, 2020                                                    

	
10,604,765.33

	
2,289,870.23

	
510,081.62

	
217,714.02

	
March 3, 2021                                                    

	
10,099,232.00

	
2,075,673.47

	
505,533.33

	
214,196.76

	
September 3, 2021                                                    

	
9,598,501.46

	
1,865,190.78

	
500,730.54

	
210,482.69

	
March 3, 2022                                                    

	
9,102,847.62

	
1,658,633.98

	
495,653.84

	
206,556.80

	
September 3, 2022                                                    

	
8,612,565.57

	
0.00

	
490,282.05

	
1,658,633.98

	
March 3, 2023                                                    

	
8,127,973.76

	
0.00

	
484,591.81

	
0.00

	
September 3, 2023                                                    

	
7,649,416.29

	
0.00

	
478,557.47

	
0.00

	
March 3, 2024                                                    

	
7,177,265.57

	
0.00

	
472,150.72

	
0.00

	
September 3, 2024                                                    

	
6,711,925.33

	
0.00

	
465,340.24

	
0.00

	
March 3, 2025                                                    

	
6,253,833.93

	
0.00

	
458,091.40

	
0.00

	
September 3, 2025                                                    

	
5,803,468.18

	
0.00

	
450,365.75

	
0.00

	
March 3, 2026                                                    

	
5,361,347.64

	
0.00

	
442,120.54

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,361,347.64

	
0.00

	  	

N85320

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$16,016,000.00

	
$4,639,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
16,016,000.00

	
4,639,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
16,016,000.00

	
4,639,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,365,093.08

	
4,365,182.39

	
650,906.92

	
273,817.61

	
September 3, 2016                                                    

	
14,824,852.32

	
4,124,505.49

	
540,240.76

	
240,676.90

	
March 3, 2017                                                    

	
14,287,656.47

	
3,886,183.27

	
537,195.85

	
238,322.22

	
September 3, 2017                                                    

	
13,753,653.80

	
3,650,330.37

	
534,002.67

	
235,852.90

	
March 3, 2018                                                    

	
13,223,002.37

	
3,417,069.04

	
530,651.43

	
233,261.33

	
September 3, 2018                                                    

	
12,695,870.85

	
3,186,529.70

	
527,131.52

	
230,539.34

	
March 3, 2019                                                    

	
12,172,439.40

	
2,958,851.68

	
523,431.45

	
227,678.02

	
September 3, 2019                                                    

	
11,652,900.72

	
2,734,183.98

	
519,538.68

	
224,667.70

	
March 3, 2020                                                    

	
11,137,461.09

	
2,512,686.14

	
515,439.63

	
221,497.84

	
September 3, 2020                                                    

	
10,626,341.66

	
2,294,529.17

	
511,119.43

	
218,156.97

	
March 3, 2021                                                    

	
10,119,779.77

	
2,079,896.61

	
506,561.89

	
214,632.56

	
September 3, 2021                                                    

	
9,618,030.46

	
1,868,985.68

	
501,749.31

	
210,910.93

	
March 3, 2022                                                    

	
9,121,368.17

	
1,662,008.61

	
496,662.29

	
206,977.07

	
September 3, 2022                                                    

	
8,630,088.60

	
0.00

	
491,279.57

	
1,662,008.61

	
March 3, 2023                                                    

	
8,144,510.84

	
0.00

	
485,577.76

	
0.00

	
September 3, 2023                                                    

	
7,664,979.69

	
0.00

	
479,531.15

	
0.00

	
March 3, 2024                                                    

	
7,191,868.34

	
0.00

	
473,111.35

	
0.00

	
September 3, 2024                                                    

	
6,725,581.33

	
0.00

	
466,287.01

	
0.00

	
March 3, 2025                                                    

	
6,266,557.90

	
0.00

	
459,023.43

	
0.00

	
September 3, 2025                                                    

	
5,815,275.85

	
0.00

	
451,282.05

	
0.00

	
March 3, 2026                                                    

	
5,372,255.78

	
0.00

	
443,020.07

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,372,255.78

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

13

	  	

N89321

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$16,032,000.00

	
$4,644,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
16,032,000.00

	
4,644,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
16,032,000.00

	
4,644,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,380,692.17

	
4,369,614.04

	
651,307.83

	
274,385.96

	
September 3, 2016                                                    

	
14,839,902.93

	
4,128,692.81

	
540,789.24

	
240,921.23

	
March 3, 2017                                                    

	
14,302,161.70

	
3,890,128.63

	
537,741.23

	
238,564.18

	
September 3, 2017                                                    

	
13,767,616.90

	
3,654,036.29

	
534,544.80

	
236,092.34

	
March 3, 2018                                                    

	
13,236,426.74

	
3,420,538.15

	
531,190.16

	
233,498.14

	
September 3, 2018                                                    

	
12,708,760.05

	
3,189,764.76

	
527,666.69

	
230,773.39

	
March 3, 2019                                                    

	
12,184,797.20

	
2,961,855.59

	
523,962.85

	
227,909.17

	
September 3, 2019                                                    

	
11,664,731.07

	
2,736,959.80

	
520,066.13

	
224,895.79

	
March 3, 2020                                                    

	
11,148,768.15

	
2,515,237.10

	
515,962.92

	
221,722.70

	
September 3, 2020                                                    

	
10,637,129.82

	
2,296,858.65

	
511,638.33

	
218,378.45

	
March 3, 2021                                                    

	
10,130,053.66

	
2,082,008.18

	
507,076.16

	
214,850.47

	
September 3, 2021                                                    

	
9,627,794.96

	
1,870,883.13

	
502,258.70

	
211,125.05

	
March 3, 2022                                                    

	
9,130,628.44

	
1,663,695.93

	
497,166.52

	
207,187.20

	
September 3, 2022                                                    

	
8,638,850.11

	
0.00

	
491,778.33

	
1,663,695.93

	
March 3, 2023                                                    

	
8,152,779.38

	
0.00

	
486,070.73

	
0.00

	
September 3, 2023                                                    

	
7,672,761.40

	
0.00

	
480,017.98

	
0.00

	
March 3, 2024                                                    

	
7,199,169.73

	
0.00

	
473,591.67

	
0.00

	
September 3, 2024                                                    

	
6,732,409.33

	
0.00

	
466,760.40

	
0.00

	
March 3, 2025                                                    

	
6,272,919.90

	
0.00

	
459,489.43

	
0.00

	
September 3, 2025                                                    

	
5,821,179.68

	
0.00

	
451,740.22

	
0.00

	
March 3, 2026                                                    

	
5,377,709.84

	
0.00

	
443,469.84

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,377,709.84

	
0.00

	  	

N86322

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                       

	
$16,043,000.00

	
$4,647,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,391,091.55

	
4,372,568.48

	
651,908.45

	
274,431.52

	
September 3, 2016                                                    

	
14,849,936.67

	
4,131,484.35

	
541,154.88

	
241,084.13

	
March 3, 2017                                                    

	
14,311,831.86

	
3,892,758.87

	
538,104.81

	
238,725.48

	
September 3, 2017                                                    

	
13,776,925.63

	
3,656,506.91

	
534,906.23

	
236,251.96

	
March 3, 2018                                                    

	
13,245,376.32

	
3,422,850.88

	
531,549.31

	
233,656.03

	
September 3, 2018                                                    

	
12,717,352.87

	
3,191,921.46

	
528,023.45

	
230,929.42

	
March 3, 2019                                                    

	
12,193,035.74

	
2,963,858.20

	
524,317.13

	
228,063.26

	
September 3, 2019                                                    

	
11,672,617.97

	
2,738,810.36

	
520,417.77

	
225,047.84

	
March 3, 2020                                                    

	
11,156,306.20

	
2,516,937.73

	
516,311.77

	
221,872.63

	
September 3, 2020                                                    

	
10,644,321.94

	
2,298,411.63

	
511,984.26

	
218,526.10

	
March 3, 2021                                                    

	
10,136,902.92

	
2,083,415.90

	
507,419.02

	
214,995.73

	
September 3, 2021                                                    

	
9,634,304.62

	
1,872,148.09

	
502,598.30

	
211,267.81

	
March 3, 2022                                                    

	
9,136,801.95

	
1,664,820.81

	
497,502.67

	
207,327.28

	
September 3, 2022                                                    

	
8,644,691.12

	
0.00

	
492,110.83

	
1,664,820.81

	
March 3, 2023                                                    

	
8,158,291.74

	
0.00

	
486,399.38

	
0.00

	
September 3, 2023                                                    

	
7,677,949.21

	
0.00

	
480,342.53

	
0.00

	
March 3, 2024                                                    

	
7,204,037.33

	
0.00

	
473,911.88

	
0.00

	
September 3, 2024                                                    

	
6,736,961.34

	
0.00

	
467,075.99

	
0.00

	
March 3, 2025                                                    

	
6,277,161.22

	
0.00

	
459,800.12

	
0.00

	
September 3, 2025                                                    

	
5,825,115.57

	
0.00

	
452,045.65

	
0.00

	
March 3, 2026                                                    

	
5,381,345.88

	
0.00

	
443,769.69

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,381,345.88

	
0.00

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

14

	  	

N85323

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$16,043,000.00

	
$4,647,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,391,091.55

	
4,372,568.48

	
651,908.45

	
274,431.52

	
September 3, 2016                                                    

	
14,849,936.67

	
4,131,484.35

	
541,154.88

	
241,084.13

	
March 3, 2017                                                    

	
14,311,831.86

	
3,892,758.87

	
538,104.81

	
238,725.48

	
September 3, 2017                                                    

	
13,776,925.63

	
3,656,506.91

	
534,906.23

	
236,251.96

	
March 3, 2018                                                    

	
13,245,376.32

	
3,422,850.88

	
531,549.31

	
233,656.03

	
September 3, 2018                                                    

	
12,717,352.87

	
3,191,921.46

	
528,023.45

	
230,929.42

	
March 3, 2019                                                    

	
12,193,035.74

	
2,963,858.20

	
524,317.13

	
228,063.26

	
September 3, 2019                                                    

	
11,672,617.97

	
2,738,810.36

	
520,417.77

	
225,047.84

	
March 3, 2020                                                    

	
11,156,306.20

	
2,516,937.73

	
516,311.77

	
221,872.63

	
September 3, 2020                                                    

	
10,644,321.94

	
2,298,411.63

	
511,984.26

	
218,526.10

	
March 3, 2021                                                    

	
10,136,902.92

	
2,083,415.90

	
507,419.02

	
214,995.73

	
September 3, 2021                                                    

	
9,634,304.62

	
1,872,148.09

	
502,598.30

	
211,267.81

	
March 3, 2022                                                    

	
9,136,801.95

	
1,664,820.81

	
497,502.67

	
207,327.28

	
September 3, 2022                                                    

	
8,644,691.12

	
0.00

	
492,110.83

	
1,664,820.81

	
March 3, 2023                                                    

	
8,158,291.74

	
0.00

	
486,399.38

	
0.00

	
September 3, 2023                                                    

	
7,677,949.21

	
0.00

	
480,342.53

	
0.00

	
March 3, 2024                                                    

	
7,204,037.33

	
0.00

	
473,911.88

	
0.00

	
September 3, 2024                                                    

	
6,736,961.34

	
0.00

	
467,075.99

	
0.00

	
March 3, 2025                                                    

	
6,277,161.22

	
0.00

	
459,800.12

	
0.00

	
September 3, 2025                                                    

	
5,825,115.57

	
0.00

	
452,045.65

	
0.00

	
March 3, 2026                                                    

	
5,381,345.88

	
0.00

	
443,769.69

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,381,345.88

	
0.00

	  	

N86324

	  	

Equipment Note Ending Balance

	

Scheduled Payments of Principal

	
Date

	

Series A

Equipment Note

	

Series B

Equipment Note

	

Series A

Equipment Note

	

Series B

Equipment Note

	
At Issuance                                                    

	
$16,043,000.00

	
$4,647,000.00

	
$                0.00

	
$                0.00

	
March 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
September 3, 2015                                                    

	
16,043,000.00

	
4,647,000.00

	
0.00

	
0.00

	
March 3, 2016                                                    

	
15,391,091.55

	
4,372,568.48

	
651,908.45

	
274,431.52

	
September 3, 2016                                                    

	
14,849,936.67

	
4,131,484.35

	
541,154.88

	
241,084.13

	
March 3, 2017                                                    

	
14,311,831.86

	
3,892,758.87

	
538,104.81

	
238,725.48

	
September 3, 2017                                                    

	
13,776,925.63

	
3,656,506.91

	
534,906.23

	
236,251.96

	
March 3, 2018                                                    

	
13,245,376.32

	
3,422,850.88

	
531,549.31

	
233,656.03

	
September 3, 2018                                                    

	
12,717,352.87

	
3,191,921.46

	
528,023.45

	
230,929.42

	
March 3, 2019                                                    

	
12,193,035.74

	
2,963,858.20

	
524,317.13

	
228,063.26

	
September 3, 2019                                                    

	
11,672,617.97

	
2,738,810.36

	
520,417.77

	
225,047.84

	
March 3, 2020                                                    

	
11,156,306.20

	
2,516,937.73

	
516,311.77

	
221,872.63

	
September 3, 2020                                                    

	
10,644,321.94

	
2,298,411.63

	
511,984.26

	
218,526.10

	
March 3, 2021                                                    

	
10,136,902.92

	
2,083,415.90

	
507,419.02

	
214,995.73

	
September 3, 2021                                                    

	
9,634,304.62

	
1,872,148.09

	
502,598.30

	
211,267.81

	
March 3, 2022                                                    

	
9,136,801.95

	
1,664,820.81

	
497,502.67

	
207,327.28

	
September 3, 2022                                                    

	
8,644,691.12

	
0.00

	
492,110.83

	
1,664,820.81

	
March 3, 2023                                                    

	
8,158,291.74

	
0.00

	
486,399.38

	
0.00

	
September 3, 2023                                                    

	
7,677,949.21

	
0.00

	
480,342.53

	
0.00

	
March 3, 2024                                                    

	
7,204,037.33

	
0.00

	
473,911.88

	
0.00

	
September 3, 2024                                                    

	
6,736,961.34

	
0.00

	
467,075.99

	
0.00

	
March 3, 2025                                                    

	
6,277,161.22

	
0.00

	
459,800.12

	
0.00

	
September 3, 2025                                                    

	
5,825,115.57

	
0.00

	
452,045.65

	
0.00

	
March 3, 2026                                                    

	
5,381,345.88

	
0.00

	
443,769.69

	
0.00

	
September 3, 2026                                                    

	
0.00

	
0.00

	
5,381,345.88

	
0.00

 

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

15

 

Indenture

 

Debt Rate (as such term is defined in Annex A of the form of Indenture marked as Exhibit C of the Note Purchase Agreement (the "Indenture Form")) for Series A (computed on the basis of a 360-day year consisting of twelve 30-day months, payable semi-annually in arrears):  3.750%

 

Debt Rate (as such term is defined in Annex A of the Indenture Form) for Series B (computed on the basis of a 360-day year consisting of twelve 30 day months, payable semi-annually in arrears):  4.625%

	
 

Payment Due Rate:

	
 

Debt Rate plus 2% per annum

	
 

Payment Dates:

	
 

March 3 and September 3 (after September 3, 2014)

	
 

Make-Whole Premiums:

	
 

As provided in Article II of the Indenture Form

	
 

Redemption:

	
 

As provided in Article II of the Indenture Form

	
 

All-risk hull insurance:

	
 

Not less than the unpaid principal amount of the Equipment Notes relating to an Aircraft, together with six months of interest accrued thereon, subject to United’s right to self-insure on terms no more favorable to United in any material respect than those set forth in Section G of Annex B to the Indenture Form.

 

Participation Agreement

 

Mortgagee, Subordination Agent, Liquidity Providers, Pass Through Trustees, Escrow Agents and Note Holders indemnified against Expenses and Taxes to the extent set forth in Section 8 of the form of the Participation Agreement marked as Exhibit B to the Note Purchase Agreement.

 

Prohibited Modifications

 

	
1.

	
May not modify in any material adverse respect the Granting Clause of the Indenture so as to deprive the Note Holders or the Related Note Holders (as defined in the Indenture) of a first priority security interest in and mortgage lien on the Aircraft or, to the extent assigned thereunder, United’s rights under the Purchase Agreement (as defined in the Indenture) or to eliminate any of the obligations intended to be secured thereby or otherwise modify in any material adverse respect as regards the interests of the Note Holders, the Related Note Holder of a Related Series A Equipment Note, the Related Note Holder of a Related Series B Equipment Note, the Subordination

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

16

 

	
  

	
Agent, the Liquidity Providers or the Mortgagee the provisions of Article II or III or Section 4.05(c), 5.01, 5.02, 6.02, 10.01(a), 10.01(b)(vii), 11.01, 11.04, 11.11, 11.12 or 11.13 of the Indenture or the definition of “Make-Whole Amount” in Annex A to the Indenture.

 

	
2.  

	
May not modify in any material adverse respect as regards the interests of the Note Holders, the Subordination Agent, the Liquidity Providers or the Mortgagee the provisions of Section 4.1.3, 4.1.8, 4.1.9, 4.1.10, 4.1.11, 6.1.3(b), 6.3, 10, 12.8(a) or 12.9 of the Participation Agreement, of the provisions of Section 4.1.2(x) of the Participation Agreement so as to eliminate the requirement to deliver to the Subordination Agent or the Mortgagee, as the case may be, the legal opinions to be provided to such Persons thereunder (recognizing that the lawyers rendering such opinions may be changed) or of the provisions of Section 6.4.5(a)(ii) of the Participation Agreement as regards the rights of the Mortgagee thereunder or otherwise modify the terms of the Participation Agreement to deprive the Trustees, the Subordination Agent, the Liquidity Providers or the Mortgagee of any indemnity or right of reimbursement in its favor for Expenses or Taxes.

 

Notwithstanding the foregoing, any form of Financing Agreement may be modified to correct or supplement any such provision which may be defective or to cure any ambiguity or correct any mistake, provided that any such action shall not materially adversely affect the interests of the Note Holders, the Related Note Holder of a Related Series A Equipment Note, the Related Note Holder of a Related Series B Equipment Note, the Subordination Agent, the Liquidity Providers, the Mortgagee or the Certificateholders.

Schedule III: Required Terms [NPA 2014-2 EETC]

  

  

BACK

ANNEX A to

Note Purchase Agreement

 

DEFINITIONS

 

 

"Act" means 49 U.S.C. §§ 40101-46507.

 

"Additional Series Equipment Notes" means Equipment Notes of each series issued under an Indenture and designated other than as "Series A" or "Series B" issued thereunder, if any.

 

"Additional Series Pass Through Certificates" means the pass through certificates issued pursuant to any Additional Series Pass Through Trust Agreement.

 

"Additional Series Pass Through Trust" means a grantor trust created to facilitate the issuance and sale of pass through certificates in connection with the issuance of any Additional Series Equipment Notes.

 

"Additional Series Pass Through Trust Agreement" means a Trust Supplement entered into in connection with the creation of an Additional Series Pass Through Trust, together with the Basic Pass Through Trust Agreement.

 

"Additional Series Pass Through Trustee" means WTNA, in its capacity as trustee under an Additional Series Pass Through Trust Agreement.

 

"Aircraft" has the meaning set forth in the third recital to the Note Purchase Agreement.

 

"Aircraft Purchase Agreement" means, (a) with respect to any Boeing 737-924ER aircraft, the Purchase Agreement No. PA-03784, dated as of July 12, 2012 (which incorporates and amends the terms and conditions of the Aircraft General Terms Agreement AGTA-UAL, dated as of February 19, 2010, between the Company and The Boeing Company), each as amended, between the Company and The Boeing Company, (b) with respect to any Boeing 787-9 aircraft, the Purchase Agreement No. 2484, dated as of December 29, 2004, as amended, between the Company and The Boeing Company, and (c) with respect to any Embraer ERJ 175 LR aircraft, the Purchase Agreement COM 0135-13, dated April 29, 2013, as amended, between the Company and Embraer S.A., (in each case under clauses (a), (b) and (c) including all exhibits thereto, together with all letter agreements entered into that by their terms constitute part of such Purchase Agreement).

Annex A (NPA 14-2)

  

  

BACK

 

2

 

"Applicable Pass Through Trustee" has the meaning provided in Section 1(b)(ii) of the Note Purchase Agreement.

 

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq.

 

"Basic Pass Through Trust Agreement" means the Pass Through Trust Agreement, dated October 3, 2012, between the Company and Pass Through Trustee, as such agreement may be supplemented, amended or modified, but does not include any Trust Supplement.

 

"Business Day" means any day, other than a Saturday, Sunday or other day on which commercial banks are authorized or required by law to close in New York, New York, Chicago, Illinois, Wilmington, Delaware or Boston, Massachusetts.

 

"Certificates" has the meaning set forth in the fourth recital to the Note Purchase Agreement.

 

"Certificateholder" means the Person in whose name a Certificate is registered in the Register.

 

"Class" means the class of Certificates issued by each Pass Through Trust.

 

"Class A Certificates" means Certificates issued by the Class A Pass Through Trust.

 

"Class B Certificates" means Certificates issued by the Class B Pass Through Trust.

 

"Class A Pass Through Trustee" has the meaning set forth in the fifth recital to the Note Purchase Agreement.

 

"Class B Pass Through Trustee" has the meaning set forth in the fifth recital to the Note Purchase Agreement.

 

"Closing Notice" has the meaning set forth in Section 1(b) of the Note Purchase Agreement.

 

"Company" means United Airlines, Inc., a Delaware corporation.

 

"Cut-off Date" means the earlier of (a) the day after the Delivery Period Termination Date and (b) the date on which a Triggering Event occurs.

 

"Delivery Date" means the Business Day on which an Aircraft is delivered to and accepted by the Company.

Annex A (NPA 14-2)

  

  

BACK

 

3

 

"Delivery Period Termination Date" means the earlier of (a) October 31, 2015, (provided that, if a labor strike occurs or continues at either Manufacturer after the Issuance Date and on or prior to such date referred to in this clause (a), such date shall be extended by adding thereto the number of days that such strike continued in effect after the Issuance Date, but not more than 60 days (such extended number of days, the “Strike Period”)) (provided that the Strike Period shall not include any day of a labor strike (1) at The Boeing Company after the Pass Through Trustees shall have purchased in accordance with the Note Purchase Agreement Equipment Notes with respect to 11 Boeing 737-924ER aircraft and four Boeing 787-9 aircraft or (2) at Embraer S.A. after the Pass Through Trustees shall have purchased in accordance with the Note Purchase Agreement Equipment Notes with respect to 12 Embraer ERJ 175 LR aircraft),and (b) the date on which Equipment Notes issued with respect to all of the Aircraft (including any Substitute Aircraft in lieu of any Eligible Aircraft) have been purchased by the Pass Through Trustees in accordance with the Note Purchase Agreement.

 

"Deposits" has the meaning set forth in the sixth recital to the Note Purchase Agreement.

 

"Deposit Agreements" has the meaning set forth in the sixth recital to the Note Purchase Agreement.

 

"Depositary" means BNP Paribas, acting through its New York Branch.

 

"Depositary Threshold Ratings" has the meaning set forth in Section 4(a)(vii) of the Note Purchase Agreement.

 

"Eligible Aircraft" has the meaning set forth in the second recital to the Note Purchase Agreement.

 

"Equipment Notes" means and includes any equipment notes issued under any Indenture in the form specified in Section 2.01 thereof (as such form may be varied pursuant to the terms of such Indenture) and any Equipment Note issued under any Indenture in exchange for or replacement of any other Equipment Note.

 

"Escrow Agent" has the meaning set forth in the first paragraph of the Note Purchase Agreement.

 

"Escrow Agent Agreements" has the meaning set forth in Section 3(e)(i) of the Note Purchase Agreement.

Annex A (NPA 14-2)

  

  

BACK

 

4

 

"Escrow and Paying Agent Agreements" has the meaning set forth in the sixth recital to the Note Purchase Agreement.

 

"FAA" means the Federal Aviation Administration of the United States.

 

"Financing Agreements" means, collectively, the Participation Agreement, the Indenture and the Equipment Notes issued thereunder.

 

"Funding Date" has the meaning set forth in Section 1(b)(i) of the Note Purchase Agreement.

 

"Government Entity" means (a) any federal, state, provincial or similar government, and any body, board, department, commission, court, tribunal, authority, agency or other instrumentality of any such government or otherwise exercising any executive, legislative, judicial, administrative or regulatory functions of such government or (b) any other government entity having jurisdiction over any matter contemplated by the Operative Agreements or relating to the observance or performance of the obligations of any of the parties to the Operative Agreements.

 

"Indenture" means the Trust Indenture and Mortgage substantially in the form of Exhibit C to the Note Purchase Agreement.

 

"Initial Deposits" has the meaning set forth in the sixth recital to the Note Purchase Agreement.

 

"Intercreditor Agreement" has the meaning set forth in the ninth recital to the Note Purchase Agreement.

 

"Issuance Date" means the date of the original issuance of the Certificates.

 

"Law" means (a) any constitution, treaty, statute, law, decree, regulation, order, rule or directive of any Government Entity, and (b) any judicial or administrative interpretation or application of, or decision under, any of the foregoing.

 

"Liquidity Facility" has the meaning set forth in the ninth recital to the Note Purchase Agreement.

 

"Liquidity Provider" has the meaning set forth in the ninth recital to the Note Purchase Agreement.

 

"Loan Trustee" means the "Mortgagee" as defined in the Financing Agreements.

Annex A (NPA 14-2)

  

  

BACK

 

5

 

"Manufacturer" means, (A) with respect to any Boeing 737-924ER aircraft and Boeing 787-9 aircraft, The Boeing Company, a Delaware corporation, and (B) with respect to any Embraer ERJ 175 LR aircraft, Embraer S.A., a company organized under the laws of Brazil, in each case solely in its capacity as manufacturer or seller of the Aircraft under the applicable Aircraft Purchase Agreement to which it is a party.

 

"Note Purchase Agreement" means the Note Purchase Agreement to which this Annex A is attached.

 

"Notice of Purchase Withdrawal" with respect to each Deposit Agreement, has the meaning set forth in Section 2.3 thereof.

 

"Operative Agreements" means, collectively, the Pass Through Trust Agreements, the Escrow and Paying Agent Agreements, the Deposit Agreements, the Liquidity Facilities, the Intercreditor Agreement, the Equipment Notes, the Certificates and the Financing Agreements.

 

"Participation Agreement" means the Participation Agreement substantially in the form of Exhibit B to the Note Purchase Agreement.

 

"Paying Agent Agreements" has the meaning set forth in Section 3(f)(i) of the Note Purchase Agreement.

 

"Pass Through Trust" has the meaning set forth in the fourth recital to the Note Purchase Agreement.

 

"Pass Through Trust Agreement" means each of the two separate Trust Supplements referred to in the fourth recital to the Note Purchase Agreement, together in each case with the Basic Pass Through Trust Agreement, each dated as of the Issuance Date, by and between the Company and Pass Through Trustee.

 

"Pass Through Trustee" has the meaning set forth in the first paragraph of the Note Purchase Agreement.

 

"Paying Agent" has the meaning set forth in the first paragraph of the Note Purchase Agreement.

 

"Person" means any individual, firm, partnership, joint venture, trust, trustee, Government Entity, organization, association, corporation, limited liability company, government agency, committee, department, authority and other body, corporate or incorporate, whether having distinct legal status or not, or any member of any of the same.

Annex A (NPA 14-2)

  

  

BACK

 

6

 

"Rating Agencies" means, collectively, at any time, each nationally recognized rating agency which shall have been requested to rate the Certificates and which shall then be rating the Certificates.  The initial Rating Agencies will be Fitch Ratings Ltd. and Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business.

 

"Rating Agency Confirmation" means, with respect to (1) any Financing Agreement that has been modified in any material respect from the forms thereof attached to the Note Purchase Agreement or (2) a Substitute Aircraft, a written confirmation from each of the Rating Agencies that (1) the use of such Financing Agreement with such modifications or (2) the substituting of such Substitute Aircraft for an Eligible Aircraft, whichever of the foregoing shall in a particular case require Rating Agency Confirmation, would not result in (i) a reduction of the rating for any Class of Certificates then rated by such Rating Agency below the then current rating for such Class of Certificates or (ii) a withdrawal or suspension of the rating of any Class of Certificates then rated by such Rating Agency.

 

"Register" means the register maintained pursuant to Sections 3.04 and 7.12 of the Basic Pass Through Trust Agreement with respect to each Pass Through Trust.

"Replacement Deposit Agreement" means, for each Class of Certificates, a deposit agreement substantially in the form of the replaced Deposit Agreement for such Class of Certificates as shall permit each Rating Agency to confirm in writing that the replacement of the Depositary will not cause a withdrawal, suspension or downgrading of the rating then in effect for such Class of Certificates by such Rating Agency (without regard to any withdrawal, suspension or downgrading of the Depositary being replaced.)

"Replacement Depositary" has the meaning set forth in Section 4(a)(vii) of the Note Purchase Agreement.

 

"Required Terms" means the terms set forth on Schedule III to the Note Purchase Agreement.

 

"Scheduled Closing Date" has the meaning set forth in Section 1(b) of the Note Purchase Agreement.

 

"Section 1110" means 11 U.S.C. § 1110 of the Bankruptcy Code or any successor or analogous Section of the federal bankruptcy Law in effect from time to time.

Annex A (NPA 14-2)

  

  

BACK

 

7

 

"Series A Equipment Notes" means the "Series A Equipment Notes" as defined in each Indenture entered into pursuant to the Note Purchase Agreement.

 

"Series B Equipment Notes" means the "Series B Equipment Notes" as defined in each Indenture entered into pursuant to the Note Purchase Agreement.

 

"Subordination Agent" has the meaning set forth in the first paragraph of the Note Purchase Agreement.

 

"Substitute Aircraft" has the meaning set forth in Section 1(g) of the Note Purchase Agreement.

 

"Taxes" means all license, recording, documentary, registration and other similar fees and all taxes, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever imposed by any Taxing Authority, together with any penalties, additions to tax, fines or interest thereon or additions thereto.

 

"Taxing Authority" means any federal, state or local government or other taxing authority in the United States, any foreign government or any political subdivision or taxing authority thereof, any international taxing authority or any territory or possession of the United States or any taxing authority thereof.

 

"Triggering Event" has the meaning assigned to such term in the Intercreditor Agreement.

 

"Trust Supplement" means an agreement supplemental to the Basic Pass Through Trust Agreement pursuant to which (i) a separate trust is created for the benefit of the holders of the pass through certificates of a class, (ii) the issuance of the pass through certificates of such class representing fractional undivided interests in such trust is authorized and (iii) the terms of the pass through certificates of such class are established.

 

"Underwriters" has the meaning set forth in the fifth recital to the Note Purchase Agreement.

 

"Underwriting Agreement" has the meaning set forth in the fifth recital to the Note Purchase Agreement.

 

"WTNA" has the meaning set forth in the first paragraph of the Note Purchase Agreement.

Annex A (NPA 14-2)

  

  

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EXHIBIT A to

Note Purchase Agreement

 

CLOSING NOTICE

 

 

Dated as of [_________]

 

To each of the addressees listed

in Schedule A hereto

 

	
  

	
Re:

	
Closing Notice in accordance with Note Purchase Agreement referred to below

 

Ladies and Gentlemen:

 

Reference is made to the Note Purchase Agreement, dated as of August 11, 2014, among United Airlines, Inc. (the “Company”), Wilmington Trust, National Association, as Pass Through Trustee under each of the  Pass Through Trust Agreements (as defined therein) (the “Pass Through Trustee”), Wilmington Trust, National Association, as Subordination Agent (the “Subordination Agent”), U.S. Bank National Association, as Escrow Agent (the “Escrow Agent”), and Wilmington Trust, National Association, as Paying Agent (the “Paying Agent”) (as in effect from time to time, the “Note Purchase Agreement”).  Unless otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Note Purchase Agreement or, to the extent not defined therein, the Intercreditor Agreement.

 

Pursuant to Section 1(b) of the Note Purchase Agreement, the undersigned hereby notifies you, in respect of the [Boeing/Embraer] Model [_______] aircraft with manufacturer’s serial number [______] (the “Aircraft”), of the following:

 

	
(1)

	
The Scheduled Closing Date of the Aircraft is [_________];

 

	
(2)

	
The Funding Date for the Aircraft shall be [__________]; and

 

	
(3)

	
The aggregate amount of each series of Equipment Notes to be issued, and purchased by the respective Pass Through Trustees referred to below (each, an “Applicable Pass Through Trustee”), on the Funding Date, in connection with the financing of such Aircraft is as follows:

 

	
  

	
(a)

	
the Class A Pass Through Trustee shall purchase Series A Equipment Notes in the amount of $[__________]; and

	
  

	
(b)

	
the Class B Pass Through Trustee shall purchase Series B Equipment Notes in the amount of $[__________].

Closing Notice 14-2

  

  

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-2-

 

The Company hereby instructs the Class A Pass Through Trustee to (i) execute a Withdrawal Certificate in the form of Annex A hereto dated as of [__________] and attach thereto a Notice of Purchase Withdrawal dated such date completed as set forth on Exhibit A hereto and (ii) deliver such Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable Escrow Agent.

 

 

The Company hereby instructs the Class B Pass Through Trustee to (i) execute a Withdrawal Certificate in the form of Annex A hereto dated as of [__________] and attach thereto a Notice of Purchase Withdrawal dated such date completed as set forth on Exhibit B hereto and (ii) deliver such Withdrawal Certificate and Notice of Purchase Withdrawal to the applicable Escrow Agent.

 

The Company hereby instructs each Applicable Pass Through Trustee to (i) purchase Equipment Notes of a series and in an amount set forth opposite such Pass Through Trustee in clause (3) above with a portion of the proceeds of the withdrawals of Deposits referred to in the applicable Notice of Purchase Withdrawal referred to above and (ii) re-deposit with the Depositary the excess, if any, of the amount so withdrawn over the purchase price of such Equipment Notes.

 

The Company hereby instructs each Applicable Pass Through Trustee to (a) enter into the Participation Agreement [____] dated as of [___________] among the Company, as Owner, and Wilmington Trust, National Association, as Mortgagee, Subordination Agent and Pass Through Trustee, (b) perform its obligations thereunder and (c) deliver such certificates, documents and legal opinions relating to such Pass Through Trustee as required thereby.

 

Closing Notice 14-2

  

  

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-3-

	  	
Yours faithfully,

 

United Airlines, Inc.

	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

Closing Notice 14-2

  

  

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SCHEDULE A

 

Wilmington Trust, National Association, as

   Pass Through Trustee, Subordination

   Agent and Paying Agent

1100 North Market Street

Wilmington, Delaware  19890-1605

Attention:  Corporate Trust Administration

Facsimile:  (302) 636-4140

 

U.S. Bank National Association,

   as Escrow Agent

Boston, MA Office

One Federal Street, 3rd Floor

EX-MA-FED

Boston, MA 02110

Attention:  David W. Doucette

Facsimile:  (617) 603-6672

BNP Paribas,

   acting through its New York Branch,

   as Depositary

787 Seventh Avenue

New York, New York 10019

Attention: Robert Papas

Facsimile: (212) 841-2748

Attention: Mary Dierdorff

Facsimile: (212) 841-2140

Attention: Adam Miller

Facsimile: (212) 841-2748

10 Harewood Avenue

London, England NW1 6AA

Attention: Helene Mizrahi-Walden

Facsimile: 44 (0) 7509-533-155

Loan Servicing

BNP (Canada)

2001 University, 9th Floor

Montreal H3A 1T9

Attention: Cathy Markos Prahalis

Facsimile: (201) 616-7917

Closing Notice 14-2

  

  

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Standard & Poor’s Ratings Services

55 Water Street, 39th Floor

New York, New York 10041-0003

Attention:  Philip A. Baggaley, CFA

Facsimile:  (212) 438-7820

 

Fitch Ratings Ltd.

1 State Street

New York, New York 10004

Attention:  Joe Rohlena

Facsimile: (212) 558-2564

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Annex A

 

WITHDRAWAL CERTIFICATE

 

(Class ___)

 

U.S. Bank National Association,

as Escrow Agent

 

Ladies and Gentlemen:

 

Reference is made to the Escrow and Paying Agent Agreement, dated as of August 11, 2014 (the “Agreement”).  We hereby certify to you that the conditions to the obligations of the undersigned to execute a Participation Agreement pursuant to the Note Purchase Agreement have been satisfied.  Pursuant to Section 1.02(c) of the Agreement, please execute the attached Notice of Purchase Withdrawal and immediately transmit by facsimile to the Depositary, at (212) 841-2748, (212) 841-2140, (212) 841-2748, 44 (0) 7509-533-155 and (201) 616-7917 (Attention:  Robert Papas, Mary Dierdorff, Adam Miller, Helene Mizrahi-Walden and Cathy Markos Prahalis, respectively).

 

 

Capitalized terms used herein but not defined herein shall have the meanings set forth in the Agreement.

 

	  	
Very truly yours,

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity but solely as Pass Through Trustee

	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

Dated: As of [____________]

Closing Notice 14-2

  

  

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Exhibit A

NOTICE OF PURCHASE WITHDRAWAL

BNP Paribas,

   acting through its New York Branch,

   as Depositary

787 Seventh Avenue

New York, New York 10019

Attention: Robert Papas

Facsimile: (212) 841-2748

Attention: Mary Dierdorff

Facsimile: (212) 841-2140

Attention: Adam Miller

Facsimile: (212) 841-2748

10 Harewood Avenue

London, England NW1 6AA

Attention: Helene Mizrahi-Walden

Facsimile: 44 (0) 7509-533-155

Loan Servicing

BNP (Canada)

2001 University, 9th Floor

Montreal H3A 1T9

Attention: Cathy Markos Prahalis

Facsimile: (201) 616-7917

 

Ladies and Gentlemen:

 

Reference is made to the Deposit Agreement (Class A) dated as of August 11, 2014 (the “Deposit Agreement”) between U.S. Bank National Association, as Escrow Agent, and BNP Paribas, acting through its New York Branch, as Depositary (the “Depositary”).

 

In accordance with Section 2.3(a) of the Deposit Agreement, the undersigned hereby requests the withdrawal of the entire amount of the Deposit, $[_______], Account No. [____].

 

The undersigned hereby directs the Depositary to pay the entire amount of the Deposit to Wilmington Trust, National Association, Account No. [____], Reference: [_________] on [__________].

 

	  	
U.S. BANK NATIONAL ASSOCIATION,

   as Escrow Agent

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

Dated: As of [____________]

Closing Notice 14-2

  

  

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Exhibit B

NOTICE OF PURCHASE WITHDRAWAL

BNP Paribas,

   acting through its New York Branch,

   as Depositary

787 Seventh Avenue

New York, New York 10019

Attention: Robert Papas

Facsimile: (212) 841-2748

Attention: Mary Dierdorff

Facsimile: (212) 841-2140

Attention: Adam Miller

Facsimile: (212) 841-2748

10 Harewood Avenue

London, England NW1 6AA

Attention: Helene Mizrahi-Walden

Facsimile: 44 (0) 7509-533-155

Loan Servicing

BNP (Canada)

2001 University, 9th Floor

Montreal H3A 1T9

Attention: Cathy Markos Prahalis

Facsimile: (201) 616-7917

 

Ladies and Gentlemen:

 

Reference is made to the Deposit Agreement (Class B) dated as of August 11, 2014 (the “Deposit Agreement”) between U.S. Bank National Association, as Escrow Agent, and BNP Paribas, acting through its New York Branch, as Depositary (the “Depositary”).

 

In accordance with Section 2.3(a) of the Deposit Agreement, the undersigned hereby requests the withdrawal of the entire amount of the Deposit, $[_______], Account No. [____].

 

The undersigned hereby directs the Depositary to pay the entire amount of the Deposit to Wilmington Trust, National Association, Account No. [____], Reference: [__________] on [__________].

 

	  	
U.S. BANK NATIONAL ASSOCIATION,

   as Escrow Agent

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

Dated: As of [____________]

Closing Notice 14-2

  

  

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EXHIBIT B TO NOTE PURCHASE AGREEMENT

	
CONFIDENTIAL:  Subject to Restrictions on

Dissemination

Set Forth in Section 7 of this Agreement

 

 

 

 

______________________________________________________________

 

 

 

 

PARTICIPATION AGREEMENT [___]

 

Dated as of [_____________]

 

Among

 

UNITED AIRLINES, INC.,

Owner,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

Not in its individual capacity

except as expressly provided herein,

but solely as Mortgagee, Subordination Agent

under the Intercreditor Agreement and Pass Through Trustee

under each of the Applicable Pass Through Trust Agreements

 

____________________________

 

One [Boeing/Embraer] Model [_________] Aircraft

Bearing Manufacturer's Serial No.[______]

and U.S. Registration No. N[_______]

 

 

 

 

______________________________________________________________

 

PARTICIPATION AGREEMENT 14-2

  

  

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CONTENTS

	
 

SECTION 1.  DEFINITIONS AND CONSTRUCTION

	
2

	
 

SECTION 2.  SECURED LOANS; CLOSING

	
2

	
2.1  Making of Loans and Issuance of Equipment Notes

	
2

	
            2.2  Closing

	
3

	
 

SECTION 3.  [Intentionally omitted]

	
3

	
 

SECTION 4.  CONDITIONS PRECEDENT

	
3

	
4.1  Conditions Precedent to the Obligations of the Pass Through Trustees

	
3

	
4.2  Conditions Precedent to Obligations of Mortgagee

	
7

	
4.3  Conditions Precedent to Obligations of Owner

	
8

	
4.4  Post-Registration Opinion

	
9

	
 

SECTION 5.  REPRESENTATIONS AND WARRANTIES

	
9

	
5.1  Owner's Representations and Warranties

	
9

	
5.2  WTNA's Representations and Warranties

	
13

	
 

SECTION 6.  COVENANTS, UNDERTAKINGS AND AGREEMENTS

	
17

	
6.1  Covenants of Owner

	
17

	
6.2  Covenants of WTNA

	
19

	
6.3  Covenants of Note Holders

	
20

	
6.4  Agreements

	
21

	
 

SECTION 7.  CONFIDENTIALITY

	
25

	
 

SECTION 8.  INDEMNIFICATION AND EXPENSES

	
26

	
8.1  General Indemnity

	
26

	
8.2  Expenses

	
32

	
8.3  General Tax Indemnity

	
33

	
8.4  Payments

	
43

	
8.5  Interest

	
43

	
8.6  Benefit of Indemnities

	
44

	
 

SECTION 9.  ASSIGNMENT OR TRANSFER OF INTEREST

	
44

	
9.1  Note Holders

	
44

	
9.2  Effect of Transfer

	
44

PARTICIPATION AGREEMENT 14-2

  

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SECTION 10.  SECTION 1110

	
45

	
 

SECTION 11.  CHANGE OF CITIZENSHIP

	
45

	
11.1  Generally

	
45

	
11.2  Mortgagee

	
45

	
 

SECTION 12.  MISCELLANEOUS

	
45

	
12.1  Amendments

	
45

	
12.2  Severability

	
46

	
12.3  Survival

	
46

	
12.4  Reproduction of Documents

	
46

	
12.5  Counterparts

	
47

	
12.6  No Waiver

	
47

	
12.7  Notices

	
47

	
12.8  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

	
48

	
12.9  Third-Party Beneficiary

	
49

	
12.10  Entire Agreement

	
49

	
12.11  Further Assurances

	
49

 

SCHEDULES AND EXHIBITS

 

	
SCHEDULE 1 -

	
Accounts; Addresses

	
SCHEDULE 2 -

	
Commitments

	
SCHEDULE 3 -

	
Certain Terms

	
SCHEDULE 4 -

	
Permitted Countries

 

	
EXHIBIT A -

	
Opinion of special counsel to Owner

	
EXHIBIT B -

	
Opinion of corporate counsel to Owner

	
EXHIBIT C -

	
Opinion of special counsel to Mortgagee

	
  

	
and to the Applicable Pass Through Trustees

	
EXHIBIT D -

	
Opinion of special counsel in Oklahoma City, Oklahoma

PARTICIPATION AGREEMENT 14-2

  

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PARTICIPATION AGREEMENT [___]

 

PARTICIPATION AGREEMENT [____], dated as of [____________] (this "Agreement"), among (a) UNITED AIRLINES, INC., a Delaware corporation ("Owner"), (b) WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly provided herein, but solely as Mortgagee (in its capacity as Mortgagee, "Mortgagee" and in its individual capacity, "WTNA"), (c) WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Pass Through Trustee under each of the Applicable Pass Through Trust Agreements (each, an "Applicable Pass Through Trustee") and (d) WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Subordination Agent under the Intercreditor Agreement ("Subordination Agent").

 

RECITALS

 

A.           Owner and Airframe Manufacturer have entered into the Purchase Agreement, pursuant to which, among other things, Airframe Manufacturer has agreed to manufacture and sell to Owner and Owner has agreed to purchase from Airframe Manufacturer, certain aircraft, including the Aircraft.

 

B.           Pursuant to each of the Pass Through Trust Agreements, the Pass Through Trusts were created and the Pass Through Certificates were issued and sold.

 

C.           Each Applicable Pass Through Trustee has agreed to use a portion of the proceeds from the issuance and sale of the Pass Through Certificates issued by each Applicable Pass Through Trust to purchase from Owner, on behalf of the related Applicable Pass Through Trust, the Equipment Note bearing the same interest rate as the Pass Through Certificates issued by such Pass Through Trust.

 

D.           Owner and Mortgagee, concurrently with the execution and delivery hereof, have entered into the Trust Indenture for the benefit of the Note Holders, pursuant to which, among other things, Owner agrees (1) to issue Equipment Notes, in the amounts and otherwise as provided in the Trust Indenture, and (2) to mortgage, pledge and assign to Mortgagee all of Owner's right, title and interest in the Collateral to secure the Secured Obligations, including, without limitation, Owner's obligations under the Equipment Notes.

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E.           The parties hereto wish to set forth in this Agreement the terms and conditions upon and subject to which the aforesaid transactions shall be effected.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.      DEFINITIONS AND CONSTRUCTION

 

Capitalized terms used but not defined herein (including in the initial paragraph and Recitals above) shall have the respective meanings set forth or incorporated by reference, and shall be construed and interpreted in the manner described, in Annex A to the Trust Indenture.

 

SECTION 2.      SECURED LOANS; CLOSING

 

2.1           Making of Loans and Issuance of Equipment Notes

 

Subject to the terms and conditions of this Agreement, on the date hereof or on such other date agreed to by the parties hereto (the "Closing Date"):

 

	
  

	
(a)

	
Each Applicable Pass Through Trustee listed on Schedule 2 shall make a secured loan to the Owner in the amount in Dollars opposite such Trustee's name on Schedule 2; and

 

	
  

	
(b)

	
The Owner shall issue, pursuant to and in accordance with the provisions of Article II of the Trust Indenture, to the Subordination Agent as the registered holder on behalf of each such Applicable Pass Through Trustee, one or more Equipment Notes, dated the Closing Date, of the Series set forth opposite such Trustee's name on Schedule 2, in an aggregate principal amount equal to the amount of the secured loan made by each such Applicable Pass Through Trustee.

 

In addition, the Owner shall have the option after the Closing Date to redeem and reissue Series B Equipment Notes and to issue (and redeem and reissue) from time to time Additional Series Equipment Notes, subject to the terms of the Note Purchase Agreement and the Intercreditor Agreement.  If Series B or Additional Series Equipment Notes are so reissued or issued after the Closing Date, the Note Holder of such Equipment Notes

PARTICIPATION AGREEMENT 14-2

  

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shall be entitled to execute a counterpart to this Agreement and become a party hereto.

 

2.2           Closing

 

(a)           The Closing of the transactions contemplated hereby shall take place at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004, or at such other place as the parties shall agree.

 

(b)           All payments pursuant to this Section 2 shall be made in immediately available funds to such accounts set forth in Schedule 1 hereto.

 

SECTION 3.         [Intentionally omitted]

 

SECTION 4.         CONDITIONS PRECEDENT

 

4.1           Conditions Precedent to the Obligations of the Pass Through Trustees

 

The obligation of each Applicable Pass Through Trustee listed on Schedule 2 to make the secured loan described in Section 2.1(a) and to participate in the transactions contemplated by this Agreement on the Closing Date is subject to the fulfillment, prior to or on the Closing Date, of the following conditions precedent:

 

4.1.1                 Equipment Notes

 

The Owner shall have tendered the Equipment Notes to be issued to such Applicable Pass Through Trustees to the Mortgagee for authentication and the Mortgagee shall have authenticated such Equipment Notes to be issued to such Applicable Pass Through Trustees and shall have tendered the Equipment Notes to the Subordination Agent on behalf of such Pass Through Trustee, against receipt of the loan proceeds, in accordance with Section 2.1.

 

4.1.2                 Delivery of Documents

 

The Subordination Agent on behalf of each such Applicable Pass Through Trustee shall have received executed counterparts or conformed copies of the following documents:

 

(i)           this Agreement;

 

(ii)           the Trust Indenture;

PARTICIPATION AGREEMENT 14-2

  

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(iii)           the initial Trust Indenture Supplement;

 

(iv)           the broker's report and insurance certificates required by Section 4.06 of the Trust Indenture;

 

(v)            the Consent and Agreement and the Engine Consent and Agreement;

 

(vi)           the Bills of Sale;

 

(vii)          (A) a copy of the Certificate of Incorporation and By-Laws of Owner and resolutions of the board of directors of Owner and/or the executive committee thereof, in each case certified as of the Closing Date, by the Secretary or an Assistant Secretary of Owner, duly authorizing the execution, delivery and performance by Owner of the Operative Agreements to which it is party required to be executed and delivered by Owner on or prior to the Closing Date in accordance with the provisions hereof and thereof; and (B) an incumbency certificate of Owner as to the person or persons authorized to execute and deliver the Operative Agreements on behalf of Owner;

 

(viii)         an Officer's Certificate of Owner, dated as of the Closing Date, stating that its representations and warranties set forth in this Agreement are true and correct as of the Closing Date (or, to the extent that any such representation and warranty expressly relates to an earlier date, true and correct as of such earlier date);

 

(ix)           the Financing Statements;

 

(x)           the following opinions of counsel, in each case dated the Closing Date:

 

(A)           an opinion of Hughes Hubbard & Reed LLP, special counsel to Owner, substantially in the form of Exhibit A;

 

(B)           an opinion of Owner's Legal Department, substantially in the form of Exhibit B;

 

(C)           an opinion of Morris James LLP, special counsel to Mortgagee and to the Applicable Pass Through Trustees, substantially in the form of Exhibit C;

 

(D)           an opinion of Lytle Soulé & Curlee, special counsel in Oklahoma City, Oklahoma, substantially in the form of Exhibit D; and

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(xi)           a copy of a current, valid [Standard Certificate of Airworthiness for the Aircraft duly issued by the FAA]1 [Export Certificate of Airworthiness duly issued by the Brazilian aviation authority]2, together with a copy of a duly executed application for registration of the Aircraft with the FAA in the name of the Owner.

 

4.1.3                 Perfected Security Interest

 

On the Closing Date, after giving effect to the filing of the FAA Filed Documents, the filing of the Financing Statements and the registration of the International Interest (or Prospective International Interest) of the Mortgagee in the Airframe and each Engine with the International Registry, Mortgagee shall have received a duly perfected first priority security interest in all of Owner's right, title and interest in the Aircraft, subject only to Permitted Liens.

 

4.1.4                 Violation of Law

 

No change shall have occurred after the date of this Agreement in any applicable Law that makes it a violation of Law for (a) Owner, any Applicable Pass Through Trustee, Subordination Agent or Mortgagee to execute, deliver and perform the Operative Agreements to which any of them is a party or (b) any Applicable Pass Through Trustee to make the loan contemplated by Section 2.1, to acquire an Equipment Note or to realize the benefits of the security afforded by the Trust Indenture.

 

4.1.5                 Representations, Warranties and Covenants

 

The representations and warranties of each other party to this Agreement made, in each case, in this Agreement and in any other Operative Agreement to which it is a party, shall be true and accurate in all material respects as of the Closing Date (unless any such representation and warranty shall have been made with reference to a specified date, in which case such representation and warranty shall be true and accurate as of such specified date) and each other party to this Agreement shall have performed and observed, in all material respects, all of its covenants, obligations and agreements in this Agreement and in any other Operative Agreement to which it is a party to be observed or performed by it as of the Closing Date.

 

  

________________________

 

1 Insert for Boeing 737-924ER Aircraft and 787-9 Aircraft.

  

2 Insert for Embraer ERJ 175 LR Aircraft.

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4.1.6                 No Event of Default

 

On the Closing Date, no event shall have occurred and be continuing, or would result from the mortgage of the Aircraft, which constitutes a Default or an Event of Default.

 

4.1.7                 No Event of Loss

 

No Event of Loss with respect to the Airframe or any Engine shall have occurred and no circumstance, condition, act or event that, with the giving of notice or lapse of time or both, would give rise to or constitute an Event of Loss with respect to the Airframe or any Engine shall have occurred.

 

4.1.8                 Title

 

Owner shall have good title (subject to filing and recordation of the FAA Bill of Sale with the FAA) to the Aircraft, free and clear of all Liens, except Permitted Liens.

 

4.1.9                 Certification

 

The Aircraft shall have been duly certificated by the FAA as to type [and airworthiness in accordance with the terms of the Purchase Agreement]3 [, and an export certificate of airworthiness shall have been issued by the Brazilian aviation authority]4.

 

4.1.10                 Section 1110

 

Mortgagee shall be entitled to the benefits of Section 1110 (as currently in effect) with respect to the right to take possession of the Airframe and Engines and to enforce any of its other rights or remedies as provided in the Trust Indenture in the event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

 

4.1.11                 Filing

 

On the Closing Date (a) the FAA Filed Documents shall have been duly filed for recordation (or shall be in the process of being so duly filed for recordation) with the FAA in accordance with the Act, (b) the sale of the Airframe and Engines to the Owner and the International Interest (or Prospective

 

  

___________________________

 

3 Insert for Boeing 737-924ER Aircraft and 787-9 Aircraft.

  

4 Insert for Embraer ERJ 175 LR Aircraft.

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International Interest) of the Mortgagee in the Airframe and Engines granted (or to be granted) under the Trust Indenture shall have been registered with the International Registry and there shall exist no registered International Interest with respect to the Airframe or either Engine on the International Registry with a priority over the International Interest of the Mortgagee therein, (c) each Financing Statement shall have been duly filed (or shall be in the process of being so duly filed) in the appropriate jurisdiction and (d) the Subordination Agent, on behalf of each Applicable Pass Through Trustee, shall have received a printout of the "priority search certificate" from the International Registry relating to the Airframe and each Engine showing no International Interest with a priority over the International Interest of the Mortgagee therein.

 

4.1.12                 No Proceedings

 

No action or proceeding shall have been instituted, nor shall any action be threatened in writing, before any Government Entity, nor shall any order, judgment or decree have been issued or proposed to be issued by any Government Entity, to set aside, restrain, enjoin or prevent the completion and consummation of this Agreement or any other Operative Agreement or the transactions contemplated hereby or thereby.

 

4.1.13                 Governmental Action

 

All appropriate action required to have been taken prior to the Closing Date by the FAA, or any governmental or political agency, subdivision or instrumentality of the United States, in connection with the transactions contemplated by this Agreement shall have been taken, and all orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be in effect on the Closing Date in connection with the transactions contemplated by this Agreement shall have been issued.

 

4.1.14                 Note Purchase Agreement

 

The conditions precedent to the obligations of the Applicable Pass Through Trustees and the other requirements relating to the Aircraft and the Equipment Notes set forth in the Note Purchase Agreement shall have been satisfied.

 

4.2           Conditions Precedent to Obligations of Mortgagee

 

The obligation of Mortgagee to authenticate the Equipment Notes on the Closing Date is subject to the satisfaction or

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waiver by Mortgagee, on or prior to the Closing Date, of the conditions precedent set forth below in this Section 4.2.

 

4.2.1                 Documents

 

Executed originals of the agreements, instruments, certificates or documents described in Section 4.1.2 shall have been received by Mortgagee, except as specifically provided therein, unless the failure to receive any such agreement, instrument, certificate or document is the result of any action or inaction by Mortgagee.

 

4.2.2                 Other Conditions Precedent

 

Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6 and 4.1.10 shall have been satisfied unless the failure of any such condition to be satisfied is the result of any action or inaction by Mortgagee.

 

4.3           Conditions Precedent to Obligations of Owner

 

The obligation of Owner to participate in the transaction contemplated hereby on the Closing Date is subject to the satisfaction or waiver by Owner, on or prior to the Closing Date, of the conditions precedent set forth below in this Section 4.3.

 

4.3.1                 Documents

 

Executed originals of the agreements, instruments, certificates or documents described in Section 4.1.2 shall have been received by Owner, except as specifically provided therein, and shall be satisfactory to Owner, unless the failure to receive any such agreement, instrument, certificate or document is the result of any action or inaction by Owner.  In addition, the Owner shall have received the following:

 

(i)           (A) an incumbency certificate of WTNA as to the person or persons authorized to execute and deliver the Operative Agreements on behalf of WTNA and (B) a copy of the Certificate of Incorporation and By-Laws and general authorizing resolution of the board of directors (or executive committee) or other satisfactory evidence of authorization of WTNA, certified as of the Closing Date by the Secretary or Assistant or Attesting Secretary of WTNA, which authorize the execution, delivery and performance by WTNA of the Operative Agreements to which it is a party; and

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(ii)           an Officer's Certificate of WTNA, dated as of the Closing Date, stating that its representations and warranties in its individual capacity or as Mortgagee, an Applicable Pass Through Trustee or Subordination Agent, as the case may be, set forth in this Agreement are true and correct as of the Closing Date (or, to the extent that any such representation and warranty expressly relates to an earlier date, true and correct as of such earlier date).

 

4.3.2                 Other Conditions Precedent

 

Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.8, 4.1.9, 4.1.10, 4.1.11, 4.1.12 and 4.1.13 shall have been satisfied or waived by Owner, unless the failure of any such condition to be satisfied is the result of any action or inaction by Owner.

 

4.4           Post-Registration Opinion

 

Promptly upon the registration of the Aircraft and the recordation of the FAA Filed Documents pursuant to the Act, Owner will cause Lytle Soulé & Curlee, special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each Pass Through Trustee and Mortgagee a favorable opinion or opinions addressed to each of them with respect to such registration and recordation.

 

SECTION 5.          REPRESENTATIONS AND WARRANTIES

 

5.1           Owner's Representations and Warranties

 

Owner represents and warrants to each Pass Through Trustee, Subordination Agent and Mortgagee that:

 

5.1.1                 Organization; Qualification

 

Owner is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and has the corporate power and authority to conduct the business in which it is currently engaged and to own or hold under lease its properties and to enter into and perform its obligations under the Operative Agreements to which it is party.  Owner is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which the nature and extent of the business conducted by it, or the ownership of its properties, requires such qualification, except where the failure to be so qualified would not give rise to a Material Adverse Change to Owner.

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5.1.2                 Corporate Authorization

 

Owner has taken, or caused to be taken, all necessary corporate action (including, without limitation, the obtaining of any consent or approval of stockholders required by its Certificate of Incorporation or By-Laws) to authorize the execution and delivery of each of the Operative Agreements to which it is party, and the performance of its obligations thereunder.

 

5.1.3                 No Violation

 

The execution and delivery by Owner of the Operative Agreements to which it is party, the performance by Owner of its obligations thereunder and the consummation by Owner on the Closing Date of the transactions contemplated thereby, do not and will not (a) violate any provision of the Certificate of Incorporation or By-Laws of Owner, (b) violate any Law applicable to or binding on Owner or (c) violate or constitute any default under (other than any violation or default that would not result in a Material Adverse Change to Owner), or result in the creation of any Lien (other than as permitted under the Trust Indenture) upon the Aircraft under, any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other material agreement, instrument or document to which Owner is a party or by which Owner or any of its properties is bound.

 

5.1.4                 Approvals

 

The execution and delivery by Owner of the Operative Agreements to which Owner is a party, the performance by Owner of its obligations thereunder and the consummation by Owner on the Closing Date of the transactions contemplated thereby do not and will not require the consent or approval of, or the giving of notice to, or the registration with, or the recording or filing of any documents with, or the taking of any other action in respect of, (a) any trustee or other holder of any Debt of Owner and (b) any Government Entity, other than (x) the filings, registrations and recordations referred to in Section 5.1.6 and (y) filings, recordings, notices or other ministerial actions pursuant to any routine recording, contractual or regulatory requirements applicable to it.

 

5.1.5                 Valid and Binding Agreements

 

The Operative Agreements to which Owner is a party have been duly authorized, executed and delivered by Owner and,

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assuming the due authorization, execution and delivery thereof by the other party or parties thereto, constitute the legal, valid and binding obligations of Owner and are enforceable against Owner in accordance with the respective terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium and other similar Laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity.

 

5.1.6                 Registration and Recordation

 

Except for (a) the registration of the Aircraft with the FAA pursuant to the Act in the name of Owner (and the periodic renewal of such registration with the FAA prior to its expiration), (b) the filing with the FAA of the AC Forms 8050-135 with respect to the sale of the Airframe and Engines to Owner and the International Interests (or Prospective International Interests) granted under the Trust Indenture thereon and the filing with the FAA for recordation (and recordation) of the FAA Filed Documents, (c) the registration of the International Interest (or Prospective International Interest) in, and the sale to the Owner of, the Airframe and Engines with the International Registry, (d) the filing of the Financing Statements (and continuation statements relating thereto at periodic intervals), and (e) the affixation of the nameplates referred to in Section 4.02(f) of the Trust Indenture, no further action, including any filing or recording of any document (including any financing statement in respect thereof under Article 9 of the UCC) is necessary in order to establish and perfect Mortgagee's security interest in the Aircraft as against Owner and any other Person, in each case, in any applicable jurisdictions in the United States.

 

5.1.7                 Owner's Location

 

The Owner's location (as such term is used in Section 9-307 of the UCC) is Delaware.  The full and correct legal name and mailing address of Owner are correctly set forth in Schedule 1 hereto in the column "Address for Notices".

 

5.1.8                 No Event of Loss

 

No Event of Loss has occurred with respect to the Airframe or any Engine, and, to the Actual Knowledge of Owner, no circumstance, condition, act or event has occurred that, with the giving of notice or lapse of time or both gives rise to or

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constitutes an Event of Loss with respect to the Airframe or any Engine.

 

5.1.9                 Compliance With Laws

 

(a)           Owner is a Citizen of the United States and a U.S. Air Carrier.

 

(b)           Owner holds all licenses, permits and franchises from the appropriate Government Entities necessary to authorize Owner to lawfully engage in air transportation and to carry on scheduled commercial passenger service as currently conducted, except where the failure to so hold any such license, permit or franchise would not give rise to a Material Adverse Change to Owner.

 

(c)           Owner is not an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

 

5.1.10                 Securities Laws

 

Neither Owner nor any person authorized to act on its behalf has directly or indirectly offered any beneficial interest or Security relating to the ownership of the Aircraft, or any of the Equipment Notes or any other interest in or security under the Trust Indenture, for sale to, or solicited any offer to acquire any such interest or security from, or has sold any such interest or security to, any person in violation of the Securities Act.

 

5.1.11                 Broker's Fees

 

No Person acting on behalf of Owner is or will be entitled to any broker's fee, commission or finder's fee in connection with the Transactions, other than the fees and expenses payable by Owner in connection with the sale of the Pass Through Certificates.

 

5.1.12                 Section 1110

 

Mortgagee is entitled to the benefits of Section 1110 (as currently in effect) with respect to the right to take possession of the Airframe and Engines and to enforce any of its other rights or remedies as provided in the Trust Indenture in the event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

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             5.1.13  

	
Cape Town

 

The Owner is a Transacting User Entity (as defined in the regulations of the International Registry); is "situated", for the purposes of the Cape Town Treaty, in the United States; and has the power to "dispose" (as such term is used in the Cape Town Treaty) of the Airframe and each Engine.  The Bills of Sale for the Airframe and Engines constitute a "contract of sale" (as defined in the Cape Town Treaty), and the Trust Indenture, as supplemented by the Trust Indenture Supplement in which such Airframe and Engines are listed, creates an International Interest in such Airframe and Engines.  The Airframe and each Engine are "aircraft objects" (as defined in the Cape Town Treaty); and the United States is a Contracting State under the Cape Town Treaty.

 

5.2           WTNA's Representations and Warranties

 

WTNA represents and warrants (with respect to Section 5.2.10, solely in its capacity as Subordination Agent) to Owner that:

 

5.2.1                 Organization, Etc.

 

WTNA is a national banking association duly organized, validly existing and in good standing under the Laws of the United States of America, holding a valid certificate to do business as a national banking association with corporate and banking authority to execute and deliver, and perform its obligations under, the Applicable Pass Through Trustee Agreements and the Operative Agreements to which it is a party.

 

5.2.2                 Corporate Authorization

 

WTNA has taken, or caused to be taken, all necessary corporate action (including, without limitation, the obtaining of any consent or approval of stockholders required by Law or by its Certificate of Incorporation or By-Laws) to authorize the execution and delivery by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of the Pass Through Trustee Agreements and the Operative Agreements to which it is a party and the performance of its obligations thereunder.

 

5.2.3                 No Violation

 

The execution and delivery by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or

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Subordination Agent, as the case may be, of the Pass Through Trustee Agreements and the Operative Agreements to which it is a party, the performance by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of its obligations thereunder and the consummation on the Closing Date of the transactions contemplated thereby, do not and will not (a) violate any provision of the Certificate of Incorporation or By-Laws of WTNA, (b) violate any Law applicable to or binding on WTNA, in its individual capacity or (except in the case of any Law relating to any Plan) as Mortgagee, a Pass Through Trustee or Subordination Agent, or (c) violate or constitute any default under (other than any violation or default that would not result in a Material Adverse Change to WTNA, in its individual capacity or Mortgagee, a Pass Through Trustee or Subordination Agent), or result in the creation of any Lien (other than the Lien of the Trust Indenture) upon any property of WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, or any of WTNA's subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other agreement, instrument or document to which WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, is a party or by which WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, or any of their respective properties is bound.

 

5.2.4                 Approvals

 

The execution and delivery by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of the Pass Through Trustee Agreements and the Operative Agreements to which it is a party, the performance by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of its obligations thereunder and the consummation on the Closing Date by WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of the transactions contemplated thereby do not and will not require the consent, approval or authorization of, or the giving of notice to, or the registration with, or the recording or filing of any documents with, or the taking of any other action in respect of, (a) any trustee or other holder of any Debt of WTNA or (b) any Government Entity, other than the filing of the FAA Filed Documents and the Financing Statements.

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5.2.5                 Valid and Binding Agreements

 

The Pass Through Trustee Agreements and the Operative Agreements to which it is a party have been duly authorized, executed and delivered by WTNA and, assuming the due authorization, execution and delivery by the other party or parties thereto, constitute the legal, valid and binding obligations of WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, and are enforceable against WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, in accordance with the respective terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar Laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity.

 

5.2.6                 Citizenship

 

WTNA is a Citizen of the United States.

 

5.2.7                 No Liens

 

On the Closing Date, there are no Liens attributable to WTNA in respect of all or any part of the Collateral.

 

5.2.8                 Litigation

 

There are no pending or, to the Actual Knowledge of WTNA, threatened actions or proceedings against WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, before any court, administrative agency or tribunal which, if determined adversely to WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, would materially adversely affect the ability of WTNA, in its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, to perform its obligations under any of the Mortgagee Agreements, the Pass Through Trustee Agreements or the Subordination Agent Agreements.

 

5.2.9                 Securities Laws

 

Neither WTNA nor any person authorized to act on its behalf has directly or indirectly offered any beneficial interest or Security relating to the ownership of the Aircraft or any interest in the Collateral or any of the Equipment Notes or any

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other interest in or security under the Collateral for sale to, or solicited any offer to acquire any such interest or security from, or has sold any such interest or security to, any Person other than the Subordination Agent and the Pass Through Trustees, except for the offering and sale of the Pass Through Certificates.

 

5.2.10                 Investment

 

The Equipment Notes to be acquired by the Subordination Agent are being acquired by it for the account of the Applicable Pass Through Trustees, for investment and not with a view to any resale or distribution thereof, except that, subject to the restrictions on transfer set forth in Section 9, the disposition by it of its Equipment Notes shall at all times be within its control.

 

5.2.11                 Taxes

 

There are no Taxes payable by any Applicable Pass Through Trustee or WTNA, as the case may be, imposed by the State of Delaware or any political subdivision or taxing authority thereof in connection with the execution, delivery and performance by such Pass Through Trustee or WTNA, as the case may be, of this Agreement or any of the Pass Through Trustee Agreements (other than franchise or other taxes based on or measured by any fees or compensation received by any such Pass Through Trustee or WTNA, as the case may be, for services rendered in connection with the transactions contemplated by any of the Pass Through Trust Agreements), and there are no Taxes payable by any Applicable Pass Through Trustee or WTNA, as the case may be, imposed by the State of Delaware or any political subdivision thereof in connection with the acquisition, possession or ownership by any such Pass Through Trustee of any of the Equipment Notes (other than franchise or other taxes based on or measured by any fees or compensation received by any such Pass Through Trustee or WTNA, as the case may be, for services rendered in connection with the transactions contemplated by any of the Pass Through Trust Agreements), and, assuming that the trusts created by the Pass Through Trust Agreements will not be taxable as corporations, but, rather, each will be characterized as a grantor trust under subpart E, Part I of Subchapter J of the Code or as a partnership under Subchapter K of the Code, such trusts will not be subject to any Taxes imposed by the State of Delaware or any political subdivision thereof.

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5.2.12                 Broker's Fees

 

No Person acting on behalf of WTNA, in its individual capacity or as Mortgagee, any Applicable Pass Through Trustee or Subordination Agent, is or will be entitled to any broker's fee, commission or finder's fee in connection with the Transactions.

 

SECTION 6.          COVENANTS, UNDERTAKINGS AND AGREEMENTS

 

6.1           Covenants of Owner

 

Owner covenants and agrees, at its own cost and expense, with Note Holder and Mortgagee as follows:

 

6.1.1                 Corporate Existence; U.S. Air Carrier

 

Owner shall at all times maintain its corporate existence, except as permitted by Section 4.07 of the Trust Indenture, and shall at all times remain a U.S. Air Carrier.

 

6.1.2                 Notice of Change of Location

 

Owner will give Mortgagee timely written notice (but in any event within 30 days prior to the expiration of the period of time specified under applicable Law to prevent lapse of perfection) of any change in its location (as such term is used in Section 9-307 of the UCC) or legal name and will promptly take any action required by Section 6.1.3(c) as a result of such relocation.

 

6.1.3                 Certain Assurances

 

(a)           Owner shall duly execute, acknowledge and deliver, or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, in any case, as Mortgagee shall reasonably request for accomplishing the purposes of this Agreement and the other Operative Agreements, provided that any instrument or other document so executed by Owner will not expand any obligations or limit any rights of Owner in respect of the transactions contemplated by any Operative Agreement.

 

(b)           Owner shall promptly take such action with respect to the recording, filing, re-recording and refiling of the Trust Indenture and any supplements thereto, including, without limitation, the initial Trust Indenture Supplement, as shall be

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necessary to continue the perfection and priority of the Lien created by the Trust Indenture.

 

(c)           Owner, at its sole cost and expense, will cause the FAA Filed Documents, the Financing Statements and all continuation statements (and any amendments necessitated by any combination, consolidation or merger of the Owner, or any relocation of its chief executive office) in respect of the Financing Statements to be prepared and, subject only to the execution and delivery thereof by Mortgagee, duly and timely filed and recorded, or filed for recordation, to the extent permitted under the Act (with respect to the FAA Filed Documents) or the UCC or similar law of any other applicable jurisdiction (with respect to such other documents).  Mortgagee, and not Owner, shall be responsible for any amendments to the foregoing documents and filings, recordings and registrations thereof necessitated in any such case by any combination, consolidation or merger of Mortgagee or change in the Mortgagee's name, status, jurisdiction of organization or address.

 

(d)           If the Aircraft has been registered in a country other than the United States pursuant to Section 4.02(e) of the Trust Indenture, Owner will furnish to Mortgagee annually after such registration, commencing with the calendar year after such registration is effected, an opinion of special counsel reasonably satisfactory to Mortgagee stating that, in the opinion of such counsel, either that (i) such action has been taken with respect to the recording, filing, rerecording and refiling of the Operative Agreements and any supplements and amendments thereto as is necessary to establish, perfect and protect the Lien created by the Trust Indenture, reciting the details of such actions, or (ii) no such action is necessary to maintain the perfection of such Lien.

 

6.1.4                 Securities Laws

 

Neither Owner nor any person authorized to act on its behalf will directly or indirectly offer any beneficial interest or Security relating to the ownership of the Aircraft or any interest in any of the Equipment Notes or any other interest in or security under the Trust Indenture, for sale to, or solicit any offer to acquire any such interest or security from, or sell any such interest or security to, any person in violation of the Securities Act or applicable state or foreign securities Laws.

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6.1.5.                 Notice of Lease

 

Owner shall give to Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, a copy of any notice regarding a lease of the Aircraft required to be given to the Mortgagee pursuant to clause (w) of the first sentence of the penultimate paragraph of Section 4.02(b) of the Trust Indenture, at the time such notice is given to Mortgagee, if at such time Standard & Poor's is then rating the Pass Through Certificates.

 

6.2           Covenants of WTNA

 

WTNA in its individual capacity or as Mortgagee, each Applicable Pass Through Trustee or Subordination Agent, as the case may be, covenants and agrees with Owner as follows:

 

6.2.1                 Liens

 

WTNA (a) will not directly or indirectly create, incur, assume or suffer to exist any Lien attributable to it on or with respect to all or any part of the Collateral or the Aircraft, (b) will, at its own cost and expense, promptly take such action as may be necessary to discharge any Lien attributable to WTNA on all or any part of the Collateral or the Aircraft and (c) will personally hold harmless and indemnify Owner, each Note Holder, each of their respective Affiliates, successors and permitted assigns, and the Collateral from and against (i) any and all Expenses, (ii) any reduction in the amount payable out of the Collateral, and (iii) any interference with the possession, operation or other use of all or any part of the Aircraft, imposed on, incurred by or asserted against any of the foregoing as a consequence of any such Lien.

 

6.2.2                 Securities Act

 

WTNA in its individual capacity or as Mortgagee, an Applicable Pass Through Trustee or Subordination Agent, will not offer any beneficial interest or Security relating to the ownership of the Aircraft or any interest in the Collateral, or any of the Equipment Notes or any other interest in or security under the Trust Indenture for sale to, or solicit any offer to acquire any such interest or security from, or sell any such interest or security to, any Person in violation of the Securities Act or applicable state or foreign securities Laws, provided that the foregoing shall not be deemed to impose on WTNA any responsibility with respect to any such offer, sale or solicitation by any other party hereto.

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6.2.3                 Performance of Agreements

 

WTNA, in its individual capacity and as Mortgagee, an Applicable Pass Through Trustee or Subordination Agent, as the case may be, shall perform its obligations under the Pass Through Trustee Agreements and the Operative Agreements in accordance with the terms thereof.

 

6.2.4                 Withholding Taxes

 

WTNA shall indemnify (on an after-tax basis) and hold harmless Owner against any United States withholding taxes (and related interest, penalties and additions to tax) as a result of the failure by WTNA to withhold on payments to any Note Holder if such Note Holder failed to provide to Mortgagee necessary certificates or forms to substantiate the right to exemption from such withholding tax.

 

6.3           Covenants of Note Holders

 

Each Note Holder (including Subordination Agent) as to itself only covenants and agrees with Owner and Mortgagee as follows:

 

6.3.1                 Withholding Taxes

 

Such Note Holder (if it is a Non-U.S. Person) agrees to indemnify (on an after-tax basis) and hold harmless Owner and Mortgagee against any United States withholding taxes (and related interest, penalties and additions to tax) as a result of the inaccuracy or invalidity of any certificate or form provided by such Note Holder to Mortgagee in connection with such withholding taxes.  Any amount payable hereunder shall be paid within 30 days after receipt by a Note Holder of a written demand therefor.

 

6.3.2                 Transfer; Compliance

 

(a)           Such Note Holder will (i) not transfer any Equipment Note or interest therein in violation of the Securities Act or applicable state or foreign securities Law; provided, that the foregoing provisions of this section shall not be deemed to impose on such Note Holder any responsibility with respect to any such offer, sale or solicitation by any other party hereto, and (ii) perform and comply with the obligations specified to be imposed on it (as a Note Holder) under each of the Trust Indenture and the form of Equipment Note set forth in the Trust Indenture.

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(b)           Except for the transfer of the interests of each Applicable Pass Through Trustee in the Equipment Notes to the trustee of the Related Trust (as defined in each Applicable Pass Through Trust Agreement) in accordance with the related Applicable Pass Through Trust Agreement, each Note Holder will not sell, assign, convey, exchange or otherwise transfer any Equipment Note or any interest in, or represented by, any Equipment Note (it being understood that this provision is not applicable to the Pass Through Certificates) unless the proposed transferee thereof first provides Owner with both of the following:

 

(i)           a written representation and covenant that either (a) no portion of the funds it uses to purchase, acquire and hold such Equipment Note or interest directly or indirectly constitutes, or may be deemed under the Code or ERISA or any rulings, regulations or court decisions thereunder to constitute, the assets of any Plan or (b) the transfer, and subsequent holding, of such Equipment Note or interest shall not involve or give rise to a transaction that constitutes a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code involving Owner, a Pass Through Trustee, the Subordination Agent or the proposed transferee (other than a transaction that is exempted from the prohibitions of such sections by applicable provisions of ERISA or the Code or administrative exemptions or regulations issued thereunder); and

 

(ii)           a written covenant that it will not transfer any Equipment Note or any interest in, or represented by, any Equipment Note unless the subsequent transferee also makes the representation described in clause (i) above and agrees to comply with this clause (ii).

 

6.4           Agreements

 

6.4.1                 Quiet Enjoyment

 

Each Applicable Pass Through Trustee, Subordination Agent, each Note Holder and Mortgagee each agrees as to itself with Owner that, so long as no Event of Default shall have occurred and be continuing, such Person shall not (and shall not permit any Affiliate or other Person claiming by, through or under it to) interfere with Owner's rights in accordance with the Indenture to the quiet enjoyment, possession and use of the Aircraft.

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6.4.2                 Consents

 

Each Pass Through Trustee, Subordination Agent and Mortgagee each covenants and agrees, for the benefit of Owner, that it shall not unreasonably withhold its consent to any consent or approval requested of it under the terms of any of the Operative Agreements which by its terms is not to be unreasonably withheld.

 

6.4.3                 Insurance

 

Each Pass Through Trustee, Subordination Agent, Mortgagee and each Note Holder each agrees not to obtain or maintain insurance for its own account as permitted by Section 4.06 of the Trust Indenture if such insurance would limit or otherwise adversely affect the coverage of any insurance required to be obtained or maintained by Owner pursuant to Section 4.06 of the Trust Indenture.

 

6.4.4                 Extent of Interest of Note Holders

 

A Note Holder shall not, as such, have any further interest in, or other right with respect to, the Collateral when and if the principal and Make-Whole Amount, if any, of and interest on the Equipment Note held by such Holder, and all other sums, then due and payable to such Holder hereunder and under any other Operative Agreement, shall have been paid in full.  The preceding sentence shall not limit the rights of the Related Note Holders with respect to Related Secured Obligations under the Trust Indenture, provided that a Related Note Holder shall not, as such, have any further interest in, or other right with respect to, the Collateral when and if the Related Secured Obligations attributable to the Related Equipment Note held by such Holder shall have been paid in full.

 

6.4.5                 Foreign Registration

 

Each Note Holder and Mortgagee hereby agree, for the benefit of Owner but subject to the provisions of Section 4.02(b) of the Trust Indenture:

 

(a)           that Owner shall be entitled to register the Aircraft or cause the Aircraft to be registered in a country other than the United States subject to compliance with the following:

 

(i)           each of the following requirements is satisfied:

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(A)

	
no Special Default or Event of Default shall have occurred and be continuing at the time of such registration;

 

	
  

	
(B)

	
such proposed change of registration is made in connection with a Permitted Lease to a Permitted Air Carrier; and

 

	
  

	
(C)

	
such country is a country with which the United States then maintains normal diplomatic relations or, if such country is Taiwan, the United States then maintains diplomatic relations at least as good as those in effect on the Closing Date; and

 

(ii)           the Mortgagee shall have received an opinion of counsel (subject to customary exceptions) reasonably satisfactory to the Mortgagee addressed to Mortgagee to the effect that:

 

(A)           such country would recognize the Owner's ownership interest in the Aircraft;

 

(B)           after giving effect to such change in registration, the Lien of the Trust Indenture on the Owner's right, title and interest in and to the Aircraft shall continue as a valid and duly perfected first priority security interest and International Interest and all filing, recording or other action necessary to protect the same shall have been accomplished (or, if such opinion cannot be given at the time of such proposed change in registration because such change in registration is not yet effective, (1) the opinion shall detail what filing, recording or other action is necessary and (2) the Mortgagee shall have received a certificate from Owner that all possible preparations to accomplish such filing, recording and other action shall have been done, and such filing, recording and other action shall be accomplished and a supplemental opinion to that effect shall be delivered to the Mortgagee on or prior to the effective date of such change in registration);

 

(C)           unless Owner or the Permitted Air Carrier shall have agreed to provide insurance covering the risk of requisition of use of the Aircraft by the government of such country (so long as the Aircraft is registered under the laws of such country), the laws of such country require fair compensation by the government of such country payable in currency freely convertible into Dollars and freely removable from such

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country (without license or permit, unless Owner prior to such proposed reregistration has obtained such license or permit) for the taking or requisition by such government of such use; and

 

(D)           it is not necessary, solely as a consequence of such change in registration and without giving effect to any other activity of the Mortgagee (or any Affiliate of the Mortgagee), for the Mortgagee to qualify to do business in such jurisdiction as a result of such reregistration in order to exercise any rights or remedies with respect to the Aircraft.

 

(b)           In addition, as a condition precedent to any change in registration Owner shall have given to  Mortgagee assurances reasonably satisfactory to Mortgagee:

 

	
  

	
(i)

	
to the effect that the provisions of Section 4.06 of the Trust Indenture have been complied with after giving effect to such change of registration;

 

	
  

	
(ii)

	
of the payment by Owner of all reasonable out-of-pocket expenses of each Note Holder and Mortgagee in connection with such change of registry, including, without limitation (1) the reasonable fees and disbursements of counsel to Mortgagee, (2) any filing or recording fees, Taxes or similar payments incurred in connection with the change of registration of the Aircraft and the creation and perfection of the security interest therein in favor of Mortgagee for the benefit of Note Holders, and (3) all costs and expenses incurred in connection with any filings necessary to continue in the United States the perfection of the security interest in the Aircraft in favor of Mortgagee for the benefit of Note Holders; and

 

	
  

	
(iii)

	
to the effect that the tax and other indemnities in favor of each person named as an indemnitee under any other Operative Agreement afford each such person substantially the same protection as provided prior to such change of registration (or Owner shall have agreed upon additional indemnities that, together with such original indemnities, in the reasonable judgment of Mortgagee, afford such protection).

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6.4.6                 Interest in Certain Engines

 

Each Note Holder and Mortgagee agree, for the benefit of each of the lessor, conditional seller, mortgagee or secured party of any airframe or engine leased to, or purchased by, Owner or any Permitted Lessee subject to a lease, conditional sale, trust indenture or other security agreement that it will not acquire or claim, as against such lessor, conditional seller, mortgagee or secured party, any right, title or interest in any engine as the result of such engine being installed on the Airframe at any time while such engine is subject to such lease, conditional sale, trust indenture or other security agreement and owned by such lessor or conditional seller or subject to a trust indenture or security interest in favor of such mortgagee or secured party.

 

SECTION 7.      CONFIDENTIALITY

 

Owner, Note Holders and Mortgagee shall keep the Participation Agreement and Annex B to the Trust Indenture confidential and shall not disclose, or cause to be disclosed, the same to any Person, except (A) to prospective and permitted transferees of Owner's, a Note Holder's, the Liquidity Provider's, Mortgagee's or other Indenture Indemnitee's interest or their respective counsel or special counsel, independent insurance brokers, auditors, or other agents who agree to hold such information confidential, (B) to Owner's, a Note Holder's, the Liquidity Provider's, a Pass Through Trustee's, Mortgagee's or other Indenture Indemnitee's counsel or special counsel, independent insurance brokers, auditors, or other agents, Affiliates or investors who agree to hold such information confidential, (C) as may be required by any statute, court or administrative order or decree, legal process or governmental ruling or regulation, including those of any applicable insurance regulatory bodies (including, without limitation, the National Association of Insurance Commissioners), federal or state banking examiners, Internal Revenue Service auditors or any stock exchange, (D) with respect to a Note Holder or any Pass Through Trustee, to a nationally recognized rating agency for the purpose of obtaining a rating on the Equipment Notes or the Pass Through Certificates or to support an NAIC rating for the Equipment Notes or (E) such other Persons as are reasonably deemed necessary by the disclosing party in order to protect the interests of such party or for the purposes of enforcing such documents by such party; provided, that any and all disclosures permitted by clauses (C), (D), or (E) above shall be made only to the extent necessary to meet the specific requirements or needs of the Persons making such disclosures.

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SECTION 8.          INDEMNIFICATION AND EXPENSES

 

8.1           General Indemnity

 

8.1.1                 Indemnity

 

Whether or not any of the transactions contemplated hereby are consummated, Owner shall indemnify, protect, defend and hold harmless each Indemnitee from, against and in respect of, and shall pay on a net after-tax basis, any and all Expenses of any kind or nature whatsoever that may be imposed on, incurred by or asserted against any Indemnitee, relating to, resulting from, or arising out of or in connection with, any one or more of the following:

 

(a)           The Operative Agreements, the Pass Through Agreements, or the enforcement of any of the terms of any of the Operative Agreements or the Pass Through Agreements;

 

(b)           The Aircraft, the Airframe, any Engine or any Part, including, without limitation, with respect thereto, (i) the manufacture, design, purchase, acceptance, nonacceptance or rejection, ownership, registration, reregistration, deregistration, delivery, nondelivery, lease, sublease, assignment, possession, use or non-use, operation, maintenance, testing, repair, overhaul, condition, alteration, modification, addition, improvement, storage, airworthiness, replacement, repair, sale, substitution, return, abandonment, redelivery or other disposition of the Aircraft, any Engine or any Part, (ii) any claim or penalty arising out of violations of applicable Laws by Owner (or any Permitted Lessee), (iii) tort liability, whether or not arising out of the negligence of any Indemnitee (whether active, passive or imputed), (iv) death or property damage of passengers, shippers or others, (v) environmental control, noise or pollution and (vi) any Liens in respect of the Aircraft, any Engine or any Part;

 

(c)           The offer, sale, or delivery of any Equipment Notes, Pass Through Certificates or any interest therein or represented thereby; and

 

(d)           Any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement or other obligation to be performed by Owner under any Operative Agreement to which it is party or any Pass Through Agreement or the falsity of any representation or warranty of Owner in any Operative Agreement to which it is party or any Pass Through Agreement.

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8.1.2                 Exceptions

 

Notwithstanding anything contained in Section 8.1.1, Owner shall not be required to indemnify, protect, defend and hold harmless any Indemnitee pursuant to Section 8.1.1 in respect of any Expense of such Indemnitee:

 

(a)           For any Taxes or a loss of Tax benefit, whether or not Owner is required to indemnify therefor pursuant to Section 8.3;

 

(b)           Except to the extent attributable to acts or events occurring prior thereto, acts or events (other than acts or events related to the performance by Owner of its obligations pursuant to the terms of the Operative Agreements) that occur after the Trust Indenture is required to be terminated in accordance with Section 11.01 of the Trust Indenture; provided, that nothing in this clause (b) shall be deemed to exclude or limit any claim that any Indemnitee may have under applicable Law by reason of an Event of Default or for damages from Owner for breach of Owner's covenants contained in the Operative Agreements or to release Owner from any of its obligations under the Operative Agreements that expressly provide for performance after termination of the Trust Indenture;

 

(c)           To the extent attributable to any Transfer (voluntary or involuntary) by or on behalf of such Indemnitee of any Equipment Note or interest therein, except for out-of-pocket costs and expenses incurred as a result of any such Transfer pursuant to the exercise of remedies under any Operative Agreement;

 

(d)           [Intentionally Omitted]

 

(e)           To the extent attributable to the gross negligence or willful misconduct of such Indemnitee or any related Indemnitee (as defined below) (other than gross negligence or willful misconduct imputed to such person by reason of its interest in the Aircraft or any Operative Agreement);

 

(f)           [Intentionally Omitted]

 

(g)           To the extent attributable to the incorrectness or breach of any representation or warranty of such Indemnitee or any related Indemnitee contained in or made pursuant to any Operative Agreement or any Pass Through Agreement;

 

(h)           To the extent attributable to the failure by such Indemnitee or any related Indemnitee to perform or observe any

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agreement, covenant or condition on its part to be performed or observed in any Operative Agreement or any Pass Through Agreement;

 

(i)           To the extent attributable to the offer or sale by such Indemnitee or any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or any similar interest, in violation of the Securities Act or other applicable federal, state or foreign securities Laws (other than any thereof caused by acts or omissions of Owner);

 

(j)           (i) With respect to any Indemnitee (other than Mortgagee), to the extent attributable to the failure of the Mortgagee to distribute funds received and distributable by it in accordance with the Trust Indenture, (ii) with respect to any Indemnitee (other than the Subordination Agent), to the extent attributable to the failure of the Subordination Agent to distribute funds received and distributable by it in accordance with the Intercreditor Agreement, (iii) with respect to any Indemnitee (other than the Pass Through Trustees), to the extent attributable to the failure of a Pass Through Trustee to distribute funds received and distributable by it in accordance with the Pass Through Trust Agreements, (iv) with respect to any Indemnitee (other than the Escrow Agent), to the extent attributable to the failure of the Escrow Agent to pay funds received and payable by it in accordance with any Escrow Agreement, (v) with respect to any Indemnitee (other than the Paying Agent), to the extent attributable to the failure of the Paying Agent to distribute funds received and distributable by it in accordance with any Escrow Agreement, (vi) to the extent attributable to the failure of the Depositary to pay funds payable by it in accordance with any Deposit Agreement, (vii) with respect to Mortgagee, to the extent attributable to the negligence or willful misconduct of Mortgagee in the distribution of funds received and distributable by it in accordance with the Trust Indenture, (viii) with respect to the Subordination Agent, to the extent attributable to the negligence or willful misconduct of the Subordination Agent in the distribution of funds received and distributable by it in accordance with the Intercreditor Agreement, (ix) with respect to the Pass Through Trustees, to the extent attributable to the negligence or willful misconduct of a Pass Through Trustee in the distribution of funds received and distributable by it in accordance with the Pass Through Trust Agreements, (x) with respect to the Escrow Agent, to the extent attributable to the negligence or willful misconduct of the Escrow Agent in the payment of funds received and payable by it in accordance with

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any Escrow Agreement and (xi) with respect to the Paying Agent, to the extent attributable to the negligence or willful misconduct of the Paying Agent in the distribution of funds received and distributable by it in accordance with any Escrow Agreement;

 

(k)           Other than during the continuation of an Event of Default, to the extent attributable to the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any Operative Agreement or Pass Through Agreement other than such as have been requested by Owner or as are required by or made pursuant to the terms of the Operative Agreements or Pass Through Agreements (unless such requirement results from the actions of an Indemnitee not required by or made pursuant to the Operative Agreements or the Pass Through Agreements);

 

(l)           To the extent attributable to any amount which any Indemnitee expressly agrees to pay or such Indemnitee expressly agrees shall not be paid by or be reimbursed by Owner;

 

(m)           To the extent that it is an ordinary and usual operating or overhead expense;

 

(n)           [Intentionally Omitted]

 

(o)           For any Lien attributable to such Indemnitee or any related Indemnitee;

 

(p)           If another provision of an Operative Agreement or a Pass Through Agreement specifies the extent of Owner's responsibility or obligation with respect to such Expense, to the extent arising from other than failure of Owner to comply with such specified responsibility or obligation; or

 

(q)           To the extent incurred by or asserted against an Indemnitee as a result of any "prohibited transaction", within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code.

