SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 3, 2000
US Airways Group, Inc.
(Commission file number: 1-8444)
and
US Airways, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware US Airways, Group Inc. 54-1194634
(State of incorporation US Airways, Inc. 53-0218143
of both registrants) (I.R.S. Employer
Identification Nos.)
US Airways Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. See exhibit list below.
The following documents are being filed as Exhibits in connection
with, and incorporated by reference into, US Airways Group, Inc.'s and US
Airways, Inc.'s Registration Statement on Form S-3 (Registration No.
333-79825). The Registration Statement, and a Prospectus Supplement, dated
February 25, 2000, to the Prospectus, dated July 30, 1999, relate to the
offering of US Airways, Inc. Pass Through Certificates, Series 2000-1, Class G.
Reg. No.
333-79825
Exhibit No. Document
4.1 Pass Through Trust Agreement, dated as of July 30, 1999,
between State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through
Trustee, US Airways Group, Inc. and US Airways, Inc.*
4.2 Pass Through Trust Supplement No. 2000-1G, dated as of
March 3, 2000, between State Street Bank and Trust Company
of Connecticut, National Association, as Pass Through
Trustee, and US Airways, Inc.+
4.3 Financial Guaranty Insurance Policy, Policy No. 31576,
dated March 3, 2000, issued by MBIA Insurance Corporation,
for the benefit of State Street Bank and Trust Company of
Connecticut, National Association as Subordination Agent,
as agent for the Pass Through Trustee+
4.4 Deposit Agreement (Class G), dated as of March 3, 2000,
between First Security Bank, National Association, as
Escrow Agent, and ABN AMRO Bank, N.V., as Depositary +
4.5 Revolving Credit Agreement (Class G), dated as of March 3,
2000, between State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through
Trustee, as Subordination Agent, and Bayerische Landesbank
Girozentrale, as Liquidity Provider+
4.6 Intercreditor Agreement, dated as of March 3, 2000, among
State Street Bank and Trust Company of Connecticut,
National Association, as Pass Through Trustee and as
Subordination Agent, MBIA Insurance Corporation, as Policy
Provider and Bayerische Landesbank Girozentrale, as
Liquidity Provider+
4.7 Escrow and Paying Agent Agreement (Class G), dated as of
March 3, 2000, among First Security Bank, National
Association, as Escrow Agent, Salomon Smith Barney Inc.,
Chase Securities, Inc, Credit Lyonnais Securities (USA)
Inc. and Credit Suisse First Boston Corporation, as
Underwriters, and State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through Trustee
and as Paying Agent+
4.8 Note Purchase Agreement, dated as of March 3, 2000, among
US Airways, Inc., State Street Bank and Trust Company of
Connecticut, National Association, as Pass Through
Trustee, Subordination Agent, and as Paying Agent, and
First Security Bank, National Association, as Escrow Agent+
4.9 Exhibit A-1 to Note Purchase Agreement -- Form of Leased
Aircraft Participation Agreement+
4.10 Exhibit A-2-1 to Note Purchase Agreement - Form of Basic
Lease+
4.11 Exhibit A-2-2 to Note Purchase Agreement - Form of Deferred
Equity/PrePaid-Deferred Rent Lease+
4.12 Exhibit A-3 to Note Purchase Agreement - Form of Leased
Aircraft Indenture+
4.13 Exhibit A-4 to Note Purchase Agreement - Form of Leased
Aircraft Purchase Agreement Assignment+
4.14 Exhibit A-5 to Note Purchase Agreement - Form of Leased
Aircraft Trust Agreement+
4.15 Exhibit A-6 to Note Purchase Agreement - Form of Leased
Aircraft French Pledge Agreement+
4.16 Exhibit C-1 to Note Purchase Agreement -- Form of Owned
Aircraft Participation Agreement+
4.17 Exhibit C-2 to Note Purchase Agreement - Form of Owned
Aircraft Indenture+
4.18 Exhibit C-3 to Note Purchase Agreement - Form of Owned
Aircraft Purchase Agreement Assignment+
4.19 Exhibit C-4 to Note Purchase Agreement - Form of Owned
Aircraft French Pledge Agreement+
4.20 Class G Global Certificate+
4.21 Underwriting Agreement, dated as of February 25, 2000, among
US Airways, Inc. and Salomon Smith Barney Inc., Chase
Securities Inc., Credit Lyonnais Securities (USA) Inc. and
Credit Suisse First Boston Corporation, as Underwriters+
+ Filed herewith.
* Previously filed. See Current Report on Form 8-K for US Airways Group,
Inc. and US Airways, Inc. filed on September 7, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
US Airways Group, Inc. (REGISTRANT)
Date: March 3, 2000 By: /s/ Anita P. Beier
--------------------------
Anita P. Beier
Vice President and Controller
(Chief Accounting Officer)
US Airways, Inc. (REGISTRANT)
Date: March 3, 2000 By: /s/ Anita P. Beier
--------------------------
Anita P. Beier
Vice President and Controller
(Chief Accounting Officer)
(this space intentionally left blank)
TRUST SUPPLEMENT No. 2000-1G
Dated as of March 3, 2000
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee,
and
US AIRWAYS, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of July 30, 1999
US Airways Pass Through Trust 2000-1G
8.11% US Airways
Pass Through Certificates,
Series 2000-1G
This Trust Supplement No. 2000-1G, dated as of March 3, 2000
(herein called the "Trust Supplement"), between US Airways, Inc., a
Delaware corporation (the "Company") and State Street Bank and Trust
Company of Connecticut, National Association (the "Trustee"), to the Pass
Through Trust Agreement, dated as of July 30, 1999, between the Company, US
Airways Group, Inc., a Delaware corporation, and the Trustee (the "Basic
Agreement").
W I T N E S S E T H:
-------------------
WHEREAS, the Basic Agreement, unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein,
capitalized terms used herein without definition having the respective
meanings specified in the Basic Agreement) which may be issued thereunder,
has heretofore been executed and delivered;
WHEREAS, the Company obtained commitments from AVSA for the
delivery of five Aircraft;
WHEREAS, the Company intends to finance the acquisition of each
such Aircraft either (i) through separate leveraged lease transactions, in
which case the Company will lease such Aircraft (collectively, the "Leased
Aircraft") or (ii) through separate secured loan transactions, in which
case the Company will own such Aircraft (collectively, the "Owned
Aircraft");
WHEREAS, in the case of each Leased Aircraft, each Owner
Trustee, acting on behalf of the corresponding Owner Participant, will
issue pursuant to an Indenture, on a non-recourse basis, Equipment Notes in
order to finance a portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will
issue pursuant to an Indenture, on a recourse basis, Equipment Notes to
finance a portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this US
Airways Pass Through Trust 2000-1G (the "Applicable Trust") for the benefit
of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their
respective acceptances of the Applicable Certificates, join in the creation
of the Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates to be issued by the
Applicable Trust will evidence fractional undivided interests in the
Applicable Trust and will convey no rights, benefits or interests in
respect of any property other than the Trust Property except for those
Applicable Certificates to which an Escrow Receipt has been affixed;
WHEREAS, the Escrow Agent, the Trustee, the Escrow Paying
Agent, and the Underwriters have contemporaneously herewith entered into an
Escrow Agreement with the Escrow Paying Agent pursuant to which the
Underwriters have delivered to the Escrow Agent the proceeds from the sale
of the Applicable Certificates and have irrevocably instructed the Escrow
Agent to withdraw and pay funds from such proceeds upon request and proper
certification by the Trustee to purchase Equipment Notes as the Aircraft
are delivered by AVSA under the Aircraft Purchase Agreement from time to
time prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein
will be made and from which it will withdraw funds to allow the Trustee to
purchase Equipment Notes from time to time prior to the Delivery Period
Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic
Agreement as supplemented by this Trust Supplement (the "Agreement") and
the Note Purchase Agreement, the Trustee on behalf of the Applicable Trust,
using funds withdrawn under the Escrow Agreement, shall purchase one or
more Equipment Notes having the same interest rate as, and final maturity
date not later than the final Regular Distribution Date of, the Applicable
Certificates issued hereunder and, in each case, shall hold such Equipment
Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to
make this Trust Supplement, when duly executed and delivered, a valid,
binding and legal instrument in accordance with its terms and for the
purposes herein expressed, have been done, performed and fulfilled, and the
execution and delivery of this Trust Supplement in the form and with the
terms hereof have been in all respects duly authorized; and
WHEREAS, this Trust Supplement is subject to the provisions of
the Trust Indenture Act of 1939, as amended, and shall, to the extent
applicable, be governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is
agreed between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a
series of certificates to be issued under the Agreement to be distinguished
and known as "8.11% US Airways Pass Through Certificates, Series 2000-1G"
(hereinafter defined as the "Applicable Certificates"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable
Trust created hereby. The Applicable Certificates shall be the only
instruments evidencing a fractional undivided interest in the Applicable
Trust.
The terms and conditions applicable to the Applicable
Certificates are as follows:
(a) The aggregate principal amount of the Applicable
Certificates that shall be authenticated under the Agreement (except
for Applicable Certificates authenticated and delivered pursuant to
Sections 3.03, 3.04 and 3.06 of the Basic Agreement) is $281,678,000.
(b) The Regular Distribution Dates with respect to any payment
of Scheduled Payments means February 20 and August 20 of each year,
commencing on August 20, 2000, until payment of all of the Scheduled
Payments to be made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the
Applicable Certificates means any Business Day on which a Special
Payment is to be distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement,
the Trustee shall affix the corresponding Escrow Receipt to each
Applicable Certificate. In any event, any transfer or exchange of any
Applicable Certificate shall also effect a transfer or exchange of
the related Escrow Receipt. Prior to the Final Withdrawal Date, no
transfer or exchange of any Applicable Certificate shall be permitted
unless the corresponding Escrow Receipt is attached thereto and also
is so transferred or exchanged. By acceptance of any Applicable
Certificate to which an Escrow Receipt is attached, each Holder of
such an Applicable Certificate acknowledges and accepts the
restrictions on transfer of the Escrow Receipt set forth herein and
in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form
attached hereto as Exhibit A. Any Person acquiring or accepting an
Applicable Certificate or an interest therein will, by such
acquisition or acceptance, be deemed to represent and warrant that
either (i) the assets of an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or of a plan subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), have not been used to
purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates is exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to
one or more prohibited transaction statutory or administrative
exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the
Letter of Representations between the Company and the Clearing Agency
attached hereto as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility and the Policy.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement",
for purposes of clause (3) of Section 7.07 of the Basic Agreement,
are Section 6(b) (with respect to Owned Aircraft) and Section 6(c)
(with respect to Leased Aircraft) of the relevant Participation
Agreement attached as an exhibit to the Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic
Agreement as supplemented by this Trust Supplement, the following
capitalized terms have the following meanings:
Agreement: Has the meaning specified in the recitals hereto.
Aircraft: Means each of the New Aircraft or Substitute Aircraft
in respect of which a Participation Agreement is entered into in
accordance with the Note Purchase Agreement.
Aircraft Purchase Agreement: Has the meaning specified in the
Note Purchase Agreement.
Applicable Certificate: Has the meaning specified in Section
1.01 of this Agreement.
Applicable Certificateholder: Means the Person in whose name an
Applicable Certificate is registered on the Register for the
Applicable Certificates.
Applicable Delivery Date: Has the meaning specified in Section
5.01(b) of this Trust Supplement.
Applicable Participation Agreement: Has the meaning specified
in Section 5.01(b) of this Trust Supplement.
AVSA: Means AVSA, S.A.R.L.
Business Day: Means any day other than a Saturday, a Sunday or
other day on which insurance companies or commercial banks in New
York, New York or commercial banking institutions in Pittsburgh,
Pennsylvania and in the cities in which the Corporate Trust Office of
the Subordination Agent or any Loan Trustee or the fiscal agent of
the Policy Provider or the office of the Policy Provider are located
are authorized or obligated by law or executive order to close.
Class C Certificate: Has the meaning specified in Section 4.01
of this Trust Supplement.
Class C Certifcateholder: Has the meaning specified in Section
4.01 of this Trust Supplement.
Class C Trust: Has the meaning specified in Section 4.01 of
this Trust Supplement.
Closing Notice: Means the Closing Notice as defined in and
delivered pursuant to Section 2(b) of the Note Purchase Agreement.
Cut-off Date: Means the earlier of (a) the Delivery Period
Termination Date and (b) the date on which a Triggering Event occurs.
Delivery Date: Has the meaning specified in the Participation
Agreements.
Delivery Period Termination Date: Means the earlier of (a)
February 7, 2001 and (b) the date on which Equipment Notes issued
with respect to all of the New Aircraft (or Substitute Aircraft in
lieu thereof) have been purchased by the Applicable Trust; provided
that, if all the Equipment Notes relating to the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by
February 7, 2001 on account of manufacturing delays that occur for
reasons beyond the control of US Airways and that are not occasioned
by US Airways' fault or negligence, then the February 7, 2001 date
may be extended to the earlier of (i) the date on which Equipment
Notes with respect to all New Aircraft (or Substitute Aircraft in
lieu thereof) have been purchased by the Applicable Trust in
accordance with the Note Purchase Agreement, and (ii) June 7, 2001.
Deposits: Has the meaning specified in the Deposit Agreement.
Deposit Agreement: Means the Deposit Agreement dated as of
March 3, 2000 relating to the Applicable Certificates between the
Depositary and the Escrow Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
Depositary: Means ABN AMRO Bank, N.V., acting through its
Chicago branch and any replacement or successor therefor.
Distribution Date: Means any Regular Distribution Date or
Special Distribution Date as the context requires.
Escrow Agent: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
Escrow Agreement: Means the Escrow and Paying Agent Agreement
dated as of March 3, 2000 relating to the Applicable Certificates,
among the Escrow Agent, the Escrow Paying Agent, the Trustee and
Underwriters, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Escrow Paying Agent: Means the Person acting as paying agent
under the Escrow Agreement.
Escrow Receipt: Means the receipt substantially in the form
annexed to the Escrow Agreement representing a fractional undivided
interest in the funds held in escrow thereunder.
Final Legal Distribution Date: Means, with respect to the
Applicable Certificates, August 20, 2018.
Final Withdrawal: Has the meaning specified in Section 1.2 of
the Escrow Agreement.
Final Withdrawal Date: Has the meaning specified in Section 1.2
of the Escrow Agreement.
Final Withdrawal Notice: Has the meaning specified in Section
5.02 of this Trust Supplement.
Indenture: Means each of the separate trust indentures and
mortgages relating to the Aircraft, in each case as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
Intercreditor Agreement: Means the Intercreditor Agreement
dated as of March 3, 2000 among the Trustee, the Liquidity Provider,
the Policy Provider and State Street Bank and Trust Company of
Connecticut, National Association, as Subordination Agent and as
trustee thereunder, as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
Investors: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
Lease: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the
lessee, referred to in the related Indenture, as such lease may be
amended, supplemented or otherwise modified in accordance with its
terms.
Leased Aircraft: Has the meaning specified in the third recital
to this Trust Supplement.
Liquidity Facility: Means, initially, the Revolving Credit
Agreement dated as of March 3, 2000 relating to the Applicable
Certificates, between the Liquidity Provider and State Street Bank
and Trust Company of Connecticut, National Association, as
Subordination Agent, as agent and trustee for the Applicable Trust,
and, from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor,
in each case as amended, supplemented or otherwise modified from time
to time in accordance with their respective terms.
Liquidity Provider: Means, initially, Bayerische Landesbank
Girozentrale, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
New Aircraft: Has the meaning specified in the Note Purchase
Agreement.
Note Documents: Means the Note Purchase Agreement, this Trust
Supplement and, with respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
Note Purchase Agreement: Means the Note Purchase Agreement
dated as of March 3, 2000 among the Trustee, the Company, the Escrow
Agent, the Escrow Paying Agent and the Subordination Agent, providing
for, among other things, the purchase of certain Equipment Notes by
the Trustee on behalf of the Trust, as the same may be amended,
supplemented or otherwise modified from time to time, in accordance
with its terms.
Notice of Purchase Withdrawal: Has the meaning specified in the
Deposit Agreement.
Owned Aircraft: Has the meaning specified in the third recital
to this Trust Supplement.
Owner Participant: With respect to any Equipment Note relating
to a Leased Aircraft, means the "Owner Participant" as referred to in
the Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and Owner
Participants at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner Trustees means
all of the Owner Trustees party to any of the Indentures.
Participation Agreement: Means each Participation Agreement to
be entered into by the Trustee pursuant to the Note Purchase
Agreement, as the same may be amended, supplemented or otherwise
modified in accordance with its terms.
Policy: Has the meaning specified in the Intercreditor Agreement.
Policy Provider: Has the meaning specified in the Intercreditor
Agreement.
Policy Provider Agreement: Has the meaning specified in the
Intercreditor Agreement.
Policy Provider Default: Has the meaning specified in the
Intercreditor Agreement.
Pool Balance: Means, as of any date, (i) the original aggregate
face amount of the Applicable Certificates less (ii) the aggregate
amount of all payments made in respect of such Applicable
Certificates or in respect of Deposits relating to the Applicable
Trust other than payments made in respect of interest or premium
thereon or reimbursement of any costs or expenses incurred in
connection therewith. The Pool Balance as of any Distribution Date
will be computed after giving effect to any special distribution with
respect to unused Deposits, payment of principal of the Equipment
Notes or payment with respect to other Trust Property, payments under
the Policy (other than in respect of interest on the Applicable
Certificates) and the distribution thereof to be made on that date.
Pool Factor: Means, as of any Distribution Date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the
Pool Balance by (ii) the original aggregate face amount of the
Applicable Certificates. The Pool Factor as of any Distribution Date
shall be computed after giving effect to any special distribution
with respect to unused Deposits, payment of principal of the
Equipment Notes or other Trust Property and the distribution thereof
to be made on that date.
Prospectus Supplement: Means the Prospectus Supplement dated
February 25, 2000, relating to the offering of the Applicable
Certificates.
PTC Event of Default: Means, with respect to the Applicable
Certificates, any failure to pay within ten Business Days of the due
date thereof: (i) the outstanding Pool Balance of the Applicable
Certificates on the Final Legal Distribution Date for the Applicable
Certificates (unless the Subordination Agent has made a drawing under
the Policy in an aggregate amount sufficient to pay such outstanding
Pool Balance and shall have distributed such amount to the Trustee)
or (ii) interest due on the Applicable Certificates on any
Distribution Date (unless the Subordination Agent shall have made an
Interest Drawing, or a withdrawal from the Cash Collateral Account or
a drawing under the Policy with respect thereto in an aggregate
amount sufficient to pay such interest and shall have distributed
such amount to the Trustee).
Scheduled Payment: Means, with respect to any Equipment Note,
(i) any payment of principal or interest on such Equipment Note
(other than any such payment which is not in fact received by the
Trustee or any Subordination Agent within five days of the date on
which such payment is scheduled to be made) or (ii) any payment of
interest on the Applicable Certificates with funds drawn under the
Liquidity Facility or the Policy (other than any such payment which
is not in fact received by the Trustee or any Subordination Agent
within five days of the date upon which payment is scheduled to be
made), which payment in the case of clauses (i) or (ii) represents
the installment of principal on such Equipment Note at the stated
maturity of such installment, the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment
Note, or both; provided, however, that any payment of principal,
premium, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled
Payment.
Special Redemption Premium: Means the premium payable by the
Company in respect of the Final Withdrawal pursuant to the Note
Purchase Agreement.
Special Payment: Means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or
Trust Indenture Estate (as defined in each Indenture) or Special
Redemption Premium.
Substitute Aircraft: Has the meaning specified in the Note
Purchase Agreement.
Triggering Event: Has the meaning assigned to such term in the
Intercreditor Agreement.
Trust Property: Means (i) subject to the Intercreditor
Agreement, the Equipment Notes held as the property of the Applicable
Trust, all monies at any time paid thereon and all monies due and to
become due thereunder, (ii) funds from time to time deposited in the
Certificate Account, the Special Payments Account and, subject to the
Intercreditor Agreement, any proceeds from the sale by the Trustee
pursuant to Article VI of the Basic Agreement of any Equipment Note
and (iii) all rights of the Applicable Trust and the Trustee, on
behalf of the Applicable Trust, under the Intercreditor Agreement,
the Escrow Agreement, the Note Purchase Agreement, the Policy and the
Liquidity Facility, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the
Trustee on behalf of the Applicable Trust pursuant to the
Intercreditor Agreement, the Policy or the Liquidity Facility,
provided that rights with respect to the Deposits or under the Escrow
Agreement, except for the right to direct withdrawals for the
purchase of Equipment Notes to be held herein, will not constitute
Trust Property.
Underwriters: Means, collectively, Salomon Smith Barney Inc.,
Chase Securities Inc., Credit Lyonnais Securities (USA) Inc. and
Credit Suisse First Boston Corporation.
Underwriting Agreement: Means the Underwriting Agreement dated
as of February 25, 2000 among the Underwriters and the Company, as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01Additions to Article IV of the Basic Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the
following provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the
Trustee under the Note Purchase Agreement, the Trustee, upon receipt
thereof, shall immediately deposit the aggregate amount of such
Special Redemption Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium
as provided for in Section 4.02(b) of the Basic Agreement shall be on
the Special Distribution Date with respect to such Special Payment or
as soon thereafter as the Trustee has confirmed receipt of the
related Special Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium
by the Company to the Trustee under the Note Purchase Agreement, the
notice provided for in Section 4.02(c) of the Basic Agreement shall
be mailed, together with the notice by the Escrow Paying Agent under
Section 2.06 of the Escrow Agreement, not less than 15 days prior to
the Special Distribution Date for such amount, which Special
Distribution Date shall be the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c)
of the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not been calculated at the time the
Trustee mails notice of a Special Payment.
Section 3.02. Statements to Applicable Certificateholders. (a)
On each Distribution Date, the Trustee will include with each distribution
to Applicable Certificateholders of a Scheduled Payment or Special Payment,
as the case may be, a statement setting forth the information provided
below (in the case of a Special Payment, including any Special Redemption
Premium, reflecting in part the information provided by the Escrow Paying
Agent under the Escrow Agreement). Such statement shall set forth (per
$1,000 face amount Applicable Certificate as to (ii), (iii), (iv) and (v)
below) the following information:
(i) the aggregate amount of funds distributed on such
Distribution Date under the Agreement and under the Escrow Agreement,
indicating the amount allocable to each source including any portion
thereof paid by the Liquidity Provider and/or the Policy Provider;
(ii) the amount of such distribution under the Agreement
allocable to principal and the amount allocable to premium (including
the Special Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement
allocable to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the
name of a Clearing Agency, on the Record Date prior to each Distribution
Date, the Trustee will request from such Clearing Agency a securities
position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests
in the Applicable Certificates on such Record Date. On each Distribution
Date, the Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as
requested by such Clearing Agency Participant for forwarding to holders of
interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was an Applicable Certificateholder of record a statement containing
the sum of the amounts determined pursuant to clauses (a)(i), (a)(ii),
(a)(iii), (a)(iv) and (a)(v) of this Section 3.02 for such calendar year
or, in the event such Person was an Applicable Certificateholder of record
during a portion of such calendar year, for such portion of such year, and
such other items as are readily available to the Trustee and which an
Applicable Certificateholder shall reasonably request as necessary for the
purpose of such Applicable Certificateholder's preparation of its federal
income tax returns. Such statement and such other items shall be prepared
on the basis of information supplied to the Trustee by the Clearing Agency
Participants and shall be delivered by the Trustee to such Clearing Agency
Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in
the manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Cut-Off Date, if there has been
any change in the information set forth in clauses (x), (y) and (z) below
from that set forth in page [S-44] of the Prospectus Supplement, and (ii)
any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting
forth (x) the expected Pool Balances for each subsequent Regular
Distribution Date following the Cut-Off Date, (y) the related Pool Factors
for such Regular Distribution Dates and (z) the expected principal
distribution schedule of the Equipment Notes, in the aggregate, held as
Trust Property at the date of such notice. With respect to the Applicable
Certificates registered in the name of a Clearing Agency, on the Cut-Off
Date, the Trustee will request from such Clearing Agency a securities
position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests
in the Applicable Certificates on such date. The Trustee will mail to each
such Clearing Agency Participant the statement described above and will
make available additional copies as requested by such Clearing Agency
Participant for forwarding to holders of interests in the Applicable
Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of
the Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders. (a) By
acceptance of its Applicable Certificate, each Applicable Certificateholder
agrees that at any time after the occurrence and during the continuation of
a Triggering Event,
(i) If and from such time as the Company forms the US Airways
Pass Through Trust 2000-1C (the "Class C Trust") and the Class
C Trust issues pass through certificates, series 2000-1C (the
"Class C Certificates"), in each case as permitted by the terms
of the Prospectus Supplement and the Note Purchase Agreement,
each holder of a Class C Certificate (a "Class C
Certificateholder") shall have the right to purchase all, but
not less than all, of the Applicable Certificates upon ten
days' written notice to the Trustee, and each other Class C
Certificateholder, provided that (A) if prior to the end of
such ten-day period any other Class C Certificateholder
notifies such purchasing Class C Certificateholder that such
other Class C Certificateholder wants to participate in such
purchase, then such other Class C Certificateholder may join
with the purchasing Class C Certificateholder to purchase all,
but not less than all, of the Applicable Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to
the end of such ten-day period any other Class C
Certificateholder fails to notify the purchasing Class C
Certificateholder of such other Class C Certificateholder's
desire to participate in such a purchase, then such other Class
C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a); and
(ii) whether or not any Class C Certificates have been issued
and whether or not any Class C Certificateholder exercises its
right to purchase pursuant to clause (a)(i) above, the Policy
Provider, if it is then the Controlling Party and 180 days have
elapsed since the occurrence of a Triggering Event that is
continuing, shall have the right (except in the event of a
Policy Provider Default) to purchase all, but not less than
all, of the Applicable Certificates upon ten days' written
notice to the Trustee, the trustee of the Class C Trust and the
Applicable Certificateholders.
The purchase price with respect to the Applicable Certificates
shall be equal to the Pool Balance of the Applicable Certificates, together
with accrued and unpaid interest thereon to the date of such purchase,
without premium, but including any other amounts then due and payable to
the Applicable Certificateholders under this Agreement, the Intercreditor
Agreement, the Escrow Agreement or any Note Document or on or in respect of
the Applicable Certificates; provided, however, that (i) if such purchase
occurs after the record date specified in Section 2.03(b) of the Escrow
Agreement relating to the distribution of unused Deposits and accrued and
unpaid interest thereunder, such purchase price shall be reduced by the
aggregate amount of unused Deposits and interest to be distributed under
the Escrow Agreement (which deducted amounts shall remain distributable to,
and may be retained by, the Applicable Certificateholder as of such Record
Date) and (ii) if such purchase occurs after a Record Date, such purchase
price shall be reduced by the amount to be distributed hereunder on the
related Distribution Date (which deducted amounts shall remain
distributable to, and may be retained by, the Applicable Certificateholder
as of such Record Date); provided further that no such purchase of
Applicable Certificates shall be effective unless the purchaser(s) shall
certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing the Applicable Certificates pursuant to the
terms of this Agreement and the trust supplement entered into with respect
to the Class C Trust (if any). Each payment of the purchase price of the
Applicable Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each such
purchase shall be subject to the terms of this Section 4.01(a). Each
Applicable Certificateholder agrees by its acceptance of its Applicable
Certificate that it will, subject to Section 3.04 of the Basic Agreement,
upon payment from such Class C Certificateholder(s) or the Policy Provider,
as the case may be, of the purchase price set forth in the first sentence
of this paragraph, forthwith sell, assign, transfer and convey to the
purchaser(s) thereof (without recourse, representation or warranty of any
kind except for its own acts), all of the right, title, interest and
obligation of such Applicable Certificateholder in this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facility, the Policy, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not
then due and payable as respects any action or inaction or state of affairs
occurring prior to such sale) and the purchaser shall assume all of such
Applicable Certificateholder's obligations under this Agreement, the Escrow
Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facility, the Policy, the Note Documents and all such Applicable
Certificates and Escrow Receipts. The Applicable Certificates will be
deemed to be purchased on the date payment of the purchase price is made
notwithstanding the failure of the Applicable Certificateholders to deliver
any Applicable Certificates and, upon such a purchase, (i) the only rights
of the Applicable Certificateholders will be to deliver the Applicable
Certificates to the purchaser(s) and receive the purchase price for such
Applicable Certificates and (ii) if the purchaser(s) shall so request, such
Applicable Certificateholder will comply with all the provisions of Section
3.04 of the Basic Agreement to enable new Applicable Certificates to be
issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new
Applicable Certificates shall be borne by the purchaser thereof.
(b) This Section 4.01 supersedes and replaces Section 6.01(b)
of the Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. Delivery of Documents; Delivery Dates. (a) The
Trustee is hereby directed (i) to execute and deliver the Intercreditor
Agreement, the Escrow Agreement and the Note Purchase Agreement, each in
the form delivered to the Trustee by the Company and (ii) subject to the
respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing
conditions specified in the Underwriting Agreement, the Trustee shall
execute, deliver, authenticate, issue and sell Applicable Certificates in
authorized denominations equaling in the aggregate the amount set forth,
with respect to the Applicable Trust, in Schedule I to the Underwriting
Agreement evidencing the entire ownership interest in the Applicable Trust,
which amount equals the maximum aggregate principal amount of Equipment
Notes which may be purchased by the Trustee pursuant to the Note Purchase
Agreement. Except as provided in Sections 3.03, 3.04, 3.05 and 3.06 of the
Basic Agreement, the Trustee shall not execute, authenticate or deliver
Applicable Certificates in excess of the aggregate amount specified in this
paragraph.
(b) On or after the Issuance Date the Company may deliver from
time to time to the Trustee a Closing Notice relating to one or more
Equipment Notes. After receipt of a Closing Notice and in any case no later
than one Business Day prior to a Delivery Date as to which such Closing
Notice relates (the "Applicable Delivery Date"), the Trustee shall (as and
when specified in the Closing Notice) instruct the Escrow Agent to provide
a Notice of Purchase Withdrawal to the Depositary requesting (A) the
withdrawal of one or more Deposits on the Applicable Delivery Date in
accordance with and to the extent permitted by the terms of the Escrow
Agreement and the Deposit Agreement and (B) the payment of all, or a
portion, of such Deposit or Deposits in an amount equal in the aggregate to
the purchase price of such Equipment Notes to or on behalf of the Owner
Trustee or the Company, as the case may be, issuing such Equipment Notes,
all as shall be described in the Closing Notice. The Trustee shall (as and
when specified in such Closing Notice), subject to the conditions set forth
in Section 3 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Closing
Notice (the "Applicable Participation Agreement") and cause such
certificates, documents and legal opinions relating to the Trustee to be
duly delivered as required by the Applicable Participation Agreement. If at
any time prior to the Applicable Delivery Date, the Trustee receives a
notice of postponement pursuant to Section 2(e), 2(f), or 2(g) of the Note
Purchase Agreement, then the Trustee shall give the Depositary (with a copy
to the Escrow Agent) a notice of cancellation of such Notice of Purchase
Withdrawal relating to such Deposit or Deposits on such Applicable Delivery
Date. Upon satisfaction of the conditions specified in the Note Purchase
Agreement and the Applicable Participation Agreement, the Trustee shall
purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow
Agreement. The purchase price of such Equipment Notes shall equal the
principal amount of such Equipment Notes. Amounts withdrawn from such
Deposit or Deposits in excess of the purchase price of the Equipment Notes
or to the extent not applied on the Applicable Delivery Date to the
purchase price of the Equipment Notes, shall be re-deposited by the Trustee
with the Depositary on the Applicable Delivery Date in accordance with the
terms of the Deposit Agreement. The provisions of Section 5.01(a) hereof
and this Section 5.01(b) supersede and replace the provisions of Section
2.02 of the Basic Agreement (which are inapplicable to the Trust), and all
provisions of the Basic Agreement relating to Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
Section 5.02Withdrawal of Deposits. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated
and instruct the Escrow Agent to provide a notice of Final Withdrawal to
the Depositary substantially in the form of Exhibit B to the Deposit
Agreement (the "Final Withdrawal Notice") and (ii) the Trustee will make a
demand upon the Company under the Note Purchase Agreement for an amount
equal to the Special Redemption Premium, such payment to be made on the
Final Withdrawal Date.
Section 5.03The Trustee. (a) Subject to Section 5.04 of this
Trust Supplement and Section 7.15 of the Basic Agreement, the Trustee shall
not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Trust Supplement, the Deposit Agreement or
the Escrow Agreement or the due execution hereof or thereof by the Company
or the other parties thereto (other than the Trustee), or for or in respect
of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company.
(b) Except as herein otherwise provided, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed by the Trustee by reason of this Trust Supplement other than as set
forth in the Basic Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions
set forth in the Basic Agreement, upon the effectiveness thereof, as fully
to all intents as if the same were herein set forth at length.
Section 5.04. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to
execute, deliver and perform this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents to which it is
a party and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Supplement,
the Intercreditor Agreement, the Escrow Agreement and the Note
Documents to which it is a party;
(b) the execution, delivery and performance by the Trustee of
this Trust Supplement, the Intercreditor Agreement, the Escrow
Agreement and the Note Documents to which it is a party (i) will not
violate any provision of any United States federal law or the law of
the state of the United States where it is located governing the
banking and trust powers of the Trustee or any order, writ, judgment,
or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate
any provision of the articles of association or by-laws of the
Trustee, and (iii) will not violate any provision of, or constitute,
with or without notice or lapse of time, a default under, or result
in the creation or imposition of any lien on any properties included
in the Trust Property pursuant to the provisions of any mortgage,
indenture, contract, agreement or other undertaking to which it is a
party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of
this Trust Supplement, the Intercreditor Agreement, the Escrow
Agreement and the Note Documents to which it is a party will not
require the authorization, consent, or approval of, the giving of
notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of
the United States or the state of the United States where it is
located regulating the banking and corporate trust activities of the
Trustee; and
(d) this Trust Supplement, the Intercreditor Agreement, the
Escrow Agreement and the Note Documents to which it is a party have been,
or will be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; provided, however, that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 5.05. Trustee Liens. The Trustee in its individual
capacity agrees, in addition to the agreements contained in Section 7.17 of
the Basic Agreement, that it will at its own cost and expense promptly take
any action as may be necessary to duly discharge and satisfy in full any
Trustee's Liens on or with respect to the Trust Property which is
attributable to the Trustee in its individual capacity and which is
unrelated to the transactions contemplated by the Intercreditor Agreement
or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. Supplemental Agreements Without Consent of
Applicable Certificateholders. Under the terms of, and subject to the
limitations contained in, Section 9.01 of the Basic Agreement, the Company
may (but will not be required to), and the Trustee (subject to Section 9.03
of the Basic Agreement) shall, at the Company's request, at any time and
from time to time, enter into one or more agreements supplemental to the
Escrow Agreement, the Note Purchase Agreement, the Policy Provider
Agreement or the Deposit Agreement, for any of the purposes set forth in
clauses (1) through (9) of such Section 9.01, except that (a) clause (3) of
such Section 9.01 shall be deemed to include the Company's rights and
powers conferred by the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to
provisions of the Escrow Agreement or the Deposit Agreement which may be
defective or inconsistent with any other provision of this Agreement or
contained in any agreement referred to in such clause (4) and the curing of
any ambiguity or the modification of any other provision with respect to
matters or questions arising under the Escrow Agreement or the Deposit
Agreement.
Section 6.02. Supplemental Agreements with Consent of
Applicable Certificateholders. The provisions of Section 9.02 of the Basic
Agreement shall apply to agreements or amendments for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the Escrow Agreement, the Deposit Agreement, the Policy
Provider Agreement or the Note Purchase Agreement to the extent applicable
to the Applicable Certificateholders approving such agreement or amendment
or modifying in any manner the rights and obligations of such Applicable
Certificateholders under the Escrow Agreement, the Deposit Agreement, the
Policy Provider Agreement or the Note Purchase Agreement; provided that the
provisions of Section 9.02(1) of the Basic Agreement shall be deemed to
include reductions in any manner of, or delay in the timing of, any receipt
by the Applicable Certificateholders of payments upon the Deposits;
provided, further, that the provisions of Section 9.02(6) of the Basic
Agreement shall not apply to the Applicable Trust and any supplemental
agreement having the effect described in said Section 9.02(6) shall require
only the consent of Applicable Certificateholders holding Applicable
Certificates evidencing a Fractional Undivided Interest aggregating not
less than a majority in interest in the Applicable Trust.
Section 9.02 shall also be amended to strike the second
parenthetical phrase in the first sentence of the first paragraph of
Section 9.02.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. Termination of the Trust. The respective
obligations and responsibilities of the Company and the Trustee with
respect to the Applicable Trust shall terminate upon the distribution to
all Applicable Certificateholders and the Trustee of all amounts required
to be distributed to them pursuant to this Agreement and the disposition of
all property held as part of the Trust Property; provided, however, that in
no event shall the Applicable Trust continue beyond 21 years less one day
following the death of the last survivor of all descendants living on the
date hereof of Joseph P. Kennedy, Sr., unless applicable law shall permit a
longer term, in which case such longer term shall apply.
Notice of any termination specifying the Distribution Date upon
which the Applicable Certificateholders may surrender their Applicable
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the
15th day next preceding such final Distribution Date specifying (A) the
Distribution Date upon which the proposed final payment of the Applicable
Certificates will be made upon presentation and surrender of Applicable
Certificates at the office or agency of the Trustee therein specified, (B)
the amount of any such proposed final payment, and (C) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Applicable
Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Registrar at the time such notice is
given to Applicable Certificateholders. Upon presentation and surrender of
the Applicable Certificates in accordance with such notice, the Trustee
shall cause to be distributed to Applicable Certificateholders such final
payments.
In the event that all of the Applicable Certificateholders
shall not surrender their Applicable Certificates for cancellation within
six months after the date specified in the above-mentioned written notice,
the Trustee shall give a second written notice to the remaining Applicable
Certificateholders to surrender their Applicable Certificates for
cancellation and receive the final distribution with respect thereto. No
additional interest shall accrue on the Applicable Certificates after the
Distribution Date specified in the first written notice. In the event that
any money held by the Trustee for the payment of distributions on the
Applicable Certificates shall remain unclaimed for two years (or such
lesser time as the Trustee shall be satisfied, after sixty days' notice
from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money
relating to such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE VIII
THE COMPANY
Section 8.01. Consolidation, Mergers, Etc. Section 5.02 of the
Basic Agreement is hereby amended with respect to the Applicable Trust by
deleting the word "and" at the end of clause (b) thereof, renumbering
clause (c) as clause "(d)" and inserting a new clause (c) as follows:
"(c) immediately after giving effect to such transaction, no
Indenture Event of Default (in the case of an Owned Aircraft) or, in
the case of a Leased Aircraft, Lease Event of Default (as defined in
the related Indenture) shall have occurred and be continuing; and"
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Basic Agreement Ratified. Except and so far as
herein expressly provided, all of the provisions, terms and conditions of
the Basic Agreement are in all respects ratified and confirmed; and the
Basic Agreement and this Trust Supplement shall be taken, read and
construed as one and the same instrument.
Section 9.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
Section 9.03. Execution in Counterparts. This Trust Supplement
may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the
same instrument.
Section 9.04. Intention of Parties. The parties hereto intend
that the Applicable Trust be classified for U.S. federal income tax
purposes as a grantor trust under Subpart E, Part I of Subchapter J of the
Internal Revenue Code of 1986, as amended, and not as a trust or
association taxable as a corporation or as a partnership. Each Applicable
Certificateholder and Investor, by its acceptance of its Applicable
Certificate or a beneficial interest therein, agrees to treat the
Applicable Trust as a grantor trust for all U.S. federal, state and local
income tax purposes. The powers granted and obligations undertaken pursuant
to the Agreement shall be so construed so as to further such intent.
Section 9.05. Third Party Beneficiary. For purposes of
enforcement, the Policy Provider shall be an express third party
beneficiary of this Agreement.
Section 9.06. Benefits of Agreement. (a) Nothing in this
Agreement or in the Certificates of any series, express or implied, shall
give to any person, other than the parties hereto and their successors
hereunder, the Certificateholders of each series and the Policy Provider
(as third party beneficiary), any benefit or any legal or equitable right,
remedy or claim under this Agreement.
(b) This Section 9.06 supercedes and replaces Section 12.10 of
the Basic Agreement.
IN WITNESS WHEREOF, the Company and the Trustee have caused
this Trust Supplement to be duly executed by their respective officers
thereto duly authorized, as of the day and year first written above.
US AIRWAYS, INC.
By: /s/ Jeffery A. McDougle
--------------------------------------
Name: Jeffery A. McDougle
Title Vice President and Treasurer
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Trustee
By: /s/ Ruth A. Smith
--------------------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT A
FORM OF CERTIFICATE
UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.*
US AIRWAYS SERIES 2000-1G PASS THROUGH TRUST
Pass Through Certificate, Series 2000-1G
Final Expected Regular Distribution Date: February 20, 2017 evidencing a
fractional undivided interest in a trust, the property of which includes
certain equipment notes each secured by Aircraft owned by or leased to US
Airways, Inc.
Certificate No.1 $281,678,000 Fractional Undivided
Interest representing
.0003550153% of the Trust per
$1,000 face amount
THIS CERTIFIES THAT __________________, for value received, is
the registered owner of a $281,678,000 (TWO HUNDRED EIGHTY-ONE MILLION AND
SIX HUNDRED AND SEVENTY- EIGHT THOUSAND dollars) Fractional Undivided
Interest in the US Airways Pass Through Trust, Series 2000-1G (the "Trust")
created by State Street Bank and Trust Company of Connecticut, National
Association, as trustee (the "Trustee"), pursuant to a Pass Through Trust
Agreement dated as of July 30, 1999 (the "Basic Agreement"), between the
Trustee, US Airways, Inc., a corporation incorporated under Delaware law
(the "Company") and US Airways Group, Inc., a corporation incorporated
under Delaware law (the "Parent"), as supplemented by Trust Supplement No.
2000-1G thereto dated March 3, 2000, between the Trustee and the Company
(collectively, the "Agreement"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "8.11% US Airways Pass Through Certificate,
Series 2000-1G" (herein called the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement. By virtue of its acceptance hereof, the Certificateholder of
this Certificate assents to and agrees to be bound by the provisions of the
Agreement and any related Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the Trust to
receive any payments under any Intercreditor Agreement, the Policy and any
Liquidity Facility (the "Trust Property"). Each issue of the Equipment
Notes is or will be secured by, among other things, a security interest in
aircraft leased to or owned by the Company.
- --------
*This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.
The Certificates represent Fractional Undivided Interests in
the Trust and the Trust Property, and have no rights, benefits or interest
in respect of any other separate trust established pursuant to the terms of
the Basic Agreement for any other series of certificates issued pursuant
thereto.
Subject to and in accordance with the terms of the Agreement
and any related Intercreditor Agreement, from funds then available to the
Trustee, there will be distributed on each February 20 and August 20 (a
"Regular Distribution Date"), commencing on February 20, 2001, to the
Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Regular Distribution Date, an amount
in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust
evidenced by this Certificate and an amount equal to the sum of such
Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and any related Intercreditor Agreement, in the event that
Special Payments on the Equipment Notes are received by the Trustee, from
funds then available to the Trustee, there shall be distributed on the
applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the 15th day
preceding the Special Distribution Date, an amount in respect of such
Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum
of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made
on the immediately following Business Day with the same force and effect as
if made on such Regular Distribution Date or Special Distribution Date and
no interest shall accrue during the intervening period. The Trustee shall
mail notice of each Special Payment and the Special Distribution Date
therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee
by check mailed to the Person entitled thereto, without the presentation or
surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name
of a Clearing Agency (or its nominee), such distribution shall be made by
wire transfer. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will
be made after notice mailed by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right of payment,
all as more specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent
that the Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the
Agreement. Each Certificateholder of this Certificate, by its acceptance
hereof, agrees that it will look solely to the income and proceeds from the
Trust Property to the extent available for distribution to such
Certificateholder as provided in the Agreement. This Certificate does not
purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under
the Agreement at any time by the Company and the Trustee with the consent
of the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
Trust. Any such consent by the Certificateholder of this Certificate shall
be conclusive and binding on such Certificateholder and upon all future
Certificateholders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without
the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
set forth, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Registrar,
or by any successor Registrar duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Registrar, duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided
Interest and integral multiples thereof except that one Certificate may be
issued in a different denomination. As provided in the Agreement and
subject to certain limitations therein set forth, the Certificates are
exchangeable for new Certificates of authorized denominations evidencing
the same aggregate Fractional Undivided Interest in the Trust, as requested
by the Certificateholder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the
Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them
pursuant to the Agreement and the disposition of all property held as part
of the Trust Property.
Any Person acquiring or accepting this Certificate or an
interest herein will, by such acquisition or acceptance, be deemed to have
represented and warranted that either: (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase this Certificate or an interest herein or (ii) the
purchase and holding of this Certificate or interest herein are exempt from
the prohibited transaction restrictions of ERISA and the Code pursuant to
one or more prohibited transaction statutory or administrative exemptions.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Trustee
By: _____________________________
Title:____________________________
Dated:____________________________
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Trustee
By:_______________________________
Authorized Officer
EXHIBIT B
[DTC Letter of Representations]
[MBIA LOGO]
MBIA INSURANCE CORPORATION
FINANCIAL GUARANTY INSURANCE POLICY
March 3, 2000
Policy No. 31576
Re: US AIRWAYS 2000-1G (THE "CLASS G TRUST")
$281,678,000 8.11 % PASS THROUGH TRUST CERTIFICATES
(THE "CLASS G CERTIFICATES")
Insured PAYMENT OF INTEREST AT THE STATED INTEREST RATE FOR THE CLASS
Obligation G CERTIFICATES AND, WITHOUT DUPLICATION, ANY DEPOSIT RELATING
TO THE ESCROW RECEIPTS REFERRED TO BELOW (WITHOUT PREMIUM)
AND PRINCIPAL ON THE CLASS G CERTIFICATES (THE "INSURED
OBLIGATION").
Beneficiary: STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION AS SUBORDINATION AGENT, AS AGENT FOR THE CLASS G
TRUSTEE (TOGETHER WITH ANY SUCCESSOR SUBORDINATION AGENT DULY
APPOINTED AND QUALIFIED UNDER THE AGREEMENT (AS DEFINED
BELOW), THE "SUBORDINATION AGENT" OR THE "BENEFICIARY")
MBIA INSURANCE CORPORATION ("MBIA"), for consideration received,
hereby irrevocably, absolutely and unconditionally and without the
assertion of any defenses to payment, including fraud in the inducement or
fact or any other circumstances (other than payment in full) that would
have the effect of discharging a surety in law or in equity guarantees to
the Subordination Agent, subject only to the terms of this Policy (the
"Policy"), payment of the Insured Obligation. MBIA agrees to pay to the
Subordination Agent, in respect of each Distribution Date, an amount equal
to (each a "Deficiency Amount"):
(i) with respect to any Regular Distribution Date other than the
Final Legal Distribution Date, any shortfall in amounts available to the
Subordination Agent (or, in the case of Escrow Receipts, the Paying Agent
(as defined in the Escrow and Paying Agent Agreement for the Class G
Trust)), after giving effect to the subordination provisions of the
Agreement and to the application of any amounts available to the Escrow
Agent in the Class G Paying Agent Account in respect of accrued interest at
the Stated Interest Rate on the Class G Deposits, any drawing paid under
the Class G Liquidity Facility in respect of interest due on the Class G
Certificates on such Distribution Date and any withdrawal from the Class G
Cash Collateral Account in respect of interest due on the Class G
Certificates on such Distribution Date in accordance with the Agreement,
for the payment of accrued and unpaid interest on the Class G Certificates
and, without duplication, accrued and unpaid interest on any Deposit
relating to the Escrow Receipts (as defined in and issued under the Escrow
and Paying Agent Agreement for the Class G Trust), in each case at the
Stated Interest Rate for the Class G Certificates on the Pool Balance of
the Class G Certificates on such Distribution Date;
(ii) with respect to any Special Distribution Date (other than an
Election Distribution Date or a Special Distribution Date established
pursuant to the succeeding clause (iv) below) established by reason of
receipt of a Special Payment constituting the proceeds of any Series G
Equipment Notes (as to which there has been a default in the payment of
principal thereof or that has been accelerated) or the related Trust
Indenture Estate or Indenture Estate, as the case may be, any shortfall in
the amounts available to the Subordination Agent after giving effect to the
subordination provisions of the Agreement and to the application of any
amounts available to the Escrow Agent in the Class G Paying Agent Account
in respect of accrued interest on the Class G Deposits, any drawing paid
under the Class G Liquidity Facility in respect of interest due on the
Class G Certificates on such Distribution Date and any withdrawal from the
Class G Cash Collateral Account in respect of interest due on such
Distribution Date in accordance with the Agreement, required to reduce the
Pool Balance of the Class G Certificates by an amount equal to the
outstanding principal amount of such Series G Equipment Note (determined
immediately prior to the receipt of such proceeds) plus accrued and unpaid
interest on the amount of such reduction at the Stated Interest Rate for
the Class G Certificates from the period from the immediately preceding
Regular Distribution Date to such Special Distribution Date;
(iii) with respect to the Special Distribution Date established by
reason of the failure of the Subordination Agent to have received a Special
Payment constituting the proceeds of any Series G Equipment Note or the
related Trust Indenture Estate or Indenture Estate, as the case may be,
during the eighteen (18) month period beginning on the last date on which
full payment was made on such Series G Equipment Note (the date of such
payment in full, the "Last Payment Date") as to which there has been a
failure to pay principal or that has been accelerated subsequent to the
Last Payment Date, the amount equal to the outstanding principal amount of
such Series G Equipment Note plus accrued and unpaid interest thereon at
the Stated Interest Rate for the Class G Certificates from the immediately
preceding Regular Distribution Date to such Special Distribution Date;
provided, however, if MBIA shall have duly given a Policy Provider Election
(as defined below) with respect to such Series G Equipment Note at the end
of such eighteen (18) month period and at least five (5) days prior to such
Special Distribution Date, the Deficiency Amount shall be an amount equal
to (A) with respect to such Special Distribution Date the scheduled
principal and interest payable but not paid on such Series G Equipment Note
(without regard to the acceleration thereof) during such eighteen (18)
month period (after giving effect to the application of any drawing paid
under the Class G Liquidity Facility and any withdrawal from the Class G
Cash Collateral Account attributable to such interest on such Series G
Equipment Note) and (B) thereafter, on each Regular Distribution Date
following such Special Distribution Date as to which a Policy Provider
Election has been given in respect of such Series G Equipment Note, and
prior to the establishment of an Election Distribution Date or a Special
Distribution Date pursuant to the immediately succeeding clause (iv) with
respect to such Series G Equipment Note, an amount equal to the scheduled
principal (without regard to the acceleration thereof) and interest payable
on such Series G Equipment Note on the related payment date;
(iv) following the giving of any Policy Provider Election, with
respect to any Business Day elected by MBIA upon twenty (20) days prior
notice (which shall be a Special Distribution Date) and upon request by
MBIA to the Subordination Agent to make a drawing under this Policy, an
amount equal to the then outstanding principal balance of the Series G
Equipment Note as to which the Policy Provider Election was given (less any
drawings previously paid by MBIA in respect of principal on such Series G
Equipment Note) and accrued and unpaid interest thereon at the Stated
Interest Rate for the Class G Certificates from the immediately preceding
Regular Distribution Date to such Special Distribution Date;
(v) with respect to any Special Distribution Date which is an
Election Distribution Date, an amount equal to the then outstanding
principal balance of the Series G Equipment Note as to which such Election
Distribution Date relates (less any drawing previously paid by MBIA in
respect of principal of such Series G Equipment Note) and accrued and
unpaid interest thereon at the Stated Interest Rate for the Class G
Certificates from the immediately preceding Regular Distribution Date to
such Election Distribution Date; and
(vi) with respect to the Final Legal Distribution Date, any
shortfall in amounts available to the Subordination Agent after giving
effect to the subordination provisions of the Agreement and to the
application of any amounts available to the Escrow Agent in the Class G
Paying Agent Account in respect of accrued interest on the Class G
Deposits, any drawing paid under the Class G Liquidity Facility in respect
of interest included in the Final Distribution and any withdrawal from the
Class G Cash Collateral Account in respect of interest included in the
Final Distribution in accordance with the Agreement, for the payment in
full of the Final Distribution (calculated as of such date but excluding
any accrued and unpaid premium) on the Class G Certificates.
For the avoidance of doubt, no Deficiency Amount described in
clauses (i)-(vi) above or payment to be made in respect of an Avoided
Payment described below shall constitute an accelerated or acceleration
payment.
If any amount paid or required to be paid in respect of the Class
G Certificates made to a Class G Certificateholder is voided (an "Avoidance
Event") under any applicable bankruptcy, insolvency, receivership or
similar law in an Insolvency Proceeding, and, as a result of such an
Avoidance Event, the Beneficiary, the Class G Trustee or any Class G
Certificateholder is required to return such voided payment, or any portion
of such voided payment made or to be made in respect of the Class G
Certificates (including any disgorgement from the Class G
Certificateholders resulting from any such Insolvency Proceeding, whether
such disgorgement is determined on a theory of preferential conveyance or
otherwise) (an "Avoided Payment"), MBIA will pay an amount equal to each
such Avoided Payment, irrevocably, absolutely and unconditionally and
without the assertion of any defenses to payment, including fraud in
inducement or fact or any other circumstances that would have the effect of
discharging a surety in law or in equity, upon receipt by MBIA from the
Beneficiary, the Class G Trustee or such Class G Certificateholder of (x) a
certified copy of a final (nonappealable) order of a court exercising
jurisdiction in such Insolvency Proceeding to the effect that the
Beneficiary, the Class G Trustee or such Class G Certificateholder is
required to return any such payment or portion thereof because such payment
was voided under applicable law, with respect to which order the appeal
period has expired without an appeal having been filed (the "Final Order"),
(y) an assignment, in the form of Exhibit D hereto, irrevocably assigning
to MBIA all rights and claims of such Beneficiary, Class G Trustee or Class
G Certificateholder relating to or arising under such Avoided Payment and
(z) a Notice of Avoided Payment in the form of Exhibit B hereto
appropriately completed and executed by the Beneficiary, Class G Trustee or
such Class G Certificateholder. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in the Final Order and not to the Beneficiary, Class G Trustee or such
Class G Certificateholder directly unless such Class G Certificateholder,
the Class G Trustee or the Beneficiary has returned such payment to such
receiver, conservator, debtor-in-possession or trustee in bankruptcy, in
which case such payment shall be disbursed to such Class G
Certificateholder, the Class G Trustee or the Beneficiary, as the case may
be.
Notwithstanding the foregoing, in no event shall MBIA be obligated
to make any payment in respect of any Avoided Payment, which payment
represents a payment of the principal amount of the Class G Certificates,
prior to the time MBIA would have been required to make a payment in
respect of such principal pursuant to sub-paragraphs (ii-vi) of this
Policy; provided, further, that no payment of principal under this Policy
on any Distribution Date, other than with respect to an Avoided Payment,
shall exceed the Net Principal Policy Amount (as defined below) for such
Distribution Date; provided, further, that no payment, other than with
respect to an Avoided Payment, of a Deficiency Amount shall be in excess of
the then outstanding Pool Balance of the Class G Certificates and accrued
and unpaid interest thereon at the Stated Interest Rate on the Class G
Certificates. This Policy does not cover (i) any premium, prepayment
penalty or other accelerated payment, which at any time may become due on
or with respect to any Class G Certificate, (ii) shortfalls, if any,
attributable to the liability of the Subordination Agent, the Paying Agent,
the Class G Trust or the Class G Trustee for withholding taxes, if any
(including interest and penalties in respect of any such liability), or
(iii) any failure of the Escrow Agent, the Subordination Agent or the Class
G Trustee to make any payment due to the Class G Certificateholders or, if
applicable, the Escrow Receiptholders from funds received.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Intercreditor Agreement
(the "Agreement") dated as of March 3, 2000, by and among MBIA, as Policy
Provider, Bayerische Landesbank Girozentrale, as Liquidity Provider, the
Class G Trustee and the Subordination Agent, without regard to any
amendment or supplement thereto unless such amendment or supplement has
been executed, or otherwise approved in writing, by MBIA.
"Class G Certificateholders" shall mean any person who is the
registered owner or beneficial owner of any of the Class G Certificates and
who, on the applicable Distribution Date, is entitled under the terms of
the Class G Certificates to payment thereunder.
"Election Distribution Date" shall mean any Special Distribution
Date established by the Subordination Agent upon 20 days notice to the
Class G Certificateholders by reason of (i) the occurrence and continuation
of a Policy Provider Default occurring after a Policy Provider Election or
(ii) the receipt of a Special Payment constituting the proceeds of a Series
G Equipment Note as to which a Policy Provider Election has been given or
of the related Trust Indenture Estate or Indenture Estate.
"Final Legal Distribution Date" shall mean August 20, 2018.
"Insolvency Proceeding" means the commencement, after the date
hereof, of any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar
proceedings by or against US Airways, Inc., any Liquidity Provider or any
Owner Trustee and the commencement, after the date hereof, of any
proceedings by US Airways, Inc., any Liquidity Provider, or any Owner
Trustee for the winding up or liquidation of its affairs or the consent,
after the date hereof, to the appointment of a trustee, conservator,
receiver, or liquidator in any bankruptcy, insolvency, readjustment of
debt, reorganization, marshalling of assets and liabilities or similar
proceedings of or relating to US Airways, Inc., any Liquidity Provider, or
any Owner Trustee.
"Insurance Agreement" shall mean the Insurance and Indemnity
Agreement (as may be amended, modified or supplemented from time to time),
dated as of March 3, 2000, by and among MBIA, US Airways, Inc., the Class G
Trustee and the Subordination Agent.
"Insured Amounts" shall mean, with respect to any Distribution
Date, the Deficiency Amount for such Distribution Date.
"Net Principal Policy Amount" shall mean the Pool Balance of the
Class G Certificates as of the Closing Date minus all amounts previously
drawn on the Policy with respect to principal.
"Nonpayment" shall mean, with respect to any Distribution Date, a
Deficiency Amount owing to the Subordination Agent for distribution to the
Class G Certificateholders or, if applicable, the Escrow Receiptholders in
respect of such Distribution Date.
"Notice of Avoided Payment" shall mean the notice, substantially
in the form of Exhibit B hereto, delivered pursuant to the Policy and sent
to the contact person at the address and/or fax number set forth in the
Policy, and specifying the Avoided Payment which shall be due and owing on
the applicable Distribution Date.
"Notice of Nonpayment" shall mean the notice, substantially in the
form of Exhibit A hereto, delivered pursuant to this Policy and sent to the
contact person at the address and/or fax numbers set forth in the Policy
specifying the Insured Amount which shall be due and owing to the Class G
Trustee (or the Paying Agent) for distribution to the Class G
Certificateholders or, if applicable, the Escrow Receiptholders on the
applicable Distribution Date.
"Policy Provider Election" shall mean a notice given by MBIA when
no Policy Provider Default shall have occurred and be continuing and the
Policy Provider has endorsed the Policy in compliance with Section 3.7(c)
of the Intercreditor Agreement, stating that MBIA elects to make payments
of Deficiency Amounts as defined under the proviso to clause (iii) of the
definition of Deficiency Amounts in respect of any Series G Equipment Note
in lieu of applying clause (iii) (without the proviso) of the definition of
Deficiency Amount, which notice shall be given to the Subordination Agent
not less than five (5) days prior to the Special Distribution Date
established for payment of a Deficiency Amount under clause (iii) of the
definition thereof.
"Trust Agreement" shall mean the Pass Through Trust Agreement,
dated as of July 30, 1999 among US Airways Group, US Airways, Inc. and
State Street Bank and Trust Company of Connecticut, National Association,
as Trustee, as supplemented by Trust Supplement No. 2000-1G dated as of
March 3, 2000 among US Airways, Inc. and the Class G Trustee, pursuant to
which the Class G Certificates have been issued.
Payment of amounts hereunder shall be made in immediately
available funds (x) with respect to Deficiency Amounts no later than 3:00
p.m., New York City time, on the later of (a) the relevant Distribution
Date and (b) the Business Day of presentation to State Street Bank and
Trust Company, N.A., as Fiscal Agent for MBIA or any successor fiscal agent
appointed by MBIA (the "Fiscal Agent") of a Notice of Nonpayment,
appropriately completed and executed by the Beneficiary (if such Notice of
Nonpayment is received by 1:00 p.m. on such day), and (y) with respect to
Avoided Payments, prior to 3:00 p.m. New York City time, on the third
Business Day following MBIA's receipt of the documents required under
clauses (x) through (z) of the third paragraph of this Policy. Any such
documents received by MBIA after 1:00 p.m. New York City time on any
Business Day or on any day that is not a Business Day shall be deemed to
have been received by MBIA prior to 1:00 p.m. on the next succeeding
Business Day. All payments made by MBIA hereunder in respect of Avoided
Payments will be made with MBIA's own funds. A Notice of Nonpayment or
Notice of Avoided Payment under this Policy may be presented to the Fiscal
Agent on any Business Day by (a) delivery of the original Notice of
Nonpayment or Notice of Avoided Payment to the Fiscal Agent at its address
set forth below, or (b) facsimile transmission of the original Notice of
Nonpayment or Notice of Avoided Payment to the Fiscal Agent at its
facsimile number set forth below. If presentation is made by facsimile
transmission, the Beneficiary shall (i) simultaneously confirm transmission
by telephone to the Fiscal Agent at its telephone number set forth below,
and (ii) as soon as reasonably practicable, deliver the original Notice of
Nonpayment or Notice of Avoided Payment to the Fiscal Agent at its address
set forth below. Each Notice of Nonpayment or Notice of Avoided Payment
shall be delivered by facsimile and mail to MBIA simultaneously with its
delivery to the Fiscal Agent.
If any Notice of Nonpayment or Notice of Avoided Payment received
by the Fiscal Agent is not in proper form or is otherwise insufficient for
the purpose of making a claim hereunder, it shall be deemed not to have
been received by the Fiscal Agent, and MBIA or the Fiscal Agent, as the
case may be, shall promptly so advise the Beneficiary, and the Beneficiary
may submit an amended Notice of Nonpayment or Notice of Avoided Payment, as
the case may be.
Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Subordination Agent for the benefit of
the Class G Certificateholders or, if applicable, the Escrow Receiptholders
by wire transfer of immediately available funds in the amount of such
payment. Other than amounts payable in respect of Avoided Payments, MBIA's
obligations under this Policy shall be discharged to the extent funds to be
applied to pay the Insured Obligations under and in accordance with the
Intercreditor Agreement are received by the Subordination Agent (including
funds disbursed by MBIA as provided in this Policy and received by the
Subordination Agent) or the Paying Agent in accordance with the Escrow and
Paying Agent Agreement for the Class G Trust whether or not such funds are
properly applied by the Subordination Agent, the Paying Agent or the Class
G Trustee. MBIA's obligations to make payments in respect of any Avoided
Payments shall be discharged to the extent such payments are made by MBIA
hereunder and are received by the Subordination Agent, the Class G Trustee,
the applicable Class G Certificateholder or the receiver, conservator,
debtor-in-possession or trustee in bankruptcy as applicable, whether or not
such payments are properly applied by the Subordination Agent or the Class
G Trustee.
The Fiscal Agent is the agent of MBIA only, and the Fiscal Agent
shall in no event be liable to Class G Certificateholders for any acts of
the Fiscal Agent or any failure of MBIA to deposit or cause to be deposited
sufficient funds to make payments due under this Policy.
Any notice hereunder delivered to the Fiscal Agent of MBIA may be
made at the address listed below for the Fiscal Agent of MBIA or such other
address within the United States as MBIA shall specify in writing to the
Subordination Agent.
The notice address of the Fiscal Agent is 61 Broadway, 15th Floor,
New York, New York 10006, Attention: Municipal Registrar and Paying Agency,
Facsimile: (212) 612-3201, Telephone: (212) 612-3458.
All notices, presentations, transmissions, deliveries and
communications made by the Beneficiary to MBIA with respect to this Policy
shall specifically refer to the number of this Policy and shall be made to
MBIA at:
MBIA Insurance Corporation
113 King Street
Armonk, N.Y. 10504
Attention: Insured Portfolio Management,
Structured Finance
Telephone: (914) 273-4949
Facsimile: (914) 765-3163
or such other address, telephone number or facsimile number as MBIA may
designate to the Beneficiary in writing from time to time. Each such
notice, presentation, transmission, delivery and communication shall be
effective only upon actual receipt by MBIA.
To the extent and in the manner specified in the Intercreditor
Agreement or the Escrow and Paying Agent Agreement for the Class G Trust,
MBIA shall be subrogated to the rights of each Class G Certificateholder to
receive payments under the Class G Certificates and the Escrow Receipts to
the extent of any payment hereunder.
This Policy is neither transferable nor assignable, in whole or in
part, except to a successor Subordination Agent duly appointed and
qualified under the Agreement. Such transfer and assignment shall be
effective upon receipt by MBIA of a copy of the instrument effecting such
transfer and assignment signed by the transferor and by the transferee, and
a certificate, properly completed and signed by the transferor and the
transferee, in the form of Exhibit C hereto (which shall be conclusive
evidence of such transfer and assignment), and, in such case, the
transferee instead of the transferor shall, without the necessity of
further action, be entitled to all the benefits of and rights under this
Policy in the transferor's place, provided that, in such case, the Notice
of Nonpayment presented hereunder shall be a certificate of the transferee
and shall be signed by one who states therein that he is a duly authorized
officer of the transferee.
There shall be no acceleration payment due under this Policy
unless such acceleration is at the sole option of MBIA.
This Policy and the obligations of MBIA hereunder shall terminate
on the day (the "Termination Date") which is one year and one day following
the Distribution Date upon which the Final Distribution on the Class G
Certificates is made. The foregoing notwithstanding, if an Insolvency
Proceeding is existing during the one year and one day period set forth
above, then this Policy and MBIA's obligations hereunder shall terminate on
the later of (i) the date of the conclusion or dismissal of such Insolvency
Proceeding without continuing jurisdiction by the court in such Insolvency
Proceeding, and (ii) the date on which MBIA has made all payments required
to be made under the terms of this Policy in respect of Avoided Payments.