 

For purposes of this Section 8.1, a Person shall be considered a "related" Indemnitee with respect to an Indemnitee if such Person is an Affiliate or employer of such Indemnitee, a director, officer, employee, agent, or servant of such Indemnitee or any such Affiliate or a successor or permitted assignee of any of the foregoing.

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8.1.3                 Separate Agreement

 

This Agreement constitutes a separate agreement with respect to each Indemnitee and is enforceable directly by each such Indemnitee.

 

8.1.4                 Notice

 

If a claim for any Expense that an Indemnitee shall be indemnified against under this Section 8.1 is made, such Indemnitee shall give prompt written notice thereof to Owner.  Notwithstanding the foregoing, the failure of any Indemnitee to notify Owner as provided in this Section 8.1.4, or in Section 8.1.5, shall not release Owner from any of its obligations to indemnify such Indemnitee hereunder, except to the extent that such failure results in an additional Expense to Owner (in which event Owner shall not be responsible for such additional expense) or materially impairs Owner's ability to contest such claim.

 

8.1.5                 Notice of Proceedings; Defense of Claims; Limitations

 

(a)           In case any action, suit or proceeding shall be brought against any Indemnitee for which Owner is responsible under this Section 8.1, such Indemnitee shall notify Owner of the commencement thereof and Owner may, at its expense, participate in and to the extent that it shall wish (subject to the provisions of the following paragraph), assume and control the defense thereof and, subject to Section 8.1.5(c), settle or compromise the same.

 

(b)           Owner or its insurer(s) shall have the right, at its or their expense, to investigate or, if Owner or its insurer(s) shall agree not to dispute liability to the Indemnitee giving notice of such action, suit or proceeding under this Section 8.1.5 for indemnification hereunder or under any insurance policies pursuant to which coverage is sought, control the defense of, any action, suit or proceeding, relating to any Expense for which indemnification is sought pursuant to this Section 8.1, and each Indemnitee shall cooperate with Owner or its insurer(s) with respect thereto; provided, that Owner shall not be entitled to control the defense of any such action, suit, proceeding or compromise any such Expense during the continuance of any Event of Default.  In connection with any such action, suit or proceeding being controlled by Owner, such Indemnitee shall have the right to participate therein, at its sole cost and expense, with counsel reasonably satisfactory to Owner;

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provided, that such Indemnitee's participation does not, in the reasonable opinion of the independent counsel appointed by the Owner or its insurers to conduct such proceedings, interfere with the defense of such case.

 

(c)           In no event shall any Indemnitee enter into a settlement or other compromise with respect to any Expense without the prior written consent of Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 8.1.

 

(d)           In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by Owner pursuant to Section 4.06 of the Indenture, at Owner's expense, each Indemnitee agrees to cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense.

 

(e)           If an Indemnitee is not a party to this Agreement, Owner may require such Indemnitee to agree in writing to the terms of this Section 8 and Section 12.8 prior to making any payment to such Indemnitee under this Section 8.

 

(f)           Nothing contained in this Section 8.1.5 shall be deemed to require an Indemnitee to contest any Expense or to assume responsibility for or control of any judicial proceeding with respect thereto.

 

8.1.6                 Information

 

Owner will provide the relevant Indemnitee with such information not within the control of such Indemnitee, as is in Owner's control or is reasonably available to Owner, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its obligations under Section 8.1.5.  The Indemnitee shall supply Owner with such information not within the control of Owner, as is in such Indemnitee's control or is reasonably available to such Indemnitee, which Owner may reasonably request to control or participate in any proceeding to the extent permitted by Section 8.1.5.

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8.1.7                 Effect of Other Indemnities; Subrogation; Further Assurances

 

Upon the payment in full by Owner of any indemnity provided for under this Agreement, Owner, without any further action and to the full extent permitted by Law, will be subrogated to all rights and remedies of the person indemnified (other than with respect to any of such Indemnitee's insurance policies or in connection with any indemnity claim such Indemnitee may have under Section 6.03 or 8.01 of the Trust Indenture) in respect of the matter as to which such indemnity was paid.  Each Indemnitee will give such further assurances or agreements and cooperate with Owner to permit Owner to pursue such claims, if any, to the extent reasonably requested by Owner and at Owner's expense.

 

8.1.8                 Refunds

 

If an Indemnitee receives any refund, in whole or in part, with respect to any Expense paid by Owner hereunder, it will promptly pay the amount refunded (but not an amount in excess of the amount Owner or any of its insurers has paid in respect of such Expense) over to Owner unless an Event of Default shall have occurred and be continuing, in which case such amounts shall be paid over to Mortgagee to hold as security for Owner's obligations under the Operative Agreements or, if requested by Owner, applied to satisfy such obligations.

 

8.2           Expenses

 

8.2.1                 Invoices and Payment

 

The Mortgagee, the Applicable Pass Through Trustees and the Subordination Agent shall promptly submit to Owner for its prompt approval (which shall not be unreasonably withheld) copies of invoices in reasonable detail of the Transaction Expenses for which it is responsible for providing information as they are received (but in no event later than the 90th day after the Closing Date). If so submitted and approved, the Owner agrees promptly, but in any event no later than the 105th day after the Closing Date, to pay Transaction Expenses.

 

8.2.2                 Payment of Other Expenses

 

Owner shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii) all reasonable out-of-pocket costs and expenses (including the reasonable fees and disbursements of counsel) incurred by Mortgagee or any Note Holder attributable

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to any waiver, amendment or modification of any Operative Agreement to the extent requested by Owner.

 

8.3           General Tax Indemnity

 

8.3.1                 General

 

Except as provided in Section 8.3.2, Owner agrees that each payment paid by Owner under the Equipment Notes, and any other payment or indemnity paid by Owner to a Tax Indemnitee under any Operative Agreement, shall be free of all withholdings or deductions with respect to Taxes of any nature (other than U.S. federal, state or local withholding taxes on, based on or measured by gross or net income, including, without limitation, any such taxes imposed under FATCA), and in the event that Owner shall be required by applicable law to make any such withholding or deduction for any such payment (x) Owner shall make all such withholdings or deductions, (y) the amount payable by Owner shall be increased so that after making all required withholdings or deductions such Tax Indemnitee receives the same amount that it would have received had no such withholdings or deductions been made, and (z) Owner shall pay the full amount withheld or deducted to the relevant Taxing Authority in accordance with applicable law.  Except as provided in Section 8.3.2 and whether or not any of the transactions contemplated hereby are consummated, Owner shall pay, indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes imposed by any Taxing Authority that may from time to time be imposed on or asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or any Part or any interest in any of the foregoing (whether or not indemnified against by any other Person), upon or with respect to the Operative Agreements or the transactions or payments contemplated thereby, including but not limited to any Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any Engine, any Part, any Operative Agreement (including without limitation any Equipment Notes) or any data or any other thing delivered or to be delivered under an Operative Agreement, (y) the purchase, manufacture, acceptance, rejection, sale, transfer of title, return, ownership, mortgaging, delivery, transport, charter, rental, lease, re-lease, sublease, assignment, possession, repossession, presence, use, condition, storage, preparation, maintenance, modification, alteration, improvement, operation, registration, transfer or change of registration, reregistration, repair, replacement, overhaul, location, control, the imposition of any Lien, financing, refinancing requested by the Owner, abandonment or other disposition of the Aircraft, the Airframe, any Engine, any Part, any data or any

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other thing delivered or to be delivered under an Operative Agreement or (z) interest, fees or any other income, proceeds, receipts or earnings, whether actual or deemed, arising upon, in connection with, or in respect of, any of the Operative Agreements (including the property or income or other proceeds with respect to property held as part of the Collateral) or the transactions contemplated thereby.

 

8.3.2                 Certain Exceptions

 

The provisions of Section 8.3.1 shall not apply to, and Owner shall have no liability hereunder for, Taxes:

 

(a)           imposed on a Tax Indemnitee by the federal government of the United States or any Taxing Authority or governmental subdivision of the United States or therein (including any state or local Taxing Authority) (i) on, based on, or measured by, gross or net income or gross or net receipts, including capital gains taxes, excess profits taxes, minimum taxes from tax preferences, alternative minimum taxes, branch profits taxes, accumulated earnings taxes, personal holding company taxes, succession taxes and estate taxes, and any withholding taxes on, based on or measured by gross or net income or receipts, including, without limitation, any such taxes imposed under FATCA or (ii) on, or with respect to, or measured by, capital or net worth or in the nature of a franchise tax or a tax for the privilege of doing business (other than, in the case of clause (i) or (ii), sales, use, license or property Taxes);

 

(b)           imposed on a Tax Indemnitee by any Taxing Authority or governmental subdivision thereof or therein outside of the United States (including any Taxing Authority in or of a territory, possession or commonwealth of the United States) (i) on, based on, or measured by, gross or net income or gross or net receipts, including capital gains taxes, excess profits taxes, minimum taxes from tax preferences, alternative minimum taxes, branch profits taxes, accumulated earnings taxes, personal holding company taxes, succession taxes and estate taxes, and any withholding taxes on, based on or measured by gross or net income or receipts or (ii) on, or with respect to, or measured by, capital or net worth or in the nature of a franchise tax or a tax for the privilege of doing business (other than, in the case of clause (i) or (ii), (A) sales, use, license or property Taxes, or (B) any Taxes imposed by any Taxing Authority (other than a Taxing Authority within whose jurisdiction such Tax Indemnitee is incorporated or organized or maintains its principal place of business) if such Tax Indemnitee would not have been subject to Taxes of such type by

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such jurisdiction but for (I) the location, use or operation of the Aircraft, the Airframe, any Engine or any Part thereof by an Owner Person within the jurisdiction of the Taxing Authority imposing such Tax,  or (II) the activities of any Owner Person in such jurisdiction, including, but not limited to, use of any other aircraft by Owner in such jurisdiction, (III) the status of any Owner Person as a foreign entity or as an entity owned in whole or in part by foreign persons, (IV) Owner having made (or having been deemed to have made) payments to such Tax Indemnitee from the relevant jurisdiction or (V) in the case of the Pass Through Trustees, the Note Holders or any related Tax Indemnitee, the Owner being incorporated or organized or maintaining a place of business or conducting activities in such jurisdiction);

 

(c)           on, or with respect to, or measured by, any trustee fees, commissions or compensation received by the Pass Through Trustee, Subordination Agent or Mortgagee;

 

(d)           that are being contested as provided in Section 8.3.4 hereof;

 

(e)           imposed on any Tax Indemnitee to the extent that such Taxes result from the gross negligence or willful misconduct of such Tax Indemnitee or any Affiliate thereof;

 

(f)           imposed on or with respect to a Tax Indemnitee (including the transferee in those cases in which the Tax on transfer is imposed on, or is collected from, the transferee) as a result of a transfer or other disposition (including a deemed transfer or disposition) by such Tax Indemnitee or a related Tax Indemnitee of any interest in the Aircraft, the Airframe, any Engine or any Part, any interest arising under the Operative Agreements or any Equipment Note or as a result of a transfer or disposition (including a deemed transfer or disposition) of any interest in a Tax Indemnitee (other than (A) a substitution or replacement of the Aircraft, the Airframe, any Engine or any Part by an Owner Person that is treated for Tax purposes as a transfer or disposition, or (B) a transfer pursuant to an exercise of remedies upon an Event of Default that shall have occurred and have been continuing);

 

(g)           Taxes in excess of those that would have been imposed had there not been a transfer or other disposition by or to such Tax Indemnitee or a related Tax Indemnitee described in paragraph (f) above;

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(h)           consisting of any interest, penalties or additions to tax imposed on a Tax Indemnitee as a result of (in whole or in part) failure of such Tax Indemnitee or a related Tax Indemnitee to file any return properly and timely, unless such failure shall be caused by the failure of Owner to fulfill its obligations, if any, under Section 8.3.6 with respect to such return;

 

(i)           resulting from, or that would not have been imposed but for, any Liens arising as a result of claims against, or acts or omissions of, or otherwise attributable to such Tax Indemnitee or a related Tax Indemnitee that the Owner is not obligated to discharge under the Operative Agreements;

 

(j)           imposed on any Tax Indemnitee as a result of the breach by such Tax Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or any Affiliate thereof contained in any Operative Agreement or the inaccuracy of any representation or warranty by such Tax Indemnitee or any Affiliate thereof in any Operative Agreement;

 

(k)           in the nature of an intangible or similar Tax (i) upon or with respect to the value or principal amount of the interest of any Note Holder in any Equipment Note or the loan evidenced thereby but only if such Taxes are in the nature of franchise Taxes or result from the Tax Indemnitee doing business in the taxing jurisdiction and are imposed because of the place of incorporation or the activities unrelated to the transactions contemplated by the Operative Agreements in the taxing jurisdiction of such Tax Indemnitee;

 

(l)           imposed on a Tax Indemnitee by a Taxing Authority of a jurisdiction outside the United States to the extent that such Taxes would not have been imposed but for a connection between the Tax Indemnitee or a related Tax Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions contemplated by the Operative Agreements; or

 

(m)           Taxes relating to ERISA or Section 4975 of the Code.

 

For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that are successors, assigns, agents, servants or Affiliates of such Tax Indemnitee shall be related Tax Indemnitees.

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8.3.3                 Payment

 

(a)           Owner's indemnity obligation to a Tax Indemnitee under this Section 8.3 shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 8.3 and any tax benefits actually recognized by such Tax Indemnitee as a result of the indemnifiable Tax (including, without limitation, any benefits recognized as a result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit against Taxes not indemnifiable under this Section 8.3), shall equal the amount of the Tax indemnifiable under this Section 8.3.

 

(b)           At Owner's request, the computation of the amount of any indemnity payment owed by Owner or any amount owed by a Tax Indemnitee to Owner pursuant to this Section 8.3 shall be verified and certified by an independent public accounting firm selected by such Tax Indemnitee and reasonably satisfactory to Owner.  Such verification shall be binding.  The costs of such verification (including the fee of such public accounting firm) shall be borne by Owner unless such verification shall result in an adjustment in Owner's favor of 5% or more of the net present value of the payment as computed by such Tax Indemnitee, in which case the costs shall be paid by such Tax Indemnitee.

 

(c)           Each Tax Indemnitee shall provide Owner with such certifications, information and documentation as shall be in such Tax Indemnitee's possession and as shall be reasonably requested by Owner to minimize any indemnity payment pursuant to this Section 8.3; provided, that notwithstanding anything to the contrary contained herein, no Tax Indemnitee shall be required to provide Owner with any Tax returns.

 

(d)           Each Tax Indemnitee shall promptly forward to Owner any written notice, bill or advice received by it from any Taxing Authority concerning any Tax for which it seeks indemnification under this Section 8.3.  Owner shall pay any amount for which it is liable pursuant to this Section 8.3 directly to the appropriate Taxing Authority if legally permissible or upon demand of a Tax Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a contest occurs in accordance with Section 8.3.4, within 30 days after a Final Determination (as defined below)), but in no event more than one Business Day prior to the date the Tax to which such amount payable hereunder relates is due.  If requested by a Tax Indemnitee in writing, Owner shall furnish to the appropriate Tax Indemnitee the original or a certified copy of a receipt for Owner's payment of any Tax paid by Owner or such other evidence

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of payment of such Tax as is acceptable to such Tax Indemnitee.  Owner shall also furnish promptly upon written request such data as any Tax Indemnitee may reasonably require to enable such Tax Indemnitee to comply with the requirements of any taxing jurisdiction unless such data is not reasonably available to Owner or, unless such data is specifically requested by a Taxing Authority, is not customarily furnished by domestic air carriers under similar circumstances.  For purposes of this Section 8.3, a "Final Determination" shall mean (i) a decision, judgment, decree or other order by any court of competent jurisdiction that occurs pursuant to the provisions of Section 8.3.4, which decision, judgment, decree or other order has become final and unappealable, (ii) a closing agreement or  settlement agreement entered into in accordance with Section 8.3.4 that has become binding and is not subject to further review or appeal (absent fraud, misrepresentation, etc.), or (iii) the termination of administrative proceedings and the expiration of the time for instituting a claim in a court proceeding.

 

(e)           If any Tax Indemnitee shall actually realize a tax savings by reason of any Tax paid or indemnified by Owner pursuant to this Section 8.3 (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Tax Indemnitee shall pay to Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as, if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 8.3 by Owner to such Tax Indemnitee (less any payments previously made by such Tax Indemnitee to Owner pursuant to this Section 8.3.3 (e)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Owner to make payments to such Tax Indemnitee pursuant to this Section 8.3); provided, that such Tax Indemnitee shall not be required to make any payment pursuant to this sentence so long as a Lease Event of Default of a monetary nature has occurred and is continuing.  If a tax benefit is later disallowed or denied, the disallowance or denial shall be treated as a Tax indemnifiable under Section 8.3.1 without regard to the provisions of Section 8.3.2 (other than Section 8.3.2 (f)).  Each such Tax Indemnitee shall in good faith use reasonable efforts in filing its tax returns and in dealing with Taxing Authorities to seek and claim any such tax benefit.

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8.3.4                 Contest

 

(a)           If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest).  In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder.  If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding.  If requested to do so by Owner, the Tax Indemnitee shall appeal any

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adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court.  If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner's cost and expense) with such information or data that is in such Tax Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)).

 

(b)           Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing

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unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder.  Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax.

 

(c)           Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

 

8.3.5                 Refund

 

If any Tax Indemnitee shall receive a refund of, or be entitled to a credit against other liability for, all or any part of any Taxes paid, reimbursed or advanced by Owner, such Tax Indemnitee shall pay to Owner within 30 days of such receipt  an amount equal to the lesser of (a) the amount of such refund or credit plus any net tax benefit (taking into account any Taxes incurred by such Tax Indemnitee by reason of the receipt

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of such refund or realization of such credit) actually realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee made pursuant to this sentence (including this clause (a)) and (b) such tax payment, reimbursement or advance by Owner to such Tax Indemnitee theretofore made pursuant to this Section 8.3 (and the excess, if any, of the amount described in clause (a) over the amount described in clause (b) shall be carried forward and applied to reduce pro tanto any subsequent obligation of Owner to make payments to such Tax Indemnitee pursuant to this Section 8.3).  If, in addition to such refund or credit, such Tax Indemnitee shall receive (or be credited with) an amount representing interest on the amount of such refund or credit, such Tax Indemnitee shall pay to Owner within 30 days of such receipt or realization of such credit that proportion of such interest that shall be fairly attributable to Taxes paid, reimbursed or advanced by Owner prior to the receipt of such refund or realization of such credit.

 

8.3.6                 Tax Filing

 

If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Section 8.3, Owner shall timely file the same (except for any such report, return or statement which a Tax Indemnitee has timely notified the Owner in writing that such Tax Indemnitee intends to file, or for which such Tax Indemnitee is required by law to file, in its own name); provided, that the relevant Tax Indemnitee shall furnish Owner with any information in such Tax Indemnitee's possession or control that is reasonably necessary to file any such return, report or statement and is reasonably requested in writing by Owner (it being understood that the Tax Indemnitee shall not be required to furnish copies of its actual tax returns, although it may be required to furnish relevant information contained therein).  Owner shall either file such report, return or statement and send a copy of such report, return or statement to such Tax Indemnitee, or, where Owner is not permitted to file such report, return or statement, it shall notify such Tax Indemnitee of such requirement and prepare and deliver such report, return or statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee within a reasonable time prior to the time such report, return or statement is to be filed.

 

8.3.7                 Forms

 

Each Tax Indemnitee agrees to furnish from time to time to Owner or Mortgagee or to such other person as Owner or Mortgagee may designate, at Owner's or Mortgagee's request, such duly

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executed and properly completed forms as may be necessary or appropriate in order to claim any reduction of or exemption from any withholding or other Tax imposed by any Taxing Authority, if (x) such reduction or exemption is available to such Tax Indemnitee and (y) Owner has provided such Tax Indemnitee with any information necessary to complete such form not otherwise reasonably available to such Tax Indemnitee.

 

8.3.8                 Non-Parties

 

If a Tax Indemnitee is not a party to this Agreement, Owner may require the Tax Indemnitee to agree in writing, in a form reasonably acceptable to Owner, to the terms of this Section 8.3 and Section 15.8 prior to making any payment to such Tax Indemnitee under this Section 8.3.

 

8.3.9                 Subrogation

 

Upon payment of any Tax by Owner pursuant to this Section 8.3 to or on behalf of a Tax Indemnitee, Owner, without any further action, shall be subrogated to any claims that such Tax Indemnitee may have relating thereto.  Such Tax Indemnitee shall cooperate with Owner (to the extent such cooperation does not result in any unreimbursed cost, expense or liability to such Tax Indemnitee) to permit Owner to pursue such claims.

 

8.4           Payments

 

Any payments made pursuant to Section 8.1 or 8.3 shall be due on the 60th day after demand therefor and shall be made directly to the relevant Indemnitee or Tax Indemnitee or to Owner, in immediately available funds at such bank or to such account as specified by such Indemnitee or Tax Indemnitee or Owner, as the case may be, in written directives to the payor, or, if no such direction shall have been given, by check of the payor payable to the order of, and mailed to, such Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified mail, postage prepaid, at its address as set forth in this Agreement.

 

8.5           Interest

 

If any amount, payable by Owner, any Indemnitee or any Tax Indemnitee under Section 8.1 or 8.3 is not paid when due, the person obligated to make such payment shall pay on demand, to the extent permitted by Law, to the person entitled thereto, interest on any such amount for the period from and including the due date for such amount to but excluding the date the same is paid, at the Payment Due Rate.  Such interest shall be paid

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in the same manner as the unpaid amount in respect of which such interest is due.

 

8.6           Benefit of Indemnities

 

The obligations of Owner in respect of all indemnities, obligations, adjustments and payments in Section 8.1 or 8.3 are expressly made for the benefit of, and shall be enforceable by, the Indemnitee or Tax Indemnitee entitled thereto, notwithstanding any provision of the Trust Indenture.

 

SECTION 9.          ASSIGNMENT OR TRANSFER OF INTEREST

 

9.1           Note Holders

 

Subject to Section 6.3.2 hereof and Section 2.07 of the Trust Indenture, any Note Holder may, at any time and from time to time, Transfer or grant participations in all or any portion of the Equipment Notes and/or all or any portion of its beneficial interest in its Equipment Notes to any person (it being understood that the sale or issuance of Pass Through Certificates by a Pass Through Trustee shall not be considered a Transfer or participation); provided, that any participant in any such participations shall not have any direct rights under the Operative Agreements or any Lien on all or any part of the Aircraft or the Collateral and Owner shall not have any increased liability or obligations as a result of any such participation.  In the case of any such Transfer, the Transferee, by acceptance of Equipment Notes in connection with such Transfer, shall be deemed to be bound by (i) all of the covenants of Note Holders contained in the Operative Agreements and (ii) certain terms of the Intercreditor Agreement as specified in such Equipment Notes and/or Section 2.07 of the Trust Indenture.

 

9.2           Effect of Transfer

 

Upon any Transfer in accordance with Section 9.1 (other than any Transfer by any Note Holder, to the extent it only grants participations in Equipment Notes or in its beneficial interest therein), Transferee shall be deemed a "Note Holder," for all purposes of this Agreement and the other Operative Agreements, and the transferring Note Holder shall be released from all of its liabilities and obligations under this Agreement and any other Operative Agreements to the extent such liabilities and obligations arise after such Transfer and, in each case, to the extent such liabilities and obligations are assumed by the Transferee; provided, that such transferring Note

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Holder (and its respective Affiliates, successors, assigns, agents, servants, representatives, directors and officers) will continue to have the benefit of any rights or indemnities under any Operative Agreement vested or relating to circumstances, conditions, acts or events prior to such Transfer.

 

SECTION 10.          SECTION 1110

 

It is the intention of each of the Owner, the Note Holders (such intention being evidenced by each of their acceptance of an Equipment Note), and Mortgagee that Mortgagee shall be entitled to the benefits of Section 1110 in the event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

 

SECTION 11.          CHANGE OF CITIZENSHIP

 

11.1           Generally

 

Without prejudice to the representations, warranties or covenants regarding the status of any party hereto as a Citizen of the United States, each of Owner, WTNA and Mortgagee agrees that it will, immediately upon obtaining knowledge of any facts that would cast doubt upon its continuing status as a Citizen of the United States and promptly upon public disclosure of negotiations in respect of any transaction which would or might adversely affect such status, notify in writing all parties hereto of all relevant matters in connection therewith.

 

11.2           Mortgagee

 

Upon WTNA giving any notice in accordance with Section 11.1, Mortgagee shall (if and so long as such citizenship is necessary under the Act as in effect at such time or, if it is not necessary, if and so long as Mortgagee's citizenship could have any adverse effect on Owner, or any Note Holder), subject to Section 9.02 of the Trust Indenture, resign as Mortgagee promptly upon its ceasing to be such a citizen.

 

SECTION 12.          MISCELLANEOUS

 

12.1           Amendments

 

No provision of this Agreement may be amended, supplemented, waived, modified, discharged, terminated or otherwise varied orally, but only by an instrument in writing that specifically identifies the provision of this Agreement that it purports to amend, supplement, waive, modify, discharge,

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terminate or otherwise vary and is signed by the party against which the enforcement of the amendment, supplement, waiver, modification, discharge, termination or variance is sought.  Each such amendment, supplement, waiver, modification, discharge, termination or variance shall be effective only in the specific instance and for the specific purpose for which it is given.  No provision of this Agreement shall be varied or contradicted by oral communication, course of dealing or performance or other manner not set forth in an agreement, document or instrument in writing and signed by the party against which enforcement of the same is sought.

 

12.2           Severability

 

If any provision hereof shall be held invalid, illegal or unenforceable in any respect in any jurisdiction, then, to the extent permitted by Law, (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.  If, however, any Law pursuant to which such provisions are held invalid, illegal or unenforceable may be waived, such Law is hereby waived by the parties hereto to the full extent permitted, to the end that this Agreement shall be deemed to be a valid and binding agreement in all respects, enforceable in accordance with its terms.

 

12.3           Survival

 

The indemnities set forth herein shall survive the delivery or return of the Aircraft, the Transfer of any interest by any Note Holder of its Equipment Note and the expiration or other termination of this Agreement or any other Operative Agreement.

 

12.4           Reproduction of Documents

 

This Agreement, all schedules and exhibits hereto and all agreements, instruments and documents relating hereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed and (b) financial statements, certificates and other information previously or hereafter furnished to any party hereto, may be reproduced by such party by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process, and such party may destroy any original documents so reproduced.  Any such reproduction shall be as admissible in evidence as the original itself in any judicial or administrative proceeding

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(whether or not the original is in existence and whether or not such reproduction was made by such party in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction likewise is admissible in evidence.

 

12.5           Counterparts

 

This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts (or upon separate signature pages bound together into one or more counterparts), each of which when so executed shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument.

 

12.6           No Waiver

 

No failure on the part of any party hereto to exercise, and no delay by any party hereto in exercising, any of its respective rights, powers, remedies or privileges under this Agreement or provided at Law, in equity or otherwise shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach hereof or default hereunder or as an acquiescence therein nor shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise thereof by it or the exercise of any other right, power, remedy or privilege by it.  No notice to or demand on any party hereto in any case shall, unless otherwise required under this Agreement, entitle such party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of any party hereto to any other or further action in any circumstances without notice or demand.

 

12.7           Notices

 

Unless otherwise expressly permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers and other communications required or permitted to be made, given, furnished or filed hereunder shall be in writing (it being understood that the specification of a writing in certain instances and not in others does not imply an intention that a writing is not required as to the latter), shall refer specifically to this Agreement or other applicable Operative Agreement, and shall be personally delivered, sent by facsimile or telecommunication transmission (which in either case provides written confirmation to the sender of its delivery), sent by registered mail or certified mail, return

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receipt requested, postage prepaid, or sent by overnight courier service, in each case to the respective address, or facsimile number set forth for such party in Schedule 1, or to such other address, facsimile or other number as each party hereto may hereafter specify by notice to the other parties hereto.  Each such notice, request, demand, authorization, direction, consent, waiver or other communication shall be effective when received or, if made, given, furnished or filed (a) by facsimile or telecommunication transmission, when confirmed, or (b) by registered or certified mail, three Business Days after being deposited, properly addressed, with the U.S. Postal Service.

 

12.8           GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

 

(a)           THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.  THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

 

(b)           EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

 

(c)           EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET FORTH PURSUANT TO SECTION 12.7.  EACH PARTY HERETO HEREBY AGREES THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SECTION 12.8(c), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.

 

(d)           EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS

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IMPROPER OR THAT THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS.

 

(e)           EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

12.9           Third-Party Beneficiary

 

This Agreement is not intended to, and shall not, provide any person not a party hereto (other than the Indenture Indemnitees (including the Related Note Holders), each of which is an intended third party beneficiary with respect to the provisions of Section 8.1 (and, in the case of the Tax Indemnitees, Section 8.3) and the persons referred to in Section 6.4.6, which are intended third party beneficiaries with respect to such Section) with any rights of any nature whatsoever against any of the parties hereto and no person not a party hereto (other than the Indenture Indemnitees (including the Related Note Holders), with respect to the provisions of Section 8.1 (and, in the case of the Tax Indemnitees, Section 8.3), and the persons referred to in Section 6.4.6 with respect to the provisions of such Section) shall have any right, power or privilege in respect of any party hereto, or have any benefit or interest, arising out of this Agreement.

 

12.10         Entire Agreement

 

This Agreement, together with the other Operative Agreements, on and as of the date hereof, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and all prior or contemporaneous understandings or agreements, whether written or oral, among any of the parties hereto with respect to such subject matter are hereby superseded in their entireties.

 

12.11         Further Assurances

 

Each party hereto shall execute, acknowledge and deliver or shall cause to be executed, acknowledged and delivered, all such further agreements, instruments, certificates or documents, and shall do and cause to be done such further acts and things, in any case, as any other party hereto shall reasonably request in connection with the administration of, or to carry out more effectually the purposes of, or to better assure and confirm into such other party the rights and benefits to be provided under this Agreement and the other Operative Agreements.

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[This space intentionally left blank]

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IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be duly executed and delivered as of the day and year first above written.

	  	
UNITED AIRLINES, INC.,

Owner

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as expressly provided herein, but solely as Mortgagee

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as expressly provided herein, but solely as Pass Through Trustee under the Pass Through Trust Agreement for the United Airlines Pass Through Trust, 2014-2A-O

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

 

PARTICIPATION AGREEMENT 14-2

  

SIGNATURE PAGE

BACK

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as expressly provided herein, but solely as Pass Through Trustee under the Pass Through Trust Agreement for the United Airlines Pass Through Trust, 2014-2B-O

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity, except as expressly provided herein, but solely as Subordination Agent

	  
	  	  
	  	  
	  	
By

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

 

 

 

PARTICIPATION AGREEMENT 14-2

  

SIGNATURE PAGE

BACK

 

	
SCHEDULE 1 - ACCOUNTS; ADDRESSES

PARTICIPATION AGREEMENT [___]

ACCOUNTS; ADDRESSES

	  	
Account for Payments

 

	
Address for Notices

	  
	
United Airlines, Inc.

	
JPMorgan Chase Bank

New York, New York 10081

Account No.: 910-2-499291

ABA#: 021-000021

Attention: Alice Free

Voice: 318-362-8612

Facsimile: 318-362-8613

Reference: United [___]

 

	
United Airlines, Inc.

233 S. Wacker Drive

Chicago, Illinois 60606

Attention: Treasurer

Facsimile: (872) 825-0316

	  
	
Wilmington Trust, National Association, Mortgagee

	
Wilmington Trust, National Association

Wilmington, Delaware 19890-1605

Account No.: [___]

ABA#: 031-100092

Attention: Corporate Trust

 Administration

Reference: United [___]

 

	
Wilmington Trust, National Association

1100 North Market Street

Wilmington, Delaware  19890-1605

Attention: Corporate Trust

 Administration

Facsimile: (302) 636-4140

	
Wilmington Trust, National Association, as Subordination Agent

	
Wilmington Trust, National Association

Wilmington, Delaware 19890-1605

Account No.: 109199-000

ABA#: 031-100092

Attention: Corporate Trust

 Administration

Reference: United [__]

 

	
Wilmington Trust, National Association

1100 North Market Street

Wilmington, Delaware  19890-1605

Attention: Corporate Trust

 Administration

Facsimile:  (302) 636-4140

	
Wilmington Trust, National Association, as Pass Through Trustee for the 2014-2A Pass Through Trust

	
Wilmington Trust, National Association

Wilmington, Delaware 19890-1605

Account No.: 109132-000

ABA#: 031-100092

Attention: Corporate Trust

 Administration

 Reference: United [__]

	
Wilmington Trust, National Association

1100 North Market Street

Wilmington, Delaware  19890-1605

Attention:  Corporate Trust

 Administration

Facsimile:  (302) 636-4140

 

SCHEDULE 1 TO PARTICIPATION AGREEMENT 14-2

  

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SCHEDULE 1 - ACCOUNTS; ADDRESSES

PARTICIPATION AGREEMENT [___]

 

	  	
Account for Payments

 

	
Address for Notices

	  
	
Wilmington Trust, National Association, as Pass Through Trustee for the 2014-2B Pass Through Trust

	
Wilmington Trust, National Association

Wilmington, Delaware 19890-1605

Account No.: 109133-000

ABA#: 031-100092

Attention: Corporate Trust

 Administration

 Reference: United [__]

	
Wilmington Trust, National Association

1100 North Market Street

Wilmington, Delaware  19890-1605

Attention:  Corporate Trust

 Administration

Facsimile:  (302) 636-4140

SCHEDULE 1 TO PARTICIPATION AGREEMENT 14-2

  

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SCHEDULE 2 - COMMITMENTS

PARTICIPATION AGREEMENT [___]

 

COMMITMENTS

	

 

Pass Through 

Trustee

	

 

Series of

Equipment Notes

	

 

Dollar Amount

of Loan

	
 

2014-2A

	
 

Series A

	
 

[_________]

	
 

2014-2B

	
 

Series B

	
 

[_________]

 

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SCHEDULE 3 - CERTAIN TERMS

PARTICIPATION AGREEMENT [___]

 

CERTAIN TERMS

 

	
 

Defined Term

	
 

Definition

	
 

Minimum Liability Insurance Amount

	
 

$[                                    ]5

	
 

Threshold Amount

	
 

$[________]6

 

__________________________

  

5.           Insert $350,000,000 for 737-924ER, $550,000,000 for 787-9 and $250,000,000 for Embraer ERJ 175 LR.

  

6.           Insert $8,000,000 for 737-924ER, $18,000,000 for 787-9 and $5,000,000 for Embraer ERJ 175 LR.

SCHEDULE 3 TO PARTICIPATION AGREEMENT 14-2

 

  

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SCHEDULE 4 - PERMITTED COUNTRIES

PARTICIPATION AGREEMENT [___]

 

PERMITTED COUNTRIES

	
Argentina

	
Luxembourg

	
Australia

	
Malaysia

	
Austria

	
Malta

	
Bahamas

	
Mexico

	
Belgium

	
Morocco

	
Bolivia

	
Netherlands

	
Brazil

	
Netherlands Antilles

	
Canada

	
New Zealand

	
Chile

	
Norway

	
Colombia

	
Panama

	
Czech Republic

	
People's Republic of China

	
Denmark

	
Peru

	
Egypt

	
Philippines

	
Ecuador

	
Poland

	
Finland

	
Portugal

	
France

	
Republic of China (Taiwan)

	
Germany

	
Russia

	
Greece

	
Singapore

	
Guatemala

	
South Africa

	
Hungary

	
South Korea

	
Iceland

	
Spain

	
India

	
Sweden

	
Indonesia

	
Switzerland

	
Ireland

	
Thailand

	
Italy

	
Trinidad and Tobago

	
Jamaica

	
Turkey

	
Japan

	
United Kingdom

	
Jordan

	
Uruguay

	
Kuwait

	
Venezuela

 

SCHEDULE 4 TO PARTICIPATION AGREEMENT 14-2

  

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EXHIBIT C TO NOTE PURCHASE AGREEMENT

 

 

 

TRUST INDENTURE AND MORTGAGE [____]

 

Dated as of [____]

 

between

 

UNITED AIRLINES, INC.,

 

Owner,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

not in its individual capacity,

except as expressly stated herein,

but solely as Mortgagee,

 

Mortgagee

 

 

 

EQUIPMENT NOTES COVERING

ONE [BOEING/EMBRAER] [______] AIRCRAFT

BEARING U.S. REGISTRATION MARK N[______]

AND MANUFACTURER’S SERIAL NO. [______]

 

 

 

TRUST INDENTURE 14-2

  

  

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TABLE OF CONTENTS

 

Page

	
 

GRANTING CLAUSE

	
1

	
 

ARTICLE I  DEFINITIONS

	
4

	
 

ARTICLE II  THE EQUIPMENT NOTES

	
4

	
SECTION 2.01.  Form of Equipment Notes

	
4

	
SECTION 2.02.  Issuance and Terms of Equipment Notes

	
10

	
SECTION 2.03.  [Intentionally Omitted]

	
12

	
SECTION 2.04.  Method of Payment

	
12

	
SECTION 2.05.  Application of Payments

	
14

	
SECTION 2.06.  Termination of Interest in Collateral

	
15

	
SECTION 2.07.  Registration Transfer and Exchange of Equipment Notes

	
15

	
SECTION 2.08.  Mutilated, Destroyed, Lost or Stolen Equipment Notes

	
16

	
SECTION 2.09.  Payment of Expenses on Transfer; Cancellation

	
17

	
SECTION 2.10.  Mandatory Redemptions of Equipment Notes

	
17

	
SECTION 2.11.  Voluntary Redemptions of Equipment Notes

	
17

	
SECTION 2.12.  Redemptions; Notice of Redemption

	
18

	
SECTION 2.13.  Subordination

	
19

	
 

ARTICLE III  RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS

	
20

	
SECTION 3.01.  Basic Distributions

	
20

	
SECTION 3.02.  Event of Loss; Replacement; Optional Redemption

	
20

	
SECTION 3.03.  Payments After Event of Default

	
22

	
SECTION 3.04.  Certain Payments

	
24

	
SECTION 3.05.  Other Payments

	
25

	
SECTION 3.06.  Cooperation

	
25

	
SECTION 3.07.  Securities Account

	
25

	
 

ARTICLE IV  COVENANTS OF THE OWNER

	
26

	
SECTION 4.01.  Liens

	
26

	
SECTION 4.02.  Possession, Operation and Use, Maintenance, Registration and Markings

	
26

	
SECTION 4.03.  Inspection

	
31

	
SECTION 4.04.  Replacement and Pooling of Parts, Alterations, Modifications and Additions; Substitution Rights

	
32

	
SECTION 4.05.  Loss, Destruction or Requisition

	
35

	
SECTION 4.06.  Insurance

	
40

	
SECTION 4.07.  Merger of Owner

	
41

	
 

ARTICLE V  EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE

	
41

	
SECTION 5.01.  Event of Default

	
41

	
SECTION 5.02.  Remedies

	
43

TRUST INDENTURE 14-2

  

  

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TABLE OF CONTENTS

(continued)

 

Page

 

	
SECTION 5.03.  Return of Aircraft, Etc.

	
44

	
SECTION 5.04.  Remedies Cumulative

	
45

	
SECTION 5.05.  Discontinuance of Proceedings

	
45

	
SECTION 5.06.  Waiver of Past Defaults

	
46

	
SECTION 5.07.  Appointment of Receiver

	
46

	
SECTION 5.08.  Mortgagee Authorized to Execute Bills of Sale, Etc.

	
46

	
SECTION 5.09.  Rights of Note Holders to Receive Payment

	
46

	
 

ARTICLE VI  DUTIES OF THE MORTGAGEE

	
47

	
SECTION 6.01.  Notice of Event of Default

	
47

	
SECTION 6.02.  Action Upon Instructions; Certain Rights and Limitations

	
47

	
SECTION 6.03.  Indemnification

	
48

	
SECTION 6.04.  No Duties Except as Specified in Trust Indenture or Instructions

	
48

	
SECTION 6.05.  No Action Except Under Trust Indenture or Instructions

	
49

	
SECTION 6.06.  Investment of Amounts Held by Mortgagee

	
49

	
 

ARTICLE VII  THE MORTGAGEE

	
49

	
SECTION 7.01.  Acceptance of Trusts and Duties

	
49

	
SECTION 7.02.  Absence of Duties

	
50

	
SECTION 7.03.  No Representations or Warranties as to Aircraft or Documents

	
50

	
SECTION 7.04.  No Segregation of Monies; No Interest

	
50

	
SECTION 7.05.  Reliance; Agreements; Advice of Counsel

	
51

	
SECTION 7.06.  Compensation

	
51

	
SECTION 7.07.  Instructions from Note Holders

	
51

	
 

ARTICLE VIII  INDEMNIFICATION

	
52

	
SECTION 8.01.  Scope of Indemnification

	
52

	
 

ARTICLE IX  SUCCESSOR AND SEPARATE TRUSTEES

	
52

	
SECTION 9.01.  Resignation of Mortgagee; Appointment of Successor

	
52

	
SECTION 9.02.  Appointment of Additional and Separate Trustees

	
53

	
 

ARTICLE X  SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER DOCUMENTS

	
55

	
SECTION 10.01.  Instructions of Majority; Limitations

	
55

	
SECTION 10.02.  Mortgagee Protected

	
56

	
SECTION 10.03.  Documents Mailed to Note Holders

	
56

	
SECTION 10.04.  No Request Necessary for Trust Indenture Supplement

	
57

TRUST INDENTURE 14-2

  

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TABLE OF CONTENTS

(continued)

 

Page

 

	
 

ARTICLE XI  MISCELLANEOUS

	
57

	
SECTION 11.01.  Termination of Trust Indenture

	
57

	
SECTION 11.02.  No Legal Title to Collateral in Note Holders

	
57

	
SECTION 11.03.  Sale of Aircraft by Mortgagee Is Binding

	
57

	
SECTION 11.04.  Trust Indenture for Benefit of Owner, Mortgagee, Note Holders and the other Indenture Indemnitees

	
58

	
SECTION 11.05.  Notices

	
58

	
SECTION 11.06.  Severability

	
58

	
SECTION 11.07.  No Oral Modification or Continuing Waivers

	
58

	
SECTION 11.08.  Successors and Assigns

	
59

	
SECTION 11.09.  Headings

	
59

	
SECTION 11.10.  Normal Commercial Relations

	
59

	
SECTION 11.11.  Governing Law; Counterpart Form

	
59

	
SECTION 11.12.  Voting By Note Holders

	
59

	
SECTION 11.13.  Bankruptcy

	
59

 

ANNEX A                 Definitions

ANNEX B                  Insurance

EXHIBIT A                Form of Trust Indenture and Mortgage Supplement

SCHEDULE I             Equipment Notes Amortization and Interest Rates

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TRUST INDENTURE AND MORTGAGE [____]

 

TRUST INDENTURE AND MORTGAGE [____], dated as of [____] (this “Trust Indenture”), between UNITED AIRLINES, INC., a Delaware corporation (“Owner”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly stated herein, but solely as Mortgagee hereunder (together with its successors hereunder, the “Mortgagee”).

 

W I T N E S S E T H

 

WHEREAS, all capitalized terms used herein shall have the respective meanings set forth or referred to in Article I hereof;

 

WHEREAS, the parties hereto desire by this Trust Indenture, among other things, (i) to provide for the issuance by the Owner of the Series of Equipment Notes specified on Schedule I hereto, and the possible issuance of Additional Series, and (ii) to provide for the assignment, mortgage and pledge by the Owner to the Mortgagee, as part of the Collateral hereunder, among other things, of all of the Owner’s right, title and interest in and to the Aircraft and, except as hereinafter expressly provided, all payments and other amounts received hereunder in accordance with the terms hereof, as security for, among other things, the Owner’s obligations to the Note Holders and the Indenture Indemnitees;

 

WHEREAS, all things have been done to make the Equipment Notes of the Series listed on Schedule I hereto, when executed by the Owner and authenticated and delivered by the Mortgagee hereunder, the valid, binding and enforceable obligations of the Owner; and

 

WHEREAS, all things necessary to make this Trust Indenture the valid, binding and legal obligation of the Owner for the uses and purposes herein set forth, in accordance with its terms, have been done and performed and have happened;

 

GRANTING CLAUSE

 

NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to secure the prompt payment of the Original Amount of, interest on, Make-Whole Amount, if any, and all other amounts due with respect to, all Equipment Notes from time to time outstanding hereunder according to their tenor and effect and to secure the performance and observance by the Owner of all the agreements, covenants and provisions contained herein and in the Participation Agreement and in the Equipment Notes and to secure the Related Secured Obligations and the performance and observance by the Owner of all agreements, covenants and provisions contained in the Related Equipment Notes, for the benefit of the Note Holders and each of the Indenture Indemnitees, and in consideration of the premises and of the covenants herein contained, and of the acceptance of the Equipment Notes and the Related Equipment Notes by the holders thereof, and for other good and valuable consideration the receipt and adequacy whereof are hereby acknowledged, the Owner has granted, bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the Mortgagee, its successors in trust and assigns, for the security and benefit of, the Note Holders and each of the

TRUST INDENTURE 14-2

  

  

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Indenture Indemnitees, a first priority security interest and, in the case of the Airframe and Engines, an International Interest in and mortgage lien on all right, title and interest of the Owner in, to and under the following described property, rights and privileges, whether now or hereafter acquired (which, collectively, together with all property hereafter specifically subject to the Lien of this Trust Indenture by the terms hereof or any supplement hereto, are included within, and are referred to as, the “Collateral”), to wit:

 

(1)           The Airframe which is one [Boeing/Embraer] [______] aircraft with the FAA Registration number of N[______] and the manufacturer’s serial number of [______] and two Engines, each of which Engines is a [________________________] jet propulsion aircraft engine with at least 1750 lb. of thrust, with the manufacturer’s serial numbers of [______] and [______] (such Airframe and Engines more particularly described in the Trust Indenture Supplement executed and delivered as provided herein) as the same is now and will hereafter be constituted, whether now owned by the Owner or hereafter acquired, and in the case of such Engines, whether or not any such Engine shall be installed in or attached to the Airframe or any other airframe, together with (a) all Parts of whatever nature, which are from time to time included within the definitions of “Airframe” or “Engines”, whether now owned or hereafter acquired, including all substitutions, renewals and replacements of and additions, improvements, accessions and accumulations to the Airframe and Engines (other than additions, improvements, accessions and accumulations which constitute appliances, parts, instruments, appurtenances, accessories, furnishings or other equipment excluded from the definition of Parts) and (b) all Aircraft Documents;

 

(2)           The Purchase Agreement and the Bills of Sale to the extent the same relate to continuing rights of the Owner in respect of any warranty, indemnity or agreement, express or implied, as to title, materials, workmanship, design or patent infringement or related matters with respect to the Airframe or the Engines (reserving to the Owner, however, all of the Owner’s other rights and interest in and to the Purchase Agreement) together with all rights, powers, privileges, options and other benefits of the Owner thereunder (subject to such reservation) with respect to the Airframe or the Engines, including, without limitation, the right to make all waivers and agreements, to give and receive all notices and other instruments or communications, to take such action upon the occurrence of a default thereunder, including the commencement, conduct and consummation of legal, administrative or other proceedings, as shall be permitted thereby or by law, and to do any and all other things which the Owner is or may be entitled to do thereunder (subject to such reservation), subject, with respect to the Purchase Agreement, to the terms and conditions of the Consent and Agreement and the Engine Consent and Agreement;

 

(3)           All proceeds with respect to the requisition of title to or use of the Aircraft or any Engine by any Government Entity or from the sale or other disposition of the Aircraft, the Airframe, any Engine or other property described in any of these Granting Clauses by the Mortgagee pursuant to the terms of this Trust Indenture, and all insurance proceeds with respect to the Aircraft, the Airframe, any Engine or any part thereof, but excluding any insurance maintained by the Owner and not required under Section 4.06;

TRUST INDENTURE 14-2

  

2

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(4)           All rents, revenues and other proceeds collected by the Mortgagee pursuant to paragraph (iv) of clause “Third” of Section 3.03 and Section 5.03(b) and all monies and securities from time to time deposited or required to be deposited with the Mortgagee by or for the account of the Owner pursuant to any terms of this Trust Indenture held or required to be held by the Mortgagee hereunder, including the Securities Account and all monies and securities deposited into the Securities Account; and

 

(5)           All proceeds of the foregoing.

 

PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so long as no Event of Default shall have occurred and be continuing, (a) the Mortgagee shall not take or cause to be taken any action contrary to the Owner’s right hereunder to quiet enjoyment of the Airframe and Engines, and to possess, use, retain and control the Airframe and Engines and all revenues, income and profits derived therefrom, and (b) the Owner shall have the right, to the exclusion of the Mortgagee, with respect to the Indenture Agreements, to exercise in the Owner’s name all rights and powers of the Owner under the Indenture Agreements (other than to amend, modify or waive any of the warranties or indemnities contained therein, except in the exercise of the Owner’s reasonable business judgment) and to retain any recovery or benefit resulting from the enforcement of any warranty or indemnity under the Indenture Agreements; and provided further that, notwithstanding the occurrence or continuation of an Event of Default, the Mortgagee shall not enter into any amendment of any Indenture Agreement which would increase the obligations of the Owner thereunder.

 

TO HAVE AND TO HOLD all and singular the aforesaid property unto the Mortgagee, and its successors and assigns, in trust for the equal and proportionate benefit and security of the Note Holders and the Indenture Indemnitees, except as provided in Section 2.13 and Article III hereof, without any preference, distinction or priority of any one Equipment Note over any other, or any Related Equipment Note over any other, by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and in all cases and as to all property specified in clauses (1) through (5) inclusive above, subject to the terms and provisions set forth in this Trust Indenture.

 

It is expressly agreed that anything herein contained to the contrary notwithstanding, the Owner shall remain liable under the Indenture Agreements to perform all of the obligations assumed by it thereunder, except to the extent prohibited or excluded from doing so pursuant to the terms and provisions thereof, and the Mortgagee, the Note Holders and the Indenture Indemnitees shall have no obligation or liability under the Indenture Agreements by reason of or arising out of the assignment hereunder, nor shall the Mortgagee, the Note Holders or the Indenture Indemnitees be required or obligated in any manner to perform or fulfill any obligations of the Owner under or pursuant to the Indenture Agreements, or, except as herein expressly provided, to make any payment, or to make any inquiry as to the nature or sufficiency of any payment received by it, or present or file any claim, or take any action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

TRUST INDENTURE 14-2

  

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The Owner does hereby constitute the Mortgagee the true and lawful attorney of the Owner, irrevocably, granted for good and valuable consideration and coupled with an interest and with full power of substitution, and with full power (in the name of the Owner or otherwise) to ask for, require, demand, receive, compound and give acquittance for any and all monies and claims for monies (in each case including insurance and requisition proceeds) due and to become due under or arising out of the Indenture Agreements, and all other property which now or hereafter constitutes part of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or to take any action or to institute any proceedings which the Mortgagee may deem to be necessary or advisable in the premises; provided that the Mortgagee shall not exercise any such rights except upon the occurrence and during the continuance of an Event of Default hereunder.

 

The Owner agrees that at any time and from time to time, upon the written request of the Mortgagee, the Owner will promptly and duly execute and deliver or cause to be duly executed and delivered any and all such further instruments and documents (including without limitation UCC continuation statements) as the Mortgagee may reasonably deem necessary to perfect, preserve or protect the mortgage, security interests, International Interests and assignments created or intended to be created hereby or to obtain for the Mortgagee the full benefits of the assignment hereunder and of the rights and powers herein granted.

 

IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as follows:

 

ARTICLE I

 

DEFINITIONS

 

Capitalized terms used but not defined herein shall have the respective meanings set forth or incorporated by reference, and shall be construed in the manner described, in Annex A hereto.

 

ARTICLE II

 

THE EQUIPMENT NOTES

 

SECTION 2.01.  Form of Equipment Notes

 

The Equipment Notes shall be substantially in the form set forth below:

 

THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS IS AVAILABLE.

TRUST INDENTURE 14-2

  

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UNITED AIRLINES, INC.

 

SERIES [_____] EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE [BOEING/EMBRAER] MODEL [_____] AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N[_____]

 

No. ____                                                                                            Date: [__________, ____]

 

_______________________

 

	
INTEREST RATE

 

	
MATURITY DATE

	
[___________]

	
[____________]

 

UNITED AIRLINES, INC., a Delaware corporation (“Owner”), hereby promises to pay to __________________, or the registered assignee thereof, the principal sum of $____________ (the “Original Amount”), together with interest on the amount of the Original Amount remaining unpaid from time to time (calculated on the basis of a year of 360 days comprised of twelve 30-day months) from the date hereof until paid in full at a rate per annum equal to the Debt Rate.  The Original Amount of this Equipment Note shall be due and payable in installments on the dates set forth in Schedule I hereto equal to the corresponding percentage of the Original Amount of this Equipment Note set forth in Schedule I hereto.  Accrued but unpaid interest shall be due and payable in semi-annual installments commencing on [______ __, 20__,]1 and thereafter on [March 3 and September 3]2 of each year, to and including [_______________].  Notwithstanding the foregoing, the final payment made on this Equipment Note shall be in an amount sufficient to discharge in full the unpaid Original Amount and all accrued and unpaid interest on, and any other amounts due under, this Equipment Note.  Notwithstanding anything to the contrary contained herein, if any date on which a payment under this Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall be made on the next succeeding Business Day and if such payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment during such extension.

 

For purposes hereof, the term “Trust Indenture” means the Trust Indenture and Mortgage [____] dated as of [____], between the Owner and Wilmington Trust, National Association (the “Mortgagee”), as the same may be amended or supplemented from time to time.  All other capitalized terms used in this Equipment Note and not defined herein shall have the respective meanings assigned in the Trust Indenture.

 

  

_______________________

 

	
1.

	
Insert first March 3 or September 3 after the Closing Date, excluding September 3, 2014.

  

	
2.

	
Correct order, if necessary.

TRUST INDENTURE 14-2

  

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This Equipment Note shall bear interest, payable on demand, at the Payment Due Rate (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole Amount, if any, and (to the extent permitted by applicable Law) any overdue interest and any other amounts payable hereunder which are overdue, in each case for the period the same is overdue.  Amounts shall be overdue if not paid when due (whether at stated maturity, by acceleration or otherwise).

 

There shall be maintained an Equipment Note Register for the purpose of registering transfers and exchanges of Equipment Notes at the Corporate Trust Office of the Mortgagee or at the office of any successor in the manner provided in Section 2.07 of the Trust Indenture.

 

The Original Amount and interest and other amounts due hereunder shall be payable in Dollars in immediately available funds at the Corporate Trust Office of the Mortgagee, or as otherwise provided in the Trust Indenture.  Each such payment shall be made on the date such payment is due and without any presentment or surrender of this Equipment Note, except that in the case of any final payment with respect to this Equipment Note, the Equipment Note shall be surrendered promptly thereafter to the Mortgagee for cancellation.

 

The holder hereof, by its acceptance of this Equipment Note, agrees that, except as provided in the Trust Indenture, each payment of the Original Amount, Make-Whole Amount, if any, and interest received by it hereunder shall be applied, first, to the payment of Make-Whole Amount, if any, and any other amount (other than as covered by any of the following clauses) due hereunder or under the Trust Indenture, second, to the payment of accrued interest on this Equipment Note (as well as any interest on any overdue Original Amount, any overdue Make-Whole Amount, if any, or, to the extent permitted by Law, any overdue interest and other amounts hereunder) to the date of such payment, third, to the payment of the Original Amount of this Equipment Note then due, and fourth, the balance, if any, remaining thereafter, to the payment of installments of the Original Amount of this Equipment Note remaining unpaid in the inverse order of their maturity.

 

This Equipment Note is one of the Equipment Notes referred to in the Trust Indenture which have been or are to be issued by the Owner pursuant to the terms of the Trust Indenture.  The Collateral is held by the Mortgagee as security, in part, for the Equipment Notes.  The provisions of this Equipment Note are subject to the Trust Indenture and the Related Indentures.  Reference is hereby made to the Trust Indenture and the Related Indentures for a complete statement of the rights and obligations of the holder of, and the nature and extent of the security for, this Equipment Note (including as a “Related Equipment Note” under each of the Related Indentures) and the rights and obligations of the holders of, and the nature and extent of the security for, any other Equipment Notes executed and delivered under the Trust Indenture, as well as for a statement of the terms and conditions of the Trust created by the Trust Indenture, to all of which terms and conditions in the Trust Indenture each holder hereof agrees by its acceptance of this Equipment Note.

TRUST INDENTURE 14-2

  

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As provided in the Trust Indenture and subject to certain limitations therein set forth, this Equipment Note is exchangeable for a like aggregate Original Amount of Equipment Notes of different authorized denominations, as requested by the holder surrendering the same.

 

Prior to due presentment for registration of transfer of this Equipment Note, the Owner and the Mortgagee shall treat the person in whose name this Equipment Note is registered as the owner hereof for all purposes, whether or not this Equipment Note be overdue, and neither the Owner nor the Mortgagee shall be affected by notice to the contrary.

 

This Equipment Note is subject to redemption as provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise.  In addition, this Equipment Note may be accelerated as provided in Section 5.02 of the Trust Indenture.

 

This Equipment Note is subject to certain restrictions set forth in Sections 4.1(a)(i) and 4.1(a)(iii) of the Intercreditor Agreement, as further specified in Section 2.07 of the Trust Indenture, to all of which terms and conditions in the Intercreditor Agreement each holder hereof agrees by its acceptance of this Equipment Note.

 

[The indebtedness evidenced by this Equipment Note is, to the extent and in the manner provided in the Trust Indenture, subordinate and subject in right of payment to the prior payment in full of the Secured Obligations (as defined in the Trust Indenture) in respect of  [Series A Equipment Notes and Related Series A Equipment Notes]3 [Series A Equipment Notes, Series B Equipment Notes, Related Series A Equipment Notes and Related Series B Equipment Notes]4, and certain other Secured Obligations, and this Equipment Note is issued subject to such provisions.  The Note Holder of this Equipment Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Mortgagee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Trust Indenture and (c) appoints the Mortgagee his attorney-in-fact for such purpose.]5

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Mortgagee by manual signature, this Equipment Note shall not be entitled to any benefit under the Trust Indenture or be valid or obligatory for any purpose.

 

THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

*   *   *

 

  

_______________________

 

	
3.

	
To be inserted in the case of a Series B Equipment Note.

  

	
4.

	
To be inserted in the case of an Additional Series Equipment Note.

  

	
5.

	
To be inserted for each Equipment Note other than any Series A Equipment Note.

TRUST INDENTURE 14-2

  

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IN WITNESS WHEREOF, the Owner has caused this Equipment Note to be executed in its corporate name by its officer thereunto duly authorized on the date hereof.

	  	
UNITED AIRLINES, INC.

	  
	  	  
	  	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

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MORTGAGEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Equipment Notes referred to in the within-mentioned Trust Indenture.

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Mortgagee

	  
	  	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

SCHEDULE I

 

EQUIPMENT NOTE AMORTIZATION

 

Payment Date                                                                             Percentage of Original Amount to Be Paid

 

[SEE SCHEDULE I TO TRUST INDENTURE

WHICH IS INSERTED UPON ISSUANCE]

*   *   *

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SECTION 2.02.  Issuance and Terms of Equipment Notes

 

The Equipment Notes (other than the Additional Series Equipment Notes) shall be dated the Closing Date, shall be issued in two separate series consisting of Series A and Series B and in the maturities and principal amounts and shall bear interest as specified in Schedule I hereto.  On the Closing Date, each Series specified in Schedule I shall be issued to the Subordination Agent on behalf of the Applicable Pass Through Trustee under the Applicable Pass Through Trust Agreement.  In addition to the foregoing, Owner shall have the option to issue Additional Series Equipment Notes at any time and from time to time at or after the Issuance Date, subject to the terms of Section 4(a)(vi) of the Note Purchase Agreement and Section 9.1(d) of the Intercreditor Agreement.  If Owner so elects to issue Additional Series Equipment Notes, Additional Series Equipment Notes may be issued in no more than two separate series (if more than one series of Additional Series Equipment Notes are so issued, each such series shall have a different designation such as, for example, “Series C” and “Series D”), shall be dated the date of original issuance thereof and shall have such maturities, principal amounts and interest rates as specified in an amendment to this Trust Indenture.  The Equipment Notes shall be issued in registered form only.  The Equipment Notes shall be issued in denominations of $1,000 and integral multiples thereof, except that one Equipment Note of each Series may be in an amount that is not an integral multiple of $1,000. Without limitation of the foregoing, new Series B Equipment Notes may be issued pursuant to the provisions of Section 2.11(b).

 

Each Equipment Note shall bear interest at the applicable Debt Rate (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on the unpaid Original Amount thereof from time to time outstanding.  Accrued interest shall be payable in arrears on [__________], 20[__],6 and on each [March 3 and September 3]7 thereafter until maturity.  The Original Amount of each Equipment Note shall be payable on the dates and in the installments equal to the corresponding percentage of the Original Amount as set forth in Schedule I hereto (as amended, in the case of any Additional Series, at the time of original issuance of such Additional Series) which shall be attached as Schedule I to such Equipment Notes.  Notwithstanding the foregoing, the final payment made under each Equipment Note shall be in an amount sufficient to discharge in full the unpaid Original Amount and all accrued and unpaid interest on, and any other amounts due under, such Equipment Note.  Each Equipment Note shall bear interest, payable on demand, at the Payment Due Rate (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any part of the Original Amount, Make-Whole Amount, if any, and, to the extent permitted by applicable Law, interest and any other amounts payable thereunder not paid when due for any period during which the same shall be overdue, in each case for the period the same is overdue.  Amounts under any Equipment Note shall be overdue if not paid when due (whether at stated maturity, by acceleration or otherwise).  Notwithstanding anything to the contrary contained herein, if any date on which a payment under any Equipment Note becomes due and payable is not a Business Day then such payment shall

 

  

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6.

	
Insert first March 3 or September 3 after the Closing Date, excluding September 3, 2014.

  

	
7.

	
Correct order, if necessary.

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not be made on such scheduled date but shall be made on the next succeeding Business Day and if such payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment during such extension.

 

The Owner agrees to pay to the Mortgagee for distribution in accordance with Section 3.04 hereof:  (a)(i) to the extent not payable (whether or not in fact paid) under Section 6(a) of the Note Purchase Agreement, an amount equal to the fees payable to the Liquidity Provider under Section 2.03 of each Liquidity Facility and the related Fee Letter (as defined in the Intercreditor Agreement) multiplied by a fraction the numerator of which shall be the then outstanding aggregate principal amount of the Series A Equipment Notes and Series B Equipment Notes and the denominator of which shall be the then outstanding aggregate principal amount of all “Series A Equipment Notes” and “Series B Equipment Notes” (each as defined in the Note Purchase Agreement); (ii) (x) the amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings from such Downgrade Advance multiplied by (y) the fraction specified in the foregoing clause (i); (iii) (x) the amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings from such Non-Extension Advance multiplied by (y) the fraction specified in the foregoing clause (i); (iv) (x) the amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under Section 3.07 of each Liquidity Facility minus Investment Earnings from such Special Termination Advance multiplied by (y) the fraction specified in the foregoing clause (i); (v) if any payment default shall have occurred and be continuing with respect to interest on any “Series A Equipment Notes” or “Series B Equipment Notes” (each as defined in the Note Purchase Agreement), (x) the excess, if any, of (1) an amount equal to interest on any Unpaid Advance, Applied Downgrade Advance, Applied Non-Extension Advance or Applied Special Termination Advance payable under Section 3.07 of each Liquidity Facility over (2) the sum of Investment Earnings from any Final Advance plus any amount of interest at the Payment Due Rate actually payable (whether or not in fact paid) by Owner on the overdue scheduled interest on the “Equipment Notes” (as defined in the Note Purchase Agreement) in respect of which such Unpaid Advance, Applied Downgrade Advance, Applied Non-Extension Advance or Applied Special Termination Advance was made by the Liquidity Provider multiplied by (y) a fraction the numerator of which shall be the then aggregate overdue amounts of interest on the Series A Equipment Notes and Series B Equipment Notes (other than interest becoming due and payable solely as a result of acceleration of any such Equipment Notes) and the denominator of which shall be the then aggregate overdue amounts of interest on all “Series A Equipment Notes” and “Series B Equipment Notes” (each as defined in the Note Purchase Agreement) (other than interest becoming due and payable solely as a result of acceleration of any such “Equipment Notes”); and (vi) any other amounts owed to the Liquidity Provider by the Subordination Agent as borrower under each Liquidity Facility other than amounts due as repayment of advances thereunder or as interest on such advances, except to the extent payable pursuant to clause (ii), (iii), (iv) or (v) above, multiplied by the fraction specified in the foregoing clause (i), (b) Owner’s pro rata share of all compensation and reimbursement of expenses, disbursements and advances payable by Owner under the Pass Through Trust Agreements, (c) Owner’s pro rata share of all compensation and reimbursement of expenses and disbursements payable to the Subordination Agent under the Intercreditor Agreement except

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with respect to any income or franchise taxes incurred by the Subordination Agent in connection with the transactions contemplated by the Intercreditor Agreement and (d) in the event Owner requests any amendment to any Operative Agreement or Pass Through Agreement, Owner’s pro rata share of all reasonable fees and expenses (including, without limitation, fees and disbursements of counsel) of the Escrow Agents and the Paying Agents in connection therewith payable by the Pass Through Trustees under the Escrow Agreements.  As used herein, “Owner’s pro rata share” means as of any time a fraction, the numerator of which is the principal balance then outstanding of Equipment Notes and the denominator of which is the aggregate principal balance then outstanding of all “Equipment Notes” (as each such term is defined in each of the Operative Indentures).  For purposes of this paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Applied Special Termination Advance”, “Cash Collateral Account”, “Downgrade Advance”, “Final Advance”, “Investment Earnings”, “Non-Extension Advance”, “Special Termination Advance” and “Unpaid Advance” shall have the meanings specified in each Liquidity Facility.

 

The Equipment Notes shall be executed on behalf of the Owner by one of its authorized officers.  Equipment Notes bearing the signatures of individuals who were at any time the proper officers of the Owner shall bind the Owner, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Equipment Notes or did not hold such offices at the respective dates of such Equipment Notes.  The Owner may from time to time execute and deliver Equipment Notes with respect to the Aircraft to the Mortgagee for authentication upon original issue and such Equipment Notes shall thereupon be authenticated and delivered by the Mortgagee upon the written request of the Owner signed by an authorized officer of the Owner.  No Equipment Note shall be secured by or entitled to any benefit under this Trust Indenture or be valid or obligatory for any purposes, unless there appears on such Equipment Note a certificate of authentication in the form provided for herein executed by the Mortgagee by the manual signature of one of its authorized officers and such certificate upon any Equipment Notes be conclusive evidence, and the only evidence, that such Equipment Note has been duly authenticated and delivered hereunder.

 

The aggregate Original Amount of any Series of Equipment Notes issued hereunder shall not exceed the amount set forth as the maximum therefor on Schedule I hereto (as amended, in the case of any Additional Series, at the time of original issuance of such Additional Series).

 

SECTION 2.03.  [Intentionally Omitted]

 

SECTION 2.04.  Method of Payment

 

(a)           The Original Amount of, interest on, Make-Whole Amount, if any, and other amounts due under each Equipment Note or hereunder will be payable in Dollars by wire transfer of immediately available funds not later than 12:30 PM, New York time, on the due date of payment to the Mortgagee at the Corporate Trust Office for distribution among the Note Holders in the manner provided herein, and payment of such amount by the Owner to the Mortgagee shall be deemed to satisfy the Owner’s obligation to make such payment.  The Owner shall not have any responsibility for the distribution of such payment to any Note Holder.

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Notwithstanding the foregoing or any provision in any Equipment Note to the contrary, the Mortgagee will use reasonable efforts to pay or cause to be paid, if so directed in writing by any Note Holder (with a copy to the Owner), all amounts paid by the Owner hereunder and under such holder’s Equipment Note or Equipment Notes to such holder or a nominee therefor (including all amounts distributed pursuant to Article III of this Trust Indenture) by transferring, or causing to be transferred, by wire transfer of immediately available funds in Dollars, prior to 2:00 p.m., New York City time, on the due date of payment, to an account maintained by such holder with a bank located in the continental United States the amount to be distributed to such holder, for credit to the account of such holder maintained at such bank.  If the Mortgagee shall fail to make any such payment as provided in the immediately foregoing sentence after its receipt of funds at the place and prior to the time specified above, the Mortgagee, in its individual capacity and not as trustee, agrees to compensate such holders for loss of use of funds at Debt Rate until such payment is made and the Mortgagee shall be entitled to any interest earned on such funds until such payment is made.  Any payment made hereunder shall be made without any presentment or surrender of any Equipment Note, except that, in the case of the final payment in respect of any Equipment Note, such Equipment Note shall be surrendered to the Mortgagee for cancellation promptly after such payment.  Notwithstanding any other provision of this Trust Indenture to the contrary, the Mortgagee shall not be required to make, or cause to be made, wire transfers as aforesaid prior to the first Business Day on which it is practicable for the Mortgagee to do so in view of the time of day when the funds to be so transferred were received by it if such funds were received after 12:30 PM, New York time, at the place of payment.  Prior to the due presentment for registration of transfer of any Equipment Note, the Owner and the Mortgagee shall deem and treat the Person in whose name any Equipment Note is registered on the Equipment Note Register as the absolute owner and holder of such Equipment Note for the purpose of receiving payment of all amounts payable with respect to such Equipment Note and for all other purposes, and none of the Owner or the Mortgagee shall be affected by any notice to the contrary.  So long as any signatory to the Participation Agreement or nominee thereof shall be a registered Note Holder, all payments to it shall be made to the account of such Note Holder specified in Schedule 1 thereto and otherwise in the manner provided in or pursuant to the Participation Agreement unless it shall have specified some other account or manner of payment by notice to the Mortgagee consistent with this Section 2.04.

 

(b)           The Mortgagee, as agent for the Owner, shall exclude and withhold at the appropriate rate from each payment of Original Amount of, interest on, Make-Whole Amount, if any, and other amounts due hereunder or under each Equipment Note (and such exclusion and withholding shall constitute payment in respect of such Equipment Note) any and all United States withholding taxes, including, without limitation, any such withholding taxes imposed under FATCA applicable thereto as required by Law.  The Mortgagee agrees to act as such withholding agent and, in connection therewith, whenever any present or future United States taxes or similar charges are required to be withheld with respect to any amounts payable hereunder or in respect of the Equipment Notes, to withhold such amounts and timely pay the same to the appropriate authority in the name of and on behalf of the Note Holders, that it will file any necessary United States withholding tax returns or statements when due, and that as promptly as possible after the payment thereof it will deliver to each Note Holder (with a copy to the Owner) appropriate receipts showing the payment thereof, together with such additional documentary evidence as any such Note Holder may reasonably request from time to time.

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If a Note Holder which is a Non-U.S. Person has furnished to the Mortgagee a properly completed, accurate and currently effective U.S. Internal Revenue Service Form W-8BEN or W-8ECI (or such successor form or forms as may be required by the United States Treasury Department) during the calendar year in which the payment hereunder or under the Equipment Note(s) held by such holder is made (but prior to the making of such payment), or in either of the two preceding calendar years, and has not notified the Mortgagee of the withdrawal or inaccuracy of such form prior to the date of such payment (and the Mortgagee has no reason to believe that any information set forth in such form is inaccurate), the Mortgagee shall withhold only the amount, if any, required by Law (after taking into account any applicable exemptions properly claimed by the Note Holder) to be withheld from payments hereunder or under the Equipment Notes held by such holder in respect of United States federal income tax, including any amounts required to be withheld under FATCA.  If a Note Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly completed, accurate and currently effective U.S. Internal Revenue Service Form W-8ECI in duplicate (or such successor certificate, form or forms as may be required by the United States Treasury Department as necessary in order to properly avoid withholding of United States federal income tax), for each calendar year in which a payment is made (but prior to the making of any payment for such year), and has not notified the Mortgagee of the withdrawal or inaccuracy of such certificate or form prior to the date of such payment (and the Mortgagee has no reason to believe that any information set forth in such form is inaccurate) or (y) which is a U.S. Person has furnished to the Mortgagee a properly completed, accurate and currently effective U.S. Internal Revenue Service Form W-9, if applicable, prior to a payment hereunder or under the Equipment Notes held by such holder, no amount shall be withheld from payments in respect of United States federal income tax.  If any Note Holder has notified the Mortgagee that any of the foregoing forms or certificates is withdrawn or inaccurate, or if such holder has not filed a form claiming an exemption from United States withholding tax or if the Code or the regulations thereunder or the administrative interpretation thereof is at any time after the date hereof amended to require such withholding of United States federal income taxes from payments under the Equipment Notes held by such holder, the Mortgagee agrees to withhold from each payment due to the relevant Note Holder withholding taxes at the appropriate rate under Law and will, on a timely basis as more fully provided above, deposit such amounts with an authorized depository and make such returns, statements, receipts and other documentary evidence in connection therewith as required by Law.

 

Owner shall not have any liability for the failure of the Mortgagee to withhold taxes in the manner provided for herein or for any false, inaccurate or untrue evidence provided by any Note Holder hereunder.

 

SECTION 2.05.  Application of Payments

 

In the case of each Equipment Note, each payment of Original Amount, Make-Whole Amount, if any, and interest due thereon shall be applied:

 

First:  to the payment of Make-Whole Amount, if any, with respect to such Equipment Note and any other amount (other than as covered by any of the following clauses) due hereunder or under such Equipment Note;

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Second:  to the payment of accrued interest on such Equipment Note (as well as any interest on any overdue Original Amount, any overdue Make-Whole Amount, if any, and to the extent permitted by Law, any overdue interest and any other overdue amounts thereunder) to the date of such payment;

 

Third:  to the payment of the Original Amount of such Equipment Note (or a portion thereof) then due thereunder; and

 

Fourth:  the balance, if any, remaining thereafter, to the payment of the Original Amount of such Equipment Note remaining unpaid (provided that such Equipment Note shall not be subject to redemption except as provided in Sections 2.10, 2.11 and 2.12 hereof).

 

The amounts paid pursuant to clause “Fourth” above shall be applied to the installments of Original Amount of such Equipment Note in the inverse order of their scheduled maturity.

 

SECTION 2.06.  Termination of Interest in Collateral

 

No Note Holder nor any other Indenture Indemnitee shall, as such, have any further interest in, or other right with respect to, the Collateral when and if the Original Amount of, Make-Whole Amount, if any, and interest on and other amounts due under all Equipment Notes held by such Note Holder and all other sums then due and payable to such Note Holder, such Indenture Indemnitee or the Mortgagee hereunder (including, without limitation, under the third paragraph of Section 2.02 hereof) and under the other Operative Agreements by the Owner and all Related Secured Obligations (collectively, the “Secured Obligations”) shall have been paid in full.

 

SECTION 2.07.  Registration Transfer and Exchange of Equipment Notes

 

The Mortgagee shall keep a register (the “Equipment Note Register”) in which the Mortgagee shall provide for the registration of Equipment Notes and the registration of transfers of Equipment Notes.  No such transfer shall be given effect unless and until registration hereunder shall have occurred.  The Equipment Note Register shall be kept at the Corporate Trust Office of the Mortgagee.  The Mortgagee is hereby appointed “Equipment Note Registrar” for the purpose of registering Equipment Notes and transfers of Equipment Notes as herein provided.  A holder of any Equipment Note intending to exchange such Equipment Note shall surrender such Equipment Note to the Mortgagee at the Corporate Trust Office, together with a written request from the registered holder thereof for the issuance of a new Equipment Note, specifying, in the case of a surrender for transfer, the name and address of the new holder or holders.  Upon surrender for registration of transfer of any Equipment Note, the Owner shall execute, and the Mortgagee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Equipment Notes of a like aggregate Original Amount and of the same Series.  At the option of the Note Holder, Equipment Notes may be exchanged for other Equipment Notes of any authorized denominations of a like aggregate Original Amount, upon surrender of the Equipment Notes to be exchanged to the Mortgagee at the Corporate Trust Office.  Whenever any Equipment Notes are so surrendered for exchange, the Owner shall execute, and the Mortgagee shall authenticate and deliver, the Equipment Notes

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which the Note Holder making the exchange is entitled to receive.  All Equipment Notes issued upon any registration of transfer or exchange of Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof or otherwise under this Trust Indenture) shall be the valid obligations of the Owner evidencing the same respective obligations, and entitled to the same security and benefits under this Trust Indenture, as the Equipment Notes surrendered upon such registration of transfer or exchange.  Every Equipment Note presented or surrendered for registration of transfer, shall (if so required by the Mortgagee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Mortgagee duly executed by the Note Holder or such holder’s attorney duly authorized in writing, and the Mortgagee shall require evidence satisfactory to it as to the compliance of any such transfer with the Securities Act, and the securities Laws of any applicable state.  The Mortgagee shall make a notation on each new Equipment Note of the amount of all payments of Original Amount previously made on the old Equipment Note or Equipment Notes with respect to which such new Equipment Note is issued and the date to which interest on such old Equipment Note or Equipment Notes has been paid.  Interest shall be deemed to have been paid on such new Equipment Note to the date on which interest shall have been paid on such old Equipment Note, and all payments of the Original Amount marked on such new Equipment Note, as provided above, shall be deemed to have been made thereon.  The Owner shall not be required to exchange any surrendered Equipment Notes as provided above during the ten-day period preceding the due date of any payment on such Equipment Note.  The Owner shall in all cases deem the Person in whose name any Equipment Note shall have been issued and registered as the absolute owner and holder of such Equipment Note for the purpose of receiving payment of all amounts payable by the Owner with respect to such Equipment Note and for all purposes until a notice stating otherwise is received from the Mortgagee and such change is reflected on the Equipment Note Register.  The Mortgagee will promptly notify the Owner of each registration of a transfer of an Equipment Note.  Any such transferee of an Equipment Note, by its acceptance of an Equipment Note, (i) agrees to the provisions of this Trust Indenture and the Participation Agreement applicable to Note Holders, including Sections 6.3, 6.4 and 9.1 thereof, and shall be deemed to have covenanted to the parties to the Participation Agreement as to the matters covenanted by the original Note Holder in the Participation Agreement and (ii) agrees to the restrictions set forth in Sections 4.1(a)(i) and 4.1(a)(iii) of the Intercreditor Agreement, and shall be deemed to have covenanted to the parties to the Intercreditor Agreement not to give any direction, or otherwise authorize, the Mortgagee to take any action that would violate Sections 4.1(a)(i) or 4.1(a)(iii) of the Intercreditor Agreement.  Subject to compliance by the Note Holder and its transferee (if any) of the requirements set forth in this Section 2.07, Mortgagee and Owner shall use all reasonable efforts to issue new Equipment Notes upon transfer or exchange within 10 Business Days of the date an Equipment Note is surrendered for transfer or exchange.

 

SECTION 2.08.  Mutilated, Destroyed, Lost or Stolen Equipment Notes

 

If any Equipment Note shall become mutilated, destroyed, lost or stolen, the Owner shall, upon the written request of the holder of such Equipment Note, execute and the Mortgagee shall authenticate and deliver in replacement thereof a new Equipment Note, payable in the same Original Amount dated the same date and captioned as issued in connection with the Aircraft.  If the Equipment Note being replaced has become mutilated, such Equipment Note shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished to the Owner.

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If the Equipment Note being replaced has been destroyed, lost or stolen, the holder of such Equipment Note shall furnish to the Owner and the Mortgagee such security or indemnity as may be required by them to save the Owner and the Mortgagee harmless and evidence satisfactory to the Owner and the Mortgagee of the destruction, loss or theft of such Equipment Note and of the ownership thereof.  If a “qualified institutional buyer” of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a “QIB”) is the holder of any such destroyed, lost or stolen Equipment Note, then the written indemnity of such QIB, signed by an authorized officer thereof, in favor of, delivered to and in form reasonably satisfactory Owner shall be accepted as satisfactory indemnity and security and no further indemnity or security shall be required as a condition to the execution and delivery of such new Equipment Note.  Subject to compliance by the Note Holder with the requirements set forth in this Section 2.08, Mortgagee and Owner shall use all reasonable efforts to issue new Equipment Notes within 10 Business Days of the date of the written request therefor from the Note Holder.

 

SECTION 2.09.  Payment of Expenses on Transfer; Cancellation

 

(a)           No service charge shall be made to a Note Holder for any registration of transfer or exchange of Equipment Notes, but the Mortgagee, as Equipment Note Registrar, may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Equipment Notes.

 

(b)           The Mortgagee shall cancel all Equipment Notes surrendered for replacement, redemption, transfer, exchange, payment or cancellation and shall destroy the canceled Equipment Notes.

 

SECTION 2.10.  Mandatory Redemptions of Equipment Notes

 

On the date on which the Owner is required pursuant to Section 4.05 hereof to make payment for an Event of Loss with respect to the Airframe, all of the Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid Original Amount thereof, together with all accrued interest thereon to the date of redemption and all other Secured Obligations (other than Related Secured Obligations) owed or then due and payable to the Note Holders but without Make-Whole Amount.

 

SECTION 2.11.  Voluntary Redemptions of Equipment Notes

 

(a)           All (but not less than all) of the Equipment Notes may be redeemed by the Owner upon at least 30 days’ revocable prior written notice to the Mortgagee and the Note Holders, and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid Original Amount thereof, together with accrued interest thereon to the date of redemption and all other Secured Obligations (other than Related Secured Obligations) owed or then due and payable to the Note Holders plus Make-Whole Amount, if any, provided that no redemption shall be permitted under this Section 2.11(a) unless simultaneously with such redemption all Related Series A Equipment Notes and Related Series B Equipment Notes shall also be redeemed.

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(b)           All (but not less than all) of the Series B Equipment Notes may be redeemed by the Owner upon at least 30 days’ revocable prior written notice to the Mortgagee and the Note Holders of such Series, and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid Original Amount thereof, together with accrued interest thereon to the date of redemption and all other Secured Obligations (other than Related Secured Obligations) owed or then due and payable to the Note Holders of such Series plus Make-Whole Amount, if any; provided that no redemption shall be permitted under this Section 2.11(b) unless the following conditions have been satisfied: (1) simultaneously with such redemption, the Related Series B Equipment Notes shall also be redeemed; and (2) simultaneously with such redemption, new Series B Equipment Notes shall be reissued in accordance with Section 4(a)(vi) of the Note Purchase Agreement and Section 9.1(c) of the Intercreditor Agreement.

 

SECTION 2.12.  Redemptions; Notice of Redemption

 

(a)           No redemption of any Equipment Note may be made except to the extent and in the manner expressly permitted by this Trust Indenture.  No purchase of any Equipment Note may be made by the Mortgagee.

 

(b)           Notice of redemption with respect to the Equipment Notes shall be given by the Mortgagee by first-class mail, postage prepaid, mailed not less than 20 nor more than 60 days prior to the applicable redemption date, to each Note Holder of such Equipment Notes to be redeemed, at such Note Holder’s address appearing in the Equipment Note Register; provided that such notice shall be revocable by written notice from the Owner to Mortgagee given not later than three days prior to the redemption date.  All notices of redemption shall state: (1) the redemption date, (2) the applicable basis for determining the redemption price, (3) that on the redemption date, the redemption price will become due and payable upon each such Equipment Note, and that, if any such Equipment Notes are then outstanding, interest on such Equipment Notes shall cease to accrue on and after such redemption date, and (4) the place or places where such Equipment Notes are to be surrendered for payment of the redemption price.

 

(c)           On or before the redemption date, the Owner (or any person on behalf of the Owner) shall, to the extent an amount equal to the redemption price for the Equipment Notes to be redeemed on the redemption date shall not then be held by the Mortgagee, deposit or cause to be deposited with the Mortgagee by 12:30 PM New York time on the redemption date in immediately available funds the redemption price of the Equipment Notes to be redeemed.

 

(d)           Notice of redemption having been given as aforesaid, the Equipment Notes to be redeemed shall, on the redemption date, become due and payable at the Corporate Trust Office of the Mortgagee or at any office or agency maintained for such purposes pursuant to Section 2.07, and from and after such redemption date (unless there shall be a default in the payment of the redemption price) any such Equipment Notes then outstanding shall cease to bear interest.  Upon surrender of any such Equipment Note for redemption in accordance with said notice, such Equipment Note shall be redeemed at the redemption price.  If any Equipment Note called for redemption shall not be so paid upon surrender thereof for redemption, the

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principal amount thereof shall, until paid, continue to bear interest from the applicable redemption date at the interest rate in effect for such Equipment Note as of such redemption date.

 

SECTION 2.13.  Subordination

 

(a)           The Owner, each Note Holder (by acceptance of its Equipment Notes of any Series) and each Related Note Holder (by acceptance of its Related Equipment Note), hereby agree that no payment or distribution shall be made on or in respect of the Secured Obligations owed to such Note Holder of such Series or owed to such Related Note Holder, including any payment or distribution of cash, property or securities after the commencement of a proceeding of the type referred to in Section 5.01(v), (vi) or (vii) hereof, except as expressly provided in Article III hereof.

 

(b)           By the acceptance of its Equipment Notes of any Series (other than Series A), each Note Holder of such Series agrees that in the event that such Note Holder, in its capacity as a Note Holder, shall receive any payment or distribution on any Secured Obligations in respect of such Series which it is not entitled to receive under this Section 2.13 or Article III hereof, it will hold any amount so received in trust for the Senior Holder (as defined in Section 2.13(c) hereof) and will forthwith turn over such payment to the Mortgagee in the form received to be applied as provided in Article III hereof.  By the acceptance of its Related Equipment Notes (other than Related Series A Equipment Notes), each Related Note Holder agrees that in the event that such Related Note Holder, in its capacity as a Related Note Holder, shall receive any payment or distribution pursuant to this Trust Indenture on any Related Secured Obligations which it is not entitled to receive under this Section 2.13 or Article III hereof, it will hold any amount so received in trust for the Senior Holder (as defined in Section 2.13(c) hereof) and will forthwith turn over such payment to the Mortgagee in the form received to be applied as provided in Article III hereof.

 

(c)           As used in this Section 2.13, the term “Senior Holder” shall mean (i) the Note Holders of Series A Equipment Notes and Related Note Holders of the Related Series A Equipment Notes until the Secured Obligations in respect of Series A Equipment Notes and Related Series A Equipment Notes have been paid in full, (ii) after the Secured Obligations in respect of Series A Equipment Notes and Related Series A Equipment Notes have been paid in full, the Note Holders of Series B Equipment Notes and Related Note Holders of the Related Series B Equipment Notes until the Secured Obligations in respect of Series B Equipment Notes and Related Series B Equipment Notes have been paid in full and (iii) after the Secured Obligations in respect of Series B Equipment Notes and Related Series B Equipment Notes have been paid in full, (and except as otherwise provided in an amendment to this Trust Indenture pursuant to Section 10.01(b) hereof), the Note Holders of the Additional Series Equipment Notes, if issued, and Related Note Holders of the Related Additional Series Equipment Notes, if issued, until the Secured Obligations in respect of the Additional Series Equipment Notes and Related Additional Series Equipment Notes have been paid in full.

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ARTICLE III

 

RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS

 

SECTION 3.01.  Basic Distributions

 

Except as otherwise provided in Sections 3.02 and 3.03 hereof, each periodic payment of principal or interest on the Equipment Notes received by the Mortgagee shall be promptly distributed in the following order of priority:

 

	
  

	
(i)

	
so much of such payment as shall be required to pay in full the aggregate amount of the payment or payments of Original Amount and interest (as well as any interest on any overdue Original Amount and, to the extent permitted by Law, on any overdue interest) then due under all Series A Equipment Notes shall be distributed to the Note Holders of Series A ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series A Equipment Note bears to the aggregate amount of the payments then due under all Series A Equipment Notes;

 

	
  

	
(ii)

	
after giving effect to paragraph (i) above, so much of such payment remaining as shall be required to pay in full the aggregate amount of the payment or payments of Original Amount and interest (as well as any interest on any overdue Original Amount and, to the extent permitted by Law, on any overdue interest) then due under all Series B Equipment Notes shall be distributed to the Note Holders of Series B ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Series B Equipment Note bears to the aggregate amount of the payments then due under all Series B Equipment Notes; and

 

	
  

	
(iii)

	
after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Trust Indenture pursuant to Section 10.01(b) hereof), so much of such payment remaining as shall be required to pay in full the aggregate amount of the payment or payments of Original Amount and interest (as well as any interest on any overdue Original Amount and, to the extent permitted by Law, on any overdue interest) then due under all Additional Series Equipment Notes shall be distributed to the Note Holders of Additional Series ratably, without priority of one over the other, in the proportion that the amount of such payment or payments then due under each Additional Series Equipment Note bears to the aggregate amount of the payments then due under all Additional Series Equipment Notes.

 

SECTION 3.02.  Event of Loss; Replacement; Optional Redemption

 

Except as otherwise provided in Section 3.03 hereof, any payments received by the Mortgagee (i) with respect to the Airframe or the Airframe and one or more Engines as the result of an Event of Loss pursuant to Section 2.10 or (ii) pursuant to an optional redemption of the Equipment Notes pursuant to Section 2.11 hereof shall be applied to redemption of the

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Equipment Notes and to all other Secured Obligations then due by applying such funds in the following order of priority:

 

	
First,

	  	
(a) to reimburse the Mortgagee and the Note Holders for any reasonable costs or expenses incurred in connection with such redemption for which they are entitled to reimbursement, or indemnity by Owner, under the Operative Agreements and then (b) to pay any other Secured Obligations then due (except as provided in clauses “Second” and “Third” below) to the Mortgagee, the Note Holders and the other Indenture Indemnitees under this Trust Indenture, the Participation Agreement or the Equipment Notes (other than amounts specified in clauses “Second” and “Third” below);

 

	
Second,

	
(i)

	
to pay the amounts specified in paragraph (i) of clause “Third” of Section 3.03 hereof plus Make-Whole Amount, if any, then due and payable in respect of the Series A Equipment Notes, but excluding distributions of amounts of Related Secured Obligations to Related Note Holders;

 

	  	
(ii)

	
after giving effect to paragraph (i) above, to pay the amounts specified in paragraph (ii) of clause “Third” of Section 3.03 hereof plus Make-Whole Amount, if any, then due and payable in respect of the Series B Equipment Notes, but excluding distributions of amounts of Related Secured Obligations to Related Note Holders;

 

	  	
(iii)

	
after giving effect to paragraph (ii) above, to pay the amounts specified in paragraph (iii) of clause “Third” of Section 3.03 hereof then due and payable in respect of the Additional Series Equipment Notes, but excluding distributions of amounts of Related Secured Obligations to Related Note Holders;

 

	
Third,

	
(i)

	
to pay the amounts specified in paragraph (i) of clause “Third” of Section 3.03 hereof then due and payable in respect of the Related Series A Equipment Notes;

 

	  	
(ii)

	
after giving effect to paragraph (i) above, to pay the amounts specified in paragraph (ii) of clause “Third” of Section 3.03 hereof then due and payable in respect of the Related Series B Equipment Notes;

 

	  	
(iii)

	
after giving effect to paragraph (ii) above, to pay the amounts specified in paragraph (iii) of clause “Third” of Section 3.03 then due and payable in respect of the Related Additional Series Equipment Notes; and

 

	
Fourth,

	  	
as provided in clause “Fourth” of Section 3.03 hereof;

 

provided, however, that if a Replacement Airframe or Replacement Engine shall be substituted for the Airframe or Engine subject to such Event of Loss as provided in Section 4.05 hereof, any insurance, condemnation or similar proceeds which result from such Event of Loss and are paid over to the Mortgagee shall be held by the Mortgagee as permitted by Section 7.04 hereof (provided that such moneys shall be invested as provided in Section 6.06 hereof) as additional security for the obligations of Owner under Operative Agreements and such proceeds (and such

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investment earnings), to the extent not theretofore applied as provided herein, shall be released to the Owner at the Owner’s written request upon the release of such Airframe or Engine and the replacement thereof as provided herein; provided, further, however, in the case of a redemption of Equipment Notes pursuant to Section 2.11(b), if a particular Series is not being redeemed pursuant thereto, no application of funds shall be made pursuant to the paragraph in clause “Second” above that refers to such Series in connection with such redemption.  No Make-Whole Amount shall be due and payable on the Equipment Notes as a consequence of the redemption of the Equipment Notes as a result of an Event of Loss with respect to the Airframe or the Airframe and one or more Engines.

 

SECTION 3.03.  Payments After Event of Default

 

Except as otherwise provided in Section 3.04 hereof, all payments received and amounts held or realized by the Mortgagee (including any amounts realized by the Mortgagee from the exercise of any remedies pursuant to Article V hereof) after an Event of Default shall have occurred and be continuing, as well as all payments or amounts then held by the Mortgagee as part of the Collateral, shall be promptly distributed by the Mortgagee in the following order of priority:

 

	
First,

	  	
so much of such payments or amounts as shall be required to (i) reimburse the Mortgagee or WTNA for any tax (except to the extent resulting from a failure of the Mortgagee to withhold taxes pursuant to Section 2.04(b) hereof), expense or other loss (including, without limitation, all amounts to be expended at the expense of, or charged upon the rents, revenues, issues, products and profits of, the property included in the Collateral (all such property being herein called the “Mortgaged Property”) pursuant to Section 5.03(b) hereof) incurred by the Mortgagee or WTNA (to the extent not previously reimbursed), the expenses of any sale, or other proceeding, reasonable attorneys’ fees and expenses, court costs, and any other expenditures incurred or expenditures or advances made by the Mortgagee, WTNA or the Note Holders in the protection, exercise or enforcement of any right, power or remedy or any damages sustained by the Mortgagee, WTNA or any Note Holder, liquidated or otherwise, upon such Event of Default shall be applied by the Mortgagee as between itself, WTNA and the Note Holders in reimbursement of such expenses and any other expenses for which the Mortgagee, WTNA or the Note Holders are entitled to reimbursement under any Operative Agreement and (ii) pay all Secured Obligations payable to the other Indenture Indemnitees hereunder and under the Participation Agreement (other than amounts specified in clauses Second and Third below); and in the case the aggregate amount to be so distributed is insufficient to pay as aforesaid in clauses (i) and (ii), then ratably, without priority of one over the other, in proportion to the amounts owed each hereunder;

 

	
Second,

	  	
so much of such payments or amounts remaining as shall be required to reimburse the then existing or prior Note Holders for payments made pursuant to Section 6.03 hereof (to the extent not previously reimbursed) shall be distributed to such then existing or prior Note Holders ratably, without priority of one over

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the other, in accordance with the amount of the payment or payments made by each such then existing or prior Note Holder pursuant to said Section 6.03 hereof;

 

	
Third,

	
(i)

	
so much of such payments or amounts remaining as shall be required to pay in full the aggregate unpaid Original Amount of all Series A Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series A Equipment Notes to the date of distribution and all other Related Secured Obligations in respect of Related Series A Equipment Notes then due, shall be distributed to the Note Holders of Series A and Related Note Holders of the Related Series A Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, to each Note Holder and Related Note Holder in the proportion that the aggregate unpaid Original Amount of all Series A Equipment Notes held by such holder plus the accrued but unpaid interest and other amounts due hereunder or thereunder to the date of distribution and all other Related Secured Obligations then due in respect of the Related Series A Equipment Notes held by such holder, bears to the aggregate unpaid Original Amount of all Series A Equipment Notes plus the accrued but unpaid interest and other amounts due thereon to the date of distribution and all other Related Secured Obligations in respect of the Related Series A Equipment Notes then due;

 

	  	
(ii)

	
after giving effect to paragraph (i) above, so much of such payments or amounts remaining as shall be required to pay in full the aggregate unpaid Original Amount of all Series B Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect of the Series B Equipment Notes to the date of distribution and all other Related Secured Obligations in respect of Related Series B Equipment Notes then due, shall be distributed to the Note Holders of Series B and Related Note Holders of the Related Series B Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, to each Note Holder and Related Note Holder in the proportion that the aggregate unpaid Original Amount of all Series B Equipment Notes held by such holder plus the accrued but unpaid interest and other amounts due hereunder or thereunder to the date of distribution and all other Related Secured Obligations then due in respect of the Related Series B Equipment Notes held by such holder, bears to the aggregate unpaid Original Amount of all Series B Equipment Notes plus the accrued but unpaid interest and other amounts due thereon to the date of distribution and all other Related Secured Obligations in respect of the Related Series B Equipment Notes then due;

 

	  	
(iii)

	
after giving effect to paragraph (ii) above (and except as otherwise provided in an amendment to this Trust Indenture pursuant to Section 10.01(b) hereof), so much of such payments or amounts remaining as shall be required to pay in full the aggregate unpaid Original Amount of all Additional Series Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other

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Secured Obligations in respect of the Additional Series Equipment Notes to the date of distribution and all other Related Secured Obligations in respect of the Related Additional Series Equipment Notes then due, shall be distributed to the Note Holders of Additional Series and Related Note Holders of the Related Additional Series Equipment Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that the aggregate unpaid Original Amount of all Additional Series Equipment Notes held by each holder plus the accrued but unpaid interest and other amounts due hereunder or thereunder to the date of distribution and all other Related Secured Obligations then due in respect of Related Additional Series Equipment Notes held by such holder, bears to the aggregate unpaid Original Amount of all Additional Series Equipment Notes held by all such holders plus the accrued but unpaid interest and other amounts due thereon to the date of distribution and all other Related Secured Obligations in respect of Related Additional Series Equipment Notes then due; and

 

	  	
(iv)

	
after giving effect to paragraph (iii) above, if any Related Equipment Note is outstanding, any of such payments or amounts remaining and any invested Cash Equivalents shall be held by the Mortgagee in an Eligible Account in accordance with the provisions of Section 3.07 (and invested as provided in Section 6.06 hereof) as additional security for the Related Secured Obligations, and such amounts (and any investment earnings thereon) shall be distributed from time to time in accordance with the foregoing provisions of this clause “Third” as and to the extent any Related Secured Obligation shall at any time and from time to time become due and remain unpaid after the giving of any required notice and the expiration of any applicable grace period; and, upon the payment in full of all Related Secured Obligations the balance, if any, of any such remaining amounts and investment earnings thereon shall be applied as provided in clause Fourth of this Section 3.03; and

 

	
Fourth,

	  	
the balance, if any, of such payments or amounts remaining thereafter shall be distributed to the Owner.

 

No Make-Whole Amount shall be due and payable on the Equipment Notes as a consequence of the acceleration of the Equipment Notes as a result of an Event of Default.

 

SECTION 3.04.  Certain Payments

 

(a)           Any payments received by the Mortgagee for which no provision as to the application thereof is made in this Trust Indenture and for which such provision is made in any other Operative Agreement shall be applied forthwith to the purpose for which such payment was made in accordance with the terms of such other Operative Agreement, as the case may be.

 

(b)           Notwithstanding anything to the contrary contained in this Article III, the Mortgagee will distribute promptly upon receipt any indemnity payment received by it

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from the Owner in respect of the Mortgagee in its individual capacity, any Note Holder or any other Indenture Indemnitee, in each case whether or not pursuant to Section 8 of the Participation Agreement, directly to the Person entitled thereto.  Any payment received by the Mortgagee under the third paragraph of Section 2.02 shall be distributed to the Subordination Agent in its capacity as Note Holder to be distributed in accordance with the terms of the Intercreditor Agreement.

 

(c)           For the avoidance of doubt, no amount will be distributed pursuant to this Article III to any holder of a note issued under a Related Indenture that is not a Related Note Holder (as such).

 

SECTION 3.05.  Other Payments

 

Any payments received by the Mortgagee for which no provision as to the application thereof is made elsewhere in this Trust Indenture or in any other Operative Agreement shall be distributed by the Mortgagee to the extent received or realized at any time, in the order of priority specified in Section 3.01 hereof, and after payment in full of all amounts then due in accordance with Section 3.01 in the manner provided in clause “Fourth” of Section 3.03 hereof.

 

SECTION 3.06.  Cooperation

 

Prior to making any distribution under this Article III, the Mortgagee shall consult with the Related Mortgagees to determine amounts payable with respect to the Related Secured Obligations.  The Mortgagee shall cooperate with the Related Mortgagees and shall provide such information as shall be reasonably requested by each Related Mortgagee to enable such Related Mortgagee to determine amounts distributable under Article III of its Related Indenture.

 

SECTION 3.07.  Securities Account

 

In furtherance of the provisions of Section 3.03 of this Trust Indenture, WTNA agrees to act as an Eligible Institution under this Trust Indenture in accordance with the provisions of this Trust Indenture.  Except as otherwise expressly provided in this Trust Indenture, WTNA waives any claim or lien against any Eligible Account it may have, by operation of law or otherwise, for any amount owed to it by Owner.  The Mortgagee hereby agrees that, notwithstanding anything to the contrary in this Trust Indenture, (i) any amounts to be held by the Mortgagee pursuant to paragraph (iv) of clause “Third” of Section 3.03 and any investment earnings thereon or other Cash Equivalents will be credited to an Eligible Account (the “Securities Account”) for which it is a “securities intermediary” (as defined in Section 8-102(a)(14) of the NY UCC) and the Mortgagee is the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY UCC) of the “securities entitlement” (as defined in Section 8-102(a)(17) of the NY UCC) with respect to each “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible Account, (ii) all such amounts, Cash Equivalents and all other property acquired with cash credited to the Securities Account will be credited to the Securities Account, (iii) all items of property (whether cash, investment property, Cash Equivalents, other investments, securities, instruments or other property) credited to the Securities Account will be treated as a “financial asset” under Article 8 of the NY UCC, (iv) its

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“securities intermediary’s jurisdiction” (as defined in Section 8-110(e) of the NY UCC) with respect to the Securities Account is the State of New York, and (v) all securities, instruments and other property in order or registered from and credited to the Securities Account shall be payable to or to the order of, or registered in the name of, the Mortgagee or shall be indorsed to the Mortgagee or in blank, and in no case whatsoever shall any financial asset credited to the Securities Account be registered in the name of the Owner, payable to or to the order of the Owner or specially indorsed to the Owner except to the extent the foregoing have been specially endorsed by the Owner to the Mortgagee or in blank.  The Mortgagee agrees that it will hold (and will indicate clearly in its books and records that it holds) its “securities entitlement” to the “financial assets” credited to the Securities Account in trust for the benefit of the Note Holders and each of the Indenture Indemnitees as set forth in this Trust Indenture.  The Owner acknowledges that, by reason of the Mortgagee being the “entitlement holder” in respect of the Securities Account as provided above, the Mortgagee shall have the sole right and discretion, subject only to the terms of this Trust Indenture, to give all “entitlement orders” (as defined in Section 8-102(a)(8) of the NY UCC) with respect to the Securities Account and any and all financial assets and other property credited thereto to the exclusion of the Owner.

 

ARTICLE IV

 

COVENANTS OF THE OWNER

 

SECTION 4.01.  Liens

 

The Owner will not directly or indirectly create, incur, assume or suffer to exist any Lien or with respect to the Airframe or any Engine, title to any of the foregoing or any interest of Owner therein, except Permitted Liens.  The Owner shall promptly, at its own expense, take such action as may be necessary to duly discharge (by bonding or otherwise) any Lien other than a Permitted Lien arising at any time.

 

SECTION 4.02.  Possession, Operation and Use, Maintenance, Registration and Markings

 

(a)           General.  Except as otherwise expressly provided herein, the Owner shall be entitled to operate, use, locate, employ or otherwise utilize or not utilize the Airframe, any Engine or any Parts in any lawful manner or place in accordance with the Owner’s business judgment.

 

(b)           Possession.  The Owner, without the prior consent of Mortgagee, shall not lease or otherwise in any manner deliver, transfer or relinquish possession of the Aircraft, the Airframe or any Engine or install any Engine, or permit any Engine to be installed, on any airframe other than the Airframe; except that the Owner may, without such prior written consent of Mortgagee:

 

(i)           Subject or permit any Permitted Lessee to subject (i) the Airframe to normal interchange agreements or (ii) any Engine to normal interchange, pooling, borrowing or similar arrangements, in each case customary in the commercial airline industry

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and entered into by Owner or such Permitted Lessee, as the case may be, in the ordinary course of business; provided, however, that if Owner’s title to any such Engine is divested under any such agreement or arrangement, then such Engine shall be deemed to have suffered an Event of Loss as of the date of such divestiture, and Owner shall comply with Section 4.04(e) in respect thereof;

 

(ii)           Deliver or permit any Permitted Lessee to deliver possession of the Aircraft, Airframe, any Engine or any Part (x) to the manufacturer thereof or to any third-party maintenance provider for testing, service, repair, maintenance or overhaul work on the Aircraft, Airframe, any Engine or any Part, or, to the extent required or permitted by Section 4.04, for alterations or modifications in or additions to the Aircraft, Airframe or any Engine or (y) to any Person for the purpose of transport to a Person referred to in the preceding clause (x);

 

(iii)           Install or permit any Permitted Lessee to install an Engine on an airframe owned by Owner or such Permitted Lessee, as the case may be, free and clear of all Liens, except (x) Permitted Liens and those that do not apply to the Engines, and (y) the rights of third parties under normal interchange or pooling agreements and arrangements of the type that would be permitted under Section 4.02(b)(i);

 

(iv)           Install or permit any Permitted Lessee to install an Engine on an airframe leased to Owner or such Permitted Lessee, or purchased by Owner or such Permitted Lessee subject to a mortgage, security agreement, conditional sale or other secured financing arrangement, but only if (x) such airframe is free and clear of all Liens, except (A) the rights of the parties to such lease, or any such secured financing arrangement, covering such airframe and (B) Liens of the type permitted by clause (iii) above and (y) Owner or Permitted Lessee, as the case may be, shall have received from the lessor, mortgagee, secured party or conditional seller, in respect of such airframe, a written agreement (which may be a copy of the lease, mortgage, security agreement, conditional sale or other agreement covering such airframe), whereby such Person agrees that it will not acquire or claim any right, title or interest in, or Lien on, such Engine by reason of such Engine being installed on such airframe at any time while such Engine is subject to the Lien of this Trust Indenture;

 

(v)           Install or permit any Permitted Lessee to install an Engine on an airframe owned by Owner or such Permitted Lessee, leased to Owner or such Permitted Lessee, or purchased by Owner or such Permitted Lessee subject to a conditional sale or other security agreement under circumstances where neither clause (iii) or (iv) above is applicable; provided, however, that any such installation shall be deemed an Event of Loss with respect to such Engine, and Owner shall comply with Section 4.04(e) hereof in respect thereof;

 

(vi)           Transfer or permit any Permitted Lessee to transfer possession of the Aircraft, Airframe or any Engine to the U.S. Government, in which event Owner shall promptly notify Mortgagee in writing of any such transfer of possession and, in the case of any transfer pursuant to CRAF, in such notification shall identify by name, address and telephone numbers the Contracting Office Representative or Representatives for the Military

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Airlift Command of the United States Air Force to whom notices must be given and to whom requests or claims must be made to the extent applicable under CRAF;

 

(vii)           Enter into a charter or Wet Lease or other similar arrangement with respect to the Aircraft or any other aircraft on which any Engine may be installed (which shall not be considered a transfer of possession hereunder); provided that the Owner’s obligations hereunder shall continue in full force and effect notwithstanding any such charter or Wet Lease or other similar arrangement;

 

(viii)           So long as no Event of Default shall have occurred and be continuing, and subject to the provisions of the immediately following paragraph, enter into a lease with respect to the Aircraft, Airframe or any Engine to any Permitted Air Carrier that is not then subject to any bankruptcy, insolvency, liquidation, reorganization, dissolution or similar proceeding and shall not have substantially all of its property in the possession of any liquidator, trustee, receiver or similar person; provided that, in the case only of a lease to a Permitted Foreign Air Carrier, (A) the United States maintains diplomatic relations with the country of domicile of such Permitted Foreign Air Carrier (or, in the case of Taiwan, diplomatic relations at least as good as those in effect on the Closing Date) and (B) Owner shall have furnished Mortgagee a favorable opinion of counsel, reasonably satisfactory to Mortgagee, in the country of domicile of such Permitted Foreign Air Carrier, that (v) the terms of such lease are the legal, valid and binding obligations of the parties thereto enforceable under the laws of such jurisdiction, (w) it is not necessary for Mortgagee to register or qualify to do business in such jurisdiction, if not already so registered or qualified, as a result, in whole or in part, of the proposed lease, (x) Mortgagee’s Lien in respect of, the Aircraft, Airframe and Engines will be recognized in such jurisdiction, (y) the Laws of such jurisdiction of domicile require fair compensation by the government of such jurisdiction, payable in a currency freely convertible into Dollars, for the loss of title to the Aircraft, Airframe or Engines in the event of the requisition by such government of such title (unless Owner shall provide insurance in the amounts required with respect to hull insurance under this Trust Indenture covering the requisition of title to the Aircraft, Airframe or Engines by the government of such jurisdiction so long as the Aircraft, Airframe or Engines are subject to such lease) and (z) the agreement of such Permitted Air Carrier that its rights under the lease are subject and subordinate to all the terms of this Trust Indenture is enforceable against such Permitted Air Carrier under applicable law;

 

provided that (1) the rights of any transferee who receives possession by reason of a transfer permitted by any of clauses (i) through (viii) of this Section 4.02(b) (other than by a transfer of an Engine which is deemed an Event of Loss) shall be subject and subordinate to all the terms of this Trust Indenture, (2) the Owner shall remain primarily liable for the performance of all of the terms of this Trust Indenture and all the terms and conditions of this Trust Indenture and the other Operative Agreements shall remain in effect and (3) no lease or transfer of possession otherwise in compliance with this Section 4.02(b) shall (x) result in any registration or re-registration of an Aircraft, except to the extent permitted by Section 4.02(e) or the maintenance, operation or use thereof except in compliance with Sections 4.02(c) and 4.02(d) or (y) permit any action not permitted to the Owner hereunder.

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In the case of any lease permitted under this Section 4.02(b), the Owner will comply with the notice requirement of Section 6.1.5 of the Participation Agreement and will include in such lease appropriate provisions which (t) make such lease expressly subject and subordinate to all of the terms of this Trust Indenture, including the rights of the Mortgagee to avoid such lease in the exercise of its rights to repossession of the Airframe and Engines hereunder; (u) require the Permitted Lessee to comply with the terms of Section 4.06; and (v) require that the Airframe or any Engine subject thereto be used in accordance with the limitations applicable to the Owner’s possession and use provided in this Trust Indenture.  No lease permitted under this Section 4.02(b) shall be entered into unless (w) Owner shall provide written notice to Mortgagee (such notice in the event of a lease to a U.S. Air Carrier to be given promptly after entering into any such lease or, in the case of a lease to any other Permitted Air Carrier, 10 days in advance of entering into such lease); (x) Owner shall furnish to Mortgagee evidence reasonably satisfactory to Mortgagee that the insurance required by Section 4.06 remains in effect; (y) all necessary documents shall have been duly filed, registered or recorded in such public offices as may be required fully to preserve the first priority security interest and International Interest (subject to Permitted Liens) of Mortgagee in the Aircraft, Airframe and Engines; and (z) Owner shall reimburse Mortgagee for all of its reasonable out-of-pocket fees and expenses, including, without limitation, reasonable fees and disbursements of counsel, incurred by Mortgagee in connection with any such lease.  Except as otherwise provided herein and without in any way relieving the Owner from its primary obligation for the performance of its obligations under this Trust Indenture, the Owner may in its sole discretion permit a lessee to exercise any or all rights which the Owner would be entitled to exercise under Sections 4.02 and 4.04, and may cause a lessee to perform any or all of the Owner’s obligations under Article IV, and the Mortgagee agrees to accept actual and full performance thereof by a lessee in lieu of performance by the Owner.

 

Mortgagee hereby agrees, and each Note Holder and Related Note Holder by acceptance of an Equipment Note and a Related Equipment Note, respectively, agrees, for the benefit of each lessor, conditional seller, indenture trustee or secured party of any engine leased to, or purchased by, Owner or any Permitted Lessee subject to a lease, conditional sale, trust indenture or other security agreement that Mortgagee, each Note Holder and Related Note Holder and their respective successors and assigns will not acquire or claim, as against such lessor, conditional seller, indenture trustee or secured party, any right, title or interest in any engine as the result of such engine being installed on the Airframe at any time while such engine is subject to such lease, conditional sale, trust indenture or other security agreement and owned by such lessor or conditional seller or subject to a trust indenture or security interest in favor of such indenture trustee or secured party.

 

(c)           Operation and Use.  So long as the Aircraft, Airframe or any Engine is subject to the Lien of this Trust Indenture, the Owner shall not operate, use or locate the Aircraft, Airframe or any Engine, or allow the Aircraft, Airframe or any Engine to be operated, used or located, (i) in any area excluded from coverage by any insurance required by the terms of Section 4.06, except in the case of a requisition by the U.S. Government where the Owner obtains indemnity in lieu of such insurance from the U.S. Government, or insurance from the U.S. Government, against substantially the same risks and for at least the amounts of the insurance required by Section 4.06 covering such area, or (ii) in any recognized area of hostilities

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unless covered in accordance with Section 4.06 by war risk insurance, or in either case unless the Aircraft, the Airframe or any Engine is only temporarily operated, used or located in such area as a result of an emergency, equipment malfunction, navigational error, hijacking, weather condition or other similar unforeseen circumstance, so long as Owner diligently and in good faith proceeds to remove the Aircraft from such area.  So long as the Aircraft, the Airframe or any Engine is subject to the Lien of this Trust Indenture, the Owner shall not permit such Aircraft, Airframe or any Engine, as the case may be, to be used, operated, maintained, serviced, repaired or overhauled (x) in violation of any Law binding on or applicable to such Aircraft, Airframe or Engine or (y) in violation of any airworthiness certificate, license or registration of any Government Entity relating to the Aircraft, the Airframe or any Engine, except (i) immaterial or non-recurring violations with respect to which corrective measures are taken promptly by Owner or Permitted Lessee, as the case may be, upon discovery thereof, or (ii) to the extent the validity or application of any such Law or requirement relating to any such certificate, license or registration is being contested in good faith by Owner or Permitted Lessee in any reasonable manner which does not involve any material risk of the sale, forfeiture or loss of the Aircraft, Airframe or any Engine, any material risk of criminal liability or material civil penalty against Mortgagee or impair the Mortgagee’s security interest or International Interest in the Aircraft, Airframe or any Engine.

 

(d)           Maintenance and Repair.  So long as the Aircraft, Airframe or any Engine is subject to the Lien of this Trust Indenture, the Owner shall cause the Aircraft, Airframe and each Engine to be maintained, serviced, repaired and overhauled in accordance with (i) maintenance standards required by or substantially equivalent to those required by the FAA, the EASA or the central aviation authority of Canada or Japan for the Aircraft, Airframe and Engines, so as to (A) keep the Aircraft, the Airframe and each Engine in as good operating condition as on the Closing Date, ordinary wear and tear excepted, (B) keep the Aircraft in such operating condition as may be necessary to enable the applicable airworthiness certification of such Aircraft to be maintained under the regulations of the FAA or other Aviation Authority then having jurisdiction over the operation of the Aircraft, except during (x) temporary periods of storage in accordance with applicable regulations, (y) maintenance and modification permitted hereunder or (z) periods when the FAA or such other Aviation Authority has revoked or suspended the airworthiness certificates for Similar Aircraft; and (ii) except during periods when a Permitted Lease is in effect, the same standards as Owner uses with respect to similar aircraft of similar size in its fleet operated by Owner in similar circumstances and, during any period in which a Permitted Lease is in effect, the same standards used by the Permitted Lessee with respect to similar aircraft of similar size in its fleet and operated by the Permitted Lessee in similar circumstances (it being understood that this clause (ii) shall not limit Owner’s obligations under the preceding clause (i)).  Owner further agrees that the Aircraft, Airframe and Engines will be maintained, used, serviced, repaired, overhauled or inspected in compliance with applicable Laws with respect to the maintenance of the Aircraft and in compliance with each applicable airworthiness certificate, license and registration relating to the Aircraft, Airframe or any Engine issued by the Aviation Authority, other than minor or nonrecurring violations with respect to which corrective measures are taken upon discovery thereof and except to the extent Owner or Permitted Lessee is contesting in good faith the validity or application of any such Law or requirement relating to any such certificate, license or registration in any reasonable manner which does not create a material risk of sale, loss or forfeiture of the Aircraft, the Airframe or

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any Engine or the interest of Mortgagee therein, or any material risk of criminal liability or material civil penalty against Mortgagee.  The Owner shall maintain or cause to be maintained the Aircraft Documents in the English language.

 

(e)           Registration.  The Owner on or prior to the date of the Closing shall cause the Aircraft to be duly registered in its name under the Act and except as otherwise permitted by this Section 4.02(e) at all times thereafter shall cause the Aircraft to remain so registered.  So long as no Special Default or Event of Default shall have occurred and be continuing, Owner may, by written notice to Mortgagee, request to change the country of registration of the Aircraft.  Any such change in registration shall be effected only in compliance with, and subject to all of the conditions set forth in, Section 6.4.5 of the Participation Agreement.  Unless this Trust Indenture has been discharged, Owner shall also cause this Trust Indenture to be duly recorded and at all times maintained of record as a first-priority perfected mortgage (subject to Permitted Liens) on the Aircraft, the Airframe and each of the Engines (except to the extent such perfection or priority cannot be maintained solely as a result of the failure by Mortgagee to execute and deliver any necessary documents).  Unless the Lien of this Indenture has been discharged, Owner shall cause the International Interest granted under this Indenture in favor of the Mortgagee in each Airframe and Engine to be registered on the International Registry as an International Interest on such Airframe and Engine, subject to the Mortgagee providing its consent to the International Registry with respect thereto, and shall cause the sale to Owner of the Airframe and each Engine on the Delivery Date to be registered on the International Registry.

 

(f)           Markings.  If permitted by applicable Law, on or reasonably promptly after the Closing Date, Owner will cause to be affixed to, and maintained in, the cockpit of the Airframe and on each Engine, in each case, in a clearly visible location, a placard of a reasonable size and shape bearing the legend:  “Subject to a security interest in favor of Wilmington Trust, National Association, not in its individual capacity but solely as Mortgagee.”  Such placards may be removed temporarily, if necessary, in the course of maintenance of the Airframe or Engines.  If any such placard is damaged or becomes illegible, Owner shall promptly replace it with a placard complying with the requirements of this Section.

 

SECTION 4.03.  Inspection

 

(a)           At all reasonable times, so long as the Aircraft is subject to the Lien of this Trust Indenture, Mortgagee and its authorized representatives (the “Inspecting Parties”) may (not more than once every 12 months unless an Event of Default has occurred and is continuing then such inspection right shall not be so limited) inspect the Aircraft, Airframe and Engines (including without limitation, the Aircraft Documents) and any such Inspecting Party may make copies of such Aircraft Documents not reasonably deemed confidential by Owner or such Permitted Lessee.

 

(b)           Any inspection of the Aircraft hereunder shall be limited to a visual, walk-around inspection and shall not include the opening of any panels, bays or other components of the Aircraft, and no such inspection shall interfere with Owner’s or any Permitted Lessee’s maintenance and operation of the Aircraft, Airframe and Engines.

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(c)           With respect to such rights of inspection, Mortgagee shall not have any duty or liability to make, or any duty or liability by reason of not making, any such visit, inspection or survey.

 

(d)           Each Inspecting Party shall bear its own expenses in connection with any such inspection (including the cost of any copies made in accordance with Section 4.03(a)).

 

SECTION 4.04.  Replacement and Pooling of Parts, Alterations, Modifications and Additions; Substitution Rights

 

(a)           Replacement of Parts.  Except as otherwise provided herein, so long as the Airframe or Engine is subject to the Lien of this Indenture, Owner, at its own cost and expense, will, or will cause a Permitted Lessee to, at its own cost and expense, promptly replace (or cause to be replaced) all Parts which may from time to time be incorporated or installed in or attached to the Aircraft, Airframe or any Engine and which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever.  In addition, Owner may, at its own cost and expense, or may permit a Permitted Lessee at its own cost and expense to, remove (or cause to be removed) in the ordinary course of maintenance, service, repair, overhaul or testing any Parts, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use; provided, however, that Owner, except as otherwise provided herein, at its own cost and expense, will, or will cause a Permitted Lessee at its own cost and expense to, replace such Parts as promptly as practicable.  All replacement parts shall be free and clear of all Liens, except for Permitted Liens and pooling arrangements to the extent permitted by Section 4.04(c) below (and except in the case of replacement property temporarily installed on an emergency basis) and shall be in good operating condition and have a value and utility not less than the value and utility of the Parts replaced (assuming such replaced Parts were in the condition required hereunder).

 

(b)           Parts.  Except as otherwise provided herein, any Part at any time removed from the Airframe or any Engine shall remain subject to the Lien of this Trust Indenture, no matter where located, until such time as such Part shall be replaced by a part that has been incorporated or installed in or attached to such Airframe or any Engine and that meets the requirements for replacement parts specified above.  Immediately upon any replacement part becoming incorporated or installed in or attached to such Airframe or any Engine as provided in Section 4.04(a), without further act, (i) the replaced Part shall thereupon be free and clear of all rights of the Mortgagee and shall no longer be deemed a Part hereunder, and (ii) such replacement part shall become a Part subject to this Trust Indenture and be deemed part of such Airframe or any Engine, as the case may be, for all purposes hereof to the same extent as the Parts originally incorporated or installed in or attached to such Airframe or any Engine.

 

(c)           Pooling of Parts.  Any Part removed from the Aircraft, Airframe or an Engine may be subjected by the Owner or a Permitted Lessee to a normal pooling arrangement customary in the airline industry and entered into in the ordinary course of business of Owner or Permitted Lessee, provided that the part replacing such removed Part shall be

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incorporated or installed in or attached to such Airframe or any Engine in accordance with Sections 4.04(a) and 4.04(b) as promptly as practicable after the removal of such removed Part.  In addition, any replacement part when incorporated or installed in or attached to the Airframe or any Engine may be owned by any third party, subject to a normal pooling arrangement, so long as the Owner or a Permitted Lessee, at its own cost and expense, as promptly thereafter as reasonably possible, either (i) causes such replacement part to become subject to the Lien of this Trust Indenture, free and clear of all Liens except Permitted Liens, at which time such replacement part shall become a Part or (ii) replaces (or causes to be replaced) such replacement part by incorporating or installing in or attaching to the Aircraft, Airframe or any Engine a further replacement part owned by the Owner free and clear of all Liens except Permitted Liens and which shall become subject to the Lien of this Trust Indenture in accordance with Section 4.04(b).

 

(d)           Alterations, Modifications and Additions.  The Owner shall, or shall cause a Permitted Lessee to, make (or cause to be made) alterations and modifications in and additions to the Aircraft, Airframe and each Engine as may be required to be made from time to time to meet the applicable standards of the FAA or other Aviation Authority having jurisdiction over the operation of the Aircraft, to the extent made mandatory in respect of the Aircraft (a “Mandatory Modification”); provided however, that the Owner or a Permitted Lessee may, in good faith and by appropriate procedure, contest the validity or application of any law, rule, regulation or order in any reasonable manner which does not materially adversely affect Mortgagee’s interest in the Aircraft, does not impair the Mortgagee’s security interest or International Interest in the Aircraft and does not involve any material risk of sale, forfeiture or loss of the Aircraft or the interest of Mortgagee therein, or any material risk of material civil penalty or any material risk of criminal liability being imposed on Mortgagee or the holder of any Equipment Note.  In addition, the Owner, at its own expense, may, or may permit a Permitted Lessee at its own cost and expense to, from time to time make or cause to be made such alterations and modifications in and additions to the Airframe or any Engine (each an “Optional Modification”) as the Owner or such Permitted Lessee may deem desirable in the proper conduct of its business including, without limitation, removal of Parts which Owner deems are obsolete or no longer suitable or appropriate for use in the Aircraft, Airframe or such Engine; provided, however, that no such Optional Modification shall (i) materially diminish the fair market value, utility, or useful life of the Aircraft or any Engine below its fair market value, utility or useful life immediately prior to such Optional Modification (assuming the Aircraft or such Engine was in the condition required by this Trust Indenture immediately prior to such Optional Modification) or (ii) cause the Aircraft to cease to have the applicable standard certificate of airworthiness except that such certificate of airworthiness temporarily may be replaced by an experimental certificate during the process of implementing and testing such Optional Modification and securing related FAA re-certification of the Aircraft.  All Parts incorporated or installed in or attached to any Airframe or any Engine as the result of any alteration, modification or addition effected by the Owner shall be free and clear of any Liens except Permitted Liens and become subject to the Lien of this Trust Indenture; provided that the Owner or any Permitted Lessee may, at any time so long as the Airframe or any Engine is subject to the Lien of this Trust Indenture, remove any such Part (such Part being referred to herein as a “Removable Part”) from such Airframe or an Engine if (i) such Part is in addition to, and not in replacement of or in substitution for, any Part originally incorporated or installed in or

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attached to such Airframe or any Engine at the time of delivery thereof hereunder or any Part in replacement of, or in substitution for, any such original Part, (ii) such Part is not required to be incorporated or installed in or attached or added to such Airframe or any Engine pursuant to the terms of Section 4.02(d) or the first sentence of this Section 4.04(d) and (iii) such Part can be removed from such Airframe or any Engine without materially diminishing the fair market value, utility or remaining useful life which such Airframe or any Engine would have had at the time of removal had such removal not been effected by the Owner, assuming the Aircraft was otherwise maintained in the condition required by this Trust Indenture and such Removable Part had not been incorporated or installed in or attached to the Aircraft, Airframe or such Engine.  Upon the removal by the Owner of any such Part as above provided in this Section 4.04(d), title thereto shall, without further act, be free and clear of all rights of the Mortgagee and such Part shall no longer be deemed a Part hereunder.  Removable Parts may be leased from or financed by third parties other than Mortgagee.

 

(e)           Substitution of Engines.  Upon the occurrence of an Event of Loss with respect to an Engine under circumstances in which an Event of Loss with respect to the Airframe has not occurred, Owner shall promptly (and in any event within 15 days after such occurrence) give the Mortgagee written notice of such Event of Loss.  The Owner shall have the right at its option at any time, on at least 5 Business Days’ prior notice to the Mortgagee, to substitute, and if an Event of Loss shall have occurred with respect to an Engine under circumstances in which an Event of Loss with respect to the Airframe has not occurred, shall within 60 days of the occurrence of such Event of Loss substitute, a Replacement Engine for any Engine.  In such event, immediately upon the effectiveness of such substitution and without further act, (i) the replaced Engine shall thereupon be free and clear of all rights of the Mortgagee and the Lien of this Trust Indenture and shall no longer be deemed an Engine hereunder and (ii) such Replacement Engine shall become subject to this Trust Indenture and be deemed part of the Aircraft for all purposes hereof to the same extent as the replaced Engine.  Such Replacement Engine shall be an engine manufactured by Engine Manufacturer that is the same model as the Engine to be replaced thereby, or an improved model, and that is suitable for installation and use on the Airframe, and that has a value, utility and remaining useful life (without regard to hours and cycles remaining until overhaul) at least equal to the Engine to be replaced thereby (assuming that such Engine had been maintained in accordance with this Trust Indenture).  The Owner’s right to make a replacement hereunder shall be subject to the fulfillment (which may be simultaneous with such replacement) of the following conditions precedent at the Owner’s sole cost and expense, and the Mortgagee agrees to cooperate with the Owner to the extent necessary to enable it to timely satisfy such conditions:

 

(i)           an executed counterpart of each of the following documents shall be delivered to the Mortgagee:

 

(A)           a Trust Indenture Supplement covering the Replacement Engine, which shall have been duly filed for recordation pursuant to the Act or such other applicable law of the jurisdiction other than the United States in which the Aircraft of which such Engine is a part is registered in accordance with Section 4.02(e), as the case may be;

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(B)           a full warranty bill of sale (as to title), covering the Replacement Engine, executed by the former owner thereof in favor of the Owner (or, at the Owner’s option, other evidence of the Owner’s ownership of such Replacement Engine, reasonably satisfactory to the Mortgagee); and

 

(C)           UCC financing statements covering the security interests created by this Trust Indenture (or any similar statements or other documents required to be filed or delivered pursuant to the laws of the jurisdiction in which such Aircraft may be registered) as are deemed necessary or desirable by counsel for the Mortgagee to protect the security interests of the Mortgagee in the Replacement Engine;

 

(ii)           the Owner shall cause to be delivered to the Mortgagee an opinion of counsel to the effect that the Lien of this Trust Indenture continues to be in full force and effect with respect to the Replacement Engine and such evidence of compliance with the insurance provisions of Section 4.06 with respect to such Replacement Engine as Mortgagee shall reasonably request;

 

(iii)           the Owner shall have furnished to Mortgagee an opinion of Owner’s aviation law counsel reasonably satisfactory to Mortgagee and addressed to Mortgagee as to the due filing for recordation of the Trust Indenture Supplement with respect to such Replacement Engine under the Act or such other applicable law of the jurisdiction other than the United States in which the Aircraft is registered in accordance with Section 4.02(e), as the case may be, and the registration (which Owner shall have caused to be effected) with the International Registry of the sale to Owner of such Replacement Engine (if occurring after February 28, 2006) and the International Interest granted under such Trust Indenture Supplement with respect to such Replacement Engine; and

 

(iv)           the Owner shall have furnished to Mortgagee a certificate of a qualified aircraft engineer (who may be an employee of Owner) certifying that such Replacement Engine has a value and utility and remaining useful life (without regard to hours and cycles remaining until overhaul) at least equal to the Engine so replaced (assuming that such Engine had been maintained in accordance with this Trust Indenture).

 

Upon satisfaction of all conditions to such substitution, (x) the Mortgagee shall execute and deliver to the Owner such documents and instruments, prepared at the Owner’s expense, as the Owner shall reasonably request to evidence the release of such replaced Engine from the Lien of this Trust Indenture, (y) the Mortgagee shall assign to the Owner all claims it may have against any other Person relating to any Event of Loss giving rise to such substitution and (z) the Owner shall receive all insurance proceeds (other than those reserved to others under Section 4.06(b)) and proceeds in respect of any Event of Loss giving rise to such replacement to the extent not previously applied to the purchase price of the Replacement Engine as provided in Section 4.05(d).

 

SECTION 4.05.  Loss, Destruction or Requisition

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(a)           Event of Loss With Respect to the Airframe.  Upon the occurrence of an Event of Loss with respect to the Airframe, the Owner shall promptly (and in any event within 15 days after such occurrence) give the Mortgagee written notice of such Event of Loss.  The Owner shall, within 45 days after such occurrence, give the Mortgagee written notice of Owner’s election to either replace the Airframe as provided under Section 4.05(a)(i) or to make payment in respect of such Event of Loss as provided under Section 4.05(a)(ii) (it being agreed that if Owner shall not have given the Mortgagee such notice of such election within the above specified time period, the Owner shall be deemed to have elected to make payment in respect of such Event of Loss as provided under Section 4.05(a)(ii)):

 

(i)           if Owner elects to replace the Airframe, Owner shall, subject to the satisfaction of the conditions contained in Section 4.05(c), as promptly as possible and in any event within 120 days after the occurrence of such Event of Loss, cause to be subjected to the Lien of this Trust Indenture, in replacement of the Airframe with respect to which the Event of Loss occurred, a Replacement Airframe and, if any Engine shall have been installed on the Airframe when it suffered the Event of Loss, a Replacement Engine therefor, such Replacement Airframe and Replacement Engines to be free and clear of all Liens except Permitted Liens and to have a value, utility and remaining useful life (without regard to hours or cycles remaining until the next regular maintenance check) at least equal to the Airframe or Engine, as the case may be, to be replaced thereby (assuming that such Airframe or Engine had been maintained in accordance with this Trust Indenture); provided that if the Owner shall not perform its obligation to effect such replacement under this clause (i) during the 120-day period of time provided herein, it shall pay the amounts required to be paid pursuant to and within the time frame specified in clause (ii) below; or

 

(ii)           if Owner elects to make a payment in respect of such Event of Loss of the Airframe, Owner shall make a payment to the Mortgagee for purposes of redeeming Equipment Notes in accordance with Section 2.10 hereof on a date on or before the Business Day next following the earlier of (x) the 120th day following the date of the occurrence of such Event of Loss, and (y) the fourth Business Day following the receipt of insurance proceeds with respect to such Event of Loss (but in any event not earlier than the date of Owner’s election under Section 4.05(a) to make payment under this Section 4.05 (a)(ii)); and upon such payment and payment of all other Secured Obligations then due and payable, the Mortgagee shall, at the cost and expense of the Owner, release from the Lien of this Trust Indenture the Airframe and the Engines, by executing and delivering to the Owner all documents and instruments as the Owner may reasonably request to evidence such release.

 

(b)           Effect of Replacement.  Should the Owner have provided a Replacement Airframe and Replacement Engines, if any, as provided for in Section 4.05(a)(i), (i) the Lien of this Trust Indenture shall continue with respect to such Replacement Airframe and Replacement Engines, if any, as though no Event of Loss had occurred; (ii) the Mortgagee shall, at the cost and expense of the Owner, release from the Lien of this Trust Indenture the replaced Airframe and Engines, if any, by executing and delivering to the Owner such documents and instruments as the Owner may reasonably request to evidence such release; and (iii) in the case of a replacement upon an Event of Loss, the Mortgagee shall assign to the Owner all claims the Mortgagee may have against any other Person arising from the Event of Loss and the Owner

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shall receive all insurance proceeds (other than those reserved to others under Section 4.06(b)) and proceeds from any award in respect of condemnation, confiscation, seizure or requisition, including any investment interest thereon, to the extent not previously applied to the purchase price of the Replacement Airframe and Replacement Engines, if any, as provided in Section 4.05(d).

 

(c)           Conditions to Airframe and Engine Replacement.  The Owner’s right to substitute a Replacement Airframe and Replacement Engines, if any, as provided in Section 4.05(a)(i) shall be subject to the fulfillment, at the Owner’s sole cost and expense, in addition to the conditions contained in such Section 4.05(a)(i), of the following conditions precedent:

 

(i)           on the date when the Replacement Airframe and Replacement Engines, if any, is subjected to the Lien of this Trust Indenture (such date being referred to in this Section 4.05 as the “Replacement Closing Date”), an executed counterpart of each of the following documents (or, in the case of the FAA Bill of Sale and full warranty bill of sale referred to below, a photocopy thereof) shall have been delivered to the Mortgagee:

 

(A)           a Trust Indenture Supplement covering the Replacement Airframe and Replacement Engines, if any, which shall have been duly filed for recordation pursuant to the Act or such other applicable law of such jurisdiction other than the United States in which the Replacement Airframe and Replacement Engines, if any, are to be registered in accordance with Section 4.02(e), as the case may be;

 

(B)           an FAA Bill of Sale (or a comparable document, if any, of another Aviation Authority, if applicable) covering the Replacement Airframe, executed by the former owner thereof in favor of the Owner;

 

(C)           a full warranty (as to title) bill of sale, covering the Replacement Airframe and Replacement Engines, if any, executed by the former owner thereof in favor of the Owner (or, at the Owner’s option, other evidence of the Owner’s ownership of such Replacement Airframe and Replacement Engines, if any, reasonably satisfactory to the Mortgagee); and

 

(D)           UCC financing statements (or any similar statements or other documents required to be filed or delivered pursuant to the laws of the jurisdiction in which the Replacement Airframe may be registered in accordance with Section 4.02(e)) as are deemed necessary or desirable by counsel for the Mortgagee to protect the security interests of the Mortgagee in the Replacement Airframe and Replacement Engines, if any;

 

(ii)           the Replacement Airframe and Replacement Engines, if any, shall be of the same model as the Airframe or Engines, as the case may be, or an improved model of such aircraft or engines of the manufacturer thereof, shall have a value and utility (without regard to hours or cycles remaining until the next regular maintenance check) at least equal to, and be in as good operating condition and repair as, the Airframe and any Engines

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replaced (assuming such Airframe and Engines had been maintained in accordance with this Trust Indenture);

 

(iii)           the Mortgagee (acting directly or by authorization to its special counsel) shall have received satisfactory evidence as to the compliance with Section 4.06 with respect to the Replacement Airframe and Replacement Engines, if any;

 

(iv)           on the Replacement Closing Date, (A) the Owner shall cause the Replacement Airframe and Replacement Engines, if any, to be subject to the Lien of this Trust Indenture free and clear of Liens (other than Permitted Liens), (B) the Replacement Airframe shall have been duly certified by the FAA as to type and airworthiness in accordance with the terms of this Trust Indenture, (C) application for registration of the Replacement Airframe in accordance with Section 4.02(e) shall have been duly made with the FAA or other applicable Aviation Authority and the Owner shall have authority to operate the Replacement Airframe and (D) the Owner shall have caused the sale of such Replacement Airframe and Replacement Engine(s), if any, to the Owner (if occurring after February 28, 2006) and the International Interest granted under the Trust Indenture Supplement in favor of the Mortgagee with respect to such Replacement Airframe and Replacement Engine(s), if any, each to be registered on the International Registry as a sale or an International Interest, respectively;

 

(v)           the Mortgagee, at the expense of the Owner, shall have received (acting directly or by authorization to its special counsel) (A) an opinion of counsel, addressed to the Mortgagee, to the effect that the Replacement Airframe and Replacement Engine, if any, has or have duly been made subject to the Lien of this Trust Indenture, and Mortgagee will be entitled to the benefits of Section 1110 with respect to the Replacement Airframe, provided that such opinion with respect to Section 1110 need not be delivered to the extent that immediately prior to such replacement the benefits of Section 1110 were not, solely by reason of a change in law or court interpretation thereof, available to Mortgagee, and (B) an opinion of Owner’s aviation law counsel reasonably satisfactory to and addressed to Mortgagee as to the due registration of any such Replacement Airframe and the due filing for recordation of each Trust Indenture Supplement with respect to such Replacement Airframe or Replacement Engine under the Act or such other applicable law of the jurisdiction other than the United States in which the Replacement Airframe is to be registered in accordance with Section 4.02(e), as the case may be, and the registration with the International Registry of the sale of such Replacement Airframe and Replacement Engine(s), if any, to the Owner (if occurring after February 28, 2006) and of the International Interest granted under the Trust Indenture Supplement with respect to such Replacement Aircraft and Replacement Engine(s), if any; and

 

(vi)           the Owner shall have furnished to the Mortgagee a certificate of a qualified aircraft engineer (who may be an employee of Owner) certifying that the Replacement Airframe and Replacement Engines, if any, have a value and utility and remaining useful life (without regard to hours and cycles remaining until overhaul) at least equal to the Airframe and any Engines so replaced (assuming that such Airframe and Engines had been maintained in accordance with this Trust Indenture).

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(d)           Non-Insurance Payments Received on Account of an Event of Loss.  Any amounts, other than insurance proceeds in respect of damage or loss not constituting an Event of Loss (the application of which is provided for in Annex B), received at any time by Mortgagee or Owner from any Government Entity or any other Person in respect of any Event of Loss will be applied as follows:

 

(i)           If such amounts are received with respect to the Airframe, and any Engine installed thereon at the time of such Event of Loss, upon compliance by Owner with the applicable terms of Section 4.05(c) with respect to the Event of Loss for which such amounts are received, such amounts shall be paid over to, or retained by, Owner;

 

(ii)           If such amounts are received with respect to an Engine (other than an Engine installed on the Airframe at the time such Airframe suffers an Event of Loss), upon compliance by Owner with the applicable terms of Section 4.04(e) with respect to the Event of Loss for which such amounts are received, such amounts shall be paid over to, or retained by, Owner;

 

(iii)           If such amounts are received, in whole or in part, with respect to the Airframe, and Owner makes, has made or is deemed to have made the election set forth in Section 4.05(a)(ii), such amounts shall be applied as follows:

 

first, if the sum described in Section 4.05(a)(ii) has not then been paid in full by Owner, such amounts shall be paid to Mortgagee to the extent necessary to pay in full such sum; and

 

second, the remainder, if any, shall be paid to Owner.

 

(e)           Requisition for Use.  In the event of a requisition for use by any Government Entity of the Airframe and the Engines, if any, or engines installed on such Airframe while such Airframe is subject to the Lien of this Trust Indenture, the Owner shall promptly notify the Mortgagee of such requisition and all of the Owner’s obligations under this Trust Indenture shall continue to the same extent as if such requisition had not occurred except to the extent that the performance or observance of any obligation by the Owner shall have been prevented or delayed by such requisition; provided that the Owner’s obligations under this Section 4.05 with respect to the occurrence of an Event of Loss for the payment of money and under Section 4.06 (except while an assumption of liability by the U.S. Government of the scope referred to in Section 4.02(c) is in effect) shall not be reduced or delayed by such requisition.  Any payments received by the Mortgagee or the Owner or Permitted Lessee from such Government Entity with respect to such requisition of use shall be paid over to, or retained by, the Owner.  In the event of an Event of Loss of an Engine resulting from the requisition for use by a Government Entity of such Engine (but not the Airframe), the Owner will replace such Engine hereunder by complying with the terms of Section 4.04(e) and any payments received by the Mortgagee or the Owner from such Government Entity with respect to such requisition shall be paid over to, or retained by, the Owner.

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(f)           Certain Payments to be Held As Security.  Any amount referred to in this Section 4.05 or Section 4.06 which is payable or creditable to, or retainable by, the Owner shall not be paid or credited to, or retained by the Owner if at the time of such payment, credit or retention a Special Default or an Event of Default shall have occurred and be continuing, but shall be paid to and held by the Mortgagee as security for the obligations of the Owner under this Trust Indenture and the Operative Agreements, and at such time as there shall not be continuing any such Special Default or Event of Default such amount and any gain realized as a result of investments required to be made pursuant to Section 6.06 shall to the extent not theretofore applied as provided herein, be paid over to the Owner.

 

SECTION 4.06.  Insurance

 

(a)           Owner’s Obligation to Insure.  Owner shall comply with, or cause to be complied with, each of the provisions of Annex B, which provisions are hereby incorporated by this reference as if set forth in full herein.

 

(b)           Insurance for Own Account.  Nothing in Section 4.06 shall limit or prohibit (a) Owner from maintaining the policies of insurance required under Annex B with higher limits than those specified in Annex B, or (b) Mortgagee from obtaining insurance for its own account (and any proceeds payable under such separate insurance shall be payable as provided in the policy relating thereto); provided, however, that no insurance may be obtained or maintained that would limit or otherwise adversely affect the coverage of any insurance required to be obtained or maintained by Owner pursuant to this Section 4.06 and Annex B.

 

(c)           Indemnification by Government in Lieu of Insurance.  Mortgagee agrees to accept, in lieu of insurance against any risk with respect to the Aircraft described in Annex B, indemnification from, or insurance provided by, the U.S. Government, or upon the written consent of Mortgagee, other Government Entity, against such risk in an amount that, when added to the amount of insurance (including permitted self-insurance), if any, against such risk that Owner (or any Permitted Lessee) may continue to maintain, in accordance with this Section 4.06, during the period of such requisition or transfer, shall be at least equal to the amount of insurance against such risk otherwise required by this Section 4.06; provided that the provisions of Section D of Annex B shall not apply to an indemnity or insurance provided by the U.S. Government in lieu of insurance required by Section C of Annex B, except to the extent the U.S. Government makes such provisions generally available to covered airlines.

 

(d)           Application of Insurance Proceeds.  As between Owner and Mortgagee, all insurance proceeds received as a result of the occurrence of an Event of Loss with respect to the Aircraft or any Engine under policies required to be maintained by Owner pursuant to this Section 4.06 will be applied in accordance with Section 4.05(d).  All proceeds of insurance required to be maintained by Owner, in accordance with Section 4.06 and Section B of Annex B, in respect of any property damage or loss not constituting an Event of Loss with respect to the Aircraft, Airframe or any Engine will be applied in payment (or to reimburse Owner) for repairs or for replacement property, and any balance remaining after such repairs or replacement with respect to such damage or loss shall be paid over to, or retained by, Owner.

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SECTION 4.07.  Merger of Owner

 

(a)           In General.  Owner shall not consolidate with or merge into any other person under circumstances in which Owner is not the surviving corporation, or convey, transfer or lease in one or more transactions all or substantially all of its assets to any other person, unless:

 

(i)           such person is organized, existing and in good standing under the Laws of the United States, any State of the United States or the District of Columbia and, upon consummation of such transaction, such person will be a U.S. Air Carrier;

 

(ii)           such person executes and delivers to Mortgagee a duly authorized, legal, valid, binding and enforceable agreement, reasonably satisfactory in form and substance to Mortgagee, containing an effective assumption by such person of the due and punctual performance and observance of each covenant, agreement and condition in the Operative Agreements to be performed or observed by Owner;

 

(iii)           if the Aircraft is, at the time, registered with the FAA, such person makes such filings and recordings with the FAA pursuant to the Act or if the Aircraft is, at the time, not registered with FAA, such person makes such filings and recordings with the applicable Aviation Authority as shall be necessary to evidence such consolidation or merger;

 

(iv)           such person makes such registrations with the International Registry as shall be permitted to evidence such consolidation or merger; and

 

(v)           immediately after giving effect to such consolidation or merger no Event of Default shall have occurred and be continuing.

 

(b)           Effect of Merger.  Upon any such consolidation or merger of Owner with or into, or the conveyance, transfer or lease by Owner of all or substantially all of its assets to, any Person in accordance with this Section 4.07, such Person will succeed to, and be substituted for, and may exercise every right and power of, Owner under the Operative Agreements with the same effect as if such person had been named as “Owner” therein.  No such consolidation or merger, or conveyance, transfer or lease, shall have the effect of releasing Owner or such Person from any of the obligations, liabilities, covenants or undertakings of Owner under this Trust Indenture.

 

ARTICLE V

 

EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE

 

SECTION 5.01.  Event of Default

 

“Event of Default” means any of the following events (whatever the reason for such Event of Default and whether such event shall be voluntary or involuntary or come about or be effected by operation of Law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

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(i)           the failure of the Owner to pay (i) principal of, interest on or Make-Whole Amount, if any, under any Equipment Note when due, and such failure shall continue unremedied for a period of 10 Business Days, or (ii) any other amount payable by it to the Note Holders under this Trust Indenture or the Participation Agreement when due, and such failure shall continue for a period in excess of 10 Business Days after Owner has received written notice from Mortgagee of the failure to make such payment when due;

 

(ii)           Owner shall fail to carry and maintain, or cause to be carried and maintained, insurance on and in respect of the Aircraft, Airframe and Engines in accordance with the provisions of Section 4.06;

 

(iii)           Owner shall fail to observe or perform (or caused to be observed and performed) in any material respect any other covenant, agreement or obligation set forth herein or in any other Operative Agreement to which Owner is a party and such failure shall continue unremedied for a period of 30 days from and after the date of written notice thereof to Owner from Mortgagee, unless such failure is capable of being corrected and Owner shall be diligently proceeding to correct such failure, in which case there shall be no Event of Default unless and until such failure shall continue unremedied for a period of 270 days after receipt of such notice;

 

(iv)           any representation or warranty made by Owner herein, in the Participation Agreement or in any other Operative Agreement to which Owner is a party (a) shall prove to have been untrue or inaccurate in any material respect as of the date made, (b) such untrue or inaccurate representation or warranty is material at the time in question, (c) and the same shall remain uncured (to the extent of the adverse impact of such incorrectness on the interest of the Mortgagee) for a period in excess of 30 days from and after the date of written notice thereof from Mortgagee to Owner;

 

(v)           the Owner shall consent to the appointment of or taking possession by a receiver, trustee or liquidator of itself or of a substantial part of its property, or the Owner shall admit in writing its inability to pay its debts generally as they come due or shall make a general assignment for the benefit of its creditors, or the Owner shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or other relief under any bankruptcy laws or insolvency laws (as in effect at such time), or an answer admitting the material allegations of a petition filed against it in any such case, or the Owner shall seek relief by voluntary petition, answer or consent, under the provisions of any other bankruptcy or similar law providing for the reorganization or winding-up of corporations (as in effect at such time), or the Owner shall seek an agreement, composition, extension or adjustment with its creditors under such laws or the Owner’s board of directors shall adopt a resolution authorizing corporate action in furtherance of any of the foregoing;

 

(vi)           an order, judgment or decree shall be entered by any court of competent jurisdiction appointing, without the consent of the Owner, a receiver, trustee or liquidator of the Owner or of any substantial part of its property, or any substantial part of the property of the Owner shall be sequestered, or granting any other relief in respect of the Owner as a debtor under any bankruptcy laws or other insolvency laws (as in effect at such time), and

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any such order, judgment, decree, or decree of appointment or sequestration shall remain in force undismissed, unstayed or unvacated for a period of 90 days after the date of entry thereof;

 

(vii)           a petition against the Owner in a proceeding under any bankruptcy laws or other insolvency laws (as in effect at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of corporations which may apply to the Owner, any court of competent jurisdiction shall assume jurisdiction, custody or control of the Owner of any substantial part of its property and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or unterminated for a period of 90 days; or

 

(viii)           the occurrence of a Related Indenture Event of Default.

 

SECTION 5.02.  Remedies

 

(a)           If an Event of Default shall have occurred and be continuing and so long as the same shall continue unremedied, then and in every such case the Mortgagee may exercise any or all of the rights and powers and pursue any and all of the remedies pursuant to this Article V and shall have and may exercise all of the rights and remedies of a secured party under the Uniform Commercial Code or of a chargee under the Cape Town Treaty and may take possession of all or any part of the properties covered or intended to be covered by the Lien created hereby or pursuant hereto and may exclude the Owner and all persons claiming under it wholly or partly therefrom; provided, that the Mortgagee shall give the Owner twenty days’ prior written notice of its intention to sell the Aircraft.  Without limiting any of the foregoing, it is understood and agreed that the Mortgagee may exercise any right of sale of the Aircraft available to it, even though it shall not have taken possession of the Aircraft and shall not have possession thereof at the time of such sale.

 

(b)           If an Event of Default shall have occurred and be continuing, then and in every such case the Mortgagee may (and shall, upon receipt of a written demand therefor from a Majority in Interest of Note Holders), at any time, by delivery of written notice or notices to the Owner, declare all the Equipment Notes to be due and payable, whereupon the unpaid Original Amount of all Equipment Notes then outstanding, together with accrued but unpaid interest thereon (without Make-Whole Amount) and other amounts due thereunder or otherwise payable hereunder, shall immediately become due and payable without presentment, demand, protest or notice, all of which are hereby waived; provided that if an Event of Default referred to in clause (v), (vi) or (vii) of Section 5.01 hereof shall have occurred, then and in every such case the unpaid Original Amount then outstanding, together with accrued but unpaid interest (without Make-Whole Amount) and all other amounts due hereunder and under the Equipment Notes shall immediately and without further act become due and payable without presentment, demand, protest or notice, all of which are hereby waived.

 

This Section 5.02(b), however, is subject to the condition that, if at any time after the Original Amount of the Equipment Notes shall have become so due and payable, and before any judgment or decree for the payment of the money so due, or any thereof, shall be entered, all overdue payments of interest upon the Equipment Notes and all other amounts payable

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hereunder or under the Equipment Notes (except the Original Amount of the Equipment Notes and any Make-Whole Amount which by such declaration shall have become payable) shall have been duly paid, and every other Default and Event of Default with respect to any covenant or provision of this Trust Indenture shall have been cured, then and in every such case a Majority in Interest of Note Holders may (but shall not be obligated to), by written instrument filed with the Mortgagee, rescind and annul the Mortgagee’s declaration (or such automatic acceleration) and its consequences; but no such rescission or annulment shall extend to or affect any subsequent Default or Event of Default or impair any right consequent thereon.

 

(c)           The Note Holders shall be entitled, at any sale pursuant to this Section 5.02, to credit against any purchase price bid at such sale by such holder all or any part of the unpaid obligations owing to such Note Holder and secured by the Lien of this Trust Indenture (only to the extent that such purchase price would have been paid to such Note Holder pursuant to Article III hereof if such purchase price were paid in cash and the foregoing provisions of this subsection (c) were not given effect).

 

(d)           In the event of any sale of the Collateral, or any part thereof, pursuant to any judgment or decree of any court or otherwise in connection with the enforcement of any of the terms of this Trust Indenture, the unpaid Original Amount of all Equipment Notes then outstanding, together with accrued interest thereon (without Make-Whole Amount), and other amounts due thereunder, shall immediately become due and payable without presentment, demand, protest or notice, all of which are hereby waived.

 

(e)           Notwithstanding anything contained herein, so long as the Pass Through Trustee under any Pass Through Trust Agreement (or its designee) is a Note Holder, the Mortgagee will not be authorized or empowered to acquire title to any Collateral or take any action with respect to any Collateral so acquired by it if such acquisition or action would cause any Trust to fail to qualify as a “grantor trust” for federal income tax purposes.

 

SECTION 5.03.  Return of Aircraft, Etc.

 

(a)           If an Event of Default shall have occurred and be continuing and the Equipment Notes have been accelerated, at the request of the Mortgagee, the Owner shall promptly execute and deliver to the Mortgagee such instruments of title and other documents as the Mortgagee may deem necessary or advisable to enable the Mortgagee or an agent or representative designated by the Mortgagee, at such time or times and place or places as the Mortgagee may specify, to obtain possession of all or any part of the Collateral to which the Mortgagee shall at the time be entitled hereunder.  If the Owner shall for any reason fail to execute and deliver such instruments and documents after such request by the Mortgagee, the Mortgagee may (i) obtain a judgment conferring on the Mortgagee the right to immediate possession and requiring the Owner to execute and deliver such instruments and documents to the Mortgagee, to the entry of which judgment the Owner hereby specifically consents to the fullest extent permitted by Law, and (ii) pursue all or part of such Collateral wherever it may be found and may enter any of the premises of Owner wherever such Collateral may be or be supposed to be and search for such Collateral and take possession of and remove such Collateral.

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All expenses of obtaining such judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Trust Indenture.

 

(b)           Upon every such taking of possession, the Mortgagee may, from time to time, at the expense of the Collateral, make all such expenditures for maintenance, use, operation, storage, insurance, leasing, control, management, disposition, modifications or alterations to and of the Collateral, as it may deem proper.  In each such case, the Mortgagee shall have the right to maintain, use, operate, store, insure, lease, control, manage, dispose of, modify or alter the Collateral and to exercise all rights and powers of the Owner relating to the Collateral, as the Mortgagee shall deem best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation, storage, insurance, leasing, control, management, disposition, modification or alteration of the Collateral or any part thereof as the Mortgagee may determine, and the Mortgagee shall be entitled to collect and receive directly all rents, revenues and other proceeds of the Collateral and every part thereof, without prejudice, however, to the right of the Mortgagee under any provision of this Trust Indenture to collect and receive all cash held by, or required to be deposited with, the Mortgagee hereunder.  Such rents, revenues and other proceeds shall be applied to pay the expenses of the maintenance, use, operation, storage, insurance, leasing, control, management, disposition, improvement, modification or alteration of the Collateral and of conducting the business thereof, and to make all payments which the Mortgagee may be required or may elect to make, if any, for taxes, assessments, insurance or other proper charges upon the Collateral or any part thereof (including the employment of engineers and accountants to examine, inspect and make reports upon the properties and books and records of the Owner), and all other payments which the Mortgagee may be required or authorized to make under any provision of this Trust Indenture, as well as just and reasonable compensation for the services of the Mortgagee, and of all persons properly engaged and employed by the Mortgagee with respect hereto.

 

SECTION 5.04.  Remedies Cumulative

 

Each and every right, power and remedy given to the Mortgagee specifically or otherwise in this Trust Indenture shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at Law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Mortgagee, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.  No delay or omission by the Mortgagee in the exercise of any right, remedy or power or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of the Owner or to be an acquiescence therein.

 

SECTION 5.05.  Discontinuance of Proceedings

 

In case the Mortgagee shall have instituted any proceeding to enforce any right, power or remedy under this Trust Indenture by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been

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determined adversely to the Mortgagee, then and in every such case the Owner and the Mortgagee shall, subject to any determination in such proceedings, be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of the Owner or the Mortgagee shall continue as if no such proceedings had been instituted.

 

SECTION 5.06.  Waiver of Past Defaults

 

Upon written instruction from a Majority in Interest of Note Holders, the Mortgagee shall waive any past Default hereunder and its consequences and upon any such waiver such Default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Trust Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon; provided, that in the absence of written instructions from all the Note Holders, the Mortgagee shall not waive any Default (i) in the payment of the Original Amount, Make-Whole Amount, if any, and interest and other amounts due under any Equipment Note then outstanding, or (ii) in respect of a covenant or provision hereof which, under Article X hereof, cannot be modified or amended without the consent of each Note Holder.

 

SECTION 5.07.  Appointment of Receiver

 

The Mortgagee shall, as a matter of right, be entitled to the appointment of a receiver (who may be the Mortgagee or any successor or nominee thereof) for all or any part of the Collateral, whether such receivership be incidental to a proposed sale of the Collateral or the taking of possession thereof or otherwise, and the Owner hereby consents to the appointment of such a receiver and will not oppose any such appointment.  Any receiver appointed for all or any part of the Collateral shall be entitled to exercise all the rights and powers of the Mortgagee with respect to the Collateral.

 

SECTION 5.08.  Mortgagee Authorized to Execute Bills of Sale, Etc.

 

The Owner irrevocably appoints, while an Event of Default has occurred and is continuing, the Mortgagee the true and lawful attorney-in-fact of the Owner (which appointment is coupled with an interest) in its name and stead and on its behalf, for the purpose of effectuating any sale, assignment, transfer or delivery for the enforcement of the Lien of this Trust Indenture, whether pursuant to foreclosure or power of sale, assignments and other instruments as may be necessary or appropriate, with full power of substitution, the Owner hereby ratifying and confirming all that such attorney or any substitute shall do by virtue hereof in accordance with applicable law.  Nevertheless, if so requested by the Mortgagee or any purchaser, the Owner shall ratify and confirm any such sale, assignment, transfer or delivery, by executing and delivering to the Mortgagee or such purchaser all bills of sale, assignments, releases and other proper instruments to effect such ratification and confirmation as may be designated in any such request.

 

SECTION 5.09.  Rights of Note Holders to Receive Payment

 

Notwithstanding any other provision of this Trust Indenture, the right of any Note Holder to receive payment of principal of, and premium, if any, and interest on an Equipment

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Note on or after the respective due dates expressed in such Equipment Note, or to bring suit for the enforcement of any such payment on or after such respective dates in accordance with the terms hereof, shall not be impaired or affected without the consent of such Note Holder.

 

ARTICLE VI

 

DUTIES OF THE MORTGAGEE

 

SECTION 6.01.  Notice of Event of Default

 

If the Mortgagee shall have Actual Knowledge of an Event of Default or of a Default arising from a failure to pay any installment of principal and interest on any Equipment Note, the Mortgagee shall give prompt written notice thereof to each Note Holder.  Subject to the terms of Sections 5.06, 6.02 and 6.03 hereof, the Mortgagee shall take such action, or refrain from taking such action, with respect to such Event of Default or Default (including with respect to the exercise of any rights or remedies hereunder) as the Mortgagee shall be instructed in writing by a Majority in Interest of Note Holders.  Subject to the provisions of Section 6.03, if the Mortgagee shall not have received instructions as above provided within 20 days after mailing notice of such Event of Default to the Note Holders, the Mortgagee may, subject to instructions thereafter received pursuant to the preceding provisions of this Section 6.01, take such action, or refrain from taking such action, but shall be under no duty to take or refrain from taking any action, with respect to such Event of Default or Default as it shall determine advisable in the best interests of the Note Holders; provided, however, that the Mortgagee may not sell the Aircraft or any Engine without the consent of a Majority in Interest of Note Holders.  For all purposes of this Trust Indenture, in the absence of Actual Knowledge on the part of the Mortgagee, the Mortgagee shall not be deemed to have knowledge of a Default or an Event of Default (except, the failure of Owner to pay any installment of principal or interest within one Business Day after the same shall become due, which failure shall constitute knowledge of a Default) unless notified in writing by the Owner or one or more Note Holders.

 

SECTION 6.02.  Action Upon Instructions; Certain Rights and Limitations

 

Subject to the terms of Sections 5.02(a), 5.06, 6.01 and 6.03 hereof, upon the written instructions at any time and from time to time of a Majority in Interest of Note Holders, the Mortgagee shall, subject to the terms of this Section 6.02, take such of the following actions as may be specified in such instructions: (i) give such notice or direction or exercise such right, remedy or power hereunder as shall be specified in such instructions and (ii) give such notice or direction or exercise such right, remedy or power hereunder with respect to any part of the Collateral as shall be specified in such instructions; it being understood that without the written instructions of a Majority in Interest of Note Holders, the Mortgagee shall not, except as provided in Section 6.01, approve any such matter as satisfactory to the Mortgagee.

 

The Mortgagee will execute and the Owner will file such continuation statements with respect to financing statements relating to the security interest created hereunder in the Collateral as may be specified from time to time in written instructions of a Majority in Interest of Note Holders (which instructions shall be accompanied by the form of such continuation

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statement so to be filed).  The Mortgagee will furnish to each Note Holder, promptly upon receipt thereof, duplicates or copies of all reports, notices, requests, demands, certificates and other instruments furnished to the Mortgagee hereunder.

 

SECTION 6.03.  Indemnification

 

The Mortgagee shall not be required to take any action or refrain from taking any action under Section 6.01 (other than the first sentence thereof), 6.02 or Article V hereof unless the Mortgagee shall have been indemnified to its reasonable satisfaction against any liability, cost or expense (including counsel fees) which may be incurred in connection therewith pursuant to a written agreement with one or more Note Holders.  The Mortgagee agrees that it shall look solely to the Note Holders for the satisfaction of any indemnity (except expenses for foreclosure of the type referred to in clause “First” of Section 3.03 hereof) owed to it pursuant to this Section 6.03.  The Mortgagee shall not be under any obligation to take any action under this Trust Indenture or any other Operative Agreement and nothing herein or therein shall require the Mortgagee to expend or risk its own funds or otherwise incur the risk of any financial liability in the performance of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it (the written indemnity of any Note Holder who is a QIB, signed by an authorized officer thereof, in favor of, delivered to and in form reasonably satisfactory to the Mortgagee shall be accepted as reasonable assurance of adequate indemnity).  The Mortgagee shall not be required to take any action under Section 6.01 (other than the first sentence thereof) or 6.02 or Article V hereof, nor shall any other provision of this Trust Indenture or any other Operative Agreement be deemed to impose a duty on the Mortgagee to take any action, if the Mortgagee shall have been advised by counsel that such action is contrary to the terms hereof or is otherwise contrary to Law.

 

SECTION 6.04.  No Duties Except as Specified in Trust Indenture or Instructions

 

The Mortgagee shall not have any duty or obligation to use, operate, store, lease, control, manage, sell, dispose of or otherwise deal with the Aircraft or any other part of the Collateral, or to otherwise take or refrain from taking any action under, or in connection with, this Trust Indenture or any part of the Collateral, except as expressly provided by the terms of this Trust Indenture or as expressly provided in written instructions from Note Holders as provided in this Trust Indenture; and no implied duties or obligations shall be read into this Trust Indenture against the Mortgagee.  The Mortgagee agrees that it will in its individual capacity and at its own cost and expense (but without any right of indemnity in respect of any such cost or expense under Section 8.01 hereof), promptly take such action as may be necessary duly to discharge all liens and encumbrances on any part of the Collateral which result from claims against it in its individual capacity not related to the administration of the Collateral or any other transaction pursuant to this Trust Indenture or any document included in the Collateral.

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SECTION 6.05.  No Action Except Under Trust Indenture or Instructions

 

The Mortgagee will not use, operate, store, lease, control, manage, sell, dispose of or otherwise deal with the Aircraft or any other part of the Collateral except in accordance with the powers granted to, or the authority conferred upon the Mortgagee pursuant to this Trust Indenture and in accordance with the express terms hereof.

 

SECTION 6.06.  Investment of Amounts Held by Mortgagee

 

Any amounts held by the Mortgagee pursuant to Section 3.02, 3.03 or 3.07 or pursuant to any provision of any other Operative Agreement providing for amounts to be held by the Mortgagee which are not distributed pursuant to the other provisions of Article III hereof shall be invested by the Mortgagee from time to time in Cash Equivalents as directed by the Owner so long as the Mortgagee may acquire the same using its best efforts.  All Cash Equivalents held by the Mortgagee pursuant to this Section 6.06 shall either be (a) registered in the name of, payable to the order of, or specially endorsed to, the Mortgagee, or (b) held in an Eligible Account.  Unless otherwise expressly provided in this Trust Indenture, any income realized as a result of any such investment, net of the Mortgagee’s reasonable fees and expenses in making such investment, shall be held and applied by the Mortgagee, in the same manner as the principal amount of such investment is to be applied and any losses, net of earnings and such reasonable fees and expenses, shall be charged against the principal amount invested.  The Mortgagee shall not be liable for any loss resulting from any investment required to be made by it under this Trust Indenture other than by reason of its willful misconduct or gross negligence or negligence in the handling of funds, and any such investment may be sold (without regard to its maturity) by the Mortgagee without instructions whenever such sale is necessary to make a distribution required by this Trust Indenture.

 

ARTICLE VII

 

THE MORTGAGEE

 

SECTION 7.01.  Acceptance of Trusts and Duties

 

The Mortgagee accepts the duties hereby created and applicable to it and agrees to perform the same but only upon the terms of this Trust Indenture and agrees to receive and disburse all monies constituting part of the Collateral in accordance with the terms hereof.  The Mortgagee, in its individual capacity, shall not be answerable or accountable under any circumstances, except (i) for its own willful misconduct or gross negligence (other than for the handling of funds, for which the standard of accountability shall be willful misconduct or negligence), (ii) as provided in the fourth sentence of Section 2.04(a) hereof and the last sentence of Section 6.04 hereof, and (iii) from the inaccuracy of any representation or warranty of the Mortgagee (in its individual capacity) in the Participation Agreement or expressly made hereunder.

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SECTION 7.02.  Absence of Duties

 

Except in accordance with written instructions furnished pursuant to Section 6.01 or 6.02 hereof, and except as provided in, and without limiting the generality of, Sections 6.03, 6.04 and 7.07 hereof the Mortgagee shall have no duty (i) to see to any registration of the Aircraft or any recording or filing of this Trust Indenture or any other document, or to see to the maintenance of any such registration, recording or filing, (ii) to see to any insurance on the Aircraft or to effect or maintain any such insurance, whether or not Owner shall be in default with respect thereto, (iii) to see to the payment or discharge of any lien or encumbrance of any kind against any part of the Collateral, (iv) to confirm, verify or inquire into the failure to receive any financial statements from Owner, or (v) to inspect the Aircraft at any time or ascertain or inquire as to the performance or observance of any of Owner’s covenants herein or any Permitted Lessee’s covenants under any assigned Permitted Lease with respect to the Aircraft.

 

SECTION 7.03.  No Representations or Warranties as to Aircraft or Documents

 

THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER.  The Mortgagee, in its individual or trust capacities, does not make or shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of this Trust Indenture, the Participation Agreement, the Equipment Notes, or the Purchase Agreement, or as to the correctness of any statement contained in any thereof, except for the representations and warranties of the Owner made in its individual capacity and the representations and warranties of the Mortgagee in its individual capacity, in each case expressly made in this Trust Indenture or in the Participation Agreement.  The Note Holders make no representation or warranty hereunder whatsoever.

 

SECTION 7.04.  No Segregation of Monies; No Interest

 

Except as otherwise provided in Section 3.07 hereof, any monies paid to or retained by the Mortgagee pursuant to any provision hereof and not then required to be distributed to the Note Holders, or the Owner as provided in Article III hereof need not be segregated in any manner except to the extent required by Law or Section 6.06 hereof, and may be deposited under such general conditions as may be prescribed by Law, and the Mortgagee shall not be liable for any interest thereon (except that the Mortgagee shall invest all monies held as directed by Owner so long as no Event of Default has occurred and is continuing (or in the absence of such direction, by the Majority In Interest of Note Holders) in Cash Equivalents);

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provided, however, that any payments received, or applied hereunder, by the Mortgagee shall be accounted for by the Mortgagee so that any portion thereof paid or applied pursuant hereto shall be identifiable as to the source thereof.

 

SECTION 7.05.  Reliance; Agreements; Advice of Counsel

 

The Mortgagee shall not incur any liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.  The Mortgagee may accept a copy of a resolution of the Board of Directors (or Executive Committee thereof) of the Owner, certified by the Secretary or an Assistant Secretary thereof as duly adopted and in full force and effect, as conclusive evidence that such resolution has been duly adopted and that the same is in full force and effect.  As to the aggregate unpaid Original Amount of Equipment Notes outstanding as of any date, the Owner may for all purposes hereof rely on a certificate signed by any Vice President or other authorized corporate trust officer of the Mortgagee.  As to any fact or matter relating to the Owner the manner of the ascertainment of which is not specifically described herein, the Mortgagee may for all purposes hereof rely on a certificate, signed by a duly authorized officer of the Owner, as to such fact or matter, and such certificate shall constitute full protection to the Mortgagee for any action taken or omitted to be taken by it in good faith in reliance thereon.  In the administration of the trusts hereunder, the Mortgagee may execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents or attorneys and may, at the expense of the Collateral, advise with counsel, accountants and other skilled persons to be selected and retained by it, and the Mortgagee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written advice or written opinion of any such counsel, accountants or other skilled persons.

 

SECTION 7.06.  Compensation

 

The Mortgagee shall be entitled to reasonable compensation, including expenses and disbursements (including the reasonable fees and expenses of counsel), for all services rendered hereunder and shall, on and subsequent to an Event of Default hereunder, have a priority claim on the Collateral for the payment of such compensation, to the extent that such compensation shall not be paid by Owner, and shall have the right, on and subsequent to an Event of Default hereunder, to use or apply any monies held by it hereunder in the Collateral toward such payments.  The Mortgagee agrees that it shall have no right against the Note Holders for any fee as compensation for its services as trustee under this Trust Indenture.

 

SECTION 7.07.  Instructions from Note Holders

 

In the administration of the trusts created hereunder, the Mortgagee shall have the right to seek instructions from a Majority in Interest of Note Holders should any provision of this Trust Indenture appear to conflict with any other provision herein or should the Mortgagee’s duties or obligations hereunder be unclear, and the Mortgagee shall incur no liability in refraining from acting until it receives such instructions.  The Mortgagee shall be fully protected for acting in accordance with any instructions received under this Section 7.07.

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ARTICLE VIII

 

INDEMNIFICATION

 

SECTION 8.01.  Scope of Indemnification

 

The Mortgagee shall be indemnified by the Owner to the extent and in the manner provided in Section 8 of the Participation Agreement.

 

ARTICLE IX

 

SUCCESSOR AND SEPARATE TRUSTEES

 

SECTION 9.01.  Resignation of Mortgagee; Appointment of Successor

 

(a)           The Mortgagee or any successor thereto may resign at any time without cause by giving at least 30 days’ prior written notice to the Owner and each Note Holder, such resignation to be effective upon the acceptance of the trusteeship by a successor Mortgagee.  In addition, a Majority in Interest of Note Holders may at any time (but only with the consent of Owner, which consent shall not be unreasonably withheld, except that such consent shall not be necessary if an Event of Default is continuing) remove the Mortgagee without cause by an instrument in writing delivered to the Owner and the Mortgagee, and the Mortgagee shall promptly notify each Note Holder thereof in writing, such removal to be effective upon the acceptance of the trusteeship by a successor Mortgagee.  In the case of the resignation or removal of the Mortgagee, a Majority in Interest of Note Holders may appoint a successor Mortgagee by an instrument signed by such holders, which successor, so long as no Event of Default shall have occurred and be continuing, shall be subject to Owner’s reasonable approval.  If a successor Mortgagee shall not have been appointed within 30 days after such notice of resignation or removal, the Mortgagee, the Owner or any Note Holder may apply to any court of competent jurisdiction to appoint a successor Mortgagee to act until such time, if any, as a successor shall have been appointed as above provided.  The successor Mortgagee so appointed by such court shall immediately and without further act be superseded by any successor Mortgagee appointed as above provided.

 

(b)           Any successor Mortgagee, however appointed, shall execute and deliver to the Owner and the predecessor Mortgagee an instrument accepting such appointment and assuming the obligations of the Mortgagee arising from and after the time of such appointment, and thereupon such successor Mortgagee, without further act, shall become vested with all the estates, properties, rights, powers and duties of the predecessor Mortgagee hereunder in the trust hereunder applicable to it with like effect as if originally named the Mortgagee herein; but nevertheless upon the written request of such successor Mortgagee, such predecessor Mortgagee shall execute and deliver an instrument transferring to such successor Mortgagee, upon the trusts herein expressed applicable to it, all the estates, properties, rights and powers of such predecessor Mortgagee, and such predecessor Mortgagee shall duly assign, transfer, deliver and pay over to such successor Mortgagee all monies or other property then held by such predecessor Mortgagee hereunder.

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(c)           Any successor Mortgagee, however appointed, shall be a bank or trust company having its principal place of business in the Borough of Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations under the Operative Agreements are guaranteed by an affiliated entity having) a combined capital and surplus of at least $100,000,000, if there be such an institution willing, able and legally qualified to perform the duties of the Mortgagee hereunder upon reasonable or customary terms.

 

(d)           Any corporation into which the Mortgagee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Mortgagee shall be a party, or any corporation to which substantially all the corporate trust business of the Mortgagee may be transferred, shall, subject to the terms of paragraph (c) of this Section 9.01, be a successor Mortgagee and the Mortgagee under this Trust Indenture without further act.

 

(e)           The Owner consents to any change in the identity of the Mortgagee on the International Registry occasioned by provisions of this Section 9.01, and if required by the International Registry to reflect such change, will provide its consent thereto.

 

SECTION 9.02.  Appointment of Additional and Separate Trustees

 

(a)           Whenever (i) the Mortgagee shall deem it necessary or desirable in order to conform to any Law of any jurisdiction in which all or any part of the Collateral shall be situated or to make any claim or bring any suit with respect to or in connection with the Collateral, this Trust Indenture, any other Indenture Agreement, the Equipment Notes or any of the transactions contemplated by the Participation Agreement, (ii) the Mortgagee shall be advised by counsel satisfactory to it that it is so necessary or prudent in the interests of the Note Holders (and the Mortgagee shall so advise the Owner), or (iii) the Mortgagee shall have been requested to do so by a Majority in Interest of Note Holders, then in any such case, the Mortgagee and, upon the written request of the Mortgagee, the Owner, shall execute and deliver an indenture supplemental hereto and such other instruments as may from time to time be necessary or advisable either (1) to constitute one or more bank or trust companies or one or more persons approved by the Mortgagee, either to act jointly with the Mortgagee as additional trustee or trustees of all or any part of the Collateral, or to act as separate trustee or trustees of all or any part of the Collateral, in each case with such rights, powers, duties and obligations consistent with this Trust Indenture as may be provided in such supplemental indenture or other instruments as the Mortgagee or a Majority in Interest of Note Holders may deem necessary or advisable, or (2) to clarify, add to or subtract from the rights, powers, duties and obligations theretofore granted any such additional or separate trustee, subject in each case to the remaining provisions of this Section 9.02. If the Owner shall not have taken any action requested of it under this Section 9.02(a) that is permitted or required by its terms within 15 days after the receipt of a written request from the Mortgagee so to do, or if an Event of Default shall have occurred and be continuing, the Mortgagee may act under the foregoing provisions of this Section 9.02(a) without the concurrence of the Owner, and the Owner hereby irrevocably appoints (which appointment is coupled with an interest) the Mortgagee, its agent and attorney-in-fact to act for it under the foregoing provisions of this Section 9.02(a) in either of such contingencies.  The Mortgagee

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may, in such capacity, execute, deliver and perform any such supplemental indenture, or any such instrument, as may be required for the appointment of any such additional or separate trustee or for the clarification of, addition to or subtraction from the rights, powers, duties or obligations theretofore granted to any such additional or separate trustee.  In case any additional or separate trustee appointed under this Section 9.02(a) shall die, become incapable of acting, resign or be moved, all the assets, property, rights, powers, trusts, duties and obligations of such additional or separate trustee shall revert to the Mortgagee until a successor additional or separate trustee is appointed as provided in this Section 9.02(a).

 

(b)           No additional or separate trustee shall be entitled to exercise any of the rights, powers, duties and obligations conferred upon the Mortgagee in respect of the custody, investment and payment of monies and all monies received by any such additional or separate trustee from or constituting part of the Collateral or otherwise payable under any Operative Agreement to the Mortgagee shall be promptly paid over by it to the Mortgagee.  All other rights, powers, duties and obligations conferred or imposed upon any additional or separate trustee shall be exercised or performed by the Mortgagee and such additional or separate trustee jointly except to the extent that applicable Law of any jurisdiction in which any particular act is to be performed renders the Mortgagee incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title to all or part of the Collateral in any such jurisdiction) shall be exercised and performed by such additional or separate trustee.  No additional or separate trustee shall take any discretionary action except on the instructions of the Mortgagee or a Majority in Interest of Note Holders.  No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, except that the Mortgagee shall be liable for the consequences of its lack of reasonable care in selecting, and the Mortgagee’s own actions in acting with, any additional or separate trustee.  Each additional or separate trustee appointed pursuant to this Section 9.02 shall be subject to, and shall have the benefit of Articles V through IX and Article XI hereof insofar as they apply to the Mortgagee.  The powers of any additional or separate trustee appointed pursuant to this Section 9.02 shall not in any case exceed those of the Mortgagee hereunder.

 

(c)           If at any time the Mortgagee shall deem it no longer necessary or in order to conform to any such Law or take any such action or shall be advised by such counsel that it is no longer so necessary or desirable in the interest of the Note Holders, or in the event that the Mortgagee shall have been requested to do so in writing by a Majority in Interest of Note Holders, the Mortgagee and, upon the written request of the Mortgagee, the Owner, shall execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any additional or separate trustee.  The Mortgagee may act on behalf of the Owner under this Section 9.02(c) when and to the extent it could so act under Section 9.02(a) hereof.

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ARTICLE X

 

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE

AND OTHER DOCUMENTS

 

SECTION 10.01.  Instructions of Majority; Limitations

 

(a)           The Mortgagee agrees with the Note Holders that it shall not enter into any amendment, waiver or modification of, supplement or consent to this Trust Indenture, or any other Operative Agreement to which it is a party, unless such supplement, amendment, waiver, modification or consent is consented to in writing by a Majority in Interest of Note Holders, but upon the written request of a Majority in Interest of Note Holders, the Mortgagee shall from time to time enter into any such supplement or amendment, or execute and deliver any such waiver, modification or consent, as may be specified in such request and as may be (in the case of any such amendment, supplement or modification), to the extent such agreement is required, agreed to by the Owner and, as may be appropriate, the Airframe Manufacturer or the Engine Manufacturer; provided, however, that, without the consent of each holder of an affected Equipment Note then outstanding and the Liquidity Providers, no such amendment, waiver or modification of the terms of, or consent under, any thereof, shall (i) modify any of the provisions of this Section 10.01, or of Article II or III or Section 5.01, 5.02(c), 5.02(d), or 6.02 hereof, the definitions of “Event of Default,” “Default,” “Majority in Interest of Note Holders,” “Make-Whole Amount” or “Note Holder,” or the percentage of Note Holders required to take or approve any action hereunder, (ii) reduce the amount, or change the time of payment or method of calculation of any amount, of Original Amount, Make-Whole Amount, if any, or interest with respect to any Equipment Note, (iii) reduce, modify or amend any indemnities in favor of the Mortgagee or the Note Holders (except that the Mortgagee may consent to any waiver or reduction of an indemnity payable to it), or the other Indenture Indemnitees or (iv) permit the creation of any Lien on the Trust Indenture Estate or any part thereof other than Permitted Liens or deprive any Note Holder of the benefit of the Lien of this Trust Indenture on the Collateral, except as provided in connection with the exercise of remedies under Article V hereof; provided, further, that without the consent of each holder of an affected Related Equipment Note then outstanding, no such amendment, waiver or modification of terms of, or consent under, any thereof shall modify Section 3.03 or deprive any Related Note Holder of the benefit of the Lien of this Trust Indenture on the Collateral, except as provided in connection with the exercise of remedies under Article V hereof.  Notwithstanding the foregoing, without the consent of the affected Liquidity Provider neither the Owner nor the Mortgagee shall enter into any amendment, waiver or modification of, supplement or consent to this Trust Indenture or the other Operative Agreements which shall reduce, modify or amend any indemnities in favor of such Liquidity Provider.

 

(b)           The Owner and the Mortgagee may enter into one or more agreements supplemental hereto without the consent of any Note Holder for any of the following purposes: (i) (a) to cure any defect or inconsistency herein or in the Equipment Notes, or to make any change not inconsistent with the provisions hereof (provided that such change does not adversely affect the interests of any Note Holder in its capacity solely as Note Holder) or (b) to cure any ambiguity or correct any mistake; (ii) to evidence the succession of another party as the

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Owner in accordance with the terms hereof or to evidence the succession of a new trustee hereunder pursuant hereto, the removal of the trustee hereunder or the appointment of any co-trustee or co-trustees or any separate or additional trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any property to or with the Mortgagee or to make any other provisions with respect to matters or questions arising hereunder so long as such action shall not adversely affect the interests of the Note Holders in its capacity solely as Note Holder; (iv) to correct or amplify the description of any property at any time subject to the Lien of this Trust Indenture or better to assure, convey and confirm unto the Mortgagee any property subject or required to be subject to the Lien of this Trust Indenture, the Airframe or Engines or any Replacement Airframe or Replacement Engine; (v) to add to the covenants of the Owner for the benefit of the Note Holders, or to surrender any rights or power herein conferred upon the Owner; (vi) to add to the rights of the Note Holders; (vii) to provide for the reissuance of Series B Equipment Notes (and Related Series B Equipment Notes) or the issuance (and optional redemption and reissuance) from time to time of no more than two separate series of Additional Series Equipment Notes (and any Related Additional Series Equipment Notes) and for pass through certificates issued by any pass through trust that acquires any such Equipment Notes  and to make changes relating to any of the foregoing (including without limitation to provide for the relative priority of different series of Additional Series Equipment Notes as between such series) and to provide for any credit support for any such reissued Series B Equipment Notes or Related Series B Equipment Notes (including without limitation to secure claims for fees, interest, expenses, reimbursement of advances and other obligations arising from such credit support (including without limitation to specify such credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider”)), provided that such Equipment Notes are issued in accordance with the Note Purchase Agreement and Section 9.1 of the Intercreditor Agreement; and (viii) to include on the Equipment Notes any legend as may be required by Law.

 

SECTION 10.02.  Mortgagee Protected

 

If, in the opinion of the institution acting as Mortgagee hereunder, any document required to be executed by it pursuant to the terms of Section 10.01 hereof affects any right, duty, immunity or indemnity with respect to such institution under this Trust Indenture, such institution may in its discretion decline to execute such document.

 

SECTION 10.03.  Documents Mailed to Note Holders

 

Promptly after the execution by the Owner or the Mortgagee of any document entered into pursuant to Section 10.01 hereof, the Mortgagee shall mail, by first class mail, postage prepaid, a copy thereof to Owner (if not a party thereto) and to each Note Holder at its address last set forth in the Equipment Note Register, but the failure of the Mortgagee to mail such copies shall not impair or affect the validity of such document.