This Policy is not covered by the property/casualty insurance fund
specified in Article Seventy-Six of the New York State insurance law.
This Policy sets forth in full the undertaking of MBIA, and,
except as expressly provided in the Insurance Agreement and the Agreement
and shall not be modified, altered or affected by any other agreement or
instrument, including any modification or amendment to any other agreement
or instrument, or by the merger, consolidation or dissolution of US
Airways, Inc. or any other Person and may not be canceled or revoked by
MBIA prior to the time it is terminated in accordance with the express
terms hereof. The Premium on this Policy is not refundable for any reason.
This Policy shall be returned to MBIA upon termination.
THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, MBIA has caused this Policy to be duly
executed on the date first written above.
MBIA INSURANCE CORPORATION
By: /s/ Gary Dunton
----------------------------------
Name: Gary Dunton
Title: President
By: /s/ Pauline M. Cullen
-----------------------------------
Name: Pauline M. Cullen
Title: Assistant Secretary
EXHIBIT A TO POLICY NUMBER 31576
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
Date: [ ]
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management,
Structured Finance
State Street Bank and Trust Company, N.A.
61 Broadway, 15th Floor
New York, New York 10006
Attention: Municipal Registrar and Paying Agency
Reference is made to Policy No. 31576 dated March 3, 2000
(the"Policy") issued by MBIA Insurance Corporation ("MBIA "). Terms
capitalized herein and not otherwise defined shall have the meanings
ascribed to such terms in or pursuant to the Policy unless the context
otherwise requires.
The Subordination Agent hereby certifies as follows:
[2. The Subordination Agent is the registered holder (as agent
and trustee for the Class G Trustee) of the Series G
Equipment Notes held in the Class G Trust under the Class G
Trust Agreement.
[3. The relevant Distribution Date is ______________. Such
Distribution Date is a [Regular Distribution Date, a Special
Distribution Date, an Election Distribution Date or the
Final Legal Distribution Date].
[4. Payment of accrued and unpaid interest on the Class G
Certificates and, without duplication, accrued and unpaid
interest on any Deposit relating to the Escrow Receipts, in
each case at the Stated Interest Rate on the outstanding
Pool Balance of Class G Certificates accrued to the
Distribution Date which is a Regular Distribution Date as
determined pursuant to paragraph (i) of the definition of
"Deficiency Amount" in the Policy is an amount equal to
$_______________.]
[3. The amount determined for payment to the Class G
Certificateholders pursuant to paragraph (ii) of the
definition of "Deficiency Amount" in the Policy on the
Distribution Date which is a Special Distribution Date
(other than an Election Distribution Date) in respect of a
reduction in the outstanding Pool Balance of such Class G
Certificates and accrued and unpaid interest on the amount
of such reduction at the Stated Interest Rate for the Class
G Certificates is $_______________.]
[3. The Subordination Agent has not received a timely Policy
Provider Election pursuant to the Policy and the amount
determined for payment to the Class G Certificateholders
pursuant to paragraph (iii) of the definition of "Deficiency
Amount" in the Policy on the Distribution Date which is a
Special Distribution Date in respect of the outstanding
principal amount of the relevant Series G Equipment Note(s)
and accrued and unpaid interest accrued thereon at the
Stated Interest Rate for the Class G Certificates is
$_______________.]
[3. The Subordination Agent has received a timely Policy
Provider Election pursuant to the Policy and the amount
determined for payment to the Class G Certificateholders
pursuant to the provision in paragraph (iii)(A) of the
definition of "Deficiency Amount" in the Policy on the
Distribution Date which is a Special Distribution Date in
respect of scheduled principal (without regard to
acceleration thereof) and interest at the Stated Interest
Rate for the Class G Certificates payable but not paid on
the relevant Series G Equipment Note during the eighteen
(18) month period referred to in such paragraph (iii) is
$_______________.]
[3. The Subordination Agent has received a timely Policy
Provider Election pursuant to the Policy, no Election
Distribution Date has been established pursuant to the
Policy or Special Distribution Date established pursuant to
clause (iv) of the definition of "Deficiency Amount" and the
amount determined for payment to the Class G
Certificateholders pursuant to paragraph (iii)(B) of the
definition of "Deficiency Amount" in the Policy on the
Distribution Date which is a Regular Distribution Date in
respect of scheduled principal (without regard to
acceleration thereof) and interest payable on such Series G
Equipment Note on the related payment date is
$_______________.]
[3. The Subordination Agent has received a timely Policy
Provider Election pursuant to the Policy, the Special
Distribution Date related hereto is a Business Day elected
by MBIA upon 20 days prior notice and the amount determined
for payment to the Class G Certificateholders pursuant to
paragraph (iv) of the definition of "Deficiency Amount" in
the Policy in respect of outstanding principal on such
Series G Equipment Note (less any drawings previously paid
by MBIA in respect of principal on such Series G Equipment
Note) and accrued and unpaid interest thereon at the Stated
Interest Rate for the Class G Certificates from the
immediately preceding Regular Distribution Date to such
Special Distribution Date is $_______________.]
[3. The amount determined for payment to the Class G
Certificateholders pursuant to paragraph (v) of the
definition of "Deficiency Amount" in the Policy on the
Distribution Date which is an Election Distribution Date in
respect of the outstanding principal balance of the relevant
Series G Equipment Note (less any drawings previously paid
by MBIA in respect of principal on such Series G Equipment
Note) and accrued and unpaid interest thereon at the Stated
Interest Rate for the Class G Certificates from the
immediately preceding Regular Distribution Date to such
Election Distribution Date is $_______________.]
[3. The amount determined for payment to the Class G
Certificateholders pursuant to paragraph (vi) of the
definition of "Deficiency Amount" in the Policy on the
Distribution Date which is the Final Legal Distribution Date
in respect of payment in full of the Final Distribution
(other than premium) on the Class G Certificates is
$________________.]
4. The sum of $_______________ is the Insured Amount that is
due.
5. The Subordination Agent has not heretofore made a demand for
the Insured Amount in respect of such Distribution Date.
6. The Subordination Agent hereby requests payment of such
Insured Amount that is due for payment be made by MBIA under
the Policy and directs that payment under the Policy be made
to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the
terms of the Policy to:
[ ]
ABA #[ ]
Acct #[ ]
FBO: [ ]
[Policy Account number.]
7. The Subordination Agent hereby agrees that, following
receipt of the Insured Amount from MBIA, it shall (a) cause
such funds to be deposited in the Policy Account and not
permit such funds to be held in any other account, (b)
either (i) cause such funds to be paid to the Class G
Trustee for distribution to the Class G Certificateholders
in reduction of the Pool Balance of, or interest on, the
Class G Certificates (as applicable) and not apply such
funds for any other purpose or (ii) cause such funds to be
paid to the Class G Paying Agent for distribution to the
holders of the Class G Escrow Receipts in payment of accrued
and unpaid interest on any Deposit related to the Class G
Escrow Receipts, in each case in accordance with the terms
of the Agreement and (c) maintain an accurate record of such
payments with respect to the Class G Certificates and Class
G Escrow Receipts and the corresponding claim on the Policy
and proceeds thereof.
State Street Bank and Trust Company of
Connecticut, National Association, as
Subordination Agent
By: __________________________________
Title: _______________________________
(Officer)
EXHIBIT B TO POLICY NUMBER 31576
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
Date: [ ]
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management,
Structured Finance
State Street Bank and Trust Company, N.A.
61 Broadway, 15th Floor
New York, New York 10006
Attention: Municipal Registrar and Paying Agency
Reference is made to Policy No. 31576 dated March 3, 2000
(the"Policy") issued by MBIA Insurance Corporation ("MBIA "). Terms
capitalized herein and not otherwise defined shall have the meanings
ascribed to such terms in or pursuant to the Policy unless the context
otherwise requires.
The [Class G Certificateholder/Class G Trustee/Subordination
Agent] hereby certifies as follows:
[1 The Class G Trust holds the Series G Equipment Notes of
which the Subordination Agent is the registered holder (as
agent and trustee for the Class G Trustee) under the Trust
Agreement.]
[1. The Subordination Agent is registered holder (as agent and
trustee for the Class G Trustee) of the Series G Equipment
Notes held in the Class G Trust under the Trust Agreement.]
2. The Subordination Agent has established _______________as a
Special Distribution Date pursuant to the Agreement for
amounts claimed hereunder.
3. A Final Order providing for the recovery of an Avoided
Payment of $_______________ has been issued.
4. $_______________ of the amount set forth in item No. 3 above
has been paid by the [Class G Certificateholder/Class G
Trustee/Subordination Agent] and $_______________ is
required to be paid to the receiver, conservator, debtor-in-
possession or trustee in bankruptcy named in the Final
Order.
5. The [Class G Certificateholder/Class G Trustee/Subordination
Agent] has not heretofore made a demand for such Avoided
Payment.
6. The [Class G Certificateholder/Class G Trustee/Subordination
Agent] has delivered to MBIA or has attached hereto all
documents required by the Policy to be delivered in
connection with such Avoided Payment.
7. The [Class G Certificateholder/Class G Trustee/Subordination
Agent] hereby requests that payment of $_______________ of
such Avoided Payment be made to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the
Final Order and $______________ of such Avoided Payment be
paid to the [Class G Certificateholder] [Class G Trustee]
[Subordination Agent [for payment over to the Class G
Trustee] for distribution to the Class G Certificateholder],
in each case, by MBIA under the Policy and directs that
payment under the Policy be made to the following account by
bank wire transfer of federal or other immediately available
funds in accordance with the terms of the Policy to:
For the portion to be paid to the receiver, conservator, debtor-in-possession
or trustee, to _________________:
ABA #[ ]
Acct #[ ]
FBO: [ ]
[relevant account number]
For the portion to be paid to the Subordination Agent:
ABA #[ ]
Acct #[ ]
FBO: [ ]
[Policy Account Number]
[[Name of Subordination Agent]
By:
Title: _________________________
(Officer)
EXHIBIT C TO POLICY NUMBER 31576
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management,
Structured Finance
Dear Sirs:
Reference is made to that certain Policy, Number 31576 dated March
3, 2000 (the"Policy") which has been issued by MBIA Insurance Corporation
in favor of the Subordination Agent.
The undersigned [Name of Transferor] has transferred and assigned
(and hereby confirms to you said transfer and assignment) all of its rights
in and under said Policy to [Name of Transferee] and confirms that [Name of
Transferor] no longer has any rights under or interest in said Policy.
Transferor and Transferee have indicated on the face of said
Policy that it has been transferred and assigned to Transferee.
Transferee hereby certifies that it is a duly authorized
transferee under the terms of said Policy and is accordingly entitled, upon
presentation of the document(s) called for therein, to receive payment
thereunder.
____________________________
[Name of Transferor]
By: ________________________
[Name and Title of
Authorized Officer of
Transferor]
____________________________
[Name of Transferee]
By: ________________________
[Name and Title of
Authorized Officer of
Transferee]
EXHIBIT D TO POLICY NUMBER 31576
FORM OF ASSIGNMENT
Reference is made to that certain Policy No. 31576, dated March 3,
2000 (the "Policy") issued by MBIA Insurance Corporation ("MBIA") relating
to the US Airways 2000-1G Pass Through Trust Certificates. Unless otherwise
defined herein, capitalized terms used in this Assignment shall have the
meanings assigned thereto in the Policy as incorporated by reference
therein. In connection with the Avoided Payment of [$ ] paid by the
undersigned (the "[Class G Certificateholder/Class G Trustee/Beneficiary]")
on [ ] and the payment by MBIA in respect of such Avoided Payment pursuant
to the Policy, the [Class G Certificateholder/Class G Trustee/Beneficiary]
hereby irrevocably and unconditionally, without recourse, representation or
warranty (except as provided below), sells, assigns, transfers, conveys and
delivers to MBIA all of such [Class G Certificateholder's/Class G
Trustee's/Beneficiary's] rights, title and interest in and to any rights or
claims, whether accrued, contingent or otherwise, which the [Class G
Certificateholder/Class G Trustee/Beneficiary] now has or may hereafter
acquire, against any person relating to, arising out of or in connection
with such Avoided Payment. The [Class G Certificateholder/Class G
Trustee/Beneficiary] represents and warrants that such claims and rights
are free and clear of any lien or encumbrance created or incurred by such
[Class G Certificateholder/Class G Trustee/Beneficiary].1
_______________________________________________________
[Class G Certificateholder/Class G Trustee/Beneficiary]
- ------------
1 In the event that the terms of this form of assignment are
reasonably determined to be insufficient solely as a result of a change of
law or applicable rules after the date of the Policy to fully vest all of
the [Class G Certificateholder's/Class G Trustee's/ Beneficiary's right],
title and interest in such rights and claims, the [Class G
Certificateholder/Class G Trustee/Beneficiary] and MBIA shall agree on such
other form as is reasonably necessary to effect such assignment, which
assignment shall be without recourse, representation or warranty except as
provided above.
EXECUTION
DEPOSIT AGREEMENT(Class G)
Dated as of March 3, 2000
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
ABN AMRO BANK N.V.,
acting through its Chicago Branch,
as Depositary
TABLE OF CONTENTS
Page
ARTICLE I FORMATION OF DEPOSITS......................................... 2
Section 1.1 Acceptance of Depositary............................. 2
Section 1.2 Establishment of Account............................. 2
-
ARTICLE II MAINTENANCE OF DEPOSITS...................................... 2
Section 2.1 Deposits............................................. 2
Section 2.2 Interest............................................. 3
Section 2.3 Withdrawals.......................................... 3
Section 2.4 Other Accounts....................................... 4
ARTICLE III TERMINATION................................................. 4
ARTICLE IV PAYMENTS..................................................... 5
ARTICLE V REPRESENTATIONS AND WARRANTIES................................ 6
ARTICLE VI TRANSFER .................................................... 7
ARTICLE VII AMENDMENT................................................... 7
ARTICLE VIII NOTICES.................................................... 7
ARTICLE IX OBLIGATIONS UNCONDITIONAL ................................... 7
ARTICLE X ENTIRE AGREEMENT ............................................ 8
ARTICLE XI GOVERNING LAW .............................................. 8
ARTICLE XII SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL RIGHT...... 8
ARTICLE XIII COUNTERPARTS ............................................ 9
ARTICLE XIV HEAD OFFICE OBLIGATION .................................... 9
Schedule I Schedule of Deposits
Exhibit A Notice of Purchase Withdrawal
Exhibit B Notice of Final Withdrawal
This DEPOSIT AGREEMENT (Class G) dated as of March 3, 2000 (as
amended, modified or supplemented from time to time, this "Agreement")
between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, as Escrow Agent under the Escrow and Paying Agent Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "Escrow Agent"), and ABN AMRO BANK N.V., a banking
institution organized under the laws of The Netherlands, acting through its
Chicago branch, as depositary bank (the "Depositary").
W I T N E S S E T H
WHEREAS, US Airways, Inc. ("US Airways") and State Street Bank
and Trust Company of Connecticut, National Association, not in its
individual capacity except as otherwise expressly provided therein, but
solely as trustee (in such capacity, together with its successors in such
capacity, the "Pass Through Trustee") have entered into a Trust Supplement,
dated as of March 3, 2000 to the Pass Through Trust Agreement dated as of
July 30, 1999 (together, as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Pass Through Trust
Agreement") relating to US Airways Pass Through Trust 2000- 1G pursuant to
which the US Airways Pass Through Trust, Series 2000-1G Certificates
referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and Salomon Smith Barney Inc., Chase
Securities Inc., Credit Lyonnais Securities (USA) Inc. and Credit Suisse
First Boston Corporation (collectively, the "Underwriters" and, together
with their respective transferees and assigns as registered owners of the
Certificates, the "Investors") have entered into an Underwriting Agreement
dated as of February 25, 2000 pursuant to which the Pass Through Trustee
will issue and sell the Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee and certain other
persons concurrently herewith are entering into the Note Purchase
Agreement, dated as of the date hereof (the "Note Purchase Agreement"),
pursuant to which the Pass Through Trustee has agreed to acquire from time
to time on or prior to the Delivery Period Termination Date (as defined in
the Note Purchase Agreement) equipment notes (the "Equipment Notes") issued
to finance the acquisition of aircraft by US Airways, as lessee or as
owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "Net Proceeds");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through
Trustee and State Street Bank and Trust Company of Connecticut, National
Association, as paying agent for the Escrow Agent (in such capacity,
together with its successors in such capacity, the "Paying Agent")
concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Escrow and Paying Agent Agreement"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend
that the Net Proceeds be held in escrow by the Escrow Agent on behalf of
the Investors pursuant to the Escrow and Paying Agent Agreement, subject to
withdrawal upon request of and proper certification by the Pass Through
Trustee for the purpose of purchasing Equipment Notes, and that pending
such withdrawal the Net Proceeds be deposited by the Escrow Agent with the
Depositary pursuant to this Agreement, which provides for the Depositary to
pay interest for distribution to the Investors and to establish accounts
from which the Escrow Agent shall make withdrawals upon request of and
proper certification by the Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I FORMATION OF DEPOSITS
Section 1.1 Acceptance of Depositary
The Depositary hereby agrees to act as depositary bank as
provided herein and in connection therewith to accept all amounts to be
delivered to or held by the Depositary pursuant to the terms of this
Agreement. The Depositary further agrees to hold, maintain and safeguard
the Deposits and the Accounts (as defined below) during the term of this
Agreement in accordance with the provisions of this Agreement. The Escrow
Agent shall not have any right to withdraw, assign or otherwise transfer
moneys held in the Accounts except as permitted by this Agreement.
Section 1.2 Establishment of Accounts.
The Escrow Agent hereby instructs the Depositary, and the
Depositary agrees, to establish the separate deposit accounts listed on
Schedule I hereto and to establish such additional separate deposit
accounts as may be required in connection with the deposits contemplated by
Section 2.4 hereof (each, an "Account" and collectively, the "Accounts"),
each in the name of the Escrow Agent and all on the terms and conditions
set forth in this Agreement.
ARTICLE II MAINTENANCE OF DEPOSITS
Section 2.1 Deposits.
The Escrow Agent shall direct the Underwriters to deposit with
the Depositary on the date of this Agreement (the "Deposit Date") in
Federal (same day) funds by official check or checks or wire or other
transfer to: Federal Reserve Bank, New York, ABN NY, Reference: US Airways
2000-1, ABA#026009580, Account: Chicago Treasury, Reference: US Airways
Deposit and the Depositary shall accept from the Underwriters, on behalf of
the Escrow Agent, the sum of US$281,678,000. Upon acceptance of such sum,
the Depositary shall (i) establish each of the deposits specified in
Schedule I hereto maturing on June 25, 2001 (including any deposit made
pursuant to Section 2.4 hereof, individually, a "Deposit" and,
collectively, the "Deposits") and (ii) credit each Deposit to the related
Account as set forth therein. No amount shall be deposited in any Account
other than the related Deposit.
Section 2.2 Interest.
Each Deposit shall bear interest from and including the date of
deposit to but excluding the date of withdrawal at the rate of 8.11% per
annum (computed on the basis of a year of twelve 30-day months) payable to
the Paying Agent on behalf of the Escrow Agent semi-annually in arrears on
each February 20 and August 20, commencing on August 20, 2000 (each, an
"Interest Payment Date"), and on the date of the Final Withdrawal (as
defined below), all in accordance with the terms of this Agreement (whether
or not any such Deposit is withdrawn on an Interest Payment Date). Interest
accrued on any Deposit that is withdrawn pursuant to a Notice of Purchase
Withdrawal (as defined below) shall be paid on the next Interest Payment
Date, notwithstanding any intervening Final Withdrawal (as defined below).
In addition, interest accrued on any Deposit that is withdrawn pursuant to
a Notice of Replacement Withdrawal (as defined below) but not paid on the
date of the Replacement Withdrawal shall be paid on the next Interest
Payment Date.
Section 2.3 Withdrawals.
(a) On and after the date seven (7) days after the
establishment of any Deposit, the Escrow Agent may, by providing at least
one (1) Business Day's prior notice of withdrawal to the Depositary
substantially in the form of Exhibit A hereto (a "Notice of Purchase
Withdrawal"), withdraw not less than the entire balance of such Deposit,
except that at any time prior to the actual withdrawal of such Deposit, the
Escrow Agent or the Pass Through Trustee may, by notice to the Depositary,
cancel such withdrawal (including on the scheduled date therefor), and
thereafter such Deposit shall continue to be maintained by the Depositary
in accordance with the original terms thereof. Following such withdrawal
the balance in the related Account shall be zero and the Depositary shall
close such Account. As used herein, "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, Pittsburgh, Pennsylvania, Hartford, Connecticut or Salt Lake
City, Utah.
The Depositary reserves the right, upon at least 14 days' prior
written notice to US Airways, the Escrow Agent and the Pass Through
Trustee, to require seven days' notice for any withdrawal.
(b) (i) The Escrow Agent may, by providing at least fifteen
(15) days' prior notice of withdrawal to the Depositary substantially in
the form of Exhibit B hereto (a "Notice of Final Withdrawal"), withdraw the
entire amount of all of the remaining Deposits together with the payment by
the Depositary of all accrued and unpaid interest on such Deposits to but
excluding the specified date of withdrawal (a "Final Withdrawal"), on such
date as shall be specified in such Notice of Final Withdrawal. If a Notice
of Final Withdrawal has not been given to the Depositary on or before
February 8, 2001 (or June 8, 2001 if all the Equipment Notes under the Note
Purchase Agreement have not been purchased by February 7, 2001 on account
of manufacturing delays that occur for reasons beyond the control of US
Airways and that are not occasioned by US Airways' fault or negligence) and
there are unwithdrawn Deposits on such date, the Depositary shall pay the
amount of the Final Withdrawal to the Paying Agent on February 23, 2001 (or
June 25, 2001 if all the Equipment Notes under the Note Purchase Agreement
have not been purchased by February 7, 2001 on account of manufacturing
delays that occur for reasons beyond the control of US Airways and that are
not occasioned by US Airways' fault or negligence).
(ii) The Escrow Agent may, by providing at least 15 days' prior
notice of withdrawal to the Depositary in the form of Exhibit C hereto (a
"Notice of Replacement Withdrawal"), request withdrawal of the entire
amount of all Deposits then held by the Depositary together with, if
specified in such Notice of Replacement Withdrawal, the payment by the
Depositary of all accrued and unpaid interest on such Deposits to but
excluding the specified date of withdrawal (a "Replacement Withdrawal"), on
such date as shall be specified in such Notice of Replacement Withdrawal.
(c) If the Depositary receives a duly completed Notice of
Purchase Withdrawal or Notice of Final Withdrawal or Notice of Replacement
Withdrawal (each a "Withdrawal Notice") complying on its face with the
provisions of this Agreement, it shall make the payments specified therein
in accordance with the provisions of this Agreement.
If such complying Withdrawal Notice is received by the
Depositary no later than 3:00 p.m. on a Business Day, the Depositary shall
make the payments requested in such Withdrawal Notice no later than 11:00
a.m. on the next succeeding Business Day or such later day specified in
such Withdrawal Notice, and if such complying Withdrawal Notice is received
by the Depositary after 3:00 p.m. on a Business Day, the Depositary shall
make the payments requested in such Withdrawal Notice no later than 11:00
a.m. on the second Business Day next following such Business Day.
Section 2.4 Other Accounts.
On the date of withdrawal of any Deposit pursuant to a Notice
of Purchase Withdrawal, the Escrow Agent, or the Pass Through Trustee on
behalf of the Escrow Agent, shall be entitled to re-deposit with the
Depositary any portion thereof and the Depositary shall accept the same for
deposit hereunder. Any sums so received for deposit shall be established as
a new Deposit and credited to a new Account, all as more fully provided in
Section 2.1 hereof, and thereafter the provisions of this Agreement shall
apply thereto as fully and with the same force and effect as if such
Deposit had been established on the Deposit Date except that (i) such
Deposit may not be withdrawn prior to the date seven days after the
establishment thereof and (ii) such Deposit shall mature on June 25, 2001
and bear interest as provided in Section 2.2. The Depositary shall promptly
give notice to the Escrow Agent of receipt of each such re-deposit and the
account number assigned thereto.
ARTICLE III TERMINATION
(a) This Agreement shall terminate on the fifth (5th) Business
Day after the later of the date on which (i) all of the Deposits shall have
been withdrawn and paid as provided herein without any re-deposit and (ii)
all accrued and unpaid interest on the Deposits shall have been paid as
provided herein, but in no event prior to the date on which the Depositary
shall have performed in full its obligations hereunder.
(b) For the avoidance of doubt, the obligations of the
Depositary under the last sentence of Section 2.2 hereof shall remain in
full force and effect notwithstanding the execution and delivery of a
replacement Deposit Agreement in accordance with Section 5(a)(vii) of the
Note Purchase Agreement.
ARTICLE IV PAYMENTS
All payments (including, without limitation, those payments
made in respect of Taxes (as defined and provided for below)) made by the
Depositary hereunder shall be paid in United States Dollars and immediately
available funds by wire transfer (i) in the case of accrued interest on the
Deposits payable under Section 2.2 hereof or any Final Withdrawal, directly
to the Paying Agent at State Street Bank and Trust Company of Connecticut,
National Association, c/o State Street Bank and Trust Company, 2
International Place, 4th Floor, Boston, MA 02110, ABA# 011-0000-28, Account
# 9903-9901 RE: US Air EETC 2000-1 (include tail number for the related
Deposit), Attention: Sandra Thomson, Reference: US Airways 2000-1G EETC, or
to such other account as the Paying Agent may direct from time to time in
writing to the Depositary and the Escrow Agent and (ii) in the case of any
withdrawal of one or more Deposits pursuant to a Notice of Purchase
Withdrawal or all the then remaining Deposits pursuant to a Notice of
Replacement Withdrawal, directly to or as directed by the Pass Through
Trustee as specified and in the manner provided in such Notice of Purchase
Withdrawal or Notice of Replacement Withdrawal. The Depositary hereby
waives any and all rights of set-off, combination of accounts, right of
retention or similar right (whether arising under applicable law, contract
or otherwise) it may have against the Deposits howsoever arising. All
payments on or in respect of each Deposit shall be made free and clear of
and without reduction for or on account of any and all taxes, levies or
other impositions or charges (collectively, "Taxes"). However, if the
Depositary or the Paying Agent (pursuant to Section 2.4 of the Escrow and
Paying Agent Agreement) shall be required by law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder, the Depositary
shall: (i) make such deductions or withholding; (ii) pay the full amount
deducted or withheld (including in respect of such additional amounts) to
the competent taxation authority; and (iii) if the Taxes required to be
deducted or withheld are imposed by The Netherlands or any political
subdivision thereof, pay such additional amounts as may be necessary in
order that the actual amount received by the designated recipient of such
sum under this Agreement or the Escrow and Paying Agent Agreement after
such deduction or withholding equals the sum it would have received had no
such deduction or withholding been required. If the date on which any
payment due on any Deposit would otherwise fall on a day which is not a
Business Day, such payment shall be made on the next succeeding Business
Day with the same force and effect as if made on such scheduled date, and
no additional interest shall accrue in respect of such extension.
ARTICLE V REPRESENTATIONS AND WARRANTIES
The Depositary hereby represents and warrants to US Airways,
the Escrow Agent, the Pass Through Trustee, the Investors and the Paying
Agent that:
(1) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of Illinois through its
Chicago branch;
(2) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(3) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
it and do not require any stockholder approval, or approval or consent of
any trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(4) no authorization, consent or approval of or other action
by, and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(5) neither the execution, delivery or performance by it of
this Agreement, nor compliance with the terms and provisions hereof,
conflicts or will conflict with or results or will result in a breach or
violation of any of the terms, conditions or provisions of, or will require
any consent or approval under, any law, governmental rule or regulation or
the charter documents, as amended, or bylaws, as amended, of it or any
similar instrument binding on it or any order, writ, injunction or decree
of any court or governmental authority against it or by which it or any of
its properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default thereunder
or results or will result in the imposition of any lien upon any of its
properties; and
(6) there are no pending or, to its knowledge, threatened
actions, suits, investigations or proceedings (whether or not purportedly
on behalf of it) against or affecting it or any of its property before or
by any court or administrative agency which, if adversely determined, (i)
would adversely affect the ability of it to perform its obligations under
this Agreement or (ii) would call into question or challenge the validity
of this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary in default with respect to any order of any
court, governmental authority, arbitration board or administrative agency
so as to adversely affect its ability to perform its obligations under this
Agreement.
ARTICLE VI TRANSFER
Neither party hereto shall be entitled to assign or otherwise
transfer this Agreement (or any interest herein) other than (in the case of
the Escrow Agent) to a successor escrow agent under Section 1.7 of the
Escrow and Paying Agent Agreement, and any purported assignment in
violation thereof shall be void. This Agreement shall be binding upon the
parties hereto and their respective successors and (in the case of the
Escrow Agent) permitted assigns.
ARTICLE VII AMENDMENT
This Agreement may not be amended, waived or otherwise modified
except by an instrument in writing signed by the party against whom the
amendment, waiver or other modification is sought to be enforced and by the
Pass Through Trustee.
ARTICLE VII INOTICES
Unless otherwise expressly provided herein, any notice or other
communication under this Agreement shall be in writing (including by
facsimile) and shall be deemed to be given and effective upon receipt
thereof. All notices shall be sent to (x) in the case of the Depositary,
ABN AMRO BANK N.V., 135 South LaSalle Street, Chicago, Illinois 60603,
Attention: Vice President-Aerospace (Telecopier: (312) 606-8428, with a
copy to ABN AMRO BANK N.V., Chicago Branch, 181 W. Madison Street, Chicago
Illinois 60602 Attention: Money Market Desk (Telecopier: (312) 904-9107) or
(y) in the case of the Escrow Agent, First Security Bank, National
Association, 79 South Main Street, Salt Lake City, UT 84111, Attention:
Corporate Trust Services (Telecopier: (801) 246-5053), in each case, with a
copy to the Pass Through Trustee, State Street Bank and Trust Company of
Connecticut, National Association, 225 Asylum Street, Goodwyn Square,
Hartford, CT 06103, Attention: Corporate/Muni. Department (Telecopier:
(860) 244-1889) and to US Airways, US Airways, Inc., 2345 Crystal Drive,
Arlington, VA 22227, Attention: Treasurer (Telecopier: (703) 872-5936) (or
at such other address as any such party may specify from time to time in a
written notice to the parties hereto). On or prior to the execution of this
Agreement, the Escrow Agent has delivered to the Depositary a certificate
containing specimen signatures of the representatives of the Escrow Agent
who are authorized to give notices and instructions with respect to this
Agreement. The Depositary may conclusively rely on such certificate until
the Depositary receives written notice from the Escrow Agent to the
contrary.
ARTICLE IX OBLIGATIONS UNCONDITIONAL
The Depositary hereby acknowledges and agrees that its
obligation to repay each Deposit together with interest thereon as provided
herein is absolute, irrevocable and unconditional and constitutes a full
recourse obligation of the Depositary enforceable against it to the full
extent of all of its assets and properties.
ARTICLE X ENTIRE AGREEMENT
This Agreement (including all attachments hereto) sets forth
all of the promises, covenants, agreements, conditions and understandings
between the Depositary and the Escrow Agent with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
undertakings, inducements or conditions, express or implied, oral or
written.
ARTICLE XI GOVERNING LAW
THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE
DEPOSITARY AND THE ESCROW AGENT WITH RESPECT TO THE DEPOSITS, SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK AND SUBJECT TO THE PROVISIONS OF REGULATION D OF THE BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM (OR ANY SUCCESSOR), AS THE SAME MAY
BE MODIFIED AND SUPPLEMENTED AND IN EFFECT FROM TIME TO TIME.
ARTICLE XII SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL RIGHT
SECTION 12.1 Submission to Jurisdiction. Each of the Depositary
and the Escrow Agent hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect
hereof, to the nonexclusive general jurisdiction of the
courts of the State of New York, the courts of the United
States of America for the Southern District of New York,
and the appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it
may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; (c) agrees that
service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of
mail), postage prepaid, to each party hereto at its
address set forth in Article VIII hereof, or at such
other address of which shall have been notified pursuant
thereto; and (d) agrees that nothing herein shall affect
the right to effect service of process in any other
manner permitted by law or shall limit the right to sue
in any other jurisdiction. SECTION 12.2 WAIVER OF JURY
TRIAL RIGHT. EACH OF THE DEPOSITARY AND THE ESCROW AGENT
ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY
JURY.
ARTICLE XIII COUNTERPARTS
This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one instrument.
ARTICLE XIV HEAD OFFICE OBLIGATION
ABN AMRO Bank N.V. is acting as the Depositary through its
Chicago Branch and hereby agrees that the obligations of the Depositary
hereunder constitute the obligations of its Chicago Branch and of its Head
Office in The Netherlands. Accordingly, any beneficiary of this Agreement
will be able to proceed directly against ABN AMRO Bank N.V.'s Head Office
in The Netherlands if ABN AMRO Bank N.V.'s Chicago branch defaults in its
obligation to such beneficiary under this Agreement.
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have
caused this Deposit Agreement to be duly executed as of the day and year
first above written.
FIRST SECURITY BANK,
NATIONALASSOCIATION, as Escrow Agent
By /s/ Brett R. King
------------------------------------
Name: Brett R. King
Title: Vice President
ABN AMRO BANK, N.V., acting through its
Chicago Branch, as Depositary
By /s/ Claudia C. Heldring
-------------------------------------
Name: Claudia C. Heldring
Title: Vice President
By /s/ Carla Waggoner
-------------------------------------
Name: Carla S. Waggoner
Title: Assistant Vice President
Schedule I
SCHEDULE OF DEPOSITS
---------------------------------
(Class G)
DATE EXPECTED DEPOSITAMOUNT ACCOUNT NO.
TAIL NO.
March 3, 2000 N672UW $56,105,300 985511
March 3, 2000 N673UW 56,105,300 985518
March 3, 2000 N674UW 56,203,300 985530
March 3, 2000 N675US 56,595,300 985540
March 3, 2000 N676UW 56,668,800 985544
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 6068428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago 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 [a portion
of]1the proceeds of the Deposit [in an amount equal to $_____]1 to
_______________, Account No. __________, Reference: __________ on
_______________, _____, [and to re-deposit the remaining proceeds of the
Deposit with the Depositary as a new deposit pursuant to Section 2.4 of the
Deposit Agreement, in each case]1 upon the telephonic request of a
representative of the Pass Through Trustee.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, as Escrow Agent
By
------------------------------------
Name:
Title:
Dated: ___________, ____
- ------------------
1 Use bracketed language if entire Deposit will not be used to
purchase Equipment Notes.
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 6068428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago Branch, as Depositary (the "Depositary").
In accordance with Section 2.3 (b)(i) of the Deposit Agreement,
the undersigned hereby requests the withdrawal of the entire amount of all
Deposits for payment on ________, 200_.
The undersigned hereby directs the Depositary to pay the
proceeds of the Deposits and accrued interest thereon to the Paying Agent
at ________________________, ABA# ___________, Account ___________,
Attention: ______________, Reference: US Airways 2000-1G EETC.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, as Escrow Agent
By______________________________________
Name:
Title:
Dated: __________, ____
EXHIBIT C
NOTICE OF REPLACEMENT WITHDRAWAL
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606-8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago Branch, as Depositary (the "Depositary").
In accordance with Section 2.3 (b)(ii) of the Deposit
Agreement, the undersigned hereby requests the withdrawal of the entire
amount of all Deposits for payment on ________, 200_.
The undersigned hereby directs the Depositary to pay the
proceeds of the Deposits to [___________] at _____________, ABA#
__________, Account _________, Attention: __________, Reference: US Airways
2000-1G EETC [and to pay accrued interest thereon to the Paying Agent at
________, ABA # ________, Acct. No. ________, Reference: US Airways 2000-1G
EETC]1. [The undersigned further directs the Depositary to pay the accrued
interest on the Deposits to the Paying Agent on _________, 20__ (the next
Interest Payment Date) at ABA # __________, Account No. ________,
Reference: US Airways 2000-1G EETC.]2
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, as Escrow Agent
By
-------------------------------------
Name:
Title:
Dated: __________, ____
- --------
1 To be deleted in the case of a Replacement Withdrawal scheduled for a
date which is not an Interest Payment Date (as defined in the Escrow and
Paying Agent Agreement).
2 To be inserted in the case of a Replacement Withdrawal scheduled for a
date which is not an Interest Payment Date (as defined in the Escrow and
Paying Agent Agreement).
EXECUTION
- ------------------------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
(2000-1G)
Dated as of March 3, 2000
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Subordination Agent,
as agent and trustee for the
US Airways Pass Through Trust 2000-1G
as Borrower
and
BAYERISCHE LANDESBANK GIROZENTRALE, as
Liquidity Provider
- ------------------------------------------------------------------------------
Relating to
US Airways Pass Through Trust 2000-1G
8.11% US Airways Pass Through Certificates,
Series 2000-1G
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................1
Section 1.01 Certain Defined Terms......................................1
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENT...............................7
Section 2.01 The Advances...............................................7
Section 2.02 Making the Advances........................................7
Section 2.03 Fees.......................................................9
Section 2.04 Reductions or Termination of the Maximum Commitment........9
Section 2.05 Repayments of Interest Advances or the Final Advance.......9
Section 2.06 Repayments of Provider Advances...........................10
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement...................................11
Section 2.08 Book Entries..............................................11
Section 2.09 Payments from Available Funds Only........................11
Section 2.10 Extension of the Expiry Date; Non-Extension Advance.......11
ARTICLE III OBLIGATIONS OF THE BORROWER....................................13
Section 3.01 Increased Costs...........................................13
Section 3.02 Capital Adequacy..........................................14
Section 3.03 Payments Free of Deductions...............................14
Section 3.05 Computations..............................................16
Section 3.06 Payment on Non-Business Days..............................16
Section 3.07 Interest..................................................16
Section 3.08 Replacement of Borrower...................................17
Section 3.09 Funding Loss Indemnification..............................17
Section 3.10 Illegality................................................18
ARTICLE IV CONDITIONS PRECEDENT............................................18
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01.....18
Section 4.02 Conditions Precedent to Borrowing.........................20
ARTICLE V COVENANTS........................................................20
Section 5.01 Affirmative Covenants of the Borrower.....................20
Section 5.02 Negative Covenants of the Borrower........................20
ARTICLE VI LIQUIDITY EVENTS OF DEFAULT.....................................20
Section 6.01 Liquidity Events of Default...............................20
ARTICLE VII MISCELLANEOUS..................................................21
Section 7.01 Amendments, Etc...........................................21
Section 7.02 Notices, Etc..............................................21
Section 7.03 No Waiver; Remedies.......................................22
Section 7.04 Further Assurances........................................22
Section 7.05 Indemnification; Survival of Certain Provisions...........22
Section 7.06 Liability of the Liquidity Provider.......................23
Section 7.07 Costs, Expenses and Taxes.................................23
Section 7.08 Binding Effect; Participations............................24
Section 7.09 Severability..............................................25
Section 7.10 GOVERNING LAW.............................................25
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity........................................25
Section 7.12 Execution in Counterparts.................................26
Section 7.13 Entirety..................................................26
Section 7.14 Headings..................................................27
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES..........27
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT (2000-1G)
This REVOLVING CREDIT AGREEMENT (2000-1G) dated as of March 3,
2000, between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each
as defined below), as agent and trustee for the Class G Trust (as defined
below) (the "Borrower"), and BAYERISCHE LANDESBANK GIROZENTRALE, a public
law banking institution organized under the laws of the Free State of
Bavaria, Germany (the "Liquidity Provider").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class G Trust Agreement (such term and
all other capitalized terms used in these recitals having the meanings set
forth or referred to in Section 1.01), the Class G Trust is issuing the
Class G Certificates; and
WHEREAS, the Borrower, in order to support the timely payment
of a portion of the interest on the Class G Certificates in accordance with
their terms, has requested the Liquidity Provider to enter into this
Agreement, providing in part for the Borrower to request in specified
circumstances that Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
ARTICLE I DEFINITIONS
Section 1.01 Certain Defined Terms
(a) Definitions. As used in this Agreement and unless
otherwise expressly indicated, or unless the context clearly requires
otherwise, the following capitalized terms shall have the following
respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such term in
Section 3.01.
"Advance" means an Interest Advance, a Final
Advance, a Provider Advance, an Applied Provider Advance or an Unpaid
Advance, as the case may be.
"Applicable Liquidity Rate" has the meaning assigned to such
term in Section 3.07(f).
"Applicable Margin" means (x) with respect to any
Unpaid Advance or Applied Provider Advance, 2.00% per annum, (y) with
respect to any Unapplied Provider Advance, the rate per annum specified in
the Fee Letter applicable to this Agreement.
"Applied Downgrade Advance" has the meaning assigned to such
term in Section 2.06(a).
"Applied Non-Extension Advance" has the meaning assigned to
such term in Section 2.06(a).
"Applied Provider Advance" has the meaning assigned to such
term in Section 2.06(a).
"Base Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all times
be equal to (a) the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider from three Federal funds
brokers of recognized standing selected by it, plus (b) one quarter of one
percent (1/4 of 1%) per annum.
"Base Rate Advance" means an Advance that bears interest at a
rate based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital
of parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery
of a Notice of Borrowing.
"Business Day" means any day other than a
Saturday or Sunday or other day on which insurance companies or commercial
banks in New York, New York, or commercial banking institutions in
Pittsburgh, Pennsylvania and in the cities in which the Corporate Trust
Office of the Subordination Agent or any Loan Trustee or the fiscal agent
of the Policy Provider or the office of the Policy Provider are located are
authorized or obligated by law or executive order to close.
"Consent Notice" has the meaning specified in Section 2.10.
"Consent Period" has the meaning specified in Section 2.10.
"Deposits" has the meaning assigned to such terms in the
Deposit Agreement.
"Depositary" has the meaning assigned to such term in the
Deposit Agreement.
"Deposit Agreement" means the Deposit Agreement
dated as of the date hereof between First Security Bank, National
Association, as Escrow Agent and ABN AMRO Bank, N.V., acting through its
Chicago branch, as Depositary, pertaining to the Class G Certificates, as
the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Downgrade Advance" means an Advance made pursuant to Section
2.02(c).
"Effective Date" has the meaning specified in
Section 4.01. The delivery of the certificate of the Liquidity Provider
contemplated by Section 4.01(e) shall be conclusive evidence that the
Effective Date has occurred.
"Excluded Taxes" means (i) taxes imposed on the
overall net income of the Liquidity Provider or of its Facility Office by
the jurisdiction where such Liquidity Provider's principal office or such
Facility Office is located, and (ii) Excluded Withholding Taxes.
"Excluded Withholding Taxes" means (i) withholding Taxes
imposed by the United States except to the extent that such United States
withholding Taxes are imposed as a result of any change in applicable law
(excluding from change in applicable law for this purpose a change in an
applicable treaty or other change in law affecting the applicability of a
treaty) after the date hereof, or in the case of a successor Liquidity
Provider (including a transferee of an Advance) or Facility Office, after
the date on which such successor Liquidity Provider obtains its interest or
on which the Facility Office is changed, and (ii) any withholding Taxes
imposed by the United States which are imposed or increased as a result of
the Liquidity Provider failing to deliver to the Borrower any certificate
or document (which certificate or document in the good faith judgment of
the Liquidity Provider it is legally entitled to provide) which is
reasonably requested by the Borrower to establish that payments under this
Agreement are exempt from (or entitled to a reduced rate of) withholding
Tax.
"Expenses" means liabilities, obligations, damages,
settlements, penalties, claims, actions, suits, costs, expenses, and
disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel and costs of investigation), provided that
Expenses shall not include any Taxes.
"Expiry Date" means March 1, 2001, initially, or any date to
which the Expiry Date is extended pursuant to Section 2.10.
"Extension Notice" has the meaning specified in Section 2.10.
"Facility Office" means the Facility Office of the Liquidity
Provider presently located at Munich, Germany, or such other Facility
Office as the Liquidity Provider from time to time shall notify the
Borrower as its Facility Office hereunder; provided that the Liquidity
Provider shall not change its Facility Office to another Facility Office
outside the United States of America except in accordance with Section
3.01, 3.02 or 3.03 hereof.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
"Intercreditor Agreement" means the Intercreditor
Agreement dated the date hereof, among the Class G Trustee, the Liquidity
Provider, the Policy Provider and the Subordination Agent, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance,
each of the following periods:
(i) the period beginning on the third Business Day following
either (x) the Liquidity Provider's receipt of the Notice
of Borrowing for such LIBOR Advance or (y) the date of
the withdrawal of funds from the Class G Cash Collateral
Account for the purpose of paying interest on the Class G
Certificates as contemplated by Section 2.06(a) hereof
and, in either case, ending on the next Regular
Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the
next Regular Distribution Date;
provided, however, that if (x) the Final Advance shall have
been made, or (y) other outstanding Advances shall
have been converted into the Final Advance, then the Interest
Periods shall be successive periods of one month beginning on
the third Business Day following the Liquidity Provider's
receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y) above).
"LIBOR Advance" means an Advance bearing interest
at a rate based upon the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period:
(i) the rate per annum appearing on display page 3750
(British Bankers Association-LIBOR) of the Dow Jones
Markets Service (or any successor or substitute therefor)
at approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period, as the
rate for dollar deposits with a maturity comparable to
such Interest Period, or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates per annum at which
deposits in dollars are offered for the relevant Interest
Period by three banks of recognized standing selected by
the Liquidity Provider in the London interbank market at
approximately 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount
approximately equal to the principal amount of the LIBOR
Advance to which such Interest Period is to apply and for
a period comparable to such Interest Period.
"Liquidity Event of Default" means the occurrence of either (a)
the Acceleration of all of the Equipment Notes (provided that, with respect
to the period prior to the Delivery Period Expiry Date, such Equipment
Notes have an aggregate outstanding principal balance in excess of
$250,000,000) or (b) a US Airways Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii)
the directors, officers, employees and agents of the Liquidity Provider,
and (iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in
the recital of parties to this Agreement.
"Maximum Available Commitment" shall mean, subject to the
proviso contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the
aggregate amount of each Interest Advance outstanding at such time;
provided that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"Maximum Commitment" means initially $34,266,128.70, as the
same may be reduced from time to time in accordance with Section 2.04(a).
"Non-Excluded Tax" has the meaning specified in Section 3.03.
"Non-Extension Advance" means an Advance made pursuant to
Section 2.02(b).
"Notice of Borrowing" has the meaning specified in Section
2.02(e).
"Notice of Replacement Subordination Agent" has the meaning
specified in Section 3.08.
"Performing Note Deficiency" means any time that
less than 65% of the then aggregate outstanding principal amount of all
Equipment Notes are Performing Equipment Notes.
"Prospectus Supplement" means the Prospectus
Supplement dated February 25, 2000 relating to the Class G Certificates, as
such Prospectus Supplement may be amended or supplemented.
"Provider Advance" means a Downgrade Advance or a Non-Extension
Advance.
"Regulatory Change" has the meaning assigned to such term in
Section 3.01.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class G Certificates, that would be payable on the
Class G Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class G Certificates on such day and without regard to
expected future payments of principal on the Class G Certificates.
Notwithstanding the above, in the event of any Policy Provider Election,
for purposes of the definition of the Required Amount, the Pool Balance
shall be deemed to be reduced by the amount (if positive) by which (a) the
then outstanding principal balance of each Series G Equipment Note in
respect of which such Policy Provider Election has been made shall exceed
(b) the amount of any Policy Drawings previously paid by the Policy
Provider in respect of principal on such Series G Equipment Note.
"Tax Letter" means the letter dated the date hereof between the
Liquidity Provider and US Airways pertaining to this Agreement.
"Termination Date" means the earliest to occur of the
following: (i) the Expiry Date; (ii) the date on which the Borrower
delivers to the Liquidity Provider a certificate, signed by a Responsible
Officer of the Borrower, certifying that all of the Class G Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Class G Trust
Agreement) or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that a Replacement Liquidity Facility has been substituted for
this Agreement in full pursuant to Section 3.6(e) of the Intercreditor
Agreement; (iv) the fifth Business Day following the receipt by the
Borrower of a Termination Notice from the Liquidity Provider pursuant to
Section 6.01 hereof; and (v) the date on which no Advance is, or may
(including by reason of reinstatement as herein provided) become, available
for a Borrowing hereunder.
"Termination Notice" means the Notice of Termination
substantially in the form of Annex V to this Agreement.
"Transferee" has the meaning assigned to such term in Section
7.08(b).
"Unapplied Downgrade Advance" means any Downgrade Advance other
than an Applied Downgrade Advance.
"Unapplied Non-Extension Advance" means any Non-Extension
Advance other than an Applied Non-Extension Advance.
"Unapplied Provider Advance" means any Provider Advance other
than an Applied Provider Advance.
"Unpaid Advance" has the meaning assigned to such term in
Section 2.05.
"Withdrawal Notice" has the meaning specified in Section 2.10.
(b) Terms Defined in the Intercreditor Agreement. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Acceleration", "Class C Certificates", "Class G Cash
Collateral Account", "Class G Certificates", "Class G Certificateholders",
"Class G Trust", "Class G Trust Agreement", "Class G
Trustee", "Closing Date", "Controlling Party", "Corporate Trust
Office", "Delivery Period Expiry Date", "Distribution Date",
"Downgraded Facility", "Equipment Notes", "Fee Letter", "Final Legal
Distribution Date", "Financing Agreement", "Indenture", "Interest
Payment Date", "Investment Earnings", "Leased Aircraft", "Liquidity
Facility", "Liquidity Obligations", "Loan Trustee", "Moody's",
"Non-Extended Facility", "Note Purchase Agreement", "Operative
Agreements", "Owned Aircraft", "Participation Agreement", "Performing
Equipment Note", "Person", "Policy Drawings", "Policy Provider",
"Policy Provider Election", "Pool Balance", "Rating Agency",
"Ratings Confirmation", "Regular Distribution Date", "Replacement
Liquidity Facility", "Responsible Officer", "Series G Equipment
Note", "Scheduled Payment", "Special Payment", "Standard & Poor's",
"Stated Interest Rate", "Subordination Agent", "Taxes", "Threshold Rating",
"Trustee", "Underwriters", "Underwriting Agreement", "US Airways",
"US Airways Bankruptcy Event" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances
The Liquidity Provider hereby irrevocably agrees, on the terms
and conditions hereinafter set forth, to make Advances to the Borrower from
time to time on any Business Day during the period from the Effective Date
until 1:00 p.m. (New York City time) on the Expiry Date (unless the
obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any
time outstanding not to exceed the Maximum Commitment.
Section 2.02 Making the Advances
(a) Interest Advances shall be made in one or more Borrowings
by delivery to the Liquidity Provider of one or more written and completed
Notices of Borrowing in substantially the form of Annex I attached hereto,
signed by a Responsible Officer of the Borrower, in an amount not exceeding
the Maximum Available Commitment at such time and shall be used solely for
the payment when due of interest on the Class G Certificates at the Stated
Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of
such Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider of all or any part of
the amount of any Interest Advance made pursuant to this Section 2.02(a),
together with accrued interest thereon (as provided herein), the Maximum
Available Commitment shall be reinstated by the amount of such repaid
Interest Advance, but not to exceed the Maximum Commitment; provided,
however, that the Maximum Available Commitment shall not be so reinstated
at any time if (i) a Liquidity Event of Default shall have occurred and be
continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing
if this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace
this Agreement shall have been delivered to the Borrower as contemplated by
said Section 3.6(d) within the time period specified in such Section) by
delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex II attached hereto, signed by
a Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class G
Cash Collateral Account in accordance with said Section 3.6(d) and Section
3.6(f) of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing
upon a downgrading of the Liquidity Provider's short-term unsecured debt
rating issued by either Rating Agency below the applicable Threshold Rating
(as provided for in Section 3.6(c) of the Intercreditor Agreement) unless a
Replacement Liquidity Facility to replace this Agreement shall have been
previously delivered to the Borrower in accordance with said Section 3.6(c)
and within the time period specified in such Section, by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class G
Cash Collateral Account in accordance with said Section 3.6(c) and Section
3.6(f) of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially
the form of Annex IV attached hereto, signed by a Responsible Officer of
the Borrower, in an amount equal to the Maximum Available Commitment at
such time, and shall be used to fund the Class G Cash Collateral Account in
accordance with Section 3.6(i) and Section 3.6(f) of the Intercreditor
Agreement.
(e) Each Borrowing shall be made on notice in writing (a
"Notice of Borrowing") in substantially the form required by Section
2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the case may be, given by the
Borrower to the Liquidity Provider. If a Notice of Borrowing is delivered
by the Borrower in respect of any Borrowing no later than 1:00 p.m. (New
York City time) on a Business Day, upon satisfaction of the conditions
precedent set forth in Section 4.02 with respect to a requested Borrowing,
the Liquidity Provider shall make available to the Borrower, in accordance
with its payment instructions, the amount of such Borrowing in U.S. dollars
and immediately available funds, before 4:00 p.m. (New York City time) on
such Business Day or on such later Business Day specified in such Notice of
Borrowing. If a Notice of Borrowing is delivered by the Borrower in respect
of any Borrowing after 1:00 p.m. (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and in immediately available
funds, before 12:00 noon (New York City time) on the first Business Day
next following the day of receipt of such Notice of Borrowing or on such
later Business Day specified by the Borrower in such Notice of Borrowing.
Payments of proceeds of a Borrowing shall be made by wire transfer of
immediately available funds to the Borrower in accordance with such wire
transfer instructions as the Borrower shall furnish from time to time to
the Liquidity Provider for such purpose. Each Notice of Borrowing shall be
irrevocable and binding on the Borrower. Each Notice of Borrowing shall be
effective upon delivery of a copy thereof to the Liquidity Provider's New
York Branch at the address specified in Section 7.02. (f) Upon the making
of any Advance requested pursuant to a Notice of Borrowing, in accordance
with the Borrower's payment instructions, the Liquidity Provider shall be
fully discharged of its obligation hereunder with respect to such Notice of
Borrowing, and the Liquidity Provider shall not thereafter be obligated to
make any further Advances hereunder in respect of such Notice of Borrowing
to the Borrower or to any other Person. If the Liquidity Provider makes an
Advance requested pursuant to a Notice of Borrowing before 12:00 noon (New
York City time) on the second Business Day after the date of payment
specified in said Section 2.02(e), the Liquidity Provider shall have fully
discharged its obligations hereunder with respect to such Advance and an
event of default shall not have occurred hereunder. Following the making of
any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the
Class G Cash Collateral Account, the Liquidity Provider shall have no
interest in or rights to the Class G Cash Collateral Account, such Advance
or any other amounts from time to time on deposit in the Class G Cash
Collateral Account; provided that the foregoing shall not affect or impair
the obligations of the Subordination Agent to make the distributions
contemplated by Section 3.6(e) or (f) of the Intercreditor Agreement. By
paying to the Borrower proceeds of Advances requested by the Borrower in
accordance with the provisions of this Agreement, the Liquidity Provider
makes no representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the Advances so
made and requested. Section 2.03Fees
The Borrower agrees to pay to the Liquidity Provider the fees
set forth in the Fee Letter applicable to this Agreement.
Section 2.04 Reductions or Termination of the Maximum
Commitment.
(a) Automatic Reduction. Promptly following each date on which
the Required Amount is reduced as a result of a reduction in the Pool
Balance of the Class G Certificates or otherwise, the Maximum Commitment
shall automatically be reduced to an amount equal to such reduced Required
Amount (as calculated by the Borrower). The Borrower shall give notice of
any such automatic reduction of the Maximum Commitment to the Liquidity
Provider within two Business Days thereof. The failure by the Borrower to
furnish any such notice shall not affect such automatic reduction of the
Maximum Commitment.
(b) Termination. Upon the making of any Provider Advance or
Final Advance hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances hereunder
shall automatically and irrevocably terminate, and the Borrower shall not
be entitled to request any further Borrowing hereunder.
Section 2.05 Repayments of Interest Advances or the Final Advance
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower
hereby agrees, without notice of an Advance or demand for repayment from
the Liquidity Provider (which notice and demand are hereby waived by the
Borrower), to pay, or to cause to be paid, to the Liquidity Provider on
each date on which the Liquidity Provider shall make an Interest Advance or
the Final Advance, an amount equal to (a) the amount of such Advance (any
such Advance, until repaid, is referred to herein as an "Unpaid Advance"),
plus (b) interest on the amount of each such Unpaid Advance as provided in
Section 3.07 hereof; provided that if (i) the Liquidity Provider shall make
a Provider Advance at any time after making one or more Interest Advances
which shall not have been repaid in accordance with this Section 2.05 or
(ii) this Liquidity Facility shall become a Downgraded Facility or
Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest
Advances shall cease to constitute Unpaid Advances and shall be deemed to
have been changed into an Applied Downgrade Advance or an Applied
Non-Extension Advance, as the case may be, for all purposes of this
Agreement (including, without limitation, for the purpose of determining
when such Interest Advance is required to be repaid to the Liquidity
Provider in accordance with Section 2.06 and for the purposes of Section
2.06(b)). The Borrower and the Liquidity Provider agree that the repayment
in full of each Interest Advance and Final Advance on the date such Advance
is made is intended to be a contemporaneous exchange for new value given to
the Borrower by the Liquidity Provider.
Section 2.06 Repayments of Provider Advances
(a) Amounts advanced hereunder in respect of a Provider Advance
shall be deposited in the Class G Cash Collateral Account, invested and
withdrawn from the Class G Cash Collateral Account as set forth in Sections
3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees to
pay to the Liquidity Provider, on each Regular Distribution Date,
commencing on the first Regular Distribution Date after the making of a
Provider Advance, interest on the principal amount of any such Provider
Advance as provided in Section 3.07 hereof; provided, however, that amounts
in respect of a Provider Advance withdrawn from the Class G Cash Collateral
Account for the purpose of paying interest on the Class G Certificates in
accordance with Section 3.6(f) of the Intercreditor Agreement (the amount
of any such withdrawal being (y) in the case of a Downgrade Advance, an
"Applied Downgrade Advance" and (z) in the case of a Non-Extension Advance,
an "Applied Non-Extension Advance" and, together with an Applied Downgrade
Advance, an "Applied Provider Advance") shall thereafter (subject to
Section 2.06(b)) be treated as an Interest Advance under this Agreement for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon; provided further, however, that if, following the making of a
Provider Advance, the Liquidity Provider delivers a Termination Notice to
the Borrower pursuant to Section 6.01 hereof, such Provider Advance shall
thereafter be treated as a Final Advance under this Agreement for purposes
of determining the Applicable Liquidity Rate for interest payable thereon.
Subject to Sections 2.07 and 2.09 hereof, immediately upon the withdrawal
of any amounts from the Class G Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the Liquidity
Provider a portion of the Provider Advances in a principal amount equal to
such reduction, plus interest on the principal amount prepaid as provided
in Section 3.07 hereof.
(b) At any time when an Applied Provider Advance (or any
portion thereof) is outstanding, upon the deposit in the Class G Cash
Collateral Account of any amount pursuant to clause "third" of Section
2.4(b) of the Intercreditor Agreement, clause "third" of Section 3.2 of the
Intercreditor Agreement or clause "fourth" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "Replenishment Amount")
for the purpose of replenishing or increasing the balance thereof up to the
Required Amount at such time, (i) the aggregate outstanding principal
amount of all Applied Provider Advances (and of Provider Advances treated
as an Interest Advance for purposes of determining the Applicable Liquidity
Rate for interest payable thereon) shall be automatically reduced by the
amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class G Cash
Collateral Account after giving effect to any Applied Provider Advance on
the date of such replacement shall be reimbursed to the Liquidity Provider,
but only to the extent such amounts are necessary to repay in full to the
Liquidity Provider all amounts owing to it hereunder.
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement
In order to provide for payment or repayment to the Liquidity
Provider of any amounts hereunder, the Intercreditor Agreement provides
that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid
to the Liquidity Provider in accordance with the terms thereof. Amounts so
paid to the Liquidity Provider shall be applied by the Liquidity Provider
to Liquidity Obligations then due and payable in accordance with the
Intercreditor Agreement or, if not provided for in the Intercreditor
Agreement, then in such manner as the Liquidity Provider shall deem
appropriate.
Section 2.08 Book Entries
The Liquidity Provider shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrower resulting from Advances made from time to time and the amounts of
principal and interest payable hereunder and paid from time to time in
respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only
All payments to be made by the Borrower under this Agreement
shall be made only from the amounts that constitute Scheduled Payments,
Special Payments or payments under Section 6(c) or 6(b), as the case may
be, of the Participation Agreements and Section 7 of the Note Purchase
Agreement and only to the extent that the Borrower shall have sufficient
income or proceeds therefrom to enable the Borrower to make payments in
accordance with the terms hereof after giving effect to the priority of
payments provisions set forth in the Intercreditor Agreement. The Liquidity
Provider agrees that it will look solely to such amounts to the extent
available for distribution to it as provided in the Intercreditor Agreement
and this Agreement and that the Borrower, in its individual capacity, is
not personally liable to it for any amounts payable or liability under this
Agreement except as expressly provided in this Agreement, the Intercreditor
Agreement or any Participation Agreement. Amounts on deposit in the Class G
Cash Collateral Account shall be available to the Borrower to make payments
under this Agreement only to the extent and for the purposes expressly
contemplated in Section 3.6(f) of the Intercreditor Agreement.
Section 2.10 Extension of the Expiry Date; Non-Extension Advance
The Borrower may, from time to time, by notice to the Liquidity
Provider (each such notice being an "Extension Notice") given no later than
the 40th day and no earlier than the 60th day prior to the then applicable
Expiry Date, request an extension of the Expiry Date to the earlier of (i)
the date which is 15 days after the Final Legal Distribution Date for the
Class G Certificates and (ii) the date that is the day immediately
preceding the 364th day occurring after the last day of the Consent Period
(as hereinafter defined). Whether or not the Liquidity Provider has
received a request from the Borrower, such Liquidity Provider may, but
shall not be obligated to, by a notice (a "Consent Notice") to the
Borrower, given during the period commencing on the date that is 60 days
prior to the Expiry Date then in effect and ending on the date that is 25
days prior to the Expiry Date then in effect for such Liquidity Facility
(such period, with respect to such Liquidity Facility, the "Consent
Period"), consent to such extension of the Expiry Date, which consent may
be given or withheld by the Liquidity Provider in its absolute and sole
discretion; provided, however, that such extension shall not be effective
with respect to the Liquidity Provider if by a notice (a "Withdrawal
Notice") to the Borrower during the Consent Period the Liquidity Provider
revokes its Consent Notice. If a Withdrawal Notice has been given during
the applicable Consent Period or if the Liquidity Provider shall not have
delivered a Consent Notice within the Consent Period (and, in each case, if
the Liquidity Provider shall not have been replaced in accordance with
Section 3.6(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after the date on which the Consent Period ends (but prior
to the then effective Expiry Date) to request a Non-Extension Advance in
accordance with Section 2.02(b) hereof and Section 3.6(d) of the
Intercreditor Agreement; provided, however, that if (a) the Borrower
delivers a Notice of Borrowing for a Non-Extension Advance after the
expiration of the Consent Period and the Liquidity Provider shall not have
received a request for an extension of the Expiry Date during the Consent
Period, or (b) if the Liquidity Provider shall not have received any
request for such an extension prior to the Expiry Date, the Liquidity
Provider may elect in writing, in the case of clause (a) until the earlier
of (x) the Expiry Date and (y) seven Business Days after receiving such
Notice of Borrowing and in the case of clause (b) at any time prior to the
Expiry Date (if the Expiry Date is not a Business Day, the immediately
preceding Business Day), to extend the Expiry Date to the earlier of (i)
the date which is 15 days after the Final Legal Distribution Date for the
Class G Certificates and (ii) the date that is the day immediately
preceding the 364th day after the date of such election, and, in the case
of clause (a), the obligation of the Liquidity Provider to make such
Non-Extension Advance shall be deferred until the earlier of (x) the Expiry
Date and (y) the next Business Day after such seven Business Day period. If
a Non-Extension Advance shall have been made and the Liquidity Provider
shall not have been replaced within 30 days after the date of such
Non-Extension Advance, or such Non-Extension Advance shall have been made
under the circumstances described in the proviso to the preceding sentence,
the Liquidity Provider may elect in writing to renew the Liquidity Facility
on the terms hereof but with a new Expiry Date which shall be the earlier
of (i) the date which is 15 days after the Final Legal Maturity Date for
the Class G Certificates and (ii) the date that is the day immediately
preceding the 364th day occurring after the date on which such election is
made, and any such renewal shall become effective upon the execution and
delivery of a Replacement Liquidity Facility in accordance with the
provisions of Section 3.6(e) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs.
The Borrower shall pay to the Liquidity Provider from time to
time such amounts as may be necessary to compensate the Liquidity Provider
for any increased costs incurred by the Liquidity Provider which are
attributable to its making or maintaining any LIBOR Advances hereunder or
its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation
(such increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any change after the date of
this Agreement in U.S. federal, state, municipal, or foreign laws or
regulations (including Regulation D of the Board of Governors of the
Federal Reserve System), or the adoption or making after the date of this
Agreement of any interpretations, directives, or requirements applying to a
class of banks including the Liquidity Provider under any U.S. federal,
state, municipal, or any foreign laws or regulations (whether or not having
the force of law) by any court, central bank or monetary authority charged
with the interpretation or administration thereof (a <-1- 34>Regulatory
Change"), which: (1) changes the basis of taxation of any amounts payable
to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any
reserve, special deposit, compulsory loan or similar requirements relating
to any extensions of credit or other assets of, or any deposits with other
liabilities of, the Liquidity Provider (including any such Advances or any
deposits referred to in the definition of LIBOR Rate or related
definitions). The Liquidity Provider agrees to use reasonable efforts
(consistent with applicable legal and regulatory restrictions) to change
the jurisdiction of its Facility Office if making such change would avoid
the need for, or reduce the amount of, any amount payable under this
Section that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event
occurring after the date of this Agreement that will entitle the Liquidity
Provider to compensation pursuant to this Section 3.01 as promptly as
practicable after it obtains knowledge thereof and determines to request
such compensation, which notice shall describe in reasonable detail the
calculation of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.01 of the effect of any
Regulatory Change on its costs of making or maintaining Advances or on
amounts receivable by it in respect of Advances, and of the additional
amounts required to compensate the Liquidity Provider in respect of any
Additional Costs, shall be prima facie evidence of the amount owed under
this Section.