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SECTION 10.04.  No Request Necessary for Trust Indenture Supplement

 

No written request or consent of the Note Holders pursuant to Section 10.01 hereof shall be required to enable the Mortgagee to execute and deliver a Trust Indenture Supplement specifically required by the terms hereof.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.01.  Termination of Trust Indenture

 

Upon (or at any time after) payment in full of the Original Amount of, Make-Whole Amount, if any, and interest on and all other amounts due under all Equipment Notes and provided that there shall then be no other Secured Obligations due to the Indenture Indemnitees, the Note Holders and the Mortgagee hereunder or under the Participation Agreement, any other Operative Agreement, any Related Equipment Note or any Related Indenture, the Owner shall direct the Mortgagee to execute and deliver to or as directed in writing by the Owner an appropriate instrument releasing the Aircraft and the Engines and (subject to paragraph (iv) of clause “Third” of Section 3.03 hereof, if applicable) all other Collateral from the Lien of this Trust Indenture and the Mortgagee shall execute and deliver such instrument as aforesaid; provided, however, that this Trust Indenture and the trusts created hereby shall earlier terminate and this Trust Indenture shall be of no further force or effect upon any sale or other final disposition by the Mortgagee of all property constituting part of the Collateral and the final distribution by the Mortgagee of all monies or other property or proceeds constituting part of the Collateral in accordance with the terms hereof.  Except as aforesaid otherwise provided, this Trust Indenture and the trusts created hereby shall continue in full force and effect in accordance with the terms hereof.

 

SECTION 11.02.  No Legal Title to Collateral in Note Holders

 

No holder of an Equipment Note or a Related Equipment Note shall have legal title to any part of the Collateral.  No transfer, by operation of law or otherwise, of any Equipment Note or Related Equipment Note or other right, title and interest of any Note Holder or holder of a Related Equipment Note in and to the Collateral or hereunder shall operate to terminate this Trust Indenture or entitle such holder or any successor or transferee of such holder to an accounting or to the transfer to it of any legal title to any part of the Collateral.

 

SECTION 11.03.  Sale of Aircraft by Mortgagee Is Binding

 

Any sale or other conveyance of the Collateral, or any part thereof (including any part thereof or interest therein), by the Mortgagee made pursuant to the terms of this Trust Indenture shall bind the Note Holders and shall be effective to transfer or convey all right, title and interest of the Mortgagee, the Owner and such holders in and to such Collateral or part thereof.  No purchaser or other grantee shall be required to inquire as to the authorization,

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necessity, expediency or regularity of such sale or conveyance or as to the application of any sale or other proceeds with respect thereto by the Mortgagee.

 

SECTION 11.04.  Trust Indenture for Benefit of Owner, Mortgagee, Note Holders and the other Indenture Indemnitees

 

Nothing in this Trust Indenture, whether express or implied, shall be construed to give any person other than the Owner, the Mortgagee, the Related Mortgagees, the Note Holders, the Related Note Holders and the other Indenture Indemnitees , any legal or equitable right, remedy or claim under or in respect of this Trust Indenture, except that the persons referred to in the last paragraph of Section 4.02(b) shall be third party beneficiaries of such paragraph.

 

SECTION 11.05.  Notices

 

Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions, consents, waivers or documents provided or permitted by this Trust Indenture to be made, given, furnished or filed shall be in writing, personally delivered or mailed by certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if to the Owner, addressed to it at 233 S. Wacker Drive, Chicago, Illinois 60606, Attention:  Treasurer, facsimile number (872) 825-0316,  (ii) if to Mortgagee, addressed to it at its office at 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration, facsimile number (302) 636-4140, or (iii) if to any Note Holder or any Indenture Indemnitee, addressed to such party at such address as such party shall have furnished by notice to the Owner and the Mortgagee, or, until an address is so furnished, addressed to the address of such party (if any) set forth on Schedule 1 to the Participation Agreement or in the Equipment Note Register.  Whenever any notice in writing is required to be given by the Owner, the Mortgagee or any Note Holder to any of the other of them, such notice shall be deemed given and such requirement satisfied when such notice is received, or if such notice is mailed by certified mail, postage prepaid, three Business Days after being mailed, addressed as provided above.  Any party hereto may change the address to which notices to such party will be sent by giving notice of such change to the other parties to this Trust Indenture.

 

SECTION 11.06.  Severability

 

Any provision of this Trust Indenture which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.  Any such prohibition or unenforceability in any particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 11.07.  No Oral Modification or Continuing Waivers

 

No term or provision of this Trust Indenture or the Equipment Notes may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Owner and the Mortgagee, in compliance with Section 10.01 hereof.  Any waiver of the terms hereof or of any Equipment Note shall be effective only in the specific instance and for the specific purpose given.

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SECTION 11.08.  Successors and Assigns

 

All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, each of the parties hereto and the permitted successors and assigns of each, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by any Note Holder shall bind the successors and assigns of such holder.  Each Note Holder by its acceptance of an Equipment Note agrees to be bound by this Trust Indenture and all provisions of the Operative Agreements applicable to a Note Holder.

 

SECTION 11.09.  Headings

 

The headings of the various Articles and sections herein and in the table of contents hereto are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

SECTION 11.10.  Normal Commercial Relations

 

Anything contained in this Trust Indenture to the contrary notwithstanding.  Owner and Mortgagee may conduct any banking or other financial transactions, and have banking or other commercial relationships, with Owner, fully to the same extent as if this Trust Indenture were not in effect, including without limitation the making of loans or other extensions of credit to Owner for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.

 

SECTION 11.11.  Governing Law; Counterpart Form

 

THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.  THIS TRUST INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK.  This Trust Indenture may be executed by the parties hereto in separate counterparts (or upon separate signature pages bound together into one or more counterparts), each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

SECTION 11.12.  Voting By Note Holders

 

All votes of the Note Holders shall be governed by a vote of a Majority in Interest of Note Holders, except as otherwise provided herein.

 

SECTION 11.13.  Bankruptcy

 

It is the intention of the parties that the Mortgagee shall be entitled to the benefits of Section 1110 with respect to the right to take possession of the Aircraft, Airframe, Engines and Parts and to enforce any of its other rights or remedies as provided herein in the event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor, and in any instance where more than one construction is possible of the terms and conditions hereof or any other

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pertinent Operative Agreement, each such party agrees that a construction which would preserve such benefits shall control over any construction which would not preserve such benefits.

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IN WITNESS WHEREOF, the parties hereto have caused this Trust Indenture and Mortgage to be duly executed by their respective officers thereof duly authorized as of the day and year first above written.

	  	
UNITED AIRLINES, INC.

	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

	  	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

   as Mortgagee

	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

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ANNEX A

 

DEFINITIONS

 

GENERAL PROVISIONS

 

(a)           In each Operative Agreement, unless otherwise expressly provided, a reference to:

 

	
  

	
(i)

	
each of “Owner,” “Mortgagee,” “Note Holder” or any other person includes, without prejudice to the provisions of any Operative Agreement, any successor in interest to it and any permitted transferee, permitted purchaser or permitted assignee of it;

 

	
  

	
(ii)

	
words importing the plural include the singular and words importing the singular include the plural;

 

	
  

	
(iii)

	
any agreement, instrument or document, or any annex, schedule or exhibit thereto, or any other part thereof, includes, without prejudice to the provisions of any Operative Agreement, that agreement, instrument or document, or annex, schedule or exhibit, or part, respectively, as amended, modified or supplemented from time to time in accordance with its terms and in accordance with the Operative Agreements, and any agreement, instrument or document entered into in substitution or replacement therefor (including, without limitation, in the case of each Pass Through Trust Agreement, the “Related Pass Through Trust Agreement” as defined therein);

 

	
  

	
(iv)

	
any provision of any Law includes any such provision as amended, modified, supplemented, substituted, reissued or reenacted prior to the Closing Date, and thereafter from time to time;

 

	
  

	
(v)

	
the words “Agreement,” “this Agreement,” “hereby,” “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Operative Agreement refer to such Operative Agreement as a whole and not to any particular provision of such Operative Agreement;

 

	
  

	
(vi)

	
the words “including,” “including, without limitation,” “including, but not limited to,” and terms or phrases of similar import when used in any Operative Agreement, with respect to any matter or thing, mean including, without limitation, such matter or thing; and

 

	
  

	
(vii)

	
a “Section,” an “Exhibit,” an “Annex” or a “Schedule” in any Operative Agreement, or in any annex thereto, is a reference to a section of, or an exhibit, an annex or a schedule to, such Operative Agreement or such annex, respectively.

 

(b)           Each exhibit, annex and schedule to each Operative Agreement is incorporated in, and shall be deemed to be a part of, such Operative Agreement.

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(c)           Unless otherwise defined or specified in any Operative Agreement, all accounting terms therein shall be construed and all accounting determinations thereunder shall be made in accordance with GAAP.

 

(d)           Headings used in any Operative Agreement are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, such Operative Agreement.

 

(e)           For purposes of each Operative Agreement, the occurrence and continuance of a Default or Event of Default referred to in Section 5.01(v),(vi) or (vii) shall not be deemed to prohibit the Owner from taking any action or exercising any right that is conditioned on no Special Default, Default or Event of Default having occurred and be continuing if such Special Default, Default or Event of Default consists of the institution of reorganization proceedings with respect to Owner under Chapter 11 of the Bankruptcy Code and the trustee or debtor-in-possession in such proceedings shall have agreed to perform its obligations under the Trust Indenture with the approval of the applicable court and thereafter shall have continued to perform such obligations in accordance with Section 1110.

 

DEFINED TERMS

 

“Act” means part A of subtitle VII of title 49, United States Code.

 

“Actual Knowledge” means (a) as it applies to Mortgagee, actual knowledge of a responsible officer in the Corporate Trust Office, and (b) as it applies to Owner, actual knowledge of a Vice President or more senior officer of Owner or any other officer of Owner having responsibility for the transactions contemplated by the Operative Agreements; provided that each of Owner and Mortgagee shall be deemed to have “Actual Knowledge” of any matter as to which it has received notice from Owner, any Note Holder or Mortgagee, such notice having been given pursuant to Section 11.05 of the Trust Indenture.

 

“Additional Series” or “Additional Series Equipment Notes” means Equipment Notes issued under the Trust Indenture and designated as a series (other than “Series A” or “Series B”) thereunder, in the Original Amount and maturities and bearing interest as specified in Schedule I to the Trust Indenture (as amended, in the case of any Additional Series issued after the date of the Trust Indenture, at the time of original issuance of such Additional Series) under the heading for such series.

 

“Affiliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with such person.  For purposes of this definition, “control” means the power, directly or indirectly, to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise and “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Aircraft” means, collectively, the Airframe and Engines.

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“Aircraft Bill of Sale” means the full warranty bill of sale covering the Aircraft delivered by Airframe Manufacturer to Owner.

 

“Aircraft Documents” means all technical data, manuals and log books, and all inspection, modification and overhaul records and other service, repair, maintenance and technical records that are required by the FAA (or the relevant Aviation Authority), to be maintained with respect to the Aircraft, Airframe, Engines or Parts, and such term shall include all additions, renewals, revisions and replacements of any such materials from time to time made, or required to be made, by the FAA (or other Aviation Authority) regulations, and in each case in whatever form and by whatever means or medium (including, without limitation, microfiche, microfilm, paper or computer disk) such materials may be maintained or retained by or on behalf of Owner (provided, that all such materials shall be maintained in the English language).

 

“Airframe” means (a) the aircraft (excluding Engines or engines from time to time installed thereon) manufactured by Airframe Manufacturer and identified by Airframe Manufacturer’s model number, United States registration number and Airframe Manufacturer’s serial number set forth in the initial Trust Indenture Supplement and any Replacement Airframe and (b) any and all Parts incorporated or installed in or attached or appurtenant to such airframe, and any and all Parts removed from such airframe, unless the Lien of the Trust Indenture shall not be applicable to such Parts in accordance with Section 4.04 of the Trust Indenture.  Upon substitution of a Replacement Airframe under and in accordance with the Trust Indenture, such Replacement Airframe shall become subject to the Trust Indenture and shall be the “Airframe” for all purposes of the Trust Indenture and the other Operative Agreements and thereupon the Airframe for which the substitution is made shall no longer be subject to the Trust Indenture, and such replaced Airframe shall cease to be the “Airframe.”

 

“Airframe Manufacturer” means [The Boeing Company, a Delaware corporation] 8 [Embraer S.A., a company organized under the laws of Brazil]9.

 

“Applicable Pass Through Trust” means each of the separate pass through trusts created under the Applicable Pass Through Trust Agreements.

 

“Applicable Pass Through Trust Agreement” means each of the separate Pass Through Trust Agreements by and between the Owner and an Applicable Pass Through Trustee.

 

“Applicable Pass Through Trustee” means each Pass Through Trustee that is a party to the Participation Agreement.

 

“Average Life Date” for any Equipment Note shall be the date which follows the time of determination by a period equal to the Remaining Weighted Average Life of such Equipment Note.  “Remaining Weighted Average Life” on a given date with respect to any

 

  

_______________________

 

	
8.

	
Insert for Boeing 737-924ER Aircraft and 787-9 Aircraft.

  

	
9.

	
Insert for Embraer ERJ 175 LR Aircraft.

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Equipment Note shall be the number of days equal to the quotient obtained by dividing (a) the sum of each of the products obtained by multiplying (i) the amount of each then remaining scheduled payment of principal of such Equipment Note by (ii) the number of days from and including such determination date to but excluding the date on which such payment of principal is scheduled to be made, by (b) the then outstanding principal amount of such Equipment Note.

 

“Aviation Authority” means the FAA or, if the Aircraft is permitted to be, and is, registered with any other Government Entity under and in accordance with Section 4.02 (e) of the Trust Indenture and Section 6.4.5 of the Participation Agreement, such other Government Entity.

 

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Sections 101 et seq.

 

“Basic Pass Through Trust Agreement” means the Pass Through Trust Agreement, dated October 3, 2012, between Owner and Pass Through Trustee, but does not include any Trust Supplement.

 

“Bills of Sale” means the FAA Bill of Sale and the Aircraft Bill of Sale.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required by law to close in New York, New York, Chicago, Illinois, or Wilmington, Delaware.

 

“Cape Town Treaty”  means the Cape Town Convention on International Interests in Mobile Equipment and the related Aircraft Equipment Protocol, as in effect in the United States.

 

“Cash Equivalents” means the following securities (which shall mature within 90 days of the date of purchase thereof):  (a) direct obligations of the U.S. Government; (b) obligations fully guaranteed by the U.S. Government; (c) certificates of deposit issued by, or bankers’ acceptances of, or time deposits or a deposit account with, Mortgagee or any bank, trust company or national banking association incorporated or doing business under the laws of the United States or any state thereof having a combined capital and surplus and retained earnings of at least $500,000,000 and having a rating of Aa or better by Moody’s Investors Service, Inc. or AA or better by Standard & Poor’s Rating Services; or (d) commercial paper of any issuer doing business under the laws of the United States or one of the states thereof and in each case having a rating assigned to such commercial paper by Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc. equal to A1 (or higher) or P-1, respectively.

 

“Certificate Owner” is defined in the Pass Through Trust Agreements.

 

“Citizen of the United States” is defined in 49 U.S.C. § 40102(a)(15).

 

“Class A Pass Through Trust” means the United Airlines Pass Through Trust 2014-2A.

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“Class B Pass Through Trust” means the United Airlines Pass Through Trust 2014-2B.

 

“Closing” means the closing of the transactions contemplated by the Participation Agreement.

 

“Closing Date” means the date on which the Closing occurs.

 

“Code” means the Internal Revenue Code of 1986, as amended; provided that, when used in relation to a Plan, “Code” shall mean the Internal Revenue Code of 1986 and any regulations and rulings issued thereunder, all as amended and in effect from time to time.

 

“Collateral” is defined in the Granting Clause of the Trust Indenture.

 

“Consent and Agreement” means the Manufacturer Consent and Agreement [____], dated as of even date with the Participation Agreement, of Airframe Manufacturer.

 

“Corporate Trust Office” means the principal office of Mortgagee located at Mortgagee’s address for notices under the Participation Agreement or such other office at which Mortgagee’s corporate trust business shall be administered which Mortgagee shall have specified by notice in writing to Owner and each Note Holder.

 

“CRAF” means the Civil Reserve Air Fleet Program established pursuant to 10 U.S.C. Section 9511-13 or any similar substitute program.

 

“Debt Rate” means, with respect to (i) any Series of Equipment Notes, the rate per annum specified for such Series under the heading “Interest Rate” in Schedule I to the Trust Indenture (as amended, in the case of any Additional Series, at the time of original issuance of such Additional Series), and (ii) any other purpose, with respect to any period, the weighted average interest rate per annum during such period borne by the outstanding Equipment Notes, excluding any interest payable at the Payment Due Rate.

 

“Default” means any event or condition that with the giving of notice or the lapse of time or both would become an Event of Default.

 

“Delivery Date” means the date on which the Aircraft is delivered by the Airframe Manufacturer to, and accepted by, the Company.

 

“Deposit Agreement” means each of the two Deposit Agreements between the Escrow Agent and the Depositary, dated as of the Issuance Date, which relate to the Class A or Class B Pass Through Trust, provided that, for purposes of any obligation of Owner, no amendment, modification or supplement to, or substitution or replacement of, any such Deposit Agreement shall be effective unless consented to by Owner.

 

“Depositary” means BNP Paribas, acting through its New York Branch, as Depositary under each Deposit Agreement.

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“Dollars,” “United States Dollars” or “$” means the lawful currency of the United States.

 

“DOT” means the Department of Transportation of the United States or any Government Entity succeeding to the functions of such Department of Transportation.

 

“EASA” means the European Aviation Safety Agency or any Government Entity succeeding to the functions of the European Aviation Safety Agency.

 

“Eligible Account” means an account established by and with an Eligible Institution at the request of the Mortgagee, which institution agrees, for all purposes of the UCC including Article 8 thereof, that (a) such account shall be a “securities account” (as defined in Section 8-501(a) of the UCC), (b) all property (other than cash) credited to such account shall be treated as a “financial asset” (as defined in Section 8-102(a)(9) of the UCC), (c) the Mortgagee shall be the “entitlement holder” (as defined in Section 8-102(a)(7) of the UCC) in respect of such account, (d) it will comply with all entitlement orders issued by the Mortgagee to the exclusion of the Owner, and (e) the “securities intermediary jurisdiction” (under Section 8-110(e) of the UCC) shall be the State of New York.

 

“Eligible Institution” means the corporate trust department of (a) WTNA, acting solely in its capacity as a “securities intermediary” (as defined in Section 8-102(a)(14) of the UCC), or (b) a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), which has a long-term unsecured debt rating from Moody’s and Standard & Poor’s of at least A-3 or its equivalent.

 

“Engine” means (a) each of the engines manufactured by Engine Manufacturer and identified by Engine Manufacturer’s model number and Engine Manufacturer’s serial number set forth in the initial Trust Indenture Supplement and originally installed on the Airframe on the Delivery Date, and any Replacement Engine, in any case whether or not from time to time installed on such Airframe or installed on any other airframe or aircraft, and (b) any and all Parts incorporated or installed in or attached or appurtenant to such engine, and any and all Parts removed from such engine, unless the Lien of the Trust Indenture shall not apply to such Parts in accordance with Section 4.04 of the Trust Indenture.  Upon substitution of a Replacement Engine under and in accordance with the Trust Indenture, such Replacement Engine shall become subject to the Trust Indenture and shall be an “Engine” for all purposes of the Trust Indenture and the other Operative Agreements and thereupon the Engine for which the substitution is made shall no longer be subject to the Trust Indenture, and such replaced Engine shall cease to be an “Engine.”

 

“Engine Consent and Agreement” means the Engine Manufacturer Consent and Agreement [____], dated as of even date with the Participation Agreement, of Engine Manufacturer.

 

“Engine Manufacturer” means [__________________], a corporation organized under the laws of [__________].

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“Equipment Note Register” is defined in Section 2.07 of the Trust Indenture.

 

“Equipment Notes” means and includes any equipment notes issued under the Trust Indenture in the form specified in Section 2.01 thereof (as such form may be varied pursuant to the terms of the Trust Indenture) and any Equipment Note issued under the Trust Indenture in exchange for or replacement of any Equipment Note.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and any regulations and rulings issued thereunder all as amended and in effect from time to time.

 

“Escrow Agent” means U.S. Bank National Association, as Escrow Agent under each of the Escrow Agreements.

 

“Escrow Agreement” means each of the two Escrow and Paying Agent Agreements, among the Escrow Agent, the Paying Agent, certain initial purchasers of the Pass Through Certificates named therein and one of the Pass Through Trustees, dated as of the Issuance Date, which relate to the Class A or Class B Pass Through Trust, provided that, for purposes of any obligation of Owner, no amendment, modification or supplement to, or substitution or replacement of, any such Escrow Agreement shall be effective unless consented to by Owner.

 

“Event of Default” is defined in Section 5.01 of the Trust Indenture.

 

“Event of Loss” means, with respect to the Aircraft, Airframe or any Engine, any of the following circumstances, conditions or events with respect to such property, for any reason whatsoever:

 

(a)           the destruction of such property, damage to such property beyond economic repair or rendition of such property permanently unfit for normal use by Owner;

 

(b)           the actual or constructive total loss of such property or any damage to such property, or requisition of title or use of such property, which results in an insurance settlement with respect to such property on the basis of a total loss or constructive or compromised total loss;

 

(c)           any theft, hijacking or disappearance of such property for a period of 180 consecutive days or more;

 

(d)           any seizure, condemnation, confiscation, taking or requisition (including loss of title) of such property by any Government Entity or purported Government Entity (other than a requisition of use by the U.S. Government) for a period exceeding 180 consecutive days;

 

(e)           as a result of any law, rule, regulation, order or other action by the Aviation Authority or by any Government Entity of the government of registry of the Aircraft or by any Government Entity otherwise having jurisdiction over the operation or use of the Aircraft, the use of such property in the normal course of Owner’s business of passenger air transportation

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is prohibited for a period of 180 consecutive days unless Owner, prior to the expiration of such 180-day period, shall have undertaken and shall be diligently carrying forward such steps as may be necessary or desirable to permit the normal use of such property by Owner, but in any event if such use shall have been prohibited for a period of two consecutive years, provided that no Event of Loss shall be deemed to have occurred if such prohibition has been applicable to Owner’s entire U.S. fleet of such property and Owner, prior to the expiration of such two-year period, shall have conformed at least one unit of such property in its fleet to the requirements of any such law, rule, regulation, order or other action and commenced regular commercial use of the same in such jurisdiction and shall be diligently carrying forward, in a manner which does not discriminate against such property in so conforming such property, steps which are necessary or desirable to permit the normal use of the Aircraft by Owner, but in any event if such use shall have been prohibited for a period of three years.

 

“Expenses” means any and all liabilities, obligations, losses, damages, settlements, penalties, claims, actions, suits, costs, expenses and disbursements (including, without limitation, reasonable fees and disbursements of legal counsel, accountants, appraisers, inspectors or other professionals, and costs of investigation).

 

“FAA” means the Federal Aviation Administration of the United States or any Government Entity succeeding to the functions of such Federal Aviation Administration.

 

“FAA Bill of Sale” means a bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the FAA) delivered to Owner by Airframe Manufacturer.

 

“FAA Filed Documents” means the FAA Bill of Sale, an application for registration of the Aircraft with the FAA in the name of Owner, the Trust Indenture and the initial Trust Indenture Supplement.

 

“FAA Regulations” means the Federal Aviation Regulations issued or promulgated pursuant to the Act from time to time.

 

“FATCA” means the provisions of Sections 1471 through 1474 of the Code and any current or future regulations or rules promulgated thereunder, or any successor or similar provisions.

 

“Financing Statements” means, collectively, UCC financing statements covering the Collateral, by Owner, as debtor, showing Mortgagee as secured party, for filing in Delaware and each other jurisdiction that, in the opinion of Mortgagee, is necessary to perfect its Lien on the Collateral.

 

“GAAP” means generally accepted accounting principles as set forth in the statements of financial accounting standards issued by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants, as such principles may at any time or from time to time be varied by any applicable financial accounting rules or regulations issued by the SEC and, with respect to any person, shall mean such principles applied on a basis consistent with prior periods except as may be disclosed in such person’s financial statements.

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“Government Entity” means (a) any federal, state, provincial or similar government, and any body, board, department, commission, court, tribunal, authority, agency or other instrumentality of any such government or otherwise exercising any executive, legislative, judicial, administrative or regulatory functions of such government or (b) any other government entity having jurisdiction over any matter contemplated by the Operative Agreements or relating to the observance or performance of the obligations of any of the parties to the Operative Agreements.

 

“GTA” means [the General Terms Agreement No. 1-2728690849 dated July 12, 2012, between the Engine Manufacturer and Owner]10 [[the General Terms Agreement No. GE-1-172575605, dated as of September 30, 2005, between Engine Manufacturer, GE Engine Services Distribution, LLC and Owner,]11 as modified and made applicable to the Engines by the Letter Agreement, dated March 26, 2014, among Engine Manufacturer, GE Engine Services Distribution, LLC, and Owner]12, in each case as amended.

 

“Indemnitee” means (i) WTNA and Mortgagee, (ii) each separate or additional trustee appointed pursuant to the Trust Indenture, (iii) the Subordination Agent, the Paying Agent and the Escrow Agent, (iv) the Liquidity Providers, (v) the Pass Through Trustees and each Related Note Holder, (vi) each Affiliate of the persons described in clauses (i) and (ii), (vii) each Affiliate of the persons described in clauses (iii), (iv) and (v), (viii) the respective directors, officers, employees, agents and servants of each of the persons described in clauses (i), (ii) and (vi), (ix) the respective directors, officers, employees, agents and servants of each of the persons described in clauses (iii), (iv), (v) and (vii), (x) the successors and permitted assigns of the persons described in clauses (i), (ii) and (viii), and (xi) the successors and permitted assigns of the persons described in clauses (iii), (iv), (v) and (ix); provided that the persons described in clauses (iii), (iv), (v), (vii), (ix) and (xi) are Indemnitees only for purposes of Section 8.1 of the Participation Agreement.  If any Indemnitee is Airframe Manufacturer or Engine Manufacturer or any subcontractor or supplier of either thereof, such Person shall be an Indemnitee only in its capacity as Note Holder.

 

“Indenture Agreements” means the Purchase Agreement and the Bills of Sale, to the extent included in Granting Clause (2) of the Trust Indenture, and any other contract, agreement or instrument from time to time assigned or pledged under the Trust Indenture.

 

“Indenture Default” means any condition, circumstance, act or event that, with the giving of notice, the lapse of time or both, would constitute an Indenture Event of Default.

 

“Indenture Event of Default” means any one or more of the conditions, circumstances, acts or events set forth in Section 5.01 of the Trust Indenture.

 

_______________________

  

	
10.

	
Insert for Boeing 737-924ER Aircraft.

  

	
11.

	
Insert for Boeing 787-9 Aircraft.

  

	
12.

	
Insert for Embraer ERJ 175 LR Aircraft.

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“Indenture Indemnitee” means (i) WTNA and the Mortgagee, (ii) each separate or additional trustee appointed pursuant to the Trust Indenture, (iii) the Subordination Agent, (iv) each  Liquidity Provider, (v) each Pass Through Trustee and each Related Note Holder, (vi) the Paying Agent, (vii) the Escrow Agent and (viii) each of the respective directors, officers, employees, agents and servants of each of the persons described in clauses (i) through (vii) inclusive above.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement among the Pass Through Trustees, the Liquidity Providers and the Subordination Agent, dated as of the Issuance Date, provided that for purposes of any obligation of Owner, no amendment, modification or supplement to, or substitution or replacement of, such Intercreditor Agreement shall be effective unless consented to by Owner.

 

“International Interest”  is defined in the Cape Town Treaty.

 

“International Registry”  is defined in the Cape Town Treaty.

 

“IRS” means the Internal Revenue Service of the United States or any Government Entity succeeding to the functions of such Internal Revenue Service.

 

“Issuance Date” means August 11, 2014.

 

“Law” means (a) any constitution, treaty, statute, law, decree, regulation, order, rule or directive of any Government Entity, and (b) any judicial or administrative interpretation or application of, or decision under, any of the foregoing.

 

“Lien” means any mortgage, pledge, lien, charge, claim, encumbrance, lease or security interest affecting the title to or any interest in property.

 

“Liquidity Facilities” means the two Revolving Credit Agreements (consisting of one Revolving Credit Agreement with the Liquidity Provider with respect to the Class A Pass Through Trust and a second Revolving Credit Agreement with the Liquidity Provider with respect to the Class B Pass Through Trust) between the Subordination Agent, as borrower, and the Liquidity Provider, each dated as of the Issuance Date, provided that, for purposes of any obligation of Owner, no amendment, modification or supplement to, or substitution or replacement of, any such Liquidity Facility shall be effective unless consented to by Owner.

 

“Liquidity Provider” means BNP Paribas, acting through its New York Branch, as “Class A Liquidity Provider” and “Class B Liquidity Provider” (as such terms are defined in the Intercreditor Agreement).

 

“Majority in Interest of Note Holders” means as of a particular date of determination, the holders of a majority in aggregate unpaid Original Amount of all Equipment Notes outstanding as of such date (excluding any Equipment Notes held by Owner or any of its Affiliates (unless all Equipment Notes then outstanding shall be held by Owner or any Affiliate of Owner); provided that for the purposes of directing any action or casting any vote or giving any consent, waiver or instruction hereunder, any Note Holder of an Equipment Note or

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Equipment Notes may allocate, in such Note Holder’s sole discretion, any fractional portion of the principal amount of such Equipment Note or Equipment Notes in favor of or in opposition to any such action, vote, consent, waiver or instruction.

 

“Make-Whole Amount” means, with respect to any Equipment Note, an amount (as determined by an independent investment bank of national standing) equal to the excess, if any, of (a) the present value of the remaining scheduled payments of principal and interest to maturity of such Equipment Note computed by discounting such payments on a semiannual basis on each Payment Date (assuming a 360-day year of twelve 30-day months) using a discount rate equal to the Treasury Yield plus the Make-Whole Spread,  over (b) the outstanding principal amount of such Equipment Note plus accrued interest to the date of determination.  For purposes of determining the Make-Whole Amount, “Treasury Yield” means, at the date of determination with respect to any Equipment Note, the interest rate (expressed as a decimal and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing on the Average Life Date of such Equipment Note and trading in the public securities markets either as determined by interpolation between the most recent weekly average yield to maturity for two series of United States Treasury securities, trading in the public securities markets, (A) one maturing as close as possible to, but earlier than, the Average Life Date of such Equipment Note and (B) the other maturing as close as possible to, but later than, the Average Life Date of such Equipment Note, in each case as published in the most recent H.15(519) or, if a weekly average yield to maturity for United States Treasury securities maturing on the Average Life Date of such Equipment Note is reported in the most recent H.15(519), such weekly average yield to maturity as published in such H.15(519).  “H.15(519)” means the weekly statistical release designated as such, or any successor publication, published by the Board of Governors of the Federal Reserve System.  The date of determination of a Make-Whole Amount shall be the third Business Day prior to the applicable payment or redemption date and the “most recent H.15(519)” means the H.15(519) published prior to the close of business on the third Business Day prior to the applicable payment or redemption date.

 

“Make-Whole Spread” means (i) in the case of Series A Equipment Notes, 0.250%, (ii) in the case of Series B Equipment Notes, 0.500% and (iii) in the case of any Additional Series, the percentage specified in Schedule I hereto (as amended at the time of original issuance of such Additional Series) as the “Make-Whole Spread” for such Additional Series.

 

“Material Adverse Change” means, with respect to any person, any event, condition or circumstance that materially and adversely affects such person’s business or consolidated financial condition, or its ability to observe or perform its obligations, liabilities and agreements under the Operative Agreements.

 

“Minimum Liability Insurance Amount” is defined in Schedule 3 to the Participation Agreement.

 

“Mortgaged Property” is defined in Section 3.03 of the Trust Indenture.

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“Mortgagee” means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as mortgagee under the Trust Indenture.

 

“Non-U.S. Person” means any Person other than a United States person, as defined in Section 7701(a)(30) of the Code.

 

“Note Holder” means at any time each registered holder of one or more Equipment Notes.

 

“Note Purchase Agreement” means the Note Purchase Agreement, dated as of the Issuance Date, among United Airlines, Inc., the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through Trustee under each Pass Through Trust Agreement providing for, among other things, the issuance and sale of certain equipment notes.

 

“NY UCC” means the UCC as in effect on the date of determination in the State of New York.

 

“Officer’s Certificate” means, in respect of any Person, a certificate signed by the Chairman, the President, any Vice President (including those with varying ranks such as Executive, Senior, Assistant or Staff Vice President), the Treasurer or the Secretary of such Person.

 

“Operative Agreements” means, collectively, the Participation Agreement, the Trust Indenture, the initial Trust Indenture Supplement, the Bills of Sale, and the Equipment Notes.

 

“Operative Indentures” means each of the indentures under which notes have been issued and purchased by the Pass Through Trustees pursuant to the Note Purchase Agreement (whether before or after the date of this Trust Indenture).

 

“Original Amount,” with respect to an Equipment Note, means the stated original principal amount of such Equipment Note and, with respect to all Equipment Notes, means the aggregate stated original principal amounts of all Equipment Notes.

 

“Owner Person” means Owner, any lessee, assignee, successor or other user or person in possession of the Aircraft, Airframe or an Engine with or without color of right, or any Affiliate of any of the foregoing (excluding any Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any person using or claiming any rights with respect to the Aircraft, Airframe or an Engine directly by or through any of the persons in this parenthetical).

 

“Participation Agreement” means the Participation Agreement [____], dated as of [____], among Owner, the Applicable Pass Through Trustees, the Subordination Agent and Mortgagee.

 

“Parts” means all appliances, parts, components, instruments, appurtenances, accessories, furnishings, seats and other equipment of whatever nature (other than (a) Engines or engines, and (b) any Removable Part leased by Owner from a third party or subject to a security

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interest granted to a third party), that may from time to time be installed or incorporated in or attached or appurtenant to the Airframe or any Engine or removed therefrom unless the Lien of the Trust Indenture shall not be applicable thereto in accordance with Section 4.04 of the Trust Indenture.

 

“Pass Through Agreements” means the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the Intercreditor Agreement, the Liquidity Facilities and the Fee Letter referred to in Section 2.03 of each of the Liquidity Facilities, provided that no amendment, modification or supplement to, or substitution or replacement of, any such Fee Letter shall be effective for purposes of any obligation of Owner, unless consented to by Owner.

 

“Pass Through Certificates” means the pass through certificates issued by the Pass Through Trusts (and any other pass through certificates for which such pass through certificates may be exchanged).

 

“Pass Through Trust” means each of the two separate pass through trusts created under the Pass Through Trust Agreements.

 

“Pass Through Trust Agreement” means each of the two separate Trust Supplements, together in each case with the Basic Pass Through Trust Agreement, each dated as of the Issuance Date by and between the Owner and a Pass Through Trustee, provided, that, for purposes of any obligation of Owner, no amendment, modification or supplement to, or substitution or replacement of, any such Agreement shall be effective unless consented to by Owner.

 

“Pass Through Trustee” means Wilmington Trust, National Association, a national banking association, in its capacity as trustee under each Pass Through Trust Agreement.

 

“Pass Through Trustee Agreements” means the Participation Agreement, the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit Agreements, the Escrow Agreements, and the Intercreditor Agreement.

 

“Paying Agent” means Wilmington Trust, National Association, as paying agent under each of the Escrow Agreements.

 

“Payment Date” means each March 3 and September 3, commencing on [__________]13.

 

“Payment Due Rate” means (a) with respect to (i) any payment made to a Note Holder under any Series of Equipment Notes, the Debt Rate applicable to such Series plus 2% and (ii) any other payment made under any Operative Agreement to any other Person, the Debt

 

  

_______________________

 

	
13.

	
Insert first March 3 or September 3 after the Closing Date, excluding September 3, 2014.

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Rate applicable to such payment plus 2% or, if less, (b) the maximum rate permitted by applicable law.

 

“Permitted Air Carrier” means (i) any manufacturer of airframes or aircraft engines, or any Affiliate of a manufacturer of airframes or aircraft engines, (ii) any Permitted Foreign Air Carrier, (iii) any person approved in writing by Mortgagee or (iv) any U.S. Air Carrier.

 

“Permitted Country” means any country listed on Schedule 4 to the Participation Agreement.

 

“Permitted Foreign Air Carrier” means any air carrier with its principal executive offices in any Permitted Country and which is authorized to conduct commercial airline operations and to operate jet aircraft similar to the Aircraft under the applicable Laws of such Permitted Country.

 

“Permitted Government Entity” means (i) the U.S. Government or (ii) any Government Entity if the Aircraft is then registered under the laws of the country of such Government Entity.

 

“Permitted Lien” means (a) the rights of Mortgagee under the Operative Agreements, or of any Permitted Lessee under any Permitted Lease; (b) Liens attributable to Mortgagee (both in its capacity as trustee under the Trust Indenture and in its individual capacity); (c) the rights of others under agreements or arrangements to the extent expressly permitted by the terms of Section 4.02(b) or 4.04 of the Trust Indenture; (d) Liens for Taxes of Owner (and its U.S. federal tax law consolidated group), or Liens for Taxes of any Tax Indemnitee (and its U.S. federal tax law consolidated group) for which Owner is obligated to indemnify such Tax Indemnitee under any of the Operative Agreements, in any such case either not yet due or being contested in good faith by appropriate proceedings so long as such Liens and such proceedings do not involve any material risk of the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee therein or impair the Lien of the Trust Indenture; (e) materialmen’s, mechanics’, workers’, repairers’, employees’ or other like Liens arising in the ordinary course of business for amounts the payment of which is either not yet delinquent for more than 60 days or is being contested in good faith by appropriate proceedings, so long as such Liens and such proceedings do not involve any material risk of the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee therein or impair the Lien of the Trust Indenture; (f) Liens arising out of any judgment or award against Owner (or any Permitted Lessee), so long as such judgment shall, within 60 days after the entry thereof, have been discharged or vacated, or execution thereof stayed pending appeal or shall have been discharged, vacated or reversed within 60 days after the expiration of such stay, and so long as during any such 60 day period there is not, or any such judgment or award does not involve, any material risk of the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee therein or impair the Lien of the Trust Indenture; (g) any other Lien with respect to which Owner (or any Permitted Lessee) shall have provided a bond, cash collateral or other security adequate in the reasonable opinion of Mortgagee.

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“Permitted Lease” means a lease permitted under Section 4.02(b) of the Trust Indenture.

 

“Permitted Lessee” means the lessee under a Permitted Lease.

 

“Persons” or “persons” means individuals, firms, partnerships, joint ventures, trusts, trustees, Government Entities, organizations, associations, corporations, limited liability companies, government agencies, committees, departments, authorities and other bodies, corporate or incorporate, whether having distinct legal status or not, or any member of any of the same.

 

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA, or any plan within the meaning of Section 4975(e)(1) of the Code.

 

“Prospective International Interest” is defined in the Cape Town Treaty.

 

“Purchase Agreement” means [the Purchase Agreement No. 2484, dated as of December 29, 2004]14 [the Purchase Agreement No. PA-03784, dated as of July 12, 2012 (which incorporates and amends the terms and conditions of the Aircraft General Terms Agreement AGTA-UAL, dated as of February 19, 2010, between the Airframe Manufacturer and Owner)]15 [the Purchase Agreement COM 0135-13, dated April 29, 2013]16, between Airframe Manufacturer and Owner, as amended (including all exhibits thereto, together with all letter agreements entered into that by their terms constitute part of such Purchase Agreement) and the GTA, in each case to the extent included in the Granting Clause (2) of the Trust Indenture.

 

“QIB” is defined in Section 2.08 of the Trust Indenture.

 

“Related Additional Series Equipment Note” means, with respect to any particular series of Additional Series Equipment Notes and as of any date, an “Additional Series Equipment Note”, as defined in each Related Indenture, having the same designation as such series of Additional Series Equipment Notes, but only if as of such date it is held by the “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.

 

“Related Equipment Note” means, as of any date, an “Equipment Note” as defined in each Related Indenture, but only if as of such date it is held by the “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.

 

“Related Indenture” means each Operative Indenture (other than the Trust Indenture).

 

  

_______________________

 

	
14.

	
Insert for Boeing 787-9 Aircraft.

  

	
15.

	
Insert for Boeing 737-924ER Aircraft.

  

	
16.

	
Insert for Embraer ERJ 175 LR Aircraft.

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“Related Indenture Event of Default” means any “Indenture Event of Default” under any Related Indenture.

 

“Related Make-Whole Amount” means the “Make-Whole Amount”, as defined in each Related Indenture.

 

“Related Mortgagee” means the “Mortgagee” as defined in each Related Indenture.

 

“Related Note Holder” means a registered holder of a Related Equipment Note.

 

“Related Secured Obligations” means, as of any date, the outstanding “Original Amount”, as defined in each Related Indenture, of the Related Equipment Notes issued under such Related Indenture, the accrued and unpaid interest due thereon in accordance with such Related Indenture as of such date, the Related Make-Whole Amount, if any, due with respect thereto and all other amounts due with respect thereto in accordance with such Related Indenture.

 

“Related Series A Equipment Note” means, as of any date, a “Series A Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by the “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.

 

“Related Series B Equipment Note” means, as of any date, a “Series B Equipment Note”, as defined in each Related Indenture, but only if as of such date it is held by the “Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in such Related Indenture.

 

“Removable Part” is defined in Section 4.04(d) of the Trust Indenture.

 

“Replacement Airframe” means any airframe substituted for the Airframe pursuant to Article IV of the Trust Indenture.

 

“Replacement Engine” means an engine substituted for an Engine pursuant to Article IV of the Trust Indenture.

 

“SEC” means the Securities and Exchange Commission of the United States, or any Government Entity succeeding to the functions of such Securities and Exchange Commission.

 

“Section 1110” means 11 U.S.C. Section 1110 of the Bankruptcy Code or any successor or analogous section of the federal bankruptcy law in effect from time to time.

 

“Secured Obligations” is defined in Section 2.06 of the Trust Indenture.

 

“Securities Account” is defined in Section 3.07 of the Trust Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended.

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“Security” means a “security” as defined in Section 2(l) of the Securities Act.

 

“Senior Holder” is defined in Section 2.13(c) of the Trust Indenture.

 

“Series” means any of Series A, Series B or any Additional Series.

 

“Series A” or “Series A Equipment Notes” means Equipment Notes issued under the Trust Indenture and designated as “Series A” thereunder, in the Original Amount and maturities and bearing interest as specified in Schedule I to the Trust Indenture under the heading “Series A.”

 

“Series B” or “Series B Equipment Notes” means Equipment Notes issued under the Trust Indenture and designated as “Series B” thereunder, in the Original Amount and maturities and bearing interest as specified in Schedule I to the Trust Indenture under the heading “Series B”.

 

“Similar Aircraft” means a [Boeing/Embraer] Model [insert model reference the same as the Aircraft] aircraft.

 

“Special Default” means (i) the failure by Owner to pay any amount of principal of or interest on any Equipment Note when due or (ii) the occurrence of any Default or Event of Default referred to in Section 5.01(v), (vi) or (vii).

 

“Subordination Agent” means Wilmington Trust, National Association, as subordination agent under the Intercreditor Agreement, or any successor thereto.

 

“Tax Indemnitee” means (a) WTNA and Mortgagee, (b) each separate or additional trustee appointed pursuant to the Trust Indenture, (c) each Note Holder and (d) the respective successors, assigns, agents and servants of the foregoing.

 

“Taxes” means all license, recording, documentary, registration and other similar fees and all taxes, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever imposed by any Taxing Authority, together with any penalties, additions to tax, fines or interest thereon or additions thereto.

 

“Taxing Authority” means any federal, state or local government or other taxing authority in the United States, any foreign government or any political subdivision or taxing authority thereof, any international taxing authority or any territory or possession of the United States or any taxing authority thereof.

 

“Threshold Amount” is defined in Schedule 3 to the Participation Agreement.

 

“Transaction Expenses” means all costs and expenses incurred by Mortgagee in connection with (a) the preparation, execution and delivery of the Operative Agreements and the recording or filing of any documents, certificates or instruments in accordance with any Operative Agreement, including, without limitation, the FAA Filed Documents and the Financing Statements, (b) the initial fee of Mortgagee under the Trust Indenture and (c) the

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reasonable fees and disbursements of counsel for each Mortgagee and special counsel in Oklahoma City, Oklahoma, in each case, in connection with the Closing.

 

“Transactions” means the transactions contemplated by the Participation Agreement.

 

“Transfer” means the transfer, sale, assignment or other conveyance of all or any interest in any property, right or interest.

 

“Transferee” means a person to which any Note Holder purports or intends to Transfer any or all of its right, title or interest in the Equipment Note, as described in Section 9 of the Participation Agreement.

 

“Trust Indenture” means the Trust Indenture and Mortgage [____], dated as of the date of the Participation Agreement between Owner and Mortgagee.

 

“Trust Indenture Supplement” means a Trust Indenture and Mortgage Supplement, substantially in the form of Exhibit A to the Trust Indenture, with appropriate modifications to reflect the purpose for which it is being used.

 

“Trust Supplement” means an agreement supplemental to the Basic Pass Through Trust Agreement pursuant to which (i) a separate trust is created for the benefit of the holders of the Pass Through Certificates of a class, (ii) the issuance of the Pass Through Certificates of such class representing fractional undivided interests in such trust is authorized and (iii) the terms of the Pass Through Certificates of such class are established.

 

“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.

 

“United States” or “U.S.” means the United States of America; provided that for geographic purposes, “United States” means, in aggregate, the 50 states and the District of Columbia of the United States of America.

 

“U.S. Air Carrier” means any United States air carrier that is a Citizen of the United States holding an air carrier operating certificate issued pursuant to chapter 447 of title 49 of the United States Code for aircraft capable of carrying 10 or more individuals or 6000 pounds or more of cargo, and as to which there is in force an air carrier operating certificate issued pursuant to Part 121 of the FAA Regulations, or which may operate as an air carrier by certification or otherwise under any successor or substitute provisions therefor or in the absence thereof.

 

“U.S. Government” means the federal government of the United States, or any instrumentality or agency thereof the obligations of which are guaranteed by the full faith and credit of the federal government of the United States.

 

“U.S. Person” means any Person described in Section 7701 (a)(30) of the Code.

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“Weighted Average Life to Maturity” means, with respect to any specified Debt, at the time of the determination thereof the number of years obtained by dividing the then Remaining Dollar-years of such Debt by the then outstanding principal amount of such Debt.  The term “Remaining Dollar-years” shall mean the amount obtained by (1) multiplying the amount of each then-remaining principal payment on such Debt by the number of years (calculated at the nearest one-twelfth) that will elapse between the date of determination of the Weighted Average Life to Maturity of such Debt and the date of that required payment and (2) totaling all the products obtained in clause (1) above.

 

“Wet Lease” means any arrangement whereby Owner or a Permitted Lessee agrees to furnish the Aircraft, Airframe or any Engine to a third party pursuant to which the Aircraft, Airframe or Engine shall at all times be in the operational control of Owner or a Permitted Lessee, provided that Owner’s obligations under the Trust Indenture shall continue in full force and effect notwithstanding any such arrangement.

 

“WTNA” means Wilmington Trust, National Association, a national banking association, not in its capacity as Mortgagee under the Trust Indenture, but in its individual capacity.

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ANNEX  B - INSURANCE

TRUST INDENTURE [___]

ANNEX B

 

INSURANCE

 

 

Capitalized terms used but not defined herein shall have the respective meanings set forth or incorporated by reference in Annex A to the Trust Indenture.

 

A.           Liability Insurance

 

1.           Except as provided in Section A.2 below, Owner (or Permitted Lessee) will carry or cause to be carried at all times, at no expense to Mortgagee, commercial airline legal liability (including, but not limited to passenger liability, property damage, baggage liability, cargo and mail liability, hangarkeeper’s liability and contractual liability insurance) with respect to the Aircraft, the Airframe and the Engines, which is (i) in an amount not less than the greater of (x) the amount of commercial airline legal liability insurance from time to time applicable to aircraft owned or leased and operated by Owner (or Permitted Lessee) of the same type and operating on similar routes as the Aircraft and (y) the Minimum Liability Insurance Amount per occurrence; (ii) of the type and covering the same risks as from time to time applicable to aircraft operated by Owner (or Permitted Lessee) of the same type as the Aircraft; and (iii) maintained in effect with insurers of nationally or internationally recognized responsibility (such insurers being referred to herein as “Approved Insurers”).  Owner (or Permitted Lessee) need not maintain cargo liability insurance with respect to the Aircraft, or may maintain such insurance in an amount less than the Minimum Liability Insurance Amount, as long as the amount of the cargo liability insurance, if any, maintained with respect to such Aircraft is not less than the amount of such coverage which is maintained by Owner (or Permitted Lessee) for other aircraft owned or leased by Owner (or Permitted Lessee) that are similar in type to such Aircraft and operated by Owner (or Permitted Lessee) on the same or similar routes.

 

2.           During any period that the Aircraft is on the ground and not in operation, Owner (or Permitted Lessee) may carry or cause to be carried, in lieu of the insurance required by Section A.1 above, insurance otherwise conforming with the provisions of said Section A.1 except that (i) the amounts of coverage shall not be required to exceed the amounts of public liability and property damage insurance from time to time applicable to aircraft owned or operated by Owner (or Permitted Lessee) of the same type as the Aircraft which are on the ground and not in operation and (ii) the scope of the risks covered and the type of insurance shall be the same as from time to time shall be applicable to aircraft owned or operated by Owner (or Permitted Lessee) of the same type which are on the ground and not in operation.

 

B.           Hull Insurance

 

1.           Except as provided in Section B.2 below, Owner (or Permitted Lessee) will carry or cause to be carried at all times, at no expense to Mortgagee, with Approved Insurers “all-risk” ground and flight aircraft hull insurance covering the Aircraft (including the Engines when they are installed on the Airframe or any other airframe) which is of the type as from time to time applicable to aircraft owned by Owner (or Permitted Lessee)  of the same type as the Aircraft for an amount denominated in United States Dollars not less than the unpaid Original Amount together with six months of interest accrued thereon (collectively, the “Debt Balance”).

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Any policies of insurance carried in accordance with this Section B.1 or Section C covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Mortgagee as exclusive loss payee for any proceeds to be paid under such policies up to an amount equal to the Debt Balance and (ii) shall provide that (A) in the event of a loss involving proceeds in excess of the Threshold Amount, the proceeds in respect of such loss up to an amount equal to the Debt Balance shall be payable to the Mortgagee, except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Owner (or any Permitted Lessee) shall endeavor to arrange for any payment of insurance proceeds in respect of such loss to be held for the account of the Mortgagee whether such payment is made to Owner (or any Permitted Lessee) or any third party, it being understood and agreed that in the case of any payment to Mortgagee otherwise than in respect of an Event of Loss, the Mortgagee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Owner or its order, and (B) the entire amount of any loss involving proceeds of the Threshold Amount or less or the amount of any proceeds of any loss in excess of the Debt Balance shall be paid to Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by the Mortgagee.  In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Mortgagee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Owner or any other third party that is entitled to receive such proceeds.

 

2.           During any period that the Aircraft is on the ground and not in operation, Owner (or Permitted Lessee) may carry or cause to be carried, in lieu of the insurance required by Section B.1 above, insurance otherwise conforming with the provisions of said Section B.1 except that the scope of the risks and the type of insurance shall be the same as from time to time applicable to aircraft owned by Owner (or Permitted Lessee) of the same type similarly on the ground and not in operation, provided that Owner (or Permitted Lessee)  shall maintain insurance against risk of loss or damage to the Aircraft in an amount equal to the Debt Balance during such period that the Aircraft is on the ground and not in operation.

 

C.           War-Risk, Hijacking and Allied Perils Insurance

 

If Owner (or any Permitted Lessee) shall at any time operate or propose to operate the Aircraft, Airframe or any Engine (i) in any area of recognized hostilities or (ii) on international routes and war-risk, hijacking or allied perils insurance is maintained by Owner (or any Permitted Lessee) with respect to other aircraft owned or operated by Owner (or any Permitted Lessee) on such routes or in such areas, Owner (or Permitted Lessee) shall maintain or cause to be maintained war-risk, hijacking and related perils insurance of substantially the same type carried by major United States commercial air carriers operating the same or comparable models of aircraft on similar routes or in such areas and in no event in an amount less than the unpaid Original Amount.

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D.           General Provisions

 

Any policies of insurance carried in accordance with Sections A, B and C, including any policies taken out in substitution or replacement for such policies:

 

(i)           in the case of Section A, shall name Mortgagee, each Note Holder, each Related Mortgagee, each Related Note Holder and each Liquidity Provider as an additional insured (collectively, the “Additional Insureds”), as its interests may appear;

 

(ii)           shall apply worldwide and have no territorial restrictions or limitations (except only in the case of war, hijacking and related perils insurance required under Section C, which shall apply to the fullest extent available in the international insurance market);

 

(iii)           shall provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated or impaired by any act or omission (including misrepresentation and nondisclosure) by Owner (or any Permitted Lessee) or any other Person (including, without limitation, use for illegal purposes of the Aircraft or any Engine) and shall insure the Additional Insureds regardless of any breach or violation of any representation, warranty, declaration, term or condition contained in such policies by Owner (or any Permitted Lessee);

 

(iv)           shall provide that, if the insurers cancel such insurance for any reason whatsoever, or if the same is allowed to lapse for nonpayment of premium, or if any material change is made in the insurance which adversely affects the interest of any of the Additional Insureds, such cancellation, lapse or change shall not be effective as to the Additional Insureds for thirty (30) days (seven (7) days in the case of war risk, hijacking and allied perils insurance and ten (10) days in case of nonpayment of premium) after receipt by the Additional Insureds of written notice by such insurers of such cancellation, lapse or change, provided that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable;

 

(v)           shall waive any rights of setoff (including for unpaid premiums), recoupment, counterclaim or other deduction, whether by attachment or otherwise, against each Additional Insured;

 

(vi)           shall waive any right of subrogation against any Additional Insured;

 

(vii)           shall be primary without right of contribution from any other insurance that may be available to any Additional Insured;

 

(viii)           shall provide that all of the liability insurance provisions thereof, except the limits of liability, shall operate in all respects as if a separate policy had been issued covering each party insured thereunder;

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(ix)           shall provide that none of the Additional Insureds shall be liable for any insurance premium; and

 

(x)           shall contain a 50/50% Clause per Lloyd’s Aviation Underwriters’ Association Standard Policy Form AVS 103 or US market equivalent.

 

E.           Reports and Certificates; Other Information

 

On or prior to the Closing Date and on or prior to each renewal date of the insurance policies required hereunder, Owner(or Permitted Lessee)  will furnish or cause to be furnished to Mortgagee insurance certificates describing in reasonable detail the insurance maintained by Owner (or Permitted Lessee) hereunder and a report, signed by Owner’s (or Permitted Lessee’s)  regularly retained independent insurance broker (the “Insurance Broker”), stating the opinion of such Insurance Broker that (a) all premiums in connection with such insurance then due have been paid and (b) such insurance complies with the terms of this Annex B, except that such opinion shall not be required with respect to war risk insurance or indemnity provided by the U.S. Government.  To the extent such agreement is reasonably obtainable Owner (or Permitted Lessee) will also cause the Insurance Broker to agree to advise Mortgagee in writing of any default in the payment of any premium and of any other act or omission on the part of Owner (or Permitted Lessee) of which it has knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft or Engines required hereunder or cause the cancellation or termination of such insurance, and to advise Mortgagee in writing at least thirty (30) days (seven (7) days in the case of war-risk and allied perils coverage and ten (10) days in the case of nonpayment of premium, or such shorter period as may be available in the international insurance market, as the case may be) prior to the cancellation, lapse or material adverse change of any insurance maintained pursuant to this Annex B.

 

F.           Right to Pay Premiums

 

The Additional Insureds shall have the rights but not the obligations of an additional named insured with respect to paying premiums.  None of Mortgagee and the other Additional Insured shall have any obligation to pay any premium, commission, assessment or call due on any such insurance (including reinsurance).  Notwithstanding the foregoing, in the event of cancellation of any insurance due to the nonpayment of premiums, Mortgagee shall have the option, in its sole discretion, to pay any such premium in respect of the Aircraft that is due in respect of the coverage pursuant to this Trust Indenture and to maintain such coverage, as Mortgagee may require, until the scheduled expiry date of such insurance and, in such event, Owner shall, upon demand, reimburse Mortgagee for amounts so paid by them.

 

G.           Deductibles; Self-insurance

 

Owner (or Permitted Lessee) may self-insure by way of deductible, premium adjustment or franchise provisions or otherwise (including, with respect to insurance maintained pursuant to Section B, insuring for a maximum amount which is less than the Debt Balance) in the insurance covering the risks required to be insured against pursuant to Section 4.06 and this Annex B under a program applicable to all aircraft in Owner’s (or Permitted Lessee’s) fleet, but in no case shall the aggregate amount of self-insurance in regard to Section 11 and this Annex B exceed during

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any policy year, with respect to all of the aircraft in Owner’s (or Permitted Lessee’s) fleet (including, without limitation, the Aircraft), the lesser of (a) 100% of the largest replacement value of any single aircraft in Owner’s fleet and (b) 1-1/2% of the average aggregate insurable value (during the preceding policy year) of all aircraft (including, without limitation, the Aircraft) on which Owner carries insurance, unless an insurance broker of national standing shall certify that the standard among all other major U.S. airlines is a higher level of self-insurance, in which case Owner may self-insure to such higher level.  In addition, Owner (and any Permitted Lessee) may self-insure to the extent of any applicable deductible per aircraft that does not exceed industry standards for major U.S. airlines.

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EXHIBIT A

TO

TRUST INDENTURE AND MORTGAGE

 

TRUST INDENTURE AND MORTGAGE SUPPLEMENT

 

This TRUST INDENTURE AND MORTGAGE SUPPLEMENT NO. __, dated [______________ ___, ____] (herein called this “Trust Indenture Supplement”) of UNITED AIRLINES, INC., as Owner (the “Owner”).

 

W I T N E S S E T H:

 

WHEREAS, the Trust Indenture and Mortgage [____], dated as of [____] (as amended and supplemented, the “Trust Indenture”), between the Owner and Wilmington Trust, National Association, as Mortgagee (the “Mortgagee”), provides for the execution and delivery of a supplement thereto substantially in the form hereof, which shall particularly describe the Aircraft, and shall specifically mortgage such Aircraft to the Mortgagee; and

 

WHEREAS, the Trust Indenture relates to the Airframe and Engines described below, and a counterpart of the Trust Indenture is attached hereto and made a part hereof and this Trust Indenture Supplement, together with such counterpart of the Trust Indenture, is being filed for recordation on the date hereof with the FAA as one document;

 

NOW, THEREFORE, this Trust Indenture Supplement WITNESSETH that the Owner hereby confirms that the Lien of the Trust Indenture on the Collateral covers all of Owner’s right, title and interest in and to the following described property and that it hereby grants to the Security Trustee an “International Interest” (as defined in the Cape Town Convention on International Interests in Mobile Equipment and related Aircraft Equipment Protocol, as in effect in the United States) in the following airframe and engines:

 

AIRFRAME

 

One airframe identified as follows:

	

 

Manufacturer

	

 

Model

	

 

FAA Registration Number

	

 

Manufacturer’s Serial Number

	  	  	  	  

 

 

AIRCRAFT ENGINES

 

Two aircraft engines, each such engine being a jet propulsion aircraft engine with at least 1750 lb of thrust or its equivalent, identified as follows:

	

 

Manufacturer

	

 

Manufacturer’s Model

	

 

Serial Number

	  	  	  

 

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Together with all of Owner’s right, title and interest in and to (a) all Parts of whatever nature, which from time to time are included within the definition of “Airframe” or “Engine”, whether now owned or hereafter acquired, including all substitutions, renewals and replacements of and additions, improvements, accessions and accumulations to the Airframe and Engines (other than additions, improvements, accessions and accumulations which constitute appliances, parts, instruments, appurtenances, accessories, furnishings or other equipment excluded from the definition of Parts) and (b) all Aircraft Documents.

 

TO HAVE AND TO HOLD all and singular the aforesaid property unto the Mortgagee, its successors and assigns, in trust for the equal and proportionate benefit and security of the Note Holders and the Indenture Indemnitees, except as provided in Section 2.13 and Article III of the Trust Indenture without any preference, distinction or priority of any one Equipment Note over any other by reason of priority of time of issue, sale, negotiation, date of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and subject to the terms and provisions set forth in the Trust Indenture.

 

This Trust Indenture Supplement shall be construed as supplemental to the Trust Indenture and shall form a part thereof.  The Trust Indenture is each hereby incorporated by reference herein and is hereby ratified, approved and confirmed.

 

AND, FURTHER, the Owner hereby acknowledges that the Aircraft referred to in this Trust Indenture Supplement has been delivered to the Owner and is included in the property of the Owner subject to the pledge and mortgage thereof under the Trust Indenture.

 

*   *   *

 

IN WITNESS WHEREOF, the Owner has caused this Trust Indenture Supplement to be duly executed by one of its officers, thereunto duly authorized, on the day and year first above written.

	  	
UNITED AIRLINES, INC.

	  
	  	  
	  	  
	  	
By:

	  	  
	  	  	
Name:

	  	  
	  	  	
Title:

	  	  

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SCHEDULE I

 

	  	

 

Original Amount

	

 

Interest Rate

	
 

Series A:

	
 

[___]

	
 

3.750%

	
 

Series B:

	
 

[___]

	
 

4.625%

	
 

Total:

	  	  

 

Trust Indenture and Mortgage

Equipment Note Amortization

 

	

 

Payment Date

	

Percentage of Original

Amount to be Paid

	  	  
	
 

 

 

[Attached on following pages.]

 

 

 

 

TRUST INDENTURE 14-2Exhibit 10.1 Joinder and Second Amendment

EXHIBIT 10.1 

JOINDER AND AMENDMENT AGREEMENT 
This JOINDER AND AMENDMENT AGREEMENT, dated as of May 30, 2014 (this “Amendment”), among TIMBERLANDS II, LLC, a Delaware limited liability company (“Timberlands II”), CATCHMARK TIMBER OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“CatchMark Partnership”; Timberlands and CatchMark Partnership are each a “Borrower” and collectively, the “Borrowers”), CATCHMARK TEXAS TIMBERLANDS GP, LLC, Texas limited liability company (“CatchMark Texas GP”), CATCHMARK TEXAS TIMBERLANDS, L.P., a Texas limited partnership (“CatchMark Texas LP”; CatchMark Texas GP and CatchMark Texas LP, collectively, the “Texas Subsidiaries”), the various other existing Loan Parties parties hereto, the various financial institutions parties hereto (collectively, the “Lenders”), and COBANK, ACB, as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders (as defined in the Credit Agreement).
W I T N E S S E T H:
WHEREAS, the Borrowers, CatchMark TRS Harvesting Operations, LLC (“CatchMark TRS Subsidiary”), CatchMark Timber Trust, Inc. (“CatchMark Timber”), CatchMark Timber TRS, Inc. (“CatchMark TRS”), CatchMark HBU, LLC (“CatchMark HBU”) and any other Loan Party parties thereto from time to time, the financial institutions party thereto from time to time as Lenders (as defined in the Credit Agreement) and the Administrative Agent are parties to that certain Third Amended and Restated Credit Agreement, dated as of December 19, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the existing Loan Parties other than CatchMark Timber are parties to that certain Second Amended and Restated Security Agreement, dated as of December 19, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), made by such Loan Parties in favor of the Administrative Agent, for the benefit of itself and the other Lender Parties;
WHEREAS, the existing Loan Parties other than CatchMark Timber are parties to that certain Second Amended and Restated Pledge Agreement, dated as of December 19, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Pledge Agreement” and, together with the Security Agreement, the “Security Documents”), made by such Loan Parties in favor of the Administrative Agent, for the benefit of itself and the other Lender Parties;
WHEREAS, on May 12, 2014, certain Lenders constituting Required Lenders gave their prior written consent to, among other things and subject to certain terms and conditions described in such written consent, the formation of CatchMark Texas GP, as a direct, wholly-owned Subsidiary of Timberlands II, and the formation of CatchMark Texas LP, all of the Equity Interests of which were to be owned by Timberlands II and CatchMark Texas GP;
WHEREAS, CatchMark Texas GP and CatchMark Texas LP were formed on or about May 14, 2014; and the Texas Subsidiaries have not been capitalized, do not own, hold or have any direct or indirect rights in any asset or property other than the Equity Interests of CatchMark Texas LP held by CatchMark Texas GP, and have not engaged in or conducted any business;
WHEREAS, the existing Loan Parties have requested certain modifications to the Credit Agreement and the Security Documents as set forth in Article II of this Amendment; 

WHEREAS, pursuant to Section 11.1 of the Credit Agreement, the Administrative Agent and the Lenders are willing, subject to the terms and conditions hereinafter set forth, to grant such modifications;
WHEREAS, the Borrowers have requested that the Texas Subsidiaries be joined to the Credit Agreement as Loan Parties and Grantors (as defined in each of the Security Documents) to the Security Documents as set forth in Article III hereto; the Borrowers have advised the Lenders that they will cause each of the Texas Subsidiaries to deliver concurrent with the effectiveness of this Amendment a duly authorized and executed Guaranty, dated as of the date hereof, in favor of the Administrative Agent for each of the Lender Parties; and, the Borrowers have advised the Lenders that Timberlands II desires to transfer all of its Real Property located in Texas to CatchMark Texas LP on or after the Amendment Effective Date (as hereinafter defined);
WHEREAS, the outstanding principal balance of the Term Loans, Multi-Draw Term Loans, and the Revolving Loans under the Credit Agreement as of the Amendment Effective Date (before giving effect to this Amendment and to any Borrowing on the date of the Amendment Effective Date), is $34,000,000, $74,418,684.40 and $0.00, respectively; the aggregate Multi-Draw Term Loan Commitments and aggregate Revolving Loan Commitments under the Credit Agreement as of the Amendment Effective Date (before giving effect to this Amendment), is $150,000,000 and $15,000,000, respectively; and, the available aggregate Multi-Draw Term Loan Commitments and the Available Revolving Facility Commitment under the Credit Agreement as of the Amendment Effective Date (before giving effect to this Amendment and to any Borrowing on the date of the Amendment Effective Date) is $75,581,315.60 and $15,000,000, respectively;
WHEREAS, the Borrowers, the Administrative Agent and the Increasing Revolving Lenders (as defined herein) desire to increase the aggregate Revolving Loan Commitment Amounts by $10,000,000 pursuant to the allocations set forth on Schedule E hereof to be used for the purposes set forth in Section 4.10 of the Credit Agreement (after giving effect to this Amendment);
WHEREAS, the Borrowers, the Administrative Agent, the Increasing Multi-Draw Term Loan Lenders and AgSouth Farm Credit, ACA desire to increase the aggregate Multi-Draw Term Loan Commitment Amounts by $65,000,000 pursuant to the allocations set forth on Schedule E hereof to be used for the purposes set forth in Section 4.10 of the Credit Agreement (after giving effect to the amendments provided for herein);
WHEREAS, AgSouth Farm Credit, ACA, who is not a party to the Credit Agreement as a Lender or otherwise immediately prior to the increase in the Multi-Draw Term Loan Commitment Amounts described herein and, consequently, is not a party to this Amendment, has separately consented to join the Credit Agreement as a Multi-Draw Term Loan Lender with respect to the portion of the increase in the Multi-Draw Term Loan Commitment Amounts described on Schedule E;
WHEREAS, on the Amendment Effective Date, AgSouth Farm Credit, ACA, will separately assign all of its Loans and Commitments in accordance with Schedule E hereto, which describes the Loans and Commitment Amounts before giving effect to the increase in the Multi-Draw Term Loan Commitment Amount and before and after giving effect to such assignments;
WHEREAS, immediately after giving effect to such increases, the outstanding principal balance of the Term Loans, Multi-Draw Term Loans, and the Revolving Loans under the Credit Agreement as of the Amendment Effective Date (after giving effect to such increase but before giving effect to any Borrowing on the date of the Amendment Effective Date), shall be $34,000,000, $74,418,684.40 and $0.00, respectively; the aggregate Multi-Draw Term Loan Commitments and aggregate Revolving Loan 

Commitments as of the Amendment Effective Date (after giving effect to such increase), shall be $215,000,000 and $25,000,000, respectively; the available aggregate Multi-Draw Term Loan Commitments and the Available Revolving Facility Commitment under the Credit Agreement as of the Amendment Effective Date (after giving effect to such increase but before giving effect to any Borrowing on the date of the Amendment Effective Date) shall be $140,581,315.60 and $25,000,000, respectively; as of the Amendment Effective Date (after giving effect to such increase but before giving effect to any Borrowing on the date of the Amendment Effective Date), the available Maximum Incremental Amount shall be $75,000,000 and the available Revolver Increase shall be the lesser of $10,000,000 and the Maximum Incremental Amount;
NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto hereby agree as follows.
ARTICLE I
DEFINITIONS; RECITALS

Unless otherwise defined herein or the context otherwise requires, terms used herein shall have the meaning provided in the Credit Agreement.
The recitals set forth above are hereby incorporated into this Amendment as if set forth at length herein.
ARTICLE II
Effective as of the Amendment Effective Date, the Lenders, together with the Administrative Agent and the Loan Parties, hereby agree to amend the Loan Documents, as follows:
SECTION 2.1    Amended Credit Agreement. The Credit Agreement (exclusive of the Schedules and Exhibits thereto) is hereby amended by this Amendment and for ease of reference is restated (after giving effect to this Amendment) in the form attached hereto as Schedule A.

SECTION 2.2    Amendments to Exhibits to Credit Agreement.  The Exhibits to the Credit Agreement are hereby amended in the following particulars:

(a)Exhibit B-1 to the Credit Agreement is hereby amended by replacing it in its entirety with the Exhibit B-1 attached hereto as Schedule B-1.

(b)Exhibit E to the Credit Agreement is hereby amended by replacing it in its entirety with the Exhibit E attached hereto as Schedule B-2.

(c)Schedule B-3 attached hereto is added to the Credit Agreement as a new Exhibit H thereto.

SECTION 2.3    Amendments to Schedules to Credit Agreement. The Schedules to the Credit Agreement are hereby amended in the following particulars:

(a)    Item 1.1(a)(i) of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Item 1.1(a)(i) of Schedule I attached hereto as Schedule C-1.

(b)    Item 1.1(b) of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Item 1.1(b) of Schedule I attached hereto as Schedule C-2.

(c)    Exhibit C to Item 6.8 of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Exhibit C to Item 6.8 of Schedule I attached hereto as Schedule C-3.

(d)    Exhibit D to Item 6.8 of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Exhibit D to Item 6.8 of Schedule I attached hereto as Schedule C-4.

(e)    Item 6.21 of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Item 6.21 of Schedule I attached hereto as Schedule C-5.

(f)    Item 6.24 of Schedule I to the Credit Agreement is hereby amended by replacing it in its entirety with the Item 6.24 of Schedule I attached hereto as Schedule C-6.

SECTION 2.4    Amendments to Security Documents.  The Security Documents are hereby amended in the following particulars:

(a)    Security Agreement.  Section 7.2(b) of the Security Agreement is hereby amended and restated in its entirety as follows:

(b) Upon the execution and delivery by any Person of a security agreement supplement in substantially the form of Exhibit A hereto or a Joinder Agreement (each a “Security Agreement Supplement”), (i) such Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor, and each reference in this Agreement to “Grantor” shall also mean and refer to such Additional Grantor and (ii) the disclosure schedule attached to each Security Agreement Supplement shall be acceptable to the Administrative Agent in its sole discretion and shall be incorporated into and become a part of and supplement Schedules I through VI attached hereto, as appropriate, and the Administrative Agent may attach such supplemental disclosure schedules to such Schedules, and each reference to such Schedules shall refer to such Schedules as amended or supplemented by such supplemental disclosure schedules.
(b)    Pledge Agreement.  Section 7.2(b) of the Security Agreement is hereby amended and restated in its entirety as follows:

Upon the execution and delivery by any Person of a pledge agreement supplement in substantially the form of Exhibit A hereto or a Joinder Agreement (each a “Pledge Agreement Supplement”), (i) such Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor, and each reference in this Agreement to “Grantor” shall also mean and refer to such Additional Grantor and (ii) the disclosure schedule attached to each Security Agreement Supplement shall be acceptable to the Administrative Agent in its sole discretion and shall be incorporated into and become a part of and supplement Schedule I attached hereto, as appropriate, and the Administrative Agent may attach such supplemental disclosure schedules to such Schedules, and each reference to such Schedules shall refer to such Schedules as amended or supplemented by such supplemental disclosure schedules.
ARTICLE III
JOINDER

SECTION 3.1    Joinder.  Each Texas Subsidiary hereby agrees that effective on the Amendment Effective Date it hereby is and shall be deemed to be, and assumes the obligations of, a “Loan Party” jointly and severally under and as defined in the Credit Agreement, an “Additional Grantor” and a “Grantor” jointly and severally under and as defined in each Security Document, and a “Loan Party” jointly and severally under and as defined in each other Loan Document; and, as such, each Texas Subsidiary hereby agrees that from the date hereof and until payment in full in cash of all Obligations and the performance of all other obligations of each of the Loan Parties under the Loan Documents, such Texas Subsidiary shall perform, comply with, and be subject to and bound by each of the terms and provisions of the Credit Agreement, each of the Security Documents and each of the other Loan Documents jointly and severally with the other Loan Parties, Additional Grantors, and Grantors party thereto, as if such Texas Subsidiary were an original party thereto.  Without limiting the generality of the foregoing, each Texas Subsidiary hereby represents and warrants that (i) each of the representations and warranties set forth in Article VI of the Credit Agreement, as modified by Schedule C-1 through C-6 hereto, applicable to such Texas Subsidiary as a Loan Party or a Subsidiary of a Loan Party is true and correct on and as of the date hereof and on and as of the Amendment Effective Date, (ii) each of the representations and warranties set forth in Article III of the Security Agreement, as modified by Schedule D-1 hereto, applicable to such Texas Subsidiary as an Additional Grantor, Grantor or Loan Party is true and correct on and as of the date hereof and on and as of the Amendment Effective Date, (iii) each of the representations and warranties set forth in Article III of the Pledge Agreement, as modified by Schedule D-2 hereto, applicable to such Texas Subsidiary as an Additional Grantor, Grantor or Loan Party is true and correct on and as of the date hereof and on and as of the Amendment Effective Date and (iv) such Texas Subsidiary has heretofore received a true and correct copy of the Credit Agreement, each of the Security Documents and each of the other Loan Documents (including any modifications thereof or supplements or waivers thereto) in effect on the date hereof or on the Amendment Effective Date.

SECTION 3.2    Covenants.  Each Texas Subsidiary covenants and agrees that, from the date hereof and until payment in full in cash of all Obligations and the performance of all other obligations of the Loan Parties under the Loan Documents, such Texas Subsidiary will perform and observe, and cause each of its Subsidiaries to perform and observe, all of the terms, covenants and agreements set forth in the Security Documents and the other Loan Documents that are required to be, or that any Loan Party has agreed to cause to be, performed or observed by the Loan Parties or the Subsidiaries of the Loan Parties, including, without limitation, the covenants set forth in Article VII, the Events of Default set forth in Article VIII and the rights of set off contained in Section 4.9 of the Credit Agreement.

SECTION 3.3    Security Interest.  Each Texas Subsidiary hereby collaterally assigns, mortgages and pledges to the Administrative Agent for its benefit and for the ratable benefit of the Lender Parties, and hereby grants to the Administrative Agent for its benefit and the ratable benefit of the Lender Parties, as collateral for the Secured Obligations (as defined in the applicable Security Document), a pledge and assignment of, and a security interest in, all of the right, title and interest of such Texas Subsidiary in and to such Texas Subsidiary’s Collateral (as defined in the applicable Security Document), whether now owned or hereafter acquired, subject to all of the terms and provisions of the applicable Security Document.

SECTION 3.4    Amendments to Schedules.  Each of the parties hereto acknowledges and agrees that the information on the schedules to the Security Agreement are hereby amended to provide the information shown on the attached Schedule D-1 and the information on the schedules to the Pledge Agreement are hereby amended to provide the information shown on the attached Schedule D-2. 

SECTION 3.5    Pledged Equity Interests.  Each of the parties hereto acknowledges and confirms that the Pledged Equity Interests described in the attached Schedule D-2 are part of the Pledged 

Equity Interests within the meaning of the Pledge Agreement and are part of the Collateral and secure all of the Secured Obligations as provided in the Pledge Agreement. 

SECTION 3.6    Further Assurances.  In furtherance of the foregoing, each Texas Subsidiary and each other Loan Party shall execute and deliver or cause to be executed and delivered at any time and from time to time such further instruments and documents and do or cause to be done such further acts as may be reasonably necessary in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Amendment.

SECTION 3.7    Transfer.  The Loan Parties hereby give prior written notice to the Administrative Agent that Timberlands II intends to transfer to CatchMark Texas LP all of its Real Property in Texas concurrent with or after the Amendment Effective Date.  The Administrative Agent hereby agrees in its sole discretion to accept such notice on such shorter period of time than that set forth in Section 7.1.9(c) of the Credit Agreement.  Satisfaction of the conditions of effectiveness set forth in Article VII of this Amendment shall be deemed by the Administrative Agent as satisfying the requirements of Section 7.2.9(i)(ii) of the Credit Agreement (as amended hereby).

ARTICLE IV

REVOLVER INCREASE AND MULTI-DRAW TERM LOAN INCREASE
SECTION 4.1    Revolver Increases.  Effective on the Amendment Effective Date, each of the Lenders identified on Schedule E hereto as an increasing Revolving Lender (collectively, the “Increasing Revolving Lenders”) hereby consents to the increase in its respective Revolver Loan Commitment Amount as described on Schedule E. 

SECTION 4.2    Multi-Draw Term Loan Increase.  Effective on the Amendment Effective Date, each of the Lenders identified on Schedule E hereto as an increasing Multi-Draw Term Loan Lender (collectively, the “Increasing Multi-Draw Term Loan Lenders” and, together with the Increasing Revolving Lenders, the “Increasing Lenders”) hereby consents to the increase in its respective Multi-Draw Term Loan Commitment Amount as described on Schedule E. 

SECTION 4.3    Updated Schedule II to Credit Agreement.  Pursuant to Section 2.2(d) of the Credit Agreement (after giving effect to the amendments provided for herein), Schedule E hereto updates Schedule II to the Credit Agreement, effective as of the Amendment Effective Date, and by execution and delivery of this Amendment, the Administrative Agent provides notice to each of the Borrowers and the Lenders of such updated Schedule II in accordance with the provisions of Section 2.2(d) of the Credit Agreement (after giving effect to the amendments provided for herein).

ARTICLE V

REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to agree to the amendments provided for in Article II and the corresponding Joinder in Article III, and the Administrative Agent and the Increasing Lenders to agree to the Revolver Increase and the Multi-Draw Term Loan Increase (defined in Schedule A) described in Article IV, each Loan Party (including each Texas Subsidiary) hereby jointly and severally (a) represents and warrants that as of the date hereof and as of Amendment Effective Date (i) the recitals set forth above are true and correct in all material respects, (ii) each of the representations and warranties of any Loan Party or any Subsidiary of any Loan Party contained in the Credit Agreement (as modified 

by this Amendment) and in the other Loan Documents (as modified by this Amendment) is true and correct in all material respects as if made on such date (except, if any such representation and warranty relates to an earlier date, such representation and warranty shall be true and correct in all material respects as of such earlier date), and (ii) no Default or Event of Default has occurred and is continuing, and (b) agrees that the incorrectness in any material respect of any representation and warranty contained in the preceding clause (a) shall constitute an immediate Event of Default.
ARTICLE VI
ACKNOWLEDGMENT OF LOAN PARTIES

Each of the existing Loan Parties, Grantors (as defined in the Security Documents and the CatchMark Timber Security Agreement) and Guarantors (as defined in each Guaranty described in the Credit Agreement) confirms that all of its respective obligations under the Credit Agreement, the Security Documents and the other Loan Documents (in each case, as modified by this Amendment) are, and upon each Texas Subsidiary becoming a Loan Party, a Grantor, and Additional Grantor and a Guarantor, shall continue to be, in full force and effect.  The parties hereto confirm and agree that immediately upon each Texas Subsidiary becoming a Grantor and Additional Grantor, the terms “Obligations” and “Secured Obligations” as used in the Credit Agreement, the Security Documents and the other Loan Documents (in each case, as modified by this Amendment), shall include all obligations of each Texas Subsidiary under the Guaranty to which it is a party, the Security Documents and under each other Loan Document to which it is a party (in each case, as modified by this Amendment).
ARTICLE VII
CONDITIONS TO EFFECTIVENESS

SECTION 7.1    Effective Date.  This Amendment shall become effective on such date (herein called the “Amendment Effective Date”) when each of the following conditions shall have been met:  

SECTION 7.2    Amendment Agreement.  The Administrative Agent shall have received counterparts of this Amendment duly executed and delivered on behalf of each existing Loan Party, each Texas Subsidiary, the Administrative Agent and the Lenders.  

SECTION 7.3    Delivery of Notes.  To the extent requested, each Increasing Lender shall have received its Note in an amount equal to such Lender’s Revolving Loan Commitment Amount, or such Lender’s Multi-Draw Term Loan Commitment Amount, in each case after giving effect to the amendments set forth herein, dated the Amendment Effective Date, duly completed as herein provided and duly executed and delivered by an Authorized Officer of each Borrower.

SECTION 7.4    Amendment Effective Date Compliance Certificate.  The Administrative Agent shall have (a) received a Compliance Certificate duly executed by a Financial Officer of the Borrowers, and dated as of the Amendment Effective Date, showing a calculation of the Loan to Value Ratio and the Minimum Liquidity Balance, and (b) confirmed to the Borrowers that, in its reasonable and good faith determinations, that the calculations contained in such Compliance Certificate are satisfactory.

SECTION 7.5    Pledged Equity Interests.  The Administrative Agent shall have received original certificates evidencing all of the issued and outstanding shares of capital stock and other Equity Interests of any Texas Subsidiary required to be pledged pursuant to the terms of the Pledge Agreement, 

which certificates shall be accompanied by undated stock and other powers duly executed in blank by each relevant pledgor.

SECTION 7.6    Solvency Certificates.  The Administrative Agent shall have received a Solvency Certificate with respect to each Texas Subsidiary and each existing Loan Party, in each case dated as of the Amendment Effective Date.

SECTION 7.7    Resolutions; Good Standing; etc.  The Administrative Agent shall have received from each existing Loan Party and each Texas Subsidiary a certificate, dated the Amendment Effective Date, of its Secretary, Assistant Secretary or Manager as to:

(a)resolutions of its Board of Directors (or equivalent body) then in full force and effect authorizing the execution, delivery and performance of this Amendment and each other document in connection therewith to be executed by it; 

(b)each Organizational Document of each such existing Loan Party and Texas Subsidiary; and

(c)the incumbency and signatures of each officer (including each Authorized Officer and Financial Officer) of each such existing Loan Party and Texas Subsidiary that is authorized to act with respect to this Amendment and each other Loan Document executed by it; 

upon which certificate each Lender Party may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary or Manager of the relevant existing Loan Party and Texas Subsidiary canceling or amending such prior certificate.  The Administrative Agent shall have received satisfactory good standing certificates for each jurisdiction where the Collateral is located and each other jurisdiction where each existing Loan Party and each Texas Subsidiary are organized and are authorized (or should be authorized under the Laws) to conduct business.

SECTION 7.8    Opinions.  The Administrative Agent shall have received legal opinions, dated the Amendment Effective Date and addressed to the Administrative Agent and all the Lenders, from legal counsel to the Borrowers in New York, Delaware, Maryland and each state where the Timberlands are located.

SECTION 7.9    Patriot Act.  The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the USA Patriot Act and any other Anti-Terrorism Law.

SECTION 7.10    Joinder Documents; other Documents.  The Administrative Agent shall have received such Joinder Documents (as defined in Schedule A hereto) and other documents as the Administrative Agent shall have identified on that certain closing checklist prepared by counsel for the Administrative Agent for the transactions contemplated hereby.

SECTION 7.11    Amendment Fees.  The Administrative Agent shall have received for its own account, and for the account of each Lender and Voting Participant all fees, costs and expenses due and payable pursuant to that certain Fee Letter, dated as of May 2, 2014, including, without limitation, an amendment fee for the account of each Lender and Voting Participant (excluding any Lender or Voting Participant who (i) was not previously a Lender or Voting Participant under the Credit Agreement or (ii) 

(x) is not the assignee of a Lender or Voting Participant who was previously a Lender under the Credit Agreement and (y) has not been joined to the Credit Agreement as of the Amendment Effective Date for the purpose of increasing the aggregate Multi-Draw Term Loan Commitments or the aggregate Revolving Loan Commitments), who has executed and electronically delivered its counterpart to this Amendment to the Administrative Agent on or before the time and day specified by the Administrative Agent.

ARTICLE VIII

POST-CLOSING COVENANTS
In order to induce the Administrative Agent and the Lenders to agree to the amendments provided for in Article II and the corresponding Joinder in Article III, and the Administrative Agent and the Increasing Lenders to agree to the Revolver Increase and the Multi-Draw Term Loan Increase (defined in Schedule A) described in Article IV, each Loan Party (including each Texas Subsidiary) hereby jointly and severally covenants that: the Borrowers and the Loan Parties will perform, and will cause their respective Subsidiaries to perform, the obligations set forth in Schedule F.  The Loan Parties hereto hereby acknowledge and agree that the failure to take the actions described in the preceding sentence within the specified time period or to otherwise comply with the covenants described in the preceding sentence at all times shall constitute an Event of Default under the Credit Agreement and, among other things, shall constitute a basis for the Lenders to withhold Loans under the Credit Agreement.
ARTICLE IX
MISCELLANEOUS

SECTION 9.1    Cross-References.  References in this Amendment to any Article or Section are, unless otherwise specified, to such Article or Section of this Amendment.

SECTION 9.2    Loan Document Pursuant to Credit Agreement.  This Amendment is a Loan Document executed pursuant to the Credit Agreement.  Except as otherwise specified herein, all of the representations, warranties, terms, covenants and conditions contained in the Credit Agreement, the Security Documents and each other Loan Document shall remain unamended or otherwise unmodified and in full force and effect.

SECTION 9.3    Limitation of Amendment.  The modifications set forth in Article II shall be limited precisely as provided for herein and, except as expressly set forth herein, shall not be deemed to be a waiver of, amendment of, consent to or modification of any other term or provision of the Credit Agreement or of any term or provision of any other Loan Document or of any transaction or further or future action on the part of either of the Borrowers or any other Loan Party which would require the consent of the Administrative Agent or any of the Lenders under the Credit Agreement or any other Loan Document.

SECTION 9.4    Counterparts.  This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 9.5    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

SECTION 9.6    Further Assurances.  The Borrowers shall execute and deliver, and shall cause each other Loan Party and each Subsidiary of any Loan Party to execute and deliver, from time to time in favor of the Administrative Agent and the Lenders, such documents, agreements, certificates and other instruments as shall be necessary or advisable to effect the purposes of this Amendment.

SECTION 9.7    GOVERNING LAW; WAIVER OF JURY TRIAL; ENTIRE AGREEMENT.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EACH PERSON A PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY AGREEMENT OR DOCUMENT ENTERED INTO IN CONNECTION HEREWITH.  THIS AMENDMENT CONSTITUTES THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENT, WRITTEN OR ORAL, WITH RESPECT HERETO.

[Signatures on following page.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers hereunto duly authorized as of the day and year first above written.

BORROWERS:

TIMBERLANDS II, LLC

By:  CATCHMARK TIMBER OPERATING PARTNERSHIP, LP, as Manager

By:  CATCHMARK TIMBER TRUST, INC., as General Partner

By:  _/s/ Brian M. Davis___________
                 Name: Brian M. Davis
                 Title:   Senior Vice President and                         Chief Financial Officer

CATCHMARK TIMBER OPERATING PARTNERSHIP, LP

By:  CATCHMARK TIMBER TRUST, INC., as General Partner

By:  _/s/ Brian M. Davis___________
                 Name: Brian M. Davis
                 Title:      Senior Vice President and
Chief Financial Officer

[Signatures continue on following page]

[Signatures continued from previous page]

OTHER LOAN PARTIES:

CATCHMARK TRS HARVESTING OPERATIONS, LLC

		
	By:
	Forest Resource Consultants, Inc., as Manager

By: _/s/ David T. Foil ________
       Name:  David T. Foil
       Title:    President

CATCHMARK TIMBER TRUST, INC.

		
	By:
	_/s/ Brian M. Davis___________

		
	        Name:  
	Brian M. Davis

		
	        Title:  
	Senior Vice President and

Chief Financial Officer

CATCHMARK TIMBER TRS, INC.

		
	By:
	_/s/ Brian M. Davis___________

		
	        Name:  
	Brian M. Davis

		
	        Title:  
	Senior Vice President and

Chief Financial Officer

     
CATCHMARK HBU, LLC

By:  CATCHMARK TIMBER OPERATING PARTNERSHIP, LP, as Manager

By:  CATCHMARK TIMBER TRUST, INC., as General Partner

		
	By:
	_/s/ Brian M. Davis___________

		
	        Name:  
	Brian M. Davis

		
	        Title:  
	Senior Vice President and

Chief Financial Officer

 [Signatures continue on following page]

[Signatures continued from previous page]

CATCHMARK TEXAS TIMBERLANDS GP, LLC

By: TIMBERLANDS II, LLC, as Member

By:  CATCHMARK TIMBER OPERATING PARTNERSHIP, L.P., as Manager 

By:  CATCHMARK TIMBER TRUST, INC., as General Partner

		
	By:
	_/s/ Brian M. Davis___________

		
	        Name:  
	Brian M. Davis

		
	        Title:  
	Senior Vice President and

Chief Financial Officer

CATCHMARK TEXAS TIMBERLANDS, L.P.

By:  CATCHMARK TEXAS TIMBERLANDS GP, LLC, as General Partner

By: TIMBERLANDS II, LLC, as Member

By:  CATCHMARK TIMBER OPERATING PARTNERSHIP, L.P., as Manager 

By:  CATCHMARK TIMBER TRUST, INC., as General Partner

		
	By:
	_/s/ Brian M. Davis___________

		
	        Name:  
	Brian M. Davis

		
	        Title:  
	Senior Vice President and

Chief Financial Officer

[Signatures continue on following page]

[Signatures continued from previous page]

Lenders:

COBANK, FCB

By:  _/s/ Zachary Carpenter_______
                Name:  Zachary Carpenter
                Title:  Vice President

AGFIRST FARM CREDIT BANK

By:  _/s/ Michael Mancini ________
                Name:  Michael Mancini
                Title:   Vice President

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK NEDERLAND”, NEW YORK BRANCH

		
	By:
	_/s/ Theodore W. Cox ______

                Name: Theodore W. Cox
                Title: Executive Director

		
	By:
	_/s/ Stewart Kalish _______

                Name: Stewart Kalish
                Title: Executive Director

METROPOLITAN LIFE INSURANCE COMPANY 

		
	By:
	_/s/ W. Kirk Purvis________

                Name: W. Kirk Purvis
                Title: Director

[Signatures continue on following page]

[Signatures continued from previous page]

VOTING PARTICIPANTS (pursuant to
Section 11.10(d)):

UNITED FCS, FLCA, D/B/A FCS COMMERCIAL FINANCE GROUP 

		
	By:
	_/s/ Daniel J. Best_______

                Name: Daniel J. Best
                Title: Vice President

AGCHOICE FARM CREDIT. FLCA 

		
	By:
	_/s/ Mark F. Kerstetter______

                Name: Mark F. Kerkstetter
                Title: Vice President

FARM CREDIT BANK OF TEXAS

		
	By:
	_/s/ Chris M. Levine_______

                Name: Chris M. Levine
                Title: Vice President

MIDATLANTIC FARM CREDIT, ACA

		
	By:
	_/s/ William J. Rutter_______

                Name: William J. Rutter
                Title: Vice President

FARM CREDIT SERVICES OF AMERICA, FLCA

		
	By:
	_/s/ Gary Mazour_______

                Name: Gary Mazour
                Title: Vice President

FARM CREDIT WEST, FLCA

		
	By:
	_/s/ Robert Stormetta_______

                Name: Robert Stormetta
                Title: Vice President

SCHEDULE A

Credit Agreement

(RESTATED PER ARTICLE II OF SECOND AMENDMENT)

THIRD AMENDED AND RESTATED CREDIT AGREEMENT,

dated as of December 19, 2013, among
TIMBERLANDS II, LLC

and

CATCHMARK TIMBER OPERATING PARTNERSHIP, L.P.,

as the Borrowers, COBANK, ACB,
as the Administrative Agent, Joint Lead Arranger, Sole Bookrunner, Swingline Lender,
and Issuing Lender, AGFIRST FARM CREDIT BANK,
as Joint Lead Arranger and Syndication Agent,

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK NEDERLAND”, NEW YORK BRANCH,

as Documentation Agent, and
CERTAIN FINANCIAL INSTITUTIONS,

as the Lenders.

	
				
	 
	TABLE OF CONTENTS
	 

	 
	 
	Page
	

	ARTICLE I
	DEFINITIONS AND ACCOUNTING TERMS
	2
	

	 
	SECTION 1.1  Defined Terms
	2
	

	 
	SECTION 1.2  Use of Defined Terms
	42
	

	 
	SECTION 1.3  Certain Rules of Construction
	42
	

	 
	SECTION 1.4  Accounting Determinations
	43
	

	ARTICLE II
	FUNDING OF LOANS
	44
	

	 
	SECTION 2.1  Amount and Terms of Loans
	44
	

	 
	SECTION 2.2  Notes; Updated Schedule II
	55
	

	 
	SECTION 2.3  Reserved
	56
	

	
				
	 
	SECTION 2.4 Continuation and Conversion Elections
	56
	

	ARTICLE III
	PAYMENTS, INTEREST AND FEES
	56
	

	 
	SECTION 3.1  Repayments and Prepayments
	56
	

	 
	SECTION 3.2 Interest Provisions
	62
	

	 
	SECTION 3.3 Revolver Commitment Fee
	63
	

	 
	SECTION 3.4  Multi-Draw Term Loan Commitment Fee
	64
	

	 
	SECTION 3.5  Letter of Credit Fees
	64
	

	ARTICLE IV
	YIELD PROTECTION, TAXES AND RELATED PROVISIONS
	64
	

	 
	SECTION 4.1 Eurodollar Rate Lending Unlawful
	64
	

	 
	SECTION 4.2 Inability to Determine Rates
	65
	

	 
	SECTION 4.3  Capital Adequacy and Other Adjustments
	65
	

	 
	SECTION 4.4 Funding Losses
	66
	

	 
	SECTION 4.5  Mitigation Obligations; Replacement of Lender
	67
	

	 
	SECTION 4.6  Taxes
	68
	

	 
	SECTION 4.7  Payments, Interest Calculations, etc
	72
	

	 
	SECTION 4.8  Sharing of Payments
	72
	

	 
	SECTION 4.9  Right of Setoff
	73
	

	 
	SECTION 4.10  Use of Proceeds
	74
	

	 
	SECTION 4.11  Payment Reliance
	74
	

	 
	SECTION 4.12 Defaulting Lenders
	75
	

	 
	SECTION 4.13 Cash Collateral
	78
	

	 
	SECTION 4.14  Letter of Credit Liability
	79
	

	ARTICLE V
	CONDITIONS PRECEDENT TO LOANS
	80
	

	 
	SECTION 5.1  Conditions to Effectiveness
	80
	

	 
	SECTION 5.2  Conditions to Multi-Draw Term Loans
	86
	

	 
	SECTION 5.3  Conditions to all Loans and Letters of Credit
	87
	

	 
	SECTION 5.4  Determinations Under Article V
	88
	

	ARTICLE V
	CONDITIONS PRECEDENT TO LOANS
	80
	

	 
	SECTION 5.1  Conditions to Effectiveness
	80
	

	 
	SECTION 5.2  Conditions to Multi-Draw Term Loans
	86
	

	 
	SECTION 5.3  Conditions to all Loans and Letters of Credit
	87
	

	 
	SECTION 5.4  Determinations Under Article V
	88
	

	ARTICLE VI
	REPRESENTATIONS AND WARRANTIES
	89
	

	 
	SECTION 6.1 Organization, etc
	89
	

	 
	SECTION 6.2 Due Authorization, Non-Contravention, etc
	89
	

	 
	SECTION 6.3 Required Approvals
	90
	

	 
	SECTION 6.4 Validity, etc
	90
	

	 
	SECTION 6.5  No Material Liabilities
	90
	

	 
	SECTION 6.6  No Material Adverse Change, etc
	91
	

	 
	SECTION 6.7  Litigation, Labor Matters, etc
	91
	

	 
	SECTION 6.8 Capitalization
	91
	

	 
	SECTION 6.9  Compliance with Laws, etc
	92
	

	 
	SECTION 6.10  Properties, Permits, etc
	92
	

	 
	SECTION 6.11 Taxes, etc
	93
	

	 
	SECTION 6.12  ERISA
	93
	

	 
	SECTION 6.13  Environmental Warranties
	94
	

	
				
	 
	SECTION 6.14 Accuracy of Information
	95
	

	 
	SECTION 6.15  Transaction Agreement, etc
	96
	

	 
	SECTION 6.16  Absence of Default and Restrictions
	97
	

	 
	SECTION 6.17 Margin Regulations; Bank Secrecy Act, etc
	97
	

	 
	SECTION 6.18  Investment Company Status
	97
	

	 
	SECTION 6.19  Material Agreements; Governmental Approvals
	97
	

	 
	SECTION 6.20  Solvency
	98
	

	 
	SECTION 6.21  Insurance
	98
	

	 
	SECTION 6.22  Affiliate Transactions
	98
	

	 
	SECTION 6.23 USA Patriot Act, etc
	98
	

	 
	SECTION 6.24  Separateness; Special Representations and  Covenants Relating to Loan Parties
	99
	

	 
	SECTION 6.25 Qualified ECP Guarantor
	102
	

	ARTICLE VIII  

	EVENTS OF DEFAULT AND REMEDIES
	143
	

	 
	SECTION 8.1  Listing of Events of Default
	143
	

	 
	SECTION 8.2 Action if Bankruptcy
	146
	

	 
	SECTION 8.3 Action if Other Event of Default
	146
	

	 
	SECTION 8.4  Remedies
	146
	

	 
	SECTION 8.5  Foreclosure on Collateral
	147
	

	 
	SECTION 8.6  Appointment of Administrative Agent as Attorney-in-Fact
	147
	

	 
	SECTION 8.7  Payments Upon Acceleration
	148
	

	ARTICLE IX
	RESERVED
	149
	

	ARTICLE X
	THE ADMINISTRATIVE AGENT
	149
	

	 
	SECTION 10.1 Appointment and Authority
	149
	

	 
	SECTION 10.2  Rights as a Lender
	150
	

	 
	SECTION 10.3  Exculpatory Provisions
	150
	

	 
	SECTION 10.4  Reliance by Administrative Agent
	151
	

	 
	SECTION 10.5  Delegation of Duties
	151
	

	 
	SECTION 10.6 Resignation of Administrative Agent
	151
	

	 
	SECTION 10.7 Non-Reliance on Administrative Agent and Other Lenders
	152
	

	 
	SECTION 10.8  No Other Duties, Etc
	153
	

	 
	SECTION 10.9  Administrative Agent May File Proof of Claims
	153
	

	 
	SECTION 10.10 Agency for Perfection; Enforcement of Security by Administrative Agent
	153
	

	 
	SECTION 10.11 Collateral and Guaranty Matters
	154
	

	 
	SECTION 10.12 Indemnification
	155
	

	 
	SECTION 10.13  Resignation of Issuing Lender
	155
	

	 
	SECTION 10.14  Resignation of Swingline Lender
	156
	

	 
	SECTION 10.15  Compliance with Flood Laws
	156
	

	 
	SECTION 10.16 No Reliance on the Administrative Agent’s Customer Identification Program
	156
	

	ARTICLE XI
	MISCELLANEOUS PROVISIONS
	156
	

	 
	SECTION 11.1  Waivers, Amendments, etc
	156
	

	 
	SECTION 11.2  Notices
	159
	

	 
	SECTION 11.3  Payment of Costs and Expenses
	160
	

	 
	SECTION 11.4  Indemnification by the Borrowers
	161
	

	 
	SECTION 11.5  Survival
	164
	

	 
	SECTION 11.6 Severability
	164
	

	 
	SECTION 11.7  Headings.
	164
	

	
				
	 
	SECTION 11.8  Counterparts; Integration; Effectiveness
	164
	

	 
	SECTION 11.9 Governing Law
	165
	

	 
	SECTION 11.10 Entire Agreement
	165
	

	 
	SECTION 11.11  Assignments and Participations
	165
	

	 
	SECTION 11.12 Press Releases and Related Matters
	170
	

	 
	SECTION 11.13  Consent to Jurisdiction and Service of Process
	170
	

	 
	SECTION 11.14  Waiver of Jury Trial, etc
	171
	

	 
	SECTION 11.15  Waiver of Consequential Damages, etc
	171
	

	 
	SECTION 11.16 No Strict Construction
	172
	

	 
	SECTION 11.17 Protection of Interests
	172
	

	 
	SECTION 11.18  Confidentiality
	172
	

	 
	SECTION 11.19 Patriot Act Information
	173
	

	 
	SECTION 11.20  Joint and Several Liability
	173
	

	 
	SECTION 11.21  Waiver of Farm Credit Rights
	173
	

	 
	SECTION 11.22  Effectiveness of Amendment and Restatement; No Novation
	174
	

	 
	SECTION 11.23 Purchase of AgSouth Equity Interest
	175
	

	 
	SECTION 11.24  Effective Date Assignment
	175
	

	 
	SECTION 11.25  Borrowers’ Agent
	175
	

	 
	SECTION 11.26  Reaffirmation of Existing Account Control Agreement
	175
	

	 
	 
	 

	 
	SCHEDULES
	 

	SCHEDULE I
	Disclosure Schedule
	 

	SCHEDULE II
	Loans, Committment Amounts and Percentages
	 

	SCHEDULE III
	Voting Participants
	 

	 
	 
	 

	 
	EXHIBITS
	 

	EXHIBIT A-1
	Form of Term Note
	 

	EXHIBIT A-2
	Form of Revolving Note
	 

	EXHIBIT A-3
	Form of Swingline Note
	 

	EXHIBIT A-4
	Form of Multi-Draw Note
	 

	EXHIBIT B-1
	Form of Borrowing Request
	 

	EXHIBIT B-2
	Form of Continuation/Conversion Notice
	 

	EXHIBIT C
	Form of Assignment and Assumption
	 

	EXHIBIT D
	Form of Closing Date Certificate
	 

	EXHIBIT E
	Form of Compliance Certificate
	 

	EXHIBIT F
	Form of Landlord Estoppel Certificate
	 

	EXHIBIT F
	Form of Collateral Assignment of Material Agreement
	 

	EXHIBIT G
	Form of Joinder Agreement
	 

	EXHIBIT 4.6(A)
	Form of U.S. Tax Compliance Certificate (Foreign Lenders Not a Partnership)
	 

	EXHIBIT 4.6(B)
	Form of U.S. Tax Compliance Certificate (Foreign Participants Not a Partnership)
	 

	EXHIBIT 4.6(C)
	Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)
	 

	EXHIBIT 4.6(D)
	Form of U.S. Tax Compliance Certificate (Foreign Lender Partnerships)
	 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
December 19, 2013 (this “Agreement”), among TIMBERLANDS II, LLC, a Delaware limited liability company (“Timberlands II”), CATCHMARK TIMBER OPERATING PARTNERSHIP, L.P. (f/k/a Wells Timberland Operating Partnership, L.P.), a Delaware limited partnership (“CatchMark Partnership”; Timberlands II and CatchMark Partnership each a “Borrower” and collectively, the “Borrowers”), the various financial institutions as are, or may from time to time become, parties hereto as Lenders, and COBANK, ACB (“CoBank”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms to Article I.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Administrative Agent and certain of the Lenders previously entered into a Credit Agreement (the “2007 Credit Agreement”), dated as of October 9, 2007, as amended and restated by that certain Amended and Restated Credit Agreement, dated as of March 24, 2010 (the “2010 Credit Agreement”), as amended and restated by that certain Second Amended and Restated Credit Agreement, dated as of September 28, 2012 (as previously amended, supplemented, extended, restated or otherwise modified, the “Existing Credit Agreement”), pursuant to which the Lenders party thereto extended certain financial accommodations to the Borrowers;

WHEREAS, the Borrowers’ only business is the direct or indirect ownership and operation of the Real Property;

WHEREAS, the Lenders desire to continue the Term Loan and Revolving Loan Commitments under the Existing Credit Agreement, and, as of December 19, 2013, extend a multi-draw term loan credit facility of $150,000,000 to the Borrowers for the purposes set forth in Section 4.10 of this Agreement;

WHEREAS, in order to continue or make such Loans or Commitments, the Borrowers, the Administrative Agent and the Lenders under the Existing Credit Agreement have agreed to amend and restate the Existing Credit Agreement as described herein; and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth (including Article V), to continue or make such Loans or Commitments to the Borrowers.

NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1 Defined Terms. The following terms when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meaning:

“2007 Credit Agreement” is defined in the recitals.

“2010 Credit Agreement” is defined in the recitals.

“Account Bank” means each bank or other financial institution, securities intermediary or commodity intermediary that is reasonably acceptable to the Administrative Agent.

“Account Control Agreement” means each deposit, securities or commodity account control agreement, executed by an Account Bank, the Loan Party named on the deposit, securities or commodity account and the Administrative Agent, in form and content reasonably acceptable to the Administrative Agent.

“Adjustment Date” means each date which is the fifth Business Day after the receipt by the Administrative Agent of each Compliance Certificate and related financial statements delivered by the Borrowers pursuant to Section 7.1.1(e) and, in the case a decrease in an Applicable Margin is warranted, a written request from the Borrowers to decrease such margin (which notice shall be deemed given if noted on the applicable Compliance Certificate).

“Administrative Agent” is defined in the preamble and includes each successor Administrative Agent pursuant to Section 10.6.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means with respect to a specific Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agent Parties” means, collectively, the Administrative Agent and each of its Related Parties.

“Aggregate Letter of Credit Usage” means, as of the date of determination, the result of
(a) the Letter of Credit Usage for all outstanding Letters of Credit less (b) the Letter of Credit Usage for any outstanding Letter of Credit for which the Borrowers have provided collateral in the manner provided in Section 4.14 in an amount not less than the Letter of Credit Liability for such Letter of Credit. For the avoidance of doubt, the Letter of Credit Usage for any Letter of Credit shall not be reduced by any Cash Collateral provided pursuant to Sections 4.12 or 4.13.

“Agreement” is defined in the preamble.
“AgSouth” means AgSouth Farm Credit, ACA.

“AgSouth Equity Interests” is defined in Section 11.23.

“Amendment Effective Date” has the meaning given to such term in that certain Joinder and Amendment Agreement, dated as of May 30, 2014, by and among the Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.

“Anti-Terrorism Laws” means any Laws relating to terrorism, “know your customer” or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department's Office of Foreign Asset Control.

“Applicable Margin” means the applicable per annum percentage set forth in the pricing table 

below opposite the applicable Loan to Value Ratio.

	
						
	Loan to Value Ratio
	Base Rate Margin for Revolving Loans and Term Loan
	Base Rate Margin for Multi-Draw Term Loans
	LIBOR
Margin for Revolving Loans and Term Loans
	

LIBOR
Margin for Multi-Draw Term Loans
	Commitment Fee

	> 40%
	1.75%
	2.00%
	2.75%
	3.00%
	0.35%

	< 40%
and
>35%
	1.50%
	1.75%
	2.50%
	2.75%
	0.35%

	

< 35%
and
>30%
	1.00%
	1.25%
	2.00%
	2.25%
	0.30%

	<30%
and
>20%
	0.75%
	1.00%
	1.75%
	2.00%
	0.25%

	< 20%
	0.50%
	0.75%
	1.50%
	1.75%
	0.20%

The Loan to Value Ratio used to compute the Applicable Margin shall be the Loan to Value Ratio most recently calculated and reported pursuant to Section 5.1.24, clause (e) of Section 7.1.1 or, in the event of a Multi-Draw Term Loan Borrowing in excess of $20,000,000, Section 5.3.3. Changes in the Applicable Margin resulting from a change in the Loan to Value Ratio shall become effective upon the Adjustment Date or, in the event of a Multi-Draw Term Loan Borrowing in excess of $20,000,000, upon the date of such Borrowing; provided that, in each case, no such change shall be made in the Applicable Margin with respect to outstanding LIBOR Loans during the existing Interest Period. If the Borrowers shall fail to deliver a Compliance Certificate with respect to a Fiscal Quarter as and when required pursuant to clause (e) of Section 7.1.1, the Applicable Margin, from and including the date it was required to deliver such Compliance Certificate to but not including the fifth Business Day following the date the Borrowers deliver to the Administrative Agent a Compliance Certificate with respect to such Fiscal Quarter, shall conclusively be presumed to equal the highest relevant Applicable Margin set forth above. Upon a Commitment Termination Event or, at the election of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, the Applicable Margin shall be immediately increased to the highest Applicable Margin set forth above during all periods of time in which any Event of Default has occurred and is continuing.

If, as a result of any restatement of or other adjustment to any financial statements referred to above (a) the Loan to Value Ratio as delivered by the Borrowers as of any applicable date was inaccurate and (b) a proper calculation of the Loan to Value Ratio would have resulted in different pricing for any period, then (i) if the proper calculation of the Loan to Value Ratio would have resulted in higher pricing for such period, the Borrowers shall automatically and retroactively be obligated to pay to Administrative Agent, promptly on demand by Administrative Agent, an amount equal to the excess of the amount of interest that should have been paid for such period over the amount of interest actually paid for such period; and (ii) if the proper calculation of the Loan to Value Ratio would have resulted in lower pricing for such period, Administrative Agent and the Lenders shall have no obligation to repay any overpaid interest to the Borrowers, provided that if, as a result of any restatement or other event a proper calculation of the Loan to Value Ratio would have resulted in higher pricing for one or more periods and lower 

pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrowers pursuant to clause (i) above shall be based upon the excess, if any, of the amount of interest that should have been paid for all applicable periods over the amount of interest paid for all such periods.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required pursuant to Section 11.11), and accepted by the Administrative Agent, in substantially the form of Exhibit C or any other form approved by the Administrative Agent.

“Authorized Officer” means, relative to any Loan Party, each Financial Officer and other officers of such Loan Party whose signatures and incumbency shall have been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.2 or otherwise.

“Available Revolving Facility Commitment” means, as of the date of determination, the result of (a) the aggregate of all Revolving Loan Commitment Amounts, minus (b) the
aggregate outstanding principal of all Revolving Loans, minus (c) the aggregate outstanding principal of all Swingline Loans, minus (d) the Aggregate Letter of Credit Usage.

“Available Revolving Lender Commitment” means, as of the date of determination, for any Revolving Lender the result of (a) such Lender’s Revolving Loan Commitment Amount, minus (b) the aggregate outstanding principal of all of such Lender’s Revolving Loans, minus (c) its Percentage of the aggregate outstanding principal of all Swingline Loans, minus (d) its Percentage of the Aggregate Letter of Credit Usage.

“Base Rate” means the rate per annum announced by the Administrative Agent on the first business day of each week, which shall be the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus one half of one percent (0.5%) and (c) 1.50% greater than the One- Month LIBOR (rounded upward, if necessary, to the next whole multiple of 1/100th of 1.00%). For purposes of this definition of “Base Rate”, (x) the “Prime Rate” means a variable rate of interest per annum equal to the “U.S. prime rate” as reported on such day in the Money Rates Section of the Eastern Edition of The Wall Street Journal, or, if the Eastern Edition of The Wall Street Journal is not published on such day, such rate as last published in the Eastern Edition of The Wall Street Journal, and (y) the “One-Month LIBOR” means LIBOR determined on a daily basis for an Interest Period of one (1) month; provided that, if LIBOR is no longer available for such Interest Period, “One-Month LIBOR” shall be calculated for such Interest Period as the Administrative Agent shall select in its sole discretion.

“Best Management Practices” means forest management, silvicultural, planting, thinning and timber harvesting practices that are in accordance with (a) SFI-certification requirements of Sustainable Forestry Initiative, Inc. and (b) “Best Management Practices” (or similarly titled regulations or non-binding guidance) issued with respect to the management and harvesting of timberlands by Governmental Authorities in the States where the Real Property is located.

“Borrower” and “Borrowers” is defined in the preamble.

“Borrowing” means (a) a borrowing from the applicable Lenders of (i) the Incremental Term 

Loans on the closing date therefor in accordance with the Lenders’ Incremental Term Loan Commitments for such Incremental Term Loan Facility, (ii) Multi-Draw Term Loans during the Multi-Draw Term Loan Availability Period in accordance with the Lenders’ Multi-Draw Term Loan Commitments, (iii) the Revolving Loans during the Revolving Availability Period in accordance with the Lenders’ Revolving Loan Commitments, or (iv) Swingline Loans during the Revolving Availability Period in accordance with the Swingline Commitment, or (b) an issuance, by any Issuing Lender of any Letter of Credit during the Revolving Availability Period in accordance with the Letter of Credit Sublimit.

“Borrowing Request” means a Borrowing Request, duly executed by a Financial Officer of each Borrower, in substantially the form of Exhibit B-1 attached hereto.

“Business Day” means (a) any day on which the Administrative Agent is open for business and is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York or Denver, Colorado; and (b) relative to the making, continuing, prepaying or repaying of the Loans, any day which is a Business Day described in clause (a) above and which is also a day on which dealings in Dollars are carried on in the interbank Eurodollar market.

“Cash Collateralize” means, to deposit in an Account Bank or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Lenders or Lenders, as collateral for Letter of Credit Liabilities or obligations of the Lenders to fund participations in respect of Letter of Credit Liabilities, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalent Investment” means, at any time:

(a)any evidence of Indebtedness, with overnight maturities issued or guaranteed by the United States;

(b)commercial paper, maturing not more than one day from the date of issuance and rated at least A-1 by S&P or P-1 by Moody’s, which is issued by a corporation (other than an Affiliate of any Loan Party) organized under the Laws of any state of the United States or of the District of Columbia;

(c)any certificate of deposit or bankers acceptance or time deposit, maturing daily, which is issued by a commercial banking institution that (i) is a member of the Federal Reserve System, (ii) has a combined capital and surplus and undivided profits of not less than
$1,000,000,000 and (iii) has a credit rating of A2 or higher from Moody’s or A or higher from S&P; or

(d)any investment in money market mutual funds having portfolio assets in excess of $5,000,000,000 that comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 and are rated AAA by S&P and Aaa by Moody’s.

“CatchMark HBU” means CatchMark Timberland HBU, LLC (f/k/a Wells Timberland HBU, LLC), a Delaware limited liability company.

“CatchMark Partnership” is defined in the preamble.

“CatchMark Timber” means CatchMark Timber Trust, Inc. (f/k/a Wells Timberland REIT, Inc.), a Maryland corporation.

“CatchMark Timber Security Agreement” means the Second Amended and Restated Security Agreement, dated as of December 19, 2013, made by CatchMark Timber in favor of the Administrative Agent for the benefit of itself and each other Loan Party.
“CatchMark Texas GP” means CatchMark Texas Timberlands GP, LLC, a Texas limited liability company.

“CatchMark Texas LP” mean CatchMark Texas Timberlands, L.P., a Texas limited partnership.

“CatchMark TRS” means CatchMark TRS, Inc. (f/k/a Wells Timberland TRS, Inc.), a Delaware corporation.

“CatchMark TRS Subsidiary” means CatchMark TRS Harvesting Operations, LLC (f/k/a Wells Timberland TRS Harvesting Operations, LLC), a Delaware limited liability company.

“CatchMark TRS Subsidiary Account” is defined in Section 7.1.13.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

“Change in Law” means the occurrence, after December 19, 2013, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“Change of Control” means: (a) CatchMark Timber ceases to own and control, beneficially and of record, directly or indirectly, 100% of the Equity Interests of CatchMark Partnership; (b) any consolidation or merger of any Borrower in which any Borrower is not the continuing or surviving entity; (c) CatchMark Partnership ceases to own and control, beneficially and of record, directly or indirectly, 100% of the Equity Interests of each Loan Party other than CatchMark Timber and CatchMark Partnership; and (d) (i) any Person or group (within the meaning of Rule 13d-5 of the SEC as in effect on the date hereof) shall own directly or indirectly, beneficially or of record, Equity Interests representing 20% or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of CatchMark Timber; or (ii) a majority of the seats (other than vacant seats) on the board of directors (or equivalent) of CatchMark Timber shall at any time be occupied by Persons who were neither (A) nominated by the management of CatchMark Timber, nor (B) appointed by directors so nominated; or (iii) any Person or group (other than its board of directors on the Effective Date) shall otherwise directly or indirectly control CatchMark Timber (for purposes of this definition, “control” 

means the possession directly or indirectly of the power to direct or cause the direction
of the management and policies of CatchMark Timber, whether through the ownership of voting securities or by contract or otherwise).

“CoBank” is defined in the preamble.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means (a) the Equity Interests of Timberlands II, CatchMark TRS, CatchMark TRS Subsidiary, CatchMark HBU, CatchMark Texas GP, CatchMark Texas LP, and any other Subsidiary of any Borrower (other than any Shell Subsidiary wholly-owned by another Shell Subsidiary) and (b) all the other assets of the Borrowers and each other Loan Party that are subject to a Lien pursuant to any Loan Document.

“Collateral Assignment of Material Agreement” means each Collateral Assignment of Material Agreement, in substantially the form of Exhibit G attached hereto, and executed by each relevant Loan Party and other Persons that are parties to the Material Agreement the subject thereof. In the discretion of the Administrative Agent, the form of the relevant Collateral Assignment of Material Agreement with respect to any particular Material Agreement (including material Transaction Documents) may vary.

“Collateral Insurance Proceeds” means all insurance proceeds that have been paid on account of any of the Collateral.

“Commitment” means, the Incremental Term Loan Commitment for each Incremental Term Loan Facility, the Multi-Draw Term Loan Commitment and the Revolving Loan Commitment, as applicable.

“Commitment Fee” means the Revolver Commitment Fee and the Multi-Draw Term Loan Commitment Fee.

“Commitment Termination Event” means (a) the occurrence of any Default or Event of Default described in Section 8.1.7 or (b) the occurrence and continuance of any other Event of Default and either (i) the declaration of the Loans to be due and payable pursuant to Section 8.3 or (ii) the giving of notice by the Administrative Agent, acting at the direction of the Required Lenders, to the Borrowers that the Commitments have been terminated.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), as amended.

“Communications” means collectively, all information, documents and other materials that any Loan Party or any Subsidiary of any Loan Party is obligated to furnish to the Administrative Agent pursuant to the Loan Documents, including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (a) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (b) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, or (c) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit hereunder.

“Compliance Certificate” means a Compliance Certificate duly executed by a Financial Officer of the Borrowers, substantially in the form of Exhibit E attached hereto, together with such changes thereto as the Administrative Agent may from time to time reasonably request, in form and content acceptable to the Administrative Agent.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Contingent Liability” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss (including by providing a Lien on its property or assets, maintaining any financial statement condition or liquidity level, or purchasing or leasing any property or services)) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The principal amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby.

“Continuation/Conversion Notice” means a Continuation/Conversion Notice duly executed by a Financial Officer of each Borrower, substantially in the form of Exhibit B-2 attached hereto.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Cost Basis” means the cost basis of any of the Collateral as set forth in Item 1.1(a) (“Cost Basis of Collateral”) of the Disclosure Schedule to the 2010 Credit Agreement, as modified by the Land Sales Adjustment attached as Item 1.1(a)(i) to the Existing Credit Agreement, as further modified by the Land Sales Adjustment attached as Item 1.1(a)(i) hereto (“Land Sales Adjustment to Cost Basis of Collateral”), and as otherwise supplemented, replaced or otherwise modified from time to time pursuant to Section 5.2.4, Section 7.2.8, Section 7.1.9 or otherwise under this Agreement.

“Cost Basis Collateral Disposition Proceeds” means, with respect to any of the Collateral (other than the sale of Timber in accordance with clause (m) of Section 7.1.11 and the termination of Timber Leases in accordance with clause (x) of Section 7.1.11) sold, leased, transferred or otherwise disposed of (whether voluntarily or involuntarily, or under power of
eminent domain, condemnation or otherwise), the allocated Cost Basis (it being understood that, if less than the relevant tract of the Collateral as set forth in the Disclosure Schedule is so disposed of, the cost basis of such tract so disposed of shall be determined by the Administrative Agent).

“Credit Support” has the meaning assigned to such term in Section 7.2.3(g).

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any condition, occurrence or event which, after notice or lapse of time or both, 

would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 4.12(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Bank, any Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified Borrowers, the Administrative Agent, or any Issuing Lender or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or Borrowers, to confirm in writing to the Administrative Agent and Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and Borrowers), (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender, or (e) has (or its parent company or a financial institution affiliate thereof has) notified the Administrative Agent, or has stated publically, that it will not comply with its funding obligations under any other loan agreement or credit agreement or other similar/other financing agreement. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 4.12(b)) upon delivery of notice of such determination to Borrowers and each Lender.

“Disclosure Schedule” means the Disclosure Schedule attached as Schedule I hereto, as amended, supplemented or otherwise modified from time to time by the Borrowers pursuant to the terms hereof or with the consent of the Administrative Agent and the Required Lenders.

“Division” means:

(a)for purposes of the Harvest Plan, shall mean those portions of the Timberlands consisting of Real Property owned in fee simple, the PLM Leases, the LTC Lease and all other Timber Leases; provided however, during an Event of Default and upon the request of the Administrative Agent in its reasonable discretion, “Division” for purposes of the Harvest Plan shall mean those portions of the 

Timberlands designated by tract by the Timber Manager or such other units or portions of the Timberlands as the Administrative Agent may request in its reasonable discretion;

(b)for purposes of the quarterly reports described in Section 7.1.11(d)(iv), shall mean the entire Timberlands of the Landholders; provided however, during an Event of Default and upon the request of the Administrative Agent in its reasonable discretion, “Division” for purposes of such quarterly reports shall mean those portions of the Timberlands consisting of Real Property owned in fee simple, the PLM Leases, the LTC Lease and all other Timber Leases or such other units or portions of the Timberlands as the Administrative Agent may request in its reasonable discretion;

(c)for purposes of appraisals, shall mean those portions of the Timberlands consisting of Real Property owned in fee simple, the PLM Leases, the LTC Lease and all other Timber Leases; provided however, during an Event of Default and upon the request of the Administrative Agent in its reasonable discretion, “Division” for purposes of appraisals shall mean such other units or portions of the Timberlands as the Administrative Agent may request in its reasonable discretion; and

(d)for all other purposes (if any), those portions of the Timberlands, whether owned or leased, which are grouped together for management purposes in units or portions as identified by the applicable Landholders and reasonably acceptable to the Administrative Agent.

“Dollar” and the symbol “$” mean lawful money of the United States.

“Domestic” means, with respect to any asset, located in any state, commonwealth or territory of the United States (including the District of Columbia) and, with respect to any corporation, limited liability company, trust, joint venture, association, company, partnership or other entity, formed and existing under the laws of the United States or any state, commonwealth or territory thereof (including the District of Columbia).

“EBITDA” means the result of (a) net income or deficit, as the case may be, calculated in accordance with GAAP; less (b) any gain on Rate Protection Agreements; plus, (c) the sum, without duplication, of (i) income taxes, (ii) total interest expense (including non-cash interest), (iii) depletion and other amortization expense, (iv) with respect to the sale in fee simple of up to two percent (2%) of the fee acreage of the Real Property in any Fiscal Year, cash proceeds from such sales equal to the Cost Basis of the Real Property sold, (v) the amount of any cash received representing unearned revenue with respect to a non-refundable option or other similar payments in connection with the sale of Real Property, (vi) any loss on Rate Protection Agreements, (vii) any non-cash expenses representing amounts due to Affiliates, (viii) any non-cash expenses associated with the termination of Timber Leases, (ix) any non-cash expenses incurred in connection with the prepayment of Indebtedness, and (x) any one-time expenses incurred in connection with the permitted acquisition of Real Property to the extent the add back of such expenses under this definition has been approved by the Administrative Agent; less (d) in the year earned as revenue, the amount of any cash previously included in EBITDA pursuant to clause (c)(v) hereof; plus (e) the actual amount of reasonable fees and out-of-pocket transaction costs and expenses of CatchMark Timber in connection with the offering and issuance of common stock of CatchMark Timber on or about December 17, 2013, in an aggregate amount not to exceed $3,000,000; plus (f) the actual amount of reasonable fees and out-of-pocket transaction costs and expenses paid by any Loan Party in connection with the transition to self- management (and including transaction costs associated with the closing of this Agreement), in an aggregate amount not to exceed $2,000,000; plus (g) non-cash compensation expenses.

“Effective Date” means the date of this Agreement, which shall be the date on which all conditions precedent in Section 5.1 have been satisfied.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.11(b)(iii), (v) and (vi) (subject to any such consents, if any, as may be required under Section 11.11(b)(iii)).

“Environmental Laws” means all Laws relating to public health and safety and protection of the environment, threatened or endangered species, preservation or reclamation of natural resources, Release of any Hazardous Material or to health and safety matters, including CERCLA, the Surface Mining Control and Reclamation Act of 1977, the Resource Conservation and Recovery Act, the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq., the Clean Air Act of 1970, 42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C., §§ 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §§ 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq., the Solid Waste Disposal Act, 42 U.S.C. §§ 6901 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq., the Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq., and any similar or implementing state or local Law.

“Environmental Tests” is defined in clause (c) of Section 7.1.6.

“Equity Interests” means, with respect to any Person, all shares of capital stock, partnership interests, membership interests in a limited liability company or other ownership in participation or equivalent interests (however designated, whether voting or non-voting) of such Person’s equity capital (including any warrants, options or other purchase rights with respect to the foregoing), whether now outstanding or issued after the Effective Date.

“Equity Raise Account” means any deposit, securities or commodity account at or with any bank, other financial institution, securities intermediary or commodity intermediary into which CatchMark Timber has, or has directed any other Loan Party or any other Person, to deposit or hold any proceeds of any issuance of equity by CatchMark Timber, together with any account or accounts replacing any of the same.

“Equity Raises Net Proceeds” is defined in clause (b) of Section 7.1.15.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Loan Party, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) a prohibited transaction with respect to a Plan within the meaning of Section 406 of ERISA or Section 4975 of the Code for which an exemption is not available; (b) with respect to any Plan that is intended to be a qualified plan under Section 401(a) of the Code, any occurrence or event that results or could reasonably be expected to result in the loss of the Plan’s qualified status; or (c) the occurrence of any event or condition that results or could reasonably be expected to result in 

any liability under Title IV of ERISA to any Borrower, any other Loan Party, any of their Subsidiaries, or any ERISA Affiliate thereof.

“Event of Default” is defined in Section 8.1.

“Excluded Account” means any deposit or securities account of any Borrower or any Subsidiary of a Borrower (a) which contains only deposits of employee withholding taxes, or (b) functions solely as a payroll account and contains only deposits of fully earned employee wages.

“Excluded Swap Obligations” means, with respect to any Loan Party providing a guaranty of or granting a security interest to secure any Swap Obligation of another Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 7.1.17(b) and any other “keepwell, support or other agreements” for the benefit of such Loan Party) at the time the guaranty of or grant of such security interest by such Loan Party becomes effective with respect to such related Swap Obligation. For the avoidance of doubt, if a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or grant of security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrowers under Section 4.5) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.6, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.6(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Account Control Agreements” means, collectively, (a) that certain Deposit Account Control Agreement, dated as of September 9, 2012, by Timberlands II, the Administrative Agent and Wells Fargo Bank, National Association, (b) that certain Deposit Account Control Agreement, dated as of November 13, 2012, by CatchMark TRS Subsidiary, the Administrative Agent and Wells Fargo Bank, National Association, (c) that certain Account Control Agreement, dated as of September 28, 2012, by Timberlands II, the Administrative Agent and CoBank, and (d) that certain Account Control Agreement, dated as of September 28, 2012, by CatchMark TRS Subsidiary, the Administrative Agent and CoBank.

“Existing Credit Agreement” is defined in the recitals.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor 

thereto.

“Farm Credit Lender” means a federally-chartered Farm Credit System lending institution organized under the Farm Credit Act of 1971, as amended.

“FATCA” means Subsections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FCCR Test Date” shall be the earlier of (i) the date that the Administrative Agent receives a Compliance Certificate, delivered pursuant to Section 7.1.1(e) for the four Fiscal Quarters ending on June 30, 2015 and (ii) the date that the Administrative Agent receives a Compliance Certificate, delivered pursuant to Section 7.1.1(e), calculating and reporting a Fixed Charge Coverage Ratio of not less than 1.05:1.00 for the four Fiscal Quarters ending on the applicable measurement date; provided that such applicable measurement date is later than September 30, 2014.

“Federal Funds Effective Rate” means, for any day, the rate of interest per annum (rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on such date, or if no such rate is so published on such day, on the most recent day preceding such day on which such rate is so published.

“Fee Letter” means the Fee Letter, dated October 10, 2013 by and between CoBank and the Borrowers.

“Fee Simple Cost Basis” means the cost basis of any of the Collateral owned by any Landholder in fee simple as set forth in Item 1.1(a) (“Cost Basis of Collateral”) of the Disclosure Schedule to the 2010 Credit Agreement, as modified by the Land Sales Adjustment attached as Item 1.1(a)(i) to the Existing Credit Agreement, as further modified by the Land Sales Adjustment attached as Item 1.1(a)(i) hereto (“Land Sales Adjustment to Cost Basis of Collateral”), and as otherwise supplemented, replaced or otherwise modified from time to time pursuant to Section 5.2.4, Section 7.2.8, Section 7.1.9 or otherwise under this Agreement.

“Fiber Supply Agreement” means the Fiber Supply Agreement, dated as of the October 9, 2007, among MW, MeadWestvaco Corporation and CatchMark TRS Subsidiary, as amended, restated or otherwise modified from time to time in accordance with clause (l) of Section 7.1.11.

“Financial Officer” means with respect to any Loan Party or Subsidiary of any Loan Party, with respect to the Timber Manager on behalf of any Loan Party, and with respect to CatchMark Timber on behalf of any Loan Party, as applicable, the president, chief financial officer, principal accounting officer or controller whose signatures and incumbency have been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.2, Section 5.2.5 or otherwise.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any period of twelve consecutive calendar months ending on December 31.

“Fixed Charge Coverage Ratio” means the ratio derived on any measurement date by dividing for the most recent four Fiscal Quarters ending on such measurement date, (a) EBITDA for CatchMark Timber, calculated on a consolidated basis less all capital expenditures related to Land maintenance paid by CatchMark Timber or any of its Subsidiaries on a consolidated basis less any dividends or distributions paid by CatchMark Timber on a consolidated basis by (b) cash interest expense paid by CatchMark Timber or any of its Subsidiaries on a consolidated basis; provided however, if any Unrestricted Timber Subsidiaries have been acquired or organized by CatchMark Timber or if any Unrestricted Timber Transactions have been consummated, each reference to “CatchMark Timber” in this definition shall be deemed replaced with “CatchMark Partnership.”

“Flood Laws” means, collectively, (a) the National Flood Insurance Act of 1968, (b) the Flood Disaster Protection Act of 1973, (c) the National Flood Insurance Reform Act of 1994 and
(d) the Flood Insurance Reform Act of 2004, and all such other applicable Laws related thereto.

“Foreign Lender” means (a) if either Borrower is a U.S. Person, a Lender that is not a U.S. Person and (b) if either Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which Borrower is a resident for tax purposes.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Percentage of the outstanding Letter of Credit Liabilities with respect to Letters of Credit issued by such Issuing Lender other than Letter of Credit Liabilities as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swingline Lender, such Defaulting Lender’s Percentage of outstanding Swingline Loans made by the Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

“Fuel Wood Residue” is defined in clause (f) of Section 7.2.9.

“Fund” means any person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” is defined in Section 1.4.

“Governmental Authority” means the government of the United States of America or any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank), and any corporation or other entity exercising such functions owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guaranty” means, collectively, the Second Amended and Restated Limited Guaranty, dated as of December 19, 2013, by CatchMark Timber in favor of the Administrative Agent for each of the Lender Parties, the Second Amended and Restated Guaranty, dated as of December 19, 2013, by CatchMark TRS in favor of the Administrative Agent for each of the Lender Parties,  the  Second  Amended  and  Restated  Guaranty,  dated  as  of  December  19,  2013,  by
CatchMark TRS Subsidiary in favor of the Administrative Agent for each of the Lender Parties, the 

Amended and Restated Guaranty, dated as of December 19, 2013, by CatchMark HBU in favor of the Administrative Agent for each of the Lender Parties, the Guaranty, dated May 30, 2014, by CatchMark Texas GP in favor of the Administrative Agent for each of the Lender Parties, the Guaranty, dated May 30, 2014, by CatchMark Texas LP in favor of the Administrative Agent for each of the Lender Parties, and each other guaranty by any Loan Party in favor of the Administrative Agent for each of the Lender Parties, in form and substance acceptable to the Administrative Agent in its sole discretion.

“Harvest Plan” is defined in clause (c) of Section 7.1.11.

“Hazardous Material” means (a) any “hazardous substance” as defined by CERCLA,
(a)any “hazardous waste” as defined by the Resource Conservation and Recovery Act, (c) any petroleum product or byproduct or (d) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance within the meaning of any Law relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material.

“Incremental Term Loan” is defined in clause (b) of Section 2.1.1.

“Incremental Term Loan Commitment” is defined in clause (b) of Section 2.1.1.

“Incremental Term Loan Facility” is defined in clause (b) of Section 2.1.1.

“Indebtedness” of any Person means, without duplication:

(a)all obligations of such Person for borrowed money, including all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (including, without limitation, the Loans);

(b)all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued for the account of such Person;

(c)all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as capitalized lease liabilities;

(d)whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable arising in the ordinary course of business), and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title  retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(e)all obligations of such Person to purchase, redeem, retire or otherwise acquire for value (including by means of converting into, or exchanging for, Indebtedness) any Equity Interest of such Person;

(f)the liquidation value of any preferred capital stock or similar Equity Interest of such Person or its Subsidiaries held by any Person;

(g)all obligations and liabilities secured by any Lien on such Person’s property or assets, even though such Person shall not have assumed or become liable for the payment thereof;

		
	(h)
	all Off-Balance Sheet Obligations; and

		
	(i)
	all Contingent Liabilities of such Person in respect of any of the foregoing.

“Indemnified Liabilities” is defined in clause (a) of Section 11.4.

“Indemnified Parties” is defined in clause (a) of Section 11.4.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document, and (b) to the extent not otherwise described in (a), Other Taxes.

“Intellectual Property Collateral” is defined in the Security Agreement.

“Interest Period” means, relative to the Loans, the period beginning on (and including) the Borrowing or the date of the conversion or continuation and ending on (but excluding) the day which numerically corresponds to such date one, two or three months thereafter (or such other date as the Administrative Agent and the Lenders shall agree to in their sole discretion), provided, however, that:

(a)the Borrowers shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than five different dates;

(b)if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and

(c)if there is no numerically corresponding day in such month, such Interest Period shall end on the last Business Day of such month.

The Loans shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loans.

“Investment” means, with respect to any Person, (a) any loan, advance, other extension of credit or capital made by such Person to any other Person (excluding account receivables generated in the ordinary course of business of such Person and payable or dischargeable in accordance with customary trade terms), (b) any Contingent Liability of such Person incurred in connection with any item described in clause (a) and (c) any Equity Interest held by such Person in any other Person.

“IRS” means the United States Internal Revenue Service.

“Issuing Lender” means CoBank and its successors and assigns and any other Lender designated from time to time by the Administrative Agent with the approval of the Borrowers, in such Lender’s capacity as an issuer of Letters of Credit hereunder; provided that, such Lender has agreed to be an Issuing Lender.

“Joinder Agreement” means a Joinder Agreement, in substantially the form of Exhibit H attached hereto, executed by the Person to be joined as a Loan Party to this Agreement, the other Loan 

Parties and the Administrative Agent pursuant to which, among other things, such Person is joined as a Loan Party to this Agreement and as a grantor, pledger, obligor or other party to such other Loan Documents as the Administrative Agent shall require in its sole discretion.

“Joinder Documents” means, all of the following (except to the extent made a post- joinder delivery by the Administrative Agent in its sole discretion or waived by the Administrative Agent in its sole discretion), each of which shall be in form and substance acceptable to the Administrative Agent in its sole discretion:

(i)a duly executed Joinder Agreement;

(ii)original certificates evidencing all of the issued and outstanding shares of capital stock and other Equity Interests of such Subsidiary pursuant to the terms of the Pledge Agreement, which certificates shall be accompanied by undated stock and other powers duly executed in blank by each relevant pledger;

		
	(iii)
	a Guaranty duly executed by an Authorized Officer of such Person;

(iv)any Real Property Documents or modifications to Real Property Documents requested by the Administrative Agent in its sole discretion;

(v)an Account Control Agreement for all deposit, securities or commodity accounts of such Person unless such account is an Excluded Account;

(vi)a duly executed Collateral Assignment of Material Agreement or a duly executed Reaffirmation of Collateral Assignment of Material Agreement, as applicable, with respect to any Material Agreements to which it is a party, to the extent requested by the Administrative Agent;

Person;
		
	(vii)
	a Solvency Certificate duly executed by an Authorized Officer of such

(viii)a certificate of the Secretary, Assistant Secretary or Manager of such Person (upon which certificate each Lender Party may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary or Manager of such Person canceling or amending such prior certificate), as to:

(1)resolutions of its Board of Directors (or equivalent body) then in full force and effect authorizing the execution, delivery and performance of each Loan Document to be executed by it;

		
	(2)
	each Organizational Document of such Person; and

(3)the incumbency and signatures of each officer (including each Authorized Officer and Financial Officer) of such Person that is authorized to act with respect to each Loan Document executed by it;

(ix)good standing certificates for each jurisdiction where the Collateral of such Person is located and each other jurisdiction where such Person is organized and authorized (or should be authorized under the Laws) to conduct business;

(x)evidence that all required consents and approvals shall have been obtained and be 

in full force and effect with respect to the transactions contemplated by the Joinder Documents from (1) all relevant Governmental Authorities and (2) any other Person whose consent or approval is necessary or the Administrative Agent reasonably deems appropriate to effect such transactions;

(xi)legal opinions, dated on or about the date of such Joinder Agreement, and addressed to the Administrative Agent and all the Lenders, from New York, the jurisdiction of formation for such Person and such other jurisdictions as the Administrative Agent may reasonably request;

(xii)evidence of the insurance coverage required to be maintained pursuant to Section 7.1.4, which insurance shall be satisfactory to the Administrative Agent and shall be subject to satisfactory endorsements in favor of the Administrative Agent;

(xiii)search reports certified by a party acceptable to the Administrative Agent, dated a date reasonably near (but prior to unless otherwise consented to by the Administrative Agent in its sole discretion) the date of the applicable Joinder Agreement, listing all effective U.C.C. financing statements, federal and state tax Liens, and judgment Liens which name such Person or its prior direct parent, if applicable, as the debtor, and which are filed in each jurisdiction in which U.C.C. filings are to be made pursuant to this Agreement or the other Loan Documents and in such other jurisdictions as the Administrative Agent may reasonably request, together with copies of such financing statements;

(xiv)evidence satisfactory to the Administrative Agent of the filing (or delivery for filing) of all necessary U.C.C. financing statements naming such Person as the debtor and the Administrative Agent as the secured party have been properly filed under the U.C.C. of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the first priority security interest of the Administrative Agent in the Collateral subject thereto;

(xv)evidence satisfactory to the Administrative Agent of the filing (or delivery for filing) of appropriate trademark, copyright and patent security supplements with the United States Patent and Trademark Office and United States Copyright Office to the extent relevant in order to perfect the first priority security interest of the Administrative Agent therein;

(xvi)evidence of completion of all other actions, reasonably requested by the Administrative Agent, in order to perfect its first priority security interest in the Collateral the subject thereof;

(xvii)all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the USA Patriot Act and any other Anti-Terrorism Law; and

(xix) all other reasonable requests of the Administrative Agent made with respect to such Person, Joinder Agreement or the transactions related thereto.

“Land” means all the land from time to time owned and held by any Landholder in fee simple, together with (a) all buildings, structures or other improvements thereon, (b) all Timber located thereon, (c) roads, bridges and other improvements and fixtures thereon and (d) all other privileges and hereditaments, tenements, appurtenances, easements, rights-of-way and other rights relating, including all development, air and water rights and water stock relating to such land and any strips and gores.

“Landholders” means, collectively, Timberlands II, CatchMark HBU, CatchMark TRS Subsidiary, CatchMark Texas LP and any other Loan Party, in each case, for so long as such Loan Party 

is a party to any mortgage, deed of trust, similar instrument or amendment or other modification to any mortgage, deed of trust or similar instrument, granting a security interest in favor of the Administrative Agent, for the benefit of the Lender Parties, securing any of the Obligations, in form and content acceptable to the Administrative Agent in its sole discretion.

“Landlord Estoppel Certificate” means a Landlord Estoppel Certificate, in substantially the form of Exhibit F attached hereto, and executed by landlords of Leasehold Interests other than the LTC Lease. For the avoidance of doubt, Landlord Estoppel Certificates executed and delivered in connection with the 2007 Credit Agreement, 2010 Credit Agreement or Existing Credit Agreement are included in this definition.

“Laws” means, collectively, all applicable constitutions, statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities of any Governmental Authority (including any of  the foregoing that relates to zoning and planning, building, subdivision, Environmental Laws, wildlife protection, forest practices, mining, drilling, extraction and reclamation), including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, decisions, judgments, consent decrees, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority or arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound. For the avoidance of doubt, the definition of “Laws” shall include FATCA.

“Leasehold Interests” means the rights of any Landholder as lessee or grantee with respect to the Timber Leases (including the Timber Deeds) including all purchase options, prepaid rents and security deposits relating thereto, together with leasehold improvements and Timber with respect thereto.

“Lender” means each of (a) the Persons listed on Schedule II hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof), (b) any other Person that shall become party hereto as a Lender pursuant to a joinder agreement executed by the Borrower, the Administrative Agent and such Person, in form and substance reasonably acceptable to each of them, with respect to an Incremental Term Loan Facility, a Revolver Increase or a Multi-Draw Term Loan Increase, and (c) any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party  hereto pursuant to an Assignment and Assumption. Unless otherwise expressly indicated or unless the context otherwise requires, the term “Lender” shall include the Issuing Lender and the Swingline Lender.

“Lender Party” means, as the context may require, (a) any Affiliate of a Lender where such Affiliate is party to a Rate Protection Agreement with either Borrower so long as (i) such Lender remains a Lender party to this Agreement, (ii) such Affiliate is in compliance with Section 7.2.21(b) and (iii) such Rate Protection Agreement is permitted under this Agreement, any Lender or (c) the Administrative Agent, together with each of the respective successors, transferees and assigns.

“Letter of Credit” is defined in clause (d) of Section 2.1.1.

“Letter of Credit Liability” means, as to each Letter of Credit, all reimbursement obligations of the Borrowers to the issuers of Letters of Credit consisting of (a) the Letter of Credit Usage; and (b) all accrued and unpaid interest, fees, and expenses with respect thereto.

“Letter of Credit Sublimit” means $5,000,000; as such amount may be adjusted in accordance with the terms of this Agreement.

“Letter of Credit Usage” means, as to each Letter of Credit, all reimbursement obligations of the Borrowers to the issuer of the Letter of Credit consisting of (a) the amount available to be drawn or which may become available to be drawn; and (b) all amounts which have been paid and made available by an Issuing Lender to the extent not reimbursed by the Borrowers, whether by the making of a Revolving Loan or otherwise.

“LIBOR” means for each applicable Interest Period, a fixed annual rate equal to: (a) the rate of interest determined by the Administrative Agent at which deposits in U.S. dollars for the relevant Interest Period are offered as reported by Bloomberg Information Services (or any successor or substitute service providing rate quotations comparable to those currently provided by such service, as determined by the Administrative Agent from time to time, for the purpose of providing quotations of interest rates applicable to dollar deposits in the London interbank market) as of 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period, divided by (b) a number equal to 1.0 minus the aggregate (but without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on the day which is two (2) Business Days prior to the beginning of such Interest Period for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board) which are required to be maintained by a member bank of the Federal Reserve System (including, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect); such rate to be rounded upward to the next whole multiple of 0.01 percent.

“Lien” means any security interest, mortgage, pledge, hypothecation, collateral, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation, or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan” means, collectively, the Term Loans, the Multi-Draw Term Loans, the Incremental Term Loans, the Revolving Loans and the Swingline Loans.

“Loan Documents” means, collectively, this Agreement, the Notes, the Security Agreement, the CatchMark Timber Security Agreement, the Pledge Agreement, the Guaranty, each Assignment and Assumption, each Account Control Agreement, each Landlord Estoppel Certificate, each Recognition Agreement, each Collateral Assignment of a Material Agreement, each Reaffirmation of Collateral Assignment of a Material Agreement, each Mortgage, each Mortgage Amendment, each Timber Manager Subordination Agreement, the LTC Lease Support Agreement, each Joinder Agreement, and each other agreement, instrument or document executed and delivered pursuant to or in connection with this Agreement and the other Loan Documents, including, without limitation, assignments and reaffirmations of any Loan Document and amendments, supplements and joinders reflecting the Incremental Term Loan Facilities, the Revolver Increase and the Multi-Draw Term Loan Increase.

“Loan Party” means the Borrowers, CatchMark TRS Subsidiary, CatchMark HBU, CatchMark Timber, CatchMark TRS, CatchMark Texas GP, CatchMark Texas LP, any wholly- owned, Domestic Subsidiary of any Loan Party (other than CatchMark Timber) which after the Amendment Effective Date becomes a party hereto and a grantor, pledgor or other obligor under any other Loan Document pursuant to a Joinder Agreement, or, with the consent of the Administrative Agent in its sole discretion, any other Person (other than any Lender Party) which after the Amendment Effective Date becomes a party hereto and a grantor, pledger or other obligor under any other Loan Document pursuant to a Joinder Agreement.

“Loan to Value Ratio” means, as of the date of determination, the ratio, expressed as a percentage, of (a) the sum of (i) the outstanding principal amount of the Loans and (ii) the Aggregate Letter of Credit Usage to (b) the Value of the Timberlands.

“LTC Lease” means the Timber Contract, dated as of June 1, 1956, entered into by and among Gerald B. Saunders, Charlotte A. Saunders, C.V. Saunders, Ruth M. Saunders, J. Frank Alexander, Helen C. Alexander and Alexander Brothers Lumber Company, Inc., as lessors and the predecessors in interest of Timberlands II, as lessee, as amended, restated or otherwise modified from time to time.

“LTC Lease Disposition Proceeds” means amounts payable to the Administrative Agent pursuant to Section 2.4 of the LTC Lease Support Agreement.

“LTC Lease Recognition Agreement” means the LTC Lease Recognition Agreement, dated as of September 28, 2012, by and among the Administrative Agent, Timberlands II and Alexander Brothers Lumber Company both for itself and as the “Managing Representative” for all Sellers (as defined in the LTC Lease) under the LTC Lease.

“LTC Lease Support Agreement” means the LTC Lease Support Agreement, dated as of the October 9, 2007, among Timberlands II, Wells Acquisition, MW, MeadWestvaco Corporation and the Administrative Agent, as amended, restated or otherwise modified from time to time.

“Master Stumpage Agreement” means the Master Stumpage Agreement, dated as of the October 9, 2007, among MW, MeadWestvaco Corporation, Timberlands II and CatchMark TRS Subsidiary, as amended, restated or otherwise modified from time to time in accordance with clause (l) of Section 7.1.11.

“Material Account” means (a) with respect to CatchMark Timber, each Equity Raise Account and (b) with respect to each of the other Loan Parties, each deposit, securities or commodities account (and all replacement accounts) of such Loan Party, including the Revenue Account and the CatchMark TRS Subsidiary Account, other than any Excluded Account.

“Material Account Collateral” means all of each Loan Party’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located:

(a)each Material Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, commodity contracts, and other financial assets credited, carried, deposited or held in any Material Account, including, without limitation, all deposits or wire transfers made to any Material Account, and any and all Material Account Collateral;
(b)any and all amounts or value on deposit in, held in, carried in, or credited to any Material Account that are invested in Cash Equivalent Investments;

(c)all interest, dividends, cash, instruments and other property from time to time received, receivable, or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(d)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

“Material Adverse Effect” means any event or series of events (whether or not related) that could reasonably be expected to have a material adverse effect on:

(a)the business, assets, operations, properties, condition (financial or otherwise) or prospects of the Borrowers and the other Loan Parties, taken as a whole;

(b)the ability of either Borrower or any other Loan Party to perform or pay its Obligations in accordance with the terms hereof or of any other Loan Document;

		
	(c)
	the Administrative Agent’s first priority security interest in the Collateral;

(d)the value of the Collateral or the amount the Administrative Agent and the Lenders would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of the Collateral; or

(e)the validity or enforceability of any Loan Document or the rights and remedies available to the Administrative Agent or the Lenders under any Loan Document.

“Material Agreements” means those agreements that are material to the business or operations of any Borrower or any Subsidiary of a Borrower, including the Supply Agreements and those other agreements identified on Item 1.1(b) (“Material Agreements) of the Disclosure Schedule, including as each such agreement may be amended, restated or otherwise modified from time to time in accordance with Section 7.2.10.

“Material Environmental Amount” means an amount payable by either Borrower or any other Loan Party in excess of $1,000,000 for remedial costs, compliance costs, compensatory damages, punitive damages, fines, penalties or any combination thereof, in each case with respect to Environmental Laws.

“Material Governmental Approvals” is defined in clause (b) of Section 6.19.

“Maximum Incremental Amount” means, $150,000,000 and shall be permanently reduced by the principal amount of any Revolver Increase, Multi-Draw Term Loan Increase or Incremental Term Loan Commitment after the Effective Date, determined on the date such Revolver Increase, Multi-Draw Term Loan Increase or Incremental Term Loan Commitment is effective, and, without duplication, by the principal amount of any Incremental Term Loan, determined on the initial funding date of such Incremental Term Loan.
“Minimum Collateral Amount” means, at any time (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 103% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time, (b) an amount equal to 103% of the Fronting Exposure of the Swingline Lender with respect to Swingline Loans issued and outstanding at such time and (c) in other cases, an amount determined by the Administrative Agent, the Swingline Lender and the Issuing Lenders in their sole discretion.

“Minimum Liquidity Balance” means, as of the date of determination, the result of (a) the Available Revolving Facility Commitment plus (b) the amount of funds contained in the Pledged Accounts on the date of determination.

“Mineral Activity” is defined in clause (c) of Section 7.2.18.

“Mineral Leases” is defined in clause (c)(ii) of Section 7.2.18.

“Minerals” means all mineral substances in, on or under the Land.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means collectively, any mortgage, deed of trust, or similar instrument granting a security interest by any Landholder in favor of the Administrative Agent, for the benefit of the Lender Parties, securing any of the Obligations, in form and content acceptable to the Administrative Agent in its sole discretion; as amended by any applicable Mortgage Amendment.

“Mortgage Amendments” means collectively, any amendment, restatement, supplement, extension, or other modification to any mortgage, deed of trust or similar instrument granting a security interest by the applicable Landholders in favor of the Administrative Agent, for the benefit of the Lender Parties securing any of the Obligations, in form and content acceptable to the Administrative Agent in its sole discretion, executed and delivered by the applicable Landholders, in form and content acceptable to the Administrative Agent in its sole discretion.

“Multi-Draw Term Loan” is defined in clause (f)(i) of Section 2.1.1.

2.1.1.
“Multi-Draw Term Loan Availability Period” is defined in clause (f)(i) of Section

“Multi-Draw Term Loan Commitment” is defined in clause (f)(i) of Section 2.1.1.

“Multi-Draw Term Loan Commitment Amount” means, for each Lender, the amount set forth opposite such Lender’s name on Part III of Schedule II attached hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof), in a joinder reflecting any Multi-Draw Term Loan Increase or in an Assignment and Assumption, as such amount is reduced from time to time pursuant to Section 3.1.1(b), Section 3.1.3 or otherwise.

“Multi-Draw Term Loan Commitment Fee” is defined in Section 3.4.

“Multi-Draw Term Loan Commitment Termination Date” means the earliest of (a) the third anniversary of the Effective Date, (b) the date on which the Multi-Draw Term Loan Commitment Amount is terminated in full or reduced to zero pursuant to Sections 3.1.1(b), Section 3.1.3, 8.2 or 8.3 or otherwise and (c) the date on which any Commitment Termination Event occurs. Upon the occurrence of any event described above, the Multi-Draw Term Loan Commitments shall terminate automatically and without any further action.

“Multi-Draw Term Loan Increase” means an increase in the Multi-Draw Term Loan Commitment Amount during the Multi-Draw Term Loan Availability Period and in the aggregate of up to the Maximum Incremental Amount; provided that, (a) the Borrowers give the Administrative Agent at least thirty (30) days’ prior written notice (or such shorter period of time as the Administrative Agent may agree to in its sole discretion); (b) no Default or Event of Default shall have occurred and be continuing or result after giving effect to such increase in the Multi-Draw Term Loan Commitment Amount; (c) the Loan Parties shall be in compliance after giving effect to any Multi-Draw Term Loan 

Increase with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4; (d) compliance with clause (c) (calculated after giving effect to such Multi-Draw Term Loan Increase) shall be evidenced by a Compliance Certificate delivered to the Administrative Agent; (e) the aggregate of any original issue discount or upfront fees applicable to any such Multi-Draw Term Loan Increase shall not be more than 1% of the principal amount of such Multi-Draw Term Loan Increase; (f) the Borrowers have executed and delivered any Notes requested under Section 2.2 regarding such Multi-Draw Term Loan Increase; and (g) the Borrowers shall have delivered any modifications or additional Real Property Documents as the Administrative Agent shall have requested in its sole discretion pursuant to such Multi-Draw Term Loan Increase.

“Multi-Draw Term Loan Lender” means each Lender with a Multi-Draw Term Loan Commitment or holding Multi-Draw Term Loans as designated on Schedule II hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof), in a joinder reflecting any Multi-Draw Term Loan Increase or in an Assignment and Assumption.

“Multi-Draw Term Note” means a promissory note of the Borrowers that is payable to any Multi-Draw Term Loan Lender, substantially in the form of Exhibit A-4 attached hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Multi-Draw Term Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“Multiemployer Plan” means a Pension Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“MW” means MeadWestvaco Coated Board, Inc., a Delaware corporation, and its successor by merger MeadWestvaco Coated Board, LLC, a Delaware limited liability company, as applicable.

“MW Supply Agreements” means, collectively, the Master Stumpage Agreement and the Fiber Supply Agreement.

“Net Collateral Disposition Proceeds” means the result of (a) the gross cash proceeds received by either of the Borrowers or any other Loan Party with respect to the sale, lease, transfer, or disposition (whether voluntarily or involuntarily, or under power of eminent domain, condemnation or otherwise) of any of the Collateral (other than the sale of Timber in accordance with clause (m) of Section 7.1.11 and the termination of Timber Leases in accordance with clause (x) of Section 7.1.11), including any cash payments received by way of a deferred payment of principal pursuant to a permitted note or installment receivable or otherwise, but only when and as received, minus (b) (i) all reasonable and customary fees and expenses actually paid in cash by either of the Borrowers or any other Loan Party in connection with such disposition which fees and expenses have not been paid to a Loan Party or an Affiliate of a Loan Party and (ii) all taxes actually paid or reasonably estimated by either of the Borrowers (determined in good faith by a Financial Officer) to be payable in cash for the same year with respect to such disposition.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of the affected Lender in accordance with the terms of Section 11.1 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is a not a Defaulting Lender at such time.

“Non-Recourse” means, with respect to any Unrestricted Timber Transaction, that none of the Loan Parties other than CatchMark Timber and none of the Subsidiaries of any of the Loan Parties other than CatchMark Timber (a) has made or will make any Investment with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary; (b) has any liability (including any Contingent Liability) with respect to the Indebtedness or other obligations with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary; or (c) is a party or otherwise subject to any agreement or arrangement with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary.

“Note” means, as the context may require, a Revolving Note, a Swingline Note, a Term Note, a Multi-Draw Term Note, or any notes evidencing any Incremental Term Loan Commitment or Incremental Term Loans as provided in the amendment or supplement to this Agreement establishing such Incremental Term Loan Facility.

“Obligations” means (a) all obligations (monetary or otherwise) of either Borrower and each other Loan Party arising under or in connection with this Agreement and each other Loan Document, including principal, interest (including post-default interest and interest accruing after the commencement of any proceeding under any Debtor Relief Laws referred to in Section 8.1.7, whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding), reimbursement obligations, fees, indemnities, costs and expenses (including the reasonable fees and disbursements of counsel to the Administrative Agent and each Lender required to be paid by the Borrowers) that are owing under this Agreement and the other Loan Documents and (b)
all obligations of either Borrower under any Rate Protection Agreements between either Borrower and any Lender or an Affiliate of any Lender for so long as such Lender remains a Lender, in each case whether now existing or hereafter incurred, direct or indirect, absolute or contingent, and due or to become due; provided however, in each case, Excluded Swap Obligations of any Loan Party shall in any event be excluded from “Obligations” owing by such Loan Party.

“Off-Balance Sheet Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use of property or sale of assets that create obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, could be characterized as Indebtedness of such Person (without regard to accounting treatment).

“Organizational Document” means, with respect to any Loan Party, its articles or certificate of incorporation, organization or formation, partnership agreement, operating agreement, by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized Equity Interests.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sole or assigned any interest in any Loan or Loan Documents).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, 

or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4.5).

“Participant” is defined in clause (d) of Section 11.11.

“Participant Register” is defined in clause (d) of Section 11.11.

“Pension Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Percentage” means, relative to any Lender, the percentage set forth opposite the name of such Lender (i) on Schedule II hereto, (ii) in a duly executed Assignment and Assumption, as such percentage may be adjusted from time to time pursuant to each Assignment and Assumption executed and delivered pursuant to Section 11.11 or pursuant to Section 4.12, (iii) in any duly executed joinder pursuant to which such Person is joined to this Agreement as a Lender as provided in Section 2.1.1(b) with respect to any Incremental Term Loan Facility, in Section 2.1.1(c)(ii)(A) with respect to any Revolver Increase, and in Section 2.1.1(f)(v)(A) with respect to any Multi-Draw Term Loan Increase, or (iv) on an updated Schedule II to this Agreement delivered from time to time by the Administrative Agent pursuant to Section 2.2(d) reflecting any Incremental Term Loan Facilities permitted by Section 2.1.1(b), any Revolver Increase permitted by Section 2.1.1(c)(ii), or any Multi-Draw Term Loan Increase permitted by Section 2.1.1(f)(v). For the avoidance of doubt, each Revolving Lender’s Percentage of any Letter of Credit Usage and of any Swingline Loans shall be determined by such Revolving Lender’s Percentage of the aggregate Revolving Loan Commitments.

“Permitted Escrow Amount” means an amount not to exceed (a) in the aggregate 5% of the aggregate purchase price, lease payments or other cash consideration with respect to any transaction or series of transactions or (b), if the Permitted Escrow Increase Conditions have been satisfied, in the aggregate 7% of the aggregate purchase price, lease payments or other cash consideration with respect to any transaction or series of transactions.

“Permitted Escrow Increase Conditions” means, collectively, the Borrowers have notified the Administrative Agent in writing that (a), despite the use of commercially reasonable efforts on the part of the Loan Parties and their respective Subsidiaries, the Loan Parties reasonably anticipate that the requirements of Section 7.1.9 or Section 5.2 regarding the delivery of Real Property Documents required by the Administrative Agent in its sole discretion with respect to such transaction or series of transactions will not be satisfied by the date the applicable Loan Parties are contractually required to consummate such transaction or series of transaction, and (b) the applicable seller or sellers has agreed in writing to extend the date for the consummation of such transaction or series of transactions to a later date which the Borrowers reasonably believe will be sufficient time for the satisfaction of such requirements on the condition that the applicable Loan Parties increase the cash earnest money deposit or other Credit Support with respect to such transaction or series of transactions.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA) that is 

maintained, sponsored or contributed to by any of the Borrowers, any other Loan Party, any of their Subsidiaries, or any ERISA Affiliate thereof or to which any of the Borrowers, any other Loan Party, any of their Subsidiaries, or any ERISA Affiliate thereof has or may incur any liability or obligation.

“Platform” has the meaning assigned to such term in Section 11.2(c).

“Pledge Agreement” means that certain Second Amended and Restated Pledge Agreement, dated as December 19, 2013, made by the Borrowers, CatchMark TRS, CatchMark TRS Subsidiary, CatchMark HBU, and each additional grantor party thereto from time to time in favor of the Administrative Agent for the benefit of itself and each other Lender Party pursuant to a Joinder Agreement or otherwise.
“Pledged Account” means any bank, securities or commodity account of any of the Loan Parties (other than CatchMark Timber) provided that such bank, securities, or commodity account is at an Account Bank and is subject to an Account Control Agreement.

“PLM Leases” means those Timber Leases labeled as such on Item 1.1(c) of the Disclosure Schedule (“PLM Leases”).

“Pro Forma Fixed Charge Coverage Ratio” means the ratio derived on any date of determination by dividing for the most recent four Fiscal Quarters for which a Compliance Certificate has been delivered pursuant to Section 7.1.1(e) (the “Measurement Period”), (a) (i) EBITDA for CatchMark Timber, calculated on a consolidated basis less (ii) all capital expenditures related to Land maintenance paid by CatchMark Timber or any of its Subsidiaries on a consolidated basis less (iii) any dividends or distributions paid by CatchMark Timber on a consolidated basis by (b) cash interest expense paid by CatchMark Timber or any of its Subsidiaries on a consolidated basis; provided that, each subclause of clause (a) and clause (b) shall be adjusted to give effect to any action proposed or actually taken by any Loan Party since the end of the Measurement Period if the ability of such Loan Party to take such action under any Loan Document is conditioned on a satisfactory Pro Forma Fixed Charge Coverage Ratio; provided further, if any Unrestricted Timber Subsidiaries have been acquired or organized by CatchMark Timber or if any Unrestricted Timber Transactions have been consummated, each reference to “CatchMark Timber” in this definition shall be deemed replaced with “CatchMark Partnership.”

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party
(a)that has total assets exceeding $10,000,000 at the time any guaranty of or any granting of a security interest to secure obligations under such Swap Obligation becomes effective or (b) that otherwise constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Quarterly Payment Date” means the last Business Day of each March, June, September and December, or, if any such day is not a Business Day, the next succeeding Business Day.

“Rate Protection Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or 

any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms  and  conditions  of,  or  governed  by,  any  form of  master  agreement  published  by  the International  Swaps  and  Derivatives  Association,  Inc.,  any  International  Foreign  Exchange Master Agreement, or any other master agreements.

“Reaffirmation of Collateral Assignment of Material Agreement” means each Reaffirmation of Collateral Assignment of Material Agreement, in form and substance reasonably satisfactory to the Administrative Agent, executed by each relevant Loan Party and other Persons that are parties to the Collateral Assignment of Material Contract which is the subject of such Reaffirmation of Collateral Assignment of Material Agreement. For the avoidance of doubt, Reaffirmations of Collateral Assignment of Material Agreements executed and delivered in connection with the 2007 Credit Agreement, 2010 Credit Agreement or the Existing Credit Agreement are included in this definition.

“Real Property” means, collectively, (a) the Land, (b) the Leasehold Interests, and (c) the Minerals.

“Real Property Documents” means, with respect to the acquisition of any Real Property on or after the Effective Date, all of the following (except to the extent made a post-closing delivery by the Administrative Agent in its sole discretion or waived by the Administrative Agent in its sole discretion), each of which shall be in form and substance acceptable to the Administrative Agent in its sole discretion:

(a)all Transaction Documents relating to such additional Real Property, including all Timber Leases relating thereto;

(b)a Collateral Assignment of Material Agreements regarding all material Transaction Documents relating to such additional Real Property and duly executed by the applicable Loan Parties and the relevant third-parties to the material Transaction Documents;

(c)a Landlord Estoppel Certificate relating to such additional Real Property, if applicable;

(d)a duly executed, first-priority Mortgage or Mortgage Amendment of the applicable Landholder regarding the additional Real Property (subject, in the case of non- possessory security interests only, to Liens permitted by Section 7.2.3) and, to the extent requested by the Administrative Agent in its sole discretion, the existing Real Property;

(e)evidence that all necessary U.C.C. financing statements relating to the additional Real Property naming the applicable Landholder as the debtor and the Administrative Agent as the secured party have been properly filed in the same offices where the applicable Mortgage or Mortgage Amendment is filed;

(f)either (i) an endorsement to the applicable existing mortgagee’s title insurance policies covering the Additional Real Property, which shall (A) be issued at ordinary rates; (B) extend the effective date of each such policy to the date of the applicable Mortgage Amendments, (C) confirm no change in the first priority Lien and security interest in favor of the Administrative Agent for the benefit of the Lender Parties, except for changes acceptable to the Administrative Agent; and (D) be issued directly by the title insurance company who issued the original title insurance policy; or (ii) a mortgagee’s title insurance policy or marked up unconditional commitment for such insurance, in each 

case, for the additional Real Property, which shall (A) be in an amount satisfactory to the Administrative Agent; (B) be issued at ordinary rates; (C) insure that each Mortgage and Mortgage Amendment insured thereby creates a valid first priority security interest in the additional Real Property free and clear of all Liens, except for such Liens as are acceptable to the Administrative Agent; (D) name the Administrative Agent for the benefit of itself and the Lender Parties, as the insured thereunder; (E) be in the form of ALTA Loan Policy - 2006 Form B (or equivalent policies), if available; (F) contain such endorsements and affirmative coverage as the Administrative Agent may require, including without limitation (to the extent applicable with respect to the additional Real Property and available in the jurisdiction in which such Additional Real Property is located), the following: variable rate endorsement; survey same as map endorsement; comprehensive endorsement; first loss, last dollar and tie-in endorsement; access coverage; separate tax parcel coverage; usury; doing business; subdivision; environmental protection lien; CLTA 119.2; and such other endorsements as the Administrative Agent shall require, including endorsements in order to provide insurance against specific risks identified by the Administrative Agent in connection with such additional Real Property and (G) be issued directly by a title insurance company acceptable to the Administrative Agent and with such co-insurance and reinsurance as may be required by the Administrative Agent;

(g)to the extent requested by the Administrative Agent in its reasonable discretion, an endorsement to each of the existing mortgagee’s title insurance policies regarding the existing Real Property;

(h)evidence satisfactory to the Administrative Agent that all premiums in respect of each such endorsement, policy or commitment, all charges for mortgage recording and similar taxes, and all related expenses, if any, have been paid by the Loan Parties;

(i)a copy of (i) all documents referred to, or listed as exceptions to title in, the title endorsements, policies or commitments referred to above and (ii) all other material documents affecting the Real Property, including all building, construction, environmental and other permits, licenses, franchises, approvals, consents, authorizations and other approvals required in connection with the construction, ownership, use, occupation or operation of the Real Property;

(j)evidence of the insurance coverage (together with endorsements thereto) required to be maintained pursuant to Section 7.1.4 with respect to such additional Real Property by this Agreement, the applicable Mortgage, Mortgage Amendments or any other Loan Document;

(k)if requested by the Administrative Agent in its reasonable discretion, a survey regarding the additional Real Property certified to Administrative Agent meeting such standards as Administrative Agent may reasonably establish;

(l)evidence that the Loan Parties have taken all actions required under the Flood Laws and/or requested by the Administrative Agent to assist in ensuring that each Lender
is in compliance with the Flood Laws applicable to the Collateral, including obtaining a flood insurance policy concerning such additional Real Property if required by Law;

(m)(i) an environmental questionnaire of the Administrative Agent with respect to such additional Real Property, (ii), to the extent required by Section 7.1.6(b), a report of an Environmental Consultant with respect to such additional Real Property and (iii) satisfactory evidence that all environmental matters, if any, have been remediated;

(n)an appraisal with respect to the additional Real Property from a nationally 

recognized forestry appraisal firm;

(o)a supplement to Item 1.1(a) of the Disclosure Schedules setting forth the allocated Cost Basis for such Real Property, supplements to the other Items of the Disclosure Schedules, and supplements to the schedules to the Security Agreement, as applicable;

(p)a supplement to the most recently delivered Harvest Plan with respect to the additional Real Property;

(q)legal opinions, dated on or about the date of the Mortgage or Mortgage Amendment and addressed to the Administrative Agent and all the Lenders, from legal counsel for the Borrowers, regarding the instruments, documents, agreements and filings described in clauses (b), (d) and (e) of this definition;

(r)(i) search reports certified by a party acceptable to the Administrative Agent, dated a date reasonably near (but prior to) the date of the Mortgage or Mortgage Amendment, listing all effective U.C.C. financing statements, fixture filings, federal and state tax Liens, judgment Liens and other Liens relevant to the additional Real Property (including the Timber) which name the seller, landlord or prior owners as the debtor, and which are filed in such jurisdictions as the Administrative Agent may reasonably request, together with copies of such financing statements and (ii) evidence that all Liens in respect of any Indebtedness secured by such additional Real Property have been released;

(s)evidence that all required consents and approvals shall have been obtained and be in full force and effect with respect to the transactions contemplated by the Real Property Documents from (i) all relevant Governmental Authorities and (ii) any other Person whose consent or approval is necessary or the Administrative Agent deems appropriate to effect such transactions; and

(t)all other reasonably requests of the Administrative Agent made with respect to such additional Real Property (including the Timber) or the transactions related thereto.

Notwithstanding the above,

(1)if such Real Property is acquired without the use of any proceeds of any Loan, clauses (b), (c), and (q) through (t) of the definition of “Real Property Documents” shall be delivered to the extent requested by the Administrative Agent in its reasonable discretion;

(2)if such Real Property is acquired with the proceeds of a Revolver Real Property Acquisition Loan (whether or not such Revolver Real Property Acquisition Loan has been repaid with the proceeds of a Multi-Draw Term Loan), the Administrative Agent shall accept delivery of one or more of the Real Property Documents described in clauses (b), (d), (e), (f), (g), (h), (i)(i), (k), and (q) on a date after the closing of the acquisition of such Real Property; provided that, unless delivery of such Real Property Document is waived by the Administrative Agent in its sole discretion, each such Real Property Document shall be delivered within 90 days of the closing of such acquisition; and

(3)if such Real Property is acquired for an amount less than $3,000,000 in connection with a single transaction or $4,000,000, in the aggregate for all such transactions, clauses (n), (o), and (p) shall be at the option of the Loan Parties and the Administrative Agent shall accept delivery of one or more of the Real Property Documents described in clauses (b), (d), (e), (f), (g), (h), (i)(i), (k), and (q) on a date after the closing of the acquisition of such Real Property; provided that, unless delivery of such Real Property Document is waived by the Administrative Agent in its sole discretion, each such 

Real Property Document shall be delivered within 90 days of the closing of such acquisition.

“Recipient” means (a) the Administrative Agent and (b) any Lender, as applicable.

“Recognition Agreement” means, collectively, the Recognition Agreement (Fiber Supply Agreement) and the Recognition Agreement (Master Stumpage Agreement), each dated on or about the date of the 2010 Credit Agreement, the LTC Lease Recognition Agreement dated on or about the date of the Existing Credit Agreement, and each other recognition agreement, entered into after the Effective Date, among the relevant Loan Parties, the Administrative Agent and any other relevant Person, in form and substance acceptable to the Administrative Agent in its sole discretion.

“Register” is defined in clause (c) of Section 11.11.

“REIT Status” is defined in clause (x) of Section 7.2.6.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Release” means a “release” or “threatened release” as such terms are defined in CERCLA, including any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material into the indoor or outdoor environment, including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials or pollutants or contaminants.

“Release Parcel” is defined in clause (n) of Section 7.1.11.

“Removal Effective Date” is defined in clause (b) of Section 10.6.
“Required Lenders” means, at the time any determination thereof is to be made, at least two (to the extent more than one Lender or Voting Participant holds Commitments or Loans under the applicable facility) Lenders (including Voting Participants) who are not Defaulting Lenders and who hold in the aggregate more than 51% of the sum of (a) the then aggregate unused Commitments plus (b) the then aggregate outstanding principal amounts of all Loans; provided however, CoBank, ACB and CoBank, FCB, acting alone, shall not constitute “Required Lenders” to the extent more than one other Lender or Voting Participant holds Commitments or Loans under the applicable facility. For purposes of this definition, the aggregate principal amount of all Swingline Loans owing to the Swingline Lender and of the Letter of Credit Usage owing to any Issuing Bank shall be considered to be owed to the Revolving Lenders ratably in accordance with their respective Revolving Loan Commitments. The Commitments and Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Resignation Effective Date” is defined in clause (a) of Section 10.6.

“Resource Conservation and Recovery Act” means collectively the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, as amended, 42 U.S.C. §§6901, et seq., as in effect from time to time.

“Revenue Account” is defined in Section 7.1.14.

“Revolver Commitment Fee” is defined in Section 3.3

“Revolver Increase” means an increase in the Revolving Loan Commitment Amount after the Effective Date in the aggregate of up to the lesser of $20,000,000 and the Maximum Incremental Amount; provided that, (a) the Borrowers give the Administrative Agent at least ten (10) days prior written notice; (b) no Default or Event of Default shall have occurred and be continuing or result after giving effect to such increase in the Revolving Loan Commitment Amount; (c) the Loan Parties shall be in compliance after giving effect to any Revolver Increase with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4; (d) compliance with clause (c) (calculated after giving effect to such Revolver Increase) shall be evidenced by a Compliance Certificate delivered to the Administrative Agent; (e) the aggregate of any original issue discount or upfront fees applicable to any such Revolver Increase shall not be more than 1% of the principal amount of such Revolver Increase; (f) the Borrowers have executed and delivered any Notes requested under Section 2.2 regarding such Revolver Increase, and (g) the Borrowers shall have delivered any modifications or additional Real Property Documents as the Administrative Agent shall have requested in its sole discretion pursuant to such Revolver Increase.

“Revolving Availability Period” is defined in clause (c)(i) of Section 2.1.1.

“Revolving Lender” means each Lender with a Revolving Loan Commitment or holding Revolving Loans as designated on Schedule II hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof), in a joinder reflecting any Revolver Increase or in an Assignment and Assumption.

“Revolving Loan” is defined in clause (c)(i) of Section 2.1.1.

“Revolving Loan Commitment” is defined in clause (c)(i) of Section 2.1.1.

“Revolving Loan Commitment Amount” means, for each Lender, the amount set forth opposite such Lender’s name on Part II of Schedule II attached hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof), in a joinder reflecting any Revolver Increase or in an Assignment and Assumption, as such amount is reduced from time to time pursuant to Section 3.1.1(b) or Section 3.1.3 or otherwise and as such amount may be increased pursuant to Section 2.1.1(c)(ii).

“Revolving Loan Commitment Termination Date” means the earliest of (a) the Stated Maturity Date, (b) the date on which the Revolving Loan Commitment Amount is terminated in full or reduced to zero pursuant to Section 3.1.1(b) or Section 3.1.3, 8.2 or 8.3 or otherwise and the date on which any Commitment Termination Event occurs. Upon the occurrence of any event described above, the Revolving Loan Commitments shall terminate automatically and without any further action.

“Revolving Note” means a promissory note of the Borrowers that is payable to any Revolving Lender, substantially in the form of Exhibit A-2 attached hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Revolving Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“Revolver Real Property Acquisition Loans” is defined in Section 4.10.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“SEC” means the Securities Exchange Commission.

“Security Agreement” means that certain Second Amended and Restated Security Agreement, dated as of December 19, 2013, made by the Borrowers, CatchMark TRS, CatchMark TRS Subsidiary, CatchMark HBU, and each additional grantor party thereto from time to time in favor of the Administrative Agent for the benefit of itself and each other Lender Party pursuant to a Joinder Agreement or otherwise.

“Shell Subsidiary” means any wholly-owned Domestic Subsidiary of any Loan Party (other than CatchMark Timber) so designated by prior written notice to the Administrative Agent by the Borrowers; provided that, (a) no such Subsidiary shall own, hold, acquire or otherwise have any rights in any Equity Interests of any Person unless such Person is also a Shell Subsidiary, (b) no such Subsidiary shall own, hold, acquire or otherwise have any rights in any securities, deposit or commodities accounts other than deposit accounts with an aggregate daily balance and inter-daily balance for all such accounts of all such Subsidiaries of less than $50,000 at all times, (c) no Loan Party or Subsidiary of any Loan Party shall create, incur, assume or suffer to exist or otherwise become liable in respect of any Indebtedness or Contingent Liability owed to or on behalf of any such Subsidiary, (d) the aggregate capital contributions to or capital accounts or balances of all such Subsidiaries shall be less than $50,000 in the aggregate at all times, (e) the aggregate fair market or book value of all assets owned or held by or otherwise subject to any rights of any such Subsidiaries shall be less than $50,000 in the aggregate at all times, and (f) all such Subsidiaries shall be (i) dissolved or otherwise disposed of by means and subject to terms and conditions approved by the Administrative Agent in its sole discretion or (ii) joined to the Loan Documents as a Loan Party, in each case, within 90 days of the date such Subsidiary was established or otherwise acquired directly or indirectly by any Loan Party.

“Solvency Certificate(s)” means those certain Solvency Certificates, in form and substance reasonably acceptable to the Administrative Agent, and executed by a  Financial Officer of CatchMark Partnership, as the Manager of Timberlands II, CatchMark Timber as the General Partner of CatchMark Partnership, Timber Manager as Manager of CatchMark TRS Subsidiary, CatchMark Partnership as the Manager of CatchMark HBU, CatchMark Timber and CatchMark TRS, respectively, and an Authorized Officer of the other Loan Parties.

“Solvent” means, when used with respect to any Person, that, as of any date of determination:

(a)the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date, as such value is established and such liabilities are evaluated in accordance with Section 101(32) of the Federal Bankruptcy Code and the state Laws governing determinations of the insolvency of debtors of New York and each state where such Person is doing business or has its principal place of business;

(b)such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business; and

		
	(c)
	such Person will be able to pay its debts as they mature.

For purposes of this definition, (i) “debt” means liability on a “claim” and (ii) “claim” means any
(i)right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or 

(y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Stated Maturity Date” means, with respect to (a) the Revolving Loans, December 19, 2018, (b) the Term Loans, December 19, 2018, (c) the Multi-Draw Term Loans, December 19, 2020 and (d) the Incremental Term Loans under any Incremental Term Loan Facility, the maturity date provided in the amendment or supplement to this Agreement establishing such Incremental Term Loan Facility.

“Subsidiary” means, with respect to any Person:

(a)any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors or other governing
body of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, or by one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than 50% of such Equity Interests (whether by proxy, agreement, operation of law or otherwise); or

(b)any partnership, joint venture, limited liability company or other entity as to which such Person, or one or more Subsidiaries of such Person, owns (whether in the form of voting or participation in profits or capital contribution) more than a 50% Equity Interest, acts as the general partner or has power to direct or cause the direction of management and policies, or the power to elect the managing partner (or the equivalent), of such partnership, joint venture or other entity, as the case may be.

“Supply Agreement” means, collectively, the MW Supply Agreements and each other supply agreement, among the relevant Loan Parties and other relevant Persons, regarding the selling of Timber acquired after the Effective Date, in form and substance acceptable to the Administrative Agent in its sole discretion.

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” means the commitment of the Swingline Lender to make the Swingline Loans, which commitment shall be $5,000,000 on the Effective Date, as such amount may be adjusted, if at all, from time to time in accordance with this Agreement.

“Swingline Lender” means CoBank and its successors and assigns.

“Swingline Loan” means an advance or advances under the Swingline Commitment.

“Swingline Note” means a note of the Borrowers substantially in the form of Exhibit A- 3, and any replacements, reinstatements, renewals, or extensions of any such note, in whole or in part.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholdings), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Loan” means those certain Term Loans made by the Lenders pursuant to the terms of the Existing Credit Agreement, which Term Loans are continued as Loans under this Agreement, as described on Part I of Schedule II attached hereto (or as updated from time to time by the Administrative Agent pursuant to the terms hereof) or in an Assignment and Assumption and as further set forth in clause (a) of Section 2.1.1.
“Term Note” means a promissory note of the Borrowers that is payable to any Term Lender, substantially in the form of Exhibit A-1 attached hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Term Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“Timber” means any trees of any age, species or condition, whether standing, lying, growing or to be grown, alive or dead and now or hereafter at any time located on the Real Property.

“Timber Deed” means, collectively (i) that certain Timber Deed, dated as of April 11, 2014, by and between ForesTree VI, LP and CatchMark TRS Harvesting Operations, LLC regarding certain Timber located in Appling County, Georgia, and (ii) any other timber deed or similar instrument conveying rights in Timber to any Landholder from time to time, in form and content acceptable to the Administrative Agent in its sole discretion, together with any replacement thereof.

“Timber Leases” means, collectively, the Timber Deeds, the LTC Lease, the PLM Leases, and any other lease, sublease or license of real estate by any Landholder from time to time, together with any replacement thereof.

“Timber Lease Termination Proceeds” means the gross cash proceeds received by any Landholder or any other Loan Party with respect to the termination or other disposition of any PLM Lease or any portion of the LTC Lease or any other Timber Lease.

“Timber Manager” means Forest Resource Consultants, Inc., a Georgia corporation, and any other manager of the Timberland that is acceptable to the Administrative Agent; provided that, unless consented to by the Administrative Agent in its sole discretion, there shall be no more than one Timber Manager at any one time.

“Timber Manager Subordination Agreement” means, collectively, that certain Amended and Restated Timber Manager Subordination Agreement, dated as of March 24, 2010, among the Administrative Agent, for the benefit of itself and the other Lender Parties, the Borrowers, CatchMark TRS Subsidiary, CatchMark HBU, and the Timber Manager and each other subordination agreement regarding any Timberland Operating Agreement, among each relevant Loan Party, the Administrative Agent, and the Timber Manager, in form and substance acceptable to the Administrative Agent in its sole discretion.

“Timberland Operating Agreement” means collectively, (i) that certain Timberland Operating Agreement, dated January 1, 2013, among CatchMark TRS Subsidiary, CatchMark HBU, Timberlands II, and the Timber Manager, as amended, restated, supplemented or modified from time to time in accordance with Section 7.2.10, pursuant to which CatchMark TRS Subsidiary, Timberlands II and CatchMark HBU have appointed the Timber Manager as manager for certain timberlands owned by Timberlands II and CatchMark HBU and (ii) each other operating agreement among the relevant Loan Parties and the Timber Manager, as amended, restated, supplemented or modified from time to time in accordance with Section
7.2.10, pursuant to which the relevant Loan Parties appoint the Timber Manager as manager for certain 

Timberlands acquired after the Effective Date, in form and substance acceptable to the Administrative Agent in its sole discretion.

“Timberlands” means, collectively, the Land and the Leasehold Interests.

“Timberlands II” is defined in the preamble.

“Transaction Agreements” means each instrument, document or agreement pursuant to which any Landholder acquires any Real Property or conveys in fee simple or lease, sublease or license any Real Property on or after the Effective Date.

“Transaction Documents” means (a) the Supply Agreements, and (b) the Transaction Agreements, in each case, together with all schedules and exhibits thereto, and each other instrument or document executed and delivered pursuant to or in connection with any Supply Agreements or any Transaction Agreements, and the various assignment and assumption agreements and deed contemplated under any of the Supply Agreements or any of the Transaction Agreements.

“U.C.C.” means the Uniform Commercial Code as from time to time in effect in the State of New York.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107- 56.

“U.S. Person” means any Person that is a “United States Person” as identified in Subsection 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 4.6(f)(ii)(B)(3).

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Unrestricted Timber Subsidiary” means any wholly-owned Subsidiary, other than CatchMark Partnership and any of its Subsidiaries, acquired or organized by CatchMark Timber for the purpose of consummating an Unrestricted Timber Transaction, provided that (a) each such direct Subsidiary of CatchMark Timber shall act as an intermediate holding company performing substantially the same functions as CatchMark Partnership in connection with such Unrestricted Timber Transaction and (b) each such Subsidiary satisfies the requirements set forth in the definition of “Unrestricted Timber Transaction.”