Notwithstanding the preceding two paragraphs, the Liquidity
Provider and the Subordination Agent agree that any permitted assignee or
participant of the initial Liquidity Provider which is not a bank shall not
be entitled to the benefits of the preceding two paragraphs (but without
limiting the provisions of Section 7.08 hereof).
Section 3.02 Capital Adequacy
If (1) the adoption, after the date hereof, of any applicable
governmental law, rule or regulation regarding capital adequacy, (2) any
change, after the date hereof, in the interpretation or administration of
any such law, rule or regulation by any central bank or other governmental
authority charged with the interpretation or administration thereof or (3)
compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that
constitutes a change of the nature described in clause (2), has the effect
of requiring an increase in the amount of capital required to be maintained
by the Liquidity Provider or any corporation controlling the Liquidity
Provider, and such increase is based upon the Liquidity Provider's
obligations hereunder and other similar obligations, the Borrower shall pay
to the Liquidity Provider from time to time such additional amount or
amounts as are necessary to compensate the Liquidity Provider for such
portion of such increase as shall be reasonably allocable to the Liquidity
Provider's obligations to the Borrower hereunder. The Liquidity Provider
agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Facility Office
if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would
not, in the reasonable judgment of the Liquidity Provider, be otherwise
materially disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event
occurring after the date of this Agreement that will entitle the Liquidity
Provider to compensation pursuant to this Section 3.02 as promptly as
practicable after it obtains knowledge thereof and determines to request
such compensation, which notice shall describe in reasonable detail the
calculation of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.02 of the effect of any
increase in the amount of capital required to be maintained by the
Liquidity Provider and of the amount allocable to the Liquidity Provider's
obligations to the Borrower hereunder shall be prima facie evidence of the
amounts owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity
Provider and the Subordination Agent agree that any permitted assignee or
participant of the initial Liquidity Provider which is not a bank shall not
be entitled to the benefits of the preceding two paragraphs (but without
limiting the provisions of Section 7.08 hereof).
Section 3.03 Payments Free of Deductions
(a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without reduction for or on account
of, any present or future stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, restrictions or conditions of any
nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed, excluding Excluded Taxes (such non-excluded taxes being referred
to herein, collectively, as "Non-Excluded Taxes" and, individually, as a
"Non-Excluded Tax"). If any Non-Excluded Taxes are required to be withheld
from any amounts payable to the Liquidity Provider under this Agreement,
the amounts so payable to the Liquidity Provider shall be increased to the
extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Facility Office if making such change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of the
Liquidity Provider, be otherwise disadvantageous to the Liquidity Provider.
From time to time upon the reasonable request of the Borrower, the
Liquidity Provider agrees to provide to the Borrower two original Internal
Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that the
Liquidity Provider is exempt from or entitled to a reduced rate of United
States withholding tax on payments pursuant to this Agreement.
(b) All payments (including, without limitation, Advances) made
by the Liquidity Provider under this Agreement shall be made free and clear
of, and without reduction for or on account of, any Taxes. If any Taxes are
required to be withheld or deducted from any amounts payable to the
Borrower under this Agreement, the Liquidity Provider shall (i) within the
time prescribed therefor by applicable law pay to the appropriate
governmental or taxing authority the full amount of any such Taxes (and any
additional Taxes in respect of the additional amounts payable under clause
(ii) hereof) and make such reports or returns in connection therewith at
the time or times and in the manner prescribed by applicable law, and (ii)
pay to the Borrower an additional amount which (after deduction of all such
Taxes) will be sufficient to yield to the Borrower the full amount which
would have been received by it had no such withholding or deduction been
made. Within 30 days after the date of each payment hereunder, the
Liquidity Provider shall furnish to the Borrower the original or a
certified copy of (or other documentary evidence of) the payment of the
Taxes applicable to such payment.
(c) If any exemption from, or reduction in the rate of, any
Taxes is reasonably available to the Borrower to establish that payments
under this Agreement are exempt from (or entitled to a reduced rate of)
Tax, the Borrower shall deliver to the Liquidity Provider such form or
forms and such other evidence of the eligibility of the Borrower for such
exemption or reduction as the Liquidity Provider may reasonably identify to
the Borrower as being required as a condition to exemption from, or
reduction in the rate of, any Taxes.
Section 3.04 Payments
The Borrower shall make or cause to be made each payment to the
Liquidity Provider under this Agreement so as to cause the same to be
received by the Liquidity Provider not later than 1:00 p.m. (New York City
time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to First Union Bank
International, Swift/BIC - Code PNBPUS3N NYC (Fedwire 0260 0509 2/CHIPS/ABA
0509) in favor of acount number 2000 193534 122, Bayerische Landesbank
Girozentrale, Munich, Swift/BIC - Code BYLADEMM, Reference Dept. - 7650 -
US Airways Liquidity Facility 2000 1G.
Section 3.05 Computations
All computations of interest based on the Base Rate shall be
made on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the LIBOR Rate shall be made on the basis
of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the
period for which such interest is payable.
Section 3.06 Payment on Non-Business Days
Whenever any payment to be made hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and no additional interest shall be due as a
result (and if so made, shall be deemed to have been made when due). If any
payment in respect of interest on an Advance is so deferred to the next
succeeding Business Day, such deferral shall not delay the commencement of
the next Interest Period for such Advance (if such Advance is a LIBOR
Advance) or reduce the number of days for which interest will be payable on
such Advance on the next interest payment date for such Advance.
Section 3.07 Interest
(a) Subject to Section 2.09, the Borrower shall pay, or shall
cause to be paid, without duplication, interest on (i) the unpaid principal
amount of each Advance from and including the date of such Advance (or, in
the case of an Applied Provider Advance, from and including the date on
which the amount thereof was withdrawn from the Class G Cash Collateral
Account to pay interest on the Class G Certificates) to but excluding the
date such principal amount shall be paid in full (or, in the case of an
Applied Provider Advance, the date on which the Class G Cash Collateral
Account is fully replenished in respect of such Advance) and (ii) any other
amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or
any such other amount) which is not paid when due (whether at stated
maturity, by acceleration or otherwise) from and including the due date
thereof to but excluding the date such amount is paid in full, in each such
case, at a fluctuating interest rate per annum for each day equal to the
Applicable Liquidity Rate (as defined below) for such Advance or such other
amount as in effect for such day, but in no event at a rate per annum
greater than the maximum rate permitted by applicable law; provided,
however, that, if at any time the otherwise applicable interest rate as set
forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will
not reduce the rate of interest payable pursuant to this Section 3.07 below
the maximum rate permitted by applicable law until the total amount of
interest accrued equals the amount of interest that would have accrued if
such otherwise applicable interest rate as set forth in this Section 3.07
had at all times been in effect.
(b) Each Advance will be either a Base Rate Advance or a LIBOR
Advance as provided in this Section. Each such Advance will be a Base Rate
Advance for the period from the date of its borrowing to (but excluding)
the third Business Day following the Liquidity Provider's receipt of the
Notice of Borrowing for such Advance. Thereafter, such Advance shall be a
LIBOR Advance; provided that the Borrower (at the direction of the
Controlling Party, so long as the Liquidity Provider is not the Controlling
Party) may (x) convert the Final Advance into a Base Rate Advance on the
last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such
election or (y) elect to maintain the Final Advance as a Base Rate Advance
by not requesting a conversion of the Final Advance to a LIBOR Advance
under Clause (5) of the applicable Notice of Borrowing (or, if such Final
Advance is deemed to have been made, without delivery of a Notice of
Borrowing pursuant to Section 2.06, by requesting, prior to 11:00 a.m. on
the first Business Day immediately following the Borrower's receipt of the
applicable Termination Notice, that such Final Advance not be converted
from a Base Rate Advance to a LIBOR Advance).
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a rate per annum equal to the LIBOR Rate for such Interest Period
plus the Applicable Margin for such LIBOR Advance, payable in arrears on
the last day of such Interest Period and, in the event of the payment of
principal of such LIBOR Advance on a day other than such last day, on the
date of such payment (to the extent of interest accrued on the amount of
principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin for such Base Rate
Advance, payable in arrears on each Regular Distribution Date and, in the
event of the payment of principal of such Base Rate Advance on a day other
than a Regular Distribution Date, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(e) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by
applicable law, installments of interest on Advances but excluding
Advances) shall bear interest at a rate per annum equal to the Base Rate
plus 2.00% until paid.
(f) Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this Section 3.07 with
respect to any Advance or other amount shall be referred to as the <-1-
34>Applicable Liquidity Rate".
Section 3.08 Replacement of Borrower
From time to time and subject to the successor Borrower's
meeting the eligibility requirements set forth in Section 6.9 of the
Intercreditor Agreement applicable to the Subordination Agent, upon the
effective date and time specified in a written and completed Notice of
Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "Notice of Replacement Subordination Agent<-1-
34>) delivered to the Liquidity Provider by the then Borrower, the
successor Borrower designated therein shall be substituted for as the
Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification
The Borrower shall pay to the Liquidity Provider, upon the
request of the Liquidity Provider, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Liquidity Provider) to
compensate it for any loss, cost, or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding
loss of anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the
last day of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on
the date for borrowing specified in the relevant notice under Section 2.02.
Section 3.10 Illegality
Notwithstanding any other provision in this Agreement, if any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its
Facility Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for the Liquidity Provider (or its
Facility Office) to maintain or fund its LIBOR Advances, then upon notice
to the Borrower by the Liquidity Provider, the outstanding principal amount
of the LIBOR Advances shall be converted to Base Rate Advances (a)
immediately upon demand of the Liquidity Provider, if such change or
compliance with such request, in the judgment of the Liquidity Provider,
requires immediate repayment; or (b) at the expiration of the last Interest
Period to expire before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section
2.01.
Section 2.01 of this Agreement shall become effective on and as
of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date
(other than this Agreement and the Intercreditor
Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class G Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the
Closing Date pursuant to the Class G Trust Agreement, the
Intercreditor Agreement and the other Operative
Agreements (in the case of each such opinion, other than
the opinion of counsel for the Underwriters, either
addressed to the Liquidity Provider or accompanied by a
letter from the counsel rendering such opinion to the
effect that the Liquidity Provider is entitled to rely on
such opinion as of its date as if it were addressed to
the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken
any notice or other similar action as may be reasonably
necessary or, to the extent reasonably requested by the
Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title
and interest, remedies, powers, privileges, liens and
security interests of, or for the benefit of, the Class G
Trustee, the Borrower and the Liquidity Provider created
by the Operative Agreements executed and delivered on or
prior to the Closing Date;
(vii) An agreement from US Airways, pursuant to which (i) US
Airways agrees to provide copies of quarterly financial
statements and audited annual financial statements to the
Liquidity Provider, and such other information as the
Liquidity Provider shall reasonably request with respect
to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that US
Airways is obligated to provide such information pursuant
to Section 16 of the Leases (related to Leased Aircraft)
or the corresponding section of the Indentures (related
to Owned Aircraft) to the parties thereto and (ii) US
Airways agrees to allow the Liquidity Provider to inspect
US Airways' books and records regarding such
transactions, and to discuss such transactions with
officers and employees of US Airways; and
(vii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by
the other Operative Agreements as the Liquidity Provider
shall have reasonably requested.
(b) The following statement shall be true on and as of the
Effective Date: no event has occurred and is continuing, or would result
from the entering into of this Agreement or the making of any Advance,
which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full
of all fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Class G
Certificates under the Class G Trust Agreement shall have been satisfied or
waived, and all conditions precedent to the purchase of the Class G
Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the
date hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02 Conditions Precedent to Borrowing
The obligation of the Liquidity Provider to make an Advance
on the occasion of each Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and, prior to the
date of such Borrowing, the Borrower shall have delivered a Notice of
Borrowing which conforms to the terms and conditions of this Agreement and
has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower
So long as any Advance shall remain unpaid or the Liquidity
Provider shall have any Maximum Commitment hereunder or the Borrower shall
have any obligation to pay any amount to the Liquidity Provider hereunder,
the Borrower will, unless the Liquidity Provider shall otherwise consent in
writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material respects
the conditions, covenants and requirements applicable to it contained in
this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider
with reasonable promptness, such other information and data with respect to
the transactions contemplated by the Operative Agreements as from time to
time may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity
Provider with reasonable promptness, such Operative Agreements entered into
after the date hereof as from time to time may be reasonably requested by
the Liquidity Provider.
Section 5.02 Negative Covenants of the Borrower
So long as any Advance shall remain unpaid or the Liquidity
Provider shall have any Maximum Commitment hereunder or the Borrower shall
have any obligation to pay any amount to the Liquidity Provider hereunder,
the Borrower will not appoint or permit or suffer to be appointed any
successor Borrower without the prior written consent of the Liquidity
Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01 Liquidity Events of Default
If (a) any Liquidity Event of Default has occurred and is
continuing and (b) there is a Performing Note Deficiency, the Liquidity
Provider may, in its discretion, deliver to the Borrower a Termination
Notice, the effect of which shall be to cause (i) the obligation of the
Liquidity Provider to make Advances hereunder to expire on the fifth
Business Day after the date on which such Termination Notice is received by
the Borrower, (ii) the Borrower to promptly request, and the Liquidity
Provider to promptly make, a Final Advance in accordance with Section
2.02(d) hereof and Section 3.6(i) of the Intercreditor Agreement, (iii) all
other outstanding Advances to be automatically converted into Final
Advances for purposes of determining the Applicable Liquidity Rate for
interest payable thereon, and (iv) subject to Sections 2.07 and 2.09
hereof, all Advances (including, without limitation, any Provider Advance
and Applied Provider Advance), any accrued interest thereon and any other
amounts outstanding hereunder to become immediately due and payable to the
Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement,
nor consent to any departure by the Borrower therefrom, shall in any event
be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Section 7.02 Notices, Etc.
Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing
(including telecopier and mailed or delivered or sent by telecopier):
Borrower: STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
225 Asylum Street
Goodwyn Square
Hartford, CT 06103
Attention: Corporate/Muni. Department
Telephone: (860) 244-1822
Telecopy: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
Corporate Trust Department
2 Avenue de Lafayette
Boston, MA 02110
Attention: Ruth A. Smith
Telecopy: (617) 662-1465
Liquidity Provider: BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
or, as to each of the foregoing, at such other address as shall be
designated by such Person in a written notice to the others. All such
notices and communications shall be effective (i) if given by telecopier,
when transmitted to the telecopier number specified above and (ii) if given
by other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either
party shall in addition be delivered to each of the parties to the
Participation Agreements at their respective addresses set forth therein.
Section 7.03 No Waiver; Remedies
No failure on the part of the Liquidity Provider to exercise,
and no delay in exercising, any right under this Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right
under this Agreement preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
Section 7.04 Further Assurances
The Borrower agrees to do such further acts and things and to
execute and deliver to the Liquidity Provider such additional assignments,
agreements, powers and instruments as the Liquidity Provider may reasonably
require or deem advisable to carry into effect the purposes of this
Agreement and the other Operative Agreements or to better assure and
confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions
The Liquidity Provider shall be indemnified hereunder to the
extent and in the manner described in Section 6(c) or 6(b), as the case may
be, of the Participation Agreements. In addition, the Borrower agrees to
indemnify, protect, defend and hold harmless the Liquidity Provider from,
against and in respect of, and shall pay on demand, all Expenses of any
kind or nature whatsoever (other than any Expenses of the nature described
in Section 3.01, 3.02 or 7.07 hereof or in the Fee Letter applicable to
this Agreement (regardless of whether indemnified against pursuant to said
Sections or in such Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to,
resulting from, or arising out of or in connection with any action, suit or
proceeding by any third party against such Liquidity Indemnitee and
relating to this Agreement, the Fee Letter applicable to this Agreement,
the Intercreditor Agreement or any Financing Agreement; provided, however,
that the Borrower shall not be required to indemnify, protect, defend and
hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the
gross negligence or willful misconduct of such Liquidity Indemnitee or any
other Liquidity Indemnitee, (ii) ordinary and usual operating overhead
expense, or (iii) attributable to the failure by such Liquidity Indemnitee
or any other Liquidity Indemnitee to perform or observe any agreement,
covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the Fee Letter applicable to this
Agreement or any other Operative Agreement to which it is a party. The
indemnities contained in Section 6(c) or 6(b), as the case may be, of the
Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this
Agreement.
Section 7.06 Liability of the Liquidity Provider
(a) Neither the Liquidity Provider nor any of its officers,
employees, directors or Affiliates shall be liable or responsible for: (i)
the use which may be made of the Advances or any acts or omissions of the
Borrower or any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; or (iii) the making of
Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the
Liquidity Provider, and the Liquidity Provider shall be liable to the
Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence
in determining whether documents presented hereunder comply with the terms
hereof, or (B) any breach by the Liquidity Provider of any of the terms of
this Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by the
Borrower of a Notice of Borrowing strictly complying with the terms and
conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers,
employees, directors or Affiliates shall be liable or responsible in any
respect for (i) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with this Agreement or any Notice of Borrowing delivered
hereunder, or (ii) any action, inaction or omission which may be taken by
it in good faith, absent willful misconduct or negligence (in which event
the extent of the Liquidity Provider's potential liability to the Borrower
shall be limited as set forth in the immediately preceding paragraph), in
connection with this Agreement or any Notice of Borrowing.
Section 7.07 Costs, Expenses and Taxes
The Borrower agrees to pay, or cause to be paid (A) on the
Effective Date and on such later date or dates on which the Liquidity
Provider shall make demand, all reasonable out-of-pocket costs and expenses
(including, without limitation, the reasonable fees and expenses of outside
counsel for the Liquidity Provider) of the Liquidity Provider in connection
with the preparation, negotiation, execution, delivery, filing and
recording of this Agreement, any other Operative Agreement and any other
documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel
fees and expenses) of the Liquidity Provider in connection with (i) the
enforcement of this Agreement or any other Operative Agreement, (ii) the
modification or amendment of, or supplement to, this Agreement or any other
Operative Agreement or such other documents which may be delivered in
connection herewith or therewith (whether or not the same shall become
effective) or (iii) any action or proceeding relating to any order,
injunction, or other process or decree restraining or seeking to restrain
the Liquidity Provider from paying any amount under this Agreement, the
Intercreditor Agreement or any other Operative Agreement or otherwise
affecting the application of funds in the Class G Cash Collateral Account.
In addition, the Borrower shall pay any and all recording, stamp and other
similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any
other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes or fees.
Section 7.08 Binding Effect; Participations
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower and the Liquidity Provider and their respective
successors and assigns, except that neither the Liquidity Provider (except
as otherwise provided in this Section 7.08) nor (except as contemplated by
Section 3.08) the Borrower shall have the right to assign its rights or
obligations hereunder or any interest herein without the prior written
consent of the other party, subject to the requirements of Section 7.08(b).
The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under
the other Operative Agreements to such Persons (other than US Airways or
any of its affiliates) as the Liquidity Provider may in its sole discretion
select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the
Liquidity Provider of its obligations hereunder. In connection with any
participation or any proposed participation, the Liquidity Provider may
disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts, additional amounts due
pursuant to Section 3.03(a) and the like as they pertain to the Liquidity
Provider shall be deemed also to include those of each of its participants
that are banks (subject, in each case, to the maximum amount that would
have been incurred by or attributable to the Liquidity Provider directly if
the Liquidity Provider, rather than the participant, had held the interest
participated).
(b) If, pursuant to subsection (a) above, the Liquidity
Provider sells any participation in this Agreement to any bank or other
entity (each, a "Transferee"), then, concurrently with the effectiveness of
such participation, the Transferee shall (i) represent to the Liquidity
Provider (for the benefit of the Liquidity Provider and the Borrower)
either (A) that it is incorporated under the laws of the United States or a
state thereof or (B) that under applicable law and treaties, no taxes will
be required to be withheld with respect to any payments to be made to such
Transferee in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated
under the laws of the United States or a state thereof or (y) if it is not
so incorporated, two copies of a properly completed United States Internal
Revenue Service Form W-8ECI or Form W-8BEN, as appropriate, or other
applicable form, certificate or document prescribed by the Internal Revenue
Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to
any and all payments to be made hereunder, and (iii) agree (for the benefit
of the Liquidity Provider and the Borrower) to provide the Liquidity
Provider and the Borrower a new Form W-8ECI or Form W-8BEN, as appropriate,
(A) on or before the date that any such form expires or becomes obsolete or
(B) after the occurrence of any event requiring a change in the most recent
form previously delivered by it and prior to the immediately following due
date of any payment by the Borrower hereunder, certifying in the case of a
Form W-8BEN or Form W-8ECI that such Transferee is entitled to a complete
exemption from United States federal withholding tax on payments under this
Agreement. Unless the Borrower has received forms or other documents
reasonably satisfactory to it (and required by applicable law) indicating
that payments hereunder are not subject to United States federal
withholding tax, the Borrower will withhold taxes as required by law from
such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08,
the Liquidity Provider may assign and pledge all or any portion of the
Advances owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued
by such Federal Reserve Bank, provided that any payment in respect of such
assigned Advances made by the Borrower to the Liquidity Provider in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Advance to the extent of
such payment. No such assignment shall release the Liquidity Provider from
its obligations hereunder.
Section 7.09 Severability
Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity
(a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any other
Operative Agreement, or for recognition and enforcement
of any judgment in respect hereof or thereof, to the
nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of
America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it
may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each party
hereto at its address set forth in Section 7.02 hereof,
or at such other address of which the Liquidity Provider
shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted
by law or shall limit the right to sue in any other
jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP
THAT IS BEING ESTABLISHED, including, without limitation, contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims. The Borrower and the Liquidity Provider each warrant and represent
that it has reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights following
consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, AND
CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any
State and waives any immunity any of its properties located in the United
States may have from attachment or execution upon a judgment entered by any
such court under the United States Foreign Sovereign Immunities Act of 1976
or any similar successor legislation.
Section 7.12 Execution in Counterparts
This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
Section 7.13 Entirety
This Agreement, the Intercreditor Agreement and the other
Operative Agreements to which the Liquidity Provider is a party constitute
the entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14 Headings
Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
OBLIGATIONS OF THE LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE
BORROWER'S RIGHTS TO DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF
ADVANCES HEREUNDER, SHALL BE UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE
PAID OR PERFORMED, IN EACH CASE STRICTLY IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Subordination Agent, as agent and trustee
for the Class G Trust, as Borrower
By: /s/ John G. Correia
-----------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By: /s/ Bernd Lonner
-----------------------------------
Name: Bernd Lonner
Title: Vice President
By: /s/ Rudiger Fern
-----------------------------------
Name: Rudiger Fern
Title: Senior Vice President
Annex I to Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to BAYERISCHE LANDESBANK
GIROZENTRALE (the "Liquidity Provider"), with reference to the Revolving
Credit Agreement (2000-1G) dated as of March 3, 2000, between the Borrower
and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as
therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used,
subject to clause (3)(v) below, for the payment of the interest on
the Class G Certificates which was payable on ____________, ____ (the
"Distribution Date") in accordance with the terms and
provisions of the Class G Trust Agreement and the Class G
Certificates, which Advance is requested to be made on ____________,
____. The Interest Advance should be transferred to [name of
bank/wire instructions/ABA number] in favor of account number [ __ ],
reference [ __ ].
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the
interest which is due and payable on the Class G Certificates on the
Distribution Date, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class G Certificates
[or the Class C Certificates, or interest on the Class C
Certificates,]1 (iii) was computed in accordance with the provisions
of the Class G Certificates, the Class G Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached
hereto as Schedule I), (iv) does not exceed the Maximum Available
Commitment on the date hereof, (v) does not include any amount of
interest which was due and payable on the Class G Certificates on
such Distribution Date but which remains unpaid due to the failure of
the Depositary to pay any amount of accrued interest on the Deposits
on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Section 3.6(b) of the Intercreditor Agreement, (b)
no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied
shall be commingled with other funds held by the Borrower.
- -------------
1 Include if Class C Certificates have been issued.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, the making of the Interest Advance as requested by
this Notice of Borrowing shall automatically reduce, subject to
reinstatement in accordance with the terms of the Liquidity Agreement, the
Maximum Available Commitment by an amount equal to the amount of the
Interest Advance requested to be made hereby as set forth in clause (i) of
paragraph (3) of this Notice of Borrowing and such reduction shall
automatically result in corresponding reductions in the amounts available
to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered
this Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Subordination Agent, as Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to BAYERISCHE LANDESBANK
GIROZENTRALE (the "Liquidity Provider"), with reference to the Revolving
Credit Agreement (2000-1G) dated as of March 3, 2000, between the Borrower
and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as
therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Non-Extension Advance by the Liquidity Provider to be
used for the funding of the Class G Cash Collateral Account in
accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____. The Non-
Extension Advance should be transferred to [name of bank/wire
instructions/ABA number] in favor of account number [ __ ], reference
[ __ ].
(3) The amount of the Non-Extension Advance requested hereby
(i) is $_______________.__, which equals the Maximum Available
Commitment on the date hereof and is to be applied in respect of the
funding of the Class G Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include
any amount with respect to the payment of the principal of, or
premium on, the Class G Certificates [or the Class C Certificates, or
interest on the Class C Certificates,]2 (iii) was computed in
accordance with the provisions of the Class G Certificates, the Class
G Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class G Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(d) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
- --------
2 Include if Class C Certificates have been issued.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Non-Extension Advance as
requested by this Notice of Borrowing shall automatically and irrevocably
terminate the obligation of the Liquidity Provider to make further Advances
under the Liquidity Agreement; and (B) following the making by the
Liquidity Provider of the Non-Extension Advance requested by this Notice of
Borrowing, the Borrower shall not be entitled to request any further
Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered
this Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,not in its individual
capacity but solely asSubordination
Agent, as Borrower
By:___________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice
of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to BAYERISCHE LANDESBANK
GIROZENTRALE (the "Liquidity Provider"), with reference to the Revolving
Credit Agreement (2000-1G) dated as of March 3, 2000, between the Borrower
and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as
therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used
for the funding of the Class G Cash Collateral Account in accordance
with Section 3.6(c) of the Intercreditor Agreement by reason of the
downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating,
which Advance is requested to be made on __________, ____. The
Downgrade Advance should be transferred to [name of bank/wire
instructions/ABA number] in favor of account number [ __ ], reference
[ __ ].
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on
the date hereof and is to be applied in respect of the funding of the
Class G Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of the principal of, or premium on, the Class
G Certificates [or the Class C Certificates, or interest on the Class
C Certificates,]3 (iii) was computed in accordance with the
provisions of the Class G Certificates, the Class G Trust Agreement
and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class G Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(c) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
- --------
3 Include if Class C Certificates have been issued.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Downgrade Advance as
requested by this Notice of Borrowing shall automatically and
irrevocably terminate the obligation of the Liquidity Provider to
make further Advances under the Liquidity Agreement; and (B)
following the making by the Liquidity Provider of the Downgrade
Advance requested by this Notice of Borrowing, the Borrower shall not
be entitled to request any further Advances under the Liquidity
Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as
Subordination
Agent, as Borrower
By:___________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to BAYERISCHE LANDESBANK
GIROZENTRALE (the "Liquidity Provider"), with reference to the Revolving
Credit Agreement (2000-1G) dated as of March 3, 2000, between the Borrower
and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as
therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Final Advance by the Liquidity Provider to be used for
the funding of the Class G Cash Collateral Account in accordance with
Section 3.6(i) of the Intercreditor Agreement by reason of the
receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____. The Final Advance should
be transferred to [name of bank/wire instructions/ABA number] in
favor of account number [ __ ], reference [ __ ].
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment
on the date hereof and is to be applied in respect of the funding of
the Class G Cash Collateral Account in accordance with Section 3.6(i)
of the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of principal of, or premium on, the Class G
Certificates [or the Class C Certificates, or interest on the Class C
Certificates,]4 (iii) was computed in accordance with the provisions
of the Class G Certificates, the Class G Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached
hereto as Schedule I), and (iv) has not been and is not the subject
of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class G Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(i) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
- --------
4 Include if Class C Certificates have been issued.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice]5.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Final Advance as requested by
this Notice of Borrowing shall automatically and irrevocably terminate the
obligation of the Liquidity Provider to make further Advances under the
Liquidity Agreement; and (B) following the making by the Liquidity Provider
of the Final Advance requested by this Notice of Borrowing, the Borrower
shall not be entitled to request any further Advances under the Liquidity
Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered
this Notice of Borrowing as of the ____ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Subordination Agent, as Borrower
By:______________________________
Name:
Title:
- --------------
5 Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
State Street Bank and Trust Company of
Connecticut, National Association,
as Subordination Agent, as Borrower
225 Asylum Street
Goodwyn Square
Hartford, CT 06103
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of March 3, 2000, between
State Street Bank and Trust Company of Connecticut, National
Association, as Subordination Agent, as agent and trustee for
the US Airways Pass Through Trust, 2000-1G, as Borrower, and
Bayerisch")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the
Liquidity Agreement, by reason of the occurrence of a Liquidity Event of
Default and the existence of a Performing Note Deficiency (each as defined
therein), we are giving this notice to you in order to cause (i) our
obligations to make Advances (as defined therein) under such Liquidity
Agreement to terminate on the fifth Business Day after the date on which
you receive this notice and (ii) you to request a Final Advance under the
Liquidity Agreement pursuant to Section 3.6(i) of the Intercreditor
Agreement (as defined in the Liquidity Agreement) as a consequence of your
receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER
THE LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE
LIQUIDITY AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE
ON WHICH YOU RECEIVE THIS NOTICE.
Very truly yours,
BAYERISCHE LANDESBANK
GIROZENTRALE,
as Liquidity Provider
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
cc: State Street Bank and Trust Company of
Connecticut, National Association,
as Class G Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of March 3, 2000,
between State Street Bank and Trust Company of Connecticut, National
Association, as Subordination Agent, as agent and trustee for the US
Airways Pass Through Trust, 2000-1G, as Borrower, and Bayerische
Landesbank Girozentrale (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the
Liquidity Agreement referred to above. The transferee has succeeded the
undersigned as Subordination Agent under the Intercreditor Agreement
referred to in the first paragraph of the Liquidity Agreement, pursuant to
the terms of Section 8.1 of the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower
under the Liquidity Agreement are transferred to the transferee and the
transferee shall hereafter have the sole rights and obligations as Borrower
thereunder. The undersigned shall pay any costs and expenses of such
transfer, including, but not limited to, transfer taxes or governmental
charges.
We ask that this transfer be effective as of _______________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely asSubordination
Agent, as Borrower
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
EXECUTION
- -------------------------------------------------------------------------------
INTERCREDITOR AGREEMENT
Dated as of
March 3, 2000
AMONG
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity
but solely as Trustee under the
US Airways Pass Through Trust 2000-1G
BAYERISCHE LANDESBANK GIROZENTRALE
as Class G Liquidity Provider
MBIA INSURANCE CORPORATION
as Policy Provider
AND
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................... 2
SECTION 1.1. Definitions................................................... 2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY ............................. 25
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only....................................... 25
SECTION 2.2. Trust Accounts............................................... 25
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account........................................... 27
SECTION 2.4. Distributions of Special Payments............................ 27
SECTION 2.5. Designated Representatives................................... 31
SECTION 2.6. Controlling Party ........................................... 32
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED .... 34
SECTION 3.1. Written Notice of Distribution .............................. 34
SECTION 3.2. Distribution of Amounts on Deposit in the
Collection Account ....................................... 36
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event.......................................... 38
SECTION 3.4. Other Payments .............................................. 41
SECTION 3.5. Payments to the Trustees, the Liquidity Providers
and the Policy Provider................................... 42
SECTION 3.6. Liquidity Facilities ........................................ 42
SECTION 3.7. The Policy................................................... 50
ARTICLE IV EXERCISE OF REMEDIES .......................................... 55
SECTION 4.1. Directions from the Controlling Party ....................... 55
SECTION 4.2. Remedies Cumulative ......................................... 56
SECTION 4.3. Discontinuance of Proceedings ............................... 56
SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired ........................................ 57
SECTION 4.5. Undertaking for Costs ....................................... 57
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.. 57
SECTION 5.1. Notice of Indenture Default or Triggering Event ............. 57
SECTION 5.2. Indemnification ............................................. 58
SECTION 5.3. No Duties Except as Specified in Intercreditor Agreement..... 58
SECTION 5.4. Notice from the Liquidity Providers and Trustees ............ 58
ARTICLE VI THE SUBORDINATION AGENT ....................................... 59
SECTION 6.1. Authorization; Acceptance of Trusts and Duties .............. 59
SECTION 6.2. Absence of Duties ........................................... 59
SECTION 6.3. No Representations or Warranties as to Documents ............ 59
SECTION 6.4. No Segregation of Monies; No Interest ....................... 59
SECTION 6.5. Reliance; Agents; Advice of Counsel ......................... 60
SECTION 6.6. Capacity in Which Acting .................................... 60
SECTION 6.7. Compensation ................................................ 60
SECTION 6.8. May Become Certificateholder ................................ 61
SECTION 6.9. Subordination Agent Required; Eligibility ................... 61
SECTION 6.10. Money to Be Held in Trust................................... 61
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT ....................... 61
SECTION 7.1. Scope of Indemnification .................................... 61
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT................................ 62
SECTION 8.1. Replacement of Subordination Agent; Appointment
of Successor .............................................. 62
ARTICLE IX SUPPLEMENTS AND AMENDMENTS .................................... 63
SECTION 9.1. Amendments, Waivers, etc. ................................... 63
SECTION 9.2. Subordination Agent Protected ............................... 65
SECTION 9.3. Effect of Supplemental Agreements ........................... 65
SECTION 9.4. Notice to Rating Agencies ................................... 65
ARTICLE X MISCELLANEOUS ................................................... 65
SECTION 10.1. Termination of Intercreditor Agreement ..................... 65
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, the Policy Provider and
Subordination Agent ..................................... 66
SECTION 10.3. Notices .................................................... 66
SECTION 10.4. Severability ............................................... 67
SECTION 10.5. No Oral Modifications or Continuing Waivers ................ 68
SECTION 10.6. Successors and Assigns ..................................... 68
SECTION 10.7. Headings .................................................. 68
SECTION 10.8. Counterpart Form ........................................... 68
SECTION 10.9. Subordination .............................................. 68
SECTION 10.10. Governing Law .............................................. 69
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ...................................... 70
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of March 3, 2000, among STATE STREET
BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association ("State Street"), not in its individual capacity but
solely as Trustee of the Class G Trust (each such term as defined below);
BAYERISCHE LANDESBANK GIROZENTRALE ("BLB"), a public law banking
institution organized under the laws of the Free State of Bavaria, Germany,
as Class G Liquidity Provider; MBIA INSURANCE CORPORATION, a New York stock
insurance company, as the Policy Provider; and STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity except as expressly set forth
herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII
hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft
that is owned by US Airways at the time such Indenture (an "Owned Aircraft
Indenture") is entered into (the "Owned Aircraft"), US Airways will issue
on a recourse basis up to two series of Equipment Notes to finance the
purchase of such Aircraft, and (ii) in the case of each Aircraft that is
leased to US Airways pursuant to a related Lease at the time such Indenture
(a "Leased Aircraft Indenture") is entered into (the "Leased Aircraft"),
the related Owner Trustee will issue on a nonrecourse basis up to two
series of Equipment Notes to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, the Class G Trust will
acquire Series G Equipment Notes having an interest rate equal to the
interest rate applicable to the Class G Certificates;
WHEREAS, pursuant to the Class G Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates bearing the
interest rate and having the final distribution date described in such
Class G Trust Agreement on the terms and subject to the conditions set
forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Class G Certificates issued by the Class G Trust in
the aggregate face amount set forth opposite the name of such Class G Trust
on Schedule I thereto on the terms and subject to the conditions set forth
therein;
WHEREAS, the Class G Liquidity Provider proposes to enter into a
revolving credit agreement with the Subordination Agent, as agent for the
Trustee of the Class G Trust, for the benefit of the Certificateholders of
such Trust;
WHEREAS, the Policy Provider proposes to enter into the Policy
Provider Agreement providing for the issuance by the Policy Provider of the
Policy for the benefit of the Class G Certificateholders (and, with respect
to interest payments only, holders of the Escrow Receipts);
WHEREAS, after the date hereof, a Class C Trust may be formed to issue
Class C Certificates pursuant to a Class C Trust Agreement and, if and when
such Class C Trust is formed, (i) the Class C Trustee will enter into this
Agreement agreeing to the terms of subordination set forth in this
Agreement, (ii) the Class C Trust will acquire Series C Equipment Notes
having an interest rate equal to the interest rate applicable to the Class
C Certificates, and (iii) if applicable, the Class C Liquidity Provider
will enter into the Class C Liquidity Facility for the benefit of the Class
C Certificateholders; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Class G Trustee, the Liquidity Provider and the Policy Provider agree
to the terms of subordination set forth in this Agreement in respect of the
Class G Certificates (and, if and when issued, the Class C Certificates),
and the Subordination Agent, the Class G Trustee, the Liquidity Provider
and the Policy Provider, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions . For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have
the meanings assigned to them in this Article, and include the plural
as well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"Acceleration" means, with respect to the amounts payable in respect
of the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. "Accelerate",
"Accelerated" and "Accelerating" have meanings correlative to the
foregoing.
"Accrued Class G Interest" has the meaning specified in Section 3.7(a).
"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits (if any) related to such Trust)
and (y) the greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and
(y) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of
the Non-Performing Equipment Notes held in such Trust has been paid in
full and such payments have been distributed to the holders of such
Certificates, (ii) the principal of the Performing Equipment Notes
held in such Trust has been paid when due (but without giving effect
to any Acceleration of Performing Equipment Notes) and such payments
have been distributed to the holders of such Certificates and (iii)
the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the terms hereof has been paid in full and
such payments have been distributed to the holders of such
Certificates, but without giving effect to any reduction in the Pool
Balance as a result of any distribution attributable to Deposits (if
any) occurring after the immediately preceding Distribution Date (or,
if the Current Distribution Date is the first Distribution Date,
occurring after the initial issuance of the Certificates of such
Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance of
such Class of Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the
Certificates of such Trust), less the amount of the Deposits (if any)
for such Class of Certificates as of such preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date,
the original aggregate amount of the Deposits (if any) for such Class
of Certificates) other than any portion of such Deposits (if any)
thereafter used to acquire Equipment Notes pursuant to the Note
Purchase Agreement, over (ii) the Aggregate LTV Collateral Amount for
such Class of Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B)
shall not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to
the amount of Adjusted Expected Distributions.
"Advance", with respect to any Liquidity Facility, means any Advances
as defined in such Liquidity Facility.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the 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 the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for
any Distribution Date means the sum of the applicable LTV Collateral
Amounts for each Leased Aircraft and Owned Aircraft, minus the Pool Balance
for each Class of Certificates, if any, senior to such Class, after giving
effect to any distribution of principal on such Distribution Date with
respect to such senior Class or Classes.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Appraisal" means a current fair market value appraisal (which may be
a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed
and willing seller under no compulsion to sell and both having knowledge of
all relevant facts.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most
recent Appraisals of such Aircraft.
"Appraisers" means BK Associates, Inc., Simat, Helliesen & Eichner,
Inc. and Morten Beyer and Agnew, Inc.
"Available Amount" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, less (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or
reinstated as provided in Section 3.6(g) hereof as of such date; provided
that, following a Downgrade Drawing, a Non-Extension Drawing or a Final
Drawing under such Liquidity Facility, the Available Amount of such
Liquidity Facility shall be zero.
"Avoided Payment" has the meaning assigned to such term in the Policy.
"Base Rate" means the fluctuating rate of interest as published from
time to time in the New York, New York edition of The Wall Street Journal,
under the caption "Money Rates" as the "prime rate", the Base Rate to
change when and as such published prime rate changes.
"Basic Agreement" means the Pass Through Trust Agreement dated as of
July 30, 1999 between US Airways, Inc., US Airways Group, Inc., and State
Street Bank and Trust Company of Connecticut, National Association.
"BLB" means Bayerische Landesbank Girozentrale.
"Business Day" means any day other than a Saturday or Sunday or other
day on which insurance companies or commercial banks in New York, New York,
or commercial banking institutions in Pittsburgh, Pennsylvania and in the
cities in which the Corporate Trust Office of the Subordination Agent or
any Loan Trustee or the fiscal agent of the Policy Provider or the office
of the Policy Provider are located are authorized or obligated by law or
executive order to close.
"Cash Collateral Account" means the Class G Cash Collateral Account or
the Class C Cash Collateral Account (if any), as applicable.
"Certificate" means a Class G Certificate or a Class C Certificate (if
any), as applicable.
"Certificateholder" means any holder of one or more Certificates.
"Class" means the Class G Certificates and/or the Class C Certificates
(if any), as the context may require.
"Class C Cash Collateral Account" means, if and when any Class C
Certificates are issued and the Class C Liquidity Facility is issued, an
Eligible Deposit Account in the name of the Subordination Agent maintained
at an Eligible Institution, which shall be the Subordination Agent if it
shall so qualify, into which all amounts drawn under the Class C Liquidity
Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one or
more Class C Certificates (if any).
"Class C Certificates" means any certificates if and when issued by
the Class C Trust, substantially in the form of Exhibit A to the Class C
Trust Agreement, and authenticated by the Class C Trustee, representing
fractional undivided interests in the Class C Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class C Trust Agreement.
"Class C Liquidity Facility" means, if and when any Class C
Certificates are issued, initially, the Revolving Credit Agreement (if any)
dated as of the date of the issuance of the Class C Certificates, between
the Subordination Agent, as agent and trustee for the Class C Trustee, and
the initial Class C Liquidity Provider, and, from and after the replacement
of such agreement pursuant hereto, the Replacement Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Liquidity Provider" means the financial institution initially
party to the Class C Liquidity Facility (if any) as the liquidity provider
thereunder, together with any Replacement Liquidity Provider which has
issued a Replacement Liquidity Facility to replace any Class C Liquidity
Facility pursuant to Section3.6(e).
"Class C Trust" means the US Airways Pass Through Trust 2000-1C, if
and when created pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means, if and when any Class C Certificates
are issued, the Basic Agreement, as supplemented by the Supplement No.
2000-1C thereto dated as of the date of the issuance of the Class C
Certificates (if any), governing the creation and administration of the US
Airways Pass Through Trust 2000-1C and the issuance of the Class C
Certificates (if any), as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class C Trustee" means, if and when any Class C Certificates are
issued, the financial institution acting as trustee under the Class C Trust
Agreement, together with any successor trustee appointed pursuant thereto.
"Class G Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent, into which all amounts drawn under
the Class G Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i)
shall be deposited.
"Class G Certificateholder" means, at any time, any holder of one or
more Class G Certificates.
"Class G Certificates" means the certificates issued by the Class G
Trust, substantially in the form of Exhibit A to the Class G Trust
Agreement, and authenticated by the Class G Trustee, representing
fractional undivided interests in the Class G Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class G Trust Agreement.
"Class G Deposits" means the Deposits with respect to the Class G
Certificates.
"Class G Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class G Trustee, and the initial Class G
Liquidity Provider and, from and after the replacement of such agreement
pursuant hereto, the Replacement Liquidity Facility therefor, if any, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"Class G Liquidity Provider" means BLB, together with any Replacement
Liquidity Provider which has issued a Replacement Liquidity Facility to
replace any Class G Liquidity Facility pursuant to Section 3.6(e).
"Class G Paying Agent Account" means the "Paying Agent Account" as
defined in the Escrow and Paying Agent Agreement pertaining to the Class G
Trust.
"Class G Trust" means the US Airways Pass Through Trust 2000-1G
created and administered pursuant to the Class G Trust Agreement.
"Class G Trust Agreement" means the Basic Agreement, as supplemented
by the Supplement No. 2000-1G thereto dated as of the date hereof,
governing the creation and administration of the US Airways Pass Through
Trust 2000-1G and the issuance of the Class G Certificates, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class G Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class G Trust Agreement, but solely as trustee
under the Class G Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Closing Date" means March 3, 2000.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account established by
the Subordination Agent pursuant to Section 2.2 which the Subordination
Agent shall make deposits in and withdrawals from in accordance with this
Agreement.
"Consent Notice" has the meaning specified in Section 3.6(d).
"Consent Period" has the meaning specified in Section 3.6(d).
"Controlling Party" means the Person entitled to act as such pursuant
to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall
be principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of
such Distribution Date.
"Delivery Period Expiry Date" means the earlier of (a) February 7,
2001, and (b)the date on which Equipment Notes with respect to all New
Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by
the Trusts in accordance with the Note Purchase Agreement; provided that if
all the Equipment Notes relating to the New Aircraft (or Substitute
Aircraft in lieu thereof) have not been purchased by February 7, 2001 on
account of manufacturing delays that occur for reasons beyond the control
of US Airways and that are not occasioned by US Airway's fault or
negligence, then the February 7, 2001 date may be extended to the earlier
of (i) the date on which Equipment Notes with respect to all New Aircraft
(or Substitute Aircraft in lieu thereof) have been purchased by the Trusts
in accordance with the Note Purchase Agreement, and (ii) June 7, 2001.
"Deposit Agreement" shall mean, (i) with respect to the Class G
Certificates, the Deposit Agreement pertaining to such Class dated the date
hereof between the applicable Escrow Agent and the applicable Depositary,
and (ii) with respect to the Class C Certificates (if and when issued), the
Deposit Agreement (if any) pertaining to such Class dated the date of the
issuance of the Class C Certificates between the applicable Escrow Agent
and the applicable Depositary, in each case as the same may be amended,
modified or supplemented from time to time in accordance with the terms
thereof.
"Depositary" means (i) ABN AMRO Bank N.V., acting through its Chicago
branch, as depositary under the Deposit Agreement with respect to the Class
G Certificates, and (ii) the financial institution acting as depositary
under the Deposit Agreement (if any) with respect to the Class C
Certificates (if any).
"Deposits" with respect to any Class, shall have the meaning set forth
in the Deposit Agreement (if any) pertaining to such Class.
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the Provider
Representatives identified under Section 2.5.
"Disposition" has the meaning assigned to such term in Section 3.7(c).
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c). "Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"Election Distribution Date" has the meaning assigned to such term in
Section 3.7(c).
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the
corporate trust department of 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), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository institution
has a long-term unsecured debt rating from each Rating Agency of at least
A-3 or its equivalent. An Eligible Deposit Account may be maintained with a
Liquidity Provider so long as such Liquidity Provider is an Eligible
Institution; provided that such Liquidity Provider shall have waived all
rights of set-off and counterclaim with respect to such account.
"Eligible Institution" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, 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 each
Rating Agency of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than
90 days following the date of such investment, (b) investments in open
market commercial paper of any corporation incorporated under the laws of
the United States of America or any state thereof with a short-term
unsecured debt rating issued by Moody's and Standard & Poor's of at least
P-1 and A-1, respectively, having maturities no later than 90 days
following the date of such investment or (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial
paper or other direct obligations of, or obligations guaranteed by,
commercial banks organized under the laws of the United States or of any
political subdivision thereof (or any U.S. branch of a foreign bank) with
short-term unsecured debt ratings of at least P-1 by Moody's and A-1 by
Standard & Poor's, having maturities no later than 90 days following the
date of such investment; provided, however, that (x) all Eligible
Investments that are bank obligations shall be denominated in U.S. dollars;
and (y) the aggregate amount of Eligible Investments at any one time that
are bank obligations issued by any one bank shall not be in excess of 5% of
such bank's capital surplus; provided further that (1) any investment of
the types described in clauses (a), (b) and (c) above may be made through a
repurchase agreement in commercially reasonable form with a bank or other
financial institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an
Eligible Institution, and (2) all such investments set forth in clause (a),
(b) or (c) above mature no later than the Business Day immediately
preceding the next Regular Distribution Date; provided further, however,
that in the case of any Eligible Investment issued by a domestic branch of
a foreign bank, the income from such investment shall be from sources
within the United States for purposes of the Code. Notwithstanding the
foregoing, no investment of the types described in clause (b) above which
is issued or guaranteed by US Airways or any of its respective Affiliates,
and no investment in the obligations of any one bank in excess of
$10,000,000, shall be an Eligible Investment unless written approval has
been obtained from the Policy Provider and a Ratings Confirmation shall
have been received with respect to the making of such investment.
"Equipment Notes" means, at any time, the Series G Equipment Notes
and, if and when issued, the Series C Equipment Notes, collectively, and in
each case, any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of the Indentures.
"Escrow Agent" means (i) First Security Bank, National Association, as
escrow agent under the Escrow and Paying Agent Agreement with respect to
the Class G Certificates, and (ii) the financial institution acting as
escrow agent under the Escrow and Paying Agent Agreement (if any) with
respect to the Class C Certificates (if any), in each case together with
its respective successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, (i) with respect to
the Class G Certificates, the Escrow and Paying Agent Agreement pertaining
to such Class dated as of the date hereof among the applicable Escrow
Agent, the Underwriters, the Trustee for such Class and the applicable
Paying Agent, and (ii) with respect to the Class C Certificates (if and
when issued) the Escrow and Paying Agent Agreement (if any) pertaining to
such Class dated the date of the issuance of the Class C Certificates among
the applicable Escrow Agent, the Underwriters or initial purchaser(s) of
the Class C Certificates, the Trustee for such Class and the applicable
Paying Agent, in each case as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Escrow Receipts" has the meaning assigned to such term in the Escrow
and Paying Agent Agreement for the Class G Trust.
"Excess Interest Policy Drawing" has the meaning assigned to such term
in Section 3.7(c).
"Excess Reimbursement Obligations" means (a) in the event of any
Policy Provider Election, the portion of the Policy Provider Obligations
that represents, when added to that portion of any Liquidity Obligations
that represents, interest on the Series G Equipment Note in respect of
which the Policy Provider Election has been made in excess of 18 months of
interest at the contract rate of interest applicable to such Equipment
Note, (b) any interest on the Liquidity Obligations in respect of the Class
G Liquidity Facility and Class C Liquidity Facility (if any) paid by the
Policy Provider to the Liquidity Provider from and after the end of the
18-month period referred to in Section 3.7(c) hereof and (c) if the Policy
Provider has, pursuant to either clause (A) or (B) of the proviso to
Section 2.6(c), paid to each Liquidity Provider all outstanding Drawings
and interest thereon owing to such Liquidity Provider under the applicable
Liquidity Facility, interest accrued at the rate of the Base Rate plus 1%
per annum on the unreimbursed amount of such payment from and including the
date of such payment to but excluding the date such payment shall be
reimbursed in full.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and
unpaid interest on such Certificates (excluding interest, if any, payable
with respect to the Deposits (if any) related to such Trust) and (y) the
difference between (A) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date (or, if the Current Distribution
Date is the first Distribution Date, the original aggregate face amount of
the Certificates of such Trust) and (B) the Pool Balance of such
Certificates as of the Current Distribution Date calculated on the basis
that (i) the principal of the Equipment Notes held in such Trust has been
paid when due (whether at stated maturity or upon redemption, prepayment,
purchase, Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (ii) the principal of
any Equipment Notes formerly held in such Trust that have been sold
pursuant to the terms hereof has been paid in full and such payments have
been distributed to the holders of such Certificates, but without giving
effect to any reduction in the Pool Balance as a result of any distribution
attributable to Deposits (if any) occurring after the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, occurring after the initial issuance of the Certificates
of such Trust). For purposes of calculating Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to
the amount of such Expected Distributions. "Expiry Date" with respect to
any Liquidity Facility, shall have the meaning set forth in such Liquidity
Facility.
"Facility Office" means, with respect to any Liquidity Facility, the
Facility Office of the Liquidity Provider thereunder, presently located (in
the case of the Class G Liquidity Facility) at Munich, Germany for BLB, or
such other Facility Office as such Liquidity Provider from time to time
shall notify the applicable Trustee as its Facility Office under any such
Liquidity Facility, provided that such Liquidity Provider shall not change
its Facility Office to a Facility Office outside the United States of
America except in accordance with Section 3.01, 3.02 or 3.03 of any such
Liquidity Facility.
"Fee Letter(s)" means the Fee Letter dated as of the date hereof
between BLB and the Subordination Agent with respect to the initial Class G
Liquidity Facility and any fee letter entered into after the date hereof
between the initial Class C Liquidity Provider and the Subordination Agent
with respect to the initial Class C Liquidity Facility (if any) and any fee
letter entered into between the Subordination Agent and any Replacement
Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (x) the aggregate amount of all
accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits (if any) relating to such Trust)
and (y) the Pool Balance of such Certificates as of the immediately
preceding Distribution Date (less the amount of the Deposits (if any) for
such Class of Certificates as of such preceding Distribution Date other
than any portion of such Deposits (if any) thereafter used to acquire
Equipment Notes pursuant to the Note Purchase Agreement). For purposes of
calculating Final Distributions with respect to the Certificates of any
Trust, any premium paid on the Equipment Notes held in such Trust which has
not been distributed to the Certificateholders of such Trust (other than
such premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such
Trust) shall be added to the amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section
3.6(i).
"Final Legal Distribution Date" means (i) with respect to the Class G
Certificates, August 20, 2018 and (ii) with respect to the Class C
Certificates (if and when issued), the date to be specified in an amendment
to this Agreement pursuant to Section 9.1(c) hereof.
"Financing Agreement" means each of the Participation Agreements and
the Note Purchase Agreement.
"Indenture" means each of the Trust Indentures entered into by the
Loan Trustee, and the Owner Trustee or US Airways, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any Event of
Default (as such term is defined in such Indenture) thereunder.
"Indenture Estate" has, with respect to each Owned Aircraft, the
meaning assigned to such term in the Owned Aircraft Indenture covering such
Owned Aircraft.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Interest Payment Date" means, with respect to any Liquidity Facility,
each date on which interest is due and payable under Section 3.07(c) or
3.07(d) of such Liquidity Facility on a Downgrade Drawing, Non-Extension
Drawing or Final Drawing.
"Investment Earnings" means investment earnings on funds on deposit in
the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"Last Payment Date" has the meaning assigned to such term in Section
3.7(c).
"Lease" means, with respect to each Indenture pertaining to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity Facility,
has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and
(ii) any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class G Liquidity
Facility or the Class C Liquidity Facility (if any).
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities,
Section 6(b) or 6(c) of the Participation Agreements or the Fee Letter(s).
"Liquidity Provider" means, at any time, any Class G Liquidity
Provider or any Class C Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the indenture
trustee thereunder.
"LTV Appraisals" has the meaning assigned to such term in Section 4.1(a).
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for
any Class of Certificates means, as of any Distribution Date, the lesser of
(i) the LTV Ratio for such Class of Certificates multiplied by the
Appraised Current Market Value of such Aircraft (or with respect to any
such Aircraft which has suffered an Event of Loss under and as defined in
the relevant Lease (in the case of a Leased Aircraft) or Indenture (in the
case of an Owned Aircraft), the amount of the insurance proceeds paid to
the related Loan Trustee in respect thereof to the extent then held by such
Loan Trustee (and/or on deposit in the Special Payments Account) or payable
to such Loan Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Notes secured by such Aircraft after giving effect
to any principal payments of such Equipment Notes on or before such
Distribution Date.
"LTV Ratio" means for the Class G Certificates 49.0% and for the Class
C Certificates (if and when issued) the percentage to be specified in an
amendment to this Agreement pursuant to Section 9.1(c) hereof.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b)
the aggregate outstanding principal amount of such Equipment Notes, plus
accrued and unpaid interest thereon.
"Moody's" means Moody's Investors Service, Inc.
"New Aircraft" shall have the meaning set forth in the Note Purchase
Agreement.
"Non-Controlling Party" means, at any time, any Trustee, Liquidity
Provider or Policy Provider which is not the Controlling Party at such
time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section3.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means (i) with respect to the Series G
Equipment Notes, the Note Purchase Agreement dated as of the date hereof
among US Airways, the Class G Trustee, the applicable Escrow Agent, the
Subordination Agent and the applicable Paying Agent, and (ii) with respect
to the Series C Equipment Notes (if and when issued), the Note Purchase
Agreement dated the date of issuance of the Class C Certificates among US
Airways, the Class C Trustee, the Subordination Agent and, if applicable,
the applicable Escrow Agent and the applicable Paying Agent, in each case
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Notice for Payment" means a Notice of Nonpayment as such term is
defined in the Policy.
"Notice of Avoided Payment" has the meaning assigned to such term in
the Policy.
"Officer's Certificate" of any Person means a certification signed by
a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity Facilities,
the Policy, the Policy Provider Agreement, the Policy Fee Letter, the
Indentures, the Trust Agreements, the Underwriting Agreement, the Financing
Agreements, the Leases, the Fee Letter(s), the Equipment Notes and the
Certificates, together with all exhibits and schedules included with any of
the foregoing and each of the other documents and instruments referred to
in the definitions of "Operative Documents" contained in the Leases or, in
the case of any Owned Aircraft, the relevant Indenture.
"Order" has the meaning assigned to the term "Final Order" in the
Policy.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such
Class theretofore authenticated and delivered under the related Trust
Agreement, except:
(i) Certificates of such Class theretofore canceled by the
Registrar (as defined in such Trust Agreement) or delivered to the
Trustee thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full
amount required to make the final distribution with respect to such
Certificates pursuant to Section11.01 of such Trust Agreement has been
theretofore deposited with the related Trustee in trust for the
holders of such Certificates as provided in Section 4.01 of such Trust
Agreement pending distribution of such money to such
Certificateholders pursuant to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered
pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by US Airways or any of its Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so
disregarded. Certificates so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction
of the applicable Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not US Airways or any of its
Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is not
in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Owner Participant" has, with respect to each Leased Aircraft, the
meaning assigned to such term in the Leased Aircraft Indenture covering
such Leased Aircraft.
"Owner Trustee" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its
individual capacity but solely as trustee under the related owner trust
agreement, together with any successor trustee appointed pursuant to such
owner trust agreement.
"Participation Agreement" means, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means (i) State Street Bank and Trust Company of
Connecticut, National Association, as paying agent under the Escrow and
Paying Agent Agreement with respect to the Class G Certificates, and (ii)
the financial institution acting as paying agent under the Escrow and
Paying Agent Agreement (if any) with respect to the Class C Certificates
(if any), in each case together with its respective successors in such
capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant to
an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided that in
the event of a bankruptcy proceeding involving US Airways under Title 11 of
the United States Code (the "Bankruptcy Code"), (i) any payment default
existing during the 60-day period under Section 1110(a)(1)(A) of the
Bankruptcy Code (or such longer period as may apply under Section 1110(b)
of the Bankruptcy Code) (the "Section 1110 Period") shall not be taken into
consideration, unless during the Section 1110 Period the trustee in such
proceeding or US Airways refuses to assume or agree to perform its
obligations under the Lease related to such Equipment Note (in the case of
a Leased Aircraft) or under the Indenture related to such Equipment Note
(in the case of an Owned Aircraft) and (ii) any payment default occurring
after the date of the order of relief in such proceeding shall not be taken
into consideration if such payment default is cured under Section
1110(a)(1)(B) of the Bankruptcy Code before the later of 30 days after the
date of such default or the expiration of the Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, trustee, unincorporated organization or government or any agency or
political subdivision thereof.
"Policy" means the MBIA Financial Guaranty Insurance Policy No. 31576,
issued as of the Closing Date, together with any endorsements thereto.
"Policy Account" means the Eligible Deposit Account established by the
Subordination Agent pursuant to Section 2.2(a)(iii).
"Policy Drawing" means any payment of a claim under the Policy.
"Policy Expenses" means all amounts (including amounts in respect of
expenses) due to the Policy Provider under Section 3.7(i) hereof or the
Financing Agreements other than (i) the amount of any Excess Reimbursement
Obligations, (ii) any Policy Drawing, (iii)any interest accrued on any
Policy Provider Obligations, (iv) reimbursement of and interest on the
Liquidity Obligations in respect of the Liquidity Facilities paid by the
Policy Provider to any Liquidity Provider, (v) any indemnity payments owed
to the Policy Provider and (vi) any amounts that the Policy Provider is
entitled to receive by virtue of the subrogation rights of the Policy
Provider under the Escrow and Paying Agent Agreement for the Class G Trust,
including, without limitation, fees and expenses incurred in connection
with the enforcement of such rights.
"Policy Fee Letter" means the fee letter, dated as of March 3, 2000,
from the Policy Provider to the Subordination Agent and acknowledged by US
Airways, setting forth the premium payable with respect to the Policy.
"Policy Provider" means MBIA Insurance Corporation.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement dated as of the date hereof among the Subordination Agent, as
agent and trustee for the Class G Trustee, US Airways and the Policy
Provider as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"Policy Provider Default" shall mean the occurrence of any of the
following events (a)the Policy Provider fails to make a payment required
under the Policy in accordance with its terms and such failure remains
unremedied for 2 Business Days following the delivery of Written Notice of
such failure to the Policy Provider, (b) the Policy Provider (i) files any
petition or commences any case or proceeding under any provisions of any
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (ii) makes a general assignment for the
benefit of its creditors or (iii) has an order for relief entered against
it under any federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization that is final and
non-appealable, or (c) a court of competent jurisdiction, the New York
Department of Insurance or another competent regulatory authority enters a
final and non-appealable order, judgment or decree (i)appointing a
custodian, trustee, agent or receiver for the Policy Provider or for all or
any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Policy
Provider (or taking of possession of all or any material portion of the
Policy Provider's property).
"Policy Provider Election" has the meaning assigned to such term in
Section 3.7(c).
"Policy Provider Obligations" means all reimbursement and other
amounts, including, without limitation, fees and indemnities, due to the
Policy Provider under the Policy Fee Letter or Section 3.7(i) hereof but
shall not include (i) any interest on Policy Drawings or interest on any
other payments made by the Policy Provider (except (a) if the Class G
Liquidity Provider has failed to honor any Interest Drawing in accordance
with Section 2.02(e) of the Class G Liquidity Facility, interest on any
Policy Drawing made to cover the shortfall attributable to such failure in
an amount equal to the amount of interest that would have accrued on such
Interest Drawing if such Interest Drawing had been made in accordance with
Section2.02(e) of the Class G Liquidity Facility, at the interest rate
applicable to such Interest Drawing until such Policy Drawing has been
repaid in full, up to a maximum of three such Policy Drawings and (b) if
the Policy Provider has, pursuant to either clause (A) or (B) of the
proviso to Section 2.6(c), paid to each Liquidity Provider all outstanding
Drawings and interest thereon owing to such Liquidity Provider under the
applicable Liquidity Facility, interest accrued at the rate of the Base
Rate plus 1% per annum on the unreimbursed amount of such payment from and
including the date of such payment to but excluding the date such payment
shall be reimbursed in full) and (ii) any amounts that the Policy Provider
is entitled to receive by virtue of the subrogation rights of the Policy
Provider under the Escrow and Paying Agent Agreement for the Class G Trust,
including, without limitation, fees and expenses incurred in connection
with the enforcement of such rights. For the avoidance of doubt, and
subject to the effect of payment priorities herein with respect to Excess
Reimbursement Obligations, Policy Provider Obligations include
reimbursement of, and interest on, the Liquidity Obligations in respect of
the Class G Liquidity Facility and the Class C Liquidity Facility paid by
the Policy Provider to the applicable Liquidity Provider.
"Policy Provider Rating" shall mean the respective ratings by each of
the Ratings Agencies of the Policy Provider's financial strength in respect
of the Policy.
"Policy Provider Threshold Rating" shall mean a Policy Provider Rating
of Aaa by Moody's and AAA by Standard & Poor's.
"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount
of the Certificates of such Trust less (ii) the aggregate amount of all
payments made in respect of the Certificates of such Trust or in respect of
Deposits (if any) relating to such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for each Trust or for
the Certificates issued by any Trust as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits (if any), payment of principal of the Equipment Notes,
payments under the Policy (other than in respect of interest on the
Certificates) or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date.
"Prior Funds" means, with respect to any Distribution Date, any
amounts received by the Escrow Agent in the Class G Paying Agent Account in
respect of accrued interest on the Class G Deposits, any Drawing paid under
the Class G Liquidity Facility in respect of interest due on the Class G
Certificates on such Distribution Date and any withdrawal of funds from the
Class G Cash Collateral Account in respect of such interest.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Provider Representatives" has the meaning assigned to such term in
Section 2.5(c). "Provider Incumbency Certificate" has the meaning assigned
to such term in Section 2.5(c).
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the
Final Legal Distribution Date for such Class (unless, in the case of the
Class G Certificates, the Subordination Agent has made a drawing under the
Policy in an aggregate amount sufficient to pay such outstanding Pool
Balance and shall have distributed such amount to the Class G Trustee) or
(ii) interest due on such Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing, or a withdrawal
from the Cash Collateral Account, or, in the case of the Class G
Certificates, a drawing under the Policy, with respect thereto in an
aggregate amount sufficient to pay such interest and shall have distributed
such amount to the Trustee entitled thereto).
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested by US Airways to
rate the Certificates and which shall then be rating the Certificates. The
initial Rating Agencies will be Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action would not result in (i) a reduction of the rating for any Class of
Certificates (without regard to the Policy in respect of the Class G
Certificates) below the then current rating for such Class of Certificates
or (ii) a withdrawal or suspension of the rating of any Class of
Certificates.