“Unrestricted Timber Transaction” means purchase or acquisition in fee simple or by lease, sublease or license of real property (either through the purchase of assets or the purchase of Equity Interests of any Person that owns such assets) for the purpose of harvesting Timber thereon, provided that (a) each such transaction is consummated and conducted exclusively by Unrestricted Timber Subsidiaries; (b) each such Unrestricted Timber Subsidiary performs the functions specified in clause (a) of the proviso that is contained in the definition of “Unrestricted Timber Subsidiary”; (c) each such Unrestricted Timber Subsidiary has been capitalized solely through amounts contributed by CatchMark Timber or funded by Persons other than any Loan Party (other than CatchMark Timber) or any of their Subsidiaries; (d) CatchMark Timber shall not in any respect be subject to any material restriction or obligation imposed by, or provide any additional material benefits to, the lenders providing any financing 

with respect to such transaction, in each case without complying with Section 7.2.19; (e) all the representations and warranties contained in this Agreement and in the other Loan Documents shall be true and correct, provided that if any such representation or warranty relates to an earlier date it shall be true and correct as of such date; (f) all obligations in connection with each such transaction are Non-Recourse; (g) no Default or Event of Default has occurred or is continuing or would result from the consummation of each such transaction; (h) each such transaction shall be consummated in accordance with the Laws and (i) no Material Adverse Effect could reasonably be expected to result from the consummation of each such transaction.

“Value of the Timberlands” means, with respect to the Real Property, the appraised value thereof as determined by the appraisal dated December 31, 2012, or the most recent appraisal delivered thereafter, including any appraisal delivered pursuant to Section 5.2.2; provided, however, that such value shall be reduced upon the sale of any Real Property or termination of any Timber Lease over certain thresholds provided in clauses (w) and (x) of Section 7.1.11 and may be increased upon the acquisition of any Real Property over certain thresholds as provided in clause (w) of Section 7.1.11, in each case, as such value is calculated and reported by the Landholders in accordance with clauses (x) and (w) of Section 7.1.11.

“Voting Participant” is defined in clause (d) of Section 11.11.

“Voting Participant Notice” is defined in clause (d) of Section 11.11.

“Wells Acquisition” means Wells Timberland Acquisition, LLC.

“Withholding Agent” means any Loan Party and Administrative Agent.

SECTION 1.2    Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Disclosure Schedule and each other Loan Document.

SECTION 1.3    Certain Rules of Construction. References to “Sections,” “Exhibits” and “Schedules” shall be to Sections, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically provided. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The word “or” is not exclusive. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and any successor statutes and regulations, and the words “asset” and “property” shall be construed to have 

the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived by the Required Lenders pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived by the Required Lenders. Whenever any provision in any Loan Document refers to the knowledge (or an analogous phrase) of any Loan Party or any Subsidiary of any Loan Party, such words are intended to signify that a member of management or officer or member of the board of directors of such Loan Party or such Subsidiary has actual knowledge or awareness of a particular fact or circumstance or a member of management or officer or director of such Loan Party or such Subsidiary, if it had exercised reasonable diligence, would have known or been aware of such fact or circumstance. For purposes of computing a period of time from a specified date, the word “from” means “from and including” and the word “to” and “until” each mean “to, but excluding.” Any reference to a Loan Party or any other Person that is an individual as “it” shall refer to such Loan Party or other Person in his or her individual capacity. Unless the context otherwise requires, “issuance,” “issue,” “issued” or similar terms shall in reference to any Letter of Credit be deemed to include any issuance of or any increase, extension or renewal any Letter of Credit under this Agreement. Unless the context otherwise requires, “acquire,” “acquisition” or similar terms shall in reference to any existing or additional Real Property be deemed to include any acquisition in fee simple or by lease, sublease or license of any such Real Property. Unless the context otherwise requires, “sale,” “disposition” or similar terms shall in reference to any existing or additional Real Property be deemed to include any sublease of any such Real Property. On the FCCR Test Date and thereafter, references in this Agreement or any other Loan Document to compliance with Section 7.2.4(a) (whether specifically or generally such as a reference to compliance with all covenants set forth in the Loan Documents) after giving effect to a specified event, transaction or otherwise, shall be calculated using the definition of Pro Forma Fixed Charge Coverage Ratio.

SECTION 1.4    Accounting Determinations. Unless otherwise specified, all accounting terms “used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made, and all financial  statements  required  to  be  delivered  hereunder  or  thereunder  shall  be  prepared  in
accordance with, those generally accepted accounting principles (“GAAP”) as in effect from time to time.

ARTICLE II FUNDING OF LOANS

SECTION 2.1    Amount and Terms of Loans.

SECTION 2.1.1    The Loans.

(a)Term Loans. The Administrative Agent and the Lenders previously lent to the Borrowers the Term Loans, and the outstanding principal balance thereof shall be continued as Loans made under and governed by this Agreement. Amounts outstanding under the Term Loan that are repaid or prepaid may not be reborrowed.

(b)Incremental Term Loans. The Borrowers and any one or more Lenders (including any Person not previously a Lender hereunder who executes and delivers a joinder agreement executed by the Borrowers, the Administrative Agent and such Lender, in form and substance reasonably 

acceptable to each of them), which Lenders are reasonably acceptable to the Administrative Agent, may agree, upon at least thirty (30) days’ prior notice to the Administrative Agent (or such shorter period of time as the Administrative Agent may agree to in its sole discretion), that such Lenders shall make one or more additional term loan facilities available to the Borrowers under this clause (b) of Section 2.1.1 (each an “Incremental Term Loan Facility” and collectively, the “Incremental Term Loan Facilities”; each commitment thereunder an “Incremental Term Loan Commitment” and collectively, the “Incremental Term Loan Commitments”; and the loans thereunder, each an “Incremental Term Loan” and collectively, the “Incremental Term Loans”) on substantially the same terms and subject to substantially the same conditions as the Term Loans. Any Incremental Term Loan or Incremental Term Loan Commitment shall be documented by an amendment or supplement to, or a restatement of, this Agreement, setting forth the specific terms and conditions of the Incremental Term Loan Facility, which amendment, supplement or restatement shall be signed by the Borrowers and the Lenders providing such Incremental Term Loan Commitments. Notwithstanding the foregoing: (i) the aggregate principal amount of all Incremental Term Loan Commitments shall not exceed the Maximum Incremental Amount; (ii) the Stated Maturity Date of any Incremental Term Loan shall be on or after the later of the Stated Maturity Date for the Term Loans and the Multi-Draw Term Loans; (iii) no Default or Event of Default shall have occurred and be continuing or result after giving effect to any Incremental Term Loan; (iv) the Loan Parties and their Subsidiaries shall be in compliance after giving effect to any Incremental Term Loan with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4; (v) compliance with clause (iv) (calculated after giving effect to any such Incremental Term Loans) shall be evidenced by a Compliance Certificate delivered to the Administrative Agent; (vi) the proceeds of any Incremental Term Loan shall be used to acquire additional Domestic Real Property which will become Collateral hereunder subject to a first priority Lien and security interest in favor of the Administrative Agent, for the benefit of the Lender Parties; (vii) with respect to such Domestic Real Property to be acquired, the Administrative Agent and each Lender extending an Incremental Term Loan Commitment shall have received and approved an appraisal from American Forest Management or another nationally recognized forestry appraisal firm that is satisfactory to the Administrative Agent; (viii) the weighted average life of any Incremental Term Loan shall be equal to or greater than the greater of the remaining weighted average life of the Term Loans and the Multi-Draw Term Loans, determined as of the initial funding date for such Incremental Term Loan; (ix) to the extent that the applicable interest rate margin on such Incremental Term Loan exceed by more than 0.25% the applicable interest rate margin for the Multi-Draw Term Loans, determined as of the initial funding date for such Incremental Term Loan, the applicable interest rate margin for the Term Loans and the Multi-Draw Term Loans shall be increased so that the applicable interest rate margin for the Multi-Draw Term Loans and for such Incremental Term Loan are equal, and the applicable interest rate margin on the Term Loans is not lower than the applicable interest rate margin on such Incremental Term Loan by more than the applicable interest rate margin for the Multi-Draw Term Loans exceeded the applicable interest rate margin for the Term Loan immediately prior to such Incremental Term Loan; (x) any covenant or Event of Default applicable to any Incremental Term Loan that is more restrictive than the equivalent covenant or Event of Default set forth in this Agreement shall be deemed to be applicable to all Loans hereunder; (xi) the aggregate of any original issue discount or upfront fees applicable to any such Incremental Term Loans shall not be more than 1% of the principal amount of such Incremental Term Loans; and (xii) the Borrowers shall have delivered any modifications or additional Real Property Documents as the Administrative Agent shall have requested in its sole discretion pursuant to such Revolver Increase.

		
	(c)
	Revolving Loan Facility.

(i)Revolving Loan Commitment. On the terms and subject to the conditions 

of this Agreement (including Article V), from time to time on any Business Day occurring on or after the Effective Date and prior to the Revolving Loan Commitment Termination Date (the “Revolving Availability Period”), each Revolving Lender severally agrees to make loans (relative to such Revolving Lender, its “Revolving Loans”) to the Borrowers equal to such Revolving Lender’s Percentage of the aggregate amount of the Borrowing of the Revolving Loans requested by the Borrowers to be made on such day. The commitment of each Revolving Lender described in this clause (c)(i) is herein referred to as its “Revolving Loan Commitment.” On the terms and subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow Revolving Loans.

		
	(ii)
	Revolver Increase.

(A)Upon satisfaction of the conditions precedent set forth in the definition of Revolver Increase and effective as of the date specified in writing by the Administrative Agent, the Revolving Loan Commitment Amount  may  be  increased  in  the  aggregate  by  the  lesser  of  (1) $10,000,000 and (2) the Maximum Incremental Amount. The Administrative Agent shall select and reasonably approve one or more Lenders (including any Person not previously a Lender hereunder who executes and delivers a joinder agreement executed by the Borrowers, the Administrative Agent and such Lender, in form and substance reasonably acceptable to each of them) to participate in any Revolver Increase. Lenders shall have no obligation and no right to participate in any Revolver Increase.

(B)The Borrowers shall in coordination with the Administrative Agent repay outstanding Revolving Loans of certain Revolving Lenders and obtain additional Revolving Loans from other Revolving Lenders, in each case, to the extent necessary so that all Revolving Lenders participate in outstanding Revolving Loans ratably, on the basis of their respective Revolving Loan Commitment Amounts, after giving effect to the increase in the aggregate Revolving Loan Commitment Amounts effected by implementation of the Revolver Increase. The Lender Parties hereby agree that the borrowing notice, minimum borrowing, pro rata borrowing, and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to this clause (B). Any repayments made pursuant to this clause (B) shall be accompanied by payment of all accrued interest on the amount prepaid and all amounts owed pursuant to Sections 4.4 and 11.3.

(C)Each Revolving Lender participating in the Revolver Increase (1) will be deemed to have purchased a participation in each then outstanding Letter of Credit equal to its Percentage of such Letter of Credit and the participation of each other Revolving Lender in such Letter of Credit shall be adjusted accordingly, (2) will acquire (and will pay to the Administrative Agent, for the account of each other Revolving Lender, in immediately available funds, an amount equal to) its Percentage of all outstanding unreimbursed payments by any Issuing Lender under any Letter of Credit and accrued interest thereon as described in Section 2.1.1(d)(ii), and (3) will be deemed to have purchased a participation in each then outstanding Swingline Loan equal to its Percentage of such Swingline Loan and the participation of each other Revolving Lender in such Swingline Loan shall be adjusted accordingly.

(iii)Revolving Loan Availability. No Borrowing of Revolving Loans shall be made if, after giving effect thereto, (A) the Available Revolving Facility Commitment would be less than zero, or (B) the Available Revolving Lender Commitment of any Revolving Lender would be less than zero.

(iv)Borrowing Procedures. By delivering a duly completed and executed Borrowing Request to the Administrative Agent by facsimile, email or other method of delivery permitted by Section 11.2 on or before 11:00 A.M. (New York City time), on a Business Day occurring prior to the Revolving Loan Commitment Termination Date, the Borrowers may from time to time irrevocably request that (A) a Base Rate Loan be made not less than one (1) nor more than five (5) Business Days thereafter or that (B) a LIBOR Loan be made not less than three (3) nor more than five (5) Business Days thereafter; provided, however, that no Revolving

Loan shall be made as a LIBOR Loan for an Interest Period extending beyond the Stated Maturity Date. All (x) Base Rate Loans shall be made in a minimum amount of $500,000 and an integral multiple of $100,000 or, if less, in the amount of the Available Revolving Facility Commitment, and (y) LIBOR Loans shall be made in a minimum amount of $1,000,000 and an integral multiple of $500,000. The proceeds of all Loans shall be used solely for the purposes described in Section 4.10.

(d)Letter of Credit Facility. The Revolving Loan Commitments may, in addition to advances as Revolving Loans and Swingline Loans, be utilized, upon the request of the Borrowers, for the issuance of irrevocable standby or trade letters of credit in United States dollars (individually, a “Letter of Credit” and, collectively, the “Letters of Credit”) by an Issuing Lender for the account of any Loan Party other than CatchMark Timber. Immediately upon the issuance by an Issuing Lender of a Letter of Credit, and without further action on the part of the Administrative Agent or any Lenders, each Lender shall be deemed to have purchased from such Issuing Lender a participation in such Letter of Credit equal to such Lender’s Percentage of the Revolving Loan Commitment of the aggregate amount available to be drawn under such Letter of Credit. Unless collateralized as provided in Section 4.14, each Letter of Credit shall reduce the amount available under the Revolving Loan Commitments by the Letter of Credit Usage with respect to such Letter of Credit.

(i)Availability. No Letter of Credit shall be issued, renewed, extended or increased if, after giving effect thereto, (A) the Available Revolving Facility Commitment would be less than zero, (B) Aggregate Letter of Credit Usage would exceed the Letter of Credit Sublimit, or (C) the Available Revolving Lender Commitment of any Revolving Lender would be less than zero. If at any time the Aggregate Letter of Credit Usage exceeds the Letter of Credit Sublimit, the Borrowers shall reduce the Aggregate Letter of Credit Usage by providing collateral for the Letter of Credit Liability corresponding to such excess Letter of Credit Usage in the manner set forth in Section
4.14 to the extent required to eliminate such excess.

(ii)Reimbursement. The Borrowers are irrevocably and unconditionally obligated without presentment, demand, protest or other formalities of any kind to reimburse an Issuing Lender in immediately available funds for any amounts paid by an Issuing Lender with respect to any Letter of Credit issued hereunder. Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter of Credit, the Issuing Lender shall notify the Borrowers and Administrative Agent thereof. Not later than 11:00 a.m. (New York City time) on the date of any payment by any Issuing Lender under a Letter of Credit (or if notice is not provided to the Borrowers of such drawing prior to such time, not later than 11:00 a.m. 

(New York City time) on the immediately succeeding Business Day), the Borrowers shall reimburse such Issuing Lender through the Administrative Agent in the amount equal to the amount of such drawing (and, if reimbursed on the immediately succeeding Business Day pursuant to this sentence, interest at the sum of the Base Rate plus the Applicable Margin for Revolving Loans on such day (or days if the next immediately succeeding day is not a Business Day)). If the Borrowers fail to so reimburse the applicable Issuing Lender by such time, the Borrowers shall be deemed to have requested a Revolving Loan (not a Swingline Loan) in the amount of the payment made by such Issuing Lender with respect to such Letter of Credit. All amounts paid by an Issuing Lender with respect to any Letter of Credit that are not repaid by the Borrowers as required by this Section 2.1.1(d)(ii), or that are not repaid with a Revolving Loan shall bear interest at the sum of the Base Rate plus the highest Applicable Margin for Revolving Loans plus 2% . Each Revolving Lender agrees to fund its Percentage of any Revolving Loan made pursuant to this Section 2.1.1(d)(ii). In the event the Borrowers fail to reimburse an Issuing Lender in full for any payment in respect of a Letter of Credit issued hereunder, the Administrative Agent shall promptly notify each Revolving Lender of the amount of such unreimbursed payment and the accrued interest thereon and each such Revolving Lender, on the next Business Day, shall deliver to Administrative Agent an amount equal to its Percentage of the aggregate Revolving Loan Commitments in same day funds. Each Revolving Lender hereby absolutely and unconditionally agrees to pay to each Issuing Lender upon demand by such Issuing Lender such Lender’s Percentage of each payment made by such Issuing Lender in respect of a Letter of Credit and not immediately reimbursed by the Borrowers. Each Revolving Lender acknowledges and agrees that its obligations to acquire participations pursuant to this Section 2.1.1(d)(ii) in respect of Letters of Credit and to make the payments to each Issuing Lender required by the preceding sentence are absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default or any failure by the Borrowers to satisfy any of the conditions set forth in Section 5.3. If any Revolving Lender fails to make available to an Issuing Lender the amount of such Lender’s Percentage of any payments made by such Issuing Lender in respect of a Letter of Credit as provided in this Section 2.1.1(d)(ii), the Administrative Agent may elect to apply Cash Collateral as described in Section 4.13 and pay such amount to such Issuing Lender. If the Administrative Agent does not so elect or if the funds in such account are insufficient, such Issuing Lender shall be entitled to recover such amount on demand from such Revolving Lender together with interest at the Base Rate.

(iii)Conditions of Issuance of Letters of Credit. In addition to all other terms and conditions set forth in this Agreement, the issuance by an Issuing Lender of any Letter of Credit shall be subject to the conditions precedent that the Letter of Credit shall be in such form, be for such amount, and contain such terms and conditions as are reasonably satisfactory to the Administrative Agent and such Issuing Lender. The expiration date of each Letter of Credit must be on a date which is the earlier of (A) (1) for a standby Letter of Credit, one (1) year from its date of issuance, but may, by its terms, be automatically renewable annually unless such Issuing Lender has notified the Borrowers on or prior to the date for notice of terminations set forth in such Letter of Credit but in any event at least thirty (30) days prior to the date of automatic renewal of its election not to renew such Letter of Credit and (2) for a trade Letter of Credit, 180 days for its date of issuance, or (B) the 30th day before the Stated Maturity Date for the Revolving Loan Commitments or such later date as agreed to by both the Administrative Agent and the applicable Issuing Lender, in their sole discretion.

(iv)Request for Letters of Credit. The Borrowers must give the Administrative 

Agent at least three (3) Business Days’ prior notice (or such shorter
period of time as the Administrative Agent and the applicable Issuing Lender shall agree to in their sole discretion), which notice will be irrevocable, specifying the date a Letter of Credit is requested to be issued and the requested amount, identifying the beneficiary, stating whether the Letter of Credit will be a standby or trade Letter of Credit and describing the nature of the transactions proposed to be supported thereby. Any notice requesting the issuance of a Letter of Credit shall be accompanied by the form of the Letter of Credit to be provided by the applicable Issuing Lender. The Borrowers must also complete any application procedures and documents required by an Issuing Lender in connection with the issuance of any Letter of Credit, including a certificate regarding Borrowers’ compliance with the provisions of Section 5.3 of this Agreement.

(v)Borrowers Obligations Absolute. The obligations of the Borrowers under this Section 2.1.1(d) are irrevocable, will remain in full force and effect until the Issuing Lender and Lenders have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit, shall be absolute and unconditional, shall not be subject to counterclaim, setoff or other defense or any other qualification or exception whatsoever and shall be paid in accordance with the terms and conditions of this Agreement under all circumstances, including, any of the following circumstances, except where caused by the gross negligence or willful misconduct of such Issuing Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction:

(A)Any lack of validity or enforceability of this Agreement, any of the other Loan Documents or any documents or instruments relating to any Letter of Credit;

(B)Any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations in respect of any Letter of Credit or any other amendment, modification or waiver of or any consent to or departure from any Letter of Credit, any documents or instruments relating thereto, or any Loan Document in each case whether or not any Loan Party or any Subsidiary of any Loan Party has notice or knowledge thereof;

(C)The existence of any claim, setoff, defense or other right that any Loan Party or any Subsidiary of any Loan Party may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any Issuing Lender, any Lender, or any other Person, whether in connection with this Agreement, any other Loan Document, any Letter of Credit, the transactions contemplated hereby or any other related or unrelated transaction or transactions (including any underlying transaction between any Loan Party or any Subsidiary of any Loan Party and the beneficiary named in any such Letter of Credit);

(D)Any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, facsimile or otherwise, or any errors in translation or in interpretation of technical terms;
(E)Payment under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

(F)Any defense based upon the failure of any drawing under any Letter of 

Credit to conform to the terms of such Letter of Credit (provided, that any draft, certificate or other document presented pursuant to such Letter of Credit appears on its face to comply with the terms thereof), any non-application or misapplication by the beneficiary or any transferee of the proceeds of such drawing or any other act or omission of such beneficiary or transferee in connection with such Letter of Credit;

(G)The exchange, release, surrender or impairment of any collateral or other security for the obligations;

		
	(H)
	The occurrence of any Default or Event of Default; or

(I)Any other circumstance or event whatsoever, including, any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Loan Party, any Subsidiary of any Loan Party or any guarantor or other surety.

Any action taken or omitted to be taken by an Issuing Lender under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, is binding upon the Loan Parties and their Subsidiaries and shall not create or result in any liability of such Issuing Lender to any Loan Party or any Subsidiary of any Loan Party.

(vi)Obligations of Issuing Lenders. Each Issuing Lender (other than the Administrative Agent) hereby agrees that it will not issue a Letter of Credit hereunder until it has provided the Administrative Agent with notice specifying the amount and intended issuance date of such Letter of Credit and the Administrative Agent has returned a written acknowledgment of such notice to such Issuing Lender. Each of the Issuing Lenders and the Administrative Agent agrees to provide such notices and acknowledgement promptly upon the Borrowers’ request for a Letter of Credit provided such request satisfies all of the requirements provided herein. Each Issuing Lender (other than the Administrative Agent) further agrees to provide to the Administrative Agent:
(A) a copy of each Letter of Credit issued by such Issuing Lender promptly after its issuance; (B) a monthly report summarizing available amounts under Letters of Credit issued by such Issuing Lender, the dates and amounts of any draws under such Letters of Credit, the effective date of any increase or decrease in the face amount of any Letters of Credit during such month and the amount of any unreimbursed draws under such Letters of Credit; and (C) such additional information reasonably requested by the Administrative Agent from time to time with respect to the Letters of Credit issued by such Issuing Lender.

(vii)UCP and ISP. The Uniform Customs and Practice for Documentary Credits as most recently published from time to time by the International Chamber of Commerce (the “UCP”) is hereby incorporated in this Agreement with respect to trade Letters of Credit and shall be deemed incorporated by this reference into each trade Letter of Credit issued pursuant to this Agreement. The terms and conditions of the UCP shall be binding with respect to trade Letters of Credit on the parties to this Agreement and each beneficiary of any trade Letter of Credit issued pursuant to this Agreement. The International Standby Practices as most recently published from time to time by the International Chamber of Commerce (the “ISP”) is hereby incorporated in this Agreement with respect to standby Letters of Credit and shall be deemed incorporated by this reference into each standby Letter of Credit issued pursuant to this Agreement. The terms and conditions of the ISP shall be binding with respect to standby Letters of Credit on the parties to this Agreement and each beneficiary of any standby Letter of Credit issued pursuant to this Agreement. Notwithstanding the above, upon the request of the Borrowers, 

in the sole discretion of the Administrative Agent and the applicable Issuing Lender, a standby Letter of Credit may expressly incorporate the UCP and the UCP is hereby incorporated in this Agreement with respect to such standby Letters of Credit. Furthermore, the terms and conditions of the UCP shall be binding with respect to such standby Letters of Credit on the parties to this Agreement and each beneficiary of such standby Letter of Credit issued pursuant to this Agreement.

		
	(e)
	Swingline Facility.

(i)On the terms and subject to the conditions of this Agreement (including Article V), during the Revolving Availability Period, the Swingline Lender agrees, in reliance upon the agreements of the other Revolving Lenders set forth herein, to make Swingline Loans to the Borrowers in an aggregate principal amount not to exceed the Swingline Loan Commitment; provided, however, unless the Borrowers have complied with Section 4.13, if at any time any Revolving Lender is a Defaulting Lender, the making of Swingline Loans shall be at the sole discretion of the Swingline Lender. On the terms and subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow Swingline Loans. Each Swingline Loan shall reduce the Available Revolving Facility Commitment and the Available Revolving Lender Commitment by the outstanding principal amount of such Swingline Loan.

(ii)Availability. No Borrowing of Swingline Loans shall be made if, after giving effect thereto, (A) the Available Revolving Facility Commitment would be less than zero, (B) aggregate principal balance of the Swingline Loans exceeds the Swingline Loan Commitment, or (C) the Available Revolving Lender Commitment of any Revolving Lender would be less than zero. If at any time the aggregate principal balance of the Swingline Loans then outstanding exceeds the Swingline Loan Commitment, the Borrowers shall be deemed to have requested a Revolving Loan Borrowing in the amount of the difference in the manner and pursuant to the terms of Section 2.1.1(e)(iii).

(iii)Any outstanding Swingline Loan shall be payable by the Borrowers on demand by Swingline Lender, a copy of which demand also shall be delivered by Swingline Lender to the Administrative Agent. If the Borrowers fail to so reimburse the Swingline Lender on demand, without limiting Swingline Lender’s remedies with respect to the Borrowers  in  the  case  of  any  Revolving  Lender’s  failure  to  advance  under  this  Section 2.1.1(e)(iii), the Borrowers shall be deemed to have requested the Administrative Agent to make a Revolving Loan in the aggregate amount of the then outstanding Swingline Loans. Each Revolving Lender agrees to fund its Percentage of any Revolving Loan made pursuant to this Section 2.2.1(e)(iii). The Administrative Agent shall promptly notify each Revolving Lender of the amount of such payment due and each such Revolving Lender, on the next Business Day, shall deliver to the Administrative Agent an amount equal to its Percentage thereof in same day funds. Each Revolving Lender hereby absolutely and unconditionally agrees to pay to Swingline Lender such Revolving Lender’s Percentage of each such payment due. In addition to the foregoing, if for any reason any Revolving Lender fails to make payment to Swingline Lender of any amount due under this Section 2.1.1(e)(iii), such Revolving Lender shall be deemed, at the option of Swingline Lender, to have unconditionally and irrevocably purchased from Swingline Lender, without recourse or warranty, an undivided interest and participation in the applicable Swingline Loan in the amount of such Revolving Loan, and such interest and participation may be recovered from such Revolver Lender together with interest thereon at the Base Rate for each day during the period commencing on the date of demand and ending on the date such amount is received. Each Revolving Lender acknowledges and agrees that its obligations to fund Revolving Loans and/or to acquire participations pursuant to this Section 2.1.1(e)(iii) in respect of Swingline Loans are absolute and 

unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default or any failure by the Borrowers to satisfy any of the conditions set forth in Section 5.3. If any Revolving Lender fails to make available to Swingline Lender the amount of such Lender’s Percentage of any payments due as provided in this Section 2.1.1(e)(iii), the Administrative Agent may elect to apply Cash Collateral as described in Section 4.13 by such amount and pay such amount to Swingline Lender. If the Administrative Agent does not so elect or if the funds in such accounts are insufficient, Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest at the Base Rate. On the Revolving Loan Commitment Termination Date, if not sooner demanded, the Borrowers shall repay in full the outstanding principal amount of the Swingline Loans.

(iv)All Swingline Loans shall accrue interest from the date made as a Base Rate Loan, at the sum of the Base Rate plus the Applicable Margin, applicable from time to time as provided in Section 3.2. Until each Revolving Lender funds its Percentage of its Revolving Loan or purchase of a participation pursuant to Section 2.1.1(e)(iii), interest in respect of the Swingline Loans, of the applicable portions thereof, shall be solely for the account of Swingline Lender. Notwithstanding any other provision of this Agreement, prior to the Revolving Loan Commitment Termination Date, the Borrowers shall make all payments of principal and interest in respect of Swingline Loans directly to the Swingline Lender by such method and to such account or place as the Swingline Lender may from time to time designate in writing and the Swingline Lender shall make the funds of the Swingline Loans directly available to the Borrowers by such method and to such account or place as the Borrowers may from time to time designate in writing. To the extent that the Swingline Lender is not the Administrative Agent, the Swingline Lender shall promptly provide to the Administrative Agent such information as it shall reasonably request with respect to the Swingline Loans.

(v)Borrowing Procedures. By delivering a duly completed and executed  Borrowing  Request  to  the  Swingline  Lender  and  the  Administrative  Agent  by facsimile, email or other method of delivery permitted by Section 11.2 on or before 1:00 P.M. (New York City time), on a Business Day occurring prior to the Revolving Loan Commitment Expiration Date, the Borrowers may from time to time irrevocably request that a Base Rate Loan be made on such Business Day.  All Swingline Loans shall be made in a minimum amount of $250,000 and an integral multiple of $100,000 or, if less, in the unused amount of the Swingline Commitment. The proceeds of all Swingline Loans shall be used solely for the purposes described in Section 4.10 for Revolving Loans; provided that, no Swingline Loan shall be used to refinance any outstanding Swingline Loan.

		
	(f)
	Multi-Draw Term Loan Facility.

(i)On the terms and subject to the conditions of this Agreement (including Article V), from time to time on any Business Day occurring on or after the Effective Date and prior to the Multi-Draw Term Loan Commitment Termination Date (the “Multi-Draw Term Loan Availability Period”), each Multi-Draw Term Loan Lender severally agrees to make loans (relative to such Multi-Draw Term Loan Lender, its “Multi-Draw Term Loans”) to the Borrowers equal to such Multi-Draw Term Loan Lender’s Percentage of the aggregate amount of the Borrowing of the Multi-Draw Term Loans requested by the Borrowers to be made on such day. The commitment of each Multi-Draw Term Loan Lender described in this clause (f)(i) is herein referred to as its “Multi-Draw Term Loan Commitment.” During the Multi-Draw Term Loan Availability Period and on the terms and subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow Multi-Draw Term Loans; provided however, there shall be no more than six (6) Borrowings of the Multi-Draw Term Loans on or after the Effective Date (other than any Borrowings the proceeds of which are used solely 

to repay Revolver Real Property Acquisition Loans).

(ii)Multi-Draw Term Loan Availability. No Borrowing of Multi- Draw Term Loans shall be made if, after giving effect thereto the aggregate outstanding principal amount of all the Multi-Draw Term Loans (A) of all the Multi-Draw Term Loan Lenders would exceed the Multi-Draw Term Loan Commitment Amount or (B) of any Multi-Draw Term Loan Lender would exceed such Multi-Draw Term Loan Lender’s Percentage of the Multi-Draw Term Loan Commitment Amount.

(iii)Borrowing Procedures. By delivering a duly completed and executed Borrowing Request to the Administrative Agent by facsimile, email or other method of delivery permitted by Section 11.2 on or before 11:00 A.M. (New York City time), on a Business Day occurring prior to the Multi-Draw Term Loan Commitment Termination Date, the Borrowers may from time to time irrevocably request that (A) a Base Rate Loan be made not less than one (1) nor more than five (5) Business Days thereafter or that (B) a LIBOR Loan be made not less than three nor more than five Business Days thereafter; provided, however, that no Multi-Draw Term Loan shall be made as a LIBOR Loan for an Interest Period extending beyond the Stated Maturity Date.   All (x) Base Rate Loans shall be made in a minimum amount of $500,000 and an integral multiple of $100,000 or, if less, in the unused amount of the Multi- Draw Term Loan Commitment Amount, and (y) LIBOR Loans shall be made in a minimum amount of $1,000,000 and an integral multiple of $500,000. The proceeds of all Loans shall be used solely for the purposes described in Section 4.10.
(iv)Refinancing of Revolver Real Property Acquisition Loans. Notwithstanding clause (iii) of this Section 2.1.1(f), during the Multi-Draw Term Loan Availability Period, Borrowings to repay the outstanding principal amount of the Revolver Real Property Acquisition Loans must be in a minimum amount of $3,000,000.

		
	(v)
	Multi-Draw Term Loan Increase.

(A)Upon satisfaction of the conditions precedent set forth in the definition of Multi-Draw Term Loan Increase and effective as of the date specified in writing by the Administrative Agent, the Multi-Draw Term Loan Commitment Amount may be increased in the aggregate by the Maximum Incremental Amount. The Administrative Agent  shall select and reasonably approve one or more Lenders (including any Person not previously a Lender hereunder who executes and delivers a joinder agreement executed by the Borrowers, the Administrative Agent and such Lender, in form and substance reasonably acceptable to each of them) to participate in any Multi-Draw Term Loan Increase. Lenders shall have no obligation and no right to participate in any Multi-Draw Term Loan Increase.

(B)The Borrowers shall in coordination with the Administrative Agent repay outstanding Multi-Draw Term Loans of certain Multi-Draw Term Lenders and obtain additional Multi-Draw Term Loans from other Multi-Draw Term Lenders, in each case, to the extent necessary so that all Multi-Draw Term Lenders participate in outstanding Multi-Draw Term Loans ratably, on the basis of their respective Multi- Draw Term Loan Commitment Amounts, after giving effect to the increase in the aggregate Multi-Draw Term Loan Commitment Amounts effected by implementation of the Multi-Draw Term Loan Increase. The Lender Parties hereby agree that the borrowing notice, minimum borrowing, pro rata borrowing, and pro rata payment requirements contained elsewhere in this 

Agreement shall not apply to the transactions effected pursuant to this clause (B). Any repayments made pursuant to this clause (B) shall be accompanied by payment of all accrued interest on the amount prepaid and all amounts owed pursuant to Sections 4.4 and 11.3.

SECTION 2.1.2    Reserved

SECTION 2.1.3    Disbursement of Fundes under the Loans.        The Administrative Agent shall promptly notify each applicable Lender of its receipt of a Borrowing Request, the amount required to be funded by each such Lender and when such amount must be funded. On the terms and subject to the conditions of this Agreement, each Borrowing shall be made on the Business Day specified in such Borrowing Request. On or before 1:00 P.M. (New York City time) on such Business Day each Lender shall deposit with the Administrative Agent same day funds in an amount equal to such Lender’s Percentage of the requested Borrowing. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to the Borrowers by wire transfer to the accounts the Borrowers shall have specified in their Borrowing Request. No Lender’s obligation to make any Loan shall be affected by any other Lender’s failure to make any Loan. Nothing in this Section 2.1.3 or elsewhere in this Agreement or the other Loan Documents shall be deemed to require the Administrative Agent (or any other Lender) to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

SECTION 2.2    Notes; Updated Schedule II.

(a)Upon the request of any applicable Lender, the Borrowers shall execute and deliver to such Lender a separate Note for each applicable Term Loan, Multi-Draw Term Loan or Revolving Loan, each dated as of the Effective Date, or, if later, the date of such request, in the principal amount of such Lender’s Percentage of such Commitment or Loan, as applicable. Upon the request of any applicable Lender, the Borrowers shall execute and deliver to such Lender a separate Note for each applicable Incremental Term Loan Facility, each dated as of the closing date of such Incremental Term Loan Facility, or, if later, the date of such request, in the principal amount of such Lender’s Percentage of such Incremental Term Loan Commitment or Incremental Term Loan, as applicable. Upon Swingline Lender’s request, the Borrowers shall execute and deliver to Swingline Lender a Swingline Note, dated as of the Effective Date, or, if later, the date of such request, in the amount of the Swingline Commitment.

(b)The Notes issued to each Lender pursuant to clause (a) shall (i) be executed by the Borrowers, (ii) be payable to the order of such Lender or such Lender’s assigns,
(iii) be in the stated principal amount equal to the Loan made by such Lender on date of such Note or the principal amount of such Lender’s pro rata share of the applicable Commitment, (iv) be payable as provided in Section 3.1, (v) accrue interest as provided in Section 3.2 and (vi) be entitled to the benefits of this Agreement and the other Loan Documents.

(c)Each Lender shall record in its records the amount and date of each Loan made by such Lender to the Borrowers (including the outstanding principal amount of the Term Loans as of the Effective Date which Loans were advanced under the Existing Credit Agreement and continued as Loans under this Agreement), and each repayment of such Lender’s Loans. The aggregate unpaid principal amount so recorded shall, absent manifest error, be conclusive evidence of the principal amount of the Loan owing and unpaid. The failure to so record any such amount or any error in so recording 

any such amount shall not, however, limit or otherwise affect the Obligations of the Borrowers hereunder or under any Note to repay the principal amount of all Loans hereunder, together with interest accruing thereon.

(d)The Administrative Agent may from time to time deliver to the Borrowers and the Lenders an updated Schedule II hereto reflecting any Incremental Term Loan Facilities permitted by Section 2.1.1(b), any Revolver Increase permitted by Section 2.1.1(c)(ii), or any Multi-Draw Term Loan Increase permitted by Section 2.1.1(f)(v).

SECTION 2.3    Reserved.

SECTION 3.1    Continuation and Conversion Elections        By delivery a Continuation/Conversion Notice to the Administrative Agent by facsimile, email or other method of delivery of notice permitted pursuant to Section 11.2, on or before 11:00 A.M. (New York City time) on a Business Day, the Borrowers may from time to time irrevocably elect on not less than one Business Day nor more than five Business Days’ notice, in the case of Loans accruing interest at the Base Rate, and not less than three nor more than five Business Days’ notice, in the case of Loans (other than Swingline Loans) accruing interest at LIBOR, that all, or any portion in an aggregate minimum amount of $1,000,000 and an integral multiple of $1,000,000 be, in the case of Loans (other than Swingline Loans) accruing at the Base Rate, converted into Loans accruing interest at LIBOR or be, in the cause of Loans accruing interest at LIBOR, converted into Loans accruing interest at the Base Rate or continued as Loans accruing interest at LIBOR (in the absence of delivery of a Continuation/Conversion Notice, by facsimile, email or other method of delivery of notice permitted pursuant to Section 11.2, with respect to any Loan accruing interest at LIBOR at least three Business Days (but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such Loan shall, on such last day, automatically convert to a Loan accruing interest at the Base Rate); provided, however, that (a) each such conversion or continuation shall be prorated among the applicable outstanding Loans of all Lenders, (b) no portion of the outstanding principal amount of any Loans may be continued as, or be converted to, Loans accruing interest at LIBOR when any Event of Default has occurred and is continuing, unless the Required Lenders otherwise agree in writing, (c) no Loans may be continued as, or be converted into, Loans accruing interest at LIBOR for an Interest Period extending beyond the Stated Maturity Date and (d) with respect to the Loans accruing interest at LIBOR that have an Interest Period ending on one particular date such Loans shall not be subject to the integral multiple requirement set forth above (it being understood that, if there are Loans with Interest Periods ending on more than one date, this clause shall only apply to those Loans with an Interest Period ending on one particular date and no other date).

ARTICLE III 
PAYMENTS, INTEREST AND FEES

SECTION 3.1    Repayments and Prepayments.  The Loans shall be repaid as set forth in this Section.

SECTION 3.1.1    Voluntary Prepayments; Commitment Reductions.

(a)Prior to the Stated Maturity Date, the Borrowers may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loans; provided, however, that:

(i)all such voluntary prepayments shall require notice on or before 11:00 A.M. (New York City time) not less than one nor more than five Business Days’ in advance of any prepayment of any Loan (or such shorter or longer period as the Administrative Agent may agree to in its reasonable discretion);
(ii)all such voluntary partial prepayments shall be in an aggregate minimum amount of $1,000,000 and an integral multiple of $500,000 (or in the case of Swingline  Loans,  an  aggregate  minimum  amount  of  $250,000  and  an  integral  multiple  of $100,000)  or,  if  less,  the  aggregate  principal  amount  of  the  relevant  Loans  outstanding hereunder; and

(iii)all such prepayments shall be made pro rata among Loans having the same Interest Period.

(b)The Borrowers may, from time to time on any Business Day after the Effective Date, voluntarily reduce the unused amount of any Commitment, the Swingline Commitment and the Letter of Credit Sublimit; provided, however, that (i) all such reductions shall be made on not less than one nor more than five Business Days’ prior notice to the Administrative Agent and be permanent, (ii) any partial reduction of the unused amount of such Commitment, Swingline Commitment or Letter of Credit Sublimit shall be in a  minimum amount of $1,000,000 and in an integral multiple of $500,000 and (iii) the applicable Loans shall have been prepaid to the extent required by Section 3.1.2 or pursuant to Section 4.12(c) or the Letter of Credit Liability corresponding to all such Letter of Credit Usage shall have been collateralized in accordance with Section 4.14.

SECTION 3.1.2    Mandatory Repayments and Prepayments.

(a)Stated Maturity Date.  On the Stated Maturity Date, the Borrowers shall repay in full the then aggregate outstanding principal amount of each Loan.

		
	(b)
	Mandatory Prepayments from Certain Sources.

(i)Equity Raises Net Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of such Equity Raises Net Proceeds by Timberlands II pursuant to clause (b) of Section 7.1.15, the Borrowers shall be obligated to repay the Loans in an amount equal to the Equity Raises Net Proceeds; provided however, after the Multi-Draw Term Loan Commitment Termination Date, if no Default or Event of Default has occurred and is continuing, and if the Loan to Value Ratio does not exceed 35%, the Borrowers shall not be obligated to repay the Loans in an amount equal to the Equity Raises Net Proceeds.

(ii)Proceeds of Other Indebtedness. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any proceeds of any Indebtedness other than Indebtedness permitted by Section 7.2.2 by any Loan Party or any Subsidiary of any Loan Party (other than an Unrestricted Timber Subsidiary), the Borrowers shall be obligated to repay the Loans in an amount equal to such proceeds.

(iii)Collateral Insurance Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any Collateral Insurance Proceeds by any Loan Party or any Subsidiary of any Loan Party or any other insurance proceeds by any of the Borrowers or any Subsidiary of any Borrower, the Borrowers shall be obligated to repay the Loans  in  an  amount  equal  to  such  Collateral  Insurance  Proceeds  or  such  other  insurance proceeds; provided however, if no Default or Event of Default has occurred and is continuing, the Borrowers shall not be obligated to repay the Loans in an amount equal to such Collateral Insurance Proceeds or such other insurance proceeds to the extent that 

(A) all such Collateral Insurance Proceeds or such other insurance proceeds do not exceed $2,000,000 in the aggregate over the term of this Agreement, (B) all such Collateral Insurance Proceeds are applied to repair or replace the lost, damaged or destroyed Collateral within 180 days of receipt of such Collateral Insurance Proceeds by any Loan Party or Subsidiary of any Loan Party and any such replacement shall be subject to the Lien of the Administrative Agent and otherwise permitted pursuant to the terms and provisions of this Agreement, and (C) all other insurance proceeds are applied to assets used or useful to the business of any of the Loan Parties other than CatchMark Timber within 180 days of receipt of such other insurance proceeds by any Borrower or any Subsidiary of any Borrower and such assets shall be subject to the Lien of the Administrative Agent and otherwise permitted pursuant to the terms and provisions of this Agreement.

(iv)LTC Lease Disposition Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any LTC Lease Disposition Proceeds by any Loan Party or any Subsidiary of any Loan Party, the Borrowers shall be obligated to repay the Loans in an amount equal to such LTC Lease Disposition Proceeds.

(v)Timber Lease Termination Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any Timber Lease Termination Proceeds by any Loan Party or any Subsidiary of any Loan Party, the Borrowers shall be obligated to repay the Loans in an amount equal to such Timber Lease Termination Proceeds; provided however, if no Default or Event of Default has occurred and is continuing, the Borrowers shall not be obligated to repay the Loans (A) to the extent the Timber Lease Termination Proceeds do not exceed $2,000,000 in connection with the termination of a single PLM Lease or a single portion of the LTC Lease or any other Timber Lease and (B) the aggregate amount of Timber Lease Termination Proceeds received during the term hereof do not exceed $5,000,000 over the term of this Agreement (regardless of whether such $5,000,000 in aggregate proceeds have been applied to prepay the Loans).

(vi)Cost Basis Collateral Disposition Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any Cost Basis Collateral Disposition Proceeds by any Loan Party or any Subsidiary of any Loan Party, the Borrowers shall be obligated to repay the Loans in an amount equal to such Cost Basis Collateral Disposition Proceeds; provided, however, that (x) if no Event of Default has occurred and is continuing and if the Loan to Value Ratio, calculated after giving effect to such disposition, does not exceed 40% but is greater than 30%, the Borrowers shall not be required to repay the Loans until the aggregate of all Cost Basis Collateral Disposition Proceeds received in any fiscal year exceeds 1.5% of the aggregate Fee Simple Cost Basis (calculated as of the date such Cost Basis Collateral Disposition Proceeds are received) and (y) if no Event of Default has occurred and is continuing and if the Loan to Value Ratio, calculated after giving effect to such disposition, does not exceed 30%, the Borrowers shall not be required to repay the Loans until the aggregate of all Cost Basis Collateral Disposition Proceeds received in any fiscal year exceeds 2.0% of the aggregate Fee Simple Cost Basis (calculated as of the date such Cost Basis Collateral Disposition Proceeds are received) and, in each case, such Cost Basis Collateral Disposition Proceeds not used to repay the Loans are used for (A) general working capital, (B) acquisitions of additional Real Property by a Landholder which shall be subject to the Lien of the Administrative Agent and otherwise permitted pursuant to the terms and provisions of this Agreement, or (C) dividends, distributions or other payments permitted pursuant to Section 7.2.6 of this Agreement.

(vii)Net Collateral Disposition Proceeds. Subject to clause (viii) of this Section 3.1.2(b), immediately upon receipt of any Net Collateral Disposition Proceeds in excess of Cost Basis Collateral Disposition Proceeds by any Loan Party or any Subsidiary of any Loan Party, the Borrowers 

shall be obligated to repay the Loans in an amount equal to such excess; however, if no Default or Event of Default has occurred and is continuing, the Borrowers shall not be obligated to repay the Loans in an amount equal to such excess (A) to the extent that all such excess is applied to acquisitions of additional Real Property by a Landholder which shall be subject to the Lien of the Administrative Agent and otherwise permitted pursuant to the terms and provisions of this Agreement within 180 days of receipt of such excess, or (B) (x) the Loan Parties and their Subsidiaries shall be in compliance after giving effect to such disposition with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4; and (y) if the Loan to Value Ratio does not exceed 40% after giving effect to such disposition.

(viii)Authorized Delay. If no Default or Event of Default has occurred and is continuing, upon the written request of the Borrowers, the Administrative Agent may in its sole discretion (or upon the direction of the Required Lenders (such direction given in their sole discretion) shall) authorize the Borrowers to delay making the repayments required by clauses (i) through (vii) and (ix) of this Section 3.1.2(b) until such time as the Administrative Agent determines in its sole discretion that no liabilities for the Borrowers under Section 4.4 would result or such liabilities would be materially reduced (it being agreed that during such period of authorized delay such amount shall be cash collateralized in such amounts and on such terms and conditions as are acceptable to the Administrative Agent in its sole discretion).

(ix)Proceeds in Excess of Actual Costs and Expenses. Subject to clause (viii) of this Section 3.1.2(b), promptly and in any event within thirty (30) days of such Borrowing, the Borrowers shall be obligated to repay the Loans by the amount by which the proceeds of any Borrowing of Revolving Loans or Multi-Draw Term Loans advanced for the purpose of funding estimated costs and expenses related to an acquisition of additional Domestic Real Property exceeded the actual costs and expenses; provided that, such calculation by the Borrowers shall be reasonably acceptable to the Administrative Agent. Notwithstanding Section 3.1.3, such repayment shall be applied first to the type of Loans pursuant to which such Borrowing was made and second in accordance with the provisions of Section 3.1.3 hereof.

		
	(c)
	Multi-Draw Term Loan.  In addition to payments made pursuant to clause

(a)of this Section 3.1.2, beginning with the first Fiscal Quarter end following the Multi-Draw Term Loan Commitment Termination, if the Loan to Value Ratio is equal to or greater than 35% as of such Fiscal Quarter end, the Borrowers shall repay the aggregate outstanding balance of the Multi-Draw Term Loans by an amount equal to the result of: the aggregate outstanding balance of all Multi-Draw Term Loans as of the last day of such Fiscal Quarter; multiplied by 7.5%; divided  by  4;  provided,  however,  that  the  Borrowers  shall  repay  the  aggregate  amount outstanding under any Multi-Draw Term Loans in full on the Stated Maturity Date.

(a)Acceleration. The Borrowers shall, immediately upon any acceleration of the Stated Maturity Date of any Loans pursuant to Section 8.2 or Section 8.3, repay all (or if only a portion is accelerated thereunder, such portion of) the Loans then outstanding.

(b)Incremental Term Loans. The Borrowers shall repay the aggregate outstanding balance of any Incremental Term Loans as provided in the amendment or supplement to this Agreement documenting such Incremental Term Loans; provided, however, that the Borrowers shall repay the aggregate amount outstanding under any Incremental Term Loans in full on the Stated Maturity Date.

(c)Revolving Loans. The Borrowers shall, on each date (i) when the sum of the aggregate outstanding principal amount of all Revolving Loans exceeds the aggregate Revolving Loan 

Commitment Amount, repay the Revolving Loans until they have been paid in an amount equal to such excess, and (ii) when the Available Revolving Facility Commitment is less than zero, repay the Revolving Loans, Swingline Loans or reduce the Aggregate Letter of Credit Usage until they have paid in or collateralized an amount equal to such deficit. During the Multi-Draw Term Loan Availability Period, within five (5) Business Days (or such later date as the Administrative Agent shall agree in its sole discretion but, in any event, within 90 days) of the aggregate outstanding principal amount of the Revolver Real Property Acquisition Loans equaling $3,000,000 (or such larger amount as the Administrative Agent shall agree to in its sole discretion but, in any event, not to exceed $4,000,000), the Borrowers shall repay all such outstanding Revolver Real Property Acquisition Loans.

SECTION 3.1.3    Application of Payments.

(a)Prior to Multi-Draw Term Loan Commitment Termination Date. Prior to the Multi-Draw Term Loan Commitment Termination Date, (i) each prepayment of any Loans made pursuant to Section 3.1.2(b)(i) shall be applied as follows: first, to the outstanding balance of any Multi-Draw Term Loans; and second, after any Multi-Draw Term Loans have been paid in full, pro rata to the outstanding balance of the Term Loans and any Incremental Term Loans (if and when applicable); and third, after the Term Loans and any Incremental Term Loans (if and when applicable) have been paid in full, to the outstanding balance of any Swingline Loans; and fourth, after any Swingline Loans have been paid in full, to the outstanding balance of any Revolving Loans; and fifth, after any Revolving Loans have been paid in full, to reduce the Aggregate Letter of Credit Usage by providing collateral pursuant to Section 4.14; and (ii) each prepayment of any Loans made pursuant to clauses (ii) through (vii) or (ix) of Section 3.1.2(b) shall be applied as follows: first, pro rata to the outstanding balance of the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable); and second, after the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable) have been paid in full, to the outstanding balance of any Swingline Loans; and third, after any Swingline Loans have been paid in full, to the outstanding balance of any Revolving Loans; and fourth, after any Revolving Loans have been paid in full, to reduce the Aggregate Letter of Credit Usage by providing collateral pursuant to Section 4.14.

(b)After Multi-Draw Term Loan Commitment Termination Date. On and after the Multi-Draw Term Loan Commitment Termination Date, each prepayment of any Loans made pursuant to Section 3.1.2(b) shall be applied as follows: first, pro rata to the outstanding balance of the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable); and second, after the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable) have been paid in full, to the outstanding balance of any Swingline Loans; and third, after any Swingline Loans have been paid in full, to the outstanding balance of any Revolving Loans; and fourth, after any Revolving Loans have been paid in full, to reduce the Aggregate Letter of Credit Usage by providing collateral pursuant to Section 4.14.

		
	(c)
	Mandatory Commitment Reduction.

(i)If any Event of Default has occurred and is continuing, at the election of the Required Lenders, each repayment of any Loans made pursuant to clauses (ii) through (vii) or clause (ix) of Section 3.1.2(b) applied to any Multi-Draw Term Loan prior to the Multi-Draw Term Loan Commitment Termination Date, any Swingline Loan, any Revolving Loan, or to reduce the Aggregate Letter of Credit Usage by providing collateral pursuant to Section 4.14 shall permanently reduce both the outstanding balance of such Loan and the Commitment corresponding to such Loan. If the amount required to be prepaid by clauses (ii) through (vii) or (ix) of Section 3.1.2(b) exceeds the outstanding 

balance of all Loans and the Letter of Credit Usage, the Commitments shall be permanently reduced by an amount equal to such excess and such reduction shall be applied as follows: (A) first pro rata to the Multi-Draw Term Loan Commitment and any Incremental Term Loan Commitment (if and when applicable); and (B) second, after the Multi-Draw Term Loan Commitment and any Incremental Term Loan Commitment (if and when applicable) have been permanently reduced to zero, to the Revolving Loan Commitment.

(ii)If any reduction in the Revolving Loan Commitments would cause the Revolving Loan Commitments to be less than the sum of the Swingline Commitment and the Letter of Credit Sublimit, then the Letter of Credit Sublimit will simultaneously with such reduction of the Revolving Loan Commitment be permanently reduced such that the sum of the Swingline Commitment and the Letter of Credit Sublimit does not exceed the Revolving Loan Commitments. If the Letter of Credit Sublimit has been reduced to $0 and a reduction of the Revolving Loan Commitments would cause the Revolving Loan Commitments to be less than the Swingline Commitment, then the Swingline Commitment will simultaneously with such reduction of the Revolving Loan Commitments be permanently reduced such that the Swingline Commitment does not exceed the reduced Revolving Loan Commitments.

(d)Application of Voluntary Prepayment. Each prepayment of any Loans made pursuant to Section 3.1.1 shall be applied first, to the prepayment of any Swingline Loans; second, after any Swingline Loans have been paid in full, to the prepayment of any Revolving Loans; third, after any Revolving Loans have been paid in full, pro rata to the outstanding balance of the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable), and fourth, after the Term Loans, any Multi-Draw Term Loans and any Incremental Term Loans (if and when applicable) have been paid in full, to reduce the Aggregate Letter of Credit Usage by providing collateral pursuant to Section 4.14; provided that, the Borrowers may, at their option, request that the prepayments be applied as provided in clause (a) or (b) of this Section 3.1.3.

(e)Installments; Interest Rate; Penalties. Any repayment of any Loans made pursuant to Sections 3.1.1 and 3.1.2 and applied to the Term Loans, any Multi-Draw Term Loans, or any Incremental Term Loans shall be applied to the principal installments in the inverse order of maturity. All payments made pursuant to Sections 3.1.1 and 3.1.2 shall first be applied to Loans accruing interest at the Base Rate or Loans accruing interest at LIBOR, as the Borrowers shall direct in writing and, in the absence of such direction, shall first be applied to Loans accruing interest at the Base Rate and then to Loans accruing interest at LIBOR as the Administrative Agent shall elect. Each prepayment of any Loans made pursuant to this Section 3.1 (and assignments pursuant to Section 4.5 or Section 11.11) shall, except as provided in Section 4.4, be without premium or penalty and be accompanied by the payment of accrued and unpaid interest on the amount prepaid.

(f)Application of Prepayment to Revolver Loans. For the purposes of calculating the aggregate outstanding principal amount of the Revolver Real Property Acquisition Loans, each prepayment for any Revolver Loans shall be deemed applied as follows: first, to any Borrowing of Revolver Loans not identified as Revolver Real Property Acquisition Loans in the applicable Borrowing Request; and, second, after all Revolver Loans not identified as Revolver Real Property Acquisition Loans have been paid in full, to any Borrowing of Revolver Loans identified as Revolver Real Property Acquisition Loans in the applicable Borrowing Request; provided that, any prepayment of Revolver Real Property Acquisition Loans financed with the proceeds of a Borrowing of Multi-Draw Term Loans shall be deemed applied to the outstanding Revolver Real Property Acquisition Loans.

SECTION 3.2    Interest Provisions. Interest on the outstanding principal amount of Loans shall, pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, accrue and be payable in accordance with this Section.

SECTION 3.2.1    Interest Rates.

Subject to Section 3.2.2, the Borrowers may elect, pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice:

(a)a Borrowing of Loans that accrue interest at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the Applicable Margin; and

(b)a Borrowing of Loans that accrue interest at a rate per annum equal to LIBOR for such Interest Period plus the Applicable Margin.

provided, that any Incremental Term Loans shall accrue interest as provided in the amendment, supplement or restatement of this Agreement evidencing such Incremental Term Loans; provided further, any Borrowing of a Swingline Loan must be at the rate described in clause (a).

SECTION 3.2.2  Post-Default  Rates.   Upon  a  Commitment  Termination Event or, at the election of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, the Borrowers shall pay, but only to the extent permitted by the Law, interest (after as well as before judgment) on the Loans and on all other Obligations at a rate per annum equal to the highest interest rate with respect to the Loans as in effect from time to time plus 2.00% per annum; provided, however, that if no Loans are outstanding such interest rate shall be based upon the Base Rate plus the highest Applicable Margin for Revolving Loans plus 2.00%.

SECTION 3.2.3    Interest Payment Dates.

Interest accrued on each Loan shall be paid as follows:

(a)on the Stated Maturity Date therefor;

(b)on the date of any payment or prepayment, in whole or in part, of principal outstanding on such Loan on the principal amount so paid or prepaid;

(c)on the last day of each applicable Interest Period and, if interest on the Loans is accruing at the Base Rate, on each Quarterly Payment Date; and

(d)on  that  portion  of  any  Loans  the  Stated  Maturity  Date  of  which  is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

Interest accrued on Loans or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.3    Revolver Commitment Fee. The Borrowers agree to pay to the Administrative Agent, for the pro rata account of each Revolving Lender (other than each Revolving Lender that is a Defaulting Lender), for the period (including any portion thereof when the Revolving Loan Commitment is suspended by reason of the Borrower’s inability to satisfy any condition of Article 

V) commencing on the Effective Date and continuing through the Revolving Loan Commitment Termination Date, a commitment fee (the “Revolver Commitment Fee”) at the Applicable Margin on such Lender’s Percentage of the average daily unused portion of the Revolving Loan Commitment Amount (calculated for the Swingline Lender as all Revolving Loan Commitment Amounts, minus the aggregate outstanding principal of all Revolving Loans, minus the aggregate outstanding principal of all Swingline Loans, minus the face amount of each outstanding Letter of Credit; and calculated for all Lenders other than the Swingline Lender as all Revolving Loan Commitment Amounts minus the aggregate outstanding principal of all Revolving Loans minus the face amount of each outstanding Letter of Credit) during the quarter ending on the applicable Quarterly Payment Date (without taking into account that portion of Revolving Loan Commitment Amount attributable to such Defaulting Lender). Such commitment fees are non-refundable and shall be payable by the Borrowers in arrears on each Quarterly Payment Date, commencing with the first Quarterly Payment Date following the Effective Date, and on the Revolving Loan Commitment Termination Date.

SECTION 3.4    Multi-Draw Term Loan Commitment Fee. The Borrowers agree to pay to the Administrative Agent, for the pro rata account of each Multi-Draw Term Loan Lender (other than each Multi-Draw Term Loan Lender that is a Defaulting Lender), for the period (including any portion thereof when the Multi-Draw Term Loan Commitment is suspended by reason of the Borrower’s inability to satisfy any condition of Article V) commencing on the Effective Date and continuing through the Multi-Draw Term Loan Commitment Termination Date, a commitment fee (the “Multi-Draw Term Loan Commitment Fee”) at the Applicable Margin on such Lender’s Percentage of the average daily unused portion of the Multi-Draw Term Loan Commitment Amount during the quarter ending on the applicable Quarterly Payment Date (without taking into account that portion of the Multi-Draw Term Loan Commitment Amount attributable to such Defaulting Lender). Such commitment fees are non- refundable and shall be payable by the Borrowers in arrears on each Quarterly Payment Date, commencing with the first Quarterly Payment Date following the Effective Date, and on the Multi-Draw Term Loan Commitment Termination Date.

SECTION 3.5    Letter of Credit Fees. From the Effective Date, the Borrowers shall pay the Administrative Agent for the account of all Revolving Lenders that are not Defaulting Lenders with respect to which any Issuing Lender has exercised the right to require Cash Collateralization pursuant to Section 4.13 from the Borrowers or such Defaulting Lender (based upon their respective Percentages) a fee for each Letter of Credit from the date of issuance to the date of termination in an amount equal to the Applicable Margin for Revolving Loans at LIBOR per annum multiplied by the face amount of such Letter of Credit, calculated for the actual number of days elapsed. Such fee shall be payable to Administrative Agent for the benefit of all Lenders committed to make Revolving Loans (based upon their respective Percentages). Such fee is to be paid quarterly in arrears on the last day of each calendar quarter and the termination of the Letter of Credit. With respect to each Letter of Credit, Borrower shall also pay Administrative Agent, for the benefit of the Issuing Lender issuing such Letter of Credit, an issuance fee equal to the greater of (a) $1,000, or (b) 0.125% of the face amount of such Letter of Credit, which amount shall be paid upon the date of issuance and, if the expiration date of such Letter of Credit is later than one (1) year from its date of issuance, upon each anniversary of the date of issuance during the term of such Letter of Credit, as well as such Issuing Lender’s then in effect customary administrative fees and administrative expenses payable with respect to such Letter of Credit as such Issuing Lender may generally charge or incur from time to time in connection with the issuance, maintenance, amendment (if any), renewal, extension, assignment or transfer (if any), negotiation or administration of such Letter of Credit.

ARTICLE IV

YIELD PROTECTION, TAXES AND RELATED PROVISIONS

SECTION 4.1    Eurodollar Rate Lending Unlawful. If any Lender shall determine (which determination shall, upon notice thereof to the Borrowers and the Administrative Agent, be conclusive and binding on the Borrowers) that any Change in Law makes it unlawful, or any central bank or other Governmental Authority asserts that it is unlawful, for such Lender to accrue interest on the Loans at LIBOR, the obligations of the Lenders to continue to accrue interest on the Loans at LIBOR shall, upon such determination, forthwith be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all Loans shall automatically, at the end of the then current Interest Period, continue to accrue interest at the Base Rate.

SECTION 4.2    Inability to Determine Rates. If the Administrative Agent shall have determined or been instructed by the Required Lenders that adequate means do not exist for adequately and fairly determining the cost to the Lenders of making or maintaining Loans that accrue interest at LIBOR or calculating the same then, upon notice from the Administrative Agent to the Borrowers and the Lenders, the obligations of all the Lenders to make or continue any Loans that accrue interest at LIBOR shall forthwith be suspended until the Administrative Agent shall notify the Borrowers and the Lenders that the circumstances causing such suspension no longer exist. Until such time as the Administrative Agent rescinds such notice the Loans shall accrue interest at the Base Rate.

SECTION 4.3    Capital Adequacy and Other Adjustments.

(a)Increased Costs, Generally.   If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR) or any Issuing Lender;

(ii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and
(C)Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or any Loan made by any Lender or any Letter of Credit participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, such Issuing Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Issuing Lender or other Recipient, Borrowers will pay to such Lender, Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)Capital Requirements. If any Lender or Issuing Lender determines that any Change in Law affecting such Lender of Issuing Lender or any lending office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital or liquidity

requirements, has or would have the effect of reducing the rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or Letters of Credit issued by any Issuing Lender, to a level below that which such Lender or Issuing Lender such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time Borrowers will pay to such Lender or Issuing Lender such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

(c)Certificates of Reimbursement. A certificate of a Lender or  Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or Issuing Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section and delivered to Borrowers (with a copy to the Administrative Agent), shall be conclusive absent manifest error. Borrowers shall pay such Lender or Issuing Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)Failure or delay on the part of any Lender or Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate a Lender or Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or Issuing Lender, as the case may be, notifies Borrowers of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 4.4    Funding Losses. In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender) as a result of any Loan not being made in accordance with a Borrowing Request, the Interest Period of any Loan not being continued in accordance with the Continuation/Conversion Notice therefor or any repayment or prepayment of the principal amount of any Loans on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Section 3.1, Section 4.1, Section 4.2, Article VIII or any assignment pursuant to Section 4.5 or otherwise then, upon the notice of such Lender to the Borrowers (with a copy to the Administrative Agent), the Borrowers shall promptly (and, in any event, within three (3) Business Days of receipt of such notice) pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense. Such notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrowers. For the purpose of calculating amounts payable to a Lender under this Section, each Lender shall be deemed to have actually funded its relevant Loan through the purchase of a deposit bearing interest at LIBOR in an amount equal to the amount of that Loan and having a maturity comparable to the relevant
Interest Period; provided, that each Lender may fund each of its Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section.

SECTION 4.5    Mitigation Obligations; Replacement of Lender.

(a)Designation of Different Lending Office If any Lender requests compensation under Section 4.3, or requires Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.6, then such Lender shall (at the request of Borrowers) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.3 or Section 4.6, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)Replacement of Lenders. If any Lender requests compensation under Section 4.3, or if Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.6 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with clause (a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.11), all of its interests, rights (other than its existing rights to payments pursuant to the Loan Documents) and obligations under this Agreement and the related Loan Documents to  an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i)Borrowers  shall  have  paid  to  the  Administrative  Agent  the assignment fee (if any) specified in Section 11.11;

(ii)such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letter of Credit Liabilities, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 11.3, Section 4.4 and Section 3.1) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrowers (in the case of all other amounts);

(iii)in the case of any such assignment resulting from a claim for compensation under Section 4.3 or payments required to be made pursuant to Section 4.6, such assignment will result in a reduction in such compensation or payments thereafter;

		
	(iv)
	such assignment does not conflict with the Laws; and

(v)in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

SECTION 4.6    Taxes.

(a)Payments Free of Taxes. Any and all payments by or on account of any obligation 

of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by the Laws. If any Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with the Laws and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay to the relevant Governmental Authority in accordance with the Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c)Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to  be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.11(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (d).

(e)Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 4.6, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

		
	(f)
	Status of Lenders.

(i)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrowers 

and the Administrative Agent, at the time or times prescribed by the Laws or reasonably requested by Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by Borrowers or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by either Borrower or the Administrative Agent, shall deliver such other documentation prescribed by the Laws or reasonably requested by either Borrower or Administrative Agent as will enable either Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 4.6 (f)(ii)(A), (ii)(B), (ii)(C) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)Without limiting the generality of the foregoing, in the event that either Borrower is a U.S. Person,

(A)any Lender that is a U.S. Person shall deliver to such Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of such Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of either Borrower or the Administrative Agent), whichever of the following is applicable:

(1)in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

		
	(2)
	executed originals of IRS Form W-8ECI;

(3)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 4.6 (A) to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of either Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled 

foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4)to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 4.6 (B) or Exhibit 4.6 (C), IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 4.6 (D) on behalf of each such direct and indirect partner;

(C)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request

of Borrowers or the Administrative Agent), executed originals of any other form prescribed by the Laws as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by the Laws to permit Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrowers and the Administrative Agent at the time or times prescribed by the Laws and at such time or times reasonably requested by Borrowers or the Administrative Agent such documentation prescribed by the Laws (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrowers or the Administrative Agent as may be necessary for Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with  such  Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrowers and the Administrative Agent in writing of its legal inability to do so.

(g)Treatment of Certain Refunds. If any party determines, in its sole discretion 

exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.6 (including by the payment of additional amounts pursuant to this Section 4.6), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4.6 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This clause shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)Survival. Each party’s obligations under this Section 4.6 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

SECTION 4.7    Payments, Interest Calculations, etc.

(a)Unless otherwise expressly provided, all payments by the Borrowers pursuant to or in respect of this Agreement, the Notes or any other Loan Document shall be made by the Borrowers to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment; provided, however, that in the case of any Revolving Lender that is a Defaulting Lender due to failure to fund, the Administrative Agent shall be entitled to set off the funding shortfall against such Defaulting Lender’s respective share of all payments received from the Borrowers. All such payments required to be made to the Administrative Agent shall be made without setoff, deduction or counterclaim, not later than 11:00 A.M. (New York City time), on the date due, in same day or immediately available funds, to such account as the Administrative Agent shall specify from time to time by notice to the Borrowers. Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day and any applicable interest shall continue to accrue thereon. The Administrative Agent shall promptly remit (and, in any event, on the same Business Day as received by the Administrative Agent is so received on or prior to 11:00 A.M. (New York City time)) in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender.

(b)All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. If a Loan is repaid on the same day it is made one day’s interest shall be charged. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (b) of the definition of the term “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

(c)The Administrative Agent is authorized to charge any account maintained by either Borrower or any other Loan Party with it for any Obligations owing to it or any of the Lender Parties.

SECTION 4.8    Sharing of Payments.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other Obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such Obligations greater than its Percentage thereof as provided herein (other than pursuant to Section 4.5(b)), then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other Obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i)if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)the provisions of this clause shall not be construed to apply to (a) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Letter of Credit Liabilities to any assignee or participant, other than to either Borrower or any Subsidiary thereof (as to which the provisions of this clause shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under the Laws, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation.

SECTION 4.9    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by the Laws, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) or other property at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, such Issuing Lender or any such Affiliate, to or for the credit or the account of Borrowers or any other Loan Party against any and all of the obligations of such Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or such Issuing Lender or their respective Affiliates, irrespective of whether or not such Lender, Issuing Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Borrower or such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such Issuing Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 4.12 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the 

Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such

Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each Issuing Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender or its respective Affiliates may have. Each Lender and Issuing Lender agrees to notify Borrowers and Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 4.10 Use of Proceeds. The Term Loan reflects  the  remaining outstanding balance of term loan indebtedness under the Existing Credit Agreement after the prepayment of certain amounts outstanding as set forth in Section 5.1. The proceeds of any Multi-Draw Term Loans (including the proceeds of any Multi-Draw Term Loan Increase) or Incremental Term Loans shall be used solely to finance acquisitions of additional Domestic Real Property (along with actual and reasonably estimated costs and expenses related thereto) in accordance with clause (b)(iv) of Section 2.1.1 with respect to Incremental Term Loans, and in accordance with clause (f) of Section 2.1.1 with respect to Multi-Draw Term Loans, subject to the fulfillment of the conditions precedent set forth in Section 5.2 and Section 5.3; provided that, the proceeds of any Multi-Draw Term Loans (including the proceeds of any Multi-Draw Term Loan Increase) may also be used to refinance Revolver Real Property Acquisition Loans. The proceeds of any Revolving Loans (including the proceeds of any Revolver Increase) shall be used (a) for general working capital, (b) to support Letters of Credit, (c) to fund cash earnest money deposits made by any Loan Party other than CatchMark Timber in connection with the acquisition of any additional Domestic Real Property in an amount that together with any other Credit Support provided with respect to such acquisition does not exceed the Permitted Escrow Amount with respect to such acquisition, (d) to fund the acquisition of additional Domestic Real Property or to pay the actual and reasonably estimated costs and expenses related thereto in an amount not to exceed $3,000,000 (or such larger amount as the Administrative Agent shall agree to in its sole discretion but, in any event, not to exceed $4,000,000) in the aggregate at any one time (collectively, the “Revolver Real Property Acquisition Loans”), and (e) for other general corporate purposes.

SECTION 4.11    Payment Reliance.

(a)Unless the Administrative Agent shall have been notified from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s Percentage of such Borrowing, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on such date in accordance with Section 2.1.3 and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its Percentage of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by Borrowers, the interest rate applicable to Base Rate Loans.   If the

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Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period. If such Lender pays its Percentage of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to this Administrative Agent. Nothing in this Subsection or elsewhere in this Agreement or the other Loan Documents shall be deemed to require the Administrative Agent (or any other Lender) to advance funds on behalf of any Lender or to relieve any Lender from its obligations to fulfill its commitments hereunder or to prejudice any rights that the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

(b)Unless the Administrative Agent shall have received notice from either Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

SECTION 4.12    Defaulting Lenders.

(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by the Laws:

(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 11.1.

(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 4.8 or Section 4.9 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or Swingline Lender hereunder; third to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 4.13; fourth, as Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and Borrowers, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (B) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 4.13; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or Swingline Lenders as a result of any 

judgment of a court of competent jurisdiction obtained by any Lender, Issuing Lenders or Swingline Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (X) such payment is a payment of the principal amount of any Loans or Letter of Credit Liabilities in respect of which such Defaulting Lender has not fully funded its appropriate share, and (Y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.1 were satisfied or waived, such payment shall be applied solely to pay the Loans of or Letter of Credit Liabilities owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Letter of Credit Liabilities owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letter of Credit Liabilities and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 4.12(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 4.12(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

		
	(iii)
	Certain Fees.

(A)No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)Each Defaulting Lender shall be entitled to receive the fees provided in Section 3.5 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 4.13.

(C)With respect to any Commitment Fee or fees provided in Section 3.5 not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers shall (x) pay to each Non- Defaulting Lender that portion of any such fee otherwise payable to such
Defaulting Lender with respect to such Defaulting Lender’s participation in Letter of Credit Liabilities or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuing Lender and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv)Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in Letter of Credit Liabilities and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (A) the 

conditions set forth in Section 5.3 are satisfied at the time of such relocation (and, unless the Borrowers shall have otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (B) such reallocation does not cause the aggregate Revolving Loans and participations in Letter of Credit Liabilities and Swingline Loans of any Non- Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Loan Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under Law, (A) first, prepay the Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (B) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in Section 4.13.

(b)Defaulting Lender Cure. If the Borrowers, the Administrative Agent, the Swingline Lender and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that such Lender will, to the extent applicable, purchase at par (together with any break funding costs the Non-Defaulting Lender may have as a result of such purchase) that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable credit facilities (without giving effect to Section 4.12(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)Reduction of Commitments of Defaulting Lender. Borrowers may terminate the unused amount of the Commitment of any Lender that is a Defaulting Lender upon not less than fifteen (15) Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders thereof), and in such event the provisions of Section 4.12(a)(ii) will apply to all amounts thereafter paid by Borrowers for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided that (i) no Event of Default shall have occurred and be continuing, and (ii) such termination shall not be deemed to be a waiver or release of any claim Borrowers, the Administrative Agent or any Lender may have against such Defaulting Lender.

(d)New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

SECTION 4.13 Cash Collateral.  At any time that there shall exist a Defaulting Lender, within 

one (1) Business Day following the written request of the Administrative Agent, the Swingline Lender or any Issuing Lender (with a copy to the Administrative Agent), the Borrowers shall Cash Collateralize the Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 4.12(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(a)Grant of Security Interest. The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lenders, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of Letter of Credit Liabilities, to be applied pursuant to clause (b) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Lenders as herein provided (other than Liens permitted pursuant to Section 7.2.3), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by Administrative Agent, pay or provide to Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(b)Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 4.13 or Section 4.12 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letter of Credit Liabilities (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c)Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 4.13 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and each Issuing Lender that there exists excess Cash Collateral; provided that, subject to Section 4.12, the Person providing Cash Collateral and each Issuing Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

SECTION 4.14    Letter of Credit Liability.

(a)Upon the occurrence and during the continuance of an Event of Default and at the direction of the Administrative Agent, or in the event any Letters of Credit are outstanding on the Revolving Loan Commitment Termination Date, then (i) with respect to all outstanding Letters of Credit, the Borrowers shall either (A) deliver to the Administrative Agent for the benefit of all Lenders with a Revolving Loan Commitment a letter of credit in United States dollars, with a term that extends 60 days beyond the expiration date of each such Letter of Credit, issued by a bank satisfactory to the Administrative Agent and in an amount equal to 103% of the Letter of Credit Liability with respect to each such Letter of Credit, which letter of credit shall be drawable by the Administrative Agent to reimburse payments of drafts drawn under each such Letter of Credit and to pay any fees and expenses related thereto or (B) immediately deposit with the Administrative Agent an amount equal to the aggregate outstanding Letter of Credit Liability to enable the Administrative Agent to make payments under all of the outstanding Letters of Credit when required and such amount shall become immediately 

due and payable, and (ii) the Borrowers shall prepay the fees payable under Section 3.5 with respect to all such Letters of Credit for the full remaining terms of such Letters of Credit. Upon termination of any such Letter of Credit, the unearned portion of such prepaid fee attributable to such Letter of Credit shall be refunded to the Borrowers.

(b)(i) In the event the Aggregate Letter of Credit Usage exceeds the Letter of Credit Sublimit at any time, the Borrowers shall reduce the Letter of Credit Usage for a sufficient number of the outstanding Letters of Credit to eliminate such excess, (ii) in the event that a mandatory or voluntary prepayment is applied pursuant to Section 3.1.3 to reduce the Aggregate Letter of Credit Usage, the Borrowers shall reduce the Aggregate Letter of Credit Usage by the amount of such prepayment, or (iii) prior to the Revolving Loan Commitment Termination Date so long as no Event of Default has occurred and is continuing or would result therefrom, the Borrowers may reduce the Letter of Credit Usage for any Letter of Credit, by either (A) delivering to the Administrative Agent for the benefit of all Lenders with a Revolving Loan Commitment a letter of credit in United States dollars, with a term that extends 60 days beyond the expiration date of such Letter of Credit, issued by a bank satisfactory to the Administrative Agent and in an amount equal to 103% of the Letter of Credit Liability with respect to such Letter of Credit, which letter of credit shall be drawable by the Administrative Agent to reimburse payments of drafts drawn under such Letter of Credit and to pay any  fees  and expenses related thereto or (B) depositing with the Administrative Agent an amount equal to the Letter of Credit Liability for such Letter of Credit to enable the Administrative Agent to make payments under such Letter of Credit when required and such amount shall become immediately due and payable.  In each case, the Borrowers shall also prepay the fees payable under Section 3.5 with respect to such Letters of Credit for the full remaining term of such Letter of Credit. Upon termination of such Letter of Credit, the unearned portion of such prepaid fee attributable to such Letter of Credit shall be refunded to the Borrowers.

ARTICLE V 
CONDITIONS PRECEDENT TO LOANS

SECTION 5.1    Conditions to Effectiveness. The effectiveness of this Agreement shall be subject to the fulfillment of each of the conditions precedent set forth in this Section 5.1 to the satisfaction of each Lender Party and the Issuing Lender on or prior to the Effective Date.

SECTION 5.1.1     Agreement.  The Administrative Agent shall have received this Agreement duly executed by each Lender, the Administrative Agent, the Issuing Lender, the Swingline Lender and an Authorized Officer of each Borrower.

SECTION 5.1.2    Resolutions, Good Standing, etc.

Each Lender shall have received from each Loan Party a certificate, dated the Effective Date, of its Secretary, Assistant Secretary or Manager as to:

(a)resolutions of its Board of Directors (or equivalent body) then in full force and effect authorizing the execution, delivery and performance of each Loan Document to be executed by it;

		
	(b)
	each Organizational Document of each such Loan Party; and

(c)the incumbency and signatures of each officer (including each Authorized Officer and Financial Officer) of each such Loan Party that is authorized to act with respect to each Loan Document executed by it;

upon which certificate each Lender Party may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary or Manager of the relevant Loan Party canceling or amending such prior certificate. The Administrative Agent shall have received satisfactory good standing certificates for each jurisdiction where the Collateral is located and each other jurisdiction where the Borrowers and each other Loan Party are organized and are authorized (or should be authorized under the Laws) to conduct business.

SECTION 5.1.3   Delivery of Notes.   To the extent requested, each Lender shall have received its Note in an amount equal to such Lender’s Term Loans, such Lender’s Revolving Loan Commitment Amount, such Lender’s Multi-Draw Term Loan Commitment Amount and such Swingline Lender’s Swingline Commitment, dated the Effective Date, duly completed as herein provided and duly executed and delivered by an Authorized Officer of each Borrower.
SECTION 5.1.4  Required  Consents  and   Approvals.   All   required consents and approvals shall have been obtained and be in full force and effect with respect to the offering and issuance of common stock of CatchMark Timber, the transaction of the Loan Parties to self-management and the other transactions contemplated hereby from (a) all relevant Governmental Authorities and (b) any other Person whose consent or approval is necessary or any Lender deems appropriate to effect such transactions.

SECTION 5.1.5 Opinion of Counsel. The Administrative Agent shall have received legal opinions, dated the Effective Date and addressed to the Administrative Agent and all the Lenders, from New York and each state where the Timberlands is located legal counsel to the Borrowers, in form and substance reasonably acceptable to the Administrative Agent.

SECTION 5.1.6  Evidence of Insurance.   The Administrative Agent shall have received evidence of the insurance coverage required to be maintained pursuant to Section 7.1.4, which insurance shall have been reviewed by one or more of the Administrative Agent’s risk managers and be satisfactory to the same. All such insurance shall be subject to satisfactory endorsements in favor of the Administrative Agent.

SECTION 5.1.7     Guaranty.  The Administrative Agent shall have received the Guaranty duly executed by an Authorized Officer of each applicable Loan Party.

SECTION 5.1.8    Pledged Property.

The Administrative Agent shall have received:

(a)the Pledge Agreement duly executed by an Authorized Officer of each applicable Loan Party, pursuant to which each of those entities shall pledge all of the Equity Interests in each of their respective Subsidiaries;

(b)original certificates evidencing all of the issued and outstanding shares of capital stock and other Equity Interests required to be pledged pursuant to the terms of the Pledge Agreement, which certificates shall be accompanied by undated stock and other powers duly executed in blank by each relevant pledgor.

SECTION 5.1.9    U.C.C. Search Results, etc.

The Administrative Agent shall have received:

(a)U.C.C. search reports certified by a party acceptable to the Administrative Agent, dated a date reasonably near (but prior to) the Effective Date, listing all effective U.C.C. financing statements, federal and state tax Liens, and judgment Liens which name the Borrowers or any other Loan Party as the debtor, and which are filed in each jurisdiction in which U.C.C. filings are to be made pursuant to this Agreement or the other Loan Documents and in such other jurisdictions as the Administrative Agent may reasonably request, together with copies of such financing statements; and
(b)with respect to all the Intellectual Property Collateral, search results from the United States Patent and Trademark Office and United States Copyright Office to the extent of any patents, trademarks or copyrights form a part of the Collateral.

SECTION 5.1.10    Security Agreements, Filings, etc.

(a)The Administrative Agent shall have received the CatchMark Timber Security Agreement duly executed by an Authorized Officer of CatchMark Timber and the Security Agreement duly executed by an Authorized Officer of each of the Borrowers, CatchMark TRS, CatchMark TRS Subsidiary and CatchMark HBU, together with:

(i)confirmation that all necessary U.C.C. financing  statements naming each such Person as the debtor and the Administrative Agent as the secured party have been properly filed under the U.C.C. of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the first priority security interest of the Administrative Agent in the Collateral subject thereto; and

(ii)evidence satisfactory to the Administrative Agent of the filing (or delivery for filing) of appropriate trademark, copyright and patent security supplements with the United States Patent and Trademark Office and United States Copyright Office to the extent relevant in order to perfect the first priority security interest of the Administrative Agent therein; and

(iii)evidence of completion of all other actions, reasonably requested by the Administrative Agent, in order to perfect its first priority security interest in the Collateral the subject thereof.

SECTION 5.1.11  Solvency  Certificate.   The  Administrative  Agent  shall have received each Solvency Certificate, dated as of the Effective Date.

SECTION 5.1.12 Closing Date Certificate.  The Administrative Agent shall have received a Closing Date Certificate in substantially the form of Exhibit D attached hereto, duly executed by a Financial Officer of each Borrower and dated the Effective Date. All documents and agreements appended to such Closing Date Certificate shall be in form and substance satisfactory to the Administrative Agent and the Lenders.

SECTION 5.1.13  Flood  Laws.  The  Administrative  Agent   shall   have received evidence that the Loan Parties have taken all actions required under the Flood Laws and/or requested by the Administrative Agent or any Lender to assist in ensuring that each Lender is in compliance with the Flood Laws applicable to the Collateral.

SECTION 5.1.14 Material Government Approvals. The Borrowers shall have delivered to the Administrative Agent a certificate signed by a Financial Officer of each Borrower and dated the Effective Date, certifying true and copies of all the approvals, if any, of Governmental 

Authorities set forth on Item 6.19(b) (“Material Governmental Approvals”) of the Disclosure Schedule.

SECTION 5.1.15    Collateral Assignment of Material Agreements; Reaffirmation of Collateral Assignment of Material Agreement.

The Administrative Agent shall have received with respect to the Timberland Operating Agreement and each MW Supply Agreement a duly executed Collateral Assignment of Material Agreement or a duly executed Reaffirmation of Collateral Assignment of Material Agreement, as applicable.

SECTION 5.1.16    Mortgages, etc.

With respect to the Real Property, the Administrative Agent shall have received all of the following:

(a)counterparts of the Mortgage Amendments, each dated as of December 19, 2013, and duly executed by Timberlands II and CatchMark HBU, as applicable;

(b)an endorsement to each of the existing mortgagee’s title insurance policies. Each such endorsement shall (i) be in an amount satisfactory to the Administrative Agent; (ii) be in form and substance satisfactory to the Administrative Agent; (iii) be issued at ordinary rates; (iv) extend the effective date of each such policy to the date of the applicable Mortgage Amendments, (v) confirm no change in the first priority Lien and security interest in favor of the Administrative Agent for the benefit of the Lender Parties, except for changes acceptable to the Administrative Agent; and (vi) be issued directly by a title insurance company reasonably acceptable to the Administrative Agent. The Administrative Agent shall have received evidence satisfactory to it that all premiums in respect of each such endorsement, all charges for mortgage recording and similar taxes, and all related expenses, if any, have been paid;

(c)a copy of (i) all documents referred to, or listed as exceptions to title in, the title endorsements referred to in clause (b) above and (ii) all other material documents affecting the Real Property, including all building, construction, environmental and other permits, licenses, franchises, approvals, consents, authorizations and other approvals required in connection with the construction, ownership, use, occupation or operation of the Real Property;

		
	(d)
	appraisal dated December 31, 2012, from American Forest Management;

(e)confirmation that all necessary U.C.C. financing statements relating to the Real Property naming the applicable Landholder as the debtor and the Administrative Agent as the secured party have been properly filed in the same offices where the applicable Mortgage is filed;

		
	(f)
	Harvest Plan dated October 1, 2013, covering the calendar year 2014; and

(g)a copy of each Timber Lease, certified as true and correct by a Financial Officer of each Borrower.

SECTION 5.1.17 Timber Manager Subordination Agreement. The Administrative Agent shall have received a reaffirmation of the Timber Manager Subordination Agreement, in form and substance reasonably acceptable to the Administrative Agent, dated as of December 19, 2013, duly 

executed by the Timber Manager, Timberlands II, CatchMark TRS Subsidiary, CatchMark HBU and the Administrative Agent, together with a copy of the Timberland Operating Agreement and its corresponding Collateral Assignment of Material Agreement delivered to the Administrative Agent pursuant to Section 5.1.15.

SECTION 5.1.18    Representations and Warranties True and Correct.

Both before and after giving effect to any Borrowing on the Effective Date (including the issuance of any Letter of Credit):

(a)all the representations and warranties set forth in Article VI shall be true and correct in all respects with the same effect as if then made, provided that (i) such representations and warranties that relate solely to an earlier date shall be true and correct as of such earlier date and (ii) the inaccuracy of any of the representations and warranties set forth in Article VI shall, subject to the terms of Section 8.1.2, result in an Event of Default;

(b)no Default or Event of Default has occurred and is continuing or would result therefrom.

SECTION 5.1.19 Environmental Matters. Each Lender shall have received satisfactory evidence that all environmental matters that were to be remediated prior to the Effective Date, if any, have been so remediated.

SECTION 5.1.20  Financial  Information,  etc.   The  Administrative  Agent shall have received on or before the Effective Date a certificate of a Financial Officer of CatchMark Timber attaching true and correct copies of (a) the annual audit report required by clause (b) of Section 7.1.1 for the Fiscal Year ended December 31, 2012, (b) a projected operating expense budget for CatchMark Timber and its Subsidiaries, prepared on a monthly basis, for the Fiscal Year ending December 31, 2014, and (c) pro forma financial projections for CatchMark Timber and its Subsidiaries for the 18-month period ending June 30, 2015.

SECTION 5.1.21    Account Control Agreements, etc.

(a)The Administrative Agent shall have received satisfactory  evidence that
(i) the Borrowers and the Subsidiaries of the Borrowers have directed that all amounts payable to them from their account debtors and other Persons shall be deposited in a Pledged Account, (ii) each of the Material Accounts of the Loan Parties other than CatchMark Timber is a Pledged Account, (iii) the CatchMark TRS Subsidiary Account has been established and is being maintained by CatchMark TRS Subsidiary, proper notice of the same has been provided to the parties to the Fiber Supply Agreement, and all amounts payable to CatchMark TRS Subsidiary under the Fiber Supply Agreement are being deposited in the CatchMark TRS Subsidiary Account, and (iv) the Revenue Account has been established and is being maintained by Timberlands  II,  proper  notice  of  the  same  has  been  provided  to  the  parties  to  the  Master Stumpage Agreement, and all amounts payable to CatchMark TRS Subsidiary or Timberlands II under the Master Stumpage Agreement are being deposited in the Revenue Account.

(b)The Administrative Agent shall have received satisfactory evidence (i) that CatchMark Timber has established and is maintaining each Equity Raise Account in accordance with Section 7.1.15 and has directed that all proceeds of any issuance of equity by CatchMark Timber to be directly deposited into an Equity Raise Account, (ii) that each Equity Raise Account is subject to an Account Control Agreement, and (iii) that CatchMark Timber and the other Loan Parties have directed 

that all Equity Raises Net Proceeds be directly deposited in a Pledged Account of Timberlands II.

SECTION 5.1.22 Patriot Act; Anti-Terrorism. The Lenders  shall  have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the USA Patriot Act and any other Anti-Terrorism Law.

SECTION 5.1.23 Satisfactory Due Diligence. Each Lender shall have completed, to its satisfaction, a due diligence analysis with respect to the business, assets, operations, condition (financial and otherwise) and prospects of the Loan Parties, including with respect to their ability to comply with the representations and warranties and covenants contained in the Loan Documents.

SECTION 5.1.24  Initial   Compliance   Certificate.   The   Administrative Agent shall have (a) received an initial Compliance Certificate, duly executed by a Financial Officer of the Borrowers, and dated as of December 19, 2013, showing a calculation of the Loan to Value Ratio and the Minimum Liquidity Balance and (b) confirmed to the Borrowers that, in its reasonable and good faith determinations, that the calculations contained in the initial Compliance Certificate are satisfactory.

SECTION 5.1.25 Satisfactory Legal Form. All documents executed or submitted pursuant hereto by or on behalf of any Loan Party shall be reasonably satisfactory in form and substance to each Lender and its legal counsel. In addition, the Administrative Agent shall have received all information, approvals, opinions, documents or instruments as its counsel may reasonably request.

SECTION 5.1.26 Fees and Expenses. The Administrative Agent shall have received for its own account, and for the account of each Lender, all fees, costs and expenses due and payable pursuant to the Fee Letter and Section 11.3.

SECTION 5.1.27    Repayment   of   Existing   Indebtedness;   Release   and Termination of Existing Liens.

(a)The Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to the Administrative Agent, that (i) all Indebtedness of the Loans Parties has been fully paid, satisfied and discharged, other than Indebtedness permitted under Section 7.2.2, and (ii) all Liens in respect of any such Indebtedness have been or will be immediately released and terminated.

(b)On or prior to the Effective Date, the aggregate outstanding principal amount of the Term Loans under the Existing Credit Agreement shall be repaid with certain of the proceeds of the offering and issuance of the common stock of CatchMark Timber on December 17, 2013, in an amount not less than $80,000,000, together with accrued and unpaid interest and any amounts due under Sections 4.4 or 11.3 of the Existing Credit Agreement such that the aggregate outstanding principal amount of the Term Loans as of the Effective Date equal the total set for on Part I of Schedule II hereto.

SECTION 5.1.28    AgSouth Equity Interests.   CatchMark Partnership shall have purchased Equity Interests in AgSouth as provided in Section 11.23.