"Regular Distribution Dates" means each February 20 and August 20,
commencing on August 20, 2000; provided, however, that, if any such day
shall not be a Business Day, the related distribution shall be made on the
next succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Liquidity Facility, an
irrevocable revolving credit agreement (or agreements) in substantially the
form of the replaced Liquidity Facility, including reinstatement
provisions, or in such other form (which may include a letter of credit) as
shall permit the Rating Agencies to confirm in writing their respective
ratings then in effect for the related Certificates (before downgrading of
such ratings, if any, as a result of the downgrading of the applicable
Liquidity Provider and without regard to the Policy), and in the case of
the Class G Liquidity Facility, to be consented to by the Policy Provider,
which consent shall not be unreasonably withheld or delayed, in a face
amount (or in an aggregate face amount) equal to the amount of interest
payable on the Certificates of such Trust (at the Stated Interest Rate for
such Trust, and without regard to expected future principal payments) on
the three Regular Distribution Dates following the date of replacement of
such Liquidity Facility and issued by a Person (or Persons) having
unsecured short-term debt ratings issued by each Rating Agency which are
equal to or higher than the Threshold Rating. Without limitation of the
form that a Replacement Liquidity Facility otherwise may have pursuant to
the preceding sentence, a Replacement Liquidity Facility for any Class of
Certificates may have a stated expiration date earlier than 15 days after
the Final Legal Distribution Date of such Class of Certificates so long as
such Replacement Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.6(d) hereof.
"Replacement Liquidity Provider" means a Person (or Persons) who
issues a Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or
the Cash Collateral Account, for any Class, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive
Regular Distribution Dates immediately following such day or, if such day
is a Regular Distribution Date, on such day and the succeeding two Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of such Class of Certificates on such date and without regard to
expected future payments of principal on such Class of Certificates. The
Pool Balance for purposes of the definition of Required Amount with respect
to the Class G Liquidity Facility shall, in the event of any Policy
Provider Election, be deemed to be reduced by the amount (if positive) by
which (a) the then outstanding principal balance of each Series G Equipment
Note in respect of which such Policy Provider Election has been made shall
exceed (b) the amount of any Policy Drawings previously paid by the Policy
Provider in respect of principal on such Series G Equipment Note.
"Responsible Officer" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to
whom any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject, (ii) with respect to each Liquidity
Provider, any authorized officer of such Liquidity Provider, and (iii) with
respect to the Policy Provider, any authorized officer of the Policy
Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment
of interest on the corresponding Class of Certificates with funds drawn
under any Liquidity Facility or the Policy, which payment represents the
installment of principal at the stated maturity of such installment of
principal on such Equipment Note, the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment Note, or
both; provided that any payment of principal of, premium, if any, or
interest resulting from the redemption or purchase of any Equipment Note
shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled Payment,
the date on which such Scheduled Payment is scheduled to be made.
"Section 2.4(b) Fraction" has the meaning assigned to such term in
Section 2.4(b).
"Series C Equipment Notes" means any equipment notes designated as
"Series C Equipment Notes" if and when issued pursuant to any Indenture by
the related Owner Trustee or US Airways, as the case may be, and
authenticated by the Loan Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series G Equipment Notes" means the 8.11% Series G Equipment Notes
issued pursuant to any Indenture by the related Owner Trustee or US
Airways, as the case may be, and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Special Distribution Date" means with respect to any Special Payment:
(i) the date chosen by the Subordination Agent pursuant to Section 2.4(a)
for the distribution of such Special Payment in accordance with this
Agreement, whether distributed pursuant to Section 2.4 or Section 3.3
hereof or (ii) the date chosen by the Subordination Agent pursuant to
Section 3.7(c) or Section 3.7(e), as the case may be, for the distribution
of such Special Payment in accordance with the provisions thereof.
"Special Payment" means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note, Trust Indenture
Estate or Indenture Estate.
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"State Street" has the meaning assigned to such terms in the
preliminary statements to this Agreement.
"Stated Amount" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the
applicable Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning specified in Section 3.6(d).
"Stated Interest Rate" means (i) with respect to the Class G
Certificates, 8.11% per annum, and (ii) with respect to the Class C
Certificates (if and when issued), the interest rate per annum to be
specified in an amendment to this Agreement pursuant to Section 9.1(c)
hereof.
"Subordination Agent" has the meaning assigned to it in the
preliminary statements to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning assigned
to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to such
term in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto)
imposed or otherwise assessed by the United States of America or by any
state, local or foreign government (or any subdivision or agency thereof)
or other taxing authority, including, without limitation: taxes or other
charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation, or net worth and similar charges; taxes or other charges in
the nature of excise, withholding, ad valorem, stamp, transfer, value
added, taxes on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs, and similar charges.
"Tax Letter(s)" means the Tax Letter, dated the date hereof, between
US Airways and BLB with respect to the Class G Liquidity Facility and any
tax letter entered into after the date hereof between US Airways and the
initial Class G Liquidity Provider with respect to the Class C Liquidity
Facility (if any) and all tax letters entered into between US Airways and
any Replacement Liquidity Provider. "Termination Notice" with respect to
any Liquidity Facility has the meaning assigned to such term in such
Liquidity Facility.
"Threshold Rating" means the short-term unsecured debt rating of P-1
by Moody's and A-1 by Standard & Poor's.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (provided that, with
respect to the period prior to the Delivery Period Expiry Date, the
aggregate principal balance of such Equipment Notes is in excess of
$250,000,000) or (z) the occurrence of a US Airways Bankruptcy Event.
"Trust" means either of the Class G Trust or the Class C Trust (if any).
"Trust Accounts" has the meaning assigned to such term in Section 2.2(a).
"Trust Agreement" means either of the Class G Trust Agreement or the
Class C Trust Agreement (if any).
"Trust Indenture Estate" has, with respect to each Leased Aircraft,
the meaning assigned to such term in the Leased Aircraft Indenture covering
such Leased Aircraft.
"Trust Property" with respect to either Trust, has the meaning set
forth in the Trust Agreement for such Trust.
"Trustee" means either of the Class G Trustee or the Class C Trustee
(if any).
"Trustee Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b). "Trustee Representatives" has the meaning assigned to
such term in Section 2.5(b).
"Underwriters" means Salomon Smith Barney Inc., Chase Securities Inc.,
Credit Lyonnais Securities (USA) Inc. and Credit Suisse First Boston
Corporation.
"Underwriting Agreement" means the Underwriting Agreement dated
February 25, 2000 among the Underwriters and US Airways, relating to the
purchase of the Class G Certificates by the Underwriters, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"US Airways" means US Airways, Inc., a Delaware corporation, and its
successors and assigns.
"US Airways Bankruptcy Event" means the occurrence and continuation of
any of the following:
(a) US Airways shall consent to the appointment of or the taking
of possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, or US Airways shall admit in writing
its inability to pay its debts generally as they come due, or does not
pay its debts generally as they become due or shall make a general
assignment for the benefit of creditors, or US Airways shall file a
voluntary petition in bankruptcy or a voluntary petition or an answer
seeking reorganization, liquidation or other relief in a case under
any bankruptcy laws or other insolvency laws (as in effect at such
time) or an answer admitting the material allegations of a petition
filed against US Airways in any such case, or US Airways shall seek
relief by voluntary petition, answer or consent, under the provisions
of any other bankruptcy or other similar law providing for the
reorganization or winding-up of corporations (as in effect at such
time) or US Airways shall seek an agreement, composition, extension or
adjustment with its creditors under such laws, or US Airways' board of
directors shall adopt a resolution authorizing corporate action in
furtherance of any of the foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of US Airways,
a receiver, trustee or liquidator of US Airways or of any substantial
part of its property, or any substantial part of the property of US
Airways shall be sequestered, or granting any other relief in respect
of US Airways as a debtor under any bankruptcy laws or other
insolvency laws (as in effect at such time), and any such order,
judgment or decree of appointment or sequestration shall remain in
force undismissed, unstayed and unvacated for a period of 60 days
after the date of entry thereof; or
(c) a petition against US Airways in a case under any bankruptcy
laws or other insolvency laws (as in effect at such time) is filed and
not withdrawn or dismissed within 60 days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of
corporations which may apply to US Airways, any court of competent
jurisdiction assumes jurisdiction, custody or control of US Airways or
of any substantial part of its property and such jurisdiction, custody
or control remains in force unrelinquished, unstayed and unterminated
for a period of 60 days.
"US Airways Provisions" has the meaning specified in Section 9.1(a).
"Written Notice" means, from the Subordination Agent, any Trustee,
Liquidity Provider or the Policy Provider, a written instrument executed by
the Designated Representative of such Person. An invoice delivered by a
Liquidity Provider pursuant to Section3.1 in accordance with its normal
invoicing procedures shall constitute Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from Monies
Received Only. (a) Each Trustee hereby acknowledges and agrees to the terms
of subordination and distribution set forth in this Agreement in respect of
each Class of Certificates and agrees to enforce such provisions and cause
all payments in respect of the Equipment Notes, the Policy and the
Liquidity Facilities to be applied in accordance with the terms of this
Agreement. In addition, each Trustee hereby agrees to cause the Equipment
Notes purchased by the related Trust to be registered in the name of the
Subordination Agent or its nominee, as agent and trustee for such Trustee,
to be held in trust by the Subordination Agent solely for the purpose of
facilitating the enforcement of the subordination and other provisions of
this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination
Agent hereunder shall be made only from amounts received by it that
constitute Scheduled Payments, Special Payments, payments under Section 6(b)
of the Participation Agreements with respect to Owned Aircraft, or payments
under Sections6(b) and 6(c) of the Participation Agreements with respect to
Leased Aircraft or payments under Section7 of the Note Purchase Agreement,
and only to the extent that the Subordination Agent shall have received
sufficient income or proceeds therefrom to enable it to make such payments
in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement,
each Certificateholder, by its acceptance of a Certificate, each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party,
and the Policy Provider, by entering into the Policy Provider Agreement,
has agreed to look solely to such amounts to the extent available for
distribution to it as provided in this Agreement and to the relevant
Deposits (if any) and that none of the Trustees, Owner Trustees, Loan
Trustees, Owner Participants nor the Subordination Agent is personally
liable to any of them for any amounts payable or any liability under this
Agreement, any Trust Agreement, any Liquidity Facility, the Fee Letter(s),
the Policy Provider Agreement, the Policy Fee Letter or such Certificate,
except (in the case of the Subordination Agent) as expressly provided
herein or (in the case of the Trustees) as expressly provided in each Trust
Agreement or (in the case of the Owner Trustees and the Loan Trustees) as
expressly provided in any Operative Agreement.
SECTION 2.2. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the
Liquidity Providers and the Policy Provider, (ii) as a sub-account in the
Collection Account, the Special Payments Account as an Eligible Deposit
Account, bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Trustees, the
Certificateholders, the Liquidity Providers and the Policy Provider, and
(iii) the Policy Account as an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Class G Trustee and Class G
Certificateholders. The Subordination Agent shall establish and maintain
the Cash Collateral Accounts pursuant to and under the circumstances set
forth in Section 3.6(f) hereof. Upon such establishment and maintenance
under Section 3.6(f) hereof, the Cash Collateral Accounts shall, together
with the Collection Account, constitute the "Trust Accounts" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by
the Subordination Agent if such investments are reasonably available and
have maturities no later than the earlier of (i) 90 days following the date
of such investment and (ii) the Business Day immediately preceding the
Regular Distribution Date or the date of the related distribution pursuant
to Section2.4 hereof, as the case may be, next following the date of such
investment (or, in the case of any amount on deposit in the Cash Collateral
Account with respect to any Liquidity Facility (with respect to such
Liquidity Facility, the "Relevant Amount"), (A) in the case of a portion of
the Relevant Amount equal to the amount scheduled to be paid to the
Liquidity Provider with respect to such Liquidity Facility on the Regular
Distribution Date next following the date of such investment in accordance
with clause (iv), (v) or (vi) of Section 3.6(f), the Business Day
immediately preceding such Regular Distribution Date, or (B) in the case of
a portion of the Relevant Amount equal to the Relevant Amount minus the
amount described in clause (A) above, the Business Day immediately
preceding the scheduled Interest Payment Date with respect to such
Liquidity Facility next following the date of such investment); provided,
however, that upon the occurrence and during the continuation of a
Triggering Event, the Subordination Agent shall invest and reinvest such
amounts in accordance with the written instructions of the Controlling
Party. Unless otherwise expressly provided in this Agreement (including,
without limitation, with respect to Investment Earnings on amounts on
deposit in the Cash Collateral Accounts, Section 3.6(f) hereof), any
Investment Earnings shall be deposited in the Collection Account when
received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the other amounts on deposit in
the Collection Account are to be applied and any losses shall be charged
against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such
investments. The Subordination Agent shall not be liable for any loss
resulting from any investment, reinvestment or liquidation required to be
made under this Agreement other than by reason of its willful misconduct or
gross negligence or with respect to the handling of funds, ordinary
negligence. Eligible Investments and any other investment required to be
made hereunder shall be held to their maturities except that any such
investment may be sold (without regard to its maturity) by the
Subordination Agent without instructions whenever such sale is necessary to
make a distribution required under this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest. The Subordination Agent is
authorized in making or disposing of any Eligible Investment to deal with
itself (in its individual capacity) or with any one or more of its
Affiliates, whether it or such Affiliates are acting as an agent of the
Subordination Agent or for any third person or dealing as principal for its
own account.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the
Trustees, the Certificateholders, the Liquidity Providers and the Policy
Provider, as the case may be. If, at any time, any of the Trust Accounts
ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, to which the Policy Provider and each Rating Agency may consent)
establish a new Collection Account, Special Payments Account, Policy
Account or Cash Collateral Account, as the case may be, as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such
new Collection Account, Special Payments Account, Policy Account or Cash
Collateral Account, as the case may be. So long as State Street is an
Eligible Institution, the Trust Accounts shall be maintained with it as
Eligible Deposit Accounts.
SECTION 2.3. Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit
in the Collection Account all Scheduled Payments received by it (other than
any Scheduled Payment which by the express terms hereof is to be deposited
to the Policy Account or a Cash Collateral Account).
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate
amount of such Special Payments.
SECTION 2.4. Distributions of Special Payments. (a) Notice of Special
Payment. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee, the Liquidity
Providers and the Policy Provider. The Subordination Agent shall promptly
calculate the amount of the redemption or purchase of Equipment Notes or
the amount of any Overdue Scheduled Payment, as the case may be, comprising
such Special Payment under the applicable Indenture or Indentures and shall
promptly send to each Trustee a Written Notice of such amount and the
amount allocable to each Trust. Such Written Notice shall also set the
distribution date for such Special Payment (a "Special Distribution Date"),
which shall be the Business Day which immediately follows the later to
occur of (x) the 15th day after the date of such Written Notice or (y) the
date the Subordination Agent has received or expects to receive such
Special Payment. Amounts on deposit in the Special Payments Account shall
be distributed in accordance with Sections 2.4(b) and 2.4(c) hereof, as
applicable.
(b) Redemptions and Purchases of Equipment Notes. (i) So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section
2.4(b) of amounts on deposit in the Special Payments Account on account of
the redemption, purchase (including, without limitation, a purchase
resulting from a sale of the Equipment Notes permitted by Article IV
hereof) or prepayment of all of the Equipment Notes issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment in the
following order of priority:
first, such amount as shall be required to pay (A) the aggregate
amount of all accrued and unpaid Liquidity Expenses and Policy
Expenses then in arrears ("past due amounts") plus (B) the product of
(x) the aggregate amount of all accrued and unpaid Liquidity Expenses
and Policy Expenses not in arrears to such Special Distribution Date
multiplied by (y) a fraction (the "Section 2.4(b) Fraction"), the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes ("accrued
amounts"), shall be distributed to the Liquidity Providers and the
Policy Provider first in satisfaction of any past due amounts and then
in satisfaction of the accrued amounts, in each case, pro rata on the
basis of the amount of Liquidity Expenses and Policy Expenses, owed to
each Liquidity Provider and the Policy Provider;
second, such amount as shall be required to pay (i) (A) all accrued
and unpaid interest (including interest accrued and unpaid on any
Interest Drawing or any Applied Provider Advance (as defined in any
Liquidity Facility)) then in arrears on all Liquidity Obligations plus
(B) the product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility) multiplied by (y) the Section 2.4(b) Fraction (in each case
determined after application of the proceeds of any Excess Interest
Policy Drawing or other payment by the Policy Provider to the
applicable Liquidity Provider in respect of any interest on Interest
Drawings in accordance with the provisions of Section2.6(c)), (ii) (A)
all accrued and unpaid interest then in arrears on any Policy Drawings
made in respect of any shortfall attributable to a failure by any
Liquidity Provider to honor an Interest Drawing (as more fully
provided in the definition of "Policy Provider Obligations") plus (B)
the product of (x) the aggregate amount of all accrued and unpaid
interest on such Policy Drawings not in arrears to such Special
Distribution Date multiplied by (y) the Section 2.4(b) Fraction, and
(iii) if the Policy Provider has elected pursuant to the proviso to
Section 2.6(c) to pay to each Liquidity Provider all outstanding
Drawings and interest thereon owing to such Liquidity Provider under
the applicable Liquidity Facility, the product of (x) the amount of
such payment made to such Liquidity Provider attributable to interest
accrued on such Drawings multiplied by (y) the Section 2.4(b)
Fraction, shall be distributed to the Liquidity Providers and the
Policy Provider pro rata on the basis of the amount of such Liquidity
Obligations owed to each Liquidity Provider and the amount of
unreimbursed Policy Provider Obligations payable under this clause
"second" to the Policy Provider;
third, such amount as shall be required (i) (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to
fund such Cash Collateral Account up to its Required Amount shall be
deposited in such Cash Collateral Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, to
deposit into the related Cash Collateral Account an amount equal to
such Cash Collateral Account's Required Amount shall be deposited in
such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (i)(A) nor subclause
(i)(B) of this clause "third" are applicable, to pay or reimburse the
Liquidity Provider in respect of such Liquidity Facility in an amount
equal to the amount of any unreimbursed Interest Drawings (net of any
and all payments made by the Policy Provider to the applicable
Liquidity Provider with respect to the principal of any Interest
Drawing under such Liquidity Facility) under such Liquidity Facility
and (ii) if the Policy Provider has elected pursuant to the proviso to
Section 2.6(c) to pay to each Liquidity Provider all outstanding
Drawings and interest thereon owing to such Liquidity Provider under
the applicable Liquidity Facility, the product of (x) the amount of
such payment made to such Liquidity Provider in respect of principal
of Drawings under such Liquidity Facility multiplied by (y)the Section
2.4(b) Fraction, shall be distributed to such Liquidity Provider and
the Policy Provider, pro rata on the basis of the amounts of all such
deficiencies and/or unreimbursed Interest Drawings in respect of each
Liquidity Provider and the amount of unreimbursed Policy Provider
Obligations payable under this clause "third" to the Policy Provider;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (i)(A) or
(i)(B) of clause "third" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x) the
aggregate outstanding amount of unreimbursed Advances (whether or not
then due) under such Liquidity Facility over (y) the Required Amount
for the relevant Class, pro rata on the basis of such amounts in
respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class G Certificates on such Special
Distribution Date shall be distributed to the Class G Trustee;
sixth, such amount as shall be required to pay the Policy Provider all
Policy Provider Obligations then due to the Policy Provider under the
Policy Provider Agreement (other than amounts payable pursuant to
clauses "first", "second" and "third" of this Section 2.4(b)(i) and
any Excess Reimbursement Obligations) shall be paid to the Policy
Provider;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amounts as shall be required to pay any Excess
Reimbursement Obligations to the Policy Provider; and
ninth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
For the purposes of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued,
due and unpaid interest on such Certificates together with (without
duplication) accrued and unpaid interest on a portion of such Certificates
equal to the outstanding principal amount of the Equipment Notes held in
such Trust and being redeemed, purchased or prepaid (immediately prior to
such redemption, purchase or prepayment) in each case excluding interest,
if any, payable with respect to the Deposits (if any) related to such
Trust".
(ii) Upon and after the occurrence of a Triggering Event (whether or
not continuing), the Subordination Agent shall make distributions of
amounts on deposit in the Special Payments Account on account of the
redemption or purchase of all of the Equipment Notes issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be
distributed in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment or expense reimbursement
received by it from the Owner Participant, the Owner Trustee or US Airways
in respect of any Trustee, any Liquidity Provider, the Policy Provider, any
Paying Agent, any Depositary or any Escrow Agent (collectively, the
"Payees") and (ii) any compensation (including, without limitation, any
fees payable to any Liquidity Provider under Section 2.03 of any Liquidity
Facility or to the Policy Provider under the Policy Provider Agreement or
the Policy Fee Letter) received by it from the Owner Participant, the Owner
Trustee or US Airways under any Operative Agreement in respect of any
Payee, directly to the Payee entitled thereto.
SECTION 2.5. Designated Representatives. (a) With the delivery of
this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider, the Policy Provider and each Trustee, and from time to time
thereafter may furnish to each Liquidity Provider, the Policy Provider and
each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's, the Policy Provider's or Trustee's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Subordination Agent Incumbency Certificate") of a
Responsible Officer of the Subordination Agent certifying as to the
incumbency and specimen signatures of the officers of the Subordination
Agent and the attorney-in-fact and agents of the Subordination Agent (the
"Subordination Agent Representatives") authorized to give Written Notices
on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider, the Policy Provider and Trustee receives a subsequent
Subordination Agent Incumbency Certificate, it shall be entitled to rely on
the last Subordination Agent Incumbency Certificate delivered to it
hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to
the Subordination Agent, and from time to time thereafter may furnish to
the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than
one time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder.
Until the Subordination Agent receives a subsequent Trustee Incumbency
Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider and
the Policy Provider shall furnish to the Subordination Agent, and from time
to time thereafter may furnish to the Subordination Agent, at such
Liquidity Provider's or Policy Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than
one time in any 12-month period), a certificate ( each a "Provider
Incumbency Certificate") of any Responsible Officer of such Liquidity
Provider or Policy Provider certifying as to the incumbency and specimen
signatures of any officer, attorney-in-fact, agent or other designated
representative of such Liquidity Provider or Policy Provider (in each case
the "Provider Representatives" and, together with the Subordination Agent
Representatives and the Trustee Representatives, the "Designated
Representatives") authorized to give Written Notices on behalf of such
Liquidity Provider or Policy Provider hereunder. Until the Subordination
Agent receives a subsequent Provider Incumbency Certificate, it shall be
entitled to rely on the last Provider Incumbency Certificate delivered to
it hereunder by the relevant Liquidity Provider or the Policy Provider.
SECTION 2.6. Controlling Party. (a) The Trustees, the Liquidity
Providers and the Policy Provider hereby agree that, with respect to any
Indenture at any given time, the Loan Trustee thereunder will be directed
(i) in taking, or refraining from taking, any action under such Indenture
or with respect to the Equipment Notes issued thereunder, so long as no
Indenture Default has occurred and is continuing thereunder, by the holders
of at least a majority of the outstanding principal amount of such
Equipment Notes (provided that, for so long as the Subordination Agent is
the registered holder of the Equipment Notes, the Subordination Agent shall
act with respect to this clause(i) in accordance with the directions of the
Trustees (in the case of each such Trustee, with respect to the Equipment
Notes issued under such Indenture and held as Trust Property of such Trust)
constituting, in the aggregate, directions with respect to such principal
amount of Equipment Notes) except as provided in Section 9.1(b) hereof, and
(ii) after the occurrence and during the continuance of an Indenture
Default thereunder (which, in the case of an Indenture pertaining to a
Leased Aircraft, has not been cured by the applicable Owner Trustee or the
applicable Owner Participant, if applicable, pursuant to Section4.03 of
such Indenture), in taking, or refraining from taking, any action under
such Indenture or with respect to such Equipment Notes, including
exercising remedies thereunder (including Accelerating the Equipment Notes
issued thereunder or foreclosing the Lien on the Aircraft securing such
Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to
any Indenture upon the occurrence of an Indenture Default thereunder shall
be: (y) the Policy Provider until the Final Distributions on the Class G
Certificates have been made and no Policy Provider Obligations remain
outstanding, or, if any Policy Provider Default shall have occurred and be
continuing or the Policy Provider is required to but has failed to endorse
the Policy under and in accordance with the provisions of Section 3.7(c)
hereof, the Class G Trustee until the payment of the Final Distribution to
the holders of the Class G Certificates; and thereafter, (z) the Class C
Trustee. For purposes of giving effect to the foregoing, the Trustees
(other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the
Equipment Notes, shall exercise its voting rights in respect of the
Equipment Notes as directed by the Controlling Party and any vote so
exercised shall be binding upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is
not the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from
exercising such rights as shall be specifically granted to such
Non-Controlling Party hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earliest to occur of (i) the date on which the entire Available Amount
under any Liquidity Facility shall have been drawn (for any reason other
than a Downgrade Drawing or a Non-Extension Drawing) and remain
unreimbursed, (ii) the date on which the entire amount of any Downgrade
Drawing or Non-Extension Drawing under any Liquidity Facility shall have
become and remain "Applied Downgrade Advances" or "Applied Non-Extension
Advances", as the case may be, under and as defined in such Liquidity
Facility and (iii) the date on which all Equipment Notes shall have been
Accelerated (provided that with respect to the period prior to the Delivery
Period Expiry Date, such Equipment Notes have an aggregate outstanding
principal balance in excess of $250,000,000), the Liquidity Provider, if
any, with the highest outstanding amount of Liquidity Obligations then owed
to it and not then in default in its obligations to make any Advance under
any Liquidity Facility shall have the right to elect, by Written Notice to
the Subordination Agent, the Policy Provider and each of the Trustees, to
become the Controlling Party hereunder with respect to any Indenture at any
time from and including the last day of such 18-month period; provided,
however, that if within 15 Business Days after its receipt of any such
written notice from such Liquidity Provider (A) (i) the Policy Provider
then meets the Policy Provider Threshold Rating and (ii) the Policy
Provider delivers to the Subordination Agent (with a copy to each of the
Trustees and each Liquidity Provider) (a) an endorsement to the Policy (x)
extending the benefits of the Policy to and covering in full all Drawings
under each Liquidity Facility together with accrued interest thereon
(determined without regard to the availability of funds for the payment
thereof by the Subordination Agent) in respect of such Liquidity Facility,
(y) permitting each Liquidity Provider when and as such Liquidity
Obligations become due under the applicable Liquidity Facility to demand a
payment thereof under such endorsed Policy directly from the Policy
Provider and (z) prohibiting any amendment or modification of such endorsed
Policy without the prior written consent of each Liquidity Provider and
otherwise in form and substance reasonably satisfactory to each Liquidity
Provider, (b) a legal opinion addressed to the Liquidity Providers to the
effect that the Policy as endorsed constitutes an enforceable obligation of
the Policy Provider and (c) a Ratings Confirmation issued by each Rating
Agency with respect thereto or (B) the Policy Provider pays to the
Liquidity Provider all outstanding Drawings under each Liquidity Facility
together with accrued interest thereon (as so determined) in respect of
such Liquidity Facility, then, in either case, the Policy Provider rather
than such Liquidity Provider shall be the Controlling Party so long as no
Policy Provider Default has occurred and is continuing (in which case such
Liquidity Provider, if it so elects and if Liquidity Obligations owing to
it remain outstanding, or, if it does not so elect or if no such Liquidity
Obligations remain outstanding, the Class G Trustee, shall become the
Controlling Party). In connection with the delivery of any such endorsement
to the Policy, the parties hereto agree to enter into an amendment to this
Agreement and the Subordination Agent agrees to enter into an amendment to
the Policy Provider Agreement, in each instance, to make such changes
thereto as may be necessary to give effect to the foregoing (any such
amendment to this Agreement to be subject to delivery to each of the
Trustees and the Subordination Agent of a Ratings Confirmation issued by
each Rating Agency with respect thereto and each such amendment to be in
form and substance reasonably satisfactory to each party thereto). In
addition, each Liquidity Provider agrees to request the Policy Drawings
permitted by such endorsed Policy and that the proceeds thereof shall be
applied to reduce, pro tanto, the Liquidity Obligations owing to it in the
following order: first, to accrued and unpaid Liquidity Expenses; second,
to interest accrued and unpaid on Liquidity Obligations; and third, to all
other Liquidity Obligations.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right
or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution. (a) No later than 3:00
p.m. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class G Certificates, the Class G Trustee
shall set forth the amounts to be paid in accordance with clause
"fifth" of Section 3.2 or 2.4(b), as the case may be, hereof;
(ii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clause "seventh" of Section 3.2 or 2.4(b), as the case
may be, hereof;
(iii) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid
in accordance with clauses "first", "second", "third" and "fourth" of
Section 3.2 or 2.4(b), as the case may be, hereof;
(iv) The Policy Provider shall set forth the amounts to be paid
to it in accordance with clauses "first", "second", "third", "sixth"
and "eighth" of Section3.2 or 2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "ninth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the
Certificates, such schedule or similar document is to remain in effect
until any substitute notice or amendment shall be given to the
Subordination Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons,
and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
(i) With respect to the Class G Certificates, the Class G Trustee
shall set forth the amounts to be paid in accordance with clauses
"first" (to reimburse payments made by the Class G Certificateholders,
pursuant to subclause (iv) of clause "first" of Section3.3 hereof) and
"seventh" of Section3.3 hereof;
(ii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (to reimburse payments made by the
Class C Certificateholders, pursuant to subclause (iv) of clause
"first" of Section 3.3 hereof) and clause "ninth" of Section 3.3
hereof ;
(iii) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid
to it in accordance with subclause
(iv) of clause "first" of Section 3.3 hereof and clauses
"second", "third", "fourth" and "fifth" of Section 3.3 hereof; (iv)
The Policy Provider shall separately set forth amounts to be paid to
it in accordance with subclauses (iii) and (iv) of clause "first" of
Section 3.3 hereof, subclause (ii) of clause "second", subclause (ii)
of clause "third", subclause (II) of clause "fourth", clause "eighth"
and clause "tenth" of Section 3.3 hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee, a Liquidity Provider or the Policy
Provider shall have received all amounts owing to it (and, in the case of a
Trustee, the Certificateholders for which it is acting) pursuant to
Section2.4, 3.2, 3.3 or 3.7 hereof, as applicable, and, in the case of a
Liquidity Provider or the Policy Provider, its commitment or obligations
under the related Liquidity Facility or the Policy, as the case may be,
shall have terminated or expired, such Person shall, by a Written Notice,
so inform the Subordination Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee, any Liquidity Provider or the
Policy Provider pursuant to paragraphs (a) through (c) above and shall have
no independent obligation to verify, calculate or recalculate any amount
set forth in any Written Notice delivered in accordance with such
paragraphs.
(e) Any Written Notice delivered by a Trustee, a Liquidity Provider,
the Policy Provider or the Subordination Agent, as applicable, pursuant to
Section3.1(a), 3.1(b), 3.1(c) or 3.7 hereof, if made prior to 10:00 A.M.
(New York City time) on any Business Day shall be effective on the date
delivered (or if delivered later on a Business Day or if delivered on a day
which is not a Business Day shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall
as promptly as practicable comply with any such instructions; provided,
however, that any transfer of funds pursuant to any instruction received
after 10:00 A.M. (New York City time) on any Business Day may be made on
the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 2.4(b), 3.2 or 3.3 hereof, the Subordination
Agent shall request such information and, failing to receive any such
information, the Subordination Agent shall not make such distribution(s) to
such Person. In such event, the Subordination Agent shall make
distributions pursuant to clauses "first" through "eighth" of Section
2.4(b), clauses "first" through "ninth" of Section 3.2 and clauses "first"
through "tenth" of Section 3.3 to the extent it shall have sufficient
information to enable it to make such distributions, and shall continue to
hold any funds remaining, after making such distributions, until the
Subordination Agent shall receive all necessary information to enable it to
distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider, the Policy Provider or any Trustee shall request, but
in any event automatically at the end of each calendar quarter, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to
Section3.1(f) hereof.
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of
any amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date
(or, in the case of any amount described in Section 2.4(c), on the Special
Distribution Date thereof) in the following order of priority and in
accordance with the information provided to the Subordination Agent
pursuant to Section 3.1(a) hereof:
first, such amount as shall be required to pay (i) all accrued
and unpaid Liquidity Expenses owed to each Liquidity Provider and (ii)
all accrued and unpaid Policy Expenses owed to the Policy Provider,
shall be distributed to the Liquidity Providers and the Policy
Provider pro rata on the basis of the amount of Liquidity Expenses and
Policy Expenses owed to each Liquidity Provider and the Policy
Provider;
second, such amount as shall be required to pay (i) the aggregate
amount of interest accrued and unpaid on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) (determined after the application of the proceeds of any
Excess Interest Policy Drawing or other payment by the Policy Provider
to the applicable Liquidity Provider in respect of any interest on
Interest Drawings in accordance with the provisions of Section
2.6(c)), (ii) the aggregate amount of interest accrued and unpaid on
any Policy Drawings made in respect of any shortfall attributable to a
failure by any Liquidity Provider to honor any Interest Drawing (as
more fully provided in the definition of "Policy Provider
Obligations"), and (iii) if the Policy Provider has elected pursuant
to the proviso to Section 2.6(c) to pay to each Liquidity Provider all
outstanding Drawings and interest thereon owing to such Liquidity
Provider under the applicable Liquidity Facility, the amount of such
payment made to such Liquidity Provider attributable to interest
accrued on such Drawings, shall be distributed to the Liquidity
Providers and the Policy Provider pro rata on the basis of the amount
of such Liquidity Obligations owed to each Liquidity Provider and the
amount of such Policy Provider Obligations payable under this clause
"second" to the Policy Provider;
third, such amount as shall be required (i) (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required Amount
shall be deposited in such Cash Collateral Account, (B) if any
Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings
under such Liquidity Facility have reduced the Available Amount
thereunder to zero, to deposit into the related Cash Collateral
Account an amount equal to such Cash Collateral Account's Required
Amount shall be deposited in such Cash Collateral Account, and (C) if,
with respect to any particular Liquidity Facility, neither subclause
(i)(A) nor subclause (i)(B) of this clause "third" is applicable, to
pay or reimburse the Liquidity Provider in respect of such Liquidity
Facility in an amount equal to the amount of all Liquidity Obligations
(net of any and all payments made by the Policy Provider to the
applicable Liquidity Provider with respect to the principal of any
Interest Drawing under such Liquidity Facility) then due under such
Liquidity Facility (other than amounts payable pursuant to clause
"first" or "second" of this Section 3.2), and (ii) if the Policy
Provider has elected pursuant to the proviso to Section 2.6(c) to pay
to each Liquidity Provider all outstanding Drawings and interest
thereon owing to such Liquidity Provider under the applicable
Liquidity Facility, the amount of such payment made to such Liquidity
Provider in respect of principal of Drawings under such Liquidity
Facility, shall be distributed to such Liquidity Provider and the
Policy Provider, pro rata on the basis of the amounts of all such
deficiencies and/or unreimbursed Liquidity Obligations in respect of
each Liquidity Provider and the amount of unreimbursed Policy Provider
Obligations payable under this clause "third" to the Policy Provider;
fourth, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (i)(A)
or (i)(B) of clause "third" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x) the
aggregate outstanding amount of unreimbursed Advances (whether or not
then due) under such Liquidity Facility over (y) the Required Amount
for the relevant Class, pro rata on the basis of such amounts in
respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class G Certificates on such
Distribution Date shall be distributed to the Class G Trustee;
sixth, such amount as shall be required to pay the Policy
Provider all Policy Provider Obligations then due to the Policy
Provider under the Policy Provider Agreement (other than amounts
payable pursuant to clauses "first", "second" and "third" of this
Section 3.2 and Excess Reimbursement Obligations) shall be paid to the
Policy Provider;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amount as shall be required to pay in full any
Excess Reimbursement Obligations shall be distributed to the Policy
Provider;
ninth, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Trustee pursuant
to the terms of this Agreement and the Trust Agreements, as the case
may be, shall be distributed to the Subordination Agent and such
Trustee; and
tenth, the balance, if any, of any such amount remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III.
SECTION 3.3. Distribution of Amounts on Deposit Following a Triggering
Event. (a) Except as otherwise provided in Sections 3.1(f), 3.6(b) and
3.6(k) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes
or any collateral securing such Equipment Notes, shall be applied by
the Subordination Agent in reimbursement of such costs and expenses,
(ii) each Trustee for any amounts of the nature described in clause
(i) above actually incurred by it under the applicable Trust Agreement
(to the extent not previously reimbursed), shall be distributed to
such Trustee, (iii) the Policy Provider for any amounts of the nature
described in clause (i) above actually incurred by it (to the extent
not previously reimbursed), shall be distributed to the Policy
Provider, and (iv) any Liquidity Provider, the Policy Provider or any
Certificateholder for payments, if any, made by it to the
Subordination Agent or any Trustee in respect of amounts described in
clause (i) above, shall be distributed to such Liquidity Provider, the
Policy Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pro rata on the basis of all
amounts described in clauses (i) through (iv) above;
second, such amount remaining as shall be required to pay (i) all
accrued and unpaid Liquidity Expenses owed to each Liquidity Provider
and (ii) all accrued and unpaid Policy Expenses owed to the Policy
Provider, shall be distributed to each Liquidity Provider and the
Policy Provider pro rata on the basis of the amount of Liquidity
Expenses and Policy Expenses owed to each Liquidity Provider and the
Policy Provider;
third, such amount remaining as shall be required to pay (i) the
aggregate amount of interest accrued and unpaid on all Liquidity
Obligations (at the rate, or in the amount, provided in the applicable
Liquidity Facility) (determined after the application of the proceeds
of any Excess Interest Policy Drawing or other payment by the Policy
Provider to the applicable Liquidity Provider in accordance with the
provisions of Section 2.6(c)), (ii) the aggregate amount of interest
accrued and unpaid on any Policy Drawings made in respect of any
shortfall attributable to a failure by any Liquidity Provider to honor
any Interest Drawing (as more fully provided in the definition of
"Policy Provider Obligations"), and (iii) if the Policy Provider has
elected pursuant to the proviso to Section 2.6(c) to pay to each
Liquidity Provider all outstanding Drawings and interest thereon owing
to such Liquidity Provider under the applicable Liquidity Facility,
the amount of such payment made to such Liquidity Provider
attributable to interest accrued on such Drawings, shall be
distributed to the Liquidity Providers and the Policy Provider pro
rata on the basis of the amount of such Liquidity Obligations owed to
each Liquidity Provider and the amount of such Policy Provider
Obligations payable under this clause "third" to the Policy Provider;
fourth, such amount remaining as shall be required (I) (A) if
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Liquidity Facility or (ii) a Final Drawing
shall have occurred with respect to such Liquidity Facility, to fund
such Cash Collateral Account up to its Required Amount (less the
amount of any repayments of Interest Drawings under such Liquidity
Facility while subclause (A)(i) above is applicable) shall be
deposited in such Cash Collateral Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended
Facility at a time when unreimbursed Interest Drawings under such
Liquidity Facility have reduced the Available Amount thereunder to
zero, unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect
to the relevant Liquidity Facility or (ii) a Final Drawing shall have
occurred with respect to such Liquidity Facility, to deposit into the
related Cash Collateral Account an amount equal to such Cash
Collateral Account's Required Amount (less the amount of any
repayments of Interest Drawings under such Liquidity Facility while
subclause (B)(i) above is applicable) shall be deposited in such Cash
Collateral Account, and (C) if, with respect to any particular
Liquidity Facility, neither subclause (I)(A) nor subclause (I)(B) of
this clause "fourth" are applicable, to pay in full the outstanding
amount of all Liquidity Obligations (net of any and all payments made
by the Policy Provider to the applicable Liquidity Provider) then due
under such Liquidity Facility (other than amounts payable pursuant to
clause "second" or "third" of this Section 3.3), and (II) if the
Policy Provider has elected pursuant to the proviso to Section 2.6(c)
to pay to each Liquidity Provider all outstanding Drawings and
interest thereon owing to such Liquidity Provider under the
applicable Liquidity Facility, the amount of such payment made to
such Liquidity Provider in respect of principal of Drawings under
such Liquidity Facility, shall be distributed to such Liquidity
Provider and the Policy Provider, pro rata on the basis of the
amounts of all such deficiencies and/or unreimbursed Liquidity
Obligations in respect of each Liquidity Provider and the amount of
unreimbursed Policy Provider Obligations payable under this clause
"fourth" to the Policy Provider;
fifth, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (I)(A)
or (I)(B) of clause "fourth" above, then the Liquidity Provider with
respect to such Liquidity Facility shall be paid the excess of (x)
the aggregate outstanding amount of unreimbursed Advances (whether or
not then due) under such Liquidity Facility over (y) the Required
Amount for the relevant Class (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause
(I)(A)(i) or (I)(B)(i), as the case may be, of clause "fourth" above
is applicable), pro rata on the basis of such amounts in respect of
each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i)
the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent in
connection with the transactions contemplated hereby (to the extent
not previously reimbursed), shall be applied by the Subordination
Agent in reimbursement of such amount, (ii) each Trustee for any Tax
(other than Taxes imposed on compensation paid under the applicable
Trust Agreement), expense, fee, charge, loss or any other amount
payable to such Trustee under the applicable Trust Agreements (to the
extent not previously reimbursed), shall be distributed to such
Trustee, and (iii) each Certificateholder for payments, if any, made
by it pursuant to Section 5.2 hereof in respect of amounts described
in clause (i) above, shall be distributed to the applicable Trustee
for the account of such Certificateholder, in each such case, pro
rata on the basis of all amounts described in clauses (i) through
(iii) above;
seventh, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class G Certificates
shall be distributed to the Class G Trustee;
eighth, such amount as is required to pay to the Policy
Provider all Policy Provider Obligations then due to the Policy
Provider under the Policy Provider Agreement (other than amounts
payable pursuant to clauses "first", "second", "third" and "fourth"
of this Section 3.3 and Excess Reimbursement Obligations) shall be
paid to the Policy Provider;
ninth, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class C Certificates
shall be distributed to the Class C Trustee; and
tenth, such amount remaining as shall be required to pay in
full any Excess Reimbursement Obligations shall be distributed to the
Policy Provider.
SECTION 3.4. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent (i)
in the order of priority specified in Section 3.3 hereof and (ii) to the
extent received or realized at any time after the Final Distributions for
each Class of Certificates have been made, in the manner provided in clause
"first" of Section 3.3 hereof.
(b) On any Interest Payment Date under each Liquidity Facility
which is not a Distribution Date, the Subordination Agent shall pay to the
Liquidity Provider under such Liquidity Facility from, and to the extent
of, amounts on deposit in the Collection Account, an amount equal to the
amount of interest then due and payable to such Liquidity Provider under
such Liquidity Facility.
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled
Payment Date relating thereto, but prior to such payment becoming an
Overdue Scheduled Payment, then the Subordination Agent shall deposit such
Scheduled Payment in the Collection Account and promptly distribute such
Scheduled Payment in accordance with the priority of distributions set
forth in Section 3.2 hereof; provided that, for the purposes of this
Section 3.4(c) only, each reference in clause "ninth" of Section 3.2 to
"Distribution Date" shall be deemed to mean the actual date of payment of
such Scheduled Payment and each reference in clause "fifth" or "seventh" of
Section 3.2 to "Distribution Date" shall be deemed to refer to such
Scheduled Payment Date.
SECTION 3.5. Payments to the Trustees, the Liquidity Providers
and the Policy Provider. Any amounts distributed hereunder to any Liquidity
Provider or the Policy Provider shall be paid to such Liquidity Provider or
Policy Provider by wire transfer of funds to the address such Liquidity
Provider or Policy Provider shall provide to the Subordination Agent. The
Subordination Agent shall provide a Written Notice of any such transfer to
the applicable Liquidity Provider or Policy Provider, as the case may be,
at the time of such transfer. Any amounts distributed hereunder by the
Subordination Agent to any Trustee which shall not be the same institution
as the Subordination Agent shall be paid to such Trustee by wire transfer
funds at the address such Trustee shall provide to the Subordination Agent.
The Policy Provider shall not have any claim against the Trust Property for
any Trust in respect of any amounts that the Policy Provider is entitled to
receive by virtue of the subrogation rights of the Policy Provider under
the Escrow and Paying Agent Agreement for the Class G Trust, including,
without limitation, fees and expenses incurred in connection with the
enforcement of such rights.
SECTION 3.6. Liquidity Facilities. (a) Interest
Drawings. If on any Distribution Date, after giving effect to the
subordination provisions of this Agreement, the Subordination Agent
shall not have sufficient funds for the payment of any amounts due
and owing in respect of accrued interest on the Class G
Certificates or the Class C Certificates (at the Stated Interest
Rate for such Class of Certificates), then, prior to 1:00 p.m.(New
York City time) on such Distribution Date, the Subordination Agent
shall request a drawing (each such drawing, an "Interest Drawing")
under the Liquidity Facility with respect to such Class of
Certificates (and concurrently with the making of such request, the
Subordination Agent shall give notice to the Policy Provider of
such insufficiency of funds) in an amount equal to the lesser of
(i) an amount sufficient to pay the amount of such accrued interest
(at the Stated Interest Rate for such Class of Certificates) and
(ii) the Available Amount under such Liquidity Facility, and shall
pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by
the Subordination Agent in respect of an Interest Drawing under the Class G
Liquidity Facility and all amounts withdrawn by the Subordination Agent
from the Class G Cash Collateral Account, and payable in each case to the
Class G Trustee on behalf of the Class G Certificateholders, shall be
promptly distributed to the Class G Trustee and (ii) all payments received
by the Subordination Agent in respect of an Interest Drawing under the
Class C Liquidity Facility and all amounts withdrawn by the Subordination
Agent from the Class C Cash Collateral Account, and payable in each case to
the Class C Trustee on behalf of the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee, except that if after any
Distribution Date the Subordination Agent shall receive any amount in
respect of an Interest Drawing under the Class G Liquidity Facility or a
withdrawal from the Class G Cash Collateral Account to pay Accrued Class G
Interest, after such Accrued Class G Interest has been fully paid by a
Policy Drawing under the Policy, such amounts shall be paid directly to the
Policy Provider as reimbursement of such Policy Drawing rather than to the
Class G Trustee on behalf of the Class G Certificateholders and shall
constitute an Interest Drawing under the Class G Liquidity Facility
hereunder.
(c) Downgrade Drawings. If at any time the short-term unsecured
debt rating of any Liquidity Provider issued by either Rating Agency is
lower than the applicable Threshold Rating, within 10 days after receiving
notice of such downgrading (but not later than the expiration date of the
Liquidity Facility issued by the downgraded Liquidity Provider (the
"Downgraded Facility")), such Liquidity Provider or US Airways may arrange
for a Replacement Liquidity Provider to issue and deliver a Replacement
Liquidity Facility to the Subordination Agent. If a Downgraded Facility has
not been replaced in accordance with the terms of this paragraph, the
Subordination Agent shall, on such 10th day (or if such 10th day is not a
Business Day, on the next succeeding Business Day) (or, if earlier, the
expiration date of such Downgraded Facility), request a drawing in
accordance with and to the extent permitted by such Downgraded Facility
(such drawing, a "Downgrade Drawing") of all available and undrawn amounts
thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be
maintained and invested as provided in Section 3.6(f) hereof. The
applicable Liquidity Provider may also arrange for a Replacement Liquidity
Provider to issue and deliver a Replacement Liquidity Facility at any time
after such Downgrade Drawing so long as such Downgrade Drawing has not been
reimbursed in full to such Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with
respect to any Class of Certificates is scheduled to expire on a date (the
"Stated Expiration Date") prior to the date that is 15 days after the Final
Legal Distribution Date for such Class of Certificates, then, no earlier
than the 60th day and no later than the 40th day prior to the then Stated
Expiration Date, the Subordination Agent shall request that such Liquidity
Provider extend the Stated Expiration Date until the earlier of (i) the
date which is 15 days after such Final Legal Distribution Date and (ii) the
date that is the day immediately preceding the 364th day occurring after
the last day of the applicable Consent Period (as hereinafter defined)
(unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility). Whether or not such
Liquidity Provider has received a request from the Subordination Agent,
such Liquidity Provider may, but shall not be obligated to, by a notice (a
"Consent Notice") to the Subordination Agent, given during the period
commencing on the date that is 60 days prior to the stated Expiration Date
then in effect and ending on the date that is 25 days prior to the Stated
Expiration Date then in effect for such Liquidity Facility (such period,
with respect to such Liquidity Facility, the "Consent Period"), consent to
such extension of such Stated Expiration Date, which consent may be given
or withheld by such Liquidity Provider in its absolute and sole discretion;
provided, however, that such extension shall not be effective with respect
to such Liquidity Provider if by a notice (a "Withdrawal Notice") to the
Subordination Agent during the applicable Consent Period such Liquidity
Provider revokes its Consent Notice. If (A) on or before such 25th day,
such Liquidity Facility shall not have been replaced in accordance with
Section 3.6(e), and (B) a Withdrawal Notice has been given with respect to
such Liquidity Facility during the applicable Consent Period or the
applicable Liquidity Provider shall not have delivered a Consent Notice
with respect to such Liquidity Facility within the applicable Consent
Period, the Subordination Agent shall, on such 25th day (or as soon as
possible thereafter), in accordance with the terms of the expiring
Liquidity Facility (a "Non-Extended Facility"), request a drawing under
such expiring Liquidity Facility (such drawing, a "Non-Extension Drawing")
of all available and undrawn amounts thereunder; provided, however, that if
(a) the Subordination Agent delivers a Notice of Borrowing for a
Non-Extension Drawing after the expiration of the Consent Period and the
Liquidity Provider shall not have received a request for an extension of
the Stated Expiration Date during the Consent Period, or (b) if the
Liquidity Provider shall not have received any request for such an
extension prior to the Stated Expiration Date, the Liquidity Provider may
elect in writing, in the case of clause (a) until the earlier of (x) the
Stated Expiration Date and (y) seven Business Days after receiving such
Notice of Borrowing and in the case of clause (b) at any time prior to the
Stated Expiration Date (and if the Stated Expiration Date is not a Business
Day, the immediately preceding Business Day), to extend the Stated
Expiration Date to the earlier of (i) the date which is 15 days after the
Final Legal Distribution Date for the applicable Class of Certificates and
(ii) the date that is the day immediately preceding the 364th day after the
date of such election, and, in the case of clause (a), the obligation of
the Liquidity Provider to make such Non-Extension Drawing shall be deferred
until the earlier of (x) the Stated Expiration Date and (y) the next
Business Day after such seven Business Day period. Amounts drawn pursuant
to a Non-Extension Drawing shall be maintained and invested in accordance
with Section 3.6(f) hereof. If a Non-Extension Drawing shall have been made
and the applicable Liquidity Provider shall not have been replaced within
30 days after the date of such Non-Extension Drawing or such Non-Extension
Drawing shall have been made under the circumstances described in the
proviso to the second immediately preceding sentence, the applicable
Liquidity Provider may elect in writing to renew the applicable Liquidity
Facility on the terms hereof but with a new Stated Expiration Date which
shall be the earlier of (i) the date which is 15 days after the Final Legal
Distribution Date for the applicable Class of Certificates to which such
Liquidity Facility relates and (ii) the date that is the day immediately
preceding the 364th day occurring after the date on which such election is
made, and any such renewal shall become effective upon the execution and
delivery of a Replacement Liquidity Facility in accordance with the
provisions of Section 3.6(e).
(e) Issuance of Replacement Liquidity Facility. (i) At any
time, US Airways may, at its option, with cause or without cause, arrange
for a Replacement Liquidity Facility to replace any Liquidity Facility for
any Class of Certificates (including any Replacement Liquidity Facility
provided pursuant to Section 3.6(e)(ii) hereof); provided, however, that if
the initial Liquidity Provider is replaced for one or more Liquidity
Facilities it must be replaced for all remaining Liquidity Facilities and
the initial Liquidity Provider for any Liquidity Facility shall not be
replaced by US Airways as a Liquidity Provider with respect to such
Liquidity Facility prior to the ninth anniversary of the Closing Date
unless (A) there shall have become due to such initial Liquidity Provider,
or such initial Liquidity Provider shall have demanded, amounts pursuant to
Section 3.01, 3.02 or 3.03 of any applicable Liquidity Facility or pursuant
to the Tax Letter(s) and the replacement of such initial Liquidity Provider
would reduce or eliminate the obligation to pay such amounts or US Airways
determines in good faith that there is a substantial likelihood that such
initial Liquidity Provider will have the right to claim any such amounts
within 180 days after the date of such determination (unless such initial
Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered
by US Airways to such initial Liquidity Provider setting forth the basis
for such determination and accompanied by an opinion of outside counsel
selected by US Airways and reasonably acceptable to such initial Liquidity
Provider verifying the legal conclusions, if any, of such certificate
relating to such basis, provided that, in the case of any likely claim for
such amounts based upon any proposed, or proposed change in, law, rule,
regulation, interpretation, directive, requirement, request or
administrative practice, such opinion may assume the adoption or
promulgation of such proposed matter, (B) it shall become unlawful or
impossible for such initial Liquidity Provider (or its Facility Office) to
maintain or fund its LIBOR Advances as described in Section 3.10 of any
Liquidity Facility, (C) any Liquidity Facility of such initial Liquidity
Provider shall become a Downgraded Facility or a Non-Extended Facility or a
Downgrade Drawing or a Non-Extension Drawing shall have occurred under any
Liquidity Facility of such initial Liquidity Provider or (D) such initial
Liquidity Provider shall have breached any of its payment (including,
without limitation, funding) obligations under any Liquidity Facility in
respect of which it is the Liquidity Provider. If such Replacement
Liquidity Facility is provided at any time after a Downgrade Drawing or
Non-Extension Drawing has been made, all funds on deposit in the relevant
Cash Collateral Account will be returned to the Liquidity Provider being
replaced.
(ii) If any Liquidity Provider shall determine not to extend
any of its Liquidity Facilities in accordance with Section 3.6(d), then
such Liquidity Provider may, at its option, arrange for a Replacement
Liquidity Facility to replace such Liquidity Facility during the period no
earlier than 40 days and no later than 25 days prior to the then effective
Stated Expiration Date of such Liquidity Facility.
(iii) No Replacement Liquidity Facility arranged by US Airways
or a Liquidity Provider in accordance with clause (i) or (ii) above or
pursuant to Section 3.6(c), respectively, shall become effective and no
such Replacement Liquidity Facility shall be deemed a "Liquidity Facility"
under the Operative Agreements (in each case other than insofar as
necessary to permit the repayment of amounts owed to the replaced Liquidity
Provider), unless and until (A) each of the conditions referred to in this
clause (iii) and clause (iv) below shall have been satisfied, (B) if such
Replacement Liquidity Facility shall materially adversely affect the
rights, remedies, interests or obligations of the Class G
Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity
Facility and (C) in the case of a Replacement Liquidity Facility arranged
by a Liquidity Provider under Section 3.6(e)(ii) or pursuant to Section
3.6(c), such Replacement Liquidity Facility is reasonably acceptable to US
Airways.
(iv) In connection with the issuance of each Replacement
Liquidity Facility, the Subordination Agent shall (x) prior to the issuance
of such Replacement Liquidity Facility, obtain written confirmation from
each Rating Agency that such Replacement Liquidity Facility will not cause
a reduction of any rating then in effect for any Class of Certificates by
such Rating Agency (without regard to any downgrading of any rating of any
Liquidity Provider being replaced pursuant to Section 3.6(c), 3.6(e)(i) or
3.6(e)(ii) hereof and without regard to the Policy) and, in the case of the
Class G Liquidity Facility, the written consent of the Policy Provider
(which consent shall not be unreasonably withheld or delayed), (y) pay all
Liquidity Obligations then owing to the replaced Liquidity Provider (which
payment shall be made first from available funds in the applicable Cash
Collateral Account as described in clause (v) of Section 3.6(f) hereof, and
thereafter from any other available source, including, without limitation,
a drawing under the Replacement Liquidity Facility) and (z) cause the
issuer of the Replacement Liquidity Facility to deliver the Replacement
Liquidity Facility to the Subordination Agent, together with a legal
opinion opining that such Replacement Liquidity Facility is an enforceable
obligation of such Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses
(iii) and (iv) of this Section 3.6(e) with respect to a Replacement
Liquidity Facility, (w) the replaced Liquidity Facility shall terminate,
(x) the Subordination Agent shall, if and to the extent so requested by US
Airways or the Liquidity Provider being replaced, execute and deliver any
certificate or other instrument required in order to terminate the replaced
Liquidity Facility, shall surrender the replaced Liquidity Facility to the
Liquidity Provider being replaced and shall execute and deliver the
Replacement Liquidity Facility and any associated Fee Letter(s), (y) each
of the parties hereto shall enter into any amendments to this Agreement
necessary to give effect to (1) the replacement of the applicable Liquidity
Provider with the applicable Replacement Liquidity Provider and (2) the
replacement of the applicable Liquidity Facility with the applicable
Replacement Liquidity Facility and (z) the applicable Replacement Liquidity
Provider shall be deemed to be a Liquidity Provider with the rights and
obligations of a Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Liquidity Facility shall be deemed to be a
Liquidity Facility hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the
event the Subordination Agent shall draw all available amounts under the
Class G Liquidity Facility or the Class C Liquidity Facility pursuant to
Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in the event amounts are to be
deposited in a Cash Collateral Account pursuant to subclause (i)(B) of
clause "third" of Section 2.4(b), subclause (i)(B) of clause "third" of
Section 3.2 or subclause (I)(B) of clause "fourth" of Section 3.3, amounts
so drawn or to be deposited, as the case may be, shall be deposited by the
Subordination Agent in the Class G Cash Collateral Account or the Class C
Collateral Account, respectively. All amounts on deposit in each Cash
Collateral Account shall be invested and reinvested in Eligible Investments
in accordance with Section 2.2(b) hereof. On each Interest Payment Date
(or, in the case of any Special Distribution Date occurring prior to the
occurrence of a Triggering Event on such Special Distribution Date),
Investment Earnings on amounts on deposit in each Cash Collateral Account
(or, in the case of any Special Distribution Date occurring prior to the
occurrence of a Triggering Event, a fraction of such Investment Earnings
equal to the Section 2.4(b) Fraction) shall be deposited in the Collection
Account (or, in the case of any Special Distribution Date occurring prior
to the occurrence of a Triggering Event, the Special Payments Account) and
applied on such Interest Payment Date (or Special Distribution Date, as the
case may be) in accordance with Section 2.4, 3.2, 3.3 or 3.4 (as
applicable). The Subordination Agent shall deliver a written statement to
US Airways, the Policy Provider and the Liquidity Provider one day prior to
each Interest Payment Date and Special Distribution Date setting forth the
aggregate amount of Investment Earnings held in the Cash Collateral
Accounts as of such date. In addition, from and after the date funds are so
deposited, the Subordination Agent shall make withdrawals from such account
as follows:
(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class G Certificates (at the
Stated Interest Rate for the Class G Certificates) from any other
source, withdraw from the Class G Cash Collateral Account, and pay to
the Class G Trustee, an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class G Certificates) on such Class G Certificates and
(y) the amount on deposit in the Class G Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class C Certificates (at the
Stated Interest Rate for the Class C Certificates) from any other
source, withdraw from the Class C Cash Collateral Account, and pay to
the Class C Trustee, an amount equal to the lesser of (x) an amount
necessary to pay accrued and unpaid interest (at the Stated Interest
Rate for the Class C Certificates) on such Class C Certificates and
(y) the amount on deposit in the Class C Cash Collateral Account;
(iii) on each date on which the Pool Balance of the Class G
Trust shall have been reduced by payments made to the Class G
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class G
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class G Cash Collateral Account on such
date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount (with respect to the Class G Liquidity Facility) plus (if on a
Special Distribution Date not coinciding with an Interest Payment
Date) Investment Earnings on deposit in such Cash Collateral Account
will be on deposit in the Class G Cash Collateral Account and shall
first, pay such withdrawn amount to the Class G Liquidity Provider
until the Liquidity Obligations (with respect to the Class G
Certificates) owing to such Liquidity Provider shall have been paid
in full, and second, deposit any remaining withdrawn amount in the
Collection Account;
(iv) on each date on which the Pool Balance of the Class C
Trust shall have been reduced by payments made to the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
such Class, the Subordination Agent shall withdraw from the Class C
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class C Cash Collateral Account on such
date) and any transfer of Investment Earnings from such Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required
Amount (with respect to the Class C Liquidity Facility) plus (if on a
Special Distribution Date not coinciding with an Interest Payment
Date) Investment Earnings on deposit in such Cash Collateral Account
will be on deposit in the Class C Cash Collateral Account and shall
first, pay such withdrawn amount to the Class C Liquidity Provider
until the Liquidity Obligations (with respect to the Class C
Certificates) owing to such Liquidity Provider shall have been paid
in full, and second, deposit any remaining withdrawn amount in the
Collection Account;
(v) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following
the date on which funds have been deposited into the Cash Collateral
Account for such Class of Certificates, the Subordination Agent shall
withdraw all amounts on deposit in such Cash Collateral Account and
shall pay such amounts to the replaced Liquidity Provider until all
Liquidity Obligations owed to such Person shall have been paid in
full, and shall deposit any remaining amount in the Collection
Account; and
(vi) following the payment of Final Distributions with respect
to any Class of Certificates, on the date on which the Subordination
Agent shall have been notified by the Liquidity Provider for such
Class of Certificates that the Liquidity Obligations owed to such
Liquidity Provider have been paid in full, the Subordination Agent
shall withdraw all amounts on deposit in the Cash Collateral Account
in respect of such Class of Certificates and shall deposit such
amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under
the Liquidity Facility for any Trust, upon the reimbursement of the
applicable Liquidity Provider for all or any part of the amount of such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of such Liquidity Facility shall be reinstated by an amount equal to
the amount of such Interest Drawing so reimbursed to the applicable
Liquidity Provider but not to exceed the Required Amount for such Liquidity
Facility; provided, however, that such Liquidity Facility shall not be so
reinstated in part or in full at any time if (x) both a Performing Note
Deficiency exists and a Liquidity Event of Default shall have occurred and
be continuing with respect to the relevant Liquidity Facility or (y) a
Final Drawing shall have occurred with respect to such Liquidity Facility.
In the event that, with respect to any particular Liquidity Facility (i)
funds are withdrawn from any Cash Collateral Account pursuant to clauses
(i) and (ii) of Section 3.6(f) hereof or (ii) such Liquidity Facility shall
become a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Available Amount thereunder to zero, then funds received by the
Subordination Agent at any time other than (x) any time when a Liquidity
Event of Default shall have occurred and be continuing with respect to such
Liquidity Facility and a Performing Note Deficiency exists or (y) any time
after a Final Drawing shall have occurred with respect to such Liquidity
Facility shall be deposited in such Cash Collateral Account as and to the
extent provided in clause "third" of Section 2.4(b), clause "third" of
Section 3.2 or clause "fourth" of Section 3.3, as applicable, and applied
in accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest
thereon, on the dates and at the rates, respectively, provided in the
Liquidity Facilities.
(i) Final Drawing. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the
Subordination Agent shall, not later than the date specified in such
Termination Notice, in accordance with the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available
and undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant
to a Final Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Subordination Agent shall, if any such
Liquidity Facility provides for reductions of the Stated Amount of such
Liquidity Facility and if such reductions are not automatic, request such
Liquidity Provider for such Class of Certificates to reduce such Stated
Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving
effect to such payment). Each such request shall be made in accordance with
the provisions of the applicable Liquidity Facility.
(k) Relation to Subordination Provisions. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Collateral
Accounts, in each case, in respect of interest on the Certificates of any
Class, will be distributed to the Trustee for such Class of Certificates
for distribution to Certificateholders of the related Class,
notwithstanding Sections 2.4(b), 3.2, 3.3 and 3.6(h) hereof.
(l) Assignment of Liquidity Facility. The Subordination Agent
agrees not to consent to the assignment by any Liquidity Provider of any of
its rights or obligations under any Liquidity Facility or any interest
therein, unless (i) US Airways shall have consented to such assignment,
(ii) each Rating Agency shall have provided a Ratings Confirmation in
respect of such assignment and (iii) in the case of the Class G Liquidity
Facility only, the Policy Provider shall have consented to such assignment
(which consent shall not be unreasonably withheld or delayed).
SECTION 3.7. The Policy. (a) Interest Drawings. If on any
Regular Distribution Date (other than the Final Legal Distribution Date)
after giving effect to the subordination provisions of this Agreement and
to the application of Prior Funds, the Subordination Agent does not then
have sufficient funds available for the payment of all amounts due and
owing in respect of accrued and unpaid interest on the Class G Certificates
and, without duplication, accrued and unpaid interest at the Stated
Interest Rate for the Class G Certificates on any Deposit relating to the
Escrow Receipts, in each case at the Stated Interest Rate for the Class G
Certificates on the Pool Balance of the Class G Certificates on such
Distribution Date ("Accrued Class G Interest"), then, prior to 1:00 p.m.
(New York City time) on such Distribution Date, the Subordination Agent (i)
shall deliver a Notice for Payment, as provided in the Policy, to the
Policy Provider or its fiscal agent, requesting a Policy Drawing under the
Policy (for payment into the Policy Account) in an amount sufficient to
enable the Subordination Agent to pay such Accrued Class G Interest and
(ii) shall pay such amount from the Policy Account to the Class G Trustee
or the Escrow Agent for the Class G Trust for deposit into the Class G
Paying Agent Account, as the case may be, in payment of such Accrued Class
G Interest on such Distribution Date.
(b) Proceeds Deficiency Drawing. If on any Special Distribution
Date (which is not also an Election Distribution Date or a Special
Distribution Date established pursuant to clause (c)(i) in the second
paragraph of Section 3.7(c) below) established by the Subordination Agent
by reason of its receipt of a Special Payment constituting the proceeds of
any Series G Equipment Note (as to which there has been a default in the
payment of principal thereof or that has been Accelerated) or the related
Trust Indenture Estate or Indenture Estate, as the case may be, and if on
such Special Distribution Date after giving effect to the subordination
provisions of this Agreement and to the application of Prior Funds, the
Subordination Agent does not then have sufficient funds available for a
reduction in the outstanding Pool Balance of the Class G Certificates by an
amount equal to the outstanding principal amount of such Equipment Note
(determined immediately prior to the receipt of such proceeds) plus accrued
and unpaid interest on the amount of such reduction at the Stated Interest
Rate for the Class G Certificates for the period from the immediately
preceding Regular Distribution Date to such Special Distribution Date,
then, prior to 1:00 p.m. (New York City time) on such Special Distribution
Date, the Subordination Agent (i) shall deliver a Notice for Payment, as
provided in the Policy (for payment into the Policy Account) in an amount
sufficient to enable the Subordination Agent to pay the amount of such
reduction plus such accrued and unpaid interest and (ii) shall pay such
amount from the Policy Account to the Class G Trustee in payment of such
reduction in the outstanding Pool Balance of the Class G Certificates plus
such accrued and unpaid interest on such Special Distribution Date.
(c) No Proceeds Drawing. If the Subordination Agent has not
received a Special Payment constituting proceeds from the sale of any
Series G Equipment Note or the related Trust Indenture Estate or Indenture
Estate (a "Disposition"), as the case may be, during the 18-month period
beginning on the last date on which any payment was made in full on such
Series G Equipment Note (the date of such payment in full, the "Last
Payment Date") as to which there has been a failure to pay principal or
that has been Accelerated subsequent to the Last Payment Date, then on the
first Business Day following the expiration of such 18-month period, the
Subordination Agent shall deliver a Notice for Payment, as provided in the
Policy, to the Policy Provider or its fiscal agent, requesting a Policy
Drawing under the Policy (for payment into the Policy Account) in an amount
equal to the then outstanding principal amount of such Equipment Note plus
accrued and unpaid interest thereon at the Stated Interest Rate for the
Class G Certificates from the immediately preceding Regular Distribution
Date to the below referred to Special Distribution Date. The Subordination
Agent shall promptly, but not less than 25 days prior to such Business Day,
send to the Class G Trustee a Written Notice setting forth the non-receipt
of any such Special Payment and establishing such Business Day as the date
for the distribution of the proceeds of such Policy Drawing, which date
shall constitute a Special Distribution Date. No later than 1:00 p.m. (New
York City time) on the specified Special Distribution Date the
Subordination Agent shall make the specified Policy Drawing and upon its
receipt of the proceeds thereof pay the amount thereof from the Policy
Account to the Class G Trustee in reduction of the outstanding Pool Balance
of the Class G Certificates together with such accrued and unpaid interest
thereon. For the avoidance of doubt, after the payment in full of such
amount under this Section 3.7(c), the Subordination Agent shall have no
right to make any further Policy Drawings under this Section 3.7(c) in
respect of any Disposition of or in respect of such Equipment Note except
for Avoided Payments as provided in Section 3.7(e).
Notwithstanding the foregoing, the Policy Provider has the
right at the end of any such 18-month period, so long as no Policy Provider
Default shall have occurred and be continuing and so long as the Policy
Provider has not defaulted in its obligations (if any) to endorse the
Policy as provided in the next paragraph of this Section 3.7(c), to elect
(the "Policy Provider Election") instead (a) to pay on such Special
Distribution Date an amount equal to any shortfall in the scheduled
principal and interest payable but not paid on such Series G Equipment Note
(without regard to the Acceleration thereof) during such 18-month period
(after giving effect to the application of funds received from the Class G
Liquidity Facility or the Class G Cash Collateral Account, in each case
attributable to such interest), (b) thereafter, on each Regular
Distribution Date until the establishment of an Election Distribution Date
or a Special Distribution Date referred to in clause (c)(i) below, to
permit drawings under the Policy for an amount equal to the scheduled
principal (without regard to the Acceleration thereof) and interest payable
on such Equipment Note on the related payment date and (c) (i) on any
Business Day (which shall be a Special Distribution Date) elected by the
Policy Provider upon 20 days' Written Notice to the Subordination Agent and
the Class G Trustee to request the Subordination Agent, or (ii) following
either the occurrence and continuation of a Policy Provider Default or a
Disposition of or in respect of such Equipment Note on any Business Day
(which shall be a Special Distribution Date) specified by the Subordination
Agent upon 20 days' Written Notice to the Class G Trustee (each such
Business Day in the case of clause (ii) an "Election Distribution Date"),
to permit the Subordination Agent, in each case, to make a Policy Drawing
for an amount equal to the then outstanding principal balance of such
Equipment Note (less any Policy Drawings previously paid by the Policy
Provider in respect of principal of such Equipment Note) and accrued and
unpaid interest on such amounts at the Stated Interest Rate for the Class G
Certificates, from the immediately preceding Regular Distribution Date to
such Election Distribution Date or such Special Distribution Date (after
giving effect to the application of funds, if any, received on such
Election Distribution Date or such Special Distribution Date from the Class
G Liquidity Facility or the Class G Cash Collateral Account attributable to
such interest) and without derogation of the Policy Provider's continuing
obligations for all previous Policy Drawings that remain unpaid in respect
of such Equipment Note. The Subordination Agent shall make each such
drawing referred to in this paragraph under the Policy (for payment into
the Policy Account) no later than 1:00 p.m. (New York City time) on each
such date and upon its receipt of the proceeds thereof pay the amount
thereof from the Policy Account to the Class G Trustee in reduction of the
outstanding Pool Balance of the Class G Certificates together with such
accrued and unpaid interest thereon.
In addition, regardless of whether or not the Policy Provider
makes a Policy Provider Election, the Policy Provider shall, at the end of
such 18-month period, provide to the Trustees and each Liquidity Provider
to the extent not previously provided (a) an endorsement to the Policy (x)
providing for the payment to each Liquidity Provider of interest accruing
on all outstanding Drawings under such Liquidity Provider's Liquidity
Facility together with accrued interest thereon in respect of such
Liquidity Facility from and after the end of such 18-month period, (y)
permitting each Liquidity Provider when and as such interest becomes due
under the applicable Liquidity Facility to demand payment thereof directly
from the Policy Provider under such endorsed Policy (each such demand, an
"Excess Interest Policy Drawing") and (z) prohibiting any amendment or
modification of such endorsed Policy without the prior written consent of
each Liquidity Provider and (b) a legal opinion to the effect that the
Policy as endorsed constitutes an enforceable obligation of the Policy
Provider. Each Liquidity Provider agrees to make such Excess Interest
Policy Drawings and that the proceeds thereof shall reduce pro tanto the
Liquidity Obligations owing to it.
(d) Final Policy Drawing. If on the applicable Final Legal
Distribution Date of the Class G Certificates after giving effect to the
subordination provisions of this Agreement and to the application of Prior
Funds, the Subordination Agent does not then have sufficient funds
available on such date for the payment in full of the Final Distributions
(calculated as at such date but excluding any accrued and unpaid premium)
on such Class of Certificates then, prior to 1:00 p.m. (New York City time)
on such date the Subordination Agent shall: (i) deliver a Notice for
Payment, as provided in the Policy, to the Policy Provider or its fiscal
agent, requesting a Policy Drawing under the Policy (for payment into the
Policy Account) in an amount equal to the minimum amount sufficient to
enable the Subordination Agent to pay the Final Distributions (calculated
as at such date but excluding any accrued and unpaid premium) on such Class
of Certificates, and (ii) shall pay such amount from the Policy Account to
the Class G Trustee in payment of such amount on such date.
(e) Avoidance Drawings. If at any time prior to the expiration
of the Policy the Subordination Agent shall have actual knowledge of the
issuance of any Order, the Subordination Agent shall promptly give notice
thereof to each Trustee, the Liquidity Providers and the Policy Provider.
The Subordination Agent shall thereupon calculate the relevant Avoided
Payment resulting therefrom and shall promptly: (a) send to the Class G
Trustee a Written Notice of such amount and (b) prior to the expiration of
the Policy, deliver to the Policy Provider or its fiscal agent a Notice of
Avoided Payment, together with a copy of the documentation required by the
Policy with respect thereto, requesting a Policy Drawing (for payment to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy
and/or to the Subordination Agent for deposit into the Policy Account, as
applicable) in an amount equal to the amount of the relevant Avoided
Payment. To the extent that any portion of such Avoided Payment is to be
paid to the Subordination Agent, such Written Notice shall also set the
date for the distribution of such portion of the proceeds of such Policy
Drawing which date shall constitute a Special Distribution Date and shall
be the earlier of three Business Days after the date of the expiration of
the Policy and the Business Day that immediately follows the 25th day after
the date of such Written Notice. No later than 1:00 p.m. (New York City
time) on the specified Special Distribution Date, the Subordination Agent
shall make the specified Policy Drawing upon its receipt of the proceeds
thereof and pay the amount thereof from the Policy Account to the Class G
Trustee in reinstatement of the Avoided Payment.
(f) Application of Policy Drawings. Notwithstanding anything to
the contrary contained in this Agreement (including, without limitation,
Sections 2.4, 3.2 and 3.3 hereof), all payments received by the
Subordination Agent in respect of a Policy Drawing (including, without
limitation, that portion, if any, of the proceeds of a Policy Drawing for
any Avoided Payment that is to be paid to the Subordination Agent and not
to any receiver, conservator, debtor-in-possession or trustee in bankruptcy
as provided in the Policy) shall be promptly paid from the Policy Account
to the Class G Trustee for distribution to the Class G Certificateholders
or the holders of the Escrow Receipts, as the case may be.
(g) Limitation to Outstanding Pool Balance. Promptly following
each date on which the Pool Balance of the Class G Certificates is reduced
as a result of payment under this Agreement, the Subordination Agent shall
inform the Policy Provider of such reduction. Notwithstanding anything to
the contrary in this Section 3.7, except as provided in Section 3.7(e), at
no time shall the Subordination Agent make (i) any Policy Drawing for
payment in respect of the Class G Certificates under clause (b), (c) or (d)
of this Section 3.7 in excess of the then outstanding Pool Balance of the
Class G Certificates and accrued and unpaid interest at the Stated Interest
Rate on the Class G Certificates or (ii) any Policy Drawing for payment in
respect of the Class G Certificates under clause (a) of this Section 3.7 in
excess of Accrued Class G Interest. Nothing contained in this Intercreditor
Agreement shall alter or amend the liabilities, obligations, requirements
or procedures of the Policy Provider under the Policy and the Policy
Provider shall not be obligated to make payment except at the times and in
the amounts and under the circumstances expressly set forth in the Policy.
(h) Resubmission of Notice for Payment. If the Policy Provider
at any time informs the Subordination Agent in accordance with the Policy
that a Notice for Payment or Notice of Avoided Payment submitted by the
Subordination Agent does not meet the requirements of the Policy, the
Subordination Agent shall, as promptly as possible after being so informed,
submit to the Policy Provider an amended and revised Notice for Payment or
Notice of Avoided Payment, as the case may be, and shall pay to the Class G
Trustee out of the Policy Account the amount received pursuant to such
amended or revised Notice for Payment or Notice of Avoided Payment, as the
case may be, when received.
(i) Reimbursement Obligation. The Policy Provider shall be
entitled to reimbursement in full for (i) any payment made by the Policy
Provider under the Policy in an amount equal to the sum of the amount so
paid and all other amounts previously paid that remain unreimbursed, which
reimbursement amount shall be due and owing to the Policy Provider on the
date payment is made under the Policy, (ii) if the Policy Provider has,
pursuant to either clause (A) or (B) of the proviso to Section 2.6(c), paid
to each Liquidity Provider all outstanding Drawings and interest thereon
owing to such Liquidity Provider under the applicable Liquidity Facility,
such payment and interest (accrued at the rate of the Base Rate plus 1% per
annum) on the unreimbursed amount of such payment from and including the
date of such payment to but excluding the date such payment shall be
reimbursed in full (without duplication of amounts reimbursable under the
foregoing clause (i)), (iii) any and all charges, fees, costs and expenses
and disbursements that the Policy Provider may reasonably pay or incur,
including reasonable attorneys' and accountants' fees and expenses (without
duplication of amounts paid to the Policy Provider in respect of the
Operative Agreements), in connection with the enforcement, defense or
preservation of any rights in respect of any of the Operative Agreements,
including defending, monitoring or participating in any litigation or
proceeding (which reimbursement obligation shall be due on the date of
presentation of an invoice therefor to the Subordination Agent and US
Airways and to the extent not paid), (iv) all Rating Agency fees, expenses
and disbursements payable by the Policy Provider at any time after the
Closing Date (without duplication of amounts paid to the Policy Provider in
respect of the Operative Agreements) in connection with the Policy Provider
Agreement and the transactions described herein (which reimbursement
obligation shall be due on the date of presentation of an invoice therefor
to the Subordination Agent and US Airways), (v) all reasonable and actual
fees, expenses and disbursements (including those of legal counsel)
incurred by the Policy Provider after the Closing Date (without duplication
of amounts paid to the Policy Provider in respect of the Operative
Agreements) in connection with the Policy Provider Agreement and the
transactions described herein and any modification, waiver, amendment,
revision or similar action of the Operative Agreements and all other
documents delivered with respect thereto (which reimbursement obligation
shall be due on the date of presentation of an invoice therefor to the
Subordination Agent and US Airways), and (vi) interest on Policy Drawings
to the extent provided in the definition of "Policy Provider Obligations"
herein; provided, that in the case of each of the foregoing clauses (i),
(ii), (iii), (iv), (v) and (vi), such reimbursement (A) shall not include
any amounts that the Policy Provider is entitled to receive by virtue of
the subrogation rights of the Policy Provider under the Escrow and Paying
Agent Agreement for the Class G Trust, including, without limitation, fees
and expenses incurred in connection with the enforcement of such rights,
and (B) shall be payable only from and to the extent of the funds available
under and at the time and in the priority specified therefor in Sections
2.4(b), 3.2 and 3.3 hereof, as applicable.
(j) Payment Information. All payments to the Policy Provider
hereunder shall be made in lawful currency of the United States and in
immediately available funds and shall be made prior to 2:00 p.m. (New York
City time) on the date such payment is due by wire transfer to The Chase
Manhattan Bank, ABA #021000021 for credit to MBIA Insurance Corporation,
Account No. 910-2-721728 Re: US Airways Pass Through Trust 2000-1G or to
such other office or account as MBIA may direct.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture
Default under any Indenture, the Controlling Party shall direct the
Subordination Agent, which in turn shall direct the Loan Trustee under such
Indenture, in the exercise of remedies available to the holders of the
Equipment Notes issued pursuant to such Indenture, including, without
limitation, the ability to vote all such Equipment Notes in favor of
Accelerating such Equipment Notes in accordance with the provisions of such
Indenture. Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased Aircraft
to purchase the Equipment Notes and the provisions of the next paragraph,
if the Equipment Notes issued pursuant to any Indenture have been
Accelerated following an Indenture Default with respect thereto, the
Controlling Party may sell, assign, contract to sell or otherwise dispose
of and deliver all (but not less than all) of such Equipment Notes to any
Person at public or private sale, at any location at the option of the
Controlling Party, all upon such terms and conditions as it may reasonably
deem advisable in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased Aircraft
to purchase the Equipment Notes, and notwithstanding the foregoing, so long
as any Certificates remain Outstanding, during the period ending on the
date which is nine months after the earlier of (x) the Acceleration of the
Equipment Notes issued pursuant to any Indenture or (y) the occurrence of a
US Airways Bankruptcy Event, without the consent of each Trustee, (A) no
Aircraft subject to the Lien of such Indenture or such Equipment Notes may
be sold if the net proceeds from such sale would be less than the Minimum
Sale Price for such Aircraft or such Equipment Notes, and (B) with respect
to any Leased Aircraft, the amount and payment dates of rentals payable by
US Airways under the Lease for such Aircraft may not be adjusted, if, as a
result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals
payable by US Airways under such Lease before giving effect to such
adjustment, in each case, using the weighted average interest rate of the
Equipment Notes issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the
Subordination Agent may from time to time during the continuance of an
Indenture Default (and before the occurrence of a Triggering Event)
commission LTV Appraisals with respect to the Aircraft subject to such
Indenture.
(iv) After a Triggering Event occurs and any Equipment Note
becomes a Non-Performing Equipment Note, the Subordination Agent shall
obtain Appraisals with respect to all of the Aircraft (the "LTV
Appraisals") as soon as practicable and additional LTV Appraisals on or
prior to each anniversary of the date of such initial LTV Appraisals;
provided that if the Controlling Party reasonably objects to the appraised
value of the Aircraft shown in such LTV Appraisals, the Controlling Party
shall have the right to obtain or cause to be obtained substitute LTV
Appraisals (including any LTV Appraisals based upon physical inspection of
the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale,
assignment, contract to sell or other disposition, the Controlling Party
may maintain or cause the Subordination Agent to maintain possession of
such Equipment Notes and continue to apply monies received in respect of
such Equipment Notes in accordance with Article III hereof. In addition, in
lieu of such sale, assignment, contract to sell or other disposition, or in
lieu of such maintenance of possession, the Controlling Party may, subject
to the terms and conditions of the related Indenture, instruct the Loan
Trustee under such Indenture to foreclose on the Lien on the related
Aircraft or to take any other remedial action permitted under such
Indenture or under any applicable law.
SECTION 4.2. Remedies Cumulative. Each and every right, power
and remedy given to the Trustees, the Liquidity Providers, the Policy
Provider, the Controlling Party or the Subordination Agent specifically or
otherwise in this Agreement shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every
right, power and remedy whether specifically herein given or otherwise
existing may, subject always to the terms and conditions hereof, be
exercised from time to time and as often and in such order as may be deemed
expedient by any Trustee, any Liquidity Provider, the Policy Provider, the
Controlling Party or the Subordination Agent, as appropriate, 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 any
Trustee, any Liquidity Provider, the Policy Provider, the Controlling Party
or the Subordination Agent in the exercise of any right, remedy or power or
in the pursuit of any remedy shall impair any such right, power or remedy
or be construed to be a waiver of any default or to be an acquiescence
therein.
SECTION 4.3. Discontinuance of Proceedings. In case any party
to this Agreement (including the Controlling Party in such capacity) shall
have instituted any Proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, entry or otherwise, and such Proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Person instituting such Proceeding, then and in
every such case each such party shall, subject to any determination in such
Proceeding, be restored to its former position and rights hereunder, and
all rights, remedies and powers of such party shall continue as if no such
Proceeding had been instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired. Anything in this Agreement to the contrary
notwithstanding but subject to each Trust Agreement, the right of any
Certificateholder, any Liquidity Provider or the Policy Provider,
respectively, to receive payments hereunder (including without limitation
pursuant to Section 2.4, 3.2 or 3.3 hereof) when due, or to institute suit
for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be impaired or affected without the consent of
such Certificateholder, such Liquidity Provider or Policy Provider,
respectively.
SECTION 4.5. Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any
Proceeding against any Controlling Party or the Subordination Agent for any
action taken or omitted by it as Controlling Party or Subordination Agent,
as the case may be, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. The provisions of this Section do not
apply to a suit instituted by the Subordination Agent, a Liquidity
Provider, the Policy Provider or a Trustee or a suit by Certificateholders
holding more than 10% of the original principal amount of any Class of
Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event.
(a) In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers, the Policy Provider and the
Trustees notice of such Indenture Default or Triggering Event, unless such
Indenture Default or Triggering Event shall have been cured or waived by
the Controlling Party. For all purposes of this Agreement, in the absence
of actual knowledge on the part of a Responsible Officer, the Subordination
Agent shall not be deemed to have knowledge of any Indenture Default or
Triggering Event unless notified in writing by one or more Trustees, one or
more Liquidity Providers or the Policy Provider or one or more
Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider, the Policy Provider and each Trustee, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished
to the Subordination Agent as registered holder of the Equipment Notes or
otherwise in its capacity as Subordination Agent to the extent the same
shall not have been otherwise directly distributed to such Liquidity
Provider, Policy Provider or Trustee, as applicable, pursuant to the
express provision of any other Operative Agreement.
SECTION 5.2. Indemnification . The Subordination Agent shall
not be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof
unless the Subordination Agent shall have been indemnified (to the extent
and in the manner reasonably satisfactory to the Subordination Agent)
against any liability, cost or expense (including counsel fees and
expenses) which may be incurred in connection therewith. The Subordination
Agent shall not be under any obligation to take any action under this
Agreement and nothing contained in this Agreement shall require the
Subordination Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section
5.1 (other than the first sentence thereof) or Article IV hereof, nor shall
any other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall
have been advised by counsel that such action is contrary to the terms
hereof or is otherwise contrary to law.
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and
no implied duties or obligations shall be read into this Agreement against
the Subordination Agent. The Subordination Agent 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 5.2
or Section 7.1 hereof) promptly take such action as may be necessary to
duly discharge all Liens on any of the Trust Accounts or any monies
deposited therein which result from claims against it in its individual
capacity not related to its activities hereunder or any other Operative
Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees.
If any Liquidity Provider or Trustee has notice of an Indenture Default or
a Triggering Event, such Person shall promptly give notice thereof to all
other Liquidity Providers, the Policy Provider and Trustees and to the
Subordination Agent, provided, however, that no such Person shall have any
liability hereunder as a result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties.
Each of the Class G Trustee and the Class C Trustee (if any) hereby
designates and appoints the Subordination Agent as the agent and trustee of
such Trustee under the applicable Liquidity Facility and, in the case of
the Class G Trustee, the Policy Provider Agreement and authorizes the
Subordination Agent to enter into the applicable Liquidity Facility (and,
in the case of the Class G Trustee, the Policy Provider Agreement) as agent
and trustee for such Trustee. Each of the Liquidity Providers, the Policy
Provider and the Trustees hereby designates and appoints the Subordination
Agent as the Subordination Agent under this Agreement. State Street hereby
accepts the duties hereby created and applicable to it as the Subordination
Agent and agrees to perform the same but only upon the terms of this
Agreement and agrees to receive and disburse all monies received by it in
accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the
handling of funds), (b) as provided in Sections 2.2 and 5.3 hereof and (c)
for liabilities that may result from the material inaccuracy of any
representation or warranty of the Subordination Agent made in its
individual capacity in any Operative Agreement. The Subordination Agent
shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Subordination Agent, unless it is proved that
the Subordination Agent was negligent in ascertaining the pertinent facts.
SECTION 6.2. Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any
other document, or to see to the maintenance of any such recording or
filing.
SECTION 6.3. No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall
be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative
Agreement or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of the Subordination
Agent, made in its individual capacity, under any Operative Agreement to
which it is a party. The Certificateholders, the Trustees, the Liquidity
Providers and the Policy Provider make no representation or warranty
hereunder whatsoever.
SECTION 6.4. No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee, any
Liquidity Provider or the Policy Provider as provided in Articles II and
III hereof or deposited into one or more Trust Accounts need not be
segregated in any manner except to the extent required by such Articles II
and III and by law, and the Subordination Agent shall not (except as
otherwise provided in Section 2.2 hereof) be liable for any interest
thereon; provided, however, that any payments received or applied hereunder
by the Subordination Agent shall be accounted for by the Subordination
Agent so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
SECTION 6.5. Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur 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. As to the Pool Balance of any Trust as of any date, the
Subordination Agent may for all purposes hereof rely on a certificate
signed by any Responsible Officer of the applicable Trustee, and such
certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance
thereon. As to any fact or matter relating to the Liquidity Providers, the
Policy Provider or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider, Policy Provider or Trustee, as the case may
be, as to such fact or matter, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. The Subordination Agent
shall assume, and shall be fully protected in assuming, that each of the
Liquidity Providers, the Policy Provider and each of the Trustees are
authorized to enter into this Agreement and to take all action to be taken
by them pursuant to the provisions hereof, and shall not inquire into the
authorization of each of the Liquidity Providers, the Policy Provider and
each of the Trustees with respect thereto. In the administration of the
trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may consult with counsel, accountants and
other skilled persons to be selected and retained by it, and the
Subordination Agent shall not be liable for the acts or omissions of any
agent appointed with due care or for anything done, suffered or omitted in
good faith by it in accordance with the advice or written opinion of any
such counsel, accountants or other skilled persons.
SECTION 6.6. Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative
Agreements.
SECTION 6.7. Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements,
for all services rendered hereunder and shall have a priority claim to the
extent set forth in Article III hereof on all monies collected hereunder
for the payment of such compensation, to the extent that such compensation
shall not be paid by others. The Subordination Agent agrees that it shall
have no right against any Trustee or Liquidity Provider or the Policy
Provider for any fee as compensation for its services as agent under this
Agreement. The provisions of this Section 6.7 shall survive the termination
of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution
acting as Subordination Agent hereunder may become a Certificateholder and
have all rights and benefits of a Certificateholder to the same extent as
if it were not the institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United
States of America or of any State or the District of Columbia having a
combined capital and surplus of at least $100,000,000 (or the obligations
of which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business
under the laws of the United States of America, any State thereof or of the
District of Columbia and having a combined capital and surplus of at least
$100,000,000), if there is such an institution willing and able to perform
the duties of the Subordination Agent hereunder upon reasonable or
customary terms. Such corporation shall be a citizen of the United States
and shall be authorized under the laws of the United States or any State
thereof or of the District of Columbia to exercise corporate trust powers
and shall be subject to supervision or examination by federal, state or
District of Columbia authorities. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of any
of the aforesaid supervising or examining authorities, then, for the
purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the
Subordination Agent shall resign immediately in the manner and with the
effect specified in Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the
parties entitled to such Equipment Notes, monies and other property. All
such Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 6(b) of the Participation Agreements with respect to Owned
Aircraft, Section 6(c) of the Participation Agreements with respect to
Leased Aircraft and Section 7 of the Note Purchase Agreement. The
indemnities contained in such Sections of such agreements shall survive the
termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying
each Trustee, each Liquidity Provider and the Policy Provider. The
Controlling Party may remove the Subordination Agent for cause by so
notifying the Subordination Agent and may appoint a successor Subordination
Agent. The Controlling Party shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a
vacancy exists in the office of Subordination Agent for any reason (the
Subordination Agent in such event being referred to herein as the retiring
Subordination Agent), the Controlling Party shall promptly appoint a
successor Subordination Agent.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the
retiring Subordination Agent and (y) a written assumption of its
obligations hereunder and under each Liquidity Facility and the Policy
Provider Agreement to each party hereto, upon which the resignation or
removal of the retiring Subordination Agent shall become effective, and the
successor Subordination Agent shall have all the rights, powers and duties
of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers, the Policy Provider and the Trustees. The retiring Subordination
Agent shall promptly transfer its rights under each of the Liquidity
Facilities and all of the property held by it as Subordination Agent to the
successor Subordination Agent.
If a successor Subordination Agent does not take office within
60 days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition
any court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9
hereof (to the extent applicable), one or more of the Trustees, one or more
of the Liquidity Providers or the Policy Provider may petition any court of
competent jurisdiction for the removal of the Subordination Agent and the
appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has
been appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a
Ratings Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. (a) This Agreement may
not be supplemented, amended or modified without the consent of each
Trustee (acting, except in the case of any amendment pursuant to Section
3.6(e)(v)(y) hereof with respect to any Replacement Liquidity Facility or
any amendment contemplated by the last sentence of this Section 9.1(a),
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in
interest in such Trust or as otherwise authorized pursuant to the relevant
Trust Agreement), the Subordination Agent, each Liquidity Provider and the
Policy Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of (x) any Trustee if
such supplement, amendment or modification (i) is in accordance with
Section 9.1(c) hereof or (ii) cures an ambiguity or inconsistency or does
not materially adversely affect such Trustee or the holders of the related
Class of Certificates and (y) any Liquidity Provider and the Policy
Provider if such supplement, amendment or modification is in accordance
with Section 9.1(c) hereof; provided further, however, that, if such
supplement, amendment or modification (A) would (x) directly or indirectly
modify or supersede, or otherwise conflict with, Section 2.2(b), Section
3.6(e), Section 3.6(f) (other than the last sentence thereof), or the
second sentence of Section 10.6 or this Section 9.1 (collectively, the "US
Airways Provisions") or (y) otherwise adversely affect the interests of a
potential Replacement Liquidity Provider or of US Airways with respect to
its ability to replace any Liquidity Facility or with respect to its
payment obligations under any Operative Agreement or (B) is made pursuant
to the last sentence of this Section 9.1(a), then such supplement,
amendment or modification shall not be effective without the additional
written consent of US Airways. Notwithstanding the foregoing, without the
consent of each Certificateholder, each Liquidity Provider and the Policy
Provider, no supplement, amendment or modification of this Agreement may
(i) reduce the percentage of the interest in any Trust evidenced by the
Certificates issued by such Trust necessary to consent to modify or amend
any provision of this Agreement or to waive compliance therewith or (ii)
except as provided in the last sentence of this Section 9.1(a), modify
Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities or the Policy. Nothing contained in
this Section shall require the consent of a Trustee at any time following
the payment of Final Distributions with respect to the related Class of
Certificates. If the Replacement Liquidity Facility for any Liquidity
Facility in accordance with Section 3.6(e) hereof is to be comprised of
more than one instrument as contemplated by the definition of the term
"Replacement Liquidity Facility", then each of the parties hereto agrees to
amend this Agreement to incorporate appropriate mechanics for multiple
Liquidity Facilities for an individual Trust.
(b) In the event that the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its
consent to any amendment, modification, consent or waiver under such
Equipment Notes, the Indenture pursuant to which such Equipment Notes were
issued, or the related Lease, Participation Agreement or other related
document, (i) if no Indenture Default shall have occurred and be continuing
with respect to such Indenture, the Subordination Agent shall request
directions with respect to each Series of such Equipment Notes from the
Trustee of the Trust which holds such Equipment Notes and shall vote or
consent in accordance with the directions of such Trustee except that so
long as the Final Distributions on the Class G Certificates have not been
made or any Policy Provider Obligations remain outstanding (and no Policy
Provider Default shall have occurred and be continuing and so long as the
Policy Provider has endorsed the Policy (if so required) as provided in
Section 3.7(c) hereof), the Subordination Agent shall request directions
from the Policy Provider rather than the Class G Trustee with respect to
the Series G Equipment Notes held in the Class G Trust and shall vote or
consent in accordance with the directions of the Policy Provider, and (ii)
if any Indenture Default (which, in the case of any Indenture pertaining to
a Leased Aircraft, has not been cured by the applicable Owner Trustee or
the applicable Owner Participant, if applicable, pursuant to Section 4.03
of such Indenture) shall have occurred and be continuing with respect to
such Indenture, the Subordination Agent will exercise its voting rights as
directed by the Controlling Party, subject to Sections 4.1 and 4.4 hereof;
provided that no such amendment, modification or waiver shall, without the
consent of each Liquidity Provider and the Policy Provider, reduce the
amount of rent, supplemental rent or stipulated loss values payable by US
Airways under any Lease or reduce the amount of principal or interest
payable by US Airways under any Equipment Note issued under any Indenture
in respect of an Owned Aircraft.
(c) Upon the issuance of the Class C Certificates, this
Agreement shall be amended by adding as a party hereto the Class C Trustee
and, if applicable, the Class C Liquidity Provider and the parties hereto
confirm and agree that upon the execution and delivery of any such
amendment by the Subordination Agent, the Class C Trustee and, if
applicable, the Class C Liquidity Provider, shall each be a party hereto as
fully and with the same force and effect as if each such Person had
originally executed and delivered a counterpart hereof. Any such amendment
shall amend the definitions of "Final Legal Distribution Date", "LTV Ratio"
and "Stated Interest Rate" to specify the applicable Final Legal
Distribution Date for the Class C Certificates, the applicable LTV Ratio
for the Class C Certificates and the applicable Stated Interest Rate for
the Class C Certificates, respectively, and to give effect to the
subordination of the Class C Certificates to the Class G Certificates and
to the Liquidity Obligations and to certain of the Policy Provider
Obligations, all to the extent and in the manner set forth herein, and any
such amendment shall make such further changes hereto as shall be
reasonably necessary to give effect thereto; provided, that no such
amendment shall materially adversely affect the Policy Provider. Upon the
presentation of any such amendment to the Subordination Agent, the
Subordination Agent agrees to execute the same and deliver a copy thereof
to each other party hereto and US Airways.
SECTION 9.2. Subordination Agent Protected. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of
Section 9.1 adversely affects any right, duty, immunity or indemnity with
respect to it under this Agreement, any Liquidity Facility or the Policy,
the Subordination Agent may in its discretion decline to execute such
document.
SECTION 9.3. Effect of Supplemental Agreements. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Agreement of the parties hereto and beneficiaries hereof shall thereafter
be determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments, and all the terms and conditions of any
such supplemental agreement shall be and be deemed to be and shall be part
of the terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article
IX, the Subordination Agent shall be entitled to receive, and shall be
fully protected in relying upon, an opinion of counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement.
SECTION 9.4. Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Certificates
and the payment in full of all Liquidity Obligations to the Liquidity
Providers and all Policy Provider Obligations to the Policy Provider and
provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers, the Policy
Provider and the Subordination Agent hereunder or under the Trust
Agreements, and that the commitment of (i) the Liquidity Providers under
the Liquidity Facilities and (ii) Policy Provider under the Policy shall
have expired or been terminated, this Agreement and the trusts created
hereby shall terminate and this Agreement shall be of no further force or
effect. Except as aforesaid or otherwise provided, this Agreement and the
trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, the Policy Provider and Subordination Agent. Subject
to the second sentence of Section 10.6 and the provisions of Sections 4.4
and 9.1, nothing in this Agreement, whether express or implied, shall be
construed to give to any Person other than the Trustees, the Liquidity
Providers, the Policy Provider and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3. 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 Agreement to be made, given, furnished or filed shall be
in writing, mailed by certified mail, postage prepaid, or by confirmed
telecopy and
(i) if to the Subordination Agent, addressed to at
its office at:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
225 Asylum Street
Goodwin Square
Hartford, CT 06013
Attention: Corporate/Muni. Department
Telephone: (860) 244-1822
Telecopy: (860) 244-1889
with a copy to:
STATE STREET CORP.
Corporate Trust Dept.
2 Avenue de Lafayette
Boston, MA 02110
Attention: Ruth A. Smith
Fax: (617) 662-1465
(ii) if to any Trustee, addressed to it at its office at:
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION
225 Asylum Street
Goodwin Square
Hartford, CT 06013
Attention: Corporate/Muni. Trust Department
Telephone: (617) 664-5340
Telecopy: (617) 664-5151
with a copy to:
STATE STREET CORP.
Corporate Trust Dept.
2 Avenue de Lafayette
Boston, MA 02110
Attention: Ruth A. Smith
Fax: (617) 662-1465
(iii) if to the initial Liquidity Provider, addressed
to it at its office at:
BAYERISCHE LANDESBANK GIROZENTRALE
Brienner Strasse 18
D-80333 Munich, Germany
Attention: Aircraft Finance Department, 7650
Telephone: 49-89-2171-2360
Telecopy: 49-89-2171-3763
(iv) if to the Policy Provider, addressed to it at its office at:
MBIA INSURANCE CORPORATION
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management,
Structured Finance
Telephone: (914) 273-4949
Telecopy: (914) 765-3163
Whenever any notice in writing is required to be given by any Trustee,
Liquidity Provider, the Policy Provider or the Subordination Agent to any
of the other of them, such notice shall be deemed given and such
requirement satisfied when such notice is received unless received outside
of business hours, in which case on the open of business on the next
Business Day. A copy of any notice given by any Trustee, Liquidity Provider
or the Subordination Agent shall be given to the Policy Provider; provided
that the failure to do so shall not impair the validity of any such notice
or the Policy Provider's obligations hereunder and under the Policy. 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
Agreement.
SECTION 10.4. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 10.5. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
or other Person against whom enforcement of the change, waiver, discharge
or termination is sought and any other party or other Person whose consent
is required pursuant to this Agreement and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific
purpose given.
SECTION 10.6. 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 successors and assigns of each, all
as herein provided. In addition, the US Airways Provisions shall inure to
the benefit of US Airways and its successors and assigns, and (without
limitation of the foregoing) US Airways is hereby constituted, and agreed
to be, an express third party beneficiary of the US Airways Provisions.
SECTION 10.7. 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 10.8. Counterpart Form. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same agreement.
SECTION 10.9. Subordination. (a) As between the Liquidity
Providers and the Policy Provider, on the one hand, and the Trustees and
the Certificateholders, on the other hand, and as among the Trustees and
the related Certificateholders, this Agreement shall be a subordination
agreement for purposes of Section 510 of the United States Bankruptcy Code,
as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior
to the payment in full to (i) the Liquidity Providers of all Liquidity
Obligations then due and payable and (ii) the Policy Provider of all Policy
Provider Obligations then due and payable, any party hereto shall have
received any payment or distribution in respect of Equipment Notes or any
other amount under the Indentures or other Operative Agreements which, had
the subordination provisions of this Agreement been properly applied to
such payment, distribution or other amount, would not have been distributed
to such Person, then such payment, distribution or other amount shall be
received and held in trust by such Person and paid over or delivered to the
Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider, the Policy Provider
or the Subordination Agent receives any payment in respect of any
obligations owing hereunder (or, in the case of the Liquidity Providers or
the Policy Provider, in respect of the Liquidity Obligations or the Policy
Provider Obligations, as the case may be), which is subsequently
invalidated, declared preferential, set aside and/or required to be repaid
to a trustee, receiver or other party, then, to the extent of such payment,
such obligations (or, in the case of the Liquidity Providers or the Policy
Provider, such Liquidity Obligations or Policy Provider Obligations, as the
case may be) intended to be satisfied shall be revived and continue in full
force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers, the Policy Provider and the
Subordination Agent confirm that the payment priorities specified in
Sections 2.4, 3.2 and 3.3 shall apply in all circumstances, notwithstanding
the fact that the obligations owed to the Trustees and the holders of
Certificates are secured by certain assets and the Liquidity Obligations
and the Policy Provider Obligations may not be so secured. The Trustees
expressly agree (on behalf of themselves and the holders of Certificates)
not to assert priority over the holders of Liquidity Obligations or the
Policy Provider Obligations (except as specifically set forth in Section
2.4, 3.2 or 3.3) due to their status as secured creditors in any
bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers, the Policy Provider and
the Subordination Agent may take any of the following actions without
impairing its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing
to it hereunder, including, in the case of the Liquidity Providers
and the Policy Provider, the Liquidity Obligations or the Policy
Provider Obligations, as the case may be,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including,
in the case of the Liquidity Providers and the Policy Provider, any
of the Liquidity Obligations or the Policy Provider Obligations, as
the case may be,
(iii) renew, extend, increase, alter or exchange any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers and the Policy Provider, any of the Liquidity Obligations
or the Policy Provider Obligations, as the case may be, or release or
compromise any obligation of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or
delay in exercising such right or remedy, which it may have,
or
(v) take any other action which might discharge a
subordinated party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the
Trustees, the Liquidity Providers, the Policy Provider or the Subordination
Agent shall not prejudice the rights or adversely affect the obligations of
any other party under this Agreement.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Immunity. (a) Each of the parties hereto
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction
of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to each party hereto at its address set forth in Section
10.3 hereof, or at such other address of which the other parties
shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each
of the parties warrants and represents that it has reviewed this waiver
with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS
WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States of America or
of any State and waives any immunity any of its properties located in the
United States of America may have from attachment or execution upon a
judgment entered by any such court under the United States Foreign
Sovereign Immunities Act of 1976 or any similar successor legislation.
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.
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee for the
Trust
By /s/ John G. Correia
---------------------------------------
Name: John G. Correia
Title: Assistant Secretary
BAYERISCHE LANDESBANK GIROZENTRALE,
as Class G Liquidity Provider
By /s/ Bernd Lonner
---------------------------------------
Name: Bernd Lonner
Title: Vice President
By /s/ Rudiger Fern
---------------------------------------
Name: Rudiger Fern
Title: Senior Vice President
MBIA INSURANCE CORPORATION,
as the Policy Provider
By /s/ Pauline M. Cullen
---------------------------------------
Name: Pauline M. Cullen
Title: Deputy General Counsel
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee
By /s/ John G. Correia
---------------------------------------
Name: John G. Correia
Title: Assistant Secretary
[
EXECUTION
ESCROW AND PAYING AGENT AGREEMENT
(Class G)
Dated as of March 3, 2000
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
and
CREDIT SUISSE FIRST BOSTON CORPORATION
as Underwriters
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
US Airways Pass Through Trust 2000-1G
as Pass Through Trustee
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Paying Agent
TABLE OF CONTENTS
Page
SECTION 1. Escrow Agent..................................................2
Section 1.1 Appointment of Escrow Agent............................2
Section 1.2 Instruction, Etc.......................................3
Section 1.3 Initial Escrow Amount; Issuance of Escrow Receipts.....4
Section 1.4 Payments to Receiptholders.............................4
Section 1.5 Mutilated, Destroyed, Lost or Stolen Escrow Receipt....5
Section 1.6 Additional Escrow Amounts..............................5
Section 1.7 Resignation or Removal of Escrow Agent.................5
Section 1.8 Persons Deemed Owners..................................6
Section 1.9 Further Assurances.....................................6
SECTION 2. Paying Agent..................................................6
Section 2.1 Appointment of Paying Agent............................6
Section 2.2 Establishment of Paying Agent Account..................7
Section 2.3 Payments from Paying Agent Account.....................7
Section 2.4 Withholding Taxes......................................8
Section 2.5 Resignation or Removal of Paying Agent.................8
Section 2.6 Notice of Final Withdrawal.............................9
SECTION 3. Payments......................................................9
SECTION 4. Other Actions................................................10
SECTION 5. Representations and Warranties of the Escrow Agent...........10
SECTION 6. Representations and Warranties of the Paying Agent...........11
SECTION 7. Indemnification..............................................12
SECTION 8. Amendment, Etc...............................................12
SECTION 9. Notices......................................................13
SECTION 10. Transfer.....................................................13
SECTION 11. Entire Agreement.............................................13
SECTION 12. Governing Law................................................13
SECTION 13. WAIVER OF JURY TRIAL RIGHT...................................14
SECTION 14. Counterparts.................................................14
SECTION 15. Subrogation and Third Party Beneficiary......................14
EXHIBITS
- --------
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
This ESCROW AND PAYING AGENT AGREEMENT (Class G) dated as of March 3,
2000 (as amended, modified or supplemented from time to time, this
"Agreement") among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, as Escrow Agent (in such capacity, together with its
successors in such capacity, the "Escrow Agent"); SALOMON SMITH BARNEY
INC., CHASE SECURITIES INC., CREDIT LYONNAIS (USA) INC. and CREDIT SUISSE
FIRST BOSTON CORPORATION, as Underwriters of the Certificates referred to
below (the "Underwriters" and together with their respective transferees
and assigns as registered owners of the Certificates, the "Investors")
under the Underwriting Agreement referred to below; STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, 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 the Pass
Through Trust Agreement referred to below; and STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association, as paying agent hereunder (in such capacity, together with its
successors in such capacity, the "Paying Agent").
W I T N E S S E T H
WHEREAS, US Airways, Inc. ("US Airways") and the Pass Through Trustee
have entered into a Trust Supplement, dated as of the date hereof (the
"Trust Supplement"), to the Pass Through Trust Agreement, dated as of July
30, 1999 (together, as amended, modified or supplemented from time to time
in accordance with the terms thereof, the "Pass Through Trust Agreement")
relating to US Airways Pass Through Trust 2000-1G (the "Pass Through
Trust") pursuant to which the US Airways Pass Through Trust, Series 2000-1G
Certificates referred to therein (the "Certificates") are being issued;
WHEREAS, US Airways and the Underwriters have entered into an
Underwriting Agreement dated as of February 25, 2000 (as amended, modified
or supplemented from time to time in accordance with the terms thereof, the
"Underwriting Agreement") pursuant to which the Pass Through Trustee will
issue and sell the Certificates to the Underwriters;
WHEREAS, US Airways, the Pass Through Trustee and certain other
persons concurrently herewith are entering into the Note Purchase
Agreement, dated as of the date hereof (the "Note Purchase Agreement"),
pursuant to which the Pass Through Trustee has agreed to acquire from time
to time on or prior to the Delivery Period Termination Date (as defined in
the Note Purchase Agreement) equipment notes (the "Equipment Notes") issued
to finance the acquisition of aircraft by US Airways, as lessee or as
owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "Net Proceeds");
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee
and satisfaction of the conditions set forth in the Note Purchase Agreement
for the purpose of purchasing Equipment Notes, and that pending such
withdrawal the Net Proceeds be deposited on behalf of the Escrow Agent with
ABN AMRO Bank N.V., acting through its Chicago branch, as Depositary (the
"Depositary"; and the term "Depositary" shall also be deemed to refer to
any Replacement Depositary (as defined in the Note Purchase Agreement) from
and after the date on which the Deposits are transferred to such
Replacement Depositary) under the Deposit Agreement, dated as of the date
hereof between the Depositary and the Escrow Agent relating to the Pass
Through Trust (as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Deposit Agreement"; and the term
"Deposit Agreement" shall also be deemed to refer to any Replacement
Deposit Agreement (as defined in the Note Purchase Agreement) to which the
Escrow Agent becomes a party pursuant to Section 1.2(a) hereof from and
after the transfer of the Deposits from the Depositary to the Replacement
Depositary) pursuant to which, among other things, the Depositary will pay
interest for distribution to the Investors and establish accounts from
which the Escrow Agent shall make withdrawals upon request of and proper
certification by the Pass Through Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference in the Pass
Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Escrow Agent.
------------
Section 1.1 Appointment of Escrow Agent. Each of the Underwriters, for
and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and
fiduciary hereunder and under the Deposit Agreement for such specific
purposes and with such powers as are specifically delegated to the Escrow
Agent by the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. Any and all money received and held by
the Escrow Agent under this Agreement or the Deposit Agreement shall be
held in escrow by the Escrow Agent in accordance with the terms of this
Agreement. This Agreement is irrevocable and the Investors' rights with
respect to any monies received and held in escrow by the Escrow Agent under
this Agreement or the Deposit Agreement shall only be as provided under the
terms and conditions of this Agreement and the Deposit Agreement. The
Escrow Agent (which term as used in this sentence shall include reference
to its affiliates and its own and its affiliates' officers, directors,
employees and agents):
(1) shall have no duties or responsibilities except those expressly
set forth in this Agreement;
(2) shall not be responsible to the Pass Through Trustee or the
Investors for any recitals, statements, representations or warranties of
any person other then itself contained in this Agreement or the Deposit
Agreement or for the failure by the Pass Through Trustee, the Investors or
any other person or entity (other than the Escrow Agent) to perform any of
its obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and
(3) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
The Underwriters, for and on behalf of each of the Investors, hereby
irrevocably instruct the Escrow Agent, and the Escrow Agent agrees: (a) to
enter into the Deposit Agreement and, if requested by the Company pursuant
to Section 5(a)(vii) of the Note Purchase Agreement, to enter into a
Replacement Deposit Agreement with the Replacement Depositary specified by
the Company; (b) to appoint the Paying Agent as provided in this Agreement;
(c) upon receipt at any time and from time to time prior to the Termination
Date (as defined below) of a certificate substantially in the form of
Exhibit B hereto (a "Withdrawal Certificate") executed by the Pass Through
Trustee, together with an attached Notice of Purchase Withdrawal in
substantially the form of Exhibit A to the Deposit Agreement duly completed
by the Pass Through Trustee (the "Applicable Notice of Purchase Withdrawal"
and the withdrawal to which it relates, a "Purchase Withdrawal"),
immediately to execute the Applicable Notice of Purchase Withdrawal as
Escrow Agent and transmit it to the Depositary by facsimile transmission in
accordance with the Deposit Agreement; provided that, upon the request of
the Pass Through Trustee after such transmission, the Escrow Agent shall
cancel such Applicable Notice of Purchase Withdrawal; (d) upon receipt of a
Withdrawal Certificate executed by the Pass Through Trustee, together with
an attached Notice of Replacement Withdrawal in substantially the form of
Exhibit C to the Deposit Agreement duly completed by the Pass Through
Trustee, to (X) give such Notice of Replacement Withdrawal to the
Depositary requesting a withdrawal, on the date specified in such notice,
which shall not be less than 15 days after such notice is given (the
"Replacement Withdrawal Date"), of all Deposits then held by the Depositary
together with, if the Replacement Withdrawal Date occurs on a Regular
Distribution Date, all accrued and unpaid interest on such Deposits to but
excluding the Replacement Withdrawal Date, and (Y) direct the Depositary to
transfer such Deposits on behalf of the Escrow Agent to the Replacement
Depositary in accordance with the Replacement Deposit Agreement and (e) if
there are any undrawn Deposits (as defined in the Deposit Agreement) on the
"Termination Date", which shall mean the earlier of (i) February 7, 2001
(or June 7, 2001 if all the Equipment Notes under the Note Purchase
Agreement have not been purchased by February 7, 2001 on account of
manufacturing delays that occur for reasons beyond the control of US
Airways and that are not occasioned by US Airways' fault or negligence) and
(ii) the day on which the Escrow Agent receives notice from the Pass
Through Trustee that the Pass Through Trustee's obligation to purchase
Equipment Notes under the Note Purchase Agreement has terminated, to give
notice to the Depositary (with a copy to the Paying Agent) substantially in
the form of Exhibit B to the Deposit Agreement requesting a withdrawal of
all of the remaining Deposits, together with accrued and unpaid interest on
such Deposits to the date of withdrawal, on the 15th day after the date
that such notice of withdrawal is given to the Depositary (or, if not a
Business Day, on the next succeeding Business Day) (a "Final Withdrawal"),
provided that if the day scheduled for the Final Withdrawal in accordance
with the foregoing is within ten days before or after a Regular
Distribution Date, then the Escrow Agent shall request that such requested
Final Withdrawal be made on such Regular Distribution Date (the date of
such requested withdrawal, the "Final Withdrawal Date"). If for any reason
the Escrow Agent shall have failed to give the Final Withdrawal Notice to
the Depositary on or before February 8, 2001 (or June 8, 2001 if all the
Equipment Notes under the Note Purchase Agreement have not been purchased
by February 7, 2001 on account of manufacturing delays that occur for
reasons beyond the control of US Airways and that are not occasioned by US
Airways' fault or negligence), and there are unwithdrawn Deposits on such
date, the Final Withdrawal Date shall be deemed to be February 23, 2001 (or
June 25, 2001 if all the Equipment Notes under the Note Purchase Agreement
have not been purchased by February 7, 2001 on account of manufacturing
delays that occur for reasons beyond the control of US Airways and that are
not occasioned by US Airways' fault or negligence).
The Escrow Agent hereby directs the Underwriters to, and the
Underwriters hereby acknowledge that on the date hereof they shall,
irrevocably deliver to the Depositary on behalf of the Escrow Agent, an
amount in U.S. dollars ("Dollars") and immediately available funds equal to
$281,678,000 for deposit on behalf of the Escrow Agent with the Depositary
in accordance with Section 2.1 of the Deposit Agreement. The Underwriters
hereby instruct the Escrow Agent, upon the Depositary's receipt (on behalf
of the Escrow Agent) of such sum from the Underwriters, to confirm such
receipt by executing and delivering to the Pass Through Trustee an Escrow
Receipt in the form of Exhibit A hereto (an "Escrow Receipt"), (a) to be
affixed by the Pass Through Trustee to each Certificate and (b) to evidence
the same percentage interest (the "Escrow Interest") in the Account Amounts
(as defined below) as the Fractional Undivided Interest in the Pass Through
Trust evidenced by the Certificate to which it is to be affixed. The Escrow
Agent shall provide to the Pass Through Trustee for attachment to each
Certificate newly issued under and in accordance with the Pass Through
Trust Agreement an executed Escrow Receipt as the Pass Through Trustee may
from time to time request of the Escrow Agent. Each Escrow Receipt shall be
registered by the Escrow Agent in a register (the "Register") maintained by
the Escrow Agent in the same name and same manner as the Certificate to
which it is attached and may not thereafter be detached from such
Certificate to which it is to be affixed prior to the distribution of the
Final Withdrawal (the "Final Distribution"). After the Final Distribution,
no additional Escrow Receipts shall be issued and the Pass Through Trustee
shall request the return to the Escrow Agent for cancellation of all
outstanding Escrow Receipts.
All payments and distributions made to holders of an Escrow Receipt
(collectively "Receiptholders") in respect of the Escrow Receipt shall be
made only from amounts deposited in the Paying Agent Account (as defined
below) ("Account Amounts"). Each Receiptholder, by its acceptance of an
Escrow Receipt, agrees that (a) it will look solely to the Account Amounts
for any payment or distribution due to such Receiptholder pursuant to the
terms of the Escrow Receipt and this Agreement and (b) it will have no
recourse to US Airways, the Pass Through Trustee, the Paying Agent or the
Escrow Agent, except as expressly provided herein or in the Pass Through
Trust Agreement. No Receiptholder shall have any right to vote or in any
manner otherwise control the operation and management of the Paying Agent
Account or the obligations of the parties hereto, nor shall anything set
forth herein, or contained in the terms of the Escrow Receipt, be construed
so as to constitute the Receiptholders from time to time as partners or
members of an association.
If (a) any mutilated Escrow Receipt is surrendered to the Escrow Agent
or the Escrow Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Escrow Receipt and (b) there is delivered
to the Escrow Agent and the Pass Through Trustee such security, indemnity
or bond, as may be required by them to hold each of them harmless, then,
absent notice to the Escrow Agent or the Pass Through Trustee that such
destroyed, lost or stolen Escrow Receipt has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the
Uniform Commercial Code in effect in any applicable jurisdiction are met,
the Escrow Agent shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Escrow Receipt,
a new Escrow Receipt or Escrow Receipts and of like Escrow Interest in the
Account Amounts and bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.5, the Escrow Agent may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of
the Pass Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.5 shall
constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen
or destroyed Escrow Receipt shall be found at any time.
The provisions of this Section 1.5 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Escrow
Receipts.
On the date of any Purchase Withdrawal, the Pass Through Trustee may
re-deposit with the Depositary some or all of the amounts so withdrawn in
accordance with Section 2.4 of the Deposit Agreement.
Subject to the appointment and acceptance of a successor Escrow Agent
as provided below, the Escrow Agent may resign at any time by giving thirty
(30) days' prior written notice thereof to the Investors, but may not
otherwise be removed except for cause by the written consent of the
Investors with respect to Investors representing Escrow Interests
aggregating not less than a majority in interest in the Account Amounts (an
"Action of Investors"). Upon any such resignation or removal, the
Investors, by an Action of Investors, shall have the right to appoint a
successor Escrow Agent. If no successor Escrow Agent shall have been so
appointed and shall have accepted such appointment within thirty (30) days
after the retiring Escrow Agent's giving of notice of resignation or the
removal of the retiring Escrow Agent, then the retiring Escrow Agent may
appoint a successor Escrow Agent. Any successor Escrow Agent shall be a
bank which has an office in the United States with a combined capital and
surplus of at least $100,000,000. Upon the acceptance of any appointment as
Escrow Agent hereunder by a successor Escrow Agent, such successor Escrow
Agent shall enter into such documents as the Pass Through Trustee shall
require and shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Escrow Agent, and the
retiring Escrow Agent shall be discharged from its duties and obligations
hereunder. No resignation or removal of the Escrow Agent shall be effective
unless a written confirmation shall have been obtained from each of Moody's
Investors Service, Inc. and Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc., that the replacement of the Escrow
Agent with the successor Escrow Agent will not result in (a) a reduction of
the rating for the Certificates below the then current rating for the
Certificates or (b) a withdrawal or suspension of the rating of the
Certificates.
Prior to due presentment of a Certificate for registration of
transfer, the Escrow Agent and the Paying Agent may treat the Person in
whose name any Escrow Receipt is registered (as of the day of
determination) as the owner of such Escrow Receipt for the purpose of
receiving distributions pursuant to this Agreement and for all other
purposes whatsoever, and neither the Escrow Agent nor the Paying Agent
shall be affected by any notice to the contrary.
The Escrow Agent agrees to take such actions, and execute such other
documents, as may be reasonably requested by the Pass Through Trustee in
order to effectuate the purposes of this Agreement and the performance by
the Escrow Agent of its obligations hereunder.
SECTION 2. Paying Agent.
------------
Section 2.1 Appointment of Paying Agent. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying
agent hereunder, for the benefit of the Investors, for such specific
purposes and with such powers as are specifically delegated to the Paying
Agent by the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. Any and all money received and held by
the Paying Agent under this Agreement or the Deposit Agreement shall be
held in the Paying Agent Account for the benefit of the Investors. The
Paying Agent (which term as used in this sentence shall include reference
to its affiliates and its own and its affiliates' officers, directors,
employees and agents):
(1) shall have no duties or responsibilities except those expressly
set forth in this Agreement, and shall not by reason of this Agreement be a
trustee for the Escrow Agent;
(2) shall not be responsible to the Escrow Agent for any recitals,
statements, representations or warranties of any person other then itself
contained in this Agreement or for the failure by the Escrow Agent or any
other person or entity (other than the Paying Agent) to perform any of its
obligations hereunder (whether or not the Paying Agent shall have any
knowledge thereof); and
(3) shall not be responsible for any action taken or omitted to be
taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
The Paying Agent shall establish a deposit account (the "Paying Agent
Account") at State Street Bank and Trust Company of Connecticut, National
Association in the name of the Escrow Agent. It is expressly understood by
the parties hereto that the Paying Agent is acting as the paying agent of
the Escrow Agent hereunder and that no amounts on deposit in the Paying
Agent Account constitute part of the Trust Property.
The Escrow Agent hereby irrevocably instructs the Paying Agent, and
the Paying Agent agrees to act, as follows:
(1) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt
in the Paying Agent Account from the Depositary of any amount in respect of
accrued interest on the Deposits, the Paying Agent shall distribute out of
the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record
on the 15th day (whether or not a Business Day) preceding such Interest
Payment Date by check mailed to such Receiptholder, at the address
appearing in the Register, such Receiptholder's pro rata share (based on
the Escrow Interest in the Account Amounts held by such Receiptholder) of
the total amount of interest deposited by the Depositary in the Paying
Agent Account on such date, except that, with respect to Escrow Receipts
registered on the Record Date in the name of The Depository Trust Company,
a New York corporation ("DTC"), such distribution shall be made by wire
transfer in immediately available funds to the account designated by DTC.
(2) Upon the confirmation by the Paying Agent of receipt in the Paying
Agent Account from the Depositary of any amount in respect of the Final
Withdrawal, the Paying Agent shall forthwith distribute the entire amount
of the Final Withdrawal deposited therein by the Depositary. There shall be
so distributed to each Receiptholder of record on the 15th day (whether or
not a Business Day) preceding the Final Withdrawal Date by check mailed to
such Receiptholder, at the address appearing in the Register, such
Receiptholder's pro rata share (based on the Escrow Interest in the Account
Amounts held by such Receiptholder) of the total amount in the Paying Agent
Account on account of such Final Withdrawal, except that, with respect to
Escrow Receipts registered on the Record Date in the name of DTC, such
distribution shall be made by wire transfer in immediately available funds
to the account designated by DTC.
(3) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five (5) days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
(4) The Paying Agent shall include with any check mailed pursuant to
this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
The Paying Agent shall exclude and withhold from each distribution of
accrued interest on the Deposits (as defined in the Deposit Agreement) and
any amount in respect of the Final Withdrawal any and all withholding taxes
applicable thereto as required by law. The Paying Agent agrees to act as
such withholding agent and, in connection therewith, whenever any present
or future taxes or similar charges are required to be withheld with respect
to any amounts payable in respect of the Deposits (as defined in the
Deposit Agreement) or the escrow amounts, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on
behalf of the Receiptholders, that it will file any necessary withholding
tax returns or statements when due, and that, as promptly as possible after
the payment thereof, it will deliver to each such Receiptholder appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Receiptholder may reasonably request from time
to time. The Paying Agent agrees to file any other information reports as
it may be required to file under United States law.
Subject to the appointment and acceptance of a successor Paying Agent
as provided below, the Paying Agent may resign at any time by giving thirty
(30) days' prior written notice thereof to the Escrow Agent, but may not
otherwise be removed except for cause by the Escrow Agent. Upon any such
resignation or removal, the Escrow Agent shall have the right to appoint a
successor Paying Agent. If no successor Paying Agent shall have been so
appointed and shall have accepted such appointment within thirty (30) days
after the retiring Paying Agent's giving of notice of resignation or the
removal of the retiring Paying Agent, then the retiring Paying Agent may
appoint a successor Paying Agent. Any Successor Paying Agent shall be a
bank which has an office in the United States with a combined capital and
surplus of at least US$100,000,000. Upon the acceptance of any appointment
as Paying Agent hereunder by a successor Paying Agent, such successor
Paying Agent shall enter into such documents as the Escrow Agent shall
require and shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Paying Agent, and the
retiring Paying Agent shall be discharged from its duties and obligations
hereunder.
Promptly after receipt by the Paying Agent of notice that the Escrow
Agent has requested a Final Withdrawal or that a Final Withdrawal will be
made, the Paying Agent shall cause notice of the distribution of the Final
Withdrawal to be mailed to each of the Receiptholders at its address as it
appears in the Register. Such notice shall be mailed not less than fifteen
(15) days prior to the Final Withdrawal Date. Such notice shall set forth:
(1) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive distributions in
respect of the Final Withdrawal;
(2) the amount of the payment in respect of the Final Withdrawal for
each $1,000 face amount Certificate (based on information provided by the
Pass Through Trustee) and the amount thereof constituting unused Deposits
(as defined in the Deposit Agreement) and interest thereon; and
(3) if the Final Withdrawal Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate (based on information provided by the Pass
Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the
Pass Through Trust Agreement.
If, notwithstanding the instructions in Article IV of the Deposit
Agreement that all amounts payable to the Escrow Agent under the Deposit
Agreement be paid by the Depositary directly to the Paying Agent or the
Pass Through Trustee (depending on the circumstances), the Escrow Agent
receives any payment thereunder, then the Escrow Agent shall forthwith pay
such amount in Dollars and in immediately available funds by wire transfer
to (a) in the case of a payment of accrued interest on the Deposits (as
defined in the Deposit Agreement) or any Final Withdrawal, directly to the
Paying Agent Account, (b) in the case of any Purchase Withdrawal, directly
to the Pass Through Trustee or its designee as specified and in the manner
provided in the Applicable Notice of Purchase Withdrawal and (c) in the
case of any Replacement Withdrawal (other than accrued interest), to the
Replacement Depositary as provided in the Replacement Deposit Agreement.
The Escrow Agent hereby waives any and all rights of set-off, combination
of accounts, right of retention or similar right (whether arising under
applicable law, contract or otherwise) it may have against amounts payable
to the Paying Agent howsoever arising.
The Escrow Agent shall take such other actions under or in respect of
the Deposit Agreement (including, without limitation, the enforcement of
the obligations of the Depositary thereunder) as the Investors, by an
Action of Investors, may from time to time request.
The Escrow Agent represents and warrants to US Airways, the Investors,
the Paying Agent and the Pass Through Trustee as follows:
(1) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America;
(2) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement, the Deposit Agreement and any
Replacement Deposit Agreement;
(3) the execution, delivery and performance of each of this Agreement,
the Deposit Agreement and any Replacement Deposit Agreement have been duly
authorized by all necessary corporate action on the part of it and do not
require any stockholder approval, or approval or consent of any trustee or
holder of any indebtedness or obligations of it, and each such document has
been duly executed and delivered by it and constitutes its legal, valid and
binding obligations enforceable against it in accordance with the terms
hereof or thereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(4) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement or
any Replacement Deposit Agreement;
(5) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement or any Replacement Deposit Agreement,
nor compliance with the terms and provisions hereof or thereof, conflicts
or will conflict with or results or will result in a breach or violation of
any of the terms, conditions or provisions of, or will require any consent
or approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default thereunder
or results or will result in the imposition of any lien upon any of its
properties; and
(6) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or the Deposit Agreement or any Replacement Deposit Agreement or
(B) would call into question or challenge the validity of this Agreement or
the Deposit Agreement or the enforceability hereof or thereof in accordance
with the terms hereof or thereof, nor is the Escrow Agent in default with
respect to any order of any court, governmental authority, arbitration
board or administrative agency so as to adversely affect its ability to
perform its obligations under this Agreement or the Deposit Agreement.
The Paying Agent represents and warrants to US Airways, the Investors,
the Escrow Agent and the Pass Through Trustee as follows:
(1) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America;
(2) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(3) the execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action on the part of it and
does not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(4) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(5) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation of
any of the terms, conditions or provisions of, or will require any consent
or approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default thereunder
or results or will result in the imposition of any lien upon any of its
properties; and
(6) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or (B) would call into question or challenge the validity of this
Agreement or the enforceability hereof in accordance with the terms hereof,
nor is the Paying Agent in default with respect to any order of any court,
governmental authority, arbitration board or administrative agency so as to
adversely affect its ability to perform its obligations under this
Agreement.
Except for actions expressly required of the Escrow Agent or the
Paying Agent hereunder, each of the Escrow Agent and the Paying Agent shall
in all cases be fully justified in failing or refusing to act hereunder
unless it shall have been indemnified by the party requesting such action
in a manner reasonably satisfactory to it against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. In the event US Airways requests any amendment to any
Operative Document (as defined in the Note Purchase Agreement), the Pass
Through Trustee agrees to pay all reasonable fees and expenses (including,
without limitation, fees and disbursements of counsel) of the Escrow Agent
and the Paying Agent in connection therewith.
Upon request of the Pass Through Trustee and approval by an Action of
Investors, the Escrow Agent shall enter into an amendment to this
Agreement, so long as such amendment does not adversely affect the rights
or obligations of the Escrow Agent or the Paying Agent, provided that upon
request of the Pass Through Trustee and without any consent of the
Investors, the Escrow Agent shall enter into an amendment to this Agreement
for any of the following purposes:
(1) to correct or supplement any provision in this Agreement which may
be defective or inconsistent with any other provision herein or to cure any
ambiguity or correct any mistake or to modify any other provision with
respect to matters or questions arising under this Agreement, provided that
any such action shall not materially adversely affect the interests of the
Investors; or
(2) to comply with any requirement of the SEC, applicable law, rules
or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(3) to evidence and provide for the acceptance of appointment under
this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
Unless otherwise expressly provided herein, any notice or other
communication under this Agreement shall be in writing (including by
facsimile) and shall be deemed to be given and effective upon receipt
thereof. All notices shall be sent to (a) in the case of the Investors, as
their respective addresses shall appear in the Register, (b) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), (c) in the case of the Pass Through Trustee,
State Street Bank and Trust Company of Connecticut, National Association,
225 Asylum Street, Goodwyn Square, Hartford, CT 06103, Attention: Corporate
Trust Administration (Telecopier: (860) 244-1889) or (d) in the case of the
Paying Agent, State Street Bank and Trust Company of Connecticut, National
Association, 225 Asylum Street, Goodwyn Square, Hartford, CT 06103,
Attention: Corporate Trust/Muni. Department (Telecopier: (617) 664-5151),
in each case with a copy to US Airways, US Airways, Inc., 2345 Crystal
Drive, Arlington, VA 22227, Attention: Treasurer (Telecopier: (703)
872-5936 (or at such other address as any such party may specify from time
to time in a written notice to the other parties). On or prior to the
execution of this Agreement, the Pass Through Trustee has delivered to the
Escrow Agent a certificate containing specimen signatures of the
representatives of the Pass Through Trustee who are authorized to give
notices and instructions with respect to this Agreement. The Escrow Agent
may conclusively rely on such certificate until the Escrow Agent receives
written notice from the Pass Through Trustee to the contrary.