SECTION 5.2    Conditions to Multi-Draw Term Loans. The obligations of each Multi-Draw Term Loan Lender to make Multi-Draw Term Loans during the Multi-Draw Term Loan Availability Period shall be subject to the fulfillment of each of the conditions precedent set forth in this Section 5.2 

and in Section 5.3 to the satisfaction of the Administrative Agent:

SECTION 5.2.1 Notice of Proposed Acquisition of Real Property. The Administrative Agent shall have received (a) not less than forty-five (45) days prior written notice (or such shorter period for notice as the Administrative Agent may agree to in its sole discretion) from the Borrowers of the proposed acquisition of additional Real Property that will be financed with such Multi-Draw Term Loans or (b) not less than five (5) Business Days prior written notice from the Borrowers of the proposed refinancing of the outstanding Revolver Real Property Acquisition Loans with proceeds of Multi-Draw Term Loans.

SECTION 5.2.2   Delivery of Real Property Documents.  Other than in the case of a refinancing of outstanding Revolver Real Property Acquisition Loans, the Administrative Agent shall have received:

(a)not less than thirty (30) days prior (or such shorter period of time as the Administrative Agent may agree to in its reasonable discretion) to the acquisition of additional Real Property to be financed with the proceeds of Multi-Draw Term Loans, copies of the substantially complete form of the Real Property Documents,

(b)not less than two (2) Business Day prior (or such shorter period of time as the Administrative Agent may agree to in its reasonable discretion) to the acquisition of additional Real Property to be financed with the proceeds of Multi-Draw Term Loans, copies of the final form of the Real Property Documents, and

(c)prior to such Borrowing copies or originals, as applicable, of the final, fully executed Real Property Documents.

(For the avoidance of doubt, as provided in the definition of “Real Property Documents,” the Administrative Agent may elect in its sole discretion to accept delivery of one or more of the Real Property Documents on a post-closing basis after such Multi-Draw Term Loan Borrowing and/or to waive delivery of one or more of the Real Property Documents.)

SECTION 5.2.3   Covenants; Compliance Certificate.   The Loan Parties shall be in compliance after giving effect to any such Borrowing with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4.

SECTION 5.2.4  Security  Interest  in  Additional  Real  Estate.  The Borrowers shall cause any additional Real Property acquired by any Landholder to be subject to a first priority security interest in favor of the Administrative Agent in accordance with the terms of Section 7.1.9. The Loan Parties shall execute any and all further documents, financing statements, agreements and instruments and take all such further actions requested by the Administrative Agent or the Lenders as may be required by Law or under this Agreement with respect to any additional Real Property acquired by the Landholders.

SECTION 5.2.5    Resolutions, Good Standing, etc.

(a)the Administrative Agent shall have received evidence that the certificates of the Loan Parties delivered pursuant to Section 5.1.2 or substantially similar certificates delivered pursuant to Section 7.1.9(d) or otherwise remain true, complete and correct or shall have received new certificates for each Loan Party consistent with Section 5.1.2 dated as of the date of such Borrowing;

(b)If requested by the Administrative Agent, the Administrative Agent shall have received a certificate, dated as of the date of such Borrowing, from the applicable Loan Parties as to the resolutions of such Loan Party’s Board of Directors (or equivalent body) then in full force and effect authorizing the execution, delivery and performance of the Real Property Documents to be executed by it; and

(c)The Administrative Agent shall have received satisfactory good standing certificates for each jurisdiction where the Additional Real Property is located.

SECTION 5.2.6 Fees and Expenses. The Administrative Agent shall have received for its own account, and for the account of each Lender, all fees, costs and expenses due and payable pursuant to any other Loan Document including, without limitation, Section 11.3.

SECTION 5.3    Conditions to all Loans and Letters of Credit. The obligation of each Lender to make any Loan and of each Issuing Lender to issue any Letters of Credit shall be subject to the prior or concurrent fulfillment of each of the conditions precedent set forth in this Section 5.3 to the satisfaction of the Administrative Agent:

SECTION 5.3.1    Compliance with Warranties, No Default, etc.

Both before and after giving effect to any Borrowing (including the issuance of any Letter of Credit):
(a)the representations and warranties set forth in Article VI and in the other Loan Documents shall be true and correct in all material respects with the same effect as if then made; provided, that such representations and warranties (i) that relate solely to an earlier date shall be true and correct as of such earlier date and (ii) shall be true and correct in all respects if they are qualified by a materiality standard;

(b)no Default or Event of Default shall have then occurred and be continuing or would result therefrom.

SECTION 5.3.2   Borrowing Request, etc.  The Administrative Agent shall have received, as herein provided, a duly completed and executed Borrowing Request, or in, accordance with the provisions of Section 2.1.1(d)(iv), a notice requesting the issuance of a Letter of Credit. Each delivery of a Borrowing Request shall constitute a representation and warranty by the Borrowers that on the date of such Borrowing or issuance of a Letter of Credit (both immediately before and after giving effect to such Borrowing or issuance of a Letter of Credit and the application of the proceeds thereof) the statements made in Section 5.3.1 are true and correct.

SECTION 5.3.3 Compliance Certificate. In the event that a Borrowing Request is for in excess of $20,000,000, the Administrative Agent shall also have received a Compliance Certificate, duly completed and executed by a Financial Officer of the Borrowers, and dated as of the date of such Borrowing, showing compliance with the financial covenants set forth in Section 7.2.4 after giving effect to such Borrowing and noting any change to the Applicable Margin as provided in the definition thereof.

SECTION 5.3.4 Satisfactory Legal Form. All documents executed  or submitted pursuant hereto by or on behalf of any Loan Party with respect to such Borrowing shall be reasonably 

satisfactory in form and substance to the Administrative Agent and its legal counsel. In addition, the Administrative Agent shall have received all information, approvals, opinions, documents or instruments as its counsel may reasonably request.

SECTION 5.4    Determinations Under Article V. For purposes of determining compliance with the conditions specified in Section 5.1, each Lender shall be deemed to have consented to and approved each document or other matter required thereunder to be consented to or approved by each of them by their execution of this Agreement. For purposes of determining compliance with the conditions specified in Sections 5.2 and 5.3, each Lender shall be deemed to have consented to and approved each document or other matter required thereunder to be consented to or approved by each of them (if any) unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received a notice from such Lender prior to the making of any Borrowing specifying its objection thereto and such Lender shall not have made available to the Administrative Agent its ratable portion of the requested Borrowing.

ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement and make the Borrowings, the Borrowers hereby represent and warrant as of the Effective Date, as of the Amendment Effective Date, and as of the date of each request for a Borrowing, and after giving effect to each Borrowing, to each Lender and the Administrative Agent as set forth in this Article. Notwithstanding the below, for purposes of this Article VI no Subsidiary of CatchMark Timber qualifying as an Unrestricted Timber Subsidiary shall be deemed to be a Subsidiary of any Loan Party.

SECTION 6.1    Organization, etc. Each Loan Party and each Subsidiary of any Loan Party (a) (i) is a corporation, limited partnership or limited liability company validly organized and existing and in good standing under the Laws of the jurisdiction of its organization and (ii) is duly qualified to do business and is in good standing as a foreign corporation or limited liability company in each jurisdiction where the nature of its business requires such qualification; and (b) has full power and authority and holds all requisite permits, licenses, authorizations, approvals, entitlements, accreditations and privileges, from Governmental Authorities or otherwise, to (i) enter into and perform its Obligations under this Agreement and each other Loan Document to which it is a party and (ii) own and hold under lease its property and to conduct its business in the ordinary course. No Loan Party or any Subsidiary of any Loan Party is in violation of its Organizational Documents.

SECTION 6.2    Due Authorization, Non-Contravention, etc.

The execution, delivery and performance by any Loan Party or any Subsidiary of any Loan Party of this Agreement, each other Loan Document executed or to be executed by it, are within such Loan Party’s and each such Subsidiary’s corporate, partnership, limited partnership or limited liability company powers, have been duly authorized by all necessary corporate, partnership, limited partnership or limited liability company action, and do not:

(a)contravene or result in a default under any Loan Party’s or any such Subsidiary’s Organizational Documents;

(b)(contravene any Law binding on any Loan Party or any Subsidiary of any Loan Party;

(c)violate, conflict with, result in a breach of, or constitute (along or with notice or lapse of time or both) a default of event of default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under, any agreement, document or other instrument to which it is a party;

(d)violate, conflict with, result in a breach of, or result in the impairment, forfeiture or non-renewal of, any material permit, license, authorization, approval, entitlement, accreditation or privilege of any Governmental Authority; or

(e)result in, or require the creation or imposition of, any Lien on any Loan Party’s or any such Subsidiary’s properties.

SECTION 6.3    Required Approvals. Except as duly obtained and in full force and effect prior to the Amendment Effective Date and the filing of U.C.C. financing statements, Mortgages and Mortgage Amendments that have not previously been filed in the appropriate filing offices, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for:

(a)the due execution, delivery or performance by any Loan Party or any Subsidiary of any Loan Party of this Agreement or any other Loan Document to which it is a party;

(b)the grant by any Loan Party or any Subsidiary of any Loan Party of the security interests, pledges and Liens granted by the Loan Documents; or

(c)the perfection of or the exercise by the Administrative Agent of its rights and remedies under this Agreement or any other Loan Document.

SECTION 6.4    Validity, etc. This Agreement constitutes, and each other Loan Document executed by any Loan Party or any Subsidiary of any Loan Party will, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of such Loan Party or such Subsidiary enforceable in accordance with their respective terms, subject in each case to the effect of any Debtor Relief Laws or other similar Laws affecting creditors’ rights generally, and subject to the effect of general principles of equity (regardless of whether considered in a proceeding in equity or at Law). Each of the Loan Documents which purports to create a security interest in favor of the Administrative Agent (on behalf of the Lender Parties) creates a valid first priority security interest in the Collateral (subject, in the case of non- possessory security interests only, to Liens permitted by Section 7.2.3) securing the payment of the Obligations, and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken. Upon the filing of U.C.C. financing statements, Mortgages and Mortgage Amendments in the proper filing offices, the Liens granted to the Administrative Agent pursuant to the Security Agreement, the CatchMark Timber Security Agreement and the Mortgages shall constitute a valid first priority perfected security interest in Collateral covered thereby in compliance with all the Laws. Mortgages and U.C.C. financing statements have been filed and recorded in the proper filing office for all Real Property other than with respect to any Real Property for which the time period provided under Section 7.1.9(c) for such filing and recordation has not yet expired.

SECTION 6.5    No Material Liabilities. No Loan Party and no Subsidiary of any Loan Party has any Indebtedness other than the Indebtedness permitted by Section 7.2.2.

SECTION 6.6    No Material Adverse Change, etc.

(a)Since December 31, 2012, there has been no material adverse change in its condition (financial or otherwise), operations, assets, business, properties or prospects, taken as a whole.

(b)No Loan Party nor any Subsidiary of any Loan Party has been involved in any bankruptcy or similar proceeding, and has never entered into an agreement or received the benefit of any settlement or compromise of Indebtedness.

SECTION 6.7    Litigation, Labor Matters, etc.

(a)There are (i) no outstanding judgments against any Loan Party or any Subsidiary of any Loan Party and (ii) no pending or, to the knowledge of any Loan Party or any Subsidiary of any Loan Party, threatened, litigation, action, proceeding or labor controversy affecting any Loan Party or any Subsidiary of any Loan Party or any of its respective properties, businesses, assets or revenues.

(b)To the extent any Loan Party or any Subsidiary of any Loan Party has employees, the hours worked by and payments made to employees of each Loan Party and each Subsidiary of any Loan Party have not been in violation of the Fair Labor Standards Act or any other Laws dealing with such matters. Item 6.7(b) (“Labor Matters”) of the Disclosure Schedule sets forth, as of the Effective Date, all collective bargaining agreements, management agreements, consulting agreements and employment agreements to which any Loan Party or any Subsidiary of any Loan Party is a party. There are no strikes, slowdowns, labor disputes, work stoppages or controversies pending, or to the knowledge of any Loan Party or any Subsidiary of any Loan Party threatened, between any Loan Party or any Subsidiary of any Loan Party, on the one hand, and its employees, on the other hand, other than employee grievances arising in the ordinary course of business.

SECTION 6.8    Capitalization. As of the Amendment Effective Date, the authorized Equity Interests in the Loan Parties, the Subsidiaries of any Loan Party and all other Persons in which any Loan Party or Subsidiary of any Loan Party owns any Equity Interests (including any Unrestricted Timber Subsidiaries) is set forth in Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule. Except as set forth in such Disclosure Schedule, as of the Amendment Effective Date there are no (a) outstanding rights to purchase, options, warrants or similar rights pursuant to which any Loan Party, any Subsidiary of any Loan Party or any other Persons in which any Loan Party or any Subsidiary of any Loan Party owns any Equity Interests (including any Unrestricted Timber Subsidiaries) may be required to issue, sell, repurchase or redeem any of its Equity Interests or (b) voting rights agreements. The Equity Interests so specified in Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule are fully paid and non- assessable and are owned by the applicable Person, directly or indirectly, free and clear of all Liens (other than Liens in favor of the Administrative Agent pursuant to the Loan Documents). From and after the Amendment Effective Date, no Loan Party or any Subsidiary of any Loan Party will establish or acquire any additional Equity Interests in any Person except as permitted by Section 7.2.5.

SECTION 6.9    Compliance with Laws, etc. Each Loan Party and each Subsidiary of any Loan Party is in compliance in all material respects with all Laws applicable to each of them or their properties.

SECTION 6.10    Properties, Permits, etc.

(a)Each Loan Party and each Subsidiary of any Loan Party has, and is in material compliance with, all material permits, licenses, authorizations, approvals, entitlements, accreditations and privileges of Governmental Authorities or otherwise that are required for such Person to lawfully 

own, lease, manage or operate the Real Property. Except as disclosed in Item 6.10(a) (“Property Matters”) of the Disclosure Schedule, no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement, accreditation or privilege, and there is no claim that any of the foregoing is not in full force and effect.

		
	(b)
	Each Loan Party and each Subsidiary of any Loan Party, as applicable, has

(i)good, valid and marketable fee title to all of the Land and (ii) good, valid, and marketable title to the Leasehold Interests, in each case free and clear of all Liens, easements, covenants, rights- of-way and other similar restrictions of any nature whatsoever, except Liens permitted  by Section 7.2.3. All Real Property of any Loan Party or any Subsidiary of any Loan Party is Domestic.

(c)All permits, licenses, authorizations, approvals, entitlements, accreditations and privileges required to have been issued to any Loan Party or any Subsidiary of any Loan Party with respect to the Real Property in order to enable such property to be lawfully occupied and used for all of the purposes for which it is currently occupied and used or is installed intended to be occupied and used have been lawfully issued and are in full force and effect, other than such permits which, if not obtained, would not have a Material Adverse Effect on the intended use or operation of the Real Property. Except as disclosed in Item 6.10(c) (“Consents and Approvals”) of the Disclosure Schedule, all the Real Property complies in all material respects with all Laws and no consent or approval of any landlord or other third party in connection with any Leasehold Interest or other leased property is necessary for any Loan Party or any Subsidiary of any Loan Party to enter into and execute the Loan Documents or grant any Liens thereunder.

(d)Except as disclosed in Item 6.10(d) (“Timber Operations”) of the Disclosure Schedule, no Person other the Landholders and their agents and representatives has any right to conduct timbering operations on the Real Property or any right, title or interest in and to any Timber located thereon, except for Liens permitted by Section 7.2.3.

(e)Except as disclosed in Item 6.10(e) (“Condemnation Proceedings”) of the Disclosure Schedule, there is no pending or, to the knowledge of any Loan Party or any Subsidiary of any Loan Party, contemplated condemnation or eminent domain proceeding affecting any of the Real Property.
(f)Except as may be disclosed in the title insurance endorsements delivered pursuant to Section 5.1.16, there are no unresolved claims or disputes relating to access to any portion of the Real Property that could reasonably be expected to have a Material Adverse Effect on the intended use of such Real Property by any Landholder or any other Loan Party or any Subsidiary of any Loan Party.

(g)The representations and warranties contained in the Security Agreement, the CatchMark Timber Security Agreement, the Pledge Agreement, each Mortgage and each other Loan Document with respect to the Collateral are true and correct.

SECTION 6.11    Taxes, etc.

(a)Each Loan Party and each Subsidiary of any Loan Party has (i) timely filed all tax returns and reports required by Law to have been filed by it, which tax returns and reports are correct and complete in all material respects, and (ii) paid all income Taxes and other Taxes of Governmental Authorities thereby shown to be owing, except any such Taxes which are being diligently contested in good faith by appropriate proceedings which stay the enforcement of any Lien resulting from the non-payment thereof and for which adequate reserves in accordance with GAAP shall have been set aside 

on its books.

(b)No Loan Party or any Subsidiary of any Loan Party is a party to any tax sharing agreement.

(c)Each Loan Party and each Subsidiary of any Loan Party has made adequate provision to establish reserves for liabilities for all Taxes as are or may become payable for the period prior to or after the Effective Date. No Loan Party or any Subsidiary of any Loan Party has knowledge of any proposed additional material tax assessment against it or its properties.

SECTION 6.12    ERISA.

(a)No Loan Party, any Subsidiary of any Loan Party or any ERISA Affiliates thereof sponsor, maintain or contribute to, are required to sponsor, maintain or contribute to, or otherwise have any liability with respect to any Pension Plan or Multiemployer Plan.

(b)Each Plan has been maintained, operated and funded in compliance with its terms and with all applicable provisions and requirements of the Code, ERISA, and other applicable federal or state laws, except where failure to so maintain, operate or fund could reasonably be expected to have a Material Adverse Effect. No Loan Party, any Subsidiary of any Loan Party, or any ERISA Affiliates thereof have incurred any liability pursuant to Title I or Title IV of ERISA or the penalty or excise taxes of the Code relating to employee benefit plans (as defined in Section 3(3) of ERISA), and no event, transaction, or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by any Loan Party, any Subsidiary of any Loan Party, or any ERISA Affiliates thereof, in either case pursuant to Title I or Title IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code.

(c)Except to the extent required under Section 4980B of the Code or comparable state law, no Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Party, any Subsidiary of any Loan Party, or any ERISA Affiliates thereof.

(d)Each Plan that is a welfare benefit plan (as defined in Section 3(1) of ERISA) can be terminated at any time without liability for the continuation of such benefits.

(e)The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder will not involve any transaction that is a prohibited transaction within the meaning of Section 406 of ERISA or in connection with which a tax under Section 4975 of the Code could be imposed.

(f)There are no pending, or to the knowledge of any Loan Party, any Subsidiary of any Loan Party, or any ERISA Affiliates thereof, threatened claims, actions, or lawsuits by any federal or state governmental authority, including, without limitation, the United States Internal Revenue Service, Department of Labor, or Pension Benefit Guaranty Corporation with respect to any Plan. No ERISA Event has occurred during the six years immediately preceding the date of this representation or is reasonably expected to occur.

SECTION 6.13    Environmental Warranties.

(a)The Real Property has been and is owned, operated or leased by each Loan Party 

and each Subsidiary of any Loan Party in compliance with all Environmental Laws, except for such violations that, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(b)There have been no past (to the knowledge of any Loan Party or any Subsidiary of any Loan Party), and there are no pending or threatened claims, complaints, written notices or requests for information received by any Loan Party or any Subsidiary of any Loan Party with respect to any alleged violation of any Environmental Law that, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount, or alleges criminal misconduct or injunctive relief.

(c)There have been no Releases of Hazardous Materials at, on or under the Real Property that, either individually or in the aggregate, has, or could reasonably be expected to result in having, a liability exceeding a Material Environmental Amount.

(d)Each Loan Party and each Subsidiary of any Loan Party has been issued, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations relating to environmental matters that are necessary or desirable for their businesses and required by Environmental Laws, except where the failure to have or do any of the foregoing, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(e)No property now or previously owned, operated or leased by any Loan Party or any Subsidiary of any Loan Party is listed or (to the best of their knowledge) proposed
for listing on the National Priorities List pursuant to CERCLA or on any similar state list of sites requiring investigation or clean-up.

(f)Except as set forth in Item 6.13(f) (“Environmental Matters/Storage Tanks”) of the Disclosure Schedule, there are no above ground or underground storage tanks, active or abandoned, including petroleum storage tanks, on or under the Real Property.

(g)None of the Loan Parties, the Subsidiaries of any Loan Party or any other Person (to the best of their knowledge (after due inquiry)) has transported or arranged for the transportation of any Hazardous Material to any location which is listed or (to the best of their knowledge) proposed for listing on the National Priorities List pursuant to CERCLA or on any similar state list or which is the subject of federal, state or local enforcement actions or other investigations, which may lead to claims against any Loan Party or any Subsidiary of any Loan Party for any remedial work, damage to natural resources or personal injury (including claims under CERCLA) which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(h)There are no polychlorinated biphenyls, friable asbestos or other Hazardous Materials present on the Real Property that, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(i)No conditions exist at, on or under any property now or previously owned, operated or leased by any Loan Party or any Subsidiary of any Loan Party which, with the passage of time, or the giving of notice or both, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(j)There are no areas of the Real Property with respect to which any Loan Party or any Subsidiary of any Loan Party has a legal obligation under the Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq., on the Real Property, and no portion of the Real Property has been designated as a “critical habitat,” as defined in such Act.

SECTION 6.14    Accuracy of Information.

(a)All information furnished from time to time (whether prior to or after the Effective Date) by or on behalf of any Loan Party, any Subsidiary of any Loan Party or any of their Related Parties in writing to the Administrative Agent or any Lender in connection with this Agreement, any other Loan Document or any transaction contemplated hereby or thereby, is and will be, as the case may be, true and accurate in every material respect on the date as of which such information is dated or certified, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not misleading.

(b)All information prepared by any consultant or professional advisor on behalf of any Loan Party, any Subsidiary of any Loan Party or any of their Related Parties which was furnished to the Administrative Agent or any Lender in connection with this Agreement or any other Loan Document has been reviewed by any Loan Party or any Subsidiary of any Loan Party, and nothing has come to the attention of any Loan Party or any Subsidiary of any Loan Party in the context of such review which would lead it to believe that such information (or the assumptions on which such information is based) is not true and correct in all material respects or that such information omits to state any material fact necessary to make such information not misleading in any material respect.

(c)Insofar as any of the information described above includes assumptions, estimates, projections or opinions, the Loan Parties and the Subsidiaries of the Loan Parties have reviewed such matters and nothing has come to the attention of the Loan Parties or the Subsidiaries of the Loan Parties which would lead them to believe that such matters were not when made true and correct in all material respects or that such assumptions, estimates, projections or opinions omitted to state any material fact necessary to make such assumptions, estimates, projections or opinions not reasonable or not misleading in any material respect. All projections and estimates have been prepared in good faith on the basis of reasonable assumptions and represent the best estimate of future performance by the party supplying the same, it being agreed that projections are subject to uncertainties and contingencies and that no assurance can be given that any projection will be realized.

(d)(i) The balance sheets and financial statements  delivered  to  the Lenders pursuant to Section 5.1.20 and Section 7.1.1 and otherwise have each been or will be, as the case may be, prepared in accordance with GAAP consistently applied and do or will, as the case may be, present fairly in all material respects the financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended; provided that unaudited interim financial statements are subject to normal year-end adjustments.

(ii)Except as disclosed in the financial statements referred to above or the notes thereto and for the items disclosed in the Disclosure Schedule, neither any Loan Party nor any Subsidiary of any Loan Party has, as of the Amendment Effective Date, any material contingent liabilities, unusual long-term commitments or unrealized losses.

SECTION 6.15    Transaction Agreement, etc.

(a)All representations and warranties by any Loan Party or any Subsidiary of any 

Loan Party under the Transaction Documents, to the extent still in effect, are true and correct as of the Amendment Effective Date; provided, however, that such representations and warranties that relate solely to an earlier date shall be true and correct as of such earlier date. Each Loan Party and each Subsidiary of any Loan Party agrees that, by this reference, such representations and warranties contained in the Transaction Documents, to the extent still in effect, are incorporated herein, mutatis, mutandis, for the benefit of the Lenders.

(b)No default exists and no events have occurred or conditions exist that, with notice or lapse of time or both, would constitute a default under the Transaction Documents by any party thereto, and, except as expressly provided by the terms of the Transaction Documents because of the lapse of time, the Transaction Documents are in full force and effect, and the rights, benefits and indemnities in favor of any Loan Party or any Subsidiary of any Loan Party thereunder are not subject to any defenses, offsets or claims of any kind.

SECTION 6.16    Absence of Default and Restrictions.

(a)Neither any Loan Party nor any Subsidiary of any Loan Party is (i) in default in the payment of (or in the performance of any obligation applicable to) any Indebtedness or (ii) in violation in any material respect of any (A) Law, (B) contract, agreement, lease or other instrument to which it is a party or (C) permit, license, authorization, entitlement, accreditation or privilege of any Governmental Authority binding upon it or its property or assets. No event has occurred and no condition exists that, upon the making of the Loans or the issuance of Letters of Credit hereunder, would constitute a Default or an Event of Default.

(b)Neither any Loan Party nor any Subsidiary of any Loan Party (i) is a party to any contract, agreement, lease or other instrument, or subject to any other restriction, that restricts its ability to incur Indebtedness (other than this Agreement) or (ii) has agreed or consented to exist on any of the Real Property or other Collateral, whether now or in the future, any Lien other than those Liens permitted by Section 7.2.3.

SECTION 6.17    Margin Regulations; Bank Secrecy Act, etc.

(a)Neither any Loan Party nor any Subsidiary of any Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock” (as defined in F.R.S. Board Regulation U). None of the proceeds of any Loan will be used for the purpose of, or be made available by any Loan Party or any Subsidiary of any Loan Party in any manner to any other Person to enable or assist such Person in, directly or indirectly purchasing or carrying “margin stock” (as so defined) or otherwise in violation of Regulations T, U or X of the F.R.S. Board.

(b)None of the proceeds of any Loan shall be used, directly or indirectly, in a manner that would cause the Administrative Agent or any Lender to violate the Foreign Corrupt Practices Act of 1977, the Bank Secrecy Act or any of the sanctions programs administered by the Office of the Foreign Assets Control of the United States Department of Treasury.

(c)None of the proceeds of any Loan shall be used, directly or indirectly, in a manner inconsistent with Section 4.10.

SECTION 6.18     Investment Company Status.   No Loan Party or Subsidiary of any Loan 

Party is an “investment company” or a “company controlled by an investment company” within the meaning of the Investment Company Act of 1940, as amended.

SECTION 6.19    Material Agreements; Governmental Approvals.

(a)Each Loan Party, each Subsidiary of any Loan Party and (to the best of their knowledge) each other party to a Material Agreement are in compliance in all material respects with all the terms contained in each Material Agreement, each Material Agreement is in full force and effect and all consents to duly assign each relevant Material Agreement (as required by Section 5.1.15 or otherwise) from any Loan Party or any Subsidiary of any Loan Party to the Administrative Agent have been obtained and are in full force and effect.

(b)Set forth on Item 6.19(b) (“Material Governmental Approvals”) of the Disclosure Schedule is a listing, as of the Amendment Effective Date, of all material licenses, permits and other approvals of Governmental Authorities (collectively, the “Material Governmental Approvals”) that are required to (i) own, operate or lease the Real Property and (ii) operate the business of any Loan Party or any Subsidiary of any Loan Party in the ordinary course (including with respect to activities related to Timber harvesting, building, zoning, sub- division, wildlife protection, mining, drilling, extraction or reclamation). No Loan Party or Subsidiary of any Loan Party has failed to obtain any Material Governmental Approval and is not in violation of any Material Governmental Approval. No Loan Party or Subsidiary of any Loan Party has received written notice of any violation with respect to the matters the subject of this clause.

SECTION 6.20      Solvency.  Each Loan Party and each Subsidiary of any Loan Party is, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith pursuant to the Loan Documents or otherwise will be and will continue to be, Solvent.

SECTION 6.21    Insurance.   Item 6.21 (“Insurance”) of the Disclosure Schedule sets forth a true, complete and correct description of all insurance maintained by any Loan Party or any Subsidiary of any Loan Party as of the Amendment Effective Date. As of such date, such insurance is in full force and effect and all premiums have been duly paid.

SECTION 6.22 Affiliate Transactions. Except as  described  on  Item  6.22 (“Affiliate Transactions”) of the Disclosure Schedule, as of the Amendment Effective Date no Affiliate of any Loan Party or any Subsidiary of any Loan Party (or any of their respective family members) is a party to any transaction with any Loan Party or any Subsidiary of any Loan Party, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Person or any Person in which any officer, director, or any such employee or family member has a substantial interest or is an officer, director, partner, member or trustee.

SECTION 6.23    USA Patriot Act, etc.

(a)Each Loan Party and each Subsidiary of any Loan Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the USA Patriot Act. No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any official or employee of any Governmental  Authority, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business 

or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. No Borrower or any other Loan Party is engaged in or has engaged in any course of conduct that could reasonably be expected to subject any of their respective properties to any Lien, seizure or other forfeiture under any criminal Law, racketeer influenced and corrupt organizations Law, civil or criminal, or other similar Laws.

(b)No Loan Party or Subsidiary of any Loan Party (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such Executive Order, or is otherwise associated with any such Person in any manner that violates such Section 2, or (iii) is a Person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order, or (iv) is otherwise in violation of any Anti-Terrorism Law.

SECTION 6.24    Separateness; Special Representations and Covenants Relating to Loan Parties.

SECTION 6.24.1    Purpose.

(a)The only business that CatchMark Timber conducts or will conduct will be (i) owning and holding the Equity Interests of CatchMark Partnership, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans, (iv) owning the Equity Interests of Unrestricted Timber Subsidiaries and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing and appropriate or necessary to its status as a public company.

(b)The only business that CatchMark Partnership conducts or will conduct will be (i) owning and holding the Equity Interests of CatchMark TRS, Timberlands II and such other Investments as may be permitted by Section 7.2.5, (ii) entering into the Loan Documents, (ii) pledging all of the Collateral that it owns as collateral for the Loans and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(c)The only business that Timberlands II conducts or will conduct will be (i) acquiring, owning and holding Real Property, incidental personal property related thereto and proceeds thereof, and operating and managing the Real Property including the selling and harvesting of Timber by itself and by others pursuant to Timber rights granted by Timberlands II, (ii) owning and holding the Equity Interests of CatchMark Texas GP, certain Equity Interests of CatchMark Texas LP and such other Investments as may be permitted by Section 7.2.5, (iii) entering into the Loan Documents, (iv) pledging all of the Collateral that it owns as collateral for the Loans and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

		
	(d)
	The only business that CatchMark TRS conducts or will conduct will be

(i) owning and holding the Equity Interests of CatchMark TRS Subsidiary, CatchMark HBU and such other Investments as may be permitted by Section 7.2.5, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans, and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate 

to accomplish the foregoing.

(e)The only business that CatchMark TRS Subsidiary conducts or will conduct will be (i) entering into the Supply Agreements, (ii) purchasing, cutting, transporting, and selling Timber from the Timberlands, (iii) processing and selling Fuel Wood Residue in accordance with the terms of this Agreement, (iv) acquiring, owning and holding rights with respect to the Real Property pursuant to timber deeds or similar instruments, incidental personal property related thereto and proceeds thereof, and operating and managing the Real Property, (v) owning and holding such Investments as may be permitted by Section 7.2.5, (vi) entering into the Loan Documents, (vii) pledging all of the Collateral that it owns as collateral for the Loans, and (viii) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

		
	(f)
	The only business that CatchMark HBU conducts or will conduct will be

(i) acquiring, owning and holding certain higher and better use portions of the Real Property, incidental personal property related thereto and proceeds thereof, and operating and managing such Real Property including the selling and harvesting of Timber by itself and by others pursuant to Timber rights granted by CatchMark HBU, (ii) selling such portions of the Real Property in accordance with the terms and conditions of this Agreement, (iii) owning and holding such Investments as may be permitted by Section 7.2.5, (iv) entering into the Loan Documents, (v) pledging all of the Collateral that it owns as collateral for the Loans and (vi) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(g)The only business that CatchMark Texas GP conducts or will conduct will be (i) owning and holding certain Equity Interests of CatchMark Texas LP and such other Investments as may be permitted by Section 7.2.5, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(h)The only business that CatchMark Texas LP conducts or will conduct will be (i) acquiring, owning and holding Real Property, incidental personal property related thereto and proceeds thereof, and operating and managing the Real Property including the selling and harvesting of Timber by itself and by others pursuant to Timber rights granted by CatchMark Texas LP, (ii) owning and holding such Investments as may be permitted by Section 7.2.5, (iii) entering into the Loan Documents, (iv) pledging all of the Collateral that it owns as collateral for the Loans and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(i)The only business that any Loan Party not otherwise addressed in this Section 6.24.1 shall conduct or will conduct will be as described in the Joinder Agreement with respect to such Loan Party.

(j)The only business that any Subsidiary of any Loan Party who is not also a Loan Party conducts or will conduct will be (i) such as is consistent with the definition of “Shell Subsidiary”, and (i) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

SECTION 6.24.2 Financial Statements. Each  Loan  Party  and  each Subsidiary of any Loan Party has and will have its own separate financial statement, provided, however, that the assets of each Loan Party and each Subsidiary of any Loan Party may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply 

with the requirements of GAAP, provided, further, that (a) such consolidated financial statement shall contain a footnote to the effect that the assets of each Loan Party and each Subsidiary of any Loan Party are owned by such Loan Party or Subsidiary and that the assets are being included on the financial statement of its parent solely to comply with the requirements of GAAP and (b) such assets shall be listed on such Loan Party’s or Subsidiary’s own separate balance sheet.

SECTION 6.24.3 Tax Return. Each of  Timberlands  II,  CatchMark Partnership, CatchMark Texas GP and CatchMark Texas LP is and will be treated as a disregarded entity or pass-through entity for Federal income tax purposes, with all items of income, gain, loss and expense of each such Person being treated as though earned or incurred by CatchMark Timber (except for the 0.1% interest in CatchMark Partnership that is not owned by CatchMark Timber). Each of CatchMark TRS Subsidiary and CatchMark HBU is and will be treated as a disregarded entity or pass-through entity for Federal income tax purposes, with all items of income, gain, loss and expense of each such Person being treated as though earned or incurred by CatchMark TRS. Each Loan Party or Subsidiary of a Loan Party established or otherwise acquired after the Amendment Effective Date shall be treated as a disregarded entity of its direct or indirect parent if so stated in the applicable Joinder Agreement.

SECTION 6.24.4  Separateness.   Each Loan Party and each Subsidiary of any Loan Party has, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other Person, shall correct any known misunderstanding regarding its status as a separate entity, shall conduct and operate its business in its own name and shall not identify itself or any of its Affiliates as a division or part of the other.

SECTION 6.24.5 Overhead. Each Loan Party and each Subsidiary of any Loan Party has and will allocate fairly and reasonably any overhead expenses that are shared with any other Loan Party or any Affiliate thereof, including paying for office space and services performed by any employee of an affiliate.

SECTION 6.24.6 Liabilities and Expenses. Item 6.24 (“Accounts”) of the Disclosure Schedule (as updated from time to time pursuant to the terms hereof) identifies all deposit, securities and commodities accounts in the name of any Loan Party or any Subsidiary of any Loan Party, including, for each such account, the name on the account, the account number, the type of account, the name and address of the financial institution at which the account is located, and the sources and uses of funds contained in such account. Except as identified in Item 6.24 (“Accounts”) of the Disclosure Schedule (as updated from time to time pursuant to the terms hereof), each Loan Party and each Subsidiary of any Loan Party has and will pay its own liabilities and expenses out of its own funds drawn on its own bank account.

SECTION 6.24.7     Adequate Capital.  Each Loan Party and each Subsidiary of any Loan Party has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

SECTION 6.24.8    Separateness of Assets.   Other than as provided in Item 6.24(“Accounts”) of the Disclosure Schedule (as updated from time to time pursuant to the terms hereof), each Loan Party and each Subsidiary of any Loan Party (a) has and will (i) maintain all of its bank accounts separate from any other Person, (ii) hold all of its assets in its own name and (iii) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other entity; and (b) has not and will not (i) commingle its funds or other assets with those of any other Person or (ii) participate in a cash management system with any other Person.

SECTION 6.24.9 Guarantees. Other  than  as  provided  in  the  Loan Documents and the Unrestricted Timber Transactions, no Loan Party and no Subsidiary of any Loan Party has or will hold itself out as being responsible for the debts or obligations of any other Person, or hold out its credit as available to satisfy the obligations of any other Person.

SECTION 6.24.10 Corporate Formalities. Each Loan Party and each Subsidiary of any Loan Party has and will hold regular meetings, as appropriate, to conduct its business in the ordinary course, and each Loan Party and each Subsidiary of any Loan Party has done and will do all things necessary to observe all customary organizational and operational formalities and record keeping and to preserve its existence. Each Loan Party and each Subsidiary of any Loan Party has and will maintain all of its books and records separate from those of any other Person and will maintain separate telephone numbers, stationery, invoices and checks.

SECTION 6.24.11 Bankruptcy. No Loan Party or any Subsidiary of any Loan Party will file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

SECTION 6.25 Qualified ECP Guarantor. Each Borrower is a Qualified ECP Guarantor.

ARTICLE VII COVENANTS

SECTION 7.1    Affirmative Covenants. The Borrowers and the Loan Parties agree with each Lender and the Administrative Agent that, until all the Obligations have been paid in full in cash and performed in full and all the Commitments have been irrevocably terminated, the Borrowers and the Loan Parties will perform, and will cause their respective Subsidiaries to perform, the obligations set forth in this Section. Notwithstanding the below, for purposes of this Section 7.1 no Subsidiary of CatchMark Timber qualifying as an Unrestricted Timber Subsidiary shall be deemed to be a Subsidiary of any Loan Party other than with respect to clauses (a), (b), (d)(i), (o), (p) and (s) of Section 7.1.1.

SECTION 7.1.1    Financial Information, Reports, Notices, etc.

Each Loan Party and each Subsidiary of any Loan Party, will furnish, or will cause to be furnished, to the Administrative Agent copies of the following financial statements, reports, notices and information (all of which shall be in form and scope reasonably satisfactory to the Administrative Agent):

(a)(i) as soon as available and in any event within the shorter of (A) 45 days after the end of each Fiscal Quarter except for the last Fiscal Quarter of each Fiscal Year and (B) 10 days of the date that CatchMark Timber is required to file its quarterly report with the SEC as part of its periodic reporting (if CatchMark Timber is subject to such reporting requirements) except for the last Fiscal Quarter of each Fiscal Year, consolidated balance sheets of CatchMark Timber and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of earnings and cash flow of CatchMark Timber and its Subsidiaries for such Fiscal Quarter and (when available) for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter (when available), together with comparable information adjusted to reflect any changes at the close of and for the corresponding Fiscal Quarter for the prior Fiscal Year and for the corresponding portion of the previous Fiscal Year, certified as complete and correct by a Financial Officer of CatchMark Timber as fairly presenting the financial position of CatchMark Timber and its consolidated Subsidiaries as of the date 

thereof and for the period then ended; and (ii), if any Unrestricted Timber Subsidiaries have been acquired or organized by CatchMark Timber or if any Unrestricted Timber Transactions have been consummated, within the shorter of (A) 45 days after the end of each Fiscal Quarter except for the last Fiscal Quarter of each Fiscal Year and (B) 10 days of the date that CatchMark Timber is required to file its quarterly report with the SEC as part of its periodic reporting (if CatchMark Timber is subject to such reporting requirements) except for the last Fiscal Quarter of each Fiscal Year, consolidated and consolidating balance sheets of CatchMark Partnership as of the end of such Fiscal Quarter and consolidated and consolidating statements of earnings and cash flow of CatchMark Partnership for such Fiscal Quarter and (when available) for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter (when available), together with comparable information adjusted to reflect any changes at the close of and for the corresponding Fiscal Quarter for the prior Fiscal Year and for the corresponding portion of the previous Fiscal Year, certified as complete and correct by a Financial Officer of CatchMark Partnership as fairly presenting the financial position of CatchMark Partnership as of the date thereof and for the period then ended; and (iii), if any Unrestricted Timber Subsidiaries have been acquired or organized by CatchMark Timber or if any Unrestricted Timber Transactions have been consummated, (A) 45 days after the end of each Fiscal Quarter except for the last Fiscal Quarter of each Fiscal Year and (B) 10 days of the date that CatchMark Timber is required to file its quarterly report with the SEC as part of its periodic reporting (if CatchMark Timber is subject to such reporting requirements) except for the last Fiscal Quarter of each Fiscal Year, consolidating balance sheets of CatchMark Timber and its Subsidiaries as of the end of such Fiscal Quarter and consolidating statements of earnings and cash flow of  CatchMark Timber and its Subsidiaries for such Fiscal Quarter and (when available) for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter (when available), together with comparable information adjusted to reflect any changes at the close of and for the corresponding Fiscal Quarter for the prior Fiscal Year and for the corresponding portion of the previous Fiscal Year, certified as complete and correct by a Financial Officer of CatchMark Timber as fairly presenting the financial position of CatchMark Timber and its consolidated Subsidiaries as of the date thereof and for the period then ended;

(b)(i) as soon as available and in any event within the shorter of (A) 90 days after the end of each Fiscal Year and (B) 10 days of the date that CatchMark Timber is required to file its annual report with the SEC as part of its periodic reporting (if CatchMark Timber is subject to such reporting requirements), a copy of the annual audit report for such Fiscal Year for CatchMark Timber and its Subsidiaries, including therein consolidated and consolidating balance sheets of CatchMark Timber and its Subsidiaries as of the end of such Fiscal Year and consolidated and consolidating statements of earnings and consolidated statements of cash flow of CatchMark Timber and its Subsidiaries for such Fiscal Year, in each case certified without any “going concern” or other material qualification in a manner reasonably acceptable to the Administrative Agent by Deloitte & Touche LLP or other independent public accountants acceptable to the Administrative Agent, together with (X) the annual letters to such accountants in connection with their audit examination detailing contingent liabilities and material litigation matters and (Y) comparable information adjusted to reflect any changes at the close of the prior Fiscal Year (when available); and (ii), if any Unrestricted Timber Subsidiaries have been acquired or organized by CatchMark Timber or if any Unrestricted Timber Transactions have been consummated, if requested by the Administrative Agent, as soon as available and in any event within the shorter of (A) 90 days after the end of each Fiscal Year and (B) 10 days of the date that CatchMark Timber is required to file its annual report with the SEC as part of its periodic reporting (if CatchMark Timber is subject to such reporting requirements), a copy of the annual audit report for such Fiscal Year for CatchMark Partnership, including therein consolidated and consolidating balance sheets of CatchMark Partnership as of the end of such Fiscal Year and consolidated and consolidating statements of earnings and consolidated statements of cash flow of CatchMark Partnership for such Fiscal Year, in each case 

certified without any “going concern” or other material qualification in a manner reasonably acceptable to the Administrative Agent by Deloitte & Touche LLP or other independent public accountants acceptable to the Administrative Agent, together with (X) the annual letters to such accountants in connection with their audit examination detailing contingent liabilities and material litigation matters and (Y) comparable information adjusted to reflect any changes at the close of the prior Fiscal Year (when available);

(c)concurrently with the delivery of the financial statements pursuant to clauses (a) and (b), a certificate from a Financial Officer of CatchMark Timber that, to the best of his or her knowledge, each Loan Party and each Subsidiary of any Loan Party during the period covered by such financial statements has observed or performed all of its covenants and other agreements contained in this Agreement and the other Loan Documents required to be observed, performed or satisfied by it, and that such Financial Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate; 

(d)concurrently  with  the  delivery  of  the  financial  statements  pursuant  to clause (b):

(i)the final management letter, if any, prepared by the independent public accountants who prepared such financial statements with respect to internal audit and financial controls of CatchMark Timber, CatchMark Partnership or their Subsidiaries; and

(ii)a certificate of a Financial Officer of the Borrowers (A) setting forth the information required pursuant to the disclosure schedules of the Security Agreement, CatchMark Security Agreement and Pledge Agreement or confirming that there has been no change in such information since the Effective Date or the date of the most recent certificate delivered pursuant to this clause and (B) certifying that all U.C.C. financing statements (including fixture filings, as applicable), mortgages or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each Governmental Authority and other appropriate office in each jurisdiction that is necessary to protect and perfect the security interests under the Loan Documents;

(e)as soon as available and in no event later than the date the financial statements are delivered (or are required to be delivered) pursuant to clause (a) or clause (b), a Compliance Certificate, executed by a Financial Officer of the Borrowers, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) the calculation of the Loan to Value Ratio, the Fixed Charge Coverage Ratio, and, if applicable, the Minimum Liquidity Balance;

(f)as soon as possible and in any event within three Business Days after (i) the occurrence of any material adverse development with respect to any litigation, action, proceeding or labor controversy described in Section 6.7, (ii) the commencement of any litigation, action, proceeding or labor controversy of the type described in Section 6.7, (iii) the commencement of any legal proceeding seeking injunctive relief or which may materially impair the ability of any Loan Party or any Subsidiary to any Loan Party to perform their Obligations or (iv) any change in the certified public accountants of any Loan Party or any Subsidiary of any Loan Party, notice thereof by an Authorized Officer of any Borrower and copies of all documentation relating thereto;

(g)as soon as possible and in any event within three Business Days after the occurrence of each Default, Event of Default or event that could reasonably be expected to result in a Material 

Adverse Effect, a statement of an Authorized Officer of a Borrower setting forth reasonably detailed information regarding such Default, Event of Default or event, and the action which the Borrowers have taken and proposes to take with respect thereto;

(h)concurrently with the sending or filing thereof, copies of all (i) reports and documents which any Loan Party or any Subsidiary of any Loan Party sends to any of its holders of Equity Interests, (ii) press releases and other statements made available by any Loan Party or any Subsidiary of any Loan Party to the public concerning material changes or developments in it business and (iii)  reports, financial statements and registration statements which the any Loan Party or any Subsidiary of any Loan Party files with the Securities and Exchange Commission or any securities exchange, except that the Borrowers shall not be required to deliver any of the foregoing which has previously been delivered hereunder;

(i)promptly after becoming aware of any events which would give rise to a mandatory prepayment under Section 3.1.2, a statement of a Financial Officer of the Borrowers setting forth reasonably detailed information regarding the same and, prior to the Multi-Draw Term Loan Commitment Termination Date, in the case of any events which would give rise to mandatory prepayment under Section 3.1.2(f), either a Borrowing Request or a statement as to the anticipated source of funds to satisfy the repayment required by the last sentence of Section 3.1.2(f);

(j)all such notices and documents required to be delivered pursuant to the other Loan Documents, including, without limitation, any reports regarding the proceeds of any issuance of equity required to be delivered pursuant to Section 7.1.15;

(k)promptly after the receipt thereof by any Loan Party or any Subsidiary of any Loan Party, copies of any notice of non-payment or underpayment of Taxes or other charges by any Loan Party or any Subsidiary of any Loan Party that is received from any relevant Governmental Authority;

(l)promptly after any Loan Party or any Subsidiary of any Loan Party obtains knowledge that any statement contained in any representation or warranty in any Loan Document was not when made true and correct, a statement of an Authorized Officer of either Borrower setting forth reasonably detailed information regarding the same;

(m)concurrently with the receipt or delivery thereof by any Loan Party or any Subsidiary of any Loan Party, all material notices, including notices of default or termination, received or delivered by any Loan Party or any Subsidiary of any Loan Party pursuant to any Material Agreement;

(n)promptly after the assertion or occurrence thereof, notice of any proceeding, demand, investigation or claim of any Governmental Authority regarding the noncompliance by any Loan Party or any Subsidiary of any Loan Party with any Environmental Law that could (i) reasonably be expected to result in a liability exceeding a Material Environmental Amount or (ii) cause any Real Property to be subject to any restrictions on ownership, transferability or occupancy;

(o)prior to or concurrent with the establishing or acquiring of any Unrestricted Timber Subsidiaries, CatchMark Timber shall give written notice of the same to the Administrative Agent and, if requested by the Administrative Agent, shall promptly deliver copies of the formation and governing documents;

(p)as soon as available and in no event later than 10 Business Days prior to the consummation of any Unrestricted Timber Transaction (or such shorter period of time as may be 

acceptable to the Administrative Agent), CatchMark Timber shall (i) certify to the Lenders that all the terms and conditions contained in the definition of “Unrestricted Timber Transaction” have been satisfied with respect thereto, (ii) deliver to the Lenders substantially final copies of the operative documents evidencing such Unrestricted Timber Transaction and (iii) provide such other evidence, as may be reasonably requested by the Administrative Agent or any Lender, in connection therewith;

(q)as soon as available and in no event later than 10 Business Days prior to the beginning of each calendar year, (i) a projected operating expense budget for CatchMark Timber and its Subsidiaries, prepared on a monthly basis for such calendar year and (ii) pro forma financial projections for the next following 18-month period for CatchMark Timber and its Subsidiaries;

(r)on or prior to the opening or acquiring of any new deposit or securities account by any Loan Party or any Subsidiary of any Loan Party and as soon as available upon any other change regarding such accounts such that the information provided in the most recently delivered schedule is no longer true and correct in all material respects, an updated Item 6.24 (“Accounts”) of the Disclosure Schedule identifying such deposit, securities or commodities account opened or acquired by any Loan Party or any Subsidiary of any Loan Party and providing such other information as is described in the first sentence of Section 6.24.6;

(s)such other information respecting the condition or operations, financial or otherwise, of any Loan Party or any Subsidiary of any Loan Party as any Lender through the Administrative Agent may from time to time reasonably request.

SECTION 7.1.2    Compliance with Laws; Payment of Obligations.

(a)Each Loan Party and each Subsidiary of any Loan Party will comply in all material respects with all material permits, licenses, authorizations, approvals, entitlements, accreditations and privileges of each Governmental Authority and all applicable Laws.

(b)Each Loan Party and each Subsidiary of any Loan Party will pay before the same become delinquent, all (i) its Indebtedness and other obligations, including all income and other Taxes, assessments and charges imposed by Governmental Authorities upon it or upon its property, and (ii) lawful claims for labor, materials and supplies or otherwise, except for the non-payment of such other obligations, Taxes and claims that (A) are being diligently contested in good faith by appropriate proceedings which (1) suspend collection of the contested other obligation or Tax or charge and any Lien arising therefrom and (2) for which adequate reserves in accordance with GAAP shall have been set aside on its books and (B) could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. If such contest is terminated, adversely resolved or the conditions set forth in this Section are no longer met, each Loan Party and each Subsidiary of any Loan Party shall promptly pay or discharge the contested other obligations, Taxes and claims.

SECTION 7.1.3    Maintenance of Properties and Franchises.

(a)Each Loan Party and each Subsidiary of any Loan Party will, in the exercise of its reasonable business judgment, maintain, preserve, protect and keep its properties in good repair, working order and condition (reasonable wear and tear excepted), and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times.

(b)Each Loan Party and each Subsidiary of any Loan Party will do or cause to be 

done all things necessary to preserve, renew and keep in full force and effect (i) its legal existence and qualification as a foreign corporation, limited liability company or partnership in each jurisdiction where it has assets or conducts business and (ii) the permits, licenses, authorizations, approvals, entitlements, accreditations, privileges and franchises of all Governmental Authorities or otherwise necessary for the proper conduct of its business (including the ownership and the leasing of the Real Property).

SECTION 7.1.4    Insurance.

(a)Each Loan Party and each Subsidiary of any Loan Party (to the extent relating to the Collateral) will maintain, insurance policies and coverage with respect to its property and assets at least as expansive as set forth on Item 6.21 (“Insurance”) of the Disclosure Schedule and, in any event, to such extent and covering such risks as is customary for companies in sound financial condition in the same or similar businesses and operations and in the same or similar locations. In addition, each Loan Party and each Subsidiary of any Loan Party (to the extent relating to the Collateral) will maintain such other additional insurance coverage in such amounts and with respect to such risks as the Administrative Agent or the Required Lenders may reasonably request from time to time. All such insurance will be provided (i) by insurers authorized by Lloyds of London to underwrite such risks, (ii) by insurers having an A.M. Best policyholders rating of not less than “A” or (iii) by such other insurers as the Administrative Agent may approve.

(b)Without limiting clause (a) above, each Loan Party and each Subsidiary of any Loan Party (to the extent relating to the Collateral) shall, to the extent required under the Flood Laws, obtain and maintain flood insurance for such structures and contents constituting Collateral located in a flood hazard zone, in such amounts as similar structures and contents are insured by prudent companies in similar circumstances carrying on similar businesses and otherwise satisfactory to the Administrative Agent.

(c)All premiums on insurance policies required under this Section will be paid by the Borrowers. All insurance policies relating to any loss or damage sustained in respect of any item constituting a part of the Collateral will contain a loss payable endorsement, in form and substance reasonably satisfactory to the Administrative Agent, in favor of the Administrative Agent. All insurance policies relating to general liability, umbrella and excess insurance coverage will contain an additional insured endorsement, in form and substance satisfactory to the Administrative Agent, in favor of the Administrative Agent. All such insurance policies will provide that:

(i)No Loan Party, Subsidiary of any Loan Party, or Lender will be a coinsurer thereunder; and

(ii)such insurance will not be affected by any unintentional act or negligence or representation or warranty on the part of any Loan Party or any Subsidiary of any Loan Party or other owner of the policy or the property described in such policy.

All such insurance policies will provide that the insurer will, simultaneously with the delivery to any Loan Party or any Subsidiary of any Loan Party of any notice of a material event under such policy, deliver to the Administrative Agent a copy of such notice. All such insurance policies and loss payable clauses will provide that they may not be canceled, amended or terminated unless the Administrative Agent is given at least the same number of days’ notice that the insurance company which issued such policies is required to give any Loan Party or any Subsidiary of any Loan Party, but in no event less than 30 days’ prior written notice.

(d)The Borrowers will provide to the Administrative Agent and to its insurance consultant (or any agent, officer or employee of the Administrative Agent) such other information relating to its insurance coverage as may be reasonably requested by the Administrative Agent. The insurance consultant (through its officers or employees) shall have the right to visit the offices of any Loan Party and any Subsidiary of any Loan Party, upon reasonable prior notice during usual business hours, to inspect the insurance policies provided for herein. The reasonable fees, costs and expenses of the insurance consultant shall be paid for by the Borrowers.

(e)If any Loan Party or Subsidiary of any Loan Party fails to maintain any of the policies of insurance required by this Section the Administrative Agent may (but shall not be required), at the sole cost and expense of the Borrowers, obtain and maintain such policies of insurance, pay the related premiums and take such other action as it deems reasonably advisable. All costs related to the foregoing shall be charged to the Borrowers’ loan account. Notwithstanding the foregoing, the Administrative Agent shall have no liability with respect to the cost, scope, amount or other terms with respect to the insurance purchased by it pursuant to this provision.

(f)Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the sole right, in the name of the Lenders and each other Lender Party, to file claims under any insurance policies with respect to which the Administrative Agent is the loss payee, to receive receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

(g)The Borrowers will furnish to the Administrative Agent at least annually and at such other times as the Administrative Agent shall request, a certificate of insurance and other evidence as to the insurance required to be maintained pursuant to this Section.

SECTION 7.1.5    Books and Records; Inspections; Annual Meeting.

(a)Each Loan Party and each Subsidiary of any Loan Party will keep books and records which accurately reflect in all material respects all of its business affairs and transactions. Each Loan Party and each Subsidiary of any Loan Party will maintain at all times books and records pertaining to the Collateral in such detail, form, and scope as the Administrative Agent shall reasonably require.

(b)Each Loan Party and each Subsidiary of any Loan Party (to the extent relating to the transactions contemplated by the Loan Documents) will permit the Administrative Agent and each Lender or any of their respective representatives (including outside auditors), at reasonable times and intervals and with reasonable prior notice unless a Default or Event of Default has occurred and is continuing, to visit all of its offices, to discuss its financial matters with its officers and independent public accountant (and each Loan Party hereby authorize such independent public accountant to discuss financial matters of any Loan Party or any Subsidiary of any Loan Party with each Lender or its representatives whether or not any representative of any Loan Party or any Subsidiary of any Loan Party is present) and to examine (and, at the expense of the Borrowers, copy extracts from) and conduct audits of any of its account receivables, other assets and books or other corporate records (including computer records).

(c)If any Default or Event of Default has occurred and is continuing, as may be requested by the Administrative Agent or the Required Lenders, the Borrowers shall host a meeting of the Lenders to discuss their financial condition and results of operations (including its financial reports 

and related material delivered with respect to such Fiscal Year). Such meeting shall be held at a mutually convenient location as agreed to by the Administrative Agent and the Lenders.

(d)The Borrowers will pay all the reasonable fees and expenses of the Administrative Agent and each Lender in the exercise of their rights pursuant to this Section, including the reasonable fees and expenses of independent public accountants and other professionals retained by the Administrative Agent and the Lenders; provided that, notwithstanding the foregoing, (i) if no Default or Event of Default has occurred and is continuing, the Borrowers shall not be required to reimburse the Administrative Agent for such fees and expenses in connection with more than one audit and one visit per calendar year, and (ii) unless a Default or an Event of Default has occurred and is continuing, the Borrowers shall not be required to reimburse the Lenders for any such fees and expenses.

SECTION 7.1.6    Environmental Covenants.

(a)Each Loan Party and each Subsidiary of any Loan Party will, and will cause all lessees and other Persons occupying any of the Real Property or their other properties to:

(i)use and operate all of its facilities and properties in compliance with all Environmental Laws, keep all permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with all applicable Environmental Laws, except where the failure to do any of the foregoing, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount;

(ii)take all such actions as are necessary and appropriate so that no liability with respect to the Environmental Laws may arise which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount;

(iii)promptly notify the Administrative Agent and provide copies upon receipt of all material written claims, complaints, notices or inquiries relating to the condition of the Real Property or compliance with Environmental Laws, and shall cure and have dismissed with prejudice to the reasonable satisfaction of the Administrative Agent any actions and proceedings relating to compliance with or liability pursuant to Environmental Laws which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount; and

(iv)provide such information and certifications which the Administrative Agent may reasonably request from time to time to evidence compliance with this Section.

(b)Prior to acquiring any ownership or leasehold interest in any additional real property after the Effective Date that could give rise to any Loan Party or any Subsidiary of any Loan Party being found subject to potential liability under any Environmental Law, the Borrowers will (i) obtain a written report by a reputable independent environmental consultant reasonably acceptable to the Administrative Agent (an “Environmental Consultant”) as to its assessment of the presence or potential presence of significant levels of any Hazardous Material on, in, under or about such property, or of other conditions that could give rise to a potentially significant liability to any Loan Party or any Subsidiary of any Loan Party under violations of any Environmental Law relating to such transaction, and notify the Administrative Agent of such potential transaction, and (ii) afford the Administrative Agent a reasonable opportunity to review, to discuss such report with the Environmental Consultant who prepared it and a knowledgeable representative of the Borrowers. The Administrative Agent shall 

have the right, but shall not have any duty, to obtain, review, or discuss any such report.

(c)If any Default or Event of Default has occurred and is continuing or if the Administrative Agent or any Lender has formed a reasonable belief that material violations of Environmental Laws may exist or Hazardous Materials may be present on the Real Property in amounts or under circumstances which could reasonably be expected to result in a liability exceeding a Material Environmental Amount, then, at the Administrative Agent’s request, the each Loan Party and each Subsidiary of any Loan Party shall perform, or use commercially reasonable efforts to cause to be performed by any other responsible party, tests, including subsurface testing, soil and groundwater testing, and other tests which may physically invade the Real Property pursuant to a scope of work proposed by the Borrowers and approved by the Administrative Agent (the “Environmental Tests”), as the Administrative Agent, in its reasonable  discretion,  determines  is  necessary  to  (i)  investigate  the  condition  of  the  Real Property, (ii) protect the security interest created under the Mortgages and the other Loan Documents and (iii) determine compliance in all material respects with all Environmental Laws, the provisions of the Loan Documents and other matters relating thereto. The Loan Parties and Subsidiaries of any Loan Party shall provide true and accurate copies of the results of the Environmental Tests to the Administrative Agent and the Lenders upon receipt of the results. In the event that (I) any Loan Party or any Subsidiary of any Loan Party fails to promptly initiate the Environmental Tests requested by the Administrative Agent, (II) any Loan Party or any Subsidiary of any Loan Party fails to provide to the Administrative Agent and the Lenders with the results of such Environmental Tests within 60 days of the request therefor or such additional time as the Administrative Agent shall agree in its sole discretion or (III) the Administrative Agent or the Required Lenders are not reasonably satisfied with the results of such Environmental Tests, then the Administrative Agent may undertake to perform or cause to be performed, at the Borrower’s expense, such Environmental Tests for the account of the Borrowers and the other Loan Parties.

(d)Each Loan Party and each Subsidiary of any Loan Party shall, in accordance with prudent industry practice, from time to time perform any remediation, reclamation or similar action required under any applicable Environmental Law, any  such actions with respect to the Real Property to include, but not be limited to, the investigation of the condition of the Real Property, the preparation of any feasibility studies, reports or remedial plans, and the performance of any cleanup, remediation, containment, operation, maintenance, monitoring or restoration work, whether on or off of the Real Property. Each plan of remediation shall be subject to the prior review of the Administrative Agent. All such work shall be performed by one or more Environmental Consultants. Each Loan Party and each Subsidiary of any Loan Party shall proceed continuously and diligently with such investigatory and remedial actions, provided that in all cases such actions shall (i) be in accordance with the remediation plan approved by an appropriate Governmental Authority and all applicable Environmental Laws and (ii) be performed in a good, safe and workmanlike manner so as to minimize, to the extent practicable, any impact on the business conducted at or the value of the Real Property. The Borrowers shall pay all costs actually incurred in connection with such investigatory and remedial activities, including all power and utility costs, and any and all Taxes or fees that may be applicable to such activities. Each Loan Party and each Subsidiary of any Loan Party shall promptly provide to the Administrative Agent and the Lenders copies of testing reports and results generated in connection with such activities. Promptly upon completion of such investigation and remediation, each Loan Party and each Subsidiary of any Loan Party shall permanently close all monitoring wells and test holes in compliance with applicable Laws, remove all associated equipment and restore the Real Property to the maximum extent practicable, which shall include, without limitation, the repair of any surface damage. Within 30 days of demand therefor, the Borrowers shall provide the Administrative Agent with a bond, letter of credit or similar financial assurance reasonably satisfactory to the Administrative Agent evidencing that the necessary 

funds are available to perform the obligations established by this clause, unless a bond or similar financial assurance at least in the amount required by the Administrative Agent is in full force and effect and is available and is in fact used by the relevant Governmental Authority to pay such obligations.

(e)The Administrative Agent, whether or not the Administrative Agent has acquired possession or title to the Real Property, shall have the right to undertake any and all actions to remediate the Real Property which any Loan Party or any Subsidiary of any Loan Party shall fail to perform or cause to be performed in accordance with the requirements of this clause.

SECTION 7.1.7    As to Intellectual Property Collateral.

(a)Each Loan Party and each Subsidiary of any Loan Party shall take all actions necessary to ensure that no Intellectual Property Collateral lapses, becomes abandoned, dedicated to the public, invalid, unenforceable or subject to any adverse determination or development (including the institution of, or any adverse determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any foreign counterpart thereof or any court), unless the Borrowers shall either (i) reasonably and in good faith determine (and notice of such determination shall have been delivered to the Administrative Agent) that any of such Intellectual Property Collateral is of negligible economic value to each Loan Party and each Subsidiary of any Loan Party or (ii) have a valid business purpose (exercised in the ordinary course of business that is consistent with past practice).

(b)In no event shall any Loan Party, any Subsidiary of any Loan Party or any of their agents, employees, designees or licensees file an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Administrative Agent, and upon request of the Administrative Agent, executes and delivers any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s first priority security interest in such Intellectual Property Collateral and the goodwill and general intangibles of each Loan Party and each Subsidiary of any Loan Party relating thereto or represented thereby.

(c)Each Loan Party and each Subsidiary of any Loan Party will take all necessary steps, including in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue any application (and to obtain the relevant registration) filed with respect to, and to maintain any registration of, the Intellectual Property Collateral, including the filing of applications for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and the payment of fees and taxes (except to the extent that dedication, abandonment or invalidation is permitted under clause (a)).

SECTION 7.1.8    Payment of Taxes and Claims; Deposits for Taxes and Insurance Premiums.

(a)Each Loan Party and each Subsidiary of any Loan Party will comply in all material  respects  with  all  material  permits,  licenses,  authorizations,  approvals,  entitlements,
accreditations and privileges of each Governmental Authority and all applicable Laws that are, in each case, binding on any of them, the Real Property or their other property or assets.

(b)Each Loan Party and each Subsidiary of any Loan Party will pay before the same become delinquent, all (i) its Indebtedness and other obligations and (ii) lawful claims for labor, materials and supplies or otherwise, except for the non-payment of such claims that (A) are being diligently contested in good faith by appropriate proceedings which (1) suspend collection of the contested Indebtedness or claim and any Lien arising therefrom and (2) for which adequate reserves in accordance with GAAP shall have been set aside on its books and (B) could not reasonably be expected to result in, either individually or in the aggregate, a material liability to any of them. If such contest is terminated, adversely resolved or the conditions set forth in this Section are no longer met, each Loan Party and each Subsidiary of any Loan Party shall promptly pay or discharge the contested Indebtedness and claims.

(c)Each Loan Party and each Subsidiary of any Loan Party will file all Federal and other material tax returns required to be filed in any jurisdiction and pay all Taxes imposed or levied upon the Collateral or on the interests created by any Mortgage or with respect to the filing of any Mortgage, or on the Lien and other interests created by any Mortgage, to the extent such Taxes have become due and payable and before they have become delinquent. Any Loan Party and any Subsidiary of any Loan Party may, at its own expense, in good faith and by appropriate proceedings diligently contest any such Taxes and, in the event of any such contest, may permit the Taxes so contested to remain unpaid during the period of such contest and any appeal therefrom, provided that during such period the Loan Parties and the Subsidiaries of the Loan Parties shall be in compliance with this Agreement and that adequate reserves for such Taxes shall have been set aside on their books in accordance with GAAP.

		
	(d)
	[reserved.]

(e)In the event of the passage, after the Effective Date, of any Law that deducts from the value of the Collateral any Tax or changes the taxation of mortgages, deeds of trust and/or security agreements, or the manner of the collection of any such Taxes, in each case which has the effect of imposing any additional payment or expense against any of the Collateral or upon the Administrative Agent or any Lender, the Borrowers shall pay such Tax or promptly reimburse the Administrative Agent or such Lender for its or their payment.

SECTION 7.1.9    Further Assurances; Additional Collateral; Additional Loan Parties

(a)Each Loan Party and each Subsidiary of any Loan Party will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds to secure debt and other documents), which may be required under any Law, or which the Administrative Agent or the Required Lenders may reasonably request, to comply with the terms of this Agreement and the other Loan Documents, including causing the Collateral to be subject to a first priority security interest in favor of the Administrative Agent, for the benefit of the Lender Parties (subject, in the case of non-possessory security interests, to the Liens permitted by Section 7.2.3), securing all the Obligations, all at the expense of the Borrowers. The Borrowers also agree to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Loan Documents.

(b)If any property or asset is acquired by any Borrower or any Subsidiary of any Borrower (other than a Shell Subsidiary to the extent consistent with the definition thereof), the Borrowers will notify the Administrative Agent promptly thereof (except such notice shall not be required 

if the Administrative Agent has a valid first priority perfected security interest in such property or asset by virtue of any actions previously taken by or on behalf of the Administrative Agent) and will cause such property or asset to be subjected to a first priority security interest in favor of the Administrative Agent (subject, in the case of non-possessory security interests, to the Liens permitted by Section 7.2.3), and will take, and cause its Subsidiaries to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens (including the actions described in clause
(a)and obtaining Landlord Estoppel Certificates with respect to assets located on leased Real Property).

(a)Without limiting the above, if any Real Property is acquired on or after the Effective Date by any Borrower or any Subsidiary of any Borrower, subject to the exceptions and extensions set forth in the last sentence of the definition of “Real Property Documents” with respect to certain acquisition of Real Property, the Loan Parties will deliver to the Administrative Agent:

(i)written notice of such acquisition at least forty-five (45) days (or such shorter notice as the Administrative Agent may agree to in its sole discretion) prior to the closing of the same,

(ii)not less than thirty (30) days prior (or such shorter period of time as the Administrative Agent may agree to in its reasonable discretion) to the closing of such acquisition of additional Real Property, copies of the substantially complete form of the Real Property Documents,

(iii)not less than two (2) Business Day prior (or such shorter period of time as the Administrative Agent may agree to in its reasonable discretion) to the closing of such acquisition of additional Real Property, copies of the final form of the Real Property Documents,

(iv)prior to such closing of such acquisition of additional Real Property copies or originals, as applicable, of the final, fully executed Real Property Documents; and

(v)not later than ninety (90) days after such closing of such acquisition of additional Real Property (or such longer period of time as the Administrative Agent may agree to in its reasonable discretion), recorded copies of any Mortgage, Mortgage Amendment, UCC financing statement or other applicable Real Property Documents;

(For the avoidance of doubt, as provided in the definition of “Real Property Documents,” the Administrative Agent may elect in its sole discretion to accept delivery of one or more of the Real Property Documents after the closing of such acquisition and/or to waive delivery of one or more of the Real Property Documents.)

(b)Without limiting the above, if any Subsidiary of any Loan Party is established or acquired after the Effective Date, the Loan Parties will, and will cause their Subsidiaries to, deliver to the Administrative Agent

(i)written notice of such establishment or  acquisition at least thirty
(30) days (or such shorter notice as the Administrative Agent may agree to in its sole discretion) prior to the same, which notice shall identify whether such new Subsidiary shall be a Shell Subsidiary; and

(ii)prior to (i) such event, transaction or date as would result in a Shell Subsidiary no longer qualifying as a Shell Subsidiary or (ii) such establishment or acquisition of a Subsidiary not designated as a Shell Subsidiary (or, in each case, such later time as the Administrative 

Agent may agree to in its sole discretion), copies or originals, as applicable, of the final, fully executed Joinder Documents.

SECTION 7.1.10 Exercise of Rights under Transaction Documents. Each Loan Party and each Subsidiary of any Loan Party will enforce in its reasonable business judgment all of its material rights under each Transaction Document to which it is a party, including, without limitation, all material indemnification rights thereunder, and pursue all material remedies that are available to any Loan Party or any Subsidiary of any Loan Party with diligence and in good faith in connection with the enforcement of any such rights.

SECTION 7.1.11    Timber Affirmative Covenants.

(a)Management. The Timberland shall be operated in accordance with (i) industry standards for their highest and best use as timberlands, having due regard to soil conditions, stand arrangements and other factors relevant to the conduct of sound silvicultural and harvesting practices and (ii) Best Management Practices.

(b)Timberland Operating Agreement. Each Timberland Operating Agreement shall remain in full force and effect and there shall be no default, breach or violation existing thereunder by any party thereto and no event shall occur (other than payments due but not yet delinquent) that would entitle any party thereto to terminate such Agreement. No Timberland Operating Agreement shall be modified in any respect except as provided in clause (a) of Section 7.2.10. No Loan Party or Subsidiary of any Loan Party shall enter into any agreement relating to the management or operation of the Timberland without the  express consent of the Administrative Agent. If at any time the Administrative Agent consents to the appointment of a new or additional timber manager, such new or additional manager and the applicable Loan Parties (and applicable Subsidiaries, if any) shall, as a condition of the Administrative Agent’s consent, execute an agreement either substantially in the form of the Timber Manager Subordination Agreement as of the Effective Date or in form and content acceptable to the Administrative Agent in its sole discretion. Timber Manager may not assign, delegate or subcontract any of its rights or obligations under any Timberland Operating Agreement or any other Loan Document to which it is a party without the prior written consent of the Administrative Agent in its sole discretion unless (i) the Timber Manager’s obligations under each Timberland Operating Agreement and any other Loan Document to  which  the Timber Manager is a party shall remain unchanged, (ii) Timber Manager shall remain solely responsible to the parties of each Timberland Operating Agreement and any other Loan Document to which the Timber Manager is a party for the performance of such obligations, and
(iii)the Loan Parties, the Subsidiaries of the Loan Parties, the Administrative Agent and the Lenders shall continue to deal solely and directly with the Timber Manager in connection with the Timber Manager’s rights and obligations under each Timberland Operating Agreement and any other Loan Document to which the Timber Manager is a party.

(a)Annual Operating Plan. As soon as available and in no event later than 10 Business Days prior to the beginning of each calendar year, Timberlands II will submit to the Lenders on behalf of the Landholders an annual plan of operations for forest management, silviculture, planting, thinning and Timber harvesting (the “Harvest Plan”) for the Timberland (which shall be prepared on a per Division basis), for the following year, which shall be prepared or reviewed by the Timber Manager, the Administrative Agent and the Administrative Agent’s consultant (if any). The Harvest Plan shall identify by a GIS based system of identification that corresponds to the legal descriptions of the Timberland attached to the Mortgages, the land area of each Division to be harvested, so that the Administrative Agent can verify that the Timberland is being harvested in an orderly and efficient manner. Also, each Harvest Plan shall be accompanied by a certification by a Financial Officer of Timberlands II (and, if 

any Timberlands of any other Landholder are included in the Harvest Plan, such other Landholder) that Timberlands II can meet the performance requirements of the Supply Agreements on a current and prospective basis during the period covered by such Harvest Plan. The Landholders shall promptly notify the Administrative Agent of any material changes in the Harvest Plan, which changes shall be subject to approval by the Administrative Agent.

(b)Timber Harvesting and Forest Management Operations. If no Default or Event of Default has occurred and is continuing, each Landholder may cut and remove its Timber from its Timberland subject to satisfaction of the following conditions:

(i)All cutting, logging and removal of Timber shall be in accordance with Best Management Practices.

(ii)All cutting operations of Timber shall be conducted in such a manner as to realize in accordance with industry standards the greatest return from the Timber, to effect suitable utilization of the Timberland, to assure the early and complete regeneration of stands of desirable Timber and to maximize development of Timber, both as to growth and quality. All standing Timber shall be cut as close to the ground as practicable in order to leave the lowest stump, with jump-butting to be used when necessary. All desirable Timber that is not at the time being harvested, including young trees, shall be protected against unnecessary injury from felling, skidding and hauling. All measures reasonably practicable shall be used in cutting operations to prevent soil erosion including the proper location of skidways and roads.

(iii)Any intermediate harvesting of Timber shall be carried out in accordance with industry standards to produce the maximum growth on the maximum number of stems, consistent with the production in accordance with industry standards in order to maximize the greatest quantity and quality of merchantable Timber, and all harvesting shall be carried on in a manner calculated to realize in accordance with industry standards the maximum investment value in the Timberland.

(iv)Each Landholder shall keep and maintain at its offices adequate and accurate books and records of all Timber cut and removed from its Timberland and the payments received therefrom. Each Landholder shall furnish a record of cuttings and payments to the Administrative Agent in a form and at such times as the Administrative Agent may specify from time to time, but not less frequently than 45 days after each calendar quarter (with a comprehensive year-end summary with the fourth calendar quarter report). All such reports shall include (A) independent information for each Division; (B) the total net volume of logs scaled by species for each product type; (C) the number of acres of the Timberland and in each Division on which cutting in the form of clear cutting, seed tree, shelterwood, cover story removal and commercial thinning was conducted (with the number of acres for each such form of cutting being separately stated and the location of the acreage for each such form of cutting being identified according to the descriptions of Divisions used in the Harvest Plan); (D) the number of acres of the Timberland in which Timber was lost or destroyed (with the number of acres lost or destroyed by each cause being separately stated and the location of the acreage lost or destroyed by each cause being identified); (E) a description of all improvements made on the Timberland (including, but not limited to, all buildings and capitalized forest roads and all pre-commercial thinning) and the acres affected by each such improvement (with the location of such improvements and acres being identified according to said descriptions); (F) a description of silviculture operations, site preparation and replanting (with the number of acres affected, the location and the type of product replanted); and (G) such other information as the Administrative Agent may reasonably specify from time to time with respect to the management of  and activities on the Timberland. No later than 45 days after the end of each calendar year (or such later date as the Administrative Agent may approve in its 

sole discretion), each Landholder shall provide a summary report of cuttings and payments for the preceding calendar year, including all information on each quarterly report that was delivered for the preceding calendar year and a comparison of the respective period’s cutting compared with the Harvest Plan for such period and the requirements of the Supply Agreements. Each Landholder shall also furnish with each such periodic report, unless previously provided, maps satisfactory to the Administrative Agent, showing the location of the Divisions on which the cutting, loss or destruction, site preparing and replanting and improvements reported on by such Landholder occurred or were made. Each such quarterly report shall be certified true and correct by a Financial Officer of the applicable Landholder and the Timber Manager, including a certification that such Landholder and the Timberland are in compliance with the Harvest Plan and the requirements of this Section.

(v)The Administrative Agent will have the right to inspect the Timberland, scaling practices, scaling slips and summaries, at any reasonable time and upon prior notice. Additionally, the Administrative Agent may, at its option, appoint a third party consulting forester of its choice to perform loan monitoring services, including conducting property inspections, monitoring of Timber harvesting, audit of each Landholder’s current cruise and inventory data, Timber volumes, Timber management plans and other services deemed reasonably necessary by the Administrative Agent so as to monitor compliance by each Loan Party and each Subsidiary of any Loan Party with the requirements of this Agreement or any of the other Loan Documents. Each Borrower agrees to pay all reasonable fees and expenses charged by such consulting foresters for such inspections and services.

(vi)Each Landholder, each other Loan Party and each other Subsidiary of any Loan Party shall comply in all material respects with all Laws concerning the harvesting of Timber and operation of a tree farm with respect to the Timberland.

(vii)The remainder of any Timber cut for pine sawtimber or hardwood sawtimber not utilized through generally accepted sawmilling processes and normally referred to as topwood may be utilized as pulpwood at the applicable Landholder’s discretion.

(viii)The cutting restrictions contained in this Section shall not apply to Timber cut for the purpose of salvaging Timber from loss due to oil, gas or mineral operations, insect infestation, fire or, with the prior approval of the Administrative Agent, for the purpose of carrying out sound forestry practices.

(ix)The words “year(s)” and “cutting period(s)” as used in this Agreement shall mean the period from January 1 to December 31.

(x)If during any cutting period there is damage to the Timber on the Timberland by trespass, unauthorized cutting, mining, drilling, right-of-way clearing, condemnation, fire, disease, insects, storm or other hazards, the applicable Landholder shall promptly cut Timber or take such other reasonable and prompt measures as may be necessary to protect Timber from further damage in accordance with good forestry practices.

(xi)Each Landholder will promptly notify the Administrative Agent of any damage to the Timberland affecting more than 500 acres.

(xii)All reasonable measures shall be taken by each Landholder to insure proper regeneration of the Timber on the Timberland in order to maximize the development of the Timber, both as to growth and quality. Any clear-cut area and each area without adequate seed source shall be site-prepared and replanted within 12 months of such cutting (or such later date as the Administrative Agent 

may approve in its sole discretion) with desirable species using the most superior-type seedlings available and in any event, using then- current sound forestry practices. In other areas when regeneration is not accomplished by natural means within a reasonable time, the applicable Landholder shall institute and maintain a planting program designed adequately to reforest such land. Notwithstanding the foregoing, no Landholder shall be required to take any actions pursuant to this clause which is not required by the terms of any Timber Lease in which it is the lessee.

(xiii)Prior to the commencement by any Landholder of any harvesting, mining or similar activities near any boundary line of the Timberland, such Landholder shall have said boundaries marked in order to prevent unauthorized harvesting from occurring. In the event adjoining landowners are conducting timber harvesting, mining or similar activities on their property near any boundary line of the Timberland, the Landholder will cause the boundary lines to be clearly marked to prevent unauthorized cutting. Each Landholder shall cause its Timberland to be inspected periodically for the purpose of preventing the unauthorized cutting of Timber.

(xiv)Each Landholder shall maintain at all times in accordance with sound silvicultural practices all reasonable and effective measures to prevent the development of and to control the spread of disease and insect infestation on its Timberland, including, the shifting of logging operations, to the extent economically feasible, to remove diseased or insect- infested Timber and other Timber threatened with disease or insect infestation and all such other accepted forest sanitation and control measures as are necessary to prevent the development and spread of disease and insect infestation.

(c)Salvage. To the extent economically feasible, all Timber that is dead, diseased, fallen or otherwise damaged by casualty or as a result of insect infestation, shall be salvaged and harvested in accordance with sound silvicultural practices.

(d)Fire Protection. All measures shall be taken which are reasonably necessary to protect the Timberland from loss by fire, which measures shall be at least equal to fire-control practices generally followed on timber producing property in the same general area, including the adoption of suitable prevention and control measures, the maintenance of adequate firefighting equipment, the maintenance of fire lanes where needed, the use of fire patrols, proper disposal of slash and full cooperation with Governmental Authorities on matters of fire prevention and control. Each Landholder shall maintain membership in forest protective associations where any of its Timberland fall within a forest protective district under the jurisdiction of any such association, and shall pay as due any forest patrol assessments of any state forester or of such forest protective association.

(e)Maintenance of Roads. The existing system of roads and roadways shall be maintained in such manner as to permit access of mobile firefighting equipment to substantially all parts of the Timberland.

(f)Cruise and Appraisals. Within 60 days of a request by the Administrative Agent in the exercise of its reasonable discretion (which request, unless an Event of Default has occurred and is continuing, shall not be made more than once in any period of 12 consecutive months), each Landholder, at the sole cost and expense of Loan Parties, shall deliver to the Lenders a Timber cruise and/or appraisal of all or any portion of such Landholder’s Timberland, in each case, as the Administrative Agent shall have specified in its request. Each such appraisal shall assign independent values to each Division and any Timber Lease. Each such appraisal shall be done by American Forest Management or other nationally recognized forestry appraisal firm that is acceptable to the Administrative Agent. Each such Timber cruise shall be done by a third party professional that is acceptable to the Administrative Agent; provided that, if no Event of Default has occurred and is continuing, the Administrative Agent 

may in its sole discretion accept a Timber cruise conducted by the Landholders or their agents. Each such Timber cruise and appraisal, as well as the scope thereof and the methods and assumptions included therein (including any “extraordinary assumptions” or “hypothetical conditions” (each as defined by the Uniform Standards of Professional Appraisal Practice), must be acceptable in form and substance to the Administrative Agent.

(g)Inventory Updates. In connection with any appraisals conducted pursuant to clause (h), each Landholder shall, if requested by the Administrative Agent, deliver to the Lenders an updated Timberland inventory report that is reasonably acceptable to the Administrative Agent. Such updated Timberland inventory report shall, among other things, reflect volumes removed, destroyed or miscalculated pursuant to the records and/or knowledge of such Landholder and/or the Timber Manager, plus the then applicable added growth of the Timber volumes since the latest of either (i) the date of the last inventory report or (ii) such Landholder’s last proprietary internal inventory system volume estimate.

		
	(h)
	Reserved.

(i)Notice of Appraisal or Cruise. Each Landholder shall promptly provide to the Lenders a copy of any appraisal or cruise related to its Timberland.

(j)Supply Contracts. No Landholder or any other Loan Party or any Subsidiary of any Loan Party shall consent to any amendment, supplement, waiver or other modification, termination or assignment of the Supply Agreements without the prior consent of the Administrative Agent, and shall furnish the Administrative Agent all information available to any Loan Party or any Subsidiary of any Loan Party, as well as any additional information reasonably requested by the Administrative Agent, with respect thereto.

(k)Timber Sale and Release. If no Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, permission is hereby granted by the Lenders to the Landholders to cut, or allow others to cut, Timber from its respective Timberland in accordance with the current Harvest Plan previously approved by the Administrative Agent and on the terms and conditions set forth in this Agreement, including, without limitation, clause (d), and so as not to result in a violation of Section 7.2.4; provided however, no Timber may be cut from any portion of the Timberland (including from any portion consisting of recently acquired, additional Real Property excepted from clause (p) of the definition of “Real Property Documents” at the option of the Loan Parties or the option of the Administrative Agent as provided herein) for which the Administrative Agent has not received and approved a current Harvest Plan. If no Event of Default has occurred and is continuing, the Lien of the Mortgages (and the related security interests under the U.C.C.) against any cut or severed Timber (but not the proceeds thereof, it being the intent hereof that the Administrative Agent’s Lien, on behalf of the Lenders, and security interest continue in the proceeds) shall be released, without any action by any of the Landholders, the Administrative Agent or the Lenders, upon the sooner of: (i) receipt by the applicable Landholder of full payment therefor and deposit of such amounts in the Revenue Account or another Pledged Account of the applicable Landholder, or (ii) its removal from the Timberland and after weight or volume is established and payment therefore assured in a manner reasonably acceptable to the Administrative Agent. The Borrowers shall pay to the Administrative Agent all reasonable fees, costs and expenses incurred by the Administrative Agent in connection with any such partial releases including, without limitation, legal, appraisal and accounting fees incurred by the Administrative Agent and all other expense, and recording and title insurance and title expenses.

(l)Partial Release Provisions. If no Default or Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, the Administrative 

Agent agrees to provide the applicable Landholder with partial releases of the Mortgages with respect to the Timberland sold or otherwise disposed of in accordance with the terms of this Agreement (the portions of the Timberland subject to such partial release being, the “Release Parcel”), subject to the following terms and conditions:

(i)All proceeds of the Release Parcel have been applied as provided in clause (b) of Section 3.1.2 and Section 3.1.3.

(ii)The proposed release of the Release Parcel does not adversely affect the Administrative Agent’s security interest on any of the other Collateral.

(iii)The proposed release of the Release Parcel does not, in the Administrative Agent’s judgment, impair in any material respect (in the determination of the Administrative Agent) the access to, or value, income producing ability, marketability or operational efficiency of, the remaining Timberland.

(iv)At the Administrative Agent’s request, the Borrowers shall cause the title insurance company which issued the Administrative Agent’s title insurance policy in connection with the Mortgage relating to the Release Parcel to issue an endorsement to such title insurance policy which is in form and substance satisfactory to the Administrative Agent with respect to the Release Parcel.

(v)All reasonable out of pocket fees, costs and expenses actually incurred by the Administrative Agent in connection with the consideration of any request for a partial release of the Release Parcel (including, without limitation, legal, appraisal and accounting fees and expenses, and all recording, title insurance premiums and title expenses) shall be borne solely by the Borrowers. In addition, in connection with each request for a partial release of a Release Parcel under this clause, the Administrative Agent shall be entitled to receive payment of a reasonable administration fee for each Release Parcel so released.

(m)Leases. With respect to all Timberland that any Landholder is the lessor (including the Mineral Leases), such Landholder shall (i) enforce such leases in a diligent, commercially reasonable and professional manner and (ii) furnish to the Administrative Agent annually (together with the year-end summary report delivered pursuant to clause (d)(iv)), and upon request of the Administrative Agent any other time, a rent roll certified by a Financial Officer of such Landholder, which lists the expiration date, the rental and when paid through, whether any default exists thereto and any other information reasonably requested by the Administrative Agent. No Landholder, any other Loan Party or any Subsidiary of any Loan Party shall enter into any lease, as lessor, affecting any portion of the Timberlands without the prior consent of the Administrative Agent, provided that the Administrative Agent and the Landholders shall work together to establish forms and parameters for routine leases so as to avoid the necessity of review of individual routine leases by the Administrative Agent (it being agreed that lease transactions documented utilizing such forms that are approved by the Administrative Agent shall not require the consent of the Administrative Agent to enter into the same).

(n)Estoppel Certificates as to Loans. Each Borrower, within five Business Days after request by the Administrative Agent, shall furnish the Lenders from time to time with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Loans, (ii) the unpaid principal amount of the Loans, (iii) the rate of interest on the Loans, (iv) the date through which all installments of interest, commitment fees and/or principal have been paid, (v) any offsets or defenses to the payment of the Obligations, if any and (vi) such other information as shall be reasonably requested by the Administrative Agent.

(o)Estoppel Certificates as to Third-Parties. Each Landholder, upon request by the Administrative Agent, will use commercially reasonable efforts to obtain and furnish (within 30 days after request therefor and, if no Default or Event of Default has occurred and is continuing, not more frequently than once in any period of 12 consecutive months with respect to each relevant Person) statements from purchasers of Timber or lessees under coal leases and oil and gas leases, as to the amount of timber purchased or coal, oil or gas extracted, as the case may be, and the amounts paid therefrom to such Landholder or any other Loan Party or any Subsidiary of any Loan Party during the preceding 12 months.

(p)Timber Leases, Generally. In addition to making payment of all rent, Tax and other payments and charges required to be made by any Landholder as tenant or grantee under and pursuant to the provisions of each Timber Lease, each Landholder covenants that it will:

(i)diligently and timely perform and observe all of the terms, conditions and covenants of each such Timber Lease that are required to be performed and observed by such Landholder, to the end that all things shall be done which are necessary to keep unimpaired Timberland rights under each such Timber Lease, and each Landholder agrees that no release or forbearance of any of its obligations under any Timber Lease shall release such Landholder from any of its obligations under this Agreement or any other Loan Agreement with regard to the same;

(ii)promptly notify the Administrative Agent of any default by any Person in the performance and observance of any of the terms, conditions or covenants to be performed or observed under each such Timber Lease;

(iii)promptly notify the Administrative Agent of the giving of any notice under each such Timber Lease of any default of any Landholder in the observance of any terms, covenants or conditions of each such Timber Lease, and promptly deliver to the Administrative Agent a true copy of each such notice; and
(iv)except as permitted pursuant to clause (x) of this Section 7.1.11, not surrender the leasehold estate or cutting rights that is the subject of each such Timber Lease nor cause or permit the termination or cancellation of any such Timber Lease except at the stated end of the lease term or Timber Deed or enter into any agreement (whether oral or written) modifying, supplementing or amending any such Timber Lease, in each case without the prior consent of the Administrative Agent.

(q)Timber Leases, Corrective Action. The Administrative Agent shall have the right (but shall not be obligated) to take any action that the Administrative Agent deems necessary or desirable to prevent or to cure any default by any Landholder in the performance of or compliance with any Landholder’s obligations under any Timber Lease. Upon receipt by the Administrative Agent of any notice of a default by any Landholder under a Timber Lease, the Administrative Agent may take any action it deems reasonably appropriate in order to cure such default even though the existence of such default or the nature thereof may be questioned or denied by any Landholder. Each Landholder hereby expressly grants to the Administrative Agent, and agrees that the Administrative Agent shall have, the absolute and immediate right to enter in and upon the Timberland or any part thereof to such extent and as often as the Administrative Agent, in its sole discretion, deems necessary or desirable in order to prevent or to cure any such default by any Landholder under any Timber Lease. The Administrative Agent may pay and expend such sums of money as the Administrative Agent deems reasonably necessary for any such purpose, and each Borrower hereby agrees to pay to the Administrative Agent, promptly upon demand, all such sums so paid and expended by the Administrative Agent.

(r)Timber Leases, Further Security. As further security for the repayment of the Indebtedness secured hereby and for the performance of the covenants contained herein and in each Timber Lease, each Landholder hereby assigns to the Administrative Agent, for the benefit of the Lender Parties, all of its rights, privileges and prerogatives as lessee or grantee under each Timber Lease to terminate, cancel, modify, change, supplement, alter or amend each such Timber Lease, and any such termination, cancellation, modification, change, supplement, alteration or amendment of any Timber Lease without the prior consent by the Administrative Agent shall be void and of no force and effect; provided, however, that so long as no Event of Default has occurred and is continuing, the Administrative Agent shall have no right to terminate, cancel, modify, change, supplement, alter or amend any such Timber Lease. Each Landholder represents and warrants that it has delivered to the Administrative Agent a true and accurate copy of each Timber Lease, to which it is a party, together with all amendments thereto if any.

(s)Timber Lease, No Merger. Unless the Administrative Agent shall otherwise expressly consent, the fee title to the land leased under any Timber Lease and the leasehold estate therein held by any Landholder shall not merge but shall always remain separate and distinct, notwithstanding the union of said estates either in the lessor or in the lessee under the Timber Lease, or in a third party by purchase or otherwise.

(a)Timber Lease, Certificates of Estoppel. Each Landholder shall, from time to time, use its best efforts to obtain from the lessor under any Timber Lease or any grantor or current owner of the property encumbered by any Timber Deed such certificates of estoppel with
respect to compliance by such Landholder with the terms of the Timber Lease as may be requested by the Administrative Agent.