No party hereto shall be entitled to assign or otherwise transfer this
Agreement (or any interest herein) other than (in the case of the Escrow
Agent) to a successor escrow agent under Section 1.7 hereof or (in the case
of the Paying Agent) to a successor paying agent under Section 2.5 hereof,
and any purported assignment in violation thereof shall be void. This
Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Escrow Agent and the Paying Agent) their
respective permitted assigns.
This Agreement sets forth all of the promises, covenants, agreements,
conditions and understandings among the Escrow Agent, the Paying Agent, the
Underwriters and the Pass Through Trustee with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
undertakings, inducements or conditions, express or implied, oral or
written.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
EACH OF THE ESCROW AGENT, THE PAYING AGENT, THE INVESTORS AND THE PASS
THROUGH TRUSTEE ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY
IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one instrument.
SECTION 15. Subrogation and Third Party Beneficiary. To the extent
that the Policy Provider makes any payment under the Policy in respect of
an Escrow Receipt as a result of the Depositary's failure to make a
scheduled interest payment on a Deposit to the Paying Agent Account, the
Policy Provider shall be subrogated to the rights of the holder of such
Escrow Receipt in respect thereof to the extent of such payment. The Policy
Provider shall be an express third party beneficiary of this Section 15 to
the extent necessary to enforce such rights of subrogation.
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the
Underwriters and the Pass Through Trustee have caused this Escrow and
Paying Agent Agreement (Class G) to be duly executed as of the day and year
first above written.
<TABLE>
<S> <C>
STATE STREET BANK AND TRUST COMPANY OF FIRST SECURITY BANK, NATIONAL
CONNECTICUT, NATIONAL ASSOCIATION, not ASSOCIATION, as Escrow Agent in its
individual capacity, but solely as Pass Through
Trustee for and on behalf of US Airways Pass
Through Trust 2000-1G By /s/ Brett R. King
---------------------------------
Name Brett R. King
Title: Vice President
By /s/ John G. Correia
------------------------------------
Name John G. Correia
Title: Assistant Secretary SALOMON SMITH BARNEY INC., CHASE
SECURITIES INC., CREDIT LYONNAIS
SECURITIES (USA) INC. and CREDIT
STATE STREET BANK AND TRUST COMPANY OF SUISSE FIRST BOSTON CORPORATION as
CONNECTICUT, NATIONAL ASSOCIATION as Underwriters
Paying Agent
BY: SALOMON SMITH BARNEY INC.
By /s/ John G. Correia
------------------------------------
Name John G. Correia
Title: Assistant Secretary By /s/ Gregory P. Lee
---------------------------------
Name Gregory P. Lee
Title: Director
</TABLE>
EXHIBIT A
US Airways 2000-1G Escrow Receipt
No. __
This Escrow Receipt evidences a fractional undivided interest
in amounts ("Account Amounts") from time to time deposited into a certain
paying agent account (the "Paying Agent Account") described in the Escrow
and Paying Agent Agreement (Class G) dated as of March 3, 2000 (as amended,
modified or supplemented from time to time, the "Escrow and Paying Agent
Agreement") among First Security Bank, National Association, a national
banking association, as Escrow Agent (in such capacity, together with its
successors in such capacity, the "Escrow Agent"), Salomon Smith Barney
Inc., Chase Securities Inc., Credit Lyonnais Securities (USA) Inc. and
Credit Suisse First Boston Corporation, as Underwriters, State Street Bank
and Trust Company of Connecticut, National Association, as Pass Through
Trustee (in such capacity, together with its successors in such capacity,
the "Pass Through Trustee") and State Street Bank and Trust Company of
Connecticut, National Association as paying agent (in such capacity,
together with its successors in such capacity, the "Paying Agent").
Capitalized terms not defined herein shall have the meanings assigned to
them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the
terms, provisions and conditions of the Escrow and Paying Agent Agreement.
By virtue of its acceptance hereof the holder of this Escrow Receipt
assents and agrees to be bound by the provisions of the Escrow and Paying
Agent Agreement and this Escrow Receipt.
This Escrow Receipt represents a fractional undivided interest
in amounts deposited from time to time in the Paying Agent Account, and
grants or represents no rights, benefits or interests of any kind in
respect of any assets or property other than such amounts. This Escrow
Receipt evidences the same percentage interest in the Account Amounts as
the Fractional Undivided Interest in the Pass Through Trust evidenced by
the Certificate to which this Escrow Receipt is affixed.
All payments and distributions made to Receiptholders in
respect of the Escrow Receipt shall be made only from Account Amounts
deposited in the Paying Agent Account. The holder of this Escrow Receipt,
by its acceptance of this Escrow Receipt, agrees that it will look solely
to the Account Amounts for any payment or distribution due to it pursuant
to this Escrow Receipt and that it will not have any recourse to US
Airways, the Pass Through Trustee, the Paying Agent or the Escrow Agent,
except as expressly provided herein, in the Escrow and Paying Agent
Agreement or in the Pass Through Trust Agreement. No Receiptholder of this
Escrow Receipt shall have any right to vote or in any manner otherwise
control the operation and management of the Paying Agent Account, nor shall
anything set forth herein, or contained in the terms of this Escrow
Receipt, be construed so as to constitute the Receiptholders from time to
time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except
in connection with the assignment or transfer of the Certificate to which
this Escrow Receipt is affixed. After payment to the holder hereof of its
Escrow Interest in the Final Distribution, upon the request of the Pass
Through Trustee, the holder hereof will return this Escrow Receipt to the
Pass Through Trustee.
The Paying Agent may treat the person in whose name the
Certificate to which this Escrow Receipt is attached as the owner hereof
for all purposes, and the Paying Agent shall not be affected by any notice
to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow
Receipt to be duly executed.
Dated: March 3, 2000
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
By _______________________________________
Name:
Title:
EXHIBIT B
Withdrawal Certificate
(Class G)
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telecopier: (801) 246-5053
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement,
dated as of March 3, 2000 (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.] [We hereby notify you that the Depositary is being replaced in
accordance with Section 5(a)(vii) of the Note Purchase Agreement.] Pursuant
to Section 1.2[(c)/(d)] of the Agreement, please execute the attached
Notice of Withdrawal and immediately transmit by facsimile to the
Depositary, at [ ].
Very truly yours,
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not
in its individual capacity but solely as
Pass Through Trustee
By _______________________________________
Name:
Title:
Dated: __________, ___
NOTICE OF PURCHASE WITHDRAWAL
-----------------------------
ABN AMRO Bank N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606-8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank, N.V., acting
through its Chicago 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 [a portion
of]1 the proceeds of the Deposit [in an amount equal to $___]1 to
_______________, Account No. __________, Reference: __________ on
_______________, _____, [and to re-deposit the remaining proceeds of the
Deposit with the Depositary as a new Deposit pursuant to Section 2.4 of the
Deposit Agreement, in each case]1 upon the telephonic request of a
representative of the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By _____________________________________
Name: Title:
Dated:___________, __
NOTICE OF REPLACEMENT WITHDRAWAL
--------------------------------
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606_8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago Branch, as Depositary (the "Depositary").
In accordance with Section 2.3 (b)(ii) of the Deposit
Agreement, the undersigned hereby requests the withdrawal of the entire
amount of all Deposits for payment on ________, 200_.
The undersigned hereby directs the Depositary to pay
the proceeds of the Deposits to [____________] at
________________________, ABA# ___________, Account ___________,
Attention: ______________, Reference: US Airways 2000-1G EETC [and
to pay accrued interest thereon to the Paying Agent at _________,
ABA # _________, Acct. No. __________, Reference: US Airways
2000-1G EETC]1. [The undersigned further directs the Depositary to
pay the accrued interest on the Deposits to the Paying Agent on
_________, 20__ (the next Interest Payment Date) at ABA #
__________, Account No. _________, Reference: US Airways 2000-1G
EETC.]2
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By ____________________________________
Name:
Title:
Dated:___________,__
___________________
1 Use bracketed language if entire Deposit will not be used to purchase
Equipment Notes.
NOTICE OF FINAL WITHDRAWAL
--------------------------
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606_8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago Branch, as Depositary (the "Depositary").
In accordance with Section 2.3 (b)(i) of the Deposit Agreement,
the undersigned hereby requests the withdrawal of the entire amount of all
Deposits for payment on ________, 200_.
The undersigned hereby directs the Depositary to pay
the proceeds of the Deposits and accrued interest thereon to the
Paying Agent at ________________________, ABA# ___________, Account
___________, Attention: ______________, Reference: US Airways
2000-1G EETC.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By _____________________________
Name:
Title:
Dated: __________, ____
_____________________
1 To be deleted in the case of a Replacement Withdrawal scheduled for a
date which is not an Interest Payment Date (as defined in the Escrow and
Paying Agent Agreement).
2 To be inserted in the case of a Replacement Withdrawal scheduled for a
date which is not an Interest Payment Date (as defined in the Escrow and
Paying Agent Agreement).
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By ___________________________
Name:
Title:
Dated:___________,__
NOTICE OF FINAL WITHDRAWAL
--------------------------
ABN AMRO BANK N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606_8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as
of March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank N.V., acting
through its Chicago Branch, as Depositary (the "Depositary").
In accordance with Section 2.3 (b)(i) of the Deposit Agreement,
the undersigned hereby requests the withdrawal of the entire amount of all
Deposits for payment on ________, 200_.
The undersigned hereby directs the Depositary to pay
the proceeds of the Deposits and accrued interest thereon to the
Paying Agent at ________________________, ABA# ___________, Account
___________, Attention: ______________, Reference: US Airways
2000-1G EETC.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _______________________________
Name:
Title:
Dated: __________, ____
---------------------------------------------------------------
NOTE PURCHASE AGREEMENT
Dated as of March 3, 2000
Among
US AIRWAYS, INC.,
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Pass Through Trustee under the
Pass Through Trust Agreement
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Paying Agent
--------------------------------------------------------------
INDEX TO NOTE PURCHASE AGREEMENT
--------------------------------
Page
----
SECTION 1. Definitions.............................................3
SECTION 2. Financing of New Aircraft...............................3
SECTION 3. Conditions Precedent....................................8
SECTION 4. Representations and Warranties..........................9
SECTION 5. Covenants..............................................14
SECTION 6. Notices................................................15
SECTION 7. Expenses...............................................15
SECTION 8. Further Assurances.....................................16
SECTION 9. Miscellaneous..........................................16
SECTION 10. Governing Law..........................................17
SCHEDULES
---------
Schedule I New Aircraft and Scheduled Closing Months
Schedule II Trust Supplement
Schedule III Deposit Agreement
Schedule IV Escrow and Paying Agent Agreement
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
ANNEX
-----
Annex A Definitions
EXHIBITS
--------
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2-1 Form of Basic Lease
Exhibit A-2-2 Form of Deferred Equity/Prepaid-Deferred Rent Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Leased Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit A-6 Form of Leased Aircraft French Pledge Agreement
Exhibit B Form of Closing Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
Exhibit C-3 Form of Owned Aircraft Purchase Agreement Assignment
Exhibit C-4 Form of Owned Aircraft French Pledge Agreement
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of March 3, 2000, among
(i) US Airways, Inc., a Delaware corporation (the "Company"), (ii) State
Street Bank and Trust Company of Connecticut, National Association, 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 the Pass Through Trust Agreement (as defined below), (iii)
State Street Bank and Trust Company of Connecticut, 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) First
Security Bank, National Association, a national banking association, as
Escrow Agent (in such capacity together with its successors in such
capacity, the "Escrow Agent"), under the Escrow and Paying Agent Agreement
(as defined below) and (v) State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, as
Paying Agent (in such capacity together with its successors in such
capacity, the "Paying Agent") under the Escrow and Paying Agent Agreement.
W I T N E S S E T H:
-------------------
WHEREAS, US Airways Group, Inc. ("Group") has obtained
commitments from the Seller pursuant to the Aircraft Purchase Agreement for
the delivery of the five (5) aircraft listed in Schedule I hereto (together
with any aircraft substituted therefor in accordance with the Aircraft
Purchase Agreement prior to the delivery thereof, the "New Aircraft");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and
the Trust Supplement set forth in Schedule II hereto, and concurrently with
the execution and delivery of this Agreement, a grantor trust (the "Pass
Through Trust") has 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 New
Aircraft;
WHEREAS, the Company has entered into the Underwriting
Agreement dated as of February 25, 2000 (the "Underwriting Agreement") with
the several underwriters (the "Underwriters") named therein, which provides
that the Company will cause the Pass Through Trustee of the Class G Trust
to issue and sell the Class G Certificates to the Underwriters;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agent and the Depositary entered into the Deposit
Agreement set forth in Schedule III hereto (the "Deposit Agreement")
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 Pass Through Trustee 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 Pass
Through Trustee, the Underwriters, the Paying Agent and the Escrow Agent
entered into the Escrow and Paying Agent Agreement set forth in Schedule IV
hereto (the "Escrow and Paying Agent Agreement") 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 Escrow
Agent and (b) the Escrow Agent, upon the Depositary receiving such amount,
has agreed to deliver escrow receipts to be affixed to each Certificate;
WHEREAS, the Company will determine whether to enter into a
leveraged lease transaction as lessee with respect to such New Aircraft (a
"Leased Aircraft") or to issue secured equipment notes in order to finance
such New Aircraft (an "Owned Aircraft") and will give to the Pass Through
Trustee a Closing Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Closing Notice with respect to a New
Aircraft, subject to the terms and conditions of this Agreement, the Pass
Through Trustee will enter into the applicable Financing Agreements
relating to such New Aircraft;
WHEREAS, on the Closing Date under the applicable Financing
Agreements, the Pass Through Trustee will fund its purchase of Equipment
Notes with the proceeds of one or more Deposits withdrawn by the Escrow
Agent under the Deposit Agreement bearing the same interest rate as the
Certificates issued by such Pass Through Trust;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Bayerische Landesbank Girozentrale, a public law banking
institution organized under the laws of the Free State of Bavaria, Germany
(the "Liquidity Provider"), has entered into a revolving credit agreement (
a "Liquidity Facility"), for the benefit of the Certificate Holders of the
Pass Through Trust, with the Subordination Agent, as agent for the Pass
Through Trustee on behalf of the Pass Through Trust and (ii) the Pass
Through Trustee, the Liquidity Provider, the Policy Provider (as defined
below) and the Subordination Agent have entered into the Intercreditor
Agreement, dated as of the date hereof (the "Intercreditor Agreement"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement, MBIA Insurance Corporation, a New York stock insurance company
(the "Policy Provider") has entered into the Insurance and Indemnity
Agreement (the "Policy Provider Agreement"), with the Company and the
Subordination Agent, as agent and trustee for the Pass Through Trustee of
the Class G Trust on behalf of the Class G Trust, and the Policy Provider
has issued the financial guarantee insurance policy (the "Policy") provided
for therein for the benefit of the Class G Certificate Holders.
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. Definitions. Capitalized terms used but not defined
herein shall have the respective meanings set forth or incorporated by
reference in Annex A.
Section 2. Financing of New Aircraft. (a) The Company confirms
that Group has entered into the Aircraft Purchase Agreement with the Seller
pursuant to which Group has agreed to purchase, and the Seller has agreed
to deliver, the New Aircraft in the months specified in Schedule I hereto,
all on and subject to terms and conditions specified in the Aircraft
Purchase Agreement. Group may, prior to the scheduled delivery date for the
New Aircraft, assign the right to purchase the New Aircraft to the Company.
The Company agrees that the New Aircraft will be financed 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, the Policy Provider and each of
the Rating Agencies not less than two (2) Business Day's prior notice (a
"Closing Notice") of the scheduled closing date (the "Scheduled Closing
Date") (or, in the case of a Substitute Closing Notice under Section 2(f)
or (g) hereof, one (1) Business Day's prior notice) of a financing in
respect of each New Aircraft, which notice shall:
(i) specify whether the Company has elected
to treat such New Aircraft as a Leased Aircraft or an Owned Aircraft;
(ii) specify the Scheduled Closing Date on
which the financing therefor in the manner provided herein shall be
consummated, which Scheduled Closing Date shall be within 120 days of
the delivery of such New Aircraft from the Seller to the Company or
Group (or, with Rating Agency Confirmation, a longer period following
delivery of such New Aircraft from Seller to the Company or Group,
but in no event on or after the Cut-Off Date) and prior to the
Cut-Off Date;
(iii) instruct the Pass Through Trustee to
instruct the Escrow Agent to provide a Notice of Purchase Withdrawal
to the Depositary with respect to the Series G Equipment Notes to be
issued in connection with the financing of such New Aircraft;
(iv) instruct the Pass Through Trustee 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 Scheduled Closing Date specified in such Closing Notice
and to perform its obligations thereunder;
(v) specify the aggregate principal amount of
Series G Equipment Notes to be issued, and purchased by the Pass
Through Trustee, in connection with the financing of such New
Aircraft on such Scheduled Closing Date (which shall in all respects
comply with the Mandatory Economic Terms); and
(vi) if such New Aircraft is to be a Leased
Aircraft, certify that the related Owner Participant (A) is not an
Affiliate of the Company and (B) based on the representations of such
Owner Participant, is either (1) a Qualified Owner Participant or (2)
any other person the obligations of which under the Owner Participant
Documents (as defined in the applicable Participation Agreement) are
guaranteed by a Qualified Owner Participant.
Notwithstanding the foregoing, in the event the Scheduled Closing Date for
any Aircraft to be financed pursuant to the terms hereof is on or within 3
Business Days following the date of issuance of the Certificates, the
Closing Notice therefor may be delivered to the parties hereto on such
Scheduled Closing Date.
(c) Upon receipt of a Closing Notice, the Pass Through
Trustee shall, and shall cause the Subordination Agent to, enter into and
perform their obligations under the Participation Agreement specified in
such Closing Notice, provided, however, that such Participation Agreement
and the other Financing Agreements to be entered into pursuant to such
Participation Agreement shall be in the forms thereof annexed hereto in all
material respects with such changes therein as shall have been requested by
the Company or the related Owner Participant (in the case of Lease
Financing Agreements), and agreed to by the Company and, if modified in any
material respect, as to which prior written consent of the Policy Provider
shall have been obtained and 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 Pass Through Trustee and the Policy Provider on or
before the relevant Closing Date, it being understood that if Policy
Provider consent and Rating Agency Confirmation shall have been received
with respect to any Financing Agreements and such Financing Agreements are
utilized for subsequent New Aircraft (or Substitute Aircraft) without
material modifications, no additional Policy Provider consent or Rating
Agency Confirmation shall be required); provided, however, that the
relevant Financing Agreements as executed and delivered shall not vary the
Mandatory Economic Terms and shall contain the Mandatory Document Terms (as
such Mandatory Document Terms may be modified in accordance with Schedule V
hereto). Notwithstanding the foregoing, if any Financing Agreement annexed
hereto shall not have been reviewed by either Rating Agency prior to the
Issuance Date, then, prior to the use thereof in connection with the
financing of any Aircraft hereunder, the Company shall obtain from each
Rating Agency a confirmation that the use of such Financing Agreement would
not result in (A) a reduction of the rating for the Class G Certificates
below the then current rating for such Class of Certificates (without
regard to the Policy) or (B) a withdrawal or suspension of the rating of
the Class G Certificates, in each case, without regard to the Policy.
(d) With respect to each New Aircraft, the Company shall
cause State Street Bank and Trust Company of Connecticut, National
Association (or such other person that meets the eligibility requirements
to act as loan trustee under the Leased Aircraft Indenture or Owned
Aircraft 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 either Rating Agency or of the
Policy Provider, the Company shall deliver or cause to be delivered to each
Rating Agency or the Policy Provider, as the case may be, a true and
complete copy of each Financing Agreement relating to the financing of each
New 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.
(e) If after giving any Closing Notice, there shall be a
delay in the delivery of a New Aircraft, or if on the Scheduled Closing
Date of a New Aircraft the financing thereof in the manner contemplated
hereby shall not be consummated for whatever reason, the Company shall give
the parties hereto and the Policy Provider prompt notice thereof.
Concurrently with the giving of such notice of postponement or
subsequently, the Company shall give the parties hereto and the Policy
Provider a substitute Closing Notice specifying the date (the "Substitute
Closing Date") to which the applicable financing shall have been
re-scheduled (which shall be a Business Day before the earlier of (x) the
120th day following the delivery of the Aircraft from the Seller to the
Company or Group, as the case may be (or, with Rating Agency Confirmation,
a longer period following delivery of such New Aircraft from Seller to the
Company or Group) and (y) the Cut-Off Date on which the Escrow Agent shall
be entitled to withdraw one or more Deposits under the Deposit Agreement to
enable each Pass Through Trustee to fund its purchase of the related
Equipment Notes). Upon receipt of any such notice of postponement, the Pass
Through Trustee shall comply with its obligations under Section 5.01(b) of
the Trust Supplement and thereafter the financing of the relevant New
Aircraft shall take place on the Substitute 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 2 to the contrary
notwithstanding, the Company shall have the right at any time on or before
the Scheduled Closing Date of any New Aircraft, and subsequent to its
giving a Closing Notice therefor, to postpone the Scheduled Closing Date of
such New Aircraft so as to enable the Company to change its election to
treat such New Aircraft as a Leased Aircraft or an Owned Aircraft by
written notice of such postponement to the other parties hereto. The
Company shall subsequently give the parties hereto and the Policy Provider
a substitute Closing Notice complying with the provisions of Section 2(b)
hereof and specifying the new Closing Date for such postponed New Aircraft
(which shall be a Business Day occurring before the earlier of (x) the
120th day following the delivery of the Aircraft from the Seller to the
Company or Group, as the case may be (or, with Rating Agency Confirmation,
a longer period following delivery of such New Aircraft from Seller to the
Company or Group) and (y) the Cut-Off Date and on which the Escrow Agent
shall be entitled to withdraw Deposits under the Deposit Agreement
sufficient to enable the Pass Through Trustee to fund its purchase of the
related Equipment Notes). All other terms and conditions of this Note
Purchase Agreement shall apply to the financing of any such New Aircraft on
the re-scheduled Closing Date therefor except the re-scheduled Closing Date
shall be deemed the Closing Date of such New Aircraft for all purposes of
this Section 2.
(g) If the delivery date for any New Aircraft under the
Aircraft Purchase Agreement is delayed for more than 30 days beyond the
month scheduled for delivery or February 7, 2001, the Company may identify
for delivery a substitute aircraft therefor meeting the following
conditions (together with the substitute aircraft referred to in the next
sentence, a "Substitute Aircraft"): (i) a Substitute Aircraft must be an
Airbus Model A330 aircraft delivered by the Seller to the Company after
January 31, 2000 and (ii) the Company shall be obligated to obtain prior
written consent of the Policy Provider and to obtain Rating Agency
Confirmation in respect of the replacement of any New Aircraft by
Substitute Aircraft. Upon the satisfaction of the conditions set
forth above with respect to a Substitute Aircraft, the New Aircraft to be
replaced shall cease to be subject to this Agreement and all rights and
obligations of the parties hereto concerning such New 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 New
Aircraft.
(h) The Company shall have no liability for the failure
of the Pass Through Trustee to purchase Equipment Notes with respect to any
New Aircraft or Substitute Aircraft, other than the Company's obligation,
if any, to pay the Deposit Make-Whole Amount pursuant to Section 5(a)(i) of
this Agreement.
(i) The parties agree that if, in connection with the
delivery of a New Aircraft or Substitute Aircraft, any Owner Participant
who is to be a party to any Lease Financing Agreements shall not be a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Act, then the applicable Lease Financing Agreements shall be
modified, consistent with the Mandatory Document Terms (as such Mandatory
Document Terms may be modified in accordance with Schedule V hereto), to
require such Owner Participant to enter into a voting trust, voting powers
or similar arrangement satisfactory to the Company that (A) enables such
New Aircraft or Substitute Aircraft to be registered in the United States
and (B) complies with the FAA regulations issued under the Act applicable
thereto.
(j) 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 Series G Equipment Notes to the 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 Deposit Agreement.
(k) Anything herein to the contrary notwithstanding, the
Company and Group shall each have the right to accept delivery of a New
Aircraft under the Aircraft Purchase Agreement on the delivery date
therefor under the Aircraft Purchase Agreement; provided that the Company
shall in any event, give the parties hereto a Closing Notice specifying a
Scheduled Closing Date not later than one hundred twenty (120) days after
the delivery of such New Aircraft under the Aircraft Purchase Agreement
(or, with Rating Agency Confirmation, a longer period following delivery of
such New Aircraft from Seller to the Company or Group) and before the
Cut-Off Date and otherwise complying with the provisions of Section 2(b)
hereof. All other terms and conditions of this Note Purchase Agreement
shall apply to the financing of any such New Aircraft on the new Scheduled
Closing Date therefor except (i) the Scheduled Closing Date shall be deemed
to be the Closing Date of such New Aircraft for all purposes of this
Section 2 and (ii) the related Financing Agreements shall be amended to
reflect the original delivery of such New Aircraft to the Company.
Section 3. Conditions Precedent. The obligation of the Pass
Through Trustee 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 the
Pass Through Trustee, the Policy Provider and the Liquidity Provider
stating that (i) such Participation Agreement and the other Financing
Agreements to be entered into pursuant to such Participation Agreement do
not vary the Mandatory Economic Terms and contain the Mandatory Document
Terms (as such Mandatory Document Terms may be modified in accordance with
Schedule V hereto) and (ii) any substantive modification of such Financing
Agreements from the forms of such Financing Agreements attached to this
Agreement do not materially and adversely affect the Policy Provider or the
Certificate Holders, and such certification shall be true and correct.
(c) a copy of the Rating Agency Confirmation required
under Section 2 shall have been delivered to the Pass Through Trustee.
Anything herein to the contrary notwithstanding, the obligation
of the Pass Through Trustee to purchase Equipment Notes shall terminate on
the Cut-Off Date.
Section 4. Representations and Warranties.
------------------------------
(a) The Company represents and warrants on the date
hereof and on each Closing Date 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 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;
(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; and
(iv) if a certificate is required to be delivered
under Section 3(b), the statements contained therein are true and
correct.
(b) State Street Bank and Trust Company of Connecticut,
National Association represents and warrants on the date hereof and on each
Closing Date that:
(i) State Street Bank and Trust Company of
Connecticut, National Association is duly incorporated, validly
existing and in good standing under the laws of the State of
Connecticut 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 Connecticut
and the United States 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 State Street Bank and Trust Company of Connecticut,
National Association, 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 State Street
Bank and Trust Company of Connecticut, National Association, in its
capacity as Subordination Agent, Pass Through Trustee or Paying
Agent, as the case may be, of this Agreement and the performance by
State Street Bank and Trust Company of Connecticut, National
Association, 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 State Street Bank and
Trust Company of Connecticut, National Association, in its capacity
as Subordination Agent, Pass Through 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 obligation of State Street Bank and Trust Company
of Connecticut, National Association, 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 the Trust Supplement are true and correct as of the date hereof.
(d) The Subordination Agent represents and warrants as of
the date hereof and as of each Closing Date that:
(i) the Subordination Agent is duly organized,
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 State of Connecticut and the United States
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 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 Connecticut 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 Connecticut governmental authority or agency 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 the State of Connecticut 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, the Liquidity Facility,
the Policy or the Policy Provider Agreement), and there are no Taxes
payable by the Subordination Agent imposed by the United States or
the State of Connecticut or any political subdivision of either 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
rendered in connection with the transactions contemplated by the
Intercreditor Agreement, the Liquidity Facility, the Policy or the
Policy Provider Agreement); 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 as of the
date hereof and as of each Closing Date 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
pertaining to its banking, trust and fiduciary powers to execute and
deliver this Agreement, the Deposit Agreement and the 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 as of the
date hereof and of each Closing Date that:
(i) the Paying Agent is duly organized,
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 pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement and the 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 5. Covenants. (a) The Company covenants with each of the
other parties hereto that:
(i) on the date that the Depositary is obligated
to pay the amount of the Final Withdrawal to the Paying Agent
pursuant to a Deposit Agreement relating to any Trust, the Company
shall pay to the Pass Through Trustee of such Trust no later than
1:00 p.m. (New York time) an amount equal to the Deposit Make-Whole
Premium, if any, required to be paid in respect of such Final
Withdrawal amount;
(ii) subject to Section 5(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 (i) in the case of Leased Aircraft, the Owner
Trustee and the Loan Trustee to the rights afforded to lessors of
aircraft equipment under Section 1110 and (ii) in the case of Owned
Aircraft, the Loan Trustee to the rights afforded to secured parties
of aircraft equipment under Section 1110;
(iv) Section 7(e) of the Owned Aircraft
Participation Agreement Form and Section 7(v) of the Leased Aircraft
Participation Agreement Form are hereby incorporated by reference
herein;
(v) the Company agrees to provide written
notice to each of the parties hereto and the Policy Provider of the
occurrence of the Cut-Off Date no later than one Business Day after
the date thereof;
(vi) with respect to Owned Aircraft, the
Company agrees to provide each Rating Agency and the Policy Provider
with prompt written notice of any lease by the Company of any
Aircraft for a lease period of more than one (1) year; and
(vii) If the Depositary's short-term rating shall
at any time fall below the Depositary Threshold Rating from either
Moody's or Standard & Poor's, the Company shall, within 60 days of
such event occurring, cause the Depositary to be replaced with a
depository bank (a "Replacement Depositary") on the following terms
and preconditions:
(1) the Replacement Depositary must
be one that either (x) meets the Depositary Threshold Rating or (y)
with respect to which the Company shall have obtained written
confirmation from each Rating Agency that such Replacement Depositary
will not cause a reduction of any rating then in effect for the Class
G Certificates by such Rating Agency (without regard to any
downgrading of any rating of the Depositary being replaced and
without regard to the Policy) and, in either case, the Company shall
have obtained written confirmation from each Rating Agency that such
replacement will not cause a reduction or withdrawal of any rating
then in effect for the Class G Certificates by such Rating Agency
(without regard to any downgrades of any rating of the Depositary
being replaced and without regard to the Policy);
(2) the Company shall pay all fees,
expenses and other amounts then owing to the replaced Depositary; and
(3) the Company shall cause the
Escrow Agent and the Replacement Depositary to enter into a
Replacement Deposit Agreement for the Class G Certificates and shall
cause the Replacement Depositary to deliver to the Company, the
Policy Provider 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 Pass Through Trustee, and the 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
Agreement) together with a Notice of Replacement Withdrawal (as
defined in the Escrow and Paying Agent Agreement).
Each of the parties hereto agrees, at the Company's request, to enter
into any amendments to this Agreement, the Escrow and Paying Agent
Agreement and any other Operative Documents 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
Agreement with the Replacement Deposit Agreements.
Upon the execution and delivery of the Replacement Deposit Agreement,
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 Documents and the Replacement Deposit
Agreement shall be deemed to be the Deposit Agreement hereunder and
under the other Operative Documents, except that the obligations of
the replaced Depositary under the last sentence of Section 2.2 of the
Deposit Agreement shall remain in full force and effect
notwithstanding the execution and delivery of the Replacement Deposit
Agreement.
(b) State Street Bank and Trust Company of Connecticut,
National Association, 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 49 U.S.C. ss.
40102(a)(15) 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 State Street Bank and Trust Company of Connecticut,
National Association giving any such notice, State Street Bank and Trust
Company of Connecticut, National Association shall, subject to Section 8.02
of any Indenture then entered into, resign as Loan Trustee in respect of
such Indenture.
(c) The Company further covenants that it will not issue
or cause to be issued any "Class C Pass Through Trust Certificates" (as
contemplated by the Company's Prospectus Supplement dated February 25,
1999) unless the Company has received written confirmation from each of the
Rating Agencies that the issuance of such certificates and the related
series C equipment notes will not result in a withdrawal, suspension or
downgrading of the rating of the Class G Certificates (without regard to
the Policy). The Company agrees, in connection with the issuance of such
"Class C Pass Through Trust Certificates," to cause the pass through
trustee for the Class C pass through trust that is formed to enter into an
amended and restated Note Purchase Agreement or a separate note purchase
agreement and in either case, to provide for the purchase of series C
equipment notes by the pass through trustee for such class C pass through
trust.
Section 6. 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. Notice to
the Policy Provider shall be given at the address specified in the Policy
Provider Agreement.
Section 7. Expenses and Indemnity. (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 the 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
Agreement and the denominator of which shall be the sum of (x) the then
outstanding aggregate principal amount of the Series G Equipment Notes
issued under all of the Indentures and (y) the then outstanding aggregate
amount of the Deposits under the Deposit Agreement.
(b) The Company agrees to pay to the Subordination Agent
when due for application in accordance with the Intercreditor Agreement an
amount or amounts equal to the fees payable to the Policy Provider under
the Policy Fee Letter (as defined in the Policy Provider Agreement)
multiplied by a fraction the numerator of which shall be the then
outstanding aggregate amount of the Deposits under the Deposit Agreement
and the denominator of which shall be the sum of (x) the then outstanding
aggregate principal amount of the Series G Equipment Notes issued under all
of the Indentures and (y) the then outstanding aggregate amount of the
Deposits under the Deposit Agreement.
(c) 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
the 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 the Liquidity Facility minus Investment
Earnings while such Non-Extension Advance shall be outstanding and (C) any
other amounts owed to the Liquidity Provider by the Subordination Agent as
borrower under the 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) or (B)), (ii) all compensation and
reimbursement of expenses, disbursements and advances payable by the
Company under the Pass Through Trust Agreement, (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, the Liquidity
Facility or the Policy Provider Agreement and (iv) all compensation and
reimbursement of expenses and disbursements payable to the Policy Provider
under Section 3.7(i) of the Intercreditor Agreement, and (v) in the event
the Company requests any amendment to this Note Purchase Agreement or any
Operative Document, all reasonable fees and expenses (including, without
limitation, fees and disbursements of counsel) of the Escrow Agent, the
Paying Agent and/or the Policy Provider in connection therewith. For
purposes of this Section 7(c), the terms "Applied Downgrade Advance,"
"Applied Non-Extension Advance," "Downgrade Advance", "Investment Earnings"
and "Non- Extension Advance" shall have the meanings specified in the
Liquidity Facility.
(d) The Company hereby agrees to indemnify each of the
Escrow Agent and the Paying Agent from and against, and agrees to protect,
save and keep harmless the Policy Provider from any and all losses, claims
and expenses imposed on, incurred by or asserted against the Policy
Provider in any way relating to, based on or arising from the execution,
delivery and performance of this Agreement, the Deposit Agreement or the
Escrow and Paying Agent Agreement; provided, that the foregoing indemnity
shall not extend to any of the Escrow Agent or the Paying Agent with
respect to any loss, claim or expense to the extent such loss, claim or
expense is attributable to (i) a breach by any such party of this
Agreement, the Deposit Agreement or the Escrow and Paying Agent Agreement
or (ii) such party's gross negligence or willful misconduct.
(e) The Company hereby agrees to indemnify the Policy
Provider from and against, and agrees to protect, save and keep harmless
each of them from any and all losses, claims and expenses imposed on,
incurred by or asserted against any of them in any way relating to, based
on or arising from the enforcement by the Policy Provider of its rights as
a subrogee under the Escrow and Paying Agent Agreement; provided, that the
foregoing indemnity shall not extend to the Policy Provider with respect to
any loss, claim or expense to the extent such loss, claim or expense is
attributable to the Policy Provider's gross negligence or willful
misconduct and provided further, that the Policy Provider shall have no
claim against any "Indenture Estate" or "Trust Indenture Estate" (as such
terms are defined in the Financing Agreements) for any payments under this
Section 7(e).
Section 8. 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.
Section 9. Miscellaneous. (a) Provided that the transactions
contemplated hereby have been consummated, 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 Agreement, the Escrow Agent and its successors as Escrow
Agent under the Escrow and Paying Agent Agreement, 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 and each
of the beneficiaries of Section 7 hereof and the Policy Provider (as a
third party beneficiary)) with any rights of any nature whatsoever against
any of the parties hereto, and no person not a party hereto (other than the
Underwriters and each of the beneficiaries of Section 7 hereof) shall have
any right, power or privilege in respect of, or have any benefit or
interest arising out of, this Agreement.
(d) For purposes of enforcement, the Policy Provider
shall be an express third party beneficiary of this Agreement.
Section 10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Note
Purchase Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
US AIRWAYS, INC.
By: /s/ Jeffery A. McDougle
---------------------------------------
Name: Jeffery A. McDougle
Title: Vice President and Treasurer
Address: 2345 Crystal Drive, Arlington, VA
22227
Attention: Treasurer
Facsimile: (703) 872-5936
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, except as otherwise
provided herein, but solely as Pass Through
Trustee
By: /s/ John G. Correia
------------------------------------------
Name: John G. Correia
Title: Assistant Secretary
Address: 225 Asylum Street
Goodwin Square
Hartford, CT 06103
Attention: Corporate Trust Administration
Facsimile: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attention: Corporate Trust Department
Facsimile: (617) 662-1461
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its
individual capacity, except as otherwise
provided herein, but solely as Subordination
Agent
By: /s/ John G. Correia
--------------------------------------------
Name: John G. Correia
Title: Assistant Secretary
Address: 225 Asylum Street
Goodwin Square
Hartford, CT 06103
Attention: Corporate Trust Administration
Facsimile: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attention: Corporate Trust Department
Facsimile: (617) 664-1461
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By: /s/ Brett R. King
----------------------------------------
Name: Brett R. King
Title: Vice President
Address: 79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Paying Agent
By: /s/ John G. Correia
---------------------------------------
Name: John G. Correia
Title: Assistant Secretary
Address: 225 Asylum Street
Goodwin Square
Hartford, CT 06103
Attention: Corporate Trust Administration
Facsimile: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attention: Corporate Trust Department
Facsimile: (617) 662-1461
SCHEDULE I to
NOTE PURCHASE AGREEMENT
-----------------------
NEW AIRCRAFT AND SCHEDULED DELIVERY MONTHS
NEW AIRCRAFT EXPECTED MANUFACTURER'S SCHEDULED
TYPE REGISTRATION NUMBER SERIAL NUMBER DELIVERY MONTH
Airbus A330-300 N672UW 333 April 2000
Airbus A330-300 N673UW 337 May 2000
Airbus A330-300 N674UW 342 June 2000
Airbus A330-300 N675US 370 November 2000
Airbus A330-300 N676UW 375 December 2000
SCHEDULE II to
NOTE PURCHASE AGREEMENT
-----------------------
Trust Supplement
Trust Supplement dated as of the Issuance Date between the
Company and the Pass Through Trustee in respect of US Airways Pass Through
Trust, Series 2000-1G.
SCHEDULE III to
NOTE PURCHASE AGREEMENT
-----------------------
Deposit Agreement
Deposit Agreement (Class G) dated as of the Issuance Date
between ABN AMRO Bank N.V., acting through its Chicago branch, and the
Escrow Agent.
SCHEDULE IV to
NOTE PURCHASE AGREEMENT
-----------------------
Escrow and Paying Agent Agreement
Escrow and Paying Agent Agreement (Class G) dated as of the
Issuance Date among the Escrow Agent, the Underwriters, the Pass Through
Trustee and the Paying Agent.
SCHEDULE V to
NOTE PURCHASE AGREEMENT
-----------------------
MANDATORY DOCUMENT TERMS
The terms "Trust Indenture Form," "Lease Form" and
"Participation Agreement Form" shall have the respective meanings specified
in Schedule VI to the Note Purchase Agreement. The Trust Indenture Form,
Lease Form and Participation Agreement Form have been prepared to reflect
the issuance of two series of Equipment Notes, series G and series C. If,
with respect to any particular Closing Date, the Company does not issue or
cause to be issued two series of Equipment Notes, the Trust Indenture Form,
Lease Form and Participation Agreement Form will be amended to delete
references to the Series C Equipment Notes and related terms.
1. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Loan Trustee, the Granting Clause of
the Trust Indenture Form so as to deprive the Note Holders of a first
priority security interest in and mortgage lien on the Aircraft, the rights
of US Airways under the Aircraft Purchase Agreement to the extent assigned
under the Indenture and in the case of a Leased Aircraft Indenture, the
Lease 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 Subordination Agent, the Liquidity
Provider, the Policy Provider or the Loan Trustee the provisions of Article
II or III or Sections 4.02, 4.03, 4.04, 5.02, 5.06, 9.01, 10.04, 10.11 or
10.12 of the Trust Indenture Form for the Leased Aircraft or Article II or
III or Sections 4.02, 4.03, 4.04 5.02, 5.06, 10.01, 11.04, 11.11 or 11.12
of the Trust Indenture Form for the Owned Aircraft.
2. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Loan Trustee the provisions of Section
3(c)(v), the proviso to the first sentence of Section 3(e), 7(a)(1)(A),
clause (6) of the final paragraph of Section 10(a), 18, 21, the penultimate
sentence of Section 25 or Section 27 of the Lease Form or otherwise modify
the terms of the Lease Form so as to deprive the Loan Trustee of rights
expressly granted to the "Loan Trustee" therein.
3. May not modify in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Loan Trustee the provisions of
Sections 4(a)(vi), 4(a)(ix)(1), 4(a)(ix)(2), 4(a)(ix)(3), 4(a)(ix)(4) (but
only to the extent relating to the representations and warranties set forth
in Sections 6(a)(vi) and 6(a)(xv)), Sections 4(a)(x), 4(a)(xi) (to the
extent such section requires special counsel for the Lessee to deliver an
opinion relating to Section 1110 of the Bankruptcy Code), 4(a)(xii),
4(a)(xiii), 4(a)(xv) and 4(a)(xvi) so as to eliminate the requirement to
deliver to the Loan Participant or the Loan Trustee, 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),
Sections 7(c), 7(h), the second sentence of Section 7(n), 7(q), 7(z), 14(f)
or 14(h) of the Participation Agreement Form or of the provisions of
Section 7(d)(II)(E) of the Participation Agreement Form as regards the
rights of the Loan Trustee thereunder.
4. May not modify, in any material adverse respect as regards
the interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider or the Loan Trustee, the definition of
"Make-Whole Amount" in Annex A to the Participation Agreement Form.
Notwithstanding the foregoing, any such Mandatory Document Term
may be modified to correct or supplement any such provision which may be
defective or to cure any ambiguity or correct any mistake, provided,
however, that any such action shall not materially adversely affect the
interests of the Note Holders, the Subordination Agent, the Liquidity
Provider, the Policy Provider, the Loan Trustee or the Certificate Holders.
SCHEDULE VI to
NOTE PURCHASE AGREEMENT
-----------------------
MANDATORY ECONOMIC TERMS
PART I:
MANDATORY ECONOMIC TERMS OF THE SERIES G EQUIPMENT NOTES
--------------------------------------------------------
OBLIGOR: (i) in the case of Equipment Notes issued under an Owned Aircraft
Indenture, US Airways, Inc. or (ii) in the case of Equipment Notes issued
under a Leased Aircraft Indenture, an Owner Trust.
MAXIMUM PRINCIPAL AMOUNT OF SERIES G EQUIPMENT NOTES (ON AN AIRCRAFT-BY-
AIRCRAFT BASIS): The principal amount of the Series G Equipment Notes
issued with respect to an Aircraft must equal the principal amount of
Series G Equipment Notes indicated for each such Aircraft as set forth in
the Prospectus Supplement in "Prospectus Supplement Summary-Secured
Promissory Notes and the Aircraft" under the column "Principal Amount of
Series G Equipment Notes."
LOAN TO AIRCRAFT VALUE RATIO OF SERIES G EQUIPMENT NOTES (ON AN
AIRCRAFT-BY- AIRCRAFT BASIS):
1. Initial Loan to Aircraft Value Ratio. Initial Loan to
Aircraft Value (with the value of any Aircraft for these purposes
equal to the value (the "Assumed Appraised Value") for such Aircraft
set forth in the Prospectus Supplement in "Prospectus Supplement
Summary-Secured Promissory Notes and the Aircraft" under the column
"Appraised Base Value") must not exceed 51%
2. Loan to Aircraft Value Ratios on Regular Distribution Dates.
The Loan to Aircraft Value for the Series G Equipment Notes issued in
respect of each Aircraft (computed as of the date of the issuance
thereof on the basis of the Assumed Appraised Value of such Aircraft
and the Depreciation Assumption (as defined in the Prospectus
Supplement in the Glossary) must not exceed as of any Regular
Distribution Date thereafter (assuming no default in the payment of
the Equipment Notes) 51%
INITIAL AVERAGE LIFE OF SERIES G EQUIPMENT NOTES (ON AN
AIRCRAFT-BY-AIRCRAFT BASIS):
Initial Average Life (in years) of the Series G Equipment Notes
on any Aircraft must not be less than 8.5 years, and will not extend beyond
11.5 years from the Issuance Date.
INTEREST RATE FOR SERIES G EQUIPMENT NOTES:
The interest rate applicable to the Series G Equipment Notes
(the "Debt Rate") must be equal to the rate applicable to the Class G
Certificates.
PAST DUE RATE APPLICABLE TO SERIES G EQUIPMENT NOTES: Not less than Debt
Rate plus 1% per annum.
AGGREGATE PRINCIPAL AMOUNT OF SERIES G EQUIPMENT NOTES:
At the Delivery Period Termination Date, the aggregate
principal amount of Series G Equipment Notes will equal the original
aggregate face amount of the Class G Certificates, without giving effect to
any scheduled principal payments on such secured promissory notes but after
giving effect to any reductions to the Pool Balance for the Class G
Certificates from Deposits not used to purchase Series G Equipment Notes on
or before such date.
PAYMENT DATES APPLICABLE TO SERIES G EQUIPMENT NOTES:
Payment dates will be February 20 and August 20, commencing on
the first such date to occur after the issuance of each Series G Equipment
Note
MAKE-WHOLE AMOUNTS APPLICABLE TO SERIES G EQUIPMENT NOTES:
As provided in Article II of the form of Leased Aircraft
Indenture marked as Exhibit A-3 of the Note Purchase Agreement (the "Leased
Aircraft Indenture Form") or the form of Owned Aircraft Indenture marked as
Exhibit C-2 of the Note Purchase Agreement (the "Owned Aircraft Indenture
Form," together with the Leased Aircraft Indenture Form, the "Trust
Indenture Form").
REDEMPTION AND PURCHASE OF SERIES G EQUIPMENT NOTES: As provided in Article II
of the applicable Trust Indenture Form.
PART II:
MANDATORY ECONOMIC TERMS OF THE CLASS G CERTIFICATES
AVERAGE LIFE (IN YEARS)
As of the Delivery Period Termination Date, the average life of
the Class G Certificates must not be more than 10.2 years from the Issuance
Date (computed without regard to the acceleration of any Series G Equipment
Notes and after giving effect to any special distribution on the Class G
Certificates thereafter required in respect of unused Deposits).
LOAN TO AIRCRAFT VALUE RATIO FOR CLASS G CERTIFICATES
As of the Delivery Period Termination Date and each Regular
Distribution Date thereafter, the Loan to Aircraft Value for the Class G
Certificates (computed as of any such date on the basis of the Assumed
Appraised Value of all Aircraft that have been delivered and the
Depreciation Assumption) must not exceed (assuming no default in the
payment of the Equipment Notes and after giving effect to scheduled
payments) 49.0%
FINAL EXPECTED DISTRIBUTION DATE
Class G Certificates: February 20, 2017
PART III:
MANDATORY ECONOMIC TERMS OF LEASE
<TABLE>
<S> <C>
TERM: The Basic Lease Term for each Lease shall expire by its
terms on or after latest maturity date of the related
Equipment Notes.
LEASE PERIOD DATES
(SOMETIMES REFERRED TO
AS RENT PAYMENT DATES): February 20 and August 20
MINIMUM PAYMENTS: Each installment of basic rent, together with any
advances or payments by Lessee and any payments of
deferred equity amounts by an Owner Participant under
a Lease and the related agreements must be sufficient for
the Owner Trustee to pay in full, on the date on which
such installment of basic rent, advance, other payment or
deferred equity is due, any payments scheduled to be
made on account of principal of, and interest on, the
related Equipment Notes. If an Owner Participant is
required to make a deferred equity payment to be used
by an Owner Trustee to pay principal of, and interest on,
the Equipment Notes and the Owner Participant fails to
make the payment, Lessee will be required to provide the
Owner Trustee with funds sufficient to make the
payment.
TERMINATION VALUE
(SOMETIMES REFERRED TO AS
STIPULATED LOSS VALUES
OR TERMINATION AMOUNTS):Termination values (or other
comparable termination amounts), together with all
other amounts payable by Lessee upon termination of
any Lease, and the amount of premium, if any,
payable by the Owner Trustee, must be sufficient to
pay amounts due with respect to the related Equipment
Notes.
ALL-RISK HULL INSURANCE:Not less than Termination Value (or,
other comparable termination amount), subject to
Lessee's right to self- insure on terms no more
favorable to Lessee in any material respect than
those set forth in Section (d) of Exhibit H to the
Lease Forms.
MINIMUM LIABILITY
INSURANCE AMOUNT: As set forth in Exhibit H to the Lease Forms.
PAST DUE RATE: Not less than (i) with respect to any portion of any
payment of Rent that may be required by the Trust
Indenture to be paid by the Loan Trustee to the holders
of any outstanding Equipment Notes, a rate per annum
equal to 1% over the interest rate then in effect for such
Equipment Notes, and (ii) with respect to the remaining
portion of any payment of Rent (and the entire amount of
any payment of Rent after the satisfaction and discharge
of the Trust Indenture), a rate per annum equal to 1%
over the rate of interest publicly announced by The
Chase Manhattan Bank, (or other major commercial
banking institutions) in New York, New York from time
to time as its base rate of interest.
</TABLE>
PART IV:
MANDATORY ECONOMIC TERMS FOR THE PARTICIPATION AGREEMENT
--------------------------------------------------------
Loan Trustee, Subordination Agent, Liquidity Provider, the
Policy Provider, Pass Through Trustee and Note Holders shall be indemnified
against Expenses and Taxes in a manner not materially less favorable to the
Loan Trustees, the Subordination Agent, the Liquidity Provider, the Policy
Provider, the Pass Through Trustee and the Note Holders than that set forth
in Section 6 of the form of the Participation Agreement (the "Participation
Form") marked as Exhibit A-1 to the Note Purchase Agreement for the Leased
Aircraft or as Exhibit C-1 to the Note Purchase Agreement for the Owned
Aircraft.
SCHEDULE VII to
NOTE PURCHASE AGREEMENT
-----------------------
AGGREGATE AMORTIZATION SCHEDULE
Scheduled
Payment Expected
of Principal Pool Factor
February 20, 2001........................... $8,700,000 0.9691137
August 20, 2001............................. 6,250,000 0.9469252
February 20, 2002........................... 6,250,000 0.9247368
August 20, 2002............................. 6,250,000 0.9025483
February 20, 2003........................... 6,250,000 0.8803598
August 20, 2003............................. 6,250,000 0.8581714
February 20, 2004........................... 6,250,000 0.8359829
August 20, 2004............................. 6,250,000 0.8137945
February 20, 2005........................... 6,500,000 0.7907185
August 20, 2005............................. 6,710,000 0.7668970
February 20, 2006........................... 6,920,000 0.7423299
August 20, 2006............................. 7,130,000 0.7170173
February 20, 2007........................... 7,340,000 0.6909592
August 20, 2007............................. 7,550,000 0.6641555
February 20, 2008........................... 7,760,000 0.6366063
August 20, 2008............................. 7,970,000 0.6083116
February 20, 2009........................... 8,180,000 0.5792714
August 20, 2009............................. 8,390,000 0.5494856
February 20, 2010........................... 8,600,000 0.5189543
August 20, 2010............................. 8,810,000 0.4876774
February 20, 2011........................... 9,020,000 0.4556550
August 20, 2011............................. 9,230,000 0.4228871
February 20, 2012........................... 9,440,000 0.3893737
August 20, 2012............................. 9,650,000 0.3551147
February 20, 2013........................... 9,860,000 0.3201102
August 20, 2013............................. 10,070,000 0.2843602
February 20, 2014.......................... 10,280,000 0.2478646
August 20, 2014............................ 10,490,000 0.2106235
February 20, 2015........................... 10,700,000 0.1726368
August 20, 2015............................ 10,910,000 0.1339047
February 20, 2016.......................... 11,120,000 0.0944270
August 20, 2016............................ 11,330,000 0.0542037
February 20, 2017........................... 15,268,000 0.0000000
ANNEX A to
NOTE PURCHASE AGREEMENT
DEFINITIONS
"Act" means 49 U.S.C.ss.ss.40101-46507.
"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 Purchase Agreement" means the Purchase Agreement
dated as of November 24, 1998 between US Airways Group, Inc. and the Seller
(including all exhibits thereto, together with all letter agreements
entered into that by their terms constitute part of any such Purchase
Agreement), as the same may be amended or otherwise supplemented from time
to time.
"Aircraft Purchase Agreement Assignment" means a Purchase
Agreement Assignment substantially in the form of Exhibit A-4 for Leased
Aircraft, and Exhibit C-3 for Owned Aircraft, to the Note Purchase
Agreement.
"Assumed Amortization Schedule" means Schedule VII to the Note
Purchase Agreement.
"Average Life Date" means, for any Equipment Note, the date
which follows the time of determination by a period equal to the Remaining
Weighted Average Life of such Equipment Note.
"Bankruptcy Code" means the United States Bankruptcy Code, 11
U.S.C.ss.ss.101 et seq.
"Basic Pass Through Trust Agreement" means the Pass Through
Trust Agreement, dated as of July 30, 1999, among the Company, US Airways
Group, Inc. 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 insurance companies or commercial banks in New York, New
York, or commercial banking institutions in Pittsburgh, Pennsylvania and in
the cities in which the Corporate Trust Office of the Subordination Agent
or any Loan Trustee or the fiscal agent of the Policy Provider or the
office of the Policy Provider are located are authorized or required by law
or executive order to close.
"Certificate" has the meaning set forth in the second recital
to the Note Purchase Agreement.
"Certificate Holder" means the Person in whose name a
Certificate is registered in the Register.
"Class" means the class of Certificates issued by the Pass
Through Trust.
"Class G Certificates" means the Class G Certificates issued by
the US Airways Pass Through Trust, Series 2000-1G.
"Class G Trust" means the US Airways Pass Through Trust, Series
2000-1G formed pursuant to the Basic Pass Through Trust Agreement and Class
G Trust Supplement.
"Closing Date" means the Business Day on which a closing occurs
under the Financing Agreements.
"Company" means US Airways, Inc., a Delaware corporation and its
successors and permitted assigns.
"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 Period Termination Date" means the earlier of (a)
February 7, 2001, and (b) the date on which Equipment Notes issued with
respect to all of the New Aircraft (or Substitute Aircraft in lieu thereof)
have been purchased by the Pass Through Trustee in accordance with the Note
Purchase Agreement; provided that if all Equipment Notes relating to the
New Aircraft (or Substitute Aircraft in lieu thereof) have not been
purchased by February 7, 2001 on account of manufacturing delays that occur
for reasons beyond the control of the Company and that are not occasioned
by the fault or negligence of the Company, then the February 7, 2001 date
may be extended to the earlier of (i) the date on which Equipment Notes
with respect to all New Aircraft (or Substitute Aircraft in lieu thereof)
have been purchased by the Pass Through Trusts in accordance with the Note
Purchase Agreement, and (ii) June 7, 2001.
"Deposit" has the meaning set forth in the fourth recital to
the Note Purchase Agreement.
"Deposit Agreement" has the meaning set forth in the fourth
recital to the Note Purchase Agreement.
"Deposit Make-Whole Premium" means, with respect to the
distribution of unused Deposits to holders of the Class G Certificates, as
of any date of determination, an amount equal to the excess, if any, of (a)
the present value of the excess of (i) the scheduled payment of principal
and interest to maturity of the Series G Equipment Notes, assuming the
maximum principal amount thereof (the "Maximum Amount") minus the
Non-Premium Amount were issued, on each remaining Regular Distribution Date
for the Class G Certificates under the Assumed Amortization Schedule over
(ii) the scheduled payment of principal and interest to maturity of the
Series G Equipment Notes actually acquired by the Trustee on each such
Regular Distribution Date, such present value computed by discounting such
excess on a semiannual basis on each Regular Distribution Date (assuming a
360-day year of twelve 30-day months) using a discount rate equal to the
Treasury Yield plus 175 basis points over (b) the amount of such unused
Deposits to be distributed to the holders of such Certificates, minus the
Non-Premium Amount plus accrued and unpaid interest on such net amount to
but excluding the date of determination from and including the preceding
Regular Distribution Date (or if such date of determination precedes the
first Regular Distribution Date, the Issuance Date).
"Depositary" means ABN AMRO Bank N.V., acting through its
Chicago branch.
"Depositary Threshold Rating" means, with respect to the
Depositary or any Replacement Depositary, short-term unsecured rating of
A-1+ from Standard & Poor's and P-1 from Moody's.
"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 and Paying Agent Agreement" has the meaning set forth
in the fourth recital to the Note Purchase Agreement.
"FAA" means the Federal Aviation Administration of the United
States.
"Final Withdrawal" with respect to the Escrow and Paying Agent
Agreement, has the meaning set forth in Section 1.2 thereof.
"Financing Agreements" means, collectively, the Lease Financing
Agreements and the Owner Financing Agreements.
"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 Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"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.
"Indentures" means, collectively, the Leased Aircraft Indentures
and the Owned Aircraft Indentures.
"Intercreditor Agreement" has the meaning set forth in the
eighth recital to the Note Purchase Agreement.
"Issuance Date" means the date of the original issuance of the
Class G 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.
"Lease" means a Lease Agreement substantially in the form of
either Exhibit A-2-1 (Basic Lease Form) or A-2-2 (Deferred
Equity/Prepaid--Deferred Rent Lease Form) to the Note Purchase Agreement.
"Lease Financing Agreements" means, collectively, the Aircraft
Purchase Agreement Assignment, the Leased Aircraft Participation Agreement,
the Lease, the Leased Aircraft Indenture, the Leased Aircraft French Pledge
Agreement, the Equipment Notes issued under the Leased Aircraft Indenture
and the Trust Agreement relating to the financing of a Leased Aircraft.
"Lease Period" has the meaning set forth in the Participation
Agreement.
"Leased Aircraft" means a New Aircraft subject to a Lease.
"Leased Aircraft French Pledge Agreement" means a French Pledge
Agreement substantially in the form of Exhibit A-6 to the Note Purchase
Agreement.
"Leased Aircraft Indenture" means a Trust Indenture and
Security Agreement substantially in the form of Exhibit A-3 to the Note
Purchase Agreement.
"Leased Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.
"Liquidity Facility" has the meaning set forth in the eighth
recital to the Note Purchase Agreement.
"Liquidity Provider" has the meaning set forth in the eighth
recital to the Note Purchase Agreement.
"Loan Trustee" means the "Indenture Trustee" as defined in the
Financing Agreements.
"Mandatory Document Terms" means the terms set forth on
Schedule V to the Note Purchase Agreement.
"Mandatory Economic Terms" means the terms set forth on
Schedule VI to the Note Purchase Agreement.
"Manufacturer" means Airbus Industrie, G.I.E., a "Groupement
d'Interet Economique" established under "Ordonnance" No. 67-821 dated
September 23, 1967, of the Republic of France.
"New Aircraft" has the meaning set forth in the first recital
to the Note Purchase Agreement.
"Non-Premium Amount" means the amount equal to unused Deposits
to be distributed due to the failure of an Aircraft to be delivered prior
to the Delivery Period Termination Date due to any reason not occasioned by
US Airways' fault or negligence.
"Note Purchase Agreement" means the Note Purchase Agreement to
which this Annex A is attached.
"Notice of Purchase Withdrawal" with respect to the Deposit
Agreement, has the meaning set forth in Section 2.3 thereof.
"Operative Documents" means, collectively, the Pass Through
Trust Agreement, the Escrow and Paying Agent Agreement, the Deposit
Agreement, the Liquidity Facility, the Policy Provider Agreement, the
Policy, the Intercreditor Agreement, the Trust Agreements, the Equipment
Notes, the Certificates and the Financing Agreements.
"Owned Aircraft" means a New Aircraft subject to an Owned Aircraft
Indenture.
"Owned Aircraft French Pledge Agreement" means a French Pledge
Agreement substantially in the form of Exhibit C-4 to the Note Purchase
Agreement.
"Owned Aircraft Indenture" means an Indenture and Security
Agreement substantially in the form of Exhibit C-2 to the Note Purchase
Agreement.
"Owned Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement.
"Owner Financing Agreements" means, collectively, the Aircraft
Purchase Agreement Assignment, the Owned Aircraft Participation Agreement,
the Owned Aircraft Indenture, the Owned Aircraft French Pledge Agreement
and the Equipment Notes issued thereunder relating to the financing of an
Owned Aircraft.
"Owner Participant" means, with respect to any Leased Aircraft,
the Person named as the Owner Participant in the Participation Agreement
with respect to such Leased Aircraft.
"Owner Trust" means with respect to any Leased Aircraft, the
trust created by the "Trust Agreement" referred to in the Leased Aircraft
Indenture related thereto.
"Owner Trustee" means with respect to any Leased Aircraft, the
"Owner Trustee" party to the "Trust Agreement" referred to in the Leased
Aircraft Indenture related thereto.
"Participation Agreements" means, collectively, the Leased
Aircraft Participation Agreements and the Owned Aircraft Participation
Agreements.
"Pass Through Trust" has the meaning set forth in the second
recital to the Note Purchase Agreement.
"Pass Through Trust Agreement" means the Trust Supplement,
together with the Basic Pass Through Trust Agreement 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, 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.
"Policy " has the meaning set forth in the ninth recital to the
Note Purchase Agreement.
"Policy Provider Obligations" has the meaning specified in the
Intercreditor Agreement.
"Policy Provider" has the meaning set forth in the ninth
recital to the Note Purchase Agreement.
"Policy Provider Agreement" has the meaning set forth in the
ninth recital to the Note Purchase Agreement.
"Qualified Owner Participant" has the meaning set forth in
Annex A to the Leased Aircraft Participation Agreement.
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency that have been requested by the Company
to rate the Certificates and which shall then be rating the Certificates.
The initial Rating Agencies will be Moody's Investors Service and Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
"Rating Agency Confirmation" means, with respect to (i) any
Financing Agreement that has been modified in any material respect from the
forms thereof attached to the Note Purchase Agreement or with respect to a
Substitute Aircraft or (ii) the length of the period between the delivery
of a New Aircraft and its Scheduled Closing Date, a written confirmation
from each of the Rating Agencies that the use of such Financing Agreement
with such modifications or the substituting of such Substitute Aircraft for
a New Aircraft or the length of such period, either of which of the
foregoing shall in a particular case require Rating Agency Confirmation,
would not result in (i) a reduction of the rating for the Class G
Certificates below the then current rating for such Class of Certificates
(without regard to the Policy) or (ii) a withdrawal or suspension of the
rating of the Class G Certificates, in each case, without reference to the
Policy.
"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.
"Regular Distribution Dates" shall mean February 20 and August
20 of each year, commencing August 2, 2000.
"Remaining Weighted Average Life" means, on a given date with
respect to any Equipment Note, 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, including the payment due on the maturity
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.
"Replacement Depositary" has the meaning set forth in Section
5(a)(vii) of the Note Purchase Agreement.
"Replacement Deposit Agreement" means, for the Class G
Certificates, a deposit agreement substantially in the form of the replaced
Deposit Agreement for such Class of Certificates as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for
such Class of Certificates (before the downgrading of such ratings, if any,
as a result of the downgrading of the Depositary and without regard to the
Policy).
"Section 1110" means 11 U.S.C. ss. 1110 of the Bankruptcy Code
or any successor or analogous Section of the federal bankruptcy Law in
effect from time to time.
"Seller" means AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France and
its successors and permitted assigns.
"Series G Equipment Notes" means Equipment Notes issued under
an Indenture and designated as "Series G" thereunder.
"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 2(g)
of the Note Purchase Agreement.
"Substitute Closing Date" has the meaning set forth in Section
2(e) 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.
"Treasury Yield" means, as of any date of determination, with
respect to any Equipment Note (utilizing the Assumed Amortization Schedule
applicable thereto), 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 semi-annual 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 on the most recent H.15(519), such
weekly average yield to maturity as published in such H.15(519).
"Triggering Event" has the meaning assigned to such term in the
Intercreditor Agreement.
"Trust Agreement" means a Trust Agreement substantially in the
form of Exhibit A-5 to the Note Purchase 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 Certificates of a class, (ii)
the issuance of the Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the
Certificates of such class are established.
"Underwriters" has the meaning set forth in the third recital
to the Note Purchase Agreement.
EXHIBIT A-1
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-2-1 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF BASIC LEASE
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-2-2 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF DEFERRED EQUITY/PREPAID-DEFERRED RENT LEASE
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-3 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF LEASED AIRCRAFT INDENTURE
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-4 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF LEASED AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-5 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF LEASED AIRCRAFT TRUST AGREEMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT A-6 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF LEASED AIRCRAFT FRENCH PLEDGE AGREEMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE
ASSUMPTION THAT BOTH SERIES G AND SERIES C EQUIPMENT
NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES ARE NOT
ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT
SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES
AND TO MAKE OTHER RELATED CHANGES.
EXHIBIT B to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF CLOSING NOTICE
EXHIBIT B
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
---------------------------
Gentlemen:
Reference is made to the Note Purchase Agreement, dated as of
March 3, 2000 among US Airways, Inc. (the "Company"), State Street Bank and
Trust Company of Connecticut, National Association, as Pass Through Trustee
under the Pass Through Trust Agreement (as defined therein) (the "Pass
Through Trustee"), State Street Bank and Trust Company of Connecticut,
National Association, as Subordination Agent (the "Subordination Agent"),
First Security Bank, National Association, as Escrow Agent (the "Escrow
Agent") and State Street Bank and Trust Company of Connecticut, 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 2(b) of the Note Purchase Agreement, the
undersigned hereby notifies you, in respect of the Airbus A330 aircraft
with manufacturer's serial number __________ (the "Aircraft"), of the
following:
1. The Company has elected to treat the Aircraft as [a Leased
Aircraft] [an Owned Aircraft];
2. The Scheduled Closing Date for the financing of the Aircraft
is __________; and
3. The aggregate amount of each series of Equipment Notes to be
issued, and purchased by the respective Pass Through Trustee, on the
Closing Date, in connection with the financing of such Aircraft is as
follows: The Class G Trustee shall purchase Series G Equipment Notes in the
amount of $__________.
The Company hereby instructs the Class G 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 Escrow
Agent.
The Company hereby instructs the Pass Through Trustee to (i)
purchase Series G Equipment Notes 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 the Pass Through Trustee to (a)
enter into the Participation Agreement dated as of __________ among the
Company, as Lessee, the Subordination Agent, the Pass Through Trustee,
State Street Bank and Trust Company of Connecticut, National Association,
as Loan Trustee and Loan Participant, First Security Bank, National
Association, as Owner Trustee and __________, as Owner Participant, (b)
perform its obligations thereunder and (c) deliver such certificates,
documents and legal opinions relating to such Pass Through Trustee as
required thereby.
[The Company hereby certifies that the Owner Participant with
respect to the Aircraft is not an Affiliate of the Company and is (A) a
Qualified Owner Participant or (B) a Person the obligations of which under
the Financing Agreements are guaranteed by a Qualified Owner Participant.]1
Yours faithfully,
US Airways, Inc.
By:___________________________
Name:
Title:
SCHEDULE A
State Street Bank and Trust Company
of Connecticut, National Association, as
Pass Through Trustee, Subordination
Agent and Paying Agent
225 Asylum Street
Goodwin Square
Hartford, CT 06103
Attention: Corporate Trust Administration
Facsimile: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attention: Corporate Trust Department
Facsimile: (617) 662-1461
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Standard & Poor's Ratings Services
55 Water Street, 39th Floor
New York, New York 10041
Attention: Philip Baggaley
Facsimile: (212) 412-0540
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: Robert Jankowitz
Facsimile: (212) 553-4600
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio
Management, Structured Finance
Facsimile: (914) 765-3163
Annex A
WITHDRAWAL CERTIFICATE
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Services
Telecopier: (801) 246-5053
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement,
dated as of March 3, 2000 (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 1.2(c) of the Agreement, please execute the
attached Notice of Withdrawal and immediately transmit by facsimile to the
Depositary, at ___________.
Capitalized terms used herein but not defined herein shall have
the meanings set forth in the Agreement.
Very truly yours,
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its
individual capacity by solely as Pass Through
Trustee
By:__________________________________________
Name:
Title:
Dated: As of __________
Exhibit A
NOTICE OF PURCHASE WITHDRAWAL
-----------------------------
ABN AMRO Bank, N.V.
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Claudia Heldring
Telecopier: (312) 606-8428
Ladies and Gentlemen:
Reference is made to the Deposit Agreement (Class G) dated as of
March 3, 2000 (the "Deposit Agreement") between First Security Bank,
National Association, as Escrow Agent, and ABN AMRO Bank, N.V., 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 [a portion
of] the proceeds of the Deposit [in an amount equal to $____________]to
_______________, Account No. __________, Reference: __________ on
_______________, _____, [and to re-deposit the remaining proceeds of the
Deposit with the Depositary as a new Deposit pursuant to Section 2.4 of the
Deposit Agreement, in each case]2 upon the telephonic request of a
representative of the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By ____________________________
Name:
Title:
Dated:___________, ____
EXHIBIT C-1 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
EXHIBIT C-2 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF OWNED AIRCRAFT INDENTURE
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
EXHIBIT C-3 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF OWNED AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
EXHIBIT C-4 to
NOTE PURCHASE AGREEMENT
-----------------------
FORM OF OWNED AIRCRAFT FRENCH PLEDGE AGREEMENT
[FILED SEPARATELY]
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
Exhibit A-1 to Note Purchase Agreement
Participation Agreement
N___U_
===============================================================================
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of
--------- --, ----
Among
US AIRWAYS, INC.,
Lessee,
[------------------],
Owner Participant,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly provided herein,
but solely as Owner Trustee,
-----------------------------
One Airbus A330 Aircraft
U.S. Registration No. N___U_
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT
BOTH SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C
EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS
AGREEMENT SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C
EQUIPMENT NOTES AND TO MAKE OTHER RELATED CHANGES.
===============================================================================
Participation Agreement
N___U_
INDEX TO PARTICIPATION AGREEMENT
Page
SECTION 1. DEFINITIONS AND CONSTRUCTION................................2
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.............3
(a) Participation by Pass Through Trustees on the Delivery
Date; Issuance of Equipment Notes..................................3
(b) Payment of Owner Participant's Commitment..............3
(c) Lessee's Notice of Delivery Date........................4
(d) Default by Pass Through Trustee or Owner Participant.
..................................................................4
(e) Closing...............................................4
(f) Postponement of Scheduled Closing Date...............4
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE.........................6
SECTION 4. CONDITIONS PRECEDENT........................................6
(a) Conditions Precedent to the Participations in the Aircraft
..................................................................6
(b) Conditions Precedent to the Obligations of Lessee.....16
SECTION 5. EXTENT OF INTEREST OF NOTE HOLDERS.........................18
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES.
........................................................................18
(a) Representations and Warranties........................18
(b) General Tax Indemnity.................................22
(i) Indemnity....................................22
(ii) Exclusions from General Tax Indemnity........23
(iii) Payments.....................................26
(iv) Contests. ..................................28
(v) Refund.......................................31
(vi) Tax Filing. ........................31
(vii) Forms. .............................32
(viii) Non-Parties..........................32
(ix) Subrogation..................................32
(x) Foreign Tax On Loan Payments.........32
(xi) Income Tax...........................33
Participation Agreement
N___U_
(c) General Indemnity...................................33
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
........................................................................38
(a) Covenants Regarding Citizenship.......................38
(b) Location of Records...................................39
(c) Securities Act........................................39
(d) Reregistration........................................39
(e) Owner Participant Representations and Warranties......42
(f) Lessor Liens..........................................44
(g) Quiet Enjoyment.......................................44
(h) Equipment Notes Acquired for Investment...............44
(i) [Reserved] ..........................................44
(j) Representations, Warranties and Covenants of Indenture
Trustee...........................................................45
(k) Owner Participant Transfers...........................46
(l) Reserved.............................................48
(m) Compliance with Trust Indenture.......................48
(n) ERISA Matters.........................................48
(o) Confidentiality of Purchase Agreement.................49
(p) Margin Regulations....................................49
(q) Loan Participant Liens................................49
(r) Indenture Trustee Liens...............................50
(s) Representations and Warranties of Owner Trustee.......50
(t) Owner Participant Obligations on Lease Termination....54
(u) Transfer of Title; Assumption of Equipment Notes......54
(v) Lessee Merger Covenant...............................55
(w) Further Assurances....................................56
(x) Rent Adjustments......................................57
(y) Owner Participant Costs on Return.....................57
(z) Transfer of Equipment Notes...........................57
(aa) Representations and Warranties of Pass Through Trustee
.................................................................57
(bb) Representations and Warranties of Subordination Agent
.................................................................60
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER AND POLICY PROVIDER.........62
SECTION 9. OTHER DOCUMENTS............................................62
Participation Agreement
N___U_
SECTION 10. CERTAIN COVENANTS OF LESSEE................................63
(a) Further Assurances....................................63
(b) Filings...............................................63
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES............................64
SECTION 12. NOTICES; CONSENT TO JURISDICTION...........................64
(a) Notices...............................................64
(b) Consent to Jurisdiction...............................64
SECTION 13. CHANGE OF SITUS OF OWNER TRUST............................65
SECTION 14. MISCELLANEOUS..............................................66
(a) Consents Under Lease..................................66
(b) Survival..............................................66
(c) Counterparts..........................................66
(d) Amendments and Waivers................................67
(e) Successors and Assigns................................67
(f) Governing Law.........................................67
(g) Trust Capacity........................................67
(h) Section 1110..........................................68
SECTION 15. EXPENSES...................................................68
(a) Invoices And Payment..................................68
(b) Payment of Other Expenses.............................68
SECTION 16. REFINANCINGS..............................................69
(a) Refinancing Generally................................69
(b) Limitation on Redemption..............................72
Participation Agreement
N___U_
ANNEXES
ANNEX A - Definitions
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreement and Pass Through Trust
Supplements
SCHEDULE IV - [Deferred Equity Payments]1
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois), special counsel for Lessee
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C - Form of Opinion of Clifford Chance Regarding Manufacturer
Documents
Exhibit D - Form of Opinion of Ray, Quinney & Nebeker, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of ______________, special counsel for the
Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of Crowe & Dunlevy, P.C., special FAA
Counsel
Exhibit G - Form of Opinion of Bingham Dana LLP, special counsel for the
Indenture Trustee
Exhibit H - Form of Opinion of Bingham Dana LLP, special counsel for the
Pass Through Trustee
Exhibit I - Form of Opinion of Bingham Dana LLP, special counsel for the
Subordination Agent
- --------
1 For Deferred Equity Transactions Only.
Participation Agreement
N___U_
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N___U_)
THIS PARTICIPATION AGREEMENT (US Airways, Inc. Trust No.
N___U_) dated as of _______ ___, (as amended, supplemented or otherwise
modified from time to time, this "Agreement") among (i) US AIRWAYS, INC., a
Delaware corporation (together with its successors and permitted assigns,
the "Lessee", (ii) [_______________], a ______________ (together with its
successors and permitted assigns, the "Owner Participant"), (iii) STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity except as
otherwise provided herein, but solely as pass through trustee under each of
two separate Pass Through Trust Agreements (in such capacity, together with
its successors and permitted assigns, the "Pass Through Trustee"),
subordination agent and trustee under the Intercreditor Agreement (in such
capacity, together with its successors and permitted assigns, the
"Subordination Agent"), and Indenture Trustee under the Trust Indenture (in
such capacity, together with any successor indenture trustee, the
"Indenture Trustee"), and (iv) FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity except as
expressly provided herein, but solely as Owner Trustee under the Trust
Agreement (herein, in such latter capacity, together with any successor
owner trustee, called the "Owner Trustee");
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Owner Participant is entering into the Trust Agreement
with the Owner Trustee, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Trust Estate for the use and
benefit of the Owner Participant;
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Indenture Trustee and the Owner Trustee are entering
into the Trust Indenture pursuant to which the Owner Trustee will issue to
the Loan Participants Equipment Notes in two series, which Equipment Notes
are to be secured by the mortgage and security interests created by the
Owner Trustee in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Owner Trustee will execute and deliver a Trust and
Indenture Supplement covering the Aircraft, supplementing the Trust
Agreement and the Trust Indenture;
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Owner Trustee and Lessee have entered into the Lease
whereby, subject to the terms and conditions set forth therein, the Owner
Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee, the Aircraft on the Delivery Date;
WHEREAS, on the Delivery Date for the Aircraft, the Lessee will
deliver a Lease Supplement covering the Aircraft;
WHEREAS, pursuant to the terms of the Note Purchase
Agreement, the Pass Through Trustee will purchase from the Owner Trustee on
the Delivery Date, on behalf of each Pass Through Trust, all of the
Equipment Notes bearing the same interest rate as the Certificates issued
by such Pass Through Trust;
WHEREAS, prior to the execution and delivery of this
Agreement, (i) the Liquidity Provider entered into two separate Liquidity
Facilities, one for the benefit of the holders of Certificates of each of
the Class G Pass Through Trust and the Class C Pass Through Trust (each
referenced on Schedule III hereto), with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust;
(ii) the Policy Provider entered into a Policy Provider Agreement with the
Subordination Agent, as agent for the Pass Through Trustee on behalf of the
Class G Trust and has issued the Policy for the benefit of the holders of
Certificates of the Class G Pass Through Trust; and (iii) the Pass Through
Trustee, the Liquidity Provider, the Policy Provider and the Subordination
Agent have entered into the Intercreditor Agreement;
WHEREAS, the Equipment Notes will be held by the
Subordination Agent pursuant to the Intercreditor Agreement on behalf of
the Pass Through Trusts;
WHEREAS, the acquisition of the Aircraft by Lessee from the
Seller and the aforementioned sale and leaseback transaction are integrally
related and constitute a series of events designed to provide financing for
such Aircraft and a means of providing the Aircraft to the Lessee for use
in its business.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery
Date; Issuance of Equipment Notes. Subject to the terms and conditions of
this Agreement, the Pass Through Trustee for each Pass Through Trust agrees
to make a non-recourse (except as provided herein) secured loan to the
Owner Trustee on the Delivery Date to finance, in part, the Owner Trustee's
payment of Lessor's Cost for the Aircraft by paying to the Owner Trustee
the aggregate purchase price of the Equipment Notes being issued to such
Pass Through Trustee as set forth on Schedule II opposite the name of such
Pass Through Trust. The Pass Through Trustees shall make such payments to
the Owner Trustee on a date to be designated pursuant to Section 2(c) but
in no event later than __________________, by transferring to the account
of the Owner Trustee at State Street Bank and Trust Company of Connecticut,
National Association, 225 Asylum Street, Hartford, Connecticut 06103, ABA
No. _________, Account No. __________, Reference: US Airways, Inc. 2000-1
EETC/US Airways, Inc. Trust No. N___U_), not later than 9:30 a.m., New York
City time, on the Delivery Date in immediately available funds in Dollars,
the amount set forth opposite the name of such Pass Through Trust on
Schedule II hereto.
Upon the occurrence of the above transfers by the Pass
Through Trustee for each Pass Through Trust to the Owner Trustee, the Owner
Trustee, at the direction of the Owner Participant, shall issue, pursuant
to Article II of the Trust Indenture, to the Subordination Agent on behalf
of the Pass Through Trustee for each of the Pass Through Trusts, Equipment
Notes of the maturity and aggregate principal amount, bearing the interest
rate and for the purchase price set forth on Schedule II opposite the name
of such Pass Through Trust.
(b) Payment of Owner Participant's Commitment. Subject to the
terms and conditions of this Agreement, the Owner Participant agrees with
the Lessee and only with the Lessee on behalf of the Owner Trustee, subject
to the terms and conditions of this Agreement, to make the amount of its
Commitment as set forth on Schedule II available for and on account of the
Owner Trustee on the Delivery Date specified in the Delivery Notice
pursuant to Section 2(c) by wire transfer of such amount in immediately
available funds, to the Owner Trustee for deposit in its account at State
Street Bank and Trust Company of Connecticut, National Association, 225
Asylum Street, Hartford, Connecticut 06103, ABA No. _________, Account No.
__________, Reference: US Airways, Inc. 2000-1 EETC/US Airways, Inc. Trust
No. N___U_, not later than 9:30 a.m., New York City time. The amount of the
Owner Participant's Commitment shall be held for the account of the Owner
Participant by the Owner Trustee until released by the Owner Participant or
its special counsel at closing or until returned to the Owner Participant
in accordance with Section 2(f).
(c) Lessee's Notice of Delivery Date. The Lessee agrees to
give the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee and the Subordination Agent at least three (3)
Business Days written or facsimile notice prior to the Delivery Date, which
notice shall specify the Lessor's Cost for the Aircraft, the estimated
amount of the Owner Participant's Commitment, the Delivery Date for the
Aircraft, the serial number of the Airframe and each Engine, and the United
States registration number for the Aircraft.
(d) Default by Pass Through Trustee or Owner Participant. In
case any of the Pass Through Trustee or the Owner Participant shall default
in its obligation under the provisions of this Section 2, no other such
party shall have any obligation to make any portion of such defaulted
amount available or to increase the amount of its Commitment and the
obligation of such nondefaulting party shall remain subject to the terms
and conditions set forth in this Agreement.
(e) Closing. The closing of the transactions referred to
in this Agreement shall take place commencing at 9:30 a.m. local time, on
the Delivery Date, at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP in New York, New York.
(f) Postponement of Scheduled Closing Date.
--------------------------------------
(i) If for any reason whatsoever the closing of the
transactions contemplated hereby is not consummated on the Delivery
Date provided for pursuant to Section 2(c) (the "Scheduled Delivery
Date"), the closing shall be deemed adjourned to the next Business
Day or to such other Business Day on or prior to _______________ as
Lessee shall specify by written notice to the Pass Through Trustee,
the Owner Participant, the Owner Trustee and the Indenture Trustee,
in which case the Owner Participant will keep its funds available.
(ii) If the closing fails to occur on the Scheduled Delivery
Date, the Owner Trustee shall promptly return to each Participant
that makes funds available to it in accordance with this Section 2
such funds, together with interest or income earned thereon.
(iii) If the closing fails to occur on the Scheduled
Delivery Date and funds are not returned to each Participant that
made funds available as provided by clause (ii) above, the Owner
Trustee shall, if so instructed by Lessee, use reasonable efforts
to invest, at the risk of Lessee, the funds received by it from
Participants in Cash Equivalents. Any such obligations purchased by
the Owner Trustee, whether directly or through a repurchase
agreement, shall be held in trust by the Owner Trustee for the
benefit of the respective Participants that provided such funds,
and not as part of the Trust Estate or the Trust Indenture Estate.
(iv) If the closing fails to occur on the Scheduled Delivery
Date, unless the Owner Trustee returns all funds to the
Participants by 2:00 p.m., New York City time, on the Scheduled
Delivery Date, Lessee shall reimburse each Participant that has
made funds available pursuant to this Section 2 for the loss of the
use of its funds an amount equal to the excess, if any, of (x)
interest at the Debt Rate on the amount of such funds for the
period from and including the Scheduled Delivery Date to but
excluding the actual Delivery Date or, if earlier, the day on which
such Participant's funds are returned if such return is made by
2:00 p.m., New York City time (or to but excluding the next
following Business Day if such return is not made by such time)
over (y) any amount paid to such Participant in respect of interest
or income earned by the Owner Trustee pursuant to clause (iii)
above.
(v) On the Delivery Date or on the date funds are required
to be returned to Participants pursuant to clause (ii) above,
Lessee shall reimburse the Owner Trustee, for the benefit of
Participants that provided funds which are invested by the Owner
Trustee pursuant to this subsection (f), for any losses incurred on
such investments. All income and profits on the investment of such
funds shall be for the respective accounts of such Participants,
and the Owner Trustee shall not be liable for failure to invest
such funds or for any losses incurred on such investments, except
for its own negligence or willful misconduct.
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE.
The Owner Participant agrees that its releasing the
amount of its Commitment for the Aircraft to the account of the Owner
Trustee in accordance with the terms of Section 2 and its instructions to
the Owner Trustee to release such funds shall constitute, without further
act, authorization and direction by the Owner Participant to the Owner
Trustee:
(i) to purchase the Aircraft from Lessee and to pay to
Lessee the Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of
the Owner Trustee (who shall be an employee or employees, or an
agent or agents, of Lessee designated by Lessee) to accept delivery
of the Aircraft on the Delivery Date pursuant to the Acceptance
Certificate;
(iii) to accept from Lessee the Bill of Sale and the FAA
Bill of Sale for the Aircraft referred to in Section 4(a)(v)(8) and
4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the
Lease Supplement and the Trust Supplement, in each case covering the
Aircraft;
(v) to borrow from the Pass Through Trustee and issue the
Equipment Notes as provided in Section 2(a); and
(vi) to take such other action as may be required to be
taken by the Owner Trustee on the Delivery Date by the terms of any
Operative Document.
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to the Participations in the
Aircraft. It is agreed that the obligations of the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party),
prior to or on the Delivery Date of the following conditions precedent,
except that paragraphs (iii) and (v)(5), (xxi), (xxii) and (xxiii) shall
not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii) (insofar as it relates certificates and
documents to be delivered by the Owner Participant) and (xiv) shall not be
a condition precedent to the obligation of the Owner Participant and
paragraph (xxv) shall not be a condition precedent to the obligations of
the Subordination Agent:
(i) At least three (3) Business Days prior to the Delivery
Date, each of the parties hereto shall have received the Delivery
Notice pursuant to Section 2(c).
(ii) On the Delivery Date, no change shall have occurred
after the date of the execution and delivery of this Agreement in
applicable law or regulations or guidelines or interpretations
thereof by appropriate regulatory authorities which would make it a
violation of law or regulations or guidelines for the Pass
Through Trustee or the Owner Participant to make its Commitment
available in accordance with Section 2.
(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments
for the Aircraft in accordance with Section 2.
(iv) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment
for the Aircraft in accordance with Section 2.
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to the Owner
Trustee, the Owner Participant, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent and shall be in full
force and effect and executed counterparts shall have been
delivered to the Owner Trustee, the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Subordination
Agent, or their respective counsel, provided that only the
Subordination Agent on behalf of each Pass Through Trustee shall
receive an executed original of such Pass Through Trustee's
respective Equipment Note and provided, further, that an excerpted
copy of the Purchase Agreement shall only be delivered to and
retained by the Owner Trustee (but the Indenture Trustee shall also
retain an excerpted copy of the Purchase Agreement which may be
inspected by the Owner Participant and its counsel prior to the
Delivery Date and subsequent to the Delivery Date may be inspected
and reviewed by the Indenture Trustee if and only if there shall
occur and be continuing an Indenture Event of Default), the chattel
paper counterpart of the Lease and the Lease Supplement covering
the Aircraft dated the Delivery Date shall be delivered to the
Indenture Trustee, the Tax Indemnity Agreement need only be
satisfactory to the Owner Participant and Lessee and shall only be
delivered to Lessee and the Owner Participant and their respective
counsel:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft);
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated
the Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Indenture and Trust Supplement covering
the Aircraft dated the Delivery Date;
(8) the Bill of Sale;
(9) the FAA Bill of Sale;
(10) an acceptance certificate covering the Aircraft
in the form agreed to by the Owner Participant and Lessee
(herein called the "Acceptance Certificate") duly completed
and executed by the Owner Trustee or its agent, which may be
a representative of Lessee, and by such representative on
behalf of Lessee;
(11) the Trust Indenture;
(12) the Equipment Notes;
(13) the Consent and Agreement; and
(14) the French Law Pledge Agreement.
In addition, the Pass Through Trustee and the Owner
Participant each shall have received executed counterparts or
conformed copies of the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement;
(3) the Liquidity Facility for each of the Class G and
Class C Pass Through Trusts; and
(4) the Policy Provider Agreement and the Policy for
the Class G Pass Through Trust.
(vi) A Uniform Commercial Code financing statement or
statements covering all the security interests created by or
pursuant to the Granting Clause of the Trust Indenture that are not
covered by the recording system established by the Transportation
Code shall have been executed and delivered by the Owner
Trustee, and arrangements satisfactory to the Owner Participant and
the Indenture Trustee shall have been made for the filing of such
financing statement or statements in all places necessary or
advisable, and any additional Uniform Commercial Code financing
statements deemed advisable by the Owner Participant or the Pass
Through Trustee shall have been executed and delivered by Lessee or
the Owner Trustee and arrangements satisfactory to the Owner
Participant and the Indenture Trustee shall have been made for the
filing of such financing statements.
(vii) The Owner Trustee, the Owner Participant, the
Indenture Trustee, Pass Through Trustee and the Subordination Agent
shall have received the following, in each case in form and
substance satisfactory to it (except it shall not be a condition to
the obligation of any such party that it receive a certificate or
other document required to be delivered by it):
(A) (1) an incumbency certificate of Lessee as to the person
or persons authorized to execute and deliver the Operative
Documents to which the Lessee is a party and any other
documents to be executed on behalf of Lessee in connection
with the transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of Lessee or Lessee's executive committee,
certified by the Secretary or an Assistant Secretary of
Lessee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
Lessee in connection with the transactions contemplated
hereby; and
(3) a copy of the certificate of incorporation of
Lessee, certified by the Secretary of State of the State of
Delaware, a copy of the by-laws of Lessee certified by the
Secretary or Assistant Secretary of Lessee, and a
certificate or other evidence from the Secretary of State of
the State of Delaware, dated as of a date shortly prior to
the closing, as to the due incorporation and good standing
of Lessee in such state.
(B) (1) an incumbency certificate of the Indenture Trustee
as to the person or persons authorized to execute and deliver
the Operative Documents to which the Indenture Trustee is a
party and any other documents to be executed on behalf of
the Indenture Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association of the
Indenture Trustee certified by the Comptroller of the
Currency, a copy of the by-laws of the Indenture Trustee
certified by the Secretary or an Assistant Secretary of the
Indenture Trustee, and a certificate or other evidence from
the Comptroller of the Currency, dated as of a date shortly
prior to closing, as to the existence of the Indenture
Trustee under the laws of the United States of America; and
(4) a certificate signed by an authorized officer of
the Indenture Trustee, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(C) (1) an incumbency certificate of the Owner Trustee as to
the person or persons authorized to execute and deliver the
Operative Documents to which the Owner Trustee is a party
and any other documents to be executed on behalf of the
Owner Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Owner Trustee, certified by the Secretary
or an Assistant Secretary of the Owner Trustee, duly
authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to
be executed and delivered on behalf of the Owner Trustee in
connection with the transactions contemplated hereby;
(3) a copy of the articles of association of the
Owner Trustee certified by the Comptroller of the Currency,
a copy of the by-laws of the Owner Trustee certified by the
Secretary or an Assistant Secretary of the Owner Trustee and
a certificate or other evidence from the Comptroller of the
Currency, dated as of a date shortly prior to closing, as to
the good standing of the Owner Trustee; and
(4) a certificate signed by an authorized officer of
the Owner Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the
Owner Trustee (in its individual capacity and as trustee)
are correct in all material respects as though made on and
as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(D) (1) an incumbency certificate of the Owner Participant
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Owner
Participant is a party and any other documents to be
executed on behalf of the Owner Participant in connection
with the transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner Participant, certified by the
Secretary or an Assistant Secretary of the Owner
Participant, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the certificate of incorporation of the
Owner Participant certified by the Secretary of State of the
State of __________, a copy of the by-laws of the Owner
Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant, and a certificate or
other evidence from the Secretary of State of the State of
____________, dated as of a date shortly prior to closing,
as to the due incorporation and good standing of the Owner
Participant in such state; and
(4) a certificate signed by an authorized officer of
the Owner Participant, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Owner Participant are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(viii) All appropriate action required to have been taken
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all
orders, permits, waivers, authorizations, exemptions and approvals
of such entities required to be in effect on the Delivery Date in
connection with the transactions contemplated by this Agreement
shall have been issued, and all such orders, permits, waivers,
authorizations, exemptions and approvals shall be in full force and
effect on the Delivery Date.
(ix) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received a certificate signed by an authorized officer of
Lessee to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a current
certificate of airworthiness;
(2) the FAA Bill of Sale, the Lease, the Lease
Supplement, the Trust Indenture and the Trust Supplement
covering the Aircraft shall have been duly filed for
recordation (or shall be in the process of being so duly
filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been
filed (or shall be in the process of being so filed) with
the Federal Aviation Administration;
(3) application for registration of the Aircraft in
the name of the Owner Trustee (together with any required
affidavits) has been duly made with the Federal Aviation
Administration;
(4) the representations and warranties contained
herein of Lessee are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date); and
(5) the conditions to the purchase of the Equipment
Notes by the Pass Through Trustees under the Pass Through
Documents have been duly satisfied or waived in accordance
with their respective terms.
(x) In the case of the Pass Through Trustees, the conditions
specified in Section 3 of the Note Purchase Agreement shall have
been satisfied or waived.
(xi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, an opinion dated the
Delivery Date substantially in the form of Exhibit B-1 hereto from
Skadden, Arps, Slate, Meagher & Flom (Illinois), special counsel
for Lessee, and an opinion dated the Delivery Date substantially in
the form of Exhibit B-2 hereto from Lessee's legal department.
(xii) The Pass Through Trustee and the Owner Participant
shall have received, addressed to the Pass Through Trustee, the
Indenture Trustee, the Owner Participant, the Owner Trustee and
Lessee, an opinion dated the Delivery Date substantially in the
form of Exhibit C hereto from Clifford Chance, with respect to the
Manufacturer Documents.
(xiii) The Owner Participant, the Indenture Trustee, the
Pass Through Trustee and the Subordination Agent shall have
received, addressed to each such party, an opinion dated the
Delivery Date substantially in the form of Exhibit D hereto from
Ray, Quinney & Nebeker, special counsel for the Owner Trustee.
(xiv) The Owner Trustee, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, an opinion dated the Delivery Date
substantially in the form of Exhibit E-1 hereto from
________________, special counsel for the Owner Participant, and
an opinion dated the Delivery Date substantially in the form of
Exhibit E-2 hereto from the Owner Participant's in-house counsel.
(xv) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, an opinion dated the
Delivery Date substantially in the form of Exhibit F hereto from
Crowe & Dunlevy, P.C., special FAA counsel.
(xvi) The Owner Trustee, the Owner Participant, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, an opinion dated the Delivery Date
substantially in the form of Exhibit G from Bingham Dana LLP,
special counsel for the Indenture Trustee.
(xvii) [Reserved.]
(xviii)The Owner Trustee, the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Subordination
Agent shall have received an insurance certificate together with an
independent insurance broker's report, in form and substance
satisfactory to the Owner Participant, as to the due compliance
with the terms of Section 11 of the Lease relating to insurance
with respect to the Aircraft.
(xix) The Owner Participant shall have received an appraisal
dated the Delivery Date from ______________ in form and substance
satisfactory to it.
(xx) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Delivery Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(xxi) The Owner Participant shall have received from
____________________, special tax counsel to the Owner Participant,
a favorable opinion, in form and substance satisfactory to the
Owner Participant, with respect to certain Federal income tax
aspects of the transaction contemplated by the Operative Documents.
(xxii) There shall have been, since the date hereof, no
amendment, modification, addition, or change in or to the
provisions of the Code, the regulations promulgated under the
Code (including temporary regulations), Internal Revenue Service
Revenue Procedures or Revenue Rulings, or other administrative
interpretations, applicable judicial precedents or Executive
Orders of the President of the United States, all as in effect on
the date hereof, the effect of which might preclude the Owner
Participant from obtaining any of the anticipated income tax
benefits with respect to the Aircraft.
(xxiii)The Owner Trustee, the Owner Participant, the
Indenture Trustee and the Subordination Agent, shall have received
(A) a certificate signed by an authorized officer of the Pass
Through Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Pass Through
Trustee are correct as though made on and as of the Delivery Date,
except to the extent that such representations and warranties
relate solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date), (B) an opinion dated the Delivery Date substantially
in the form of Exhibit H hereto addressed to each such party of
Bingham Dana LLP, special counsel for the Pass Through Trustee, and
(C) such other documents and evidence with respect to the Pass
Through Trustee as it may reasonably request in order to establish
the due consummation of the transactions contemplated by this
Agreement, the taking of all necessary corporate action in
connection therewith and compliance with the conditions herein set
forth.
(xxiv) No Lease Event of Default has occurred and is
continuing and no Event of Loss has occurred with respect to the
Airframe or any Engine.
(xxv) The Owner Trustee, the Owner Participant, the
Indenture Trustee and the Pass Through Trustee shall have received,
addressed to each such party, an opinion dated the Delivery Date
substantially in the form of Exhibit I from Bingham Dana LLP,
special counsel for the Subordination Agent.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft
and the Trust Supplement covering the Aircraft pursuant to the
Transportation Code, Lessee will cause Crowe & Dunlevy, P.C., special FAA
counsel in Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee,
the Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
an opinion as to the due and valid registration of the Aircraft in the name
of the Owner Trustee, the due recording of the FAA Bill of Sale, the Trust
Indenture, such Lease Supplement, such Trust Supplement and the Lease and
the filing of the Trust Agreement and the lack of filing of any intervening
documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee. It is
agreed that (A) the obligations of Lessee to sell the Aircraft to the Owner
Trustee and to accept delivery of the Aircraft under the Lease on the
Delivery Date, and (B) the obligations of Lessee to enter into the other
Operative Documents on the Delivery Date are all subject to the fulfillment
to the satisfaction of Lessee prior to the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all
orders, permits, waivers, exemptions, authorizations and approvals
of such entities required to be in effect on the Delivery Date in
connection with the transactions contemplated by this Agreement
shall have been issued, and all such orders, permits, waivers,
exemptions, authorizations and approvals shall be in full force and
effect on the Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii),
4(a)(iii) and 4(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall
have been duly authorized, executed and delivered by the respective
party or parties thereto (other than Lessee) in the manner
specified in Section 4(a)(v), shall each be satisfactory in form
and substance to Lessee, shall be in full force and effect on the
Delivery Date, and an executed counterpart of each thereof (other
than the Equipment Notes) shall have been delivered to Lessee or
its special counsel.
(iv) Lessee shall have received (A) each certificate
referred to in Section 4(a)(vii) (other than the certificate and
documents referred to in clause (A) thereof), (B) the certificate
referred to in Section 4(a)(xxiii)(A), and (C) such other documents
and evidence with respect to the Pass Through Trustee as Lessee or
its special counsel may reasonably request in order to establish
the due consummation of the transactions contemplated by this
Agreement, the taking of all corporate proceedings in connection
therewith and compliance with the conditions herein set forth.
(v) Lessee shall have received the opinions set forth in
Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), 4(a)(xvi),
4(a)(xxv), and 4(a)(xxiii)(B) in each case addressed to Lessee and
dated the Delivery Date and in each case in scope and substance
reasonably satisfactory to Lessee and its special counsel.
(vi) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have
been issued or proposed to be issued by any court or governmental
agency at the time of the Delivery Date to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement
or the transactions contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate
regulatory authorities which would make it a violation of law or
regulations or guidelines for Lessee to enter into any transaction
contemplated by the Operative Documents.
(viii) There shall have been, since the date hereof, no
amendment, modification, addition or change in or to the Code, the
regulations promulgated under the Code (including temporary
regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations,
applicable judicial precedents or Executive Orders of the President
of the United States which might give rise to an indemnity
obligation of Lessee under any of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the
Aircraft.
SECTION 5. EXTENT OF INTEREST OF NOTE HOLDERS. No Note Holder shall
have any further interest in, or other right with respect to, the mortgage
and security interests created by the Trust Indenture when and if the
principal of and interest on all Equipment Notes held by such holder and
all other sums payable to such holder hereunder, under the Trust Indenture
and under such Equipment Notes shall have been paid in full. Each Pass
Through Trustee and, by its acceptance of a Equipment Note, each Note
Holder agrees that it will look solely to the income and proceeds from the
Trust Indenture Estate to the extent available for distribution to such
Note Holder as provided in Article III of the Trust Indenture and that
neither the Owner Participant nor the Owner Trustee shall be personally
liable to the Pass Through Trustees or any Note Holder for any amounts
payable under the Equipment Notes, the Trust Indenture or hereunder, except
as expressly provided in the Operative Documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES.
(a) Representations and Warranties. Lessee represents and
warrants to the Pass Through Trustee, the Owner Trustee, the Indenture
Trustee, each Liquidity Provider, the Policy Provider, the Subordination
Agent and the Owner Participant that:
(i) Lessee is a corporation duly organized, validly existing
and in good standing under the laws of the state of its
incorporation, has the corporate power and authority to own or hold
under lease its properties, has, or had on the respective dates of
execution thereof, the corporate power and authority to enter into
and perform its obligations under the Lessee Documents, the Pass
Through Trust Agreements and the other Operative Documents to which
it is a party, and is duly qualified to do business as a foreign
corporation in each state in which its operations or the nature of
its business requires other than failures to so qualify which would
not have a material adverse effect on the condition (financial or
otherwise), business or properties of Lessee and its subsidiaries
considered as one enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the State of Virginia) is located at
Arlington, Virginia;
(iii) the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements and each other
Operative Document to which Lessee is a party, and the performance
of the obligations of Lessee under the Lessee Documents, the Pass
Through Trust Agreements and each other Operative Document to which
Lessee is a party, have been duly authorized by all necessary
corporate action on the part of Lessee, do not require any
stockholder approval, or approval or consent of any trustee or
holder of any material indebtedness or material obligations of
Lessee, except such as have been duly obtained and are in full
force and effect, and do not contravene any law, governmental rule,
regulation or order binding on Lessee or the certificate of
incorporation or by- laws of Lessee, or contravene the provisions
of, or constitute a default under, or result in the creation of any
Lien (other than Permitted Liens) upon the property of Lessee
under, any indenture, mortgage, contract or other agreement to
which Lessee is a party or by which it may be bound or affected
which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise provided, that insofar as the representations and
warranties set forth in this Section 6(a)(iii) apply to the
prohibited transaction rules of ERISA and Section 4975 of the Code,
such representations and warranties are based upon and subject to
the truth and accuracy of the representations, warranties and
covenants set forth in Section 7(n) and the representations and
warranties made or deemed made by each purchaser of Certificates
issued by a Pass Through Trust;
(iv) neither the execution and delivery by Lessee of the
Lessee Documents, the Pass Through Trust Agreements or any other
Operative Document to which Lessee is a party, nor the performance
of the obligations of Lessee under the Lessee Documents, the Pass
Through Trust Agreements or the other Operative Documents to which
Lessee is a party, requires the consent or approval of, the giving
of notice to, the registration with, or the taking of any other
action in respect of, the Department of Transportation, the FAA, or
any other Federal, state or foreign governmental authority having
jurisdiction over Lessee, other than (A) the registration of the
Pass Through Trust Certificates under the Securities Act and under
the securities laws of any state in which the Pass Through Trust
Certificates may be offered for sale if the laws of such state
require such action, (B) the qualification of the Pass Through
Trust Agreements under the Trust Indenture Act of 1939, as amended,
pursuant to an order of the Securities and Exchange Commission, (C)
the orders, permits, waivers, exemptions, authorizations and
approvals of the regulatory authorities having jurisdiction over
the operation of the Aircraft by Lessee or any Sublessee required
to be obtained on or prior to the Delivery Date, which orders,
permits, waivers, exemptions, authorizations and approvals have
been, or on the Delivery Date will be, duly obtained and are, or on
the Delivery Date will be, in full force and effect, (D) the
application for registration of the Aircraft referred to in Section
4(a)(ix)(3), (E) the registrations and filings referred to in
Section 6(a)(vi), and (F) authorizations, consents, approvals,
actions, notices and filings required to be obtained, taken, given
or made either only after the date hereof or the failure of which
to obtain, take, give or make would not be reasonably likely to
have a material adverse effect on the condition (financial or
otherwise), business or properties of Lessee and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other Lessee Documents and
the Pass Through Trust Agreements to which Lessee is a party
constitute (or, in the case of documents to be executed on the
Delivery Date, will constitute) the legal, valid and binding
obligations of Lessee enforceable against Lessee in accordance with
their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors or lessors generally and by general principles of equity,
whether considered in a proceeding at law or in equity, and except,
in the case of the Lease, as limited by applicable laws which may
affect the remedies provided in the Lease;
(vi) except for (A) the filing of the Trust Agreement with
the FAA, (B) the registration of the Aircraft pursuant to the
Transportation Code, (C) the filing for recording pursuant to the
Transportation Code of the Lease with the Lease Supplement covering
the Aircraft, the Trust Indenture and the Trust Supplement attached
thereto and made a part thereof, the Trust Indenture with the Trust
Supplement attached thereto and made a part thereof and the FAA
Bill of Sale, (D) the filing of financing statements (and
continuation statements at periodic intervals) with respect to the
security interests created by such documents under the Uniform
Commercial Code of Virginia and Utah and such other states as may
be specified in the opinion furnished pursuant to Section 4(a)(xi)
hereof, and (E) the taking of possession by the Indenture Trustee
of the original chattel paper counterpart of each of the Lease and
the Lease Supplement covering the Aircraft, no further filing or
recording of any document (including any financing statement in
respect thereof under Article 9 of the Uniform Commercial Code of
any applicable jurisdiction) or other action is necessary under the
laws of the United States of America or any State thereof in order
to perfect the Owner Trustee's title to and interest in the
Aircraft as against Lessee and any third parties, or to perfect the
security interest in favor of the Indenture Trustee in the Owner
Trustee's interest in the Aircraft (with respect to such portion of
the Aircraft as is covered by the recording system established by
the FAA pursuant to 49 U.S.C. Section 44107) and in the Lease in
any applicable jurisdiction in the United States;
(vii) neither Lessee nor any of its Affiliates has directly
or indirectly offered any interest in the Trust Estate, the
Equipment Notes or the Pass Through Trust Certificates for sale to
any Person other than in a manner permitted by the Securities Act
and by the rules and regulations thereunder;
(viii) Lessee is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which
constitutes a Lease Default or Lease Event of Default;
(x) no event has occurred and is continuing which
constitutes an Event of Loss or would constitute an Event of Loss
with the lapse of time;
(xi) Lessee is solvent and will not be rendered insolvent by
the sale of the Aircraft; after the sale of the Aircraft the
capital of Lessee will not be unreasonably small for the conduct of
the business in which Lessee is engaged or is about to engage;
Lessee has no intention or belief that it is about to incur
debts beyond its ability to pay as they mature; and Lessee's sale
of the Aircraft is made without any intent to hinder, delay or
defraud either present or future creditors;
(xii) none of the proceeds from the issuance of the
Equipment Notes or from the acquisition by the Owner Participant of
its beneficial interest in the Trust Estate will be used directly
or indirectly by Lessee to purchase or carry any "margin security"
as such term is defined in Regulation U of the Board of Governors
of the Federal Reserve System;
(xiii) on the Delivery Date, all sales or use tax then due
and for which Lessee is responsible pursuant to Section 6(b)(i)
hereof shall have been paid, other than such taxes which are being
contested by Lessee in good faith and by appropriate proceedings so
long as such proceedings do not involve any material risk of the
sale, forfeiture or loss of the Aircraft;
(xiv) except as may have been disclosed in the Lessee's
reports filed with the Securities and Exchange Commission, there
are no pending or threatened actions or proceedings that
individually or in the aggregate which could be expected to have a
material adverse effect on the condition (financial or otherwise),
business or properties of Lessee and its subsidiaries considered as
one enterprise;
(xv) the Owner Trustee will receive good and marketable
title to the Aircraft from Lessee free and clear of all Liens,
except the rights of Lessee under the Lease and the Lease
Supplement covering the Aircraft, the Lien of the Trust Indenture,
the beneficial interest of the Owner Participant in the Aircraft,
and the Liens permitted by clause (iv) (solely for Taxes not yet
due but excluding any such Taxes being contested) and clause (v) of
Section 6 of the Lease (solely securing obligations that are not
yet due, but excluding any such obligations being contested);
(xvi) the audited consolidated balance sheet of Lessee with
respect to fiscal year ended _____2 included in Lessee's annual
report on Form 10-K for the year ended _____, [as amended], filed
by Lessee with the SEC, and the related consolidated statements of
income, stockholders' equity and cash flows for the period then
ended, have been prepared in conformity with GAAP and present
fairly in all material respects the financial condition of Lessee
and its consolidated subsidiaries as of such date and the result
of its operations and cash flows for such period; and
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2 Insert most recent fiscal year end.
(xvii) Lessee holds all licenses, permits and franchises
from the appropriate Government Entities necessary to authorize
Lessee 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 be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise.
(b) General Tax Indemnity.
---------------------
(i) Indemnity. Except as provided in Section 6(b)(ii)
hereof, Lessee hereby agrees to indemnify, protect, defend and hold
harmless each Indemnitee on an after-tax basis for all Taxes
imposed by the United States or any state, local or foreign
government or taxing authority upon or with respect to (A) the
Aircraft, (B) the manufacture, ownership, delivery, lease, sale,
alteration, change in registration, sublease, possession, use,
operation, condition, maintenance, financing, inspection, overhaul,
testing, modification, storage, manufacture, purchase, acceptance,
rejection, or registration of the Aircraft, (C) the rentals or
receipts from the Aircraft, (D) the payments made pursuant to any
of the Operative Documents, (E) the interest and principal paid
with respect to the Equipment Notes and (F) the income or proceeds
from the property held in the Trust Estate or the Trust Indenture
Estate.
(ii) Exclusions from General Tax Indemnity. The provisions of
Section 6(b)(i) shall not apply to:
(1) Taxes on, based on, measured by or with respect
to the gross or net income, gross or net receipts, minimum
or alternative taxes, tax preferences, capital, net worth,
franchise or conduct of business (but not excluding sales,
use, license, rental, ad valorem, value added tax (to the
extent that such value added tax is not imposed as a
substitute for an income tax) or property taxes) (a) imposed
by the United States or by any state or local government or
taxing authority or (b) imposed by any foreign government or
taxing authority except where such Tax is imposed by reason
of the use, location, registration, subleasing, leasing or
operation of the Aircraft or the presence or activities of
Lessee in such jurisdiction and exceeds the Tax that would
have been imposed on the Indemnitee regardless of the use,
location, registration, subleasing, leasing or operation of
the Aircraft or the presence or activities of Lessee;
(2) Taxes that would not have been imposed but for a
Lessor's Lien;
(3) Taxes resulting from a voluntary transfer by the
Owner Participant of the Aircraft, the Trust Estate, or the
Operative Documents, or any interest therein, or a transfer
relating to bankruptcy or similar proceedings involving the
Owner Participant;
(4) Taxes resulting from the willful misconduct or
negligence of the Indemnitees;
(5) Taxes imposed with respect to any period after
the expiration of the Lease or the earlier discharge in full
of Lessee's obligation to pay Termination Value;
(6) Taxes imposed on any transferee (a) if such Tax
would not have been imposed on the original Indemnitee, or
(b) to the extent such Tax exceeds the amount of Tax that
would have been imposed on the original Indemnitee;
(7) Taxes which have been included in the Lessor's
Cost;
(8) Taxes imposed by a government or taxing authority
of any jurisdiction that would have been imposed on the
Indemnitee for activities or property in such jurisdiction
unrelated to the transactions contemplated by the Operative
Documents;
(9) Taxes being contested pursuant to the contest
provisions contained in Section 6(b)(iv);
(10) Taxes imposed on the Owner Trustee or the Owner
Participant based on, measured by or imposed with respect to
any fees, commissions or compensation received by it;
(11) Taxes imposed on the Owner Participant and
indemnified under the Tax Indemnity Agreement;
(12) Interest, penalties and additions to Tax to the
extent imposed as a result of the failure of the Owner
Participant to timely and properly file any return, unless
such failure is caused by Lessee's failure to timely provide
information required to be provided under the Operative
Documents;
(13) Taxes that would not have been imposed but for
an Indemnitee's breach of any covenant or the inaccuracy of
any representation or warranty of such Indemnitee in any of
the Operative Documents;
(14) Taxes in the nature of an intangible or similar
Tax imposed upon, or with respect to, (a) the value of the
Owner Participant's interest in the Trust or the Indenture
Trust or (b) the value or the principal amount of any
Lender's interest in any of the Equipment Notes;
(15) U.S. withholding taxes imposed on payments to a
foreign person; and
(16) Taxes imposed by section 4975 of the Code or any
successor provision thereto.
References to the Owner Participant shall include such Person's
respective successors and permitted assigns, officers, directors, servants,
employees, agents and Affiliates.
(iii) Payments. The Lessee's indemnity obligation to an
Indemnitee under this Section 6(b) shall include any amount
necessary to hold such Indemnitee harmless (as determined in good
faith by such Indemnitee), after taking into account any tax
benefits actually realized by such Indemnitee (including, without
limitation, any benefits realized as a result of an indemnifiable
Tax being utilized by such Indemnitee as a credit against Taxes not
indemnifiable under this Section 6(b)), from the net amount of all
Taxes actually required to be paid by such Indemnitee by reason of
the receipt or accrual of the amounts payable under this Section
6(b). Each Indemnitee shall provide Lessee with such
certifications, information and documentation as shall be
reasonably requested by Lessee to minimize any indemnity payment
pursuant to this Section 6(b).
At Lessee's request, the computation of the amount of any indemnity
payment owed by Lessee or any amount owed by an Indemnitee to Lessee
pursuant to this Section 6(b) shall be verified and certified by a
nationally recognized independent public accounting firm selected by the
Indemnitee and reasonably acceptable to Lessee. The costs of such
verification (including the fee of such public accounting firm) shall be
borne by Lessee unless such verification shall result in an adjustment in
Lessee's favor of 5% or more of the net present value of the payment as
computed by such Indemnitee, in which case the costs shall be paid by such
Indemnitee.
Each Indemnitee shall promptly forward to Lessee any written
notice, bill or advice received by it from any government or taxing
authority concerning any Tax for which it seeks indemnification under this
Section 6(b); provided, however, the failure to provide such notice shall
not adversely affect such Indemnitee's right to indemnity under this
Section 6(b) except to the extent such failure materially adversely affects
the contest of the Tax. The Lessee shall pay any amount for which it is
liable pursuant to this Section 6(b) directly to the appropriate government
or taxing authority if legally permissible or, upon demand of an
Indemnitee, to such Indemnitee within 30 days of such demand (or, if a
contest occurs in accordance with Section (6)(b)(iv), 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, provided, Lessee shall not be required to make
any payment pursuant to this Section 6(b)(iii) unless the Indemnitee elects
to pay such Tax claimed and sue for a refund as provided in Section
6(b)(iv). If requested by an Indemnitee in writing, Lessee shall furnish to
the appropriate Indemnitee the original or a certified copy of a receipt
for Lessee's payment of any Tax or such other evidence of payment of Tax.
For purposes of this Section 6(b), a "Final Determination" shall mean (A) a
decision, judgment, decree or other order by any court of competent
jurisdiction that occurs pursuant to the provisions of Section 6(b)(iv),
which decision, judgment, decree or other order has become final and
unappealable, (B) a closing agreement or settlement agreement entered into
in accordance with Section 6(b)(iv) that has become binding and is not
subject to further review or appeal absent fraud or misrepresentation or
(C) the termination of administrative proceedings and the expiration of the
time for instituting a claim in a court proceeding.
If any Indemnitee shall actually realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 6(b) and
such savings was not otherwise taken into account in computing such payment
or indemnity, such Indemnitee shall pay to Lessee an amount equal to the
lesser of (A) the amount of such tax savings, plus any additional tax
savings actually realized as the result of any payment made pursuant to
this sentence and (B) the amount of all payments made by Lessee to such
Indemnitee (reduced by any payments previously made by such Indemnitee to
Lessee pursuant to this Section 6(b)), 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
obligations of Lessee to make payments to such Indemnitee pursuant to this
Section 6(b)). No Indemnitee shall have any obligation to make any payment
while a Lease Event of Default has occurred and is continuing.
Any Taxes that are imposed on any Indemnitee as a result of the
disallowance or reduction of any tax benefit referred to in this Section
6(b) pursuant to a Final Determination by a tax authority as to which such
Indemnitee has made the payment to Lessee required hereby or which tax
benefit was otherwise taken into account in computing Lessee's indemnity
obligation pursuant to this Section 6(b) in a taxable year subsequent to
the utilization by such Indemnitee shall be treated as a Tax for which
Lessee is obligated to indemnify pursuant to this Section 6(b).
(iv) Contests. If a written claim is made against an
Indemnitee or if any proceeding is commenced against an Indemnitee
(including a written notice of such proceeding) for Taxes as to
which Lessee could be liable for payment or indemnity hereunder, or
if an Indemnitee makes a determination that a Tax is due for which
Lessee could have an indemnity obligation hereunder, such
Indemnitee shall promptly give Lessee notice in writing of such
claim (provided, however, that the failure to provide such notice
shall not affect Lessee's obligations hereunder to the Owner
Participant unless such failure shall materially adversely affect
the right to contest such claim) and shall not take any action with
respect to such claim or Tax without the consent of Lessee for 30
days following the receipt of such notice by Lessee; provided,
however, that, if such Indemnitee shall be required by law to take
action prior to the end of such 30-day period, such Indemnitee
shall, in such notice to Lessee, so inform Lessee, and such
Indemnitee shall take no action for as long as it is legally able
to do so (it being understood that an Indemnitee shall be entitled
to pay the Tax claimed and sue for a refund prior to the end of
such 30-day period if (A)(I) the failure to so pay the Tax would
result in substantial penalties (unless immediately reimbursed by
Lessee) and the act of paying the Tax would not prejudice the right
to contest or (II) the failure to so pay would result in criminal
penalties and (B) such Indemnitee shall act in connection with
paying the Tax in the manner that is the least prejudicial to the
pursuit of the contest). In addition, such Indemnitee shall
(provided that Lessee shall have agreed to keep such information
confidential other than to the extent necessary in order to contest
the claim) furnish Lessee with copies of any requests for
information from any taxing authority relating to such Taxes with
respect to which Lessee may be required to indemnify hereunder. If
requested by Lessee in writing within 30 days after its receipt of
such notice, such Indemnitee shall, at the expense of Lessee
(including all reasonable out-of-pocket costs and reasonable
attorney and accountants fees), in good faith contest (or, if
permitted by applicable law, allow Lessee to contest) through
appropriate administrative and judicial proceedings the validity,
applicability or amount of such Taxes by (X) resisting payment
thereof, (Y) not paying the same except under protest if protest is
necessary and proper or (Z) 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
Lessee, the Indemnitee shall appeal any adverse administrative or
judicial decision, except that the Indemnitee shall not be required
to pursue any appeals to the United States Supreme Court. If and to
the extent the 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 Documents without, in the good faith
judgment of such Indemnitee, adversely affecting such Indemnitee,
such Indemnitee shall permit Lessee to control the conduct of any
such proceeding and shall provide to Lessee such information or
data that is in such Indemnitee's control or possession that is
reasonably necessary to conduct such contest. In the case of a
contest controlled by an Indemnitee, such Indemnitee shall consult
with Lessee in good faith regarding the manner of contesting such
claim and shall keep Lessee reasonably informed regarding the
progress of such contest. An Indemnitee shall not fail to take any
action expressly required by this Section 6(b)(iv) (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 Lessee (except as
contemplated by this Section 6(b)(iv)).
Notwithstanding the foregoing, in no event shall an Indemnitee be
required to pursue any contest (or to permit Lessee to pursue any contest)
unless (A) Lessee shall have agreed to pay such Indemnitee on demand all
reasonable out-of-pocket costs and reasonable attorney and accountants fees
that such Indemnitee shall incur in connection with contesting such claim,
(B) if such contest shall involve the payment of the claim, Lessee shall
advance the amount thereof plus (to the extent indemnified hereunder)
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 basis and with no additional net after-tax cost to such
Indemnitee (and such Indemnitee shall promptly pay to Lessee any net
realized tax benefits resulting from any imputed interest deduction arising
from such interest free advance from Lessee plus any tax benefits resulting
from making any such payment), (C) such 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 Lessee shall have made
provisions to protect the interests of any such Indemnitee), (D) no Lease
Event of Default shall have occurred and be continuing at the
time the contest is begun unless Lessee has provided security for its
obligations hereunder by advancing to such Indemnitee before proceeding
with such contest, the amount of the Tax being contested, plus any interest
and penalties and an amount estimated in good faith by such Indemnitee for
reasonable expenses, and (E) in the case of a contest that is being pursued
by an Indemnitee, the aggregate amount of the claim (together with the
amount of all similar or logically related claims that have been or could
be raised with any or all of the other Aircraft leased by the Owner
Participant to Lessee or raised in any other audit for which Lessee would
have an indemnity obligation under this Section 6(b)(iv)) is at least
$3,000. Notwithstanding the foregoing, if any Indemnitee shall release,
waive, compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 6(b) without the written permission of Lessee,
Lessee's obligation to indemnify such Indemnitee with respect to such claim
(and all directly related claims and claims based on the outcome of such
claim) shall terminate, subject to this Section 6(b)(iv), and subject to
Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount
previously paid or advanced to such 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.
Notwithstanding anything contained in this Section 6(b), an
Indemnitee will not be required to contest the imposition of any Tax and
shall be permitted to settle or compromise any claim without Lessee's
consent if such Indemnitee (A) shall waive its right to indemnity under
this Section 6(b), 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) and (B) shall pay to Lessee any amount previously paid or
advanced by Lessee pursuant to this Section 6(b) 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.
(v) Refunds. If any Indemnitee shall receive a refund or
credit (or would have received such refund or credit but for a
counterclaim or other claim not indemnified by Lessee hereunder (a
"deemed refund or credit")) with respect to all or any part of any
Taxes paid, reimbursed or advanced by Lessee, in each case, whether
by means of a deduction, credit, refund or otherwise, and which was
not taken into account in computing such payment or indemnity, such
Indemnitee shall pay to Lessee within 30 days of such receipt or,
in the case of a deemed refund or credit, within 30 days of the
resolution of such contest, an amount equal to the lesser of (A)
the amount of such refund or credit or deemed refund or credit
actually realized by such Indemnitee, plus any additional tax
savings actually realized by such Indemnitee as a result of any
payment made pursuant to this sentence (including clause (A)), and
(B) such tax payment, reimbursement or advance by Lessee to such
Indemnitee theretofore made pursuant to this Section 6(b) 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 obligations of Lessee
to make payments to such Indemnitee pursuant to this Section
6(b)). If, in addition to such refund or credit (or deemed refund
or credit), such Indemnitee shall receive or be credited with (or
would have received but for a counterclaim or other claim not
indemnified by Lessee hereunder) an amount representing interest
on the amount of such refund or credit or deemed refund or
credit, as the case may be, such Indemnitee shall pay to Lessee
within 30 days of such receipt or, in the case of a deemed refund
or credit, within 30 days of the resolution or such contest, that
portion of such interest that shall be fairly attributable to
Taxes paid, reimbursed or advanced by Lessee prior to the receipt
of such refund or credit or deemed refund or credit. Each
Indemnitee agrees to reasonably cooperate with Lessee in claiming
and pursuing any such refunds or credits of any Taxes payable or
indemnifiable pursuant to this Section 6(b).
(vi) 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 6(b), Lessee shall timely file
the same (except for any such report, return or statement which an
Indemnitee has timely notified Lessee in writing that such
Indemnitee intends to file, or for which such Indemnitee is
required by law to file, in its own name); provided, that the
relevant Indemnitee shall furnish Lessee with any information in
such Indemnitee's possession or control that is reasonably
necessary to file any such return, report or statement and is
reasonably requested in writing by Lessee, but in no event shall be
obligated to furnish tax returns, although it may be required to
furnish relevant information contained therein. The Lessee shall
either file such report, return or statement and send a copy of
such report, return or statement to such Indemnitee, and the Owner
Trustee if the Indemnitee is not the Owner Trustee, or, where
Lessee is not permitted to file such report, return or statement,
it shall notify such Indemnitee of such requirement and prepare and
deliver such report, return or statement to such Indemnitee in a
manner satisfactory to such Indemnitee within a reasonable time
prior to the time such report, return or statement is to be filed.
(vii) Forms. Each Indemnitee agrees to furnish from time to
time to Lessee or the Indenture Trustee or to such other Person as
Lessee or the Indenture Trustee may designate, at Lessee's or the
Indenture Trustee's request, such duly 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 government or taxing authority, if (A) such
reduction or exemption is available to such Indemnitee and (B)
Lessee has provided such Indemnitee with any information
necessary to complete such form not otherwise reasonably
available to such Indemnitee.
(viii) Non-Parties. If an Indemnitee is not a party to this
Agreement, Lessee may require the Indemnitee to agree in writing,
in a form reasonably acceptable to Lessee, to the terms of this
Section 6(b) prior to making any payment to such Indemnitee under
this Section 6(b).
(ix) Subrogation. Upon payment of any Tax by Lessee pursuant
to this Section 6(b) to or on behalf of an Indemnitee, Lessee,
without any further action, shall be subrogated to any claims that
such Indemnitee may have relating thereto. Such Indemnitee shall
cooperate with Lessee to permit Lessee to pursue such claims.
(c) General Indemnity. Lessee hereby agrees to indemnify
each Indemnitee against, and agrees to protect, save and keep harmless each
of them from (whether or not the transactions contemplated herein or in any
of the other Operative Documents are consummated), any and all Expenses
imposed on, incurred by or asserted against any Indemnitee, in any way
relating to, based on or arising out of (A) the execution, delivery and
performance of the Operative Documents or the Pass Through Documents and
the transactions contemplated thereby; (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine or Parts; (C) the
Aircraft (or any portion thereof) or any engine installed on the Airframe
or any airframe on which an Engine is installed whether or not arising out
of the manufacture, purchase, registration, reregistration, financing,
refinancing, ownership, delivery, nondelivery, inspection, lease, sublease,
possession, storage, use or non-use, operation, maintenance, overhaul,
modification, alteration, condition, replacement, repair, substitution,
sale, return or other disposition of the Aircraft including, without
limitation, any violation of law relating to the Aircraft (including
environmental laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; (D) the offer or sale of any interest in the Trust Estate or
the Trust Agreement or any similar interest on or prior to the Delivery
Date (including any violation of securities laws or ERISA); or (E) the
offer or sale of any interest in the Equipment Notes or the Pass Through
Certificates (or other evidence of the debt relating to the Aircraft) on
the Delivery Date or in connection with a refinancing in accordance with
the terms hereof (including any violation of securities laws or ERISA);
provided, that the foregoing indemnity shall not extend to an Indemnitee
with respect to any Expense to the extent such Expense is attributable to
one or more of the following: (1) any representation or warranty by such
Indemnitee in the Operative Documents or the Pass Through Documents being
incorrect, or (2) the failure by such Indemnitee to perform or observe any
of its agreements, covenants or conditions in any of the Operative
Documents or the Pass Through Documents, or (3) the willful misconduct or
the gross negligence of such Indemnitee, or (4) (A) in the case of any
Indemnitee, the offer, sale or other disposition (voluntary or involuntary)
by such Indemnitee of all or any part of its interest in the Airframe or
any Engine (other than during the continuance of a Lease Event of Default
or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the
Lease), (B) in the case of a Note Holder, the offer, sale or other
disposition (voluntary or involuntary) by such Note Holder of all or any
part of its interest in any Equipment Note or (C) in the case of any
Indemnitee, the offer, sale or other disposition by such Indemnitee of all
or any part of such Indemnitee's interest in the Operative Documents, or
(5) any Tax (other than taxes under ERISA or Section 4975 of the Code that
are not excluded from the foregoing indemnity by reason of clause 18 below)
whether or not Lessee is required to indemnify for such Tax pursuant to
Section 6(b) hereof (it being understood that Section 6(b) hereof and the
Tax Indemnity Agreement exclusively provide for Lessee's liability with
respect to Taxes), or (6) in the case of the Owner Participant, the offer
or sale by the Owner Participant after the Delivery Date of any interest in
the Trust Estate or the Trust Agreement or any similar interest except
during the continuance of an Event of Default so long as such disposition
is made in accordance with Section 7(k), or (7) in the case of the Owner
Trustee in its individual and trust capacities, and the Affiliates,
successors and assigns thereof, a failure on the part of the Owner Trustee
to distribute in accordance with the Trust Agreement any amounts
distributable by it thereunder, or (8) in the case of the Indenture Trustee
in its individual and trust capacities, failure on the part of the
Indenture Trustee to distribute in accordance with the Trust Indenture any
amounts distributable by it thereunder, or (9) in the case of any Pass
Through Trustee, failure on the part of such Pass Through Trustee or the
Subordination Agent to distribute in accordance with the Intercreditor
Agreement and the Pass Through Trust Agreement amounts received and
distributable thereunder, or (10) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents which amendments, supplements,
waivers or consents (a) are not or were not requested by Lessee or (b) are
not occasioned by a specific requirement of the Operative Documents, or
(11) except to the extent fairly attributable to acts or events occurring
during the Term or actions taken (or required to be taken and not taken)
during the Term, actions taken (or required to be taken and not taken) or
events occurring after the earlier of: (I) the return of possession of the
Aircraft to the Owner Trustee or its designee pursuant to the terms of the
Lease (other than pursuant to and in accordance with Section 15 thereof, in
which case Lessee's liability under this Section 6(c) shall survive for so
long as Lessor shall be entitled to exercise remedies under such Section
15), (II) the termination of the Term in accordance with Section 9 of the
Lease, (III) the payment by Lessee of all amounts required to be paid under
the Lease following an Event of Loss or (IV) termination of the Lease and
payment by Lessee of all amounts required to be paid by Lessee pursuant to
the terms of the Operative Documents or (12) any amount which any
Indemnitee expressly agrees to pay under any Operative Document or any
amount which is expressly stated to be an Expense that is not reimbursable
by Lessee under the Operative Documents, or (13) any amount that is an
ordinary and usual operating or overhead expense of any Indemnitee (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating and overhead expenses"), or (14)
any amounts relating to the deregistration with the FAA of the Aircraft as
a result of the Owner Participant or the Owner Trustee, as the case may be,
not being a Citizen of the United States or any other act or omission of
the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any
amounts attributable to any Lien which such Indemnitee is required to
remove pursuant to the terms of the Operative Documents or the Pass Through
Documents, or (16) any loss of tax benefits or increases in tax liability
whether or not the Lessee is required to indemnify an Indemnitee elsewhere
in the Operative Documents, or (17) principal of, or interest or premium on
the Equipment Notes, or (18) any prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with
respect to the purchase or holding of any Pass Through Certificate (i) over
which purchase or holding the Owner Participant or any Affiliate thereof
has discretion or control (other than in the capacity of a directed trustee
or custodian), or (ii) by an employee benefit plan, within the meaning of
Section 3(3) of ERISA, or individual retirement account or plan subject to
Section 4975 of the Code with respect to which the Owner Participant (or
any Affiliate thereof) has the power, directly or indirectly, to appoint or
terminate, or to negotiate the terms of the management agreement with, the
Person or Persons having discretion or control (other than in the capacity
of a directed trustee or custodian), over such purchase or holding, or (19)
without limiting any indemnification otherwise expressly provided under the
Operative Documents, any amount payable under the Pass Through Documents
(other than the Participation Agreement) to the extent not included in the
definition of Supplemental Rent.