(b)Updated Value of the Timberlands.    Upon the sale of any Real Property by any Landholder for an amount greater than $3,000,000 in connection with a single sale or $4,000,000 in the aggregate (including all sales by any Landholder) since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 or otherwise, the Landholders shall deliver to the Lenders a report updating the Value of the Timberlands. The Value of the Timberlands set forth in such reports shall be calculated by reducing the Value of the Timberlands reported in the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 or otherwise by the Cost Basis of the Real Property sold. Upon the acquisition of any Real Property by any Landholder for an amount greater than $3,000,000 in connection with a single purchase or $4,000,000 in the aggregate (including all acquisitions by any Landholder) since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 or otherwise, the Landholders may deliver to the Lenders a report updating the Value of the Timberlands; provided that, (i) for any acquisition of any Real Property by any Landholder for an amount greater than $4,000,000 in connection with a single purchase, the Administrative Agent and each Lender shall have received and approved an appraisal from American Forest Management or another nationally recognized forestry appraisal firm that is reasonably satisfactory to the Administrative Agent, (ii) such acquisition is permitted pursuant to the terms of this Agreement, (iii) such Real Property is subject to a first priority security interest in favor of the Administrative Agent, and (iv) the Loan Parties have complied with the terms of and all requests of the Administrative Agent made pursuant to the Loan Documents, including, without limitation, Section 7.1.9 of this Agreement.

(c)Termination of Timber Leases. If no Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, permission is hereby granted by the Lenders to the applicable Landholder to terminate PLM Leases or portions of the LTC 

Lease or other Timber Lease on the terms and conditions set forth in this Agreement, including, without limitation, clause (d); provided, that (i) any such termination shall not result in a violation of Section 7.2.4, (ii) such Landholder shall notify the Administrative Agent in writing of each such termination, which written notification will include (A) the allocated Cost Basis of each terminated PLM Lease or each portion of the LTC Lease or other Timber Lease and (B) the net amount of proceeds received in connection with such termination, (iii) all related Timber Lease Termination Proceeds shall be applied as provided in Section 3.1.2, (iv) to the extent Timber Lease Termination Proceeds exceed $3,000,000 in connection with the termination of a single Timber Lease or a single portion of the LTC Lease, or $4,000,000 in the aggregate (including all terminations by any Landholder) since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 or otherwise, the Landholders shall deliver to the Lenders a report updating the Value of the Timberlands by reducing the Value of the Timberlands reported in the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 or otherwise by the allocated Cost Basis, and (v) such termination is (A) consistent with the most current budget and projections delivered pursuant to Section 7.1.11(p) or (B) consented to by the Administrative Agent in its sole discretion.

SECTION 7.1.12    Material Accounts.

(a)Each Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, each Loan Party (other than CatchMark Timber) has and will direct that all amounts payable to them from their account debtors and other Persons shall be deposited in a Material Account. Each Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, each Loan Party has established and will maintain each Material Account in accordance with this Agreement. Each Loan Party represents, warrants and covenants that except for the Material Accounts listed on Item 6.24 of the Disclosure Schedules (as updated from time to time pursuant to the terms hereof), there are no other deposit, securities or commodities accounts into which revenues from the ownership and operation of the Collateral or otherwise are deposited or held by any Loan Party or any Subsidiary of any Loan Party. So long as any Obligations shall be outstanding, no Loan Party and no Subsidiary of any Loan Party shall open any accounts for the deposit of revenues from the ownership and operation of the Collateral or otherwise other than the accounts described in the immediately preceding sentence.

(b)Each Loan Party acknowledges that each Account Bank may comply with instructions originated by the Administrative Agent regarding any Material Account without further consent by any Loan Party. Notwithstanding the foregoing, funds, investment property, security entitlements and other financial assets of any Loan Party that are deposited in or credited to a Material Account may at the direction of the applicable Loan Party, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by the Borrowers or any other Loan Party in the making of any such Cash Equivalent Investments. All interest, dividends or other earnings which accrue on any Material Account shall be taxable to the applicable Loan Party.

(c)To secure the full and punctual payment and performance of all the Obligations, each of the Loan Parties hereby grant to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to the Material Account Collateral.

The Administrative Agent and the Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the Material Account Collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., 

as if such rights and remedies were fully set forth herein.

(d)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Material Account Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws, including liquidating the same and applying all proceeds therefrom to the payment of the Obligations as set forth in Section 8.6. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Material Account Collateral (or any portion thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

(e)Each Loan Party hereby irrevocably constitute and appoints the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney- in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of such Loan Party with respect to the Material Account Collateral, and do in the name, place and stead of such Loan Party, all such acts, things and deeds for and on behalf of and in the name of such Loan Party, which such Loan Party is required to do hereunder or under the other Loan Documents, or which any Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Material Account Collateral or otherwise received in or for deposit in any Material Account, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Collateral are sent or received, (iii) endorse any Loan Party’s name upon any item of payment constituting Material Account Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in any Material Account, (iv) endorse any Loan Party’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (v) sign any Loan Party’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Each Loan Party hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

(f)Each Loan Party agree that at any time and from time to time, at the expense of the Borrowers, each Loan Party will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable, or that the Administrative Agent or any Lender may reasonably request, in order to perfect and protect any security interest granted in the Material Account Collateral or purported to be granted or to enable the Administrative Agent or 

any Lender to exercise and enforce its rights and remedies hereunder with respect to any Material Account Collateral. In the event of any change in name, identity or structure of any Loan Party or as otherwise reasonable requested
by the Administrative Agent from time to time, each such Person, at its sole cost and expense, shall promptly notify the Administrative Agent and take all actions reasonably requested by the Administrative Agent in order to maintain its first priority perfected security interest in the Material Account Collateral.

SECTION 7.1.13    CatchMark TRS Subsidiary Account.

Each of the Borrowers, CatchMark TRS Subsidiary and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, CatchMark TRS Subsidiary has established and will maintain one or more accounts at  an Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “CatchMark TRS Subsidiary Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “CatchMark TRS Subsidiary Account”), and into which CatchMark TRS shall deposit all amounts that are payable to it from any source whatsoever, including, without limitation under the Fiber Supply Agreement. Each of the Borrowers, CatchMark TRS Subsidiary and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement and the Fiber Supply Agreement, CatchMark TRS Subsidiary has and will give proper notice of the CatchMark TRS Subsidiary Account to the parties to the Fiber Supply Agreement.

SECTION 7.1.14    Revenue Account.

Each of the Borrowers and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, Timberlands II has established and will maintain one or more accounts at one or more Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Revenue Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “Revenue Account”). Timberlands II shall cause and direct all amounts that are payable to it under the Master Stumpage Agreement from the harvesting of Timber to the Revenue Account. CatchMark TRS Subsidiary shall pay directly into the Revenue Account, as and when due, all amounts owing by it to Timberlands II pursuant to the Master Stumpage Agreement. Each of the Borrowers, CatchMark TRS Subsidiary and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement and the Master Stumpage Agreement, each of Timberlands II and CatchMark TRS Subsidiary and the other Loan Parties has and will give proper notice of the Revenue Account to the parties to the Master Stumpage Agreement.

SECTION 7.1.15    Equity Raise Account.

(a)Each of the Borrowers, CatchMark Timber and each other Loan Party acknowledges and confirms that:
(i)on or before the date hereof and pursuant to the terms of this Agreement, CatchMark Timber has established and will maintain at all times at least one Equity Raise Account;

(ii)each Equity Raise Account is a deposit or securities account at an Account Bank established and maintained for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties;

(iii)CatchMark Timber shall direct all proceeds raised by, contributed to or received by CatchMark Timber or any other Loan Party at any time to be directly deposited to an Equity Raise Account.

Other than as provided herein with respect to Equity Raises Net Proceeds, each Borrower and other Loan Party represents, warrants and covenants that except for the Equity Raise Accounts, there are no other accounts into which any proceeds of any issuance of equity by CatchMark Timber are deposited or held. Until all the Obligations have been paid in full in cash and performed in full and all the Commitments have been irrevocably terminated, other than as provided herein with respect to Equity Raises Net Proceeds, no Borrower, any other Loan Party or any other Person shall open any accounts other than an Equity Raise Account for the deposit of or to hold any proceeds of any issuance of equity by CatchMark Timber.

(b)Promptly upon receipt (and in any event within 10 days after receipt by CatchMark Timber or any other Loan Party or any Subsidiary of any Loan Party), the Borrowers shall cause CatchMark Timber to, and CatchMark Timber hereby agrees to, pay, deposit or otherwise transfer directly into a Pledged Account of Timberlands II all proceeds of any equity issued by CatchMark Timber less the actual amount of reasonable fees and out-of-pocket transaction costs and expenses of such equity issuance due to any unaffiliated third parties (the “Equity Raises Net Proceeds”), which deposited proceeds shall correspond to the amount or description of proceeds listed on the certificate described below.

(c)Promptly upon receipt of any proceeds of any equity issuance of CatchMark Timber (and in any event within 10 days after receipt by CatchMark Timber or any other Loan Party or any Subsidiary of any Loan Party), the Borrowers or CatchMark Timber shall provide a certificate of a Financial Officer of CatchMark Timber and the Borrowers (i) describing the equity issuance, (ii) setting forth the proceeds of the equity issuance, (iii) setting forth the calculation of the Equity Raises Net Proceeds, (iv) after the Multi-Draw Term Loan Commitment Termination Date, calculating the Loan to Value Ratio, and (v) calculating any repayment required by Section 3.1.2(b) with respect to such Equity Raises Net Proceeds.

SECTION 7.1.16    [Reserved.]

SECTION 7.1.17    Qualified ECP Guarantor; Keepwell.

(a)Each Loan Party will be a Qualified ECP Guarantor on the date it enters into any Rate Protection Agreement and on the date it guarantees or grants any security interest
with respect to, any Rate Protection Agreement, in each case in accordance with the terms hereof.

(b)Each Borrower will, and will cause each of the other Loan Parties (other than CatchMark Timber) that is a Qualified ECP Guarantor to, provide such funds or other credit support to each other Loan Party (other than CatchMark Timber) as may be needed by such Loan Party from time to time to honor all of such Loan Party’s obligations under the guarantees provided under the Loan Documents, including, without limitation, obligations to guaranty Obligations constituting Swap Obligations that are permitted Rate Protection Agreements under this Agreement that would, in the absence of the agreement in this Section 7.1.17(b), otherwise constitute Excluded Swap Obligations (but in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations under this Section 7.1.17(b), or otherwise under this Agreement or any Loan Document, as it relates to such other Loan Parties, voidable under Laws 

relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of the Borrowers under this Section 7.1.17(b) shall remain in full force and effect until all Obligations have been indefeasibly paid and performed in full and the Commitments have expired or been terminated. The Loan Parties intend that this Section 7.1.17(b) constitute, and this Section 7.1.17(b) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party (other than CatchMark Timber) for all permitted Rate Protection Agreements for all purposes of the Commodity Exchange Act.

SECTION 7.1.18    Post-Closing Matters.

(a)At the end of each calendar year (or such later date as the Administrative Agent shall agree to in its sole discretion), either:

(i)the Administrative Agent shall have received, with respect to at least eighty percent (80%) of property subject to the PLM Leases on which final harvest has not occurred, either (A) a Landlord Estoppel Certificate duly executed by the relevant landlords or
(A)certification that all payments due and payable during the immediately following three- months have been paid to the relevant landlords; or

		
	(ii)
	the Administrative Agent shall have received:

(A)a certified list of those PLM Leases on which final harvest has not occurred that do not meet the requirements of subclause (A) or subclause (B) of clause (i) above;

(B)a certified schedule containing the amounts and due dates of all payments due and payable during the immediately following twelve- month period with respect to those PLM Leases on which final harvest has not occurred that do not meet the requirements of subclause (A) or subclause (B) of clause (i) above; and
(C)evidence that the applicable Landholder has sufficient funds in its Pledged Accounts to make each of the payments referred to in subclause (B) of this clause (ii) that are due and payable during the immediately following twelve-months.

SECTION 7.2    Negative Covenants. Each of the Borrowers and each other Loan Party agree with each Lender and the Administrative Agent that, until all the Obligations have been paid in full in cash and performed in full and all the Commitments have been irrevocably terminated, each of the Borrowers and each other Loan Party will perform, and will cause each of their Subsidiaries to perform, the obligations set forth in this Section. Notwithstanding the below, for purposes of this Section 7.2 no Subsidiary of CatchMark Timber qualifying as an Unrestricted Timber Subsidiary shall be deemed to be a Subsidiary of any Loan Party other than with respect to Sections 7.2.8, 7.2.9 and 7.2.19.

SECTION 7.2.1  Business Activities.  No Loan Party or Subsidiary of any Loan Party will engage in any business activity, except those business activities described in Section 6.24.1 and in the recitals.

SECTION 7.2.2    Indebtedness.

No Loan Party or Subsidiary of any Loan Party will create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

(a)Indebtedness in respect of the Loans;

(b)Contingent Liabilities of CatchMark Timber, in the form of limited recourse guarantees in form and substance satisfactory to the Administrative Agent, in each case with respect to Indebtedness incurred pursuant to any Unrestricted Timber Transaction pursuant to the definition thereof;

(c)Indebtedness with respect to cash management and similar arrangements in the ordinary course of business;

(d)Indebtedness with respect to Rate Protection Agreements permitted pursuant to Section 7.2.21;

(e)Unsecured, subordinated Indebtedness among the Loan Parties other than CatchMark Timber;

(f)Contingent Liabilities of the Landholders arising under indemnity agreements to title insurers in connection with mortgagee title insurance policies in favor of the Administrative Agent for the benefit of itself and the other Lender Parties; and

(g)Contingent Liabilities of any Loan Party arising with respect to customary indemnification obligations in favor of (i) purchasers in connection with transactions permitted under Section 7.2.9 and (ii) sellers in connection with transactions permitted by Section 7.2.8.

SECTION 7.2.3    Liens.

No Loan Party or Subsidiary of any Loan Party will create, incur, assume or suffer to exist any Lien upon any of the Collateral, whether now owned or hereafter acquired, except:

(a)Liens securing payment of the Obligations and granted pursuant to any Loan Document in favor of the Administrative Agent;

(b)with respect to the Real Property, Liens listed as exceptions on Schedule B of any title insurance with respect thereto that have been approved by the Administrative Agent;

(c)Liens for taxes, assessments or other charges or levies of any Governmental Authority not at the time delinquent or being diligently contested in good faith by appropriate proceedings which suspends enforcement of such Liens and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(d)easements, rights of way and similar restrictions that (i) arise in the ordinary course of business of the applicable Landholder, (ii) are not in a substantial amount and
		
	(iii)
	do not in any respect materially impair the value or usefulness of the Real Property;

8.1.6;

		
	(e)
	judgment Liens which do not result in an Event of Default under Section

(f)Liens in favor of AgSouth on all AgSouth Equity Interests as provided in Section 11.23; and

(g)Liens solely on any cash earnest money deposits, Letters of Credit, Investments or other credit support (collectively, “Credit Support”) made by or for the account of any Loan Party or any Subsidiary of any Loan Party in connection with any letter of intent or purchase agreement arising in connection with a transaction which (i) if consummated would be permitted by Section 7.2.8, (ii) such Credit Support does not exceed in the aggregate the Permitted Escrow Amount with respect to such transaction, and (iii) such Credit Support does not exceed in the aggregate $7,000,000 with respect to all such transactions at any time.

In addition, CatchMark Partnership shall not permit there to be a Lien on any of its Equity Interests.

SECTION 7.2.4    Financial Covenants.

(a)(i) From the Effective Date until the last day of the Fiscal Quarter during which the FCCR Test Date occurs, the Minimum Liquidity Balance shall not be less than
$10,000,000 at any time.    (ii) From the FCCR Test Date and thereafter, the Fixed Charge Coverage Ratio shall not be not less than 1.05:1.00 at any time.

		
	(b)
	The Loan to Value Ratio may not exceed 45% at any time.

SECTION 7.2.5    Investments; Change in Capital Structure.

(a)No Loan Party or Subsidiary of any Loan Party will make, incur, assume or suffer to exist (or agree to do any of the foregoing) any Investment in any other Person, except
(i) investments set forth on Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule, (ii) Investments by CatchMark Timber in Unrestricted Timber Subsidiaries in connection with Unrestricted Timber Transactions, (iii) Rate Protection Agreements permitted pursuant to Section 7.2.21, (iv) Investments in AgSouth Equity Interests as provided in Section 11.23; (v) Investments in any Person provided such Person is or will become concurrent with such Investment a wholly-owned Domestic Subsidiary of any Borrower (whether direct or indirect); and (vi) Investments in any Person who is or will become concurrent with such Investment a Shell Subsidiary to the extent such Investment is consistent with the definition of Shell Subsidiary and with Section 6.24.1.

(b)No Loan Party or any Subsidiary of any Loan Party will make any change in its capital structure or ownership, including, without limitation, raising, taking any contribution of, or receiving any cash equity, and entering into any partnership, joint venture or similar relationship, except (i) as provided in the preceding clause (a) and (ii) in connection with the issuance of equity by CatchMark Timber.

SECTION 7.2.6  Restricted Payments.  No Loan Party or Subsidiary of any Loan Party will (notwithstanding the terms of any Organizational Document or any other agreement or instrument), (a) declare, pay or make on any of its Equity Interests (or  any warrants, options or other rights with respect thereto) any dividend, distribution or other payment, whether on account of the purchase, redemption, sinking or analogous fund, retirement, defeasance of any Equity Interests and whether in cash, property or obligations (other than dividends or distributions payable solely in its Equity Interests, 

warrants to purchase its Equity Interests or split-ups or reclassifications of its Equity Interests into additional or other shares of its Equity Interests), or apply, or permit any Loan Party or any Subsidiary of any Loan Party to apply, any of its funds, property or assets to the purchase, redemption, sinking or analogous fund or other retirement of, any such Equity Interests (or any options, warrants or other rights with respect thereto); or (b) make any payment, loan, advance, contribution or other transfer of funds or property to any holder of its Equity Interests; provided, however, that (v) any Subsidiary of any Loan Party may make dividends, distributions and other payments to any Loan Party other than CatchMark Timber, (w) any Loan Party may make intercompany loans to the extent permitted by Section 7.2.2 and may make dividends and distributions and other payments to any Loan Party other than CatchMark Timber, (x) for so long as CatchMark Timber is qualified as a real estate investment trust under the Code (“REIT Status”), CatchMark Partnership may make dividends, distributions and other payments to CatchMark Timber and the other holders of Equity Interests in CatchMark Partnership and CatchMark Timber may make dividends, distributions and other payments to its shareholders, in each case, as required for CatchMark Timber to maintain REIT Status; provided that, (A) no Default or Event of Default described in Section 8.1.7 or in Section 8.1.14 has occurred or would result therefrom, (B) the Administrative Agent has not elected to (or been directed by the Required Lenders to) declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and the Commitments (if not theretofore terminated) to be terminated under Section 8.3, and (C)

the Borrowers shall have timely delivered to the Administrative Agent a duly completed and executed Compliance Certificate for the most recent Fiscal Quarter for which the same  is required to be delivered pursuant to clause (e) of Section 7.1.1; (y) CatchMark Partnership may make dividends, distributions and other payments to CatchMark Timber and the other holders of Equity Interests in CatchMark Partnership and CatchMark Timber may make dividends, distributions and other payments to its shareholders and to the employees, officers or directors of any Loan Party in accordance with that certain Amended and Restated CatchMark Timber Trust, Inc. 2005 Long-Term Incentive Plan or any substantially similar successor plan; provided that, in each case, (A) no Default or Event of Default has occurred and is continuing or would result therefrom, (B) (1) the Minimum Liquidity Balance is not less than $10,000,000 or (2) the Pro Forma Fixed Charge Ratio is not less than 1.05:1.00, in each case, after giving effect to such dividends, distributions and other payments; and (C), if requested by the Administrative Agent in its reasonable discretion, the Borrowers deliver a Compliance Certificate to the Administrative Agent demonstrating compliance with clause (B); and (z) non-cash compensation to employees, officers or directors of any Loan Party issued in the form of Equity Interests of CatchMark Timber in accordance with that certain Amended and Restated CatchMark Timber Trust, Inc. 2005 Long-Term Incentive Plan or any substantially similar successor plan.

SECTION 7.2.7     Take or Pay Contracts.  No Loan Party or Subsidiary of any Loan Party will enter into or be a party to any arrangement for the purchase of materials, supplies, other property or services if such arrangement by its express terms requires that payment be made by any Loan Party or any Subsidiary of any Loan Party regardless of whether such materials, supplies, other property or services are delivered or furnished to it.

SECTION 7.2.8 Mergers, Asset Acquisitions, etc. No Loan Party  or Subsidiary of any Loan Party will (or will agree to), liquidate or dissolve, consolidate or amalgamate with, or merge into or with, any other Person, or establish, purchase, lease or otherwise acquire (in each case in one transaction or series of transactions) all or any part of the assets or Equity Interests of any Person (or of any division thereof), other than:

(a)subject to compliance with the terms of Section 7.1.9 on or prior to the closing of 

such Investment and to the other terms of this Agreement, Investments by the Loan Parties and Subsidiaries of the Loan Parties permitted by Section 6.8 comprising the Equity Interests of Persons referred to therein;

(b)subject to compliance with the terms of Section 7.1.9, if applicable, on or prior to the closing of such transactions and to the other terms of this Agreement, transactions permitted by Section 7.2.5;

(c)subject to compliance with the terms of Section 7.1.9 on or prior to the closing of such acquisition and to the other terms of this Agreement, the acquisition of assets other than Real Property that are to be utilized in the ordinary course of the business of the Loan Parties;

(d)subject to the terms of Section 7.1.9 on or prior to the closing of such acquisition and to the other terms of this Agreement, the acquisition of additional Domestic Real
Property (including the acquisition of additional rights in existing Real Property) by any Landholder; and

(e)subject to the other terms of this Agreement, the purchase or lease of additional real property pursuant to an Unrestricted Timber Transaction;

; provided that, in each case, (i) no Event of Default has occurred and is continuing or would result from such acquisition; and (ii) the Loan Parties and their Subsidiaries are in compliance after giving effect to such acquisition with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4.

SECTION 7.2.9    Asset Dispositions, etc.

No Loan Party or Subsidiary of any Loan Party will sell, transfer, lease, contribute or otherwise convey or dispose of (in each case in one transaction or series of transactions), or grant options, warrants or other rights with respect to (in each case in one transaction or series of related transactions, whether voluntary or involuntary), all or any part of its assets or property, except:

(a)the sale of Timber in accordance with the conditions of clause (m) of Section 7.1.11;

(b)the sale of Land, provided, that (i) such sales are conducted pursuant to and in accordance with the applicable restrictions contained in any Material Contract including, if applicable to such Land, the Master Stumpage Agreement, in each case, without giving effect to any waivers with respect to such restrictions that have not been approved by the Required Lenders, (ii) such sale is (A) consistent with the most current budget and projections delivered pursuant to Section 7.1.1(q) or (B) consented to by the Administrative Agent in its sole discretion; (iii) no Event of Default has occurred and is continuing or would result from such sale; (iv) the Loan Parties and their Subsidiaries are in compliance after giving effect to such sale of Land with all covenants set forth in the Loan Documents, including the financial covenants set forth in Section 7.2.4, (v) after giving effect to such sale, the Loan to Value Ratio must be less than 40%, (vi) such Landholder shall notify the Administrative Agent in writing of each such sale, which written notification will include (A) a report updating the Value of the Timberlands to the extent required by Section 7.1.11(w), (B) the calculations demonstrating compliance with clauses (iv) (calculated after giving effect to such sale of Land) and (v) of this Section 7.2.9(b) if requested by the Administrative Agent in its reasonable discretion and (C) such other information as 

the Administrative Agent may request in its reasonable discretion; (vii) all the related Cost Basis Collateral Disposition Proceeds are applied to prepay the Loans to the extent required by clause (b)(vi) of Section 3.1.2, and (viii) all the related Net Collateral Disposition Proceeds in excess of such Cost Basis Collateral Disposition Proceeds are applied to prepay the Loans to the extent required by clause (b)(vii) of Section 3.1.2;

(c)in the ordinary course of business the sale or disposition of worn-out or obsolete equipment;
(d)pursuant to any Unrestricted Timber Transaction, each relevant Unrestricted Timber Subsidiary may do any of the foregoing in accordance with the terms of the relevant Unrestricted Timber Transaction;

(e)any disposition of the Equity Interest of any Shell Subsidiary by means and subject to terms and conditions approved by the Administrative Agent in its sole discretion;

(f)in the ordinary course of business, the sale of fuel wood residue materials such as tree branches, tree tops and other wood residue inherent or resulting from the harvesting of timber (collectively, “Fuel Wood Residue”);

(g)in order to maintain REIT Status or for other legitimate corporate or business purposes, the transfer of Fuel Wood Residue by way of contribution, assignment or other conveyance from one Loan Party to another Loan Party prior to the sale of such Fuel Wood Residue to a third party as permitted by clause (f);

(h)subject to the terms and conditions hereof, including, without limitation, clause (x) of Section 7.1.11, the termination of Timber Leases; and

(i)any sale, lease, or other disposition or conveyance of all or any portion of the Real Property among the Landholders, provided, that (i) the Loan Parties provide prior written notice to the Administrative Agent consistent with the requirements of Section 7.1.9(c) and (ii) the Landholders and other Loan Parties deliver such Real Property Documents as the Administrative Agent may request in its sole discretion.

SECTION 7.2.10    Modification of Certain Agreements.

(a)Subject to clause (b) and other applicable terms, no Loan Party or Subsidiary of any Loan Party will consent to any amendment, supplement, waiver or other modification of any of the terms or provisions contained in, or applicable to, any of their Organizational Documents, any Transaction Document or any Material Agreement which in any case:

(i)is  contrary  to  the  terms  of  this  Agreement  or  any  other  Loan Document;

(ii)could reasonably be expected to be adverse to the rights, interests or privileges of the Administrative Agent or the Lenders or their ability to enforce the same;

(iii)results in the imposition or expansion in any material respect of any restriction or burden on the Borrowers or any other Loan Party;

(iv)reduces  in  any  material  respect  any  rights  or  benefits  of  the Borrowers or any other Loan Party; or

(v)could  reasonably  be  expected  to  result  in  a  Material  Adverse Effect.

(b)No Loan Party or Subsidiary to any Loan Party will consent to any amendment, supplement, waiver or other modification of any of the terms or provisions contained in, or applicable to, (i) any Timberland Operating Agreement if the effect of such amendment, supplement, waiver or other modification is to replace the Timber Manager or would be prohibited by clause (a) of this Section 7.2.10, or (ii) any Supply Agreement in a manner contrary to clause (l) of Section 7.1.11.

SECTION 7.2.11    Transactions with Related Parties.

Except for the Transactions Documents and the other Material Agreements listed on Item 1.1(b) (“Material Agreements”) of the Disclosure Schedule, no Loan Party or Subsidiary of any Loan Party will enter into, or cause, suffer or permit to exist any arrangement or contract with, any of its Related Parties unless such arrangement or contract:

(a)is  not  otherwise  prohibited  by  this  Agreement  or  the  other  Loan Documents;

(b)(i) is in the ordinary course of business of such Loan Party or such Subsidiary of a Loan Party, (ii) is on fair and reasonable terms and (iii) is an arrangement or contract of the kind which would be entered into by a prudent Person in the position of such Loan Party or Subsidiary of a Loan Party with a Person which is not one of its Related Parties;

(c)is for the payment of fees and compensation paid to, and customary indemnities and reimbursements provided on behalf of, officers, directors, employees and agents of any Loan Party or Subsidiary of any Loan Party.

SECTION 7.2.12    Negative Pledges, Restrictive Agreements, etc.

No Loan Party or Subsidiary of any Loan Party will enter into any agreement (excluding this Agreement and any other Loan Document) prohibiting or restricting:

(a)their ability to comply with and perform their Obligations;

(b)the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, provided that, with respect to each Unrestricted Timber Transaction, CatchMark Timber may be subject to any of such restrictions solely as it relates to each such Unrestricted Timber Transaction;

(c)the ability of any Loan Party or any Subsidiary of any Loan Party to amend or otherwise modify this Agreement or any other Loan Document; or

(d)the ability of any Loan Party or Subsidiary of any Loan Party to make any payments, directly or indirectly, to any Loan Party other than CatchMark Timber by way of dividends, distributions, return on equity, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement 

or arrangement which restricts the ability of any
such Subsidiary to make any payment or transfer any property or asset, directly or indirectly, to any Loan Party other than CatchMark Timber.

SECTION 7.2.13    Management Fees, Expenses, etc.

No Loan Party or Subsidiary of any Loan Party will:

(a)pay management, advisory, consulting, director or other similar fees, other than:

(i)fees payable to the Administrative Agent, the Lenders or any of their Affiliates;

(ii)fees payable to non-Affiliate consultants engaged on arm’s-length basis as approved by the board of directors, partners, or members of the applicable Loan Party or Subsidiary; or

(iii)director fees and reimbursement of out-of-pocket expenses incurred in connection with attending the board of director, partnership, or member meetings, in an aggregate amount not to exceed $600,000 in any Fiscal Year.

(b)reimburse employees or any Affiliates for any expenses unless the same is incurred in the ordinary course of business of such Loan Party or Subsidiary of any Loan Party and is reasonable.

SECTION 7.2.14 Limitation on Sale and Leaseback Transactions.  No Loan Party or Subsidiary of any Loan Party will enter into any arrangement with any Person whereby in a substantially contemporaneous transaction the Borrowers or any of the other Loan Parties sells or transfers all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back the right to use such asset.

SECTION 7.2.15 Fiscal Year End, etc. No Loan Party or Subsidiary of any Loan Party will, or will permit any other Loan Party to, change their Fiscal Year. In addition, except as required by GAAP, no Loan Party or Subsidiary of any Loan Party shall make any significant change in its accounting treatment or reporting practices.

SECTION 7.2.16 ERISA.  No Loan Party, Subsidiary of any Loan Party, or any Affiliate thereof shall establish any Pension Plan or Multiemployer Plan, or shall enter into any arrangements that could be expected to require any Loan Party, any Subsidiary of any Loan Party or any Affiliate thereof to contribute to any Pension Plan or Multiemployer Plan. No Loan Party, Subsidiary of any Loan Party, or any Affiliate thereof shall establish any Plan that is a welfare benefit plan (as defined under Section 3(1) of ERISA) or shall enter into any arrangements that could be expected to require any Loan Party, any Subsidiary of any Loan Party or any Affiliate thereof to contribute to any welfare benefit plan (as defined in Section 3(1) of ERISA), unless such Plan can be terminated at any time without liability for the continuation of such benefits. No Loan Party or Subsidiary of any Loan Party shall have any ERISA Affiliates and shall not be an ERISA Affiliate of any other Person.

SECTION 7.2.17    Account Control Agreements.

(a)No Loan Party other than CatchMark Timber will have any deposit, commodities or securities account other than an Excluded Account unless the same is a Pledged Account.

(b)CatchMark Timber and the other Loan Parties shall not fail to cause all proceeds of any issuance of equity by CatchMark Timber to be directly deposited into the Equity Raise Account and all Equity Raises Net Proceeds to be directly deposited into a Pledged Account of Timberlands II.

(c)CatchMark Timber will not have any Equity Raise Accounts other than those subject to an Account Control Agreement.

SECTION 7.2.18    Timber Negative Covenants.

(a)Timber Sale, Harvesting and Stumpage Agreements. Other than the Supply Agreements, without the prior approval of the Administrative Agent, no Loan Party shall enter into, and no Landholder shall be subject to, any contracts or agreements (whether written or oral) for the cutting, sale, removal or disposition of Timber which have: (i) a term (including renewal options but excluding extensions for weather) of more than one year, (ii) a sale price of less than then current fair market value or (iii) terms and conditions inconsistent with the then current approved Harvest Plan or the requirements of this Agreement.

(b)Restrictions on Grazing and Use of Fire. No Landholder shall permit the grazing of livestock on the Timberland except with the consent of the Administrative Agent, provided, that, in no event shall the grazing of the livestock be injurious to forest regeneration, soils or forest growth. The application of fire in a controlled manner for the benefit of Timber production (“prescribed burning”) shall not be utilized in the management of the Timberland unless (i) local fire protection agencies are notified and all fire protection and other Laws are followed, (ii) appropriate equipment and trained personnel are available and utilized, (iii) fire is applied only when weather conditions are favorable and (iv) the prescribed burning area is isolated from other areas by appropriate natural or manmade fire breaks.

(c)Coal, Oil, Gas and Other Minerals. The Landholders shall not hold and shall not permit any other Person to hold for any Landholder’s benefit or as any Landholder’s agent, whether directly or indirectly, any permit or license which permits the exploration, extraction, mining, processing, production, storage, transportation or handling of any coal, oil, gas or any other mineral (collectively, “Mineral Activity”) with respect to the Timberlands.

(i)Except as permitted hereby, no Landholder shall undertake or operate or cause or permit to be undertaken or operated for its benefit or by its agent, or under any lease of the Real Property, whether directly or indirectly, any Mineral Activity.

(ii)Any Mineral Activity on the Timberland, with respect to minerals owned by any Landholder, if any, shall be carried out by third party (not Affiliates of any Loan Party or any Subsidiary of any Loan Party) tenants under bona fide leases (collectively, “Mineral Leases”) which, to the extent not in existence on the date of this Agreement, shall be in form and substance reasonably acceptable to the Administrative Agent and shall contain covenants by the tenant to comply with all Laws, including without limitation, Environmental Laws, and an agreement by the tenant to indemnify, defend and hold harmless the applicable Loan Parties and Subsidiaries of any Loan Party, the Administrative Agent and the Lenders and their respective successors and assigns against any loss, claims or damage, including legal fees, arising from any breach of its Mineral Lease or liability arising 

from such tenant’s activity or presence on the Timberland (including as a result of a violation of any Environmental Laws).

(iii)Each Landholder shall (A) reasonably inspect and monitor the activities of all tenants under the Mineral Leases, if any, to assure compliance in all material respects with the terms and conditions of the Mineral Leases, (B) enforce the material terms and conditions of the Mineral Leases and cause the tenants thereunder to comply with all material terms and conditions of the Mineral Leases and (C) assure that all Mineral Activity complies in all material respects with all Environmental Laws in the manner set forth in Section 7.1.6. Each Landholder shall furnish to the Administrative Agent, promptly following a request therefor, copies of its records with regard to the compliance by tenants with all material terms and conditions of the Mineral Leases.

(iv)Any Mineral Activity on the Timberlands permitted  hereunder shall not be undertaken or permitted by any Landholder, except in such manner that none of the Administrative Agent or the Lenders shall be liable in any event for any of such activities under applicable Environmental Laws, including claims based upon the existence of any Hazardous Material, non-hazardous wastes, discoloration or degradation of any water or streams, interference with the bed of any stream or the natural flow thereof, reclamation or revegetation. Each Landholder shall assure that all reclamation and revegetation of the Timberland that is conducted as a result of any Mineral Lease be timely completed in accordance with applicable Environmental Laws, other Laws and applicable Best Management Practices.

(v)Without limiting Section 7.1.6, in connection with the Mineral Activity, the Loan Parties and the Subsidiaries of the Loan Parties shall, to the extent required by applicable Environmental Laws, clean up, or cause to be cleaned up, any Hazardous Material or nonhazardous waste materials held, released, spilled, abandoned or placed upon the Timberland or released into the environment by any Loan Party, any lessees, contractors, subcontractors, suppliers, employees, agents, or by anyone for whom any Landholder or any lessees are responsible, at its own expense.

(vi)Each Landholder shall use commercially reasonable efforts (A) to cause all Mineral Activity to be conducted with due regard for the present and future value of both the Timberland as Timber producing coal mining and oil and gas properties, particularly with respect to the support of overlying coal seams and prevention of slips, slides, squeezes and other distortions of said seams; (B) all Mineral Activity be conducted in material compliance with all Environmental Laws and other Laws; (C) to require that any Mineral Activity complies with all material conditions, covenants and limitations contained in any of the instruments under which any Landholder holds title to the Timberland or where any Landholder owns minerals without ownership of the surface overlying said minerals; and (D) to cause its tenants to obtain rights from the then surface owners with respect to such Mineral Activities.

(vii)The Administrative Agent shall have the right (subject to the proviso of the last sentence of clause (d) of Section 7.1.5), but not the duty, at any and all reasonable times to enter upon the Timberland for the purposes of inspecting the Mineral Activities being conducted thereon, including the financial records, royalty summaries, mining reports, weighing devices and maps related thereto. Each Landholder shall keep, or use commercially reasonable efforts to cause its tenants to keep, adequate and accurate records of all depths of mining and drilling, maps of the locations of all Mineral Activities, both above and below ground, quantities of minerals extracted and amounts shipped, and all payments payable and received with respect to all minerals and Mineral Leases. Each Landholder agrees that it will promptly furnish the Administrative Agent, without cost to the Administrative Agent, the results of all core drilling and other exploratory openings and tests made for coal, oil, gas or other 

minerals upon the Timberland, including the results of any analytical test made to determine the quality, type or characteristics thereof, upon request.

(viii)Without limiting Section 11.4, the Borrowers shall indemnify and hold harmless the Administrative Agent and the Lenders and their respective officers, directors and employees and their respective successors, from and against all fines, penalties, actions, suits, legal proceedings and all costs and expenses associated therewith (including legal fees) arising out of or in any way connected with any failure of any Loan Party or any Subsidiary of any Loan Party to perform its obligations under this Section.

SECTION 7.2.19    Unrestricted Timber Transactions.    CatchMark Timber shall not consummate, or cause to be consummated, any Unrestricted Timber Transaction unless (a) the certification required to be delivered pursuant to clause (p) of Section 7.1.1 has been timely delivered as therein provided and (b) neither the Administrative Agent nor any Lender has objected to the accuracy of any statement contained in such certification (it being agreed that if the Administrative Agent or any Lender fails to object to such certification, on or prior to 10 Business Days after the delivery thereof, the Administrative Agent or such Lender shall be deemed to have accepted such certification). If the Administrative Agent or any Lender reasonably objects to such certification, the relevant Unrestricted Timber Transaction shall not be consummated until CatchMark Timber provide reasonably satisfactory evidence as to the accuracy of the statements contained in such certification. Without limiting the foregoing, if, in connection with any Unrestricted Timber Transaction that is consummated pursuant the definition thereof, CatchMark Timber is subject in any respect to any material restriction or obligation imposed by, or provide any material benefit to, any of the lenders providing financing in connection with such Unrestricted Timber Transaction, then CatchMark Timber shall be subject to similar restrictions or obligations, or provide similar benefits, to the Lender Parties pursuant to the Loan Documents (which additional restrictions, obligations and benefits shall be evidenced by amendments to the relevant Loan Documents within five Business Days after the Administrative Agent makes a request therefore).

SECTION 7.2.20    Transfer   of   Funds.    The   Loan   Parties   other   than CatchMark Timber shall not fail to cause their account debtors and other Persons owing money
to them to deposit the same into either (a) in the case of account debtors and other Persons under the Master Stumpage Agreement, in the Revenue Account, or (b) in the case of account debtors and other Persons under the Fiber Supply Agreement, in the CatchMark TRS Subsidiary Account, or (c) in the case of all other account debtors and other Persons, a Pledged Account. In addition CatchMark TRS Subsidiary shall not fail to pay into the Revenue Account, as and when due, all amounts owing by it to Timberlands II pursuant to the Master Stumpage Agreement or otherwise.

SECTION 7.2.21    Rate Protection Agreements.

(a)No Loan Party or Subsidiary of any Loan Party will engage in, guaranty or grant a security interest to secure any speculative transactions or any transaction involving a Rate Protection Agreement except for the sole purpose of hedging in the normal course of business; provided however, that no Loan Party will engage in, guaranty or grant a security interest to secure any Swap Obligation if at the time of such swap obligation, guaranty or grant it does not constitute an “eligible contract participant” as defined in the Commodity Exchange Act.

(b)No Rate Protection Agreement shall be secured under the  Loan Documents or otherwise unless such Rate Protection Agreement is between a Borrower and a Lender or an Affiliate 

of a Lender and (i) such Lender remains a Lender hereunder and (ii), in the case of an Affiliate of a Lender, such Affiliate of a Lender has executed and delivered to the Administrative Agent a letter agreement in form and substance acceptable to the Administrative Agent in its sole discretion pursuant to which such Affiliate appoints the Administrative Agent to act as agent for such Affiliate for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto, appoints such Lender as its agent for all other purposes hereunder or under any other Loan Document, and affirms and ratifies all terms and provisions agreed to by such Lender on its behalf herein or in any other Loan Document.

SECTION 7.2.22 Anti-Terrorism  Laws.  Each  of  the  Loan  Parties covenants and agrees that it shall not, and shall not permit any of its Subsidiaries to, knowingly, directly or indirectly, (a) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person subject to Executive Order No 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions Persons Who Commit, Threaten to Commit or Support Terrorism) (the “Executive Order”), (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law (and the Borrowers shall deliver to the Administrative Agent any certification or other evidence requested from time to time by the Administrative Agent in its reasonable discretion, confirming Borrowers’ compliance with this Section 7.2.22).
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

SECTION 8.1    Listing of Events of Default.    Each of the following events or occurrences described in this Section shall constitute an “Event of Default.”

SECTION 8.1.1  Non-Payment  of  Obligations.   Either  Borrower  or  any other Loan Party shall default in the payment or prepayment when due of any (a) principal or (b) interest on a Loan or (c) any fee, indemnity or other monetary Obligation hereunder or under any other Loan Document or under any Rate Protection Agreement between a Borrower and a Lender or an Affiliate of a Lender, provided that the failure to make any such payments pursuant to clause (b) or (c) shall not result in an Event of Default unless such failure is not cured within two Business Days after the occurrence thereof.

SECTION 8.1.2 Breach of Representations and Warranties. Any representation or warranty of any Loan Party with regard to any Loan Party or any Subsidiary of any Loan Party made or deemed to be made hereunder, in any other Loan Document or any other writing or certificate furnished by or on behalf of any Loan Party or any Subsidiary of any Loan Party to any Lender Party in connection with this Agreement or any such other Loan Document (including any certificates delivered pursuant to Article V), is or shall be incorrect in any respect when made (or in any material respect if such representation or warranty is not by its terms already qualified as to materiality).

SECTION 8.1.3  Non-Performance  of   Certain   Covenants   and Obligations. Any Loan Party shall, or shall cause or permit any of its Subsidiaries to, default in the due performance and observance of any of its obligations under Sections 4.10, 5.3, 6.24 and 7.1.1(subject to a three Business Day grace period, except with respect to clause (g) of Section 7.1.1, for which there shall be no grace period), clause (a) of Section 7.1.2 (with respect to the Borrowers’ existence), 7.1.4, 7.1.5, 7.1.8, 7.1.9 

(with respect to maintaining the Administrative Agent’s first priority security interest in the Collateral), 7.1.12, 7.1.13, 7.1.14, 7.1.15, 7.1.17, 7.1.18, 7.2, or 11.23.

SECTION 8.1.4    Non-Performance of Other Covenants and Obligations. Any Loan Party shall, or shall cause or permit any of its Subsidiaries to, default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than items covered by Sections 8.1.1 or 8.1.3), and such default shall continue unremedied for a period of 30 days after the earlier of (a) any officer of any Loan Party or any Subsidiary of any Loan Party having knowledge thereof or (b) notice thereof having been given to any Loan Party or any Subsidiary of any Loan Party.

SECTION 8.1.5 Default on Other Obligations.  Any event of default shall occur under any agreement, document or instrument in which any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) is a party, or their property or assets are bound, which involves a claim or liability of $500,000 or more.

SECTION 8.1.6 Judgments. Any money judgment, writs or warrants of attachment, executions or similar processes involving any aggregate amount (to the extent not paid or fully covered by insurance maintained in accordance with the requirements of this Agreement and as to which the relevant insurance company has acknowledged coverage) in excess of $250,000 shall be rendered against any Loan Party, any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) or any of the respective properties and either (a) enforcement proceeding shall have been commenced by any creditor upon such judgment or order or (b) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal, bond or otherwise, shall not be in effect.

SECTION 8.1.7    Bankruptcy, Insolvency, etc.

Any Loan Party or any Subsidiary of any Loan Party shall:

(a)generally fail to pay debts as they become due, or admit in writing its inability to pay debts as they become due;

(b)apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator, or other custodian for any Loan Party, any Subsidiary of any Loan Party, or any property of any thereof, or make a general assignment for the benefit of creditors;

(c)in the absence of such application, consent or acquiescence, permit or suffer to exist the involuntary appointment of a trustee, receiver, sequestrator or other custodian for any Loan Party, any Subsidiary of any Loan Party, or for any part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days;

(d)permit or suffer to exist the involuntary commencement of, or voluntarily commence, any bankruptcy, reorganization, debt arrangement or other case or proceeding under any Debtor Relief Laws, or permit or suffer to exist the involuntary commencement of, or voluntarily commence, any dissolution, winding up or liquidation proceeding, in each case, by or against any Loan Party or any Subsidiary of any Loan Party; provided, however, that if not commenced by any Loan Party or any Subsidiary of any Loan Party such proceeding shall be consented to or acquiesced in by such Loan Party or Subsidiary, or shall result in the entry of an order for relief or shall remain for 30 days undismissed; or

foregoing.
		
	(e)
	take any corporate action authorizing, or in furtherance of, any of the

SECTION 8.1.8   Impairment  of  Loan  Documents,  Security,  etc.   Any Loan Document, or any Lien granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) which Loan Party or Subsidiary is a party thereto; any Loan Party, any Subsidiary of any Loan Party, any Governmental Authority or any other Person shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or any security interest in favor of the Administrative Agent for the benefit of the Lender Parties securing (or required to secure) any Obligation shall, in whole or in part, cease to be a perfected first priority security interest in the Collateral, subject to the Liens permitted by Section 7.2.3.

SECTION 8.1.9  Non-Payment  of  Taxes.  Any  Loan  Party  or  any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) shall have failed to pay when due any Taxes or other charges of any Governmental Authority in excess of $250,000, except any such Taxes or other charges which are being diligently contested by it in good faith by appropriate proceedings which stay the enforcement of any Lien resulting from the non-payment thereof and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

SECTION 8.1.10 Impairment of Material Agreements. Any Material Agreement shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) which Loan Party or Subsidiary is a party thereto; or there shall be any event of default under any Material Agreement.

SECTION 8.1.11    Impairment of Business.

(a)Any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) shall be prohibited or otherwise materially restrained, for a period of 10 or more consecutive days, from conducting all or any material part of its business in the ordinary course in accordance with past practice, as a result of (i) any casualty, strike, lockout, labor dispute, embargo, condemnation, order of any Governmental Authority or act of God, (ii) one or more licenses, permits, accreditations or authorizations of any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) being suspended, limited or terminated or (iii) any other reason.

(b)The indictment or threatened indictment of any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary) under any criminal statute, or the commencement or threatened commencement of a criminal or civil proceedings against any Loan Party or any Subsidiary of any Loan Party (other than any Unrestricted Timber Subsidiary), pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any portion of the property of such Person.

SECTION 8.1.12  Bankruptcy Claims.  Any Loan Party or any Subsidiary of any Loan Party shall be subject to a claim arising out of any proceeding of the type referred to in Section 8.1.7 to which MW or any of its Affiliates shall be subject.

SECTION 8.1.13    Material Adverse Effect.  There shall have occurred any event described in clause (a), (c), (d) or (e) of the definition “Material Adverse Effect.”

SECTION 8.1.14 Change of Control. There shall have occurred any event described in the definition of “Change of Control.”

SECTION 8.1.15 REIT Status. At any time and for any reason, CatchMark Timber ceases to have REIT Status.

SECTION 8.1.16 ERISA Event. One or more ERISA Events occurs, that, individually or in the aggregate, results in liability to any Borrower, any other Loan Party, any of their Subsidiaries, or any ERISA Affiliates thereof which could reasonably be expected to have a Material Adverse Effect.

SECTION 8.2    Action  if  Bankruptcy.    If  any  Event  of  Default  described  in Section 8.1.7 shall occur, the Commitments (if not theretofore terminated) shall automatically terminate  and  the  outstanding  principal  amount  of  all  outstanding  Loans  and  all  other Obligations shall automatically become immediately due and payable, without notice or demand.

SECTION 8.3    Action if Other Event of Default. If any Event of Default (other than any Event of Default described in Section 8.1.7) shall occur and be continuing for any reason, whether voluntary or involuntary, the Administrative Agent, may, and upon the direction of the Required Lenders, shall, by notice to the Borrowers declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and the Commitments (if not theretofore terminated) to be terminated, whereupon (without further notice, demand or presentment) the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall become immediately due and payable and the Commitments shall terminate.

SECTION 8.4    Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement, the other Loan Documents and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the U.C.C. Without limiting the generality of the foregoing, the Administrative Agent without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by Law or referred to below) to or upon any Borrower, any other Loan Party, any Subsidiary of any Loan Party or any other Person (each and all of which demands, presentments, protests, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels or as an entirety at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent shall have the right upon any such public sale or sales, and, to the extent permitted by Law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrowers, which right or equity is hereby waived or released. The Borrowers and each other Loan Party further agree, at the Administrative Agent’s request, to assemble, or caused to be assembled, the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at the Borrowers’ premises or elsewhere. The Administrative Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization 

or sale, after deducting all costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Lender Parties hereunder, including without limitation attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in the order set forth in Section 8.7, and only after such application and after the payment by the Administrative Agent of any other amount required or permitted by any provision of Law, including without limitation Section 9-615(a)(3) of the U.C.C., need the Administrative Agent account for the surplus, if any, to the Borrowers. If any notice of a proposed sale or other disposition of Collateral shall be required by Law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition. The Borrowers shall remain liable for any deficiency (plus accrued interest thereon as contemplated pursuant to Article III) if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent to collect such deficiency. The rights, powers and remedies of the Administrative Agent and the Lenders under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which the Administrative Agent or the Lenders may have against the Borrowers or the other Loan Parties pursuant to this Agreement or the other Loan Documents, or existing at Law or in equity or otherwise.

SECTION 8.5    Foreclosure on Collateral. If any Event of Default shall occur and be continuing, the Administrative Agent shall have, in addition to all rights and remedies provided for in the U.C.C. and Laws, all such rights (including the right of foreclosure) with respect to the Collateral as provided in the Pledge Agreement, the Security Agreement, the CatchMark Timber Security Agreement, the Mortgages, the Mortgage Amendments and each other Loan Document.

SECTION 8.6    Appointment of Administrative Agent as Attorney-in-Fact. The Borrowers hereby constitute and appoint the Administrative Agent as the Borrowers’ attorney-in-fact with full authority in the place and stead of the Borrowers and in the name of the Borrowers, from time to time in the Administrative Agent’s discretion while any Event of Default is continuing, to take any action and to execute any instrument that the Administrative Agent may deem necessary or advisable to accomplish the purposes of this Agreement and any other Loan Document, including to: (a) ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (b) enforce the obligations of obligors of account receivables or other Person obligated on the Collateral and enforce the rights of the Borrowers with respect to such obligations and to any property that secures such obligations; (c) file any claims or take any action or institute any proceedings that the Administrative Agent may deem necessary or desirable for the collection of or to preserve the value of any of the Collateral or otherwise to enforce the rights of the Administrative Agent and the Lenders with respect to any of the Collateral; (d) pay or discharge Taxes or Liens levied or placed upon or threatened against the Collateral in amounts necessary to discharge the same as determined by the Administrative Agent in its sole discretion (all of such payments made by the Administrative Agent shall become Obligations, due and payable immediately without demand); (e) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with the account receivables, chattel paper or general intangibles and other documents relating to the Collateral; (f) take any act required of the Borrowers under this Agreement or any other Loan Document; and (g) sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and to do, at the Administrative Agent’s option and the Borrowers’ expense, at any time, all acts and things that the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral. The Borrowers hereby ratify and approve all acts of the Administrative Agent made or taken pursuant to this Section 8.6, agrees to cooperate with the exercise by the Administrative Agent in the exercise of its 

rights pursuant to this Section 8.6 and shall not, either directly or indirectly, take or fail to take any action which could impair, in any respect, any action taken by the Administrative Agent pursuant to this Section 8.6. The appointment pursuant to this Section 8.6 of the Administrative Agent as the Borrowers’ attorney and the Administrative Agent’s rights and powers are coupled with an interest and are irrevocable, so long as any of the Commitments hereunder shall be in effect and until payment in full in cash of all Obligations.

SECTION 8.7    Payments Upon Acceleration.

After the occurrence of an Event of Default and the acceleration of the Obligations pursuant to Section 8.2 or 8.3, the Administrative Agent shall apply all payments in respect of the Obligations and all proceeds of Collateral to the Obligations in the following order:

(a)first, to pay Obligations in respect of any fees, expenses or indemnities then due to the Administrative Agent, Issuing Lender or Swingline Lender (including, without limitation, fees and expenses referred to in Sections 11.3 or 11.4), whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

(b)second, to pay Obligations in respect of any fees, expenses or indemnities then due to the Lenders, whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

		
	(c)
	third, pro rata to interest due in respect of any Swingline Loan;

(d)fourth, to pay interest due in respect of the Loans (other than Swingline Loans), whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

(e)fifth, to pay, pro rata to the outstanding principal amount of any Swingline Loan;

(f)sixth, to pay, on a pari passu basis, the principal outstanding with respect to the Loans and Obligations in respect of Rate Protection Agreements in which the counterparty is a Lender or an Affiliate of a Lender;
(g)seventh, to pay all other Obligations, including, without limitation, cash management obligations; and

		
	(h)
	eighth, to pay who may be lawfully entitled thereto.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order of each category and shall only be applied to the next succeeding category after all amounts in the preceding category have been paid in full in cash and (ii) amounts owing to each relevant Lender Party in clauses (b) through (g) shall be allocated to the payment of the relevant Obligations ratably, based on the proportion of each Lender Party’s interest in the aggregate outstanding Obligations described in each such relevant clause. Notwithstanding the foregoing, amounts received from any Loan Party shall not be applied to Obligations that comprise Excluded Swap Obligations of such Loan Party (it being understood that in the event that any amount is applied to Obligations other than Excluded Swap Obligations as a result of this sentence, the Administrative Agent shall make such adjustments as it determines in its sole discretion are appropriate to distributions pursuant to clause (f) above from amounts received from “eligible contract participants” under the Commodity Exchange Act or any regulations 

promulgated thereunder to ensure, as nearly as possible, that the proportional aggregate recoveries with respect to Obligations described in clause (f) above by the holders of any Excluded Swap Obligations are the same as the proportional aggregate recoveries with respect to other Obligations pursuant to clause (f) above ).

ARTICLE IX RESERVED

ARTICLE X
THE ADMINISTRATIVE AGENT

SECTION 10.1 Appointment  and  Authority.  Each  of  the  Lenders  and  the Issuing Lenders on behalf of itself and its Affiliates holding Obligations pursuant to clause (ii) of the definition of “Obligations” hereby irrevocably appoints CoBank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10.1 are solely for the benefit of Administrative Agent and the Lenders and its Affiliates holding Obligations pursuant to clause (ii) of the definition of “Obligations”, and neither the Borrowers nor any other Loan Party nor any of their Subsidiaries shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Laws. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SECTION 10.2  Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 10.3    Exculpatory Provisions.

(a)The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i)shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by 

the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Law, including for the avoidance of doubt, any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii)shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b)The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 11.1 and Article VIII), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrowers or a Lender.

(c)Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other  document  delivered  hereunder  or  thereunder  or  in  connection  herewith  or  therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

SECTION 10.4    Reliance by Administrative Agent.   The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including facsimile, e-mail, Platform, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 10.5    Delegation of Duties. The Administrative Agent may perform any and all of 

its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10.5 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Commitments as well as activities as the Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 10.6    Resignation of Administrative Agent

(a)The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b)If the Person serving as the Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by the Laws, by notice in writing to Borrowers and such Person remove such Person as the Administrative Agent and, in consultation with Borrowers, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c)With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed 

Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section and Sections 11.3 and 11.4 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

SECTION 10.7   Non-Reliance  on  Administrative  Agent  and  Other  Lenders. Each Lender and Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 10.8 No Other Duties, Etc. Anything herein to  the  contrary notwithstanding, none of the Lead Arranger, the Bookrunner, the Documentation Agent or the Syndication Agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

SECTION 10.9 Administrative Agent May File Proof of Claims. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party or any Subsidiary of any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or any Obligations shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on Borrowers) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Section 11.3 and Section 11.4) allowed in such judicial proceeding; and

(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Lender and each Affiliate holding Obligations pursuant to clause (ii) of the definition of “Obligations,” to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, Issuing Lenders and such Affiliates, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 11.3, Section 11.4 and Section 10.12.

SECTION 10.10 Agency for Perfection; Enforcement of Security by Administrative Agent. Administrative Agent and each Lender and Issuing Lender hereby appoint each other Lender as agent for the purpose of perfecting the Administrative Agent’s security interest in assets which, in accordance with Article 9 of the Uniform Commercial Code in any applicable jurisdiction, can be perfected only by possession or control. Should any Lender or Issuing Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender or Issuing Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor, shall deliver such Collateral (or control thereof) to the Administrative Agent or in accordance with the Administrative Agent’s instructions without affecting any Lender’s or Issuing Lenders’ right to set-off. Each Lender (for itself and its Affiliates) and Issuing Lender agrees that it will not have any right individually to enforce or seek to enforce any Loan Document regarding the Collateral or to realize upon any collateral security for the Loans or the other Obligations, it being understood and agreed that such rights and remedies may be exercised only by the Administrative Agent.

SECTION 10.11    Collateral and Guaranty Matters.

(a)The  Lenders  and  their  respective  Affiliates  irrevocably  authorize  the Administrative Agent, at its option and in its discretion,

(i)to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (A) upon termination of all Commitments and payment in full of all Obligations (other than contingent indemnification obligations and Rate Protection Agreements as to which other arrangements satisfactory to the Administrative Agent and the applicable Lender on behalf of itself or its Affiliate shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the applicable Issuing Lender shall have been made), (B) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, (C) constituting property in which the Borrowers or any other Loan Party owned no interest at the time the security interest and/or Lien was granted, (D) constituting a Timber Deed or property leased to the Borrowers or any other Loan Party under a Timber Deed or lease which has expired or been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by the Borrowers or any other Loan Party to be, renewed or extended, or (E) if approved by the Required Lenders or, if required by Section 11.1, each Lender, if applicable; provided that, upon the request of any Borrower, the Administrative Agent, in its sole discretion, may provide a non-disturbance and attornment agreement or subordinate the Administrative Agent’s Lien in Real Property subject to a Mortgage to easements, rights of way and similar restrictions where any Loan Party is permitted to create such easement, right of way or similar restriction pursuant to Section 7.2.3(d) hereof;

(ii)to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien permitted by Section 7.2.3(b) or (d); and

(iii)to release any guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any guarantor from its obligations under the Guaranty pursuant to this Section 10.11.

(b)The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

(c)The Administrative Agent may from time to time make disbursements and advances that, in its sole discretion, it deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral, to enhance the likelihood or maximize the amount of the Obligations that are repaid by the Loan Parties or pay any other amount chargeable to any Loan Party hereunder. All such amounts disbursed or advanced by the Administrative Agent shall be Obligations that are secured by the Collateral and be repayable by the Borrowers on demand.

SECTION 10.12 Indemnification. Lenders will reimburse and indemnify Administrative Agent and all other Agent Parties on demand (to the extent not actually reimbursed by the Loan Parties, but without limiting the obligations of the Loan Parties under this Agreement) for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, reasonable attorneys’ fees and expenses), advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent or any other Agent Parties (a) in any way relating to or arising out of this Agreement or any of the Loan Documents or any action taken or omitted by the Administrative Agent or any other Agent Parties under this Agreement or any of the Loan Documents, and (b) in connection with the preparation, negotiation, execution, delivery, administration, amendment, modification, waiver or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any of the other Loan Documents in proportion to each Lender’s Percentage; provided, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements resulting from the Administrative Agent’s or any other Agent Parties’ gross negligence, bad faith or willful misconduct, as determined by a final, non-appealable judgment by a court of competent jurisdiction. If any indemnity furnished to any Agent Party for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired, Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The obligations of Lenders under this Section 10.12 shall survive the payment in full of the Obligations and the termination of this Agreement.

SECTION 10.13     Resignation of Issuing Lender.  Any Issuing Lender may resign at any time by giving 30 days prior notice to the Administrative Agent, the Lenders and the Borrowers. After the resignation of an Issuing Lender hereunder, the retiring Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit or to extend, renew or increase any existing Letters of Credit.

SECTION 10.14 Resignation of Swingline Lender. The Swingline Lender may resign at any time by giving notice to Administrative Agent, the Lenders and the Borrowers. After the resignation of the Swingline Lender hereunder, the retiring Swingline Lender shall remain a party hereto and shall continue to have rights and obligations of the Swingline Lender under this Agreement and the other Loan Documents with respect to Swingline Loans made by it prior to such resignation, but shall not be 

required to make any additional Swingline Loans.

SECTION 10.15 Compliance with Flood Laws. CoBank  has  adopted  internal policies and procedures that address requirements placed on federally regulated lenders under the Flood Laws. CoBank, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each lender in the syndicate) documents that it receives in connection with the Flood Laws. However, CoBank reminds each lender and participant in the facility that, pursuant to the Flood Laws, each federally regulated lender (whether acting as a lender or participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

SECTION 10.16 No Reliance on the Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender's, Affiliate's, participant's or assignee's customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures, (b) any recordkeeping, (c) comparisons with government lists, (d) customer notices or (e) other procedures required under the CIP Regulations or such other Laws.

ARTICLE XI 
MISCELLANEOUS PROVISIONS

SECTION 11.1    Waivers, Amendments, etc.

(a)Except for actions expressly permitted to be taken by the Administrative Agent pursuant to the terms of the Loan Documents (including the acceptance in its sole discretion of supplements by the Borrowers to certain Items of the Disclosure Schedules regarding  Real  Property  acquired  after  the  Effective  Date  and  from  time  to  time  updated Schedules to the Security Agreement or Pledge Agreement), no amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, or any consent to any departure by the Borrowers or any other Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, the Borrowers and the Required Lenders; provided however, that

(i)no amendment, modification, termination or waiver of this Agreement or any other Loan Document shall, unless in writing and signed by the Administrative Agent, all Lenders and Voting Participants:

(A)release all or substantially all of the Collateral;

(B)release any Loan Party from its guarantee obligations under any Loan Document except as specifically provided for in the Loan Documents;

(C)alter in any manner the pro rata sharing of payments required hereunder; or

(D)amend or waive this Section 11.1 or the definition of the “Required Lenders” or of “Percentage” insofar as such definition affects the substance of this Section, or any other provision specifying the number or percentage of Lenders and Voting Participants required to take any action under any Loan Document;

(ii)no amendment, modification, termination or waiver of this Agreement or any other Loan Document shall, unless in writing and signed by the Administrative Agent and each Lender and each Voting Participant specified below for such amendment, modification, termination or waiver:

(A)increase the amount of any Commitment of any affected Lender or Voting Participant without the consent of such affected Lender or Voting Participant;

(B)extend the Revolving Loan Commitment Termination Date, the Multi-Draw Term Loan Commitment Termination Date, or any Stated Maturity Date without the consent of such affected Lender or Voting Participant;

(C)reduce the principal of, or rate of interest on (other than any waiver of any increase in the interest rate pursuant to Section 3.2.2), or fees payable with respect to, any Loan of any affected Lender or Voting Participant without the consent of such affected Lender or Voting Participant;

(D)alter Section 8.7 without the consent of any affected Lender or Voting Participant;
(E)extend the due date for, or reduce the amount of, any prepayment under clauses (b)(i) through (vii) of Section 3.1.2 of principal on any Loan of any affected Lender or Voting Participant without the consent of such affected Lender or Voting Participant;

(F)extend the due date for, or reduce the amount of, any payment of interest (other than any waiver of any increase in the interest rate pursuant to Section 3.2.2) as to any affected Lender or Voting Participant without the consent of such affected Lender or Voting Participant;

(G)except with respect to any amendment, modification or waiver expressly permitted to be made by the Administrative Agent, Swingline Lender or Issuing Lender pursuant to the terms of the Loan Documents, amend, modify or waive any condition precedent to any Borrowing under the Revolving Loan Commitments without the written consent of holders of more than 51% of the Revolving Loan Commitments; or

(H)except with respect to any amendment, modification or waiver expressly permitted to be made by the Administrative Agent pursuant to the terms of the Loan Documents, amend, modify or waive any condition precedent to any Borrowing under the Multi-Draw Term Loan Commitments without the written consent of holders of more than 51% of the Multi-Draw Term Loan Commitments;

(iii)no amendment, modification, termination or waiver affecting the rights or duties of the Administrative Agent, the Swingline Lender or any Issuing Lender under this Agreement or any other Loan Document shall be effective unless in writing and signed by the Administrative Agent, the Swingline Lender or such Swingline Lender, as applicable, in addition to the Lenders required hereinabove to take such action.

(b)No failure or delay on the part of any Lender Party in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrowers in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any Lender Party shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. The remedies provided in this Agreement are cumulative, and not exclusive of remedies provided by Law.

(c)Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that any Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Commitments or Loans held or deemed to be held by any such Defaulting Lender shall be excluded from a vote of the Lenders hereunder requiring the consent of the Lenders).

SECTION 11.2    Notices.

(a)Notices   Generally.    Except    in    the    case    of    notices    and    other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or e-mail as follows:

(i)If to Borrowers: c/o CatchMark Timber Trust, Inc., 5 Concourse Parkway, Suite 2325, Atlanta, Georgia 30328, Attention Ursula Godoy-Arbelaez (Facsimile no. (855) 865-8223; Telephone No. (404) 445-8480; email: Ursula.Godoy @catchmark.com);

(ii)if to Administrative Agent, to CoBank, ACB at 5500 S. Quebec Street, Greenwood Village, Colorado 80111, Attention of Syndications Coordinator, Corporate Finance Division (Facsimile No. (303) 694-5830; Telephone No. (303) 740-4000; email:  ZCarpenter @cobank.com; agencybank@cobank.com);

(iii)if to CoBank, in its capacity as an Issuing Lender or the Swingline Lender, to it at CoBank, ACB at 5500 S. Quebec Street, Greenwood Village, Colorado 80111, Attention of Syndications Coordinator, Corporate Finance Division (Facsimile No. (303) 694- 5830; Telephone No. (303) 740-4000; email: ZCarpenter@cobank.com;  agencybank@cobank.com)

(iv)If to a Lender to it at its address (or facsimile number or e-mail address) set forth in its Administrative Questionnaire or in the Assignment and Assumption pursuant to which it became a Lender, as the case may be; and

(v)as to any other party, at such other address as shall be designated by such party in a notice to the other parties.

Any party hereto may change its address, facsimile number, telephone number, or e-mail address, by notice to the other parties. Notices and communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices and communications sent by facsimile or e-mail shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient); provided that, notices and communications sent by facsimile or email to the Administrative Agent, Swingline Lender or an Issuing Lender shall not be effective until received by the Administrative Agent, Swingline Lender or such Issuing Lender, respectively.

(a)Delivery of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or any Exhibit hereto to be executed and delivered hereunder by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart thereof.

(b)Each Loan Party, Lender and Issuing Lender agrees that the Administrative Agent may, but shall not be obligated to, make the Communications available to the other Lenders and the Issuing Lender by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). Each Lender and Issuing Lender agrees that notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender or Issuing Lender for purposes of the Loan Documents. Each Lender and Issuing Lender shall (i) notify Administrative Agent in writing (including by e-mail) from time to time of its e-mail address to which the foregoing notice may be sent by e-mail and (ii) that the foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the rights of Administrative Agent or any Lender or Issuing Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

(c)THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES DO NOT WARRANT THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL ANY AGENT PARTY HAVE ANY LIABILITY TO BORROWERS, ANY OTHER LOAN PARTY, ANY LENDER, OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING FOR ANY DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY BORROWER’S, ANY LOAN PARTY’S, ADMINISTRATIVE AGENT’S, ANY LENDER’S OR ANY OTHER PERSON’S TRANSMISSION OF COMMUNICATIONS THROUGH THE PLATFORM, THE INTERNET OR ANY OTHER TELECOMMUNICATIONS, ELECTRONIC OR INFORMATION TRANSMISSION SYSTEM, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

SECTION 11.3    Payment of Costs and Expenses.

(a)Subject to the proviso of the last sentence of clause (d) of Section 7.1.5, the Borrowers agree to pay all reasonable fees and out-of-pocket expenses of the Administrative Agent, its directors, officers, employees, agents, Affiliates and their Related Parties (including, without limitation, the reasonable fees and out-of-pocket expenses of legal counsel to the Administrative Agent and accountants, appraisers, investment bankers, environmental advisors, management consultants and other consultants, if any, who may be retained by the Administrative Agent) that are actually incurred in connection with:

(i)the syndication of the credit facilities provided for herein;

(ii)the negotiation, preparation, execution, delivery and administration of this Agreement and each other Loan Document (including with respect to due diligence matters, the preparation of additional Loan Documents, the review and preparation of agreements, instruments or documents pursuant to Article V and Section 7.1.9), and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, and the Administrative Agent’s consideration of their rights and remedies hereunder or in connection herewith from time to time whether or not the transactions contemplated hereby or thereby are consummated;

(iii)the filing, recording, refiling or rerecording of the Loan Documents and any other security instruments executed in connection with the transactions contemplated hereby;

(iv)the preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document;

(v)sums paid or incurred to pay any amount or take any action required by the Borrowers or any other Loan Party under the Loan Documents that the Borrowers or any such Loan Party fail to pay or take; and

(vi)costs of appraisals, field exams, inspections and verification of the Collateral, including, without limitation, travel, lodging, meals and other charges, including the costs, fees and expenses of independent auditors and appraisers.

(b)The Borrowers further agree to reimburse each Lender Party upon demand for all out-of-pocket expenses (including, without limitation, the fees and out-of-pocket expenses of legal counsel and consultants to each Lender Party who may be retained by each such Lender Party) actually incurred by each Lender Party in connection with (i) the consideration of their rights and remedies hereunder in connection with any current or prospective Default or Event of Default; (ii) the negotiation of any restructuring or “work-out,” whether or not consummated, of any Obligations; (iii) the enforcement or protection of its rights in connection with this Agreement or any other Loan Document or any permitted Rate Protection Agreement; and (iv) any litigation, dispute, suit or proceeding relating to this Agreement or any Loan Document.

		
	(c)
	[reserved].

(d)All amounts due under this Section shall be payable promptly and, in any event, not later than ten (10) days after demand therefor.

SECTION 11.4    Indemnification by the Borrowers.

(a)The Borrowers agree, at their sole cost and expense, to indemnify, exonerate and hold each Lender Party and each of their respective directors, officers, employees, agents, Affiliates and Related Parties (collectively, the “Indemnified Parties”) free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities, damages and out-of-pocket expenses (in each case whether asserted by any third party or the Borrowers or any of its Affiliates and irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including, without limitation, the fees and out- of-pocket expenses of the Indemnified Parties (including the fees and out-of-pocket expenses of legal counsel and consultants to the Indemnified Parties who may be retained by the Indemnified Parties) (collectively, the “Indemnified Liabilities”), that arise out of or relate to:

(i)the negotiation, preparation, execution, delivery or performance of the terms of, or consummation of the transactions contemplated by, this Agreement, any other Loan Document or any other agreement or instrument contemplated thereby (including any action brought by or on behalf of the Borrowers or any other Loan Party as the result of any determination by the Required Lenders pursuant to Article V not to fund any Borrowing);

(ii)any Loan and any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan;

		
	(iii)
	any Environmental Laws;

(iv)any presence, release, or threat of Release of Hazardous Materials, at, upon, under or within the Real Property;

(v)the falsity in any material respect of any of the representations made in Section 6.13, whether or not caused by the Borrowers;

(vi)the failure of the Borrowers to duly perform the covenants, obligations or actions set forth in Section 7.1.6, including with respect to: (A) the imposition by any Governmental Authority of any lien upon the Real Property, (B) remediation of the Real Property or any other land or water contaminated by Hazardous Materials which were generated on or migrated from the Real Property, (C) liability for personal injury or property damage or damage to the environment, (D) any diminution in the value of the Real Property and (E) claims, costs, liabilities and damages arising under any Environmental Law, or any other claims, liabilities or costs which may be incurred by or asserted against Indemnified Parties directly or indirectly resulting from the presence of any Hazardous Material in, on, under or affecting the Real Property;

(vii)any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory; except for any such Indemnified Liabilities arising from the relevant Indemnified Party’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrowers agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under the Laws. Such indemnification shall be available regardless whether the relevant Indemnified Party is found to have acted with comparative, contributory or sole negligence. Under no circumstances shall any Indemnified Party be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other
information  transmission  systems  in  connection  with  this  Agreement  or  the  other  Loan 

Documents or the transactions contemplated hereby or thereby.

(b)The Borrowers further agree that Lender Parties and their respective directors, officers, employees, agents, Affiliates and Related Parties shall not assume any liability or obligation for loss, damage, fines, penalties, claims or duty to remediate or dispose of wastes or Hazardous Substances on or relating to Real Property as a result of any conveyance of title to the Real Property to any of the Lender Parties or otherwise or as a result of any inspections or any other actions made or taken by any Lender Party on the Real Property, except to the extent that any of the foregoing matters are attributable to actions or omissions by such Lender Party or its agents constituting fraud, gross negligence or willful misconduct. The Borrowers agree to remain fully liable under the indemnification contained in this Section.

(c)Promptly following completion of any actions imposed upon the Borrowers by any order, judgment or other final resolution of a matter indemnified under this Agreement, or completion of any other remediation requirement under any applicable Environmental Laws, the Borrowers shall certify to the Administrative Agent and the Lenders that all such required actions have been completed. The Administrative Agent or any Lender, at its option, may require the Borrowers, at the Borrowers’ expense, to obtain and deliver to the Administrative Agent and the Lenders an environmental report in form and substance reasonably acceptable to Administrative Agent from a consultant reasonably acceptable to the Administrative Agent confirming that all such actions have been completed in accordance with any such order, judgment or resolution or other legal or remediation requirements, and that the Real Property is in compliance in all material respects with applicable Environmental Laws. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under clause (a) to be paid by it to the Administrative Agent (or any director, officer, employee, agent, Affiliate or Related Party thereof), each Lender severally agrees to pay to the Administrative Agent (or any director, officer, employee, agent, Affiliate or Related Party thereof), such Lender’s pro rata share (determined as of the time that the applicable unreimbursed indemnity payment is sought) of such unpaid amount. The obligations of the Lenders under this clause are several and not joint and shall survive the termination of this Agreement.

(d)Each Loan Party also agrees that, without the prior consent of the Administrative Agent (not to be unreasonably withheld), neither it nor any of its Affiliates will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification has been or could be sought under the indemnification provisions hereof (whether or not any Indemnified Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent (i) includes a full and unconditional written release of each Indemnified Party from all liability arising out of such claim, action or proceeding and (ii) does not include any statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnified Party.

(e)This Section 11.4 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

SECTION 11.5    Survival.   The obligations of the Borrowers under Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 and under any other provision specifically providing for indemnification or reimbursement of fees, costs and expenses incurred by any of the Lender Parties in connection with this Agreement and the other Loan Documents, and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement, the payment in full of all the Obligations and the termination of all the Commitments. All covenants, agreements, representations and warranties made 

by each Loan Party in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lender Parties and shall survive the execution and delivery of the Loan Documents and the making of any Loan, regardless of any investigation made by any Lender Party or on its behalf and notwithstanding that any Lender Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder.

SECTION 11.6 Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7  Headings.   The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8    Counterparts; Integration; Effectiveness.

(a)This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article V, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

(b)Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 11.9    Governing Law.  This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York, without regard to conflicts of law principles that require or permit application of the laws of any other state or jurisdiction.

SECTION 11.10 Entire Agreement. This Agreement and each other Loan Document constitute the entire understanding among the parties hereto with respect  to  the subject matter hereof and supersede 

any prior agreements, written or oral, with respect thereto.

SECTION 11.11    Assignments and Participations.

(a) Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of clause (b) of this Section, (ii) by way of participation in accordance with the provisions of clause (a) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of clause (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (including Voting Participants) to the extent provided in clause (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(a)Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (in each case with respect to any credit facility) any such assignment shall be subject to the following conditions:

(i)Minimum Amounts

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Commitment) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in clause (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

(ii)Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Commitments on a non-pro rata basis.

(iii)Required Consents. No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) of this Section and, in addition:

(A)the consent of Borrowers (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment, or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that Borrowers shall be deemed to have consented to any such assignment unless it shall object thereto by notice to the Administrative Agent within 5 Business Days after having received notice thereof and provided, further, that Borrowers’ consent shall not be required during the primary syndication of the Commitments;

(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (1) the Revolving Commitment or any unfunded Commitments with respect to any Multi-Draw Term Loan Commitment or Incremental Term Loan Commitment if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (2) any Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and

(C)the consent of each Swingline Lender and Issuing Lender (which consent shall not be unreasonably withheld or delayed) shall be required for assignments in respect of the Revolving Commitment.

(iv)Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. No such assignment shall be made to (A) Borrowers or any of Borrowers’ Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (v).

(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural Person.

(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Lender, the Swingline Lender and each 

other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full Percentage of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Laws without compliance with the provisions of this clause, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrowers (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d) of this Section.

(b)Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at an office specified from time to time a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(c)Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 11.1(a)(i) through (ii) that affects such Participant. 

Borrowers agrees that each Participant shall be entitled to the benefits of Sections 4.3, 4.4, 11.4 and 4.6 (subject to the requirements and limitations therein, including the requirements under Section 4.6(f) (it being understood that the documentation required under Section 4.6(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Subsection; provided that, such Participant (A) agrees to be subject to the provisions of Section 4.5 as if it were an assignee under clause (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 4.3 and 4.6, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 4.5 with respect to any Participant. To the extent permitted by the Laws, each Participant also shall be entitled to the benefits of Sections 4.8 and 4.9 as though it were a Lender; provided that such Participant agrees to be subject to Sections 4.8 and 4.9 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as the Administrative Agent) shall have no responsibility for maintaining a Participant Register.

Any Participant that is a Farm Credit Lender and that (i) has purchased a participation in a minimum amount of $5,000,000, (ii) if the Administrative Agent is other than CoBank, has been designated as a voting participant (a “Voting Participant”) in a notice (a “Voting Participant Notice”) sent by the relevant Lender to the Administrative Agent as being entitled to be accorded the right of a Voting Participant, and (iii) receives the prior written consent of the Administrative Agent (such consent being required only if Administrative Agent is other than CoBank) and of the Borrowers (such consent being required only if no Event of Default then exists and is continuing and only as to Farm Credit Lenders not disclosed to the Borrowers on Schedule III as being a Participant as of the Effective Date) to become a Voting Participant, shall be entitled to vote, and the voting rights of the selling Lender shall be correspondingly reduced, on a dollar- for-dollar basis, as if such Participant were a Lender, on any matter requiring or allowing a Lender to provide or withhold its consent, or to otherwise vote on any proposed action to which the Lender selling such participation is entitled to vote.

(d)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(e)Issuing Lender. Subject to the terms and conditions of this Section 11.11, an Issuing Lender may assign to an Eligible Assignee all or a portion of its rights and obligations under the undrawn 

portion of its commitment to issue Letters of Credit at any time; provided, however, that (i) each such assignment shall be to an Eligible Assignee and (ii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Assumption.

(f)Swingline Lender. Subject to the terms and conditions of this Section 11.11, the Swingline Lender may assign to an Eligible Assignee all of its rights and obligations under the Swingline Loans and the undrawn portion of the Swingline Commitment at any time; provided, however, that (i) each such assignment shall be to an Eligible Assignee and (ii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Assumption.

SECTION 11.12 Press Releases and Related Matters. The Borrowers agree that neither it nor any other Loan Party nor any Subsidiary of any Loan Party will issue any press release or other public disclosure using the name of CoBank or its Affiliates (other than the filing of the Loan Documents with the Securities and Exchange Commission) without the prior consent of CoBank. The Borrowers consent to the publication by the Administrative Agent or any Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement. The Administrative Agent and each such Lender shall provide a draft of any such tombstone or similar advertising material to the Borrowers for review and reasonable comment prior to the publication thereof. In addition, the Administrative Agent reserves the right to provide to industry trade organizations customary information for inclusion in league table measurements.

SECTION 11.13    Consent to Jurisdiction and Service of Process

(a)Jurisdiction. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION WHETHER IN LAW OR IN EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY SWINGLINE LENDER, ANY ISSUING LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK, SITTING IN NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT, OR TO THE FULLEST EXTENT PERMITTED BY THE LAWS, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT  THE  ADMINISTRATIVE  AGENT,  THE  ISSUING  LENDER,  THE  SWINGLINE
LENDER OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR ANY SUBSIDIARY OF ANY 

LOAN PARTY OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(b)Waiver of Venue. BORROWERS AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN CLAUSE (A) OF THIS SECTION 11.13. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(c)Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY THE LAWS.

SECTION 11.14 Waiver of Jury Trial, etc. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,      SEEK      TO      ENFORCE      THE      FOREGOING      WAIVER      AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 11.15 Waiver of Consequential Damages, etc. TO THE FULLEST EXTENT PERMITTED BY THE LAWS, EACH BORROWER AND EACH OTHER LOAN PARTY SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNIFIED PARTY, ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT  CONTEMPLATED  HEREBY,  THE  TRANSACTIONS  CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR OTHER CREDIT EXTENSION OR THE USE OF THE PROCEEDS THEREOF. NO INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

SECTION 11.16 No Strict Construction.  The  parties  hereto  have  participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no 

presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

SECTION 11.17 Protection of Interests. Without limiting any of the  other provisions hereof and whether or not the Administrative Agent or any Lender acquires legal possession and title to the Real Property, if the Administrative Agent becomes aware of any matter for which the Borrowers may have liability in accordance with the other provisions of this Agreement, whether or not a claim is asserted against any Lender Party, the Administrative Agent shall have the right to take any action available to the Administrative Agent under the Laws, and the Borrowers hereby grant to the Administrative Agent and its respective agents, attorneys, employees, consultants, contractors and assigns, an irrevocable license and authorization for access to the Real Property and to conduct any such actions that the Administrative Agent deems reasonably appropriate in connection therewith. The Borrowers shall pay promptly following demand by the Administrative Agent all costs and expenses in connection with such investigatory and remedial activities. The foregoing license and authorization is intended to be a means of protection of the Administrative Agent’s or the Lenders’ security interest in the Real Property and not as participation in the management of the Borrowers or the Real Property.

SECTION 11.18 Confidentiality. Each of the Administrative Agent, the Issuing Lenders and the Lenders agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its other Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by the Laws or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrowers and their obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating Borrowers or their Subsidiaries or the Commitments or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Commitments; (h) with the consent of the Borrowers; or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section, or (ii) becomes available to the Administrative Agent, any Lender, any Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers. For purposes of this Section, “Information” means all information received from the Borrowers or any of their Subsidiaries relating to the Borrowers or any of their Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any Issuing Lender on a nonconfidential basis prior to disclosure by the Borrowers or any of their Subsidiaries; provided that, in the case of information received from the Borrowers or any of their Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.

SECTION 11.19 Patriot Act Information. Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender Party) hereby notifies the Loan Parties that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of Loan Parties and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Loan Parties in accordance with the USA Patriot Act. The Borrowers shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.

SECTION 11.20 Joint and Several Liability. In consideration of the financial accommodations being provided by the Lender Parties, each of the Borrowers agree to be jointly and severally liable, not merely as a surety but also as a co-debtor, with respect to the payment and performance of all the Loans and other Obligations under this Agreement and the other Loan Documents. Without limiting the foregoing, if any Borrower fails to make any payment of, or perform with respect to, any of the Obligations, the other Borrower agrees to make such payment and complete such performance requirement in accordance with the terms hereof and the other Loan Documents.

SECTION 11.21 Waiver of Farm Credit Rights. THE BORROWERS ACKNOWLEDGE AND AGREE THAT, TOGETHER WITH LEGAL COUNSEL, THEY HAVE REVIEWED ALL RIGHTS THAT THEY MAY OTHERWISE BE ENTITLED TO WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS UNDER THE STATUTES AND REGULATIONS OF THE FARM CREDIT ADMINISTRATION AS SPECIFIED AT 12 CFR § 617.7000 ET. SEQ., AND THAT    THEY    KNOWINGLY, VOLUNTARILY, INTENTIONALLY    AND IRREVOCABLY WAIVE ANY AND ALL SUCH RIGHTS.

SECTION 11.22   Effectiveness of Amendment and Restatement; No Novation. The amendment and restatement of the Existing Credit Agreement pursuant to this Agreement shall be effective on the Effective Date. All obligations and rights of the Loan Parties, the Administrative Agent, the Issuing Lenders and the Lenders arising out of or relating to the period commencing on the Effective Date shall be governed by the terms and provisions of this Agreement; the obligations and rights of the Loan Parties, the Administrative Agent and the Lenders arising out of or relating to the period prior to the Effective Date shall continue to be governed by the Existing Credit Agreement without giving effect to the amendment and restatement provided for herein. This Agreement shall not constitute a novation or termination of the Loan Parties’ obligations under the Existing Credit Agreement or any document, note or agreement executed or delivered in connection therewith, but shall constitute an amendment and restatement of the obligations and covenants of the Loan Parties under such documents, notes and agreements, and the Loan Parties hereby reaffirm all such obligations and covenants, as amended and restated hereby.

Notwithstanding the above, any amendment or other modification to this Agreement entered into after the Effective Date which meets the requirements of Section 11.1 shall be effective as of the date specified in such amendment or other modification for the effectiveness thereof. All obligations and rights of the Loan Parties, the Administrative Agent, the Issuing Lenders and the Lenders arising out of or relating to the period commencing on  the  date specified in such amendment or other modification for the effectiveness thereof shall be governed by the terms and provisions of such amendment or other modification; the obligations and rights of the Loan Parties, the Administrative Agent and the Lenders arising out of or relating to the period prior to the date specified in such amendment 

or other modification for the effectiveness thereof shall continue to be governed by this Agreement without giving effect to such amendment or other modification.

SECTION 11.23 Purchase of AgSouth Equity Interest. CatchMark Partnership agrees to purchase Equity Interests in AgSouth (the “AgSouth Equity Interests”) as AgSouth may require in accordance with its bylaws and capital plan that are applicable to its borrowers generally. In connection with the foregoing, CatchMark Partnership hereby  acknowledges receipt, prior to the execution of this Agreement, of: (a) AgSouth’s bylaws; (b) a written description of the terms and conditions under which the AgSouth Equity Interests are issued; and (c) the most recent annual financial report, and if more current, the latest quarterly financial report of AgSouth. CatchMark Partnership acknowledges and agrees that it shall not receive any patronage with respect to the AgSouth Equity Interests purchased by it.

SECTION 11.24    Effective  Date  Assignment.    On  the  Effective  Date, AgSouth will assign all of its Loans and Commitments in accordance with Schedule II, which describes the Loans and Commitment Amounts both before and after giving effect to such assignments.

SECTION 11.25 Borrowers’ Agent. Each of the Borrowers hereby appoints and authorizes the other to act as its agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Borrowers (individually or collectively) by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto, including, without limitation, to execute and deliver to the Administrative Agent all notices, certificates and similar items (including, without limitation, any Borrowing Requests or Continuation/Conversion Notice) required or permitted under this Agreement on behalf of any Borrower or both Borrowers. The Administrative Agent and each Borrower may rely on any notice delivered by either Borrower on behalf of any Borrower or both Borrowers. Any act by one Borrower shall be deemed taken on behalf of both Borrowers.

SECTION 11.26   Reaffirmation of Existing Account Control Agreement.   Each of Timberlands II and CatchMark TRS Subsidiary hereby

(a)acknowledges that notwithstanding the execution of this Agreement and the consummation of the transactions contemplated hereby or any other facts and circumstances, all of the terms, conditions, representations and covenants contained in the Existing Account Control Agreements to which it is a party are and shall remain in full force and effect in accordance with their respective terms and are hereby ratified and confirmed;

(b)ratifies and confirms that its grant of a security interest in each of its Collateral Accounts and all of its Collateral Account Funds (as defined in the Existing Account Control Agreement), as applicable, pursuant to the Security Agreement (subject to no Lien other than as contemplated by Section 7.2.3) secures the Obligations under this Agreement; and

(c)represents and warrants that no offsets, counterclaims or defenses exist as of the date hereof with respect to its Obligations under any Existing Account Control Agreement to which it is a party.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

TIMBERLANDS II, LLC

By: CATCHMARK TIMBER OPERATING PARTNERSHIP, LP, f/k/a WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P., as Manager

By:   CATCHMARK TIMBER TRUST, INC., f/k/a WELLS TIMBERLAND
REIT, INC., as General Partner

		
	By:  /s/ Brian M. Davis                              
	 

Name:  Brian M. Davis
		
	Title:
	Senior Vice President and Chief Financial Officer

CATCHMARK TIMBER OPERATING PARTNERSHIP, LP, f/k/a WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.

By: CATCHMARK TIMBER TRUST, INC., f/k/a WELLS TIMBERLAND
REIT, INC., as General Partner

By:  /s/ Brian M. Davis                              
Name:  Brian M. Davis
		
	Title:
	Senior Vice President and Chief Financial Officer

[Signatures continue on following page]

COBANK, ACB,
as Administrative Agent, Issuing Lender, Swingline Lender, Joint Lead Arranger, and Sole Bookrunner

By:     /s/ Zachary Carpenter                          
Name:  Zachary Carpenter
Title:    Vice President

AGFIRST FARM CREDIT BANK, as a Joint
Lead Arranger and Syndication Agent

By:     /s/ J Michael Mancini                       
Name: J Michael Mancini
Title:    Vice President

[Signatures continue on following page]

LENDERS:

AGSOUTH FARM CREDIT, ACA, as a Lender

By:     /s/ William P. Spigener, Jr.                     
Name:  William P. Spigener, Jr.
Title:    C.E.O.

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK NEDERLAND”, NEW YORK BRANCH

		
	By:
	_/s/ Theodore W. Cox ______

                Name: Theodore W. Cox
                Title: Executive Director

		
	By:
	_/s/ Stewart Kalish _______

                Name: Stewart Kalish
                Title: Executive Director

METROPOLITAN LIFE INSURANCE COMPANY 

		
	By:
	_/s/ W. Kirk Purvis________

                Name: W. Kirk Purvis
                Title: Director

[Signatures continue on following page]

Acknowledged and Agreed to:

CATCHMARK TRS HARVESTING OPERATIONS, LLC, f/k/a WELLS TRS HARVESTING OPERATIONS, LLC

By:   FOREST RESOURCE
CONSULTANTS, INC., as Manager

		
	By:  /s/ David T. Foil                                 
	 

Name:  David T. Foil
		
	Title:
	President

CATCHMARK TIMBER TRUST, INC., f/k/a WELLS TIMBERLAND REIT, INC.

		
	By:  /s/ Brian M. Davis                              
	 

Name:  Brian M. Davis
		
	Title:
	Senior Vice President and Chief Financial Officer

CATCHMARK TIMBER TRS, INC., f/k/a WELLS TIMBERLAND TRS, INC.

By:  /s/ Brian M. Davis                              
Name:  Brian M. Davis
		
	Title:
	Senior Vice President and Chief Financial Officer

[Signatures continue on following page]

CATCHMARK HBU, LLC, f/k/a WELLS TIMBERLAND HBU, LLC

By: CATCHMARK TIMBER OPERATING PARTNERSHIP, LP, f/k/a WELLS TIMBERLAND OPERATING PARTNERSHIP,
L.P., as Manager

By: CATCHMARK TIMBER TRUST, INC., f/k/a WELLS TIMBERLAND
REIT, INC., as General Partner

		
	By:  /s/ Brian M. Davis                             
	 

Name:  Brian M. Davis
		
	Title:
	Senior Vice President and Chief Financial Officer

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