Lessee's indemnity obligation to an Indemnitee under this
Section 6(c) shall equal the amount which, after taking into account any
Tax imposed upon the receipt or accrual of the amounts payable under this
Section 6(c) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(c).
If any Indemnitee shall realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 6(c)
(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 Indemnitee shall pay to Lessee 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 6(c) by Lessee to such Indemnitee (less any payments
previously made by such Indemnitee to Lessee pursuant to this Section 6(c))
(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 Lessee to make payments to
such Indemnitee pursuant to this Section 6(c)).
Nothing in this Section 6(c) shall be construed as a
guaranty by Lessee of payments due pursuant to the Equipment Notes or of
the residual value of the Aircraft.
If a claim is made against an Indemnitee involving one or
more Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Lessee;
provided that the failure to give such notice shall not affect the
obligations of Lessee hereunder except to the extent Lessee is prejudiced
by such failure or the Lessee's indemnification obligations are increased
as a result of such failure. If no Lease Event of Default shall have
occurred and be continuing, Lessee shall be entitled, at its sole cost and
expense, acting through counsel reasonably acceptable to the respective
Indemnitee, (A) in any judicial or administrative proceeding that involves
solely a claim for one or more Expenses, to assume responsibility for and
control thereof, (B) in any judicial or administrative proceeding involving
a claim for one or more Expenses and other claims related or unrelated to
the transactions contemplated by the Operative Documents, to assume
responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such
Indemnitee shall use its best efforts to obtain such severance), and (C) in
any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Lessee's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Lessee shall not be entitled to assume
responsibility for and control of any such judicial or administrative
proceedings if such proceedings will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any
part thereof unless in such an event Lessee shall have posted a bond or
other security satisfactory to the relevant Indemnitees in respect to such
risk. The Indemnitee may participate at its own expense and with its own
counsel in any judicial proceeding controlled by Lessee pursuant to the
preceding provisions.
The affected Indemnitee shall supply Lessee with such
information reasonably requested by Lessee as is necessary or advisable for
Lessee to control or participate in any proceeding to the extent permitted
by this Section 6(c). Such Indemnitee shall not enter into a settlement or
other compromise with respect to any Expense without the prior written
consent of Lessee, 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 6(c).
The Lessee shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 6(c).
Upon payment of any Expense pursuant to this Section 6(c),
Lessee, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Lessee to permit
Lessee to pursue such claims, if any, to the extent reasonably requested by
Lessee.
If an Indemnitee is reimbursed, in whole or in part, with
respect to any Expense paid by Lessee hereunder, it will promptly pay the
amount refunded, including interest received thereto (but not an amount in
excess of the amount Lessee or any of its insurers has paid in respect of
such Expense pursuant to this Section 6(c)) over to Lessee.
To the extent permitted by applicable law, interest at the
Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount
or indemnity not paid when due pursuant to this Section 6 until the same
shall be paid. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
Any amount which is payable to Lessee by any Person pursuant
to this Section 6 shall not be paid to Lessee if a Lease Event of Default
has occurred and is continuing or if any payment is due and owing by Lessee
to such Person under the Lease or any other Operative Document. Any such
amount shall be held by such Person (the Lessee hereby granting a security
interest in such amount to such Person) and, if a Lease Event of Default
shall have occurred and be continuing, shall be applied against Lessee's
obligations hereunder to such Person as and when due (and, to the extent
that Lessee has no obligations hereunder to such Person, such amount shall
be paid to Lessee). At such time as there shall not be continuing any such
Lease Event of Default or there shall not be due and owing any such
payment, such amount shall be paid to Lessee to the extent not previously
applied in accordance with the immediately preceding sentence.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Covenants Regarding Citizenship. Each of the Owner
Participant and First Security Bank, National Association, in its
individual capacity, represents and warrants to the other parties to this
Agreement that it is, and on the Delivery Date will be, a Citizen of the
United States without making use of any voting trust, voting powers
agreement or similar arrangement. The Owner Participant agrees, solely for
the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United
States and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Transportation Code
and regulations then applicable thereunder, then the Owner Participant
shall (at its own expense and without any reimbursement or indemnification
from Lessee) as soon as practicable, but in any event within 60 days of
obtaining knowledge of such ineligibility or loss of citizenship effect a
voting trust, voting powers agreement or other similar arrangement or take
any other action as may be necessary to prevent any deregistration and to
maintain the United States registration of the Aircraft. It is agreed that:
(A) the Owner Participant shall be liable to pay on request to each of the
other parties hereto and to each holder of a Equipment Note for any damages
suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence
of this Section 7(a) proving to be untrue as of the Delivery Date; and (B)
the Owner Participant shall be liable to Lessee, any Sublessee and the Loan
Participants for any damages which may be incurred by Lessee, any Sublessee
or the Loan Participants as a result of the Owner Participant's failure to
comply with its obligations pursuant to the second sentence of this Section
7(a). Each party hereto agrees, upon the request and at the sole expense of
the Owner Participant, to cooperate with the Owner Participant in complying
with its obligations under the provisions of the second sentence of this
Section 7(a). First Security Bank, National Association, in its individual
capacity, agrees that if at any time an officer or responsible employee of
the Corporate Trust Department of First Security Bank, National
Association, shall obtain actual knowledge that First Security Bank,
National Association, has ceased to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement, it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, Lessee or the Owner Participant), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement. If the Owner Participant or First Security Bank,
National Association, in its individual capacity, does not comply with the
requirements of this Section 7(a), the Owner Trustee, the Indenture Trustee
and the Participants hereby agree that a Lease Default or Lease Event of
Default shall not have occurred and be continuing due to non-compliance by
Lessee with the registration requirements in the Lease.
(b) Location of Records. First Security Bank, National
Association, in its individual capacity, agrees that it will not change the
location of its principal place of business or the office where it
maintains its books and records with respect to the Aircraft and the Trust
Estate to a location outside of Salt Lake City, Utah, without prior written
notice to all parties.
(c) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting in its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any Person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act or the
rules and regulations thereunder.
(d) Reregistration. The Owner Participant, the Indenture
Trustee, the Pass Through Trustee and each Loan Participant agree that, at
any time after the Depreciation Period, so long as no Lease Event of
Default shall have occurred and be continuing, Lessee may elect to effect a
change in registration of the Aircraft, at Lessee's cost and expense, so
long as the country of registry of the Aircraft is a country listed on
Exhibit A. Upon the request of the Lessee, Exhibit A shall be amended from
time to time to include any other country which the Owner Participant and
the Indenture Trustee have determined, acting reasonably, would provide
substantially equivalent protection for the rights of owner participants,
lessors or lenders in similar transactions as provided under the laws of
the United States and the states thereof. In order for Lessee to effect a
change in the country of registry of the Aircraft, Lessee shall deliver to
the Owner Participant, the Owner Trustee (in its individual capacity) and
the Indenture Trustee the following:
(I) an Officer's Certificate certifying that (A) the insurance or
self-insurance required by Section 11 of the Lease shall be in
full force and effect at the time of such change in registration
after giving effect to such change in registration, (B) all
indemnities in favor of the Owner Participant, the Owner Trustee
(in its individual capacity and as trustee under the Trust
Agreement) and the Indenture Trustee under any Operative Document
afford each such party substantially the same protection as
provided prior to such change of registry, (C) the lien of the
Trust Indenture in favor of the Trustee will continue as a first
priority lien following such change of registry, (D) such change
will not result in the imposition of, or increase in the amount
of, any Tax for which Lessee is not required to indemnify, or is
not then willing to enter into a binding agreement to indemnify,
the Owner Participant, the Note Holders, the Indenture Trustee,
the Owner Trustee (in its individual capacity and as trustee
under the Trust Agreement), the Indenture Trustee or the Trust
Estate pursuant to this Agreement or the Tax Indemnity Agreement,
and (E) that the new country of registry imposes aircraft
maintenance standards not materially less stringent from those of
any Permitted Foreign Air Authority; and
(II) a favorable opinion (subject to customary exceptions) of counsel
(opinion and counsel reasonably acceptable to the Owner
Participant) addressed to the Owner Participant and the Indenture
Trustee, from counsel of recognized reputation qualified in the
laws of the relevant jurisdiction to the effect that: (A) the
obligations of Lessee, and the rights and remedies of the Owner
Trustee, under the Lease shall remain valid, binding and (subject
to customary bankruptcy and equitable remedies exceptions and to
other exceptions customary in foreign opinions generally)
enforceable under the laws of such jurisdiction (or the laws of
the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law); (B) it is not necessary,
solely as a consequence of such change in registration and
without giving effect to any other activity of the Owner Trustee,
the Owner Participant or the Indenture Trustee (or any Affiliate
thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to register or qualify to do
business in such jurisdiction; (C) there is no tort liability of
the owner of an aircraft not in possession thereof under the laws
of such jurisdiction (it being agreed that, in the event such
latter opinion cannot be given in a form satisfactory to the
Owner Participant, such opinion shall be waived if insurance
reasonably satisfactory to the Owner Participant is provided to
cover such risk); (D) unless Lessee shall have agreed to provide
insurance covering the risk of requisition of use of such
Aircraft by the government of such jurisdiction so long as such
Aircraft is registered under the laws of such jurisdiction, the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of such Aircraft in
the event of the requisition by such government of such use; and
(E) after giving effect to such change in registration, the Lien
of the Trust Indenture on the Owner Trustee's right, title and
interest in and to the Aircraft and the Lease shall continue as a
valid and duly perfected first priority security 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 Owner Trustee and the Indenture Trustee shall have
received a certificate from Lessee 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 Owner Trustee and the Indenture Trustee on or
prior to the effective date of such change in registration).
Upon receipt of the foregoing certificate and opinion, the Owner
Participant and the Indenture Trustee will instruct the Owner Trustee to
make such change of registration.
Lessee shall pay all reasonable costs, expenses, fees,
recording and registration taxes, including the reasonable fees and
expenses of counsel to the Owner Trustee, the Owner Participant and the
Indenture Trustee, and other charges in connection with any such change in
registration.
(e) Owner Participant Representations and Warranties. The
Owner Participant represents and warrants to Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider, the Policy Provider and the Owner Trustee, in its
capacity as such and in its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good
standing under the laws of the State of __________ and has the
corporate power and authority to carry on its present business and
operations and to own or lease its properties, and has the
corporate power and authority to enter into and to perform its
obligations under the Owner Participant Documents; this Agreement
and the other Owner Participant Documents have been duly
authorized, executed and delivered by it; and this Agreement and
each of the other Owner Participant Documents constitute the legal,
valid and binding obligations of the Owner Participant enforceable
against it in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity; and the
Owner Participant is a Qualified Owner Participant;
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance
by it with all of the provisions thereof, (x) will contravene any
law or order of any court or governmental authority or agency
applicable to or binding on the Owner Participant (it being
understood that no representation or warranty is made with respect
to laws, rules or regulations relating to aviation or to the nature
of the equipment owned by the Owner Trustee other than such laws,
rules or regulations relating to the citizenship requirements of
the Owner Participant under applicable law), or (y) will
contravene the provisions of, or constitutes or has constituted
or will constitute a default under, or result in the creation of
any Lien (other than Liens provided for in the Operative
Documents) upon any property of the Owner Participant under, its
certificate of incorporation or by-laws or any indenture,
mortgage, contract or other agreement or instrument to which the
Owner Participant is a party or by which it or any of its
property may be bound or affected;
(iii) no authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body (other than as required by the Transportation Code
or the regulations promulgated thereunder) is required for the due
execution, delivery or performance by it of the Owner Participant
Documents;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings before any court or administrative agency or
arbitrator which would materially adversely affect the Owner
Participant's ability to perform its obligations under this
Agreement, the Participation Agreement, the Tax Indemnity Agreement
and the Trust Agreement;
(v) neither the Owner Participant nor anyone authorized by
it to act on its behalf (it being understood that in proposing,
facilitating and otherwise taking any action in connection with the
financing contemplated hereby and agreed to herein by the Owner
Participant, Lessee has not acted as agent of the Owner
Participant) has directly or indirectly offered any Equipment Note
or Pass Through Trust Certificate or any interest in and to the
Trust Estate, the Trust Agreement or any similar interest for sale
to, or solicited any offer to acquire any of the same from, any
Person; the Owner Participant's interest in the Trust Estate and
the Trust Agreement is being acquired for its own account and is
being purchased for investment and not with a view to any resale or
distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of
Lessor Liens attributable to the Owner Participant; and
(vii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangement).
(f) Lessor Liens. Each of First Security Bank, National
Association, in its individual capacity, and the Owner Participant
covenants and agrees that it shall not cause or permit to exist a Lessor
Lien attributable to it with respect to the Aircraft or any other portion
of the Trust Estate. Each of First Security Bank, National Association, in
its individual capacity, and the Owner Participant agrees that it will
promptly, at its own expense, take such action as may be necessary duly to
discharge such Lessor Lien attributable to it. Each of First Security Bank,
National Association, in its individual capacity, and the Owner Participant
agrees to make restitution to the Trust Estate for any actual diminution of
the assets of the Trust Estate resulting from Lessor Liens attributable to
it. The Owner Participant agrees to make restitution to the Trust Estate
for any actual diminution of the assets of the Trust Estate resulting from
any Taxes or Expenses imposed on the Trust Estate against which Lessee is
not required to indemnify the Trust Estate pursuant to Section 6.
(g) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent, the Owner Trustee, the Pass
Through Trustee and the Owner Participant covenants and agrees that, so
long as no Lease Event of Default shall have occurred and be continuing and
the Lessee has not been duly declared in default and, notwithstanding
default by any Loan Participant, the Indenture Trustee, the Owner Trustee,
the Pass Through Trustee or the Owner Participant, that such Person shall
not (and shall not permit any Affiliate or other Person claiming by,
through or under it to) interfere with Lessee's (or any Sublessee's)
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft or Lessee's rights, benefits and obligations pursuant to the
Transactions during the Term of the Lease, and the Lease shall not be
terminated except as expressly provided therein.
(h) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Trust Indenture is being acquired by it for investment
and not with a view to resale or distribution (it being understood that
such Loan Participant may pledge or assign as security its interest in each
Equipment Note issued to it), except that the Loan Participants may sell,
transfer or otherwise dispose of any Equipment Note or any portion thereof,
or grant participations therein, in a manner which in itself does not
require registration under the Securities Act.
(i) [Reserved.]
(j) Representations, Warranties and Covenants of Indenture
Trustee. State Street Bank and Trust Company of Connecticut, National
Association represents, warrants (as of the Delivery Date) and covenants,
in its individual capacity, to Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent, the Liquidity Provider, the Policy
Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a national banking association
duly incorporated, validly existing and in good standing under the
laws of the United States, is a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement), will notify promptly all parties to this
Agreement if in its reasonable opinion its status as a Citizen of
the United States (without making use of any voting trust, voting
powers agreement or similar arrangement) is likely to change and
will resign as Indenture Trustee as provided in Section 8.02 of the
Trust Indenture promptly after it obtains actual knowledge that it
has ceased to be such a Citizen of the United States (without
making use of a voting trust, voting powers agreement or similar
arrangement), and has the full corporate power, authority and legal
right under the laws of the State of Connecticut and the United
States pertaining to its banking, trust and fiduciary powers to
execute and deliver each of this Agreement, the Trust Indenture and
each other Operative Document to which it is a party and to carry
out its obligations under this Agreement, the Trust Indenture, each
other Operative Document to which it is a party and to authenticate
the Equipment Notes;
(ii) the execution and delivery by the Indenture Trustee of
the Indenture Trustee Documents and the authentication of the
Equipment Notes and the performance by the Indenture Trustee of its
obligations under the Indenture Trustee Documents have been duly
authorized by the Indenture Trustee 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;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of
the Indenture Trustee enforceable against it in accordance with
their respective 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;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee,
in its individual capacity or as Indenture Trustee as the case may
be, to perform its obligations under the Operative Documents to
which it is a party; and
(v) there are no Indenture Trustee Liens on the Aircraft or
any portion of the Trust Estate.
(k) Owner Participant Transfers. So long as the Aircraft
shall be leased to the Lessee under the Lease, the Owner Participant will
not, directly or indirectly, sell, assign, convey or otherwise transfer any
of its right, title or interest in and to this Agreement, the Trust Estate
or the Trust Agreement or any proceeds therefrom to any Person or entity,
unless (i) the proposed transferee is a "Transferee" (as defined below),
(ii) Lessee shall have (1) received an opinion (in form and substance
reasonably satisfactory to Lessee) of counsel to the Owner Participant (who
shall be reasonably satisfactory to Lessee) to the effect that such
transfer will not result in any risk of loss of tax benefits to, or any
increase in the tax liability of, Lessee and (2) received from the Owner
Participant so seeking to transfer such right, title or interest reasonably
satisfactory indemnification for any loss of tax benefits to, and increase
in the tax liability of, Lessee, and (iii) the Owner Participant sells,
assigns, conveys or otherwise transfers all of its right, title and
interest in and to this Agreement, the Trust Estate, the Trust Agreement
and the proceeds therefrom to a single entity. A "Transferee" shall mean
either (A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least [$50,000,000] or a corporation
whose tangible net worth is at least [$50,000,000], exclusive of goodwill,
in either case as of the proposed date of such transfer, as determined in
accordance with generally accepted accounting principles, or (B) any
subsidiary of such a bank, financial institution or corporation, provided
that such bank, financial institution or corporation furnishes to the Owner
Trustee, the Indenture Trustee and Lessee a guaranty with respect to the
Owner Participant's obligations under the Operative Documents to which the
Owner Participant is a party in form and substance reasonably satisfactory
to Lessee, the Owner Trustee, and the Indenture Trustee, or (C) is an
affiliate of the Owner Participant and the Owner Participant agrees to
remain liable for all obligations of the Owner Participant under the
Operative Documents; provided, further, that any Transferee shall not be an
airline, a commercial aircraft operator, an air freight forwarder, an
entity engaged in the business of parcel transport by air or other similar
Person or an Affiliate thereof. Each such transfer to a Transferee shall be
subject to the conditions that (S) upon giving effect to such transfer, the
Transferee is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or other similar
arrangement unless approved by Lessee), and has full power and authority to
enter into the transactions contemplated hereby, (T) the Transferee has the
requisite power and authority to enter into and carry out the transactions
contemplated hereby and such Transferee shall have delivered to Lessee, the
Owner Trustee and the Indenture Trustee an opinion of counsel in form and
substance reasonably satisfactory to Lessee and the Owner Trustee as to the
due authorization, delivery, legal, valid and binding effect and
enforceability of the agreement or agreements referred to in the next
clause with respect to the Transferee and any guaranty provided pursuant to
the provisions of this Section 7(k) as to the guarantor, (U) the Transferee
enters into an agreement or agreements, in form and substance reasonably
satisfactory to the Owner Trustee and Lessee, whereby the Transferee
confirms that it shall be deemed a party to this Agreement and a party to
the Trust Agreement and agrees to be bound by all the terms of, and to
undertake all of the obligations of the transferor Owner Participant
contained in, the Owner Participant Documents (to the extent of the
participation so transferred to it) and makes the representations and
warranties made by the Owner Participant thereunder, (V) such transfer does
not affect registration of the Aircraft under the Transportation Code, or
any rules or regulations promulgated thereunder or create a relationship
which would be in violation thereof or violate any provision of the
Securities Act or any other applicable Federal or state law and the Lessee
shall be entitled to require an opinion of counsel to such effect, (W) the
transferor Owner Participant assumes the risk of any adverse tax
consequences with respect to the true lease nature of the transaction
(including, without limitation, loss of depreciation and amortization
deductions and interest deductions resulting from such transfer, (X) the
transferor Owner Participant pays all of the reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of
counsel) incurred in connection with such transfer, including the
reasonable costs and expenses of the Owner Trustee, the Indenture Trustee,
Lessee and the Loan Participants in connection therewith without the right
of indemnification or reimbursement by Lessee, (Y) the terms of the
Operative Documents and the Transactions shall not be altered and (Z) such
transfer will not give rise to a Default under the Trust Indenture or an
Indenture Event of Default. Upon any such transfer by the Owner Participant
as above provided, the Transferee shall be deemed the Owner Participant for
all purposes hereof and of the other Operative Documents and each reference
herein to the transferor Owner Participant shall thereafter be deemed for
all purposes to be to the Transferee and the transferor Owner Participant
shall be relieved of all obligations of the transferor Owner Participant
under the Owner Participant Documents arising after the date of such
transfer except to the extent fully attributable to or arising out of acts
or events occurring prior thereto and not assumed by the Transferee. If the
Owner Participant intends to transfer any of its interests hereunder, it
shall give thirty (30) days prior written notice thereof to the Indenture
Trustee, the Owner Trustee and Lessee, specifying the name and address of
the proposed Transferee and providing the financial statements of such
proposed Transferee.
(l) Reserved.
(m) Compliance with Trust Indenture. First Security Bank,
National Association, and State Street Bank and Trust Company of
Connecticut, National Association, each in its individual capacity, agrees
for the benefit of Lessee to comply with the terms of the Trust Indenture
which it is required to comply with in its individual capacity.
(n) ERISA Matters. The Owner Participant represents and
warrants as of the Delivery Date that either (i) no part of the source of
funds used to acquire and hold its interest in the Trust Estate constitutes
the assets of any "employee benefit plan" as defined in Section 3(3) of
ERISA or of any "plan" within the meaning of Section 4975(e)(1) of the
Code, including, without limitation, as applicable, an insurance company
general account ("Plan Assets") or (ii) the source of funds used to acquire
and hold its interest in the Trust Estate is an insurance company general
account (within the meaning of United States Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60 (issued July 12, 1995)), and as
of the date hereof and at all times while it holds such interest (x) less
than 25% of the assets of such general account do and will constitute Plan
Assets and (y) the amount of reserves and liabilities (as defined in the
annual statement for life insurance companies approved by the National
Association of Insurance Commissioners ("NAIC Annual Statement") (the
"Reserves and Liabilities")) for the general account contract(s) held by or
on behalf of any employee benefit plan subject to Title I of ERISA or any
plan subject to Section 4975 of the Code (an "ERISA Plan"), together with
the amount of the Reserves and Liabilities for the general account
contract(s) held by or on behalf of any other ERISA Plans maintained by the
same employer (or any "affiliate" thereof within the meaning of Section
V(a)(1) of PTCE 95- 60) or by the same employee organization, do not and
will not exceed 10% of the total Reserves and Liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set
forth in the NAIC Annual Statement filed with the state of domicile of the
insurance company maintaining such general account (the conditions of this
clause (y) shall be referred to as the "Reserves and Liabilities
Conditions"). Each Loan Participant agrees that it will not transfer any
Equipment Note (or any part thereof) to any entity (except pursuant to
Section 2.14 of the Trust Indenture) unless such entity either (i) makes a
representation and warranty as of the date of transfer that no part of the
funds to be used by it for the purchase and holding of such Equipment Note
(or any part thereof) constitutes Plan Assets or that such purchase and
holding will not constitute or result in a non-exempt prohibited
transaction (as defined in Section 4975 of the Code and ERISA), provided,
that Equipment Notes may be transferred to a Pass Through Trustee in
connection with an offering of Certificates by the related Pass Through
Trust if, as a condition of such offering, each Person or entity acquiring
such Certificates makes (or is deemed to make) the foregoing representation
and warranty with respect to its purchase and holding of such Certificates.
The Owner Participant agrees that it will not transfer any of its right,
title or interest in and to this Agreement, the Trust Estate or the Trust
Agreement or any proceeds therefrom to any entity unless such entity makes
(or is deemed to have made) a representation and warranty as of the date of
transfer that either no part of the funds to be used by it for the purchase
and holding of such right, title, interest and proceeds (or any part
thereof) constitutes Plan Assets or (ii) is an insurance company general
account that represents, warrants and covenants both as of the date it
acquires such right, title, interest and proceeds and at all times while it
holds such right, title, interest and proceeds that (x) less than 25% of
the assets of such general account will constitute Plan Assets and (y) the
Reserves and Liabilities Conditions will be satisfied, such that such
transfer will not constitute or result in a non-exempt prohibited
transaction (as defined in Section 4975 of the Code and ERISA). The Pass
Through Trustee agrees that it will not agree to any amendment,
modification or waiver of Section 1.01(e)(1) of the initial supplement to
each Pass Through Trust Agreement without the prior written consent of the
Owner Participant.
(o) Confidentiality of Purchase Agreement. Each Participant,
the Owner Trustee and the Indenture Trustee agrees for the benefit of the
Manufacturer and Lessee that it will not disclose or suffer to be disclosed
the terms of the Purchase Agreement to any third party except (A) as may be
required by any applicable statute, court or administrative order or decree
or governmental ruling or regulation or to any regulatory authorities
having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Equipment Notes (including
by way of participation or assignment of an interest, provided such
participant or assignee agrees to hold such terms confidential to the same
extent as herein provided) or the Owner Participant's beneficial interest
in the Trust Estate and any exercise of remedies under the Lease and the
Trust Indenture), (C) with the prior written consent of the Manufacturer
and Lessee, (D) to the Owner Trustee's, the Indenture Trustee's and each
Participant's counsel or special counsel, independent insurance brokers or
other agents who agree to hold such information confidential, or (E) in the
case of the Owner Participant and/or the Owner Trustee, it may disclose so
much of the Purchase Agreement as has been assigned to the Owner Trustee
under the Purchase Agreement Assignment to bona fide potential purchasers
of the Aircraft.
(p) Margin Regulations. The Owner Trustee and the Owner
Participant severally, not jointly, represent and warrant, as of the
Delivery Date that none of the funds made available by the Pass Through
Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation U of
the Board of Governors of the Federal Reserve System or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry such margin security or for any other purpose which might
cause the transaction contemplated by this Agreement to constitute a
"purpose credit" within the meaning of Regulation X of the Board of
Governors of the Federal Reserve System, assuming that the proceeds were
and are applied as contemplated by the provisions of this Agreement.
(q) Loan Participant Liens. Each Loan Participant covenants
and agrees that it shall not cause or permit to exist a Loan Participant
Lien attributable to it with respect to the Aircraft or any other portion
of the Trust Estate. Each Loan Participant agrees that it will promptly, at
its own expense, take such other action as may be necessary duly to
discharge such Loan Participant Lien attributable to it. Each Loan
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from such Loan
Participant Lien attributable to it.
(r) Indenture Trustee Liens. State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any
Indenture Trustee's Liens with respect to the Trust Indenture Estate or the
Trust Estate. State Street Bank and Trust Company of Connecticut, National
Association, in its individual capacity, agrees that it will promptly, at
its own expense, take such action as may be necessary duly to discharge
such Indenture Trustee's Liens. State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity, agrees to
make restitution to the Trust Estate for any actual diminution of the
assets of the Trust Indenture Estate or the Trust Estate resulting from
such Indenture Trustee's Liens.
(s) Representations and Warranties of Owner Trustee. The
Owner Trustee, in its individual capacity (except as provided in clauses
(iii) and (vii) below) and (but only as provided in clauses (iii) and (vii)
and, to the extent that it relates to the Owner Trustee, clauses (ii), (ix)
and (xi) below) as Owner Trustee, represents and warrants to Lessee, the
Pass Through Trustee, the Subordination Agent, the Liquidity Provider, the
Policy Provider and the Owner Participant as follows:
(i) the Owner Trustee, in its individual capacity, is a
national banking association duly organized and validly existing in
good standing under the laws of the United States, has full
corporate power and authority to carry on its business as now
conducted, has the corporate power and authority to execute and
deliver the Trust Agreement, has the corporate power and authority
to carry out the terms of the Trust Agreement, and has (assuming
the authorization, execution and delivery of the Trust Agreement by
the Owner Participant), as Owner Trustee, and to the extent
expressly provided herein or therein, in its individual capacity,
the corporate power and authority to execute and deliver and to
carry out the terms of this Agreement, the Trust Indenture, the
Equipment Notes, the Lease and each other Operative Document (other
than the Trust Agreement) to which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the
extent expressly provided herein, in its individual capacity, has
duly authorized, executed and delivered this Agreement, in its
individual capacity, has duly authorized, executed and delivered
the Trust Agreement and in its trust capacity, except as expressly
provided therein, has duly authorized, executed and delivered (or,
in the case of Owner Trustee Documents to be executed on the
Delivery Date, will on the Delivery Date, execute and deliver) the
other Owner Trustee Documents and (assuming the due authorization,
execution and delivery of the Trust Agreement by the Owner
Participant) this Agreement and each of the other Owner Trustee
Documents constitutes (or, in the case of documents to be executed
and delivered on the Delivery Date, upon execution and delivery
will constitute) the legal, valid and binding obligations of the
Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, enforceable against it in its individual capacity
or as Owner Trustee, as the case may be, 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;
(iii) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, the Owner Trustee
has duly authorized, and on the Closing Date shall have duly
issued, executed and delivered to the Indenture Trustee for
authentication, the Equipment Notes pursuant to the terms and
provisions hereof and of the Trust Indenture, and each Equipment
Note on the Closing Date will constitute the valid and binding
obligation of the Owner Trustee and will be entitled to the
benefits and security afforded by the Trust Indenture in accordance
with the terms of such Equipment Note and the Trust Indenture;
(iv) neither the execution and delivery by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the
case may be, of any Owner Trustee Document, nor the consummation by
the Owner Trustee, in its individual capacity or as Owner Trustee,
as the case may be, of any of the transactions contemplated
thereby, nor the compliance by the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, with any of the
terms and provisions thereof, (A) requires or will require any
approval of its stockholders, or approval or consent of any
trustees or holders of any indebtedness or obligations of it, or
(B) violates or will violate its articles of association or by-
laws, or contravenes or will contravene any provision of, or
constitutes or will constitute a default under, or results or will
result in any breach of, or results or will result in the creation
of any Lien (other than as permitted under the Operative
Documents) upon its property under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sale contract, bank
loan or credit agreement, license or other agreement or instrument
to which it is a party or by which it is bound, or contravenes or
will contravene any law, governmental rule or regulation of the
United States of America or the State of Utah governing the trust
powers of the Owner Trustee, or any judgment or order applicable to
or binding on it;
(v) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action
in respect of, any Utah state or local governmental authority or
agency or any United States Federal governmental authority or
agency regulating the trust powers of the Owner Trustee in its
individual capacity is required for the execution and delivery of,
or the carrying out by, the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, of any of the
transactions contemplated hereby or by the Trust Agreement, the
Participation Agreement, the Trust Indenture, the Lease or the
Equipment Notes, or any other Operative Document to which it is or
will be a party or by which it is or will be bound, other than any
such consent, approval, order, authorization, registration, notice
or action as has been duly obtained, given or taken or which is
described in Section 7(a)(iv);
(vi) there exists no Lessor Lien attributable to the Owner
Trustee, in its individual capacity;
(vii) there exists no Lessor Lien attributable to the Owner
Trustee, as lessor under the Lease;
(viii) there are no Taxes payable by the Owner Trustee,
either in its individual capacity or as Owner Trustee, imposed by
the State of Utah or any political subdivision thereof in
connection with the issuance of the Equipment Notes, or the
execution and delivery in its individual capacity or as Owner
Trustee, as the case may be, of any of the instruments referred to
in clauses (i), (ii), (iii) and (iv) above, that, in each case,
would not have been imposed if the Trust Estate were not located in
the State of Utah and First Security Bank, National Association had
not (a) had its principal place of business in, (b) performed (in
its individual capacity or as Owner Trustee) any or all of its
duties under the Operative Documents in, and (c) engaged in any
activities unrelated to the transactions contemplated by the
Operative Documents in, the State of Utah;
(ix) there are no pending or, to its knowledge, threatened
actions or proceedings against the Owner Trustee, either in its
individual capacity or as Owner Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be,
to perform its obligations under any of the instruments referred
to in clauses (i), (ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and
under all documents relating to the Trust Estate, are located in
Salt Lake City, Utah;
(xi) the Owner Trustee has not, in its individual capacity
or as Owner Trustee, directly or indirectly offered any Equipment
Note or Pass Through Certificate or any interest in or to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or
solicited any offer to acquire any of the same from, anyone other
than the Pass Through Trustee and the Owner Participant; and the
Owner Trustee has not authorized anyone to act on its behalf (it
being understood that in arranging and proposing the refinancing
contemplated hereby and agreed to herein by the Owner Trustee, the
Lessee has not acted as agent of the Owner Trustee) to offer
directly or indirectly any Equipment Note, any Certificate or any
interest in and to the Trust Estate, the Trust Agreement or any
similar interest for sale to, or to solicit any offer to acquire
any of the same from, any Person;
(xii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangements);
(xiii) there has not occurred any event which constitutes
(or, to the best of its knowledge would, with the passing of time
or the giving of notice or both, constitute) an Indenture Event of
Default which has been caused by or relates to the Owner Trustee,
in its individual capacity, and which is presently continuing; and
(xiv) on the Delivery Date the Owner Trustee shall have
received whatever title to the Aircraft as was conveyed to it by
Lessee.
(t) Owner Participant Obligations on Lease Termination. The
Owner Participant covenants and agrees that if (i) Lessee has elected
pursuant to Section 9(a)(1) of the Lease to terminate the Lease by causing
the Aircraft to be sold pursuant to Section 9(b) of the Lease and (ii) the
Owner Trustee has, pursuant to Section 9(b) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and
(iii) the Owner Trustee has failed to make, on or before the Termination
Date, any payment required to be made by the Owner Trustee pursuant to
Section 9(b) of the Lease in connection with its retention of title to the
Aircraft, the Owner Participant will indemnify Lessee for any losses,
damages, costs or expenses of any kind (including any additional rents paid
by Lessee and any fees and expenses of lawyers, appraisers, brokers or
accountants) incurred as a consequence of such failure by the Owner
Trustee.
(u) Transfer of Title; Assumption of Equipment Notes. Each
of the Owner Participant, the Owner Trustee, the Indenture Trustee and
Lessee covenants and agrees that if Lessee elects (A) to purchase the
Aircraft pursuant to Section 19(b) or Section 20 of the Lease or (B) to
terminate the Lease and purchase the Aircraft pursuant to Section 19(c) of
the Lease, then each of the parties will execute and deliver appropriate
documentation transferring all right, title and interest in the Aircraft to
Lessee (including, without limitation, such bills of sale and other
instruments and documents as Lessee shall reasonably request to evidence
(on the public record or otherwise) such transfer and the vesting of all
right, title and interest in and to the Aircraft in Lessee), and if Lessee,
in connection with such purchase, elects to assume the obligations of the
Owner Trustee pursuant to the Trust Indenture and the Equipment Notes each
of the parties will execute and deliver appropriate documentation
permitting Lessee to assume such obligations on the basis of full recourse
to Lessee, maintaining the security interest in the Aircraft created by the
Trust Indenture, releasing the Owner Participant and the Owner Trustee from
all future obligations in respect of the Equipment Notes, the Trust
Indenture and all other Operative Documents and all such other actions as
are reasonably necessary to permit such assumption by Lessee.
Notwithstanding the provisions of this Section 7(u), unless waived by the
Loan Participants, Lessee shall not be entitled to assume the Equipment
Notes on the date for purchase of the Aircraft pursuant to Section 19(c) or
20 of the Lease if on such date a Specified Default or Lease Event of
Default shall have occurred and be continuing.
Notwithstanding the foregoing, Lessee shall not be entitled
to assume the obligations of the Owner Trustee in respect of the Equipment
Notes unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest
in and to the Aircraft, (ii) the Indenture Trustee will be entitled to the
benefits of 11 U.S.C. Section 1110; provided that the opinion required by
subclause (ii) need only be given if immediately prior to such assumption
the Owner Trustee would have been entitled to the benefits of 11 U.S.C.
Section 1110 and (iii) the Pass Through Trusts will not be subject to
Federal income taxation and the Note Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such assumption
and will be subject to taxation in the same amounts, in the same manner,
and at the same times as would have been the case if such assumption had
not occurred.
(v) Lessee Merger Covenant. Lessee will not consolidate
with or merge into any other corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into
which Lessee is merged or the Person which acquires by conveyance,
transfer or lease substantially all of the assets of Lessee as an
entirety shall be (i) organized and validly existing under the laws
of the United States of America or any state thereof or the
District of Columbia, (ii) a Citizen of the United States and (iii)
a Certificated Air Carrier, if and so long as such status is a
condition of entitlement to the benefits of Section 1110 of the
Bankruptcy Code with respect to the Lease or the Aircraft;
(ii) the corporation formed by such consolidation or into
which Lessee is merged or the Person which acquires by conveyance,
transfer or lease substantially all of the assets of Lessee as an
entirety shall execute and deliver to the Owner Trustee, the
Indenture Trustee and the Owner Participant an agreement in form
and substance reasonably satisfactory to the Owner Participant a
duly authorized, valid, binding and enforceable agreement
containing an assumption by such successor corporation or Person of
the due and punctual performance and observance of each covenant
and condition of the Operative Documents to which Lessee is a party
to be performed or observed by Lessee;
(iii) immediately after giving effect to such transaction,
no Lease Event of Default shall have occurred and be continuing;
and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant a certificate signed by
the President, any Executive Vice President, any Senior Vice
President or any Vice President and by the Secretary or an
Assistant Secretary of Lessee, and an opinion of counsel (which may
be Lessee's General Counsel, Deputy General Counsel, Associate
General Counsel or Assistant General Counsel) reasonably
satisfactory to the Owner Participant, each to the effect that such
consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (ii) above comply with
this Section 7(v) and that all conditions precedent herein provided
for relating to such transaction have been complied with.
Upon any such consolidation or merger or any such
conveyance, transfer or lease of substantially all of the assets of Lessee
as an entirety in accordance with this Section 7(v), the successor
corporation or Person formed by such consolidation or into
which Lessee is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right
and power of, Lessee under this Agreement with the same effect as if such
successor corporation or Person had been named as Lessee herein. No such
conveyance, transfer or lease of substantially all of the assets of Lessee
as an entirety shall have the effect of releasing Lessee or any successor
corporation or Person which shall theretofore have become such in the
manner prescribed in this Section 7(v) from its liability in respect of any
Operative Document to which it is a party.
(w) Further Assurances. Lessee, at its expense, will take,
or cause to be taken, such action with respect to the recording, filing,
re-recording and refiling of the Lease, the Lease Supplement, the Trust
Agreement, the Trust Indenture, the Trust Supplement and any financing
statements or other instruments as are necessary to maintain, so long as
the Trust Indenture or the Lease is in effect, the perfection of the
security interests created by the Trust Indenture and any security interest
that may be claimed to have been created by the Lease and the ownership
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee, the Owner Participant and the Indenture Trustee timely notice of
the necessity of such action, together with such instruments, in execution
form, and such other information as may be required to enable them to take
such action. Lessee will notify the Owner Trustee, the Owner Participant
and the Indenture Trustee of any change in the location of its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code) promptly after making such change or in any event within
the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the
Operative Documents.
(x) Rent Adjustments. Section 3 of the Lease contemplates
that, under certain circumstances, the Owner Participant will make certain
recalculations of Basic Rent, EBO Amount and Termination Value, and the
Owner Participant hereby agrees to make such recalculations as and when
contemplated by the Lease and subject to all the terms and conditions of
the Lease and promptly to take such further actions as may be necessary or
desirable to give effect to and to cause the Owner Trustee to give effect
to the provisions of Section 3 of the Lease.
(y) Owner Participant Costs on Return. The Owner Participant
hereby agrees with Lessee that it will pay, or cause to be paid, all costs
and expenses that are for the account of the Owner Trustee pursuant to
Section 5 of the Lease without the right of reimbursement or
indemnification from Lessee.
(z) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Lessee, the
Owner Trustee and the Owner Participant) to make the representations
contemplated to be made by a Loan Participant in this Agreement and to be
bound by the terms of this Agreement and the Trust Indenture (including,
without limitation, the representations and covenants set forth in Sections
7(c), 7(h), 7(n) and 7(q) hereof and this Section 7(z) and Sections 2.03,
2.14 and 4.03 of the Trust Indenture).
(aa) Representations and Warranties of Pass Through Trustee.
The Pass Through Trustee represents and warrants to Lessee, the Indenture
Trustee, the Subordination Agent, the Liquidity Provider, the Policy
Provider, the Owner Participant and the Owner Trustee, in its capacity as
such and in its individual capacity, as follows:
(i) the Pass Through Trustee is a national banking
association duly organized, 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 State of
Connecticut and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver each of the Pass
Through Trust Agreements, the Intercreditor Agreement and this
Agreement and to perform its obligations under the Pass Through
Trust Agreements, the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust
Agreements and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Pass Through Trustee;
this Agreement, each of the Pass Through Trust Agreements and the
Intercreditor Agreement constitute the legal, valid and binding
obligations of the Pass Through Trustee enforceable against it in
accordance with their respective 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;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Trust Agreements,
the Intercreditor Agreement or this Agreement, the purchase by the
Pass Through Trustee of the Equipment Notes pursuant to this
Agreement, or the issuance of the Certificates pursuant to the Pass
Through Trust Agreements, contravenes any law, rule or regulation
of the State of Connecticut or any United States governmental
authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and does not contravene or
result in any breach of, or constitute a default under, the Pass
Through Trustee's articles of association or by-laws or any
agreement or instrument to which the Pass Through Trustee is a
party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, nor the consummation by
the Pass Through Trustee of any of the transactions contemplated
hereby or thereby, 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 Connecticut governmental authority or
agency or any Federal governmental authority or agency regulating
the Pass Through Trustee's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Pass Through Trustee of this Agreement, any
of the Pass Through Trust Agreements or the Intercreditor Agreement
(other than franchise or other taxes based on or measured by any
fees or compensation received by the Pass Through Trustee for
services rendered in connection with the transactions contemplated
by any of the Pass Through Trust Agreements), and there are no
Taxes payable by the Pass Through Trustee imposed by the State of
Connecticut or any political subdivision thereof in connection with
the acquisition, possession or ownership by the 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 the Pass Through Trustee 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 either as a
grantor trust under subpart E, Part I, of Subchapter J of the Code
or as a partnership, such trusts will not be subject to any Taxes
imposed by the State of Connecticut or any political subdivision
thereof;
(vi) there are no pending or threatened actions or
proceedings against the Pass Through Trustee 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 Pass Through Trustee to perform its obligations
under this Agreement, the Intercreditor Agreement or any Pass
Through Trust Agreement;
(vii) except for the issue and sale of the Pass Through
Trust Certificates contemplated hereby, the Pass Through Trustee
has not directly or indirectly offered any Equipment Note for sale
to any Person or solicited any offer to acquire any Equipment Notes
from any Person, nor has the Pass Through Trustee authorized anyone
to act on its behalf to offer directly or indirectly any Equipment
Note for sale to any Person, or to solicit any offer to acquire any
Equipment Note from any Person; and the Pass Through Trustee is not
in default under any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or
indirectly controlling, controlled by or under common control with
the Owner Participant, the Owner Trustee or Lessee.
(bb) Representations and Warranties of Subordination Agent.
The Subordination Agent represents and warrants to Lessee, the Indenture
Trustee, the Pass Through Trustee, the Liquidity Provider, the Policy
Provider, the Owner Participant and the Owner Trustee, in its capacity as
such and in its individual capacity, as follows:
(i) the Subordination Agent is a national banking
association duly organized, 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 State of
Connecticut and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver this Agreement, the
Liquidity Facilities, the Policy Provider Agreement and the
Intercreditor Agreement and to perform its obligations under this
Agreement, the Liquidity Facilities, the Policy Provider Agreement
and the Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities, the
Policy Provider Agreement and the Intercreditor Agreement have been
duly authorized, executed and delivered by the Subordination Agent;
this Agreement, each of the Liquidity Facilities, the Policy
Provider Agreement and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with their respective 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;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Policy
Provider Agreement, the Intercreditor Agreement or this Agreement
contravenes any law, rule or regulation of the State of
Connecticut 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 or result in any breach
of, or constitute a default under, the Subordination Agent's
articles of association or by- laws or 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 any of the Liquidity Facilities, the Policy Provider
Agreement, the Intercreditor Agreement or this Agreement nor the
consummation by the Subordination Agent of any of the transactions
contemplated hereby or thereby 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 Connecticut governmental
authority or agency 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 the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Subordination Agent of this Agreement, any
of the Liquidity Facilities, the Policy Provider Agreement or the
Intercreditor 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, the
Policy Provider Agreement or any of the Liquidity Facilities), and
there are no Taxes payable by the Subordination Agent imposed by
the State of Connecticut 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
rendered in connection with the transactions contemplated by the
Intercreditor Agreement, the Policy Provider Agreement or any of
the Liquidity Facilities);
(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, the Intercreditor Agreement, the Policy Provider
Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person,
or to solicit any offer to acquire any Equipment Note from any
Person; and the Subordination Agent is not in default under any
[Policy Provider Agreement or] Liquidity Facility;
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee; and
(ix) [Certain Other Covenants of the Owner Participant and
the Indenture Trustee. The Owner Participant hereby unconditionally
agrees with Lessee, and only with Lessee (and not with any other
party to this Participation Agreement), that on behalf of the Owner
Trustee it will make available to the Indenture Trustee funds
sufficient to pay the Indenture Trustee the amounts (the "Deferred
Equity Amounts") set forth on the dates (the "Deferred Equity
Dates") set forth in Schedule IV attached hereto; provided, that
the Owner Participant shall not be obligated to make such funds
available if an event specified in Section 14(e), (f) or (g) of the
Lease which either does, or with the giving of notice or passage of
time, or both, would constitute an Event of Default or Lease Event
of Default shall have occurred and be continuing on the date on
which such funds are to be made available. The Owner Participant
and the Owner Trustee hereby direct the Indenture Trustee, and the
Indenture Trustee hereby agrees, to apply any such payment of
Deferred Equity Amounts to the payment of principal and interest on
the Equipment Notes, as appropriate, which may be due and payable
pursuant to the provisions of the Trust Indenture on such Deferred
Equity Date. The Owner Participant agrees to make any such payment
of Deferred Equity Amounts in immediately available funds on or
before 11:00 a.m. New York City time, on the Deferred Equity Date.
The Owner Participant agrees to give Lessee notice by 11:00 a.m.,
New York City time, on the Deferred Equity Date if it has failed to
make the payment of the Deferred Equity Amount due on such date.
The Indenture Trustee agrees to give Lessee notice by 12:00 noon,
New York City time, on the Deferred Equity Date if it has failed to
receive the payment of the Deferred Equity Amount due on such date.
In the event the Owner Participant fails to make such payment,
Lessee shall make the Advance under Section 3(g) of the Lease and
the Owner Participant shall cause Lessor to comply with all of its
obligations under said Section 3(g). The Owner Participant agrees
to repay the amount of any Advance made pursuant to Section 3(g) of
the Lease forthwith following the making thereof together with
interest at a rate per annum equal to the Base Rate plus 2%
commencing on the date of such Advances to the date of repayment
and agrees that its obligation shall be a full recourse
obligation of the Owner Participant. All amounts paid to the
Lessee by the Owner Participant in respect of an Advance or
deducted by the Lessee pursuant to Section 3(g) of the Lease
shall be applied first to payment to Lessee of interest and then
to payment to Lessee of amounts equal to the Advance.]3
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER AND POLICY PROVIDER. Each
of the parties hereto agrees and acknowledges that the Liquidity Provider
and the Policy Provider shall each be third party beneficiaries of each of
the representations, warranties and covenants made herein by such party,
and that each of the Liquidity Provider and the Policy Provider may rely on
such representations and warranties to the same extent as if such
representations and warranties were made to each of the Liquidity Provider
and the Policy Provider directly. Lessee agrees and acknowledges that each
of the Liquidity Provider and the Policy Provider shall be third party
beneficiaries of the indemnities contained in Section 6(c) hereof, and each
of the Liquidity Provider and Policy Provider may rely on such indemnities
to the same extent as if such indemnities were made to each of the
Liquidity Provider and Policy Provider directly.
SECTION 9. OTHER DOCUMENTS. Each of the Owner Participant and the
Owner Trustee hereby (a) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may
hereafter be amended or supplemented from time to time in accordance with
the terms thereof) applicable to it; (b) agrees with Lessee and the
Indenture Trustee not to amend, supplement or otherwise modify any
provision of the Trust Agreement in a manner adversely affecting such party
without the prior written consent of such party; and (c) agrees with Lessee
and the Loan Participants not to revoke the Trust Agreement without the
prior written consent of Lessee and the Indenture Trustee. Notwithstanding
the foregoing, so long as the Lease has not been terminated, the
Subordination Agent, the Pass Through Trustee, the Indenture Trustee, the
Owner Participant and the Owner Trustee hereby agree for the benefit of
Lessee that without the consent of Lessee they will not amend, modify or
supplement the definition of "Secured Obligations" or Articles II, III, IX
or Section 5.02 of the Trust Indenture. Furthermore, so long as the Lease
has not been terminated, the Pass Through Trustee, the Subordination Agent,
the Indenture Trustee, the Owner Participant and the Owner Trustee hereby
agree for the benefit of Lessee that without Lessee's consent, each such
party will not amend any other provision of any Operative Document or Pass
Through Document in a manner adversely affecting Lessee. Each of the Owner
Participant, the Indenture Trustee, the Subordination Agent, the Pass
Through Trustee and the Owner Trustee agree to promptly furnish to Lessee
copies of any supplement, amendment, waiver or modification of any of the
Operative Documents or Pass Through Documents to which Lessee is not a
party. Each Loan Participant agrees that it will not take any action in
respect of the Trust Indenture Estate except through the Indenture Trustee
pursuant to the Trust Indenture or as otherwise permitted by the Trust
Indenture.
- --------
3 For deferred equity transactions only.
SECTION 10. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the
Indenture Trustee and the Owner Trustee, as follows:
(a) Further Assurances. Lessee will cause to be done,
executed, acknowledged and delivered all and every such further acts,
conveyances and assurances as the Owner Trustee, the Indenture Trustee or
the Owner Participant shall reasonably require for accomplishing the
purposes of this Agreement and the other Operative Documents; provided that
any instrument or other document so executed by Lessee will not expand any
obligations or limit any rights of Lessee in respect of the transactions
contemplated by any Operative Documents. Lessee, forthwith upon delivery of
the Aircraft under the Lease, shall cause the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the
name of the Owner Trustee, except as otherwise required or permitted
hereunder or under the Lease, under the Transportation Code, or shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration (at the expense
of Lessee), and shall promptly furnish to the Owner Trustee such
information as may be required to enable the Owner Trustee to timely file
any reports required to be filed by it as the lessor under the Lease or as
the owner of the Aircraft with any governmental authority (including tax
authorities).
(b) Filings. Lessee, at its expense, will cause the Lease,
all Lease Supplements, all amendments to the Lease, the Trust Indenture,
all supplements and amendments to the Trust Indenture and this Agreement to
be promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code, or required under any other
applicable law. Upon the execution and delivery of the FAA Bill of Sale,
the Lease, the Lease Supplement covering the Aircraft, the Trust Supplement
and the Trust Indenture shall be filed for recording with the Federal
Aviation Administration in the following order of priority; First, the FAA
Bill of Sale, Second, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and Third,
the Trust Indenture, with the Trust Supplement attached.
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES. It is the intent of
the parties to this Agreement that the Lease be treated as a true lease,
the Owner Participant be treated as the owner of the Aircraft to be
delivered under the Lease, and Lessee be treated as the lessee thereof for
Federal income tax purposes.
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
prepaid courier service, and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered to the recipient
thereof in accordance with the provisions of this Section 12(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 12(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Indenture
Trustee or the Owner Participant, to the respective addresses set forth on
Schedule I hereto, or (B) if to a subsequent Owner Participant, addressed
to such subsequent Owner Participant at such address as such subsequent
Owner Participant shall have furnished by notice to the parties hereto, or
(C) if to any subsequent Note Holder, addressed to such Note Holder at its
address set forth in the Equipment Note register maintained pursuant to
Section 2.07 of the Trust Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document, the subject matter of any
thereof or any of the transactions contemplated hereby or thereby brought
by any party or parties thereto, or their successors or assigns and (B)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, to the extent permitted
by applicable law, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper, or that this Agreement, the Lease, the Tax Indemnity Agreement or
any other Operative Document or the subject matter of any thereof or any of
the transactions contemplated hereby or thereby may not be enforced in or
by such courts; provided, however that the foregoing shall not apply to the
right any party may have to seek removal of such suit, action or proceeding
to federal court or to seek consolidation of any separate actions, suits or
proceedings brought by one or more of the other parties in the same or
different jurisdictions. The agreement set forth in this Section 12(b) is
given solely for the benefit of the parties hereto and shall not inure to
the benefit of any other Person.
SECTION 13. CHANGE OF SITUS OF OWNER TRUST. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes
for which it is indemnified pursuant to Section 6(b) hereof and if, as a
consequence thereof, Lessee should request that the situs of the trust be
moved to another state in the United States from the state in which it is
then located, the situs of the trust may be moved and the Owner Participant
will take whatever action may be reasonably necessary to accomplish such
removal; provided that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative
Documents of the Owner Participant and the Indenture Trustee shall not be
altered as a result of the taking of such action, (C) the lien of the Trust
Indenture on the Trust Indenture Estate shall not be adversely affected by
such action and (D) the Owner Participant and the Indenture Trustee shall
have received an opinion or opinions of counsel (reasonably satisfactory to
the Owner Participant), in scope, form and substance satisfactory to the
Owner Participant to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust
Agreement necessitated by such removal shall have been duly authorized,
executed and delivered by the parties thereto and shall constitute the
valid and binding obligations of such parties, enforceable in accordance
with their terms, (III) such removal will not result in the imposition of,
or increase in the amount of, any Tax for which Lessee is not required to
indemnify the Owner Participant, the Indenture Trustee, the Owner Trustee
or the Trust Estate pursuant to Section 6(b) hereof (taking into account
any additional indemnification provided by Lessee pursuant to clause (A) of
this sentence) and (IV) if such removal involves the replacement of the
Owner Trustee, an opinion of counsel to such successor Owner Trustee in
form and substance reasonably satisfactory to the Owner Participant
covering the matters described in the opinion delivered pursuant to Section
4(a)(xiii) and such other matters as the Owner Participant may reasonably
request and (E) Lessee shall indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-tax basis against any
and all reasonable and actual costs and expenses including reasonable
counsel fees and disbursements, registration fees, recording or filing fees
and taxes incurred by the Owner Trustee, the Owner Participant and the
Indenture Trustee in connection with such change of situs. Notwithstanding
anything to the contrary contained herein or in any other Operative
Document, the Owner Participant agrees with Lessee that it will not consent
to or direct a change in the situs of the Trust Estate without the prior
consent of Lessee unless the Owner Trustee, the Indenture Trustee, the Note
Holders and the Trust Estate each waives its right to any indemnity payable
by the Lessee under Section 6(b) as a result of the change in situs.
SECTION 14. MISCELLANEOUS.
(a) Consents Under Lease. The Owner Participant covenants
and agrees that it shall not unreasonably withhold its consent to any
consent requested of the Owner Trustee, as Lessor, under the terms of the
Lease which by its terms is not to be unreasonably withheld by the Owner
Trustee, as Lessor.
(b) Survival. The representations, warranties, indemnities
and agreements of Lessee, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant
provided for in this Agreement or any other Operative Document, and
Lessee's, the Owner Trustee's, the Indenture Trustee's, the Subordination
Agent's, the Pass Through Trustee's and the Owner Participant's obligations
under any and all thereof, shall survive the making available of the
respective Commitments by the Pass Through Trustee and the Owner
Participant, the delivery or return of the Aircraft, the transfer of any
interest of the Owner Participant in the Trust Estate or the Aircraft or
any Engine or the transfer of any interest by any Loan Participant in any
Equipment Note or the Trust Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(c) Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(d) Amendments and Waivers. Neither this Agreement nor any
of the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee and the Owner Trustee.
(e) Successors and Assigns. The terms of this Agreement
shall be binding upon, and inure to the benefit of, Lessee and, subject to
the terms of this Agreement, 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 Owner Participant and, subject to the terms of this
Agreement, its successors and permitted assigns, each Note Holder and its
successors and registered assigns, the Indenture Trustee and its successors
as Indenture Trustee under the Trust Indenture and the Owner Trustee and
its successors as Owner Trustee under the Trust Agreement. The terms of
this Agreement shall inure to the benefit of the Liquidity Provider and
Policy Provider, and each of their successors and permitted assigns.
(f) Governing Law. THIS AGREEMENT 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.
(g) Trust Capacity. The parties hereto agree that all of the
statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Agreement and any
agreement referred to herein other than the Trust Agreement, unless
expressly otherwise stated, are made and intended only for the purpose of
binding the Trust Estate and establishing the existence of rights and
remedies which can be exercised and enforced against the Trust Estate.
Therefore, anything contained in this Agreement or such other agreements to
the contrary notwithstanding (except for any express provisions that the
Owner Trustee is responsible for in its individual capacity), no recourse
shall be had with respect to this Agreement or such other agreements
against the Owner Trustee in its individual capacity or against any
institution or Person which becomes a successor trustee or co-trustee or
any officer, director, trustee, servant or direct or indirect parent or
controlling Person or Persons of any of them; provided, however, that this
Section 14(g) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or grossly
negligent conduct for which it would otherwise be liable; and provided,
further, that nothing contained in this Section 14(g) shall be construed to
limit the exercise and enforcement in accordance with the terms of this
Agreement or such other agreements of rights and remedies against the Trust
Estate. The foregoing provisions of this Section 14(g) shall survive the
termination of this Agreement and the other Operative Documents.
(h) Section 1110. It is the intention of the parties hereto
that the Owner Trustee, as Lessor under the Lease, and the Indenture
Trustee, as assignee of such Owner Trustee's rights under the Lease
pursuant to the Trust Indenture, will be entitled to the benefits of 11
U.S.C. Section 1110 in the event of any reorganization of Lessee under such
Section.
SECTION 15. EXPENSES.
(a) Invoices And Payment. Each of the parties hereto shall
promptly submit to the Owner Trustee and Lessee for their 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. The Owner Participant agrees to
transfer to the Owner Trustee promptly such amount as shall be necessary in
order to enable the Owner Trustee to pay, or if previously paid by Lessee,
to reimburse Lessee for, Transaction Expenses. To the extent of funds
received by it, the Owner Trustee agrees to pay all invoices of Transaction
Expenses that have been approved by it and Lessee promptly upon receipt
thereof and, to the extent such invoices have previously been paid by
Lessee, to reimburse Lessee promptly therefor. Notwithstanding the
foregoing, to the extent that Transaction Expenses exceed __% of Lessor's
Cost, Lessee at its sole option shall have the right to pay directly any or
all Transaction Expenses which are in excess of __% of Lessor's Cost.
(b) Payment of Other Expenses. In the event that the
transaction contemplated by this Participation Agreement fails to close as
a result of the Owner Participant's failure to negotiate in good faith or
to comply with the terms and conditions upon which its participation in the
transaction was predicated, the Owner Participant will be responsible for
all of its fees and expenses, including but not limited to the fees,
expenses and disbursements of its special counsel.
SECTION 16. REFINANCINGS.
(a) Refinancing Generally. So long as no Lease Event of
Default shall have occurred and be continuing, Lessee shall have the right
to refinance all (but not less than all) of the Equipment Notes no more
than three times by giving written notice to the Owner Participant and the
Owner Trustee that there shall be effected a voluntary redemption of the
Equipment Notes by the Owner Trustee, whereupon the Owner Participant
agrees to negotiate promptly in good faith to conclude an agreement with
Lessee as to the terms of such refinancing operation (including the terms
of any debt to be issued in connection with such refinancing); provided
that no such refinancing shall require an increase in the amount of the
Owner Participant's investment in the beneficial ownership of the Aircraft
or in the principal amount of the Equipment Notes; and provided further
that the Owner Participant may reject any terms that, in its reasonable
judgment, materially and adversely affect the Owner Participant.
Upon such agreement:
(1) within ten (10) Business Days after the reaching
of such agreement, the Owner Participant will deliver to
Lessee a certificate of an authorized representative of the
Owner Participant (the "Refinancing Certificate") setting
forth (i) (based upon information provided by Lessee and on
the agreement reached between Lessee and the Owner
Participant) the proposed date on which the outstanding
Equipment Notes will be redeemed and a description of any
new debt to be issued and the other aspects of such
refinancing that will be consummated (such date, the
"Refinancing Date") and (ii) the following information
calculated pursuant to the provisions of paragraph (6) of
this Section 16(a): (A) the proposed adjusted debt/equity
ratio, (B) the principal amount of debt to be issued by the
Owner Trustee on the Refinancing Date, (C) the amount, if
any, by which the Owner Participant's aggregate investment
in the beneficial interest in the Aircraft is to be
decreased and (D) the proposed revised schedules of Basic
Rent percentages, debt amortization, EBO Amount, Termination
Value percentages and other purchase option or termination
percentages. The Refinancing Certificate shall not provide
for a debt/equity ratio of more than [_:1]. Within fourteen
days of its receipt of the Refinancing Certificate, Lessee
may demand a verification pursuant to Exhibit E to the Lease
of the information set forth in the Refinancing Certificate.
Upon the acceptance by Lessee of the accuracy of the
information set forth in the Refinancing Certificate (or the
determination pursuant to such verification procedures), as
to the debt/equity ratio, the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date and the
revised Basic Rent percentages, debt amortization, EBO
Amount, Termination Value percentages and other buyout and
termination percentages (such information, whether as set
forth or as so determined, the "Refinancing Information")
the appropriate parties will take the actions specified in
paragraphs (2) through (5) below;
(2) the appropriate parties will enter into
appropriate documentation (which may involve an underwriting
agreement in connection with such sale or the sale of the
Owner Trustee's interest in the Trust Estate and/or the
Aircraft and its resale to the Owner Trustee) with the
institution or institutions to be named therein providing
for (A) (i) the issuance and sale by the Owner Trustee to
such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified
in the Refinancing Information which amount shall be equal
to the aggregate principal amount of all Equipment Notes
outstanding on the Refinancing Date (such debt securities,
the "New Debt") except that the principal amount of New Debt
may exceed the principal amount of all outstanding Equipment
Notes in connection with the first refinancing under this
Section 16, (ii) the application of the proceeds of the sale
of the New Debt to the redemption of all such Equipment
Notes on the Refinancing Date and (iii) the payment of the
excess, if any, of such proceeds over the amounts necessary
to effect such redemption to the Owner Trustee and (B)
pursuant to which the parties to the refinancing transaction
(including the Owner Participant, the Lessee, the Owner
Trustee and the Loan Participants, but excluding the holders
of the Pass Through Certificates) make such representations,
warranties and covenants as Lessee and Owner Participant
reasonably require;
(3) Lessee shall give the notice to the Indenture
Trustee pursuant to Section 2.11 of the Trust Indenture, and
Lessee and the Owner Trustee will amend the Lease to provide
that (i) Basic Rent payable in respect of the period from
and after the Refinancing Date shall be as provided in the
Refinancing Information and (ii) amounts payable in respect
of EBO Amount and Termination Value from and after the
Refinancing Date shall be as provided in the Refinancing
Information;
(4) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the New Debt in like
manner as the Equipment Notes and will enter into such
amendments and supplements to the Trust Indenture (or such
new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Lessee shall pay all of the reasonable
expenses of such refinancing (including, but not limited to,
the reasonable fees, expenses and disbursements of counsel
and any placement or underwriting fees); and
(6) when calculating any of the information required
to be set forth in a Refinancing Certificate, the Owner
Participant shall make such calculations in a manner which
(A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred are the
subject of the recalculations being conducted by the Owner
Participant) and (B) minimizes the Net Present Value of
Rents to Lessee to the extent possible consistent with
clause (A).
(b) Limitation on Redemption. The Equipment Notes shall not
be subject to voluntary redemption by the Owner Trustee without the consent
of Lessee except as set forth in Section 2.14 of the Trust Indenture.
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.
US AIRWAYS, INC.,
Lessee
By:_____________________________________
Name:
Title:
[OWNER PARTICIPANT],
as Owner Participant
By:_____________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
except as otherwise provided herein,
but solely as Indenture Trustee
By:______________________________________
Name:
Title:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee
By:_______________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise provided herein, but solely as
Pass Through Trustee
By:_______________________________________
Name:
Title:
STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise provided herein, but solely as
Subordination Agent
By:_______________________________________
Name:
Title:
SCHEDULE I
NAMES AND ADDRESSES
Lessee: US Airways, Inc.
U.S. MAIL
2345 Crystal Drive
Arlington, Virginia 22227
OVERNIGHT COURIER
2345 Crystal Drive
Arlington, Virginia 22227
Attn: Treasurer
Telecopy No.: (703) 872-5936
WIRE TRANSFER
[PNC Bank, N.A.]
ABA No.____________
Acct. No. ___________
Reference: __________
Owner Participant:
U.S. Mail
-------------------------
Attn:
Telecopy No.:
OVERNIGHT COURIER
Attn:
Telecopy No.: (___) ___-____
WIRE TRANSFER
ABA No._________________
Acct. No._________________
Indenture Trustee, Pass State Street Bank and Trust Company of Connecticut,
Through Trustee and National Association
Subordination Agent:
U.S. MAIL
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attn: Corporate Trust Administration
Telecopy No.: (860) 244-1889
with a copy to:
State Street Bank and Trust Company
Corporate Trust Department
2 Avenue de Lafayette, 6th Floor
Boston, Massachusetts 02111
Attn: Ruth A. Smith
Telecopy: (617) 662-1461
OVERNIGHT COURIER
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attn: Corporate Trust Administration
with a copy to:
State Street Bank and Trust Company
Corporate Trust Department
2 Avenue de Lafayette, 6th Floor
Boston, Massachusetts 02111
Attn: Ruth A. Smith
WIRE TRANSFER
State Street Bank and Trust Company of Connecticut,
National Association
ABA No. ___________
Acct. No. _____________
Attn: Corporate Trust Administration
-----------------
Reference: US Airways, Inc. 2000-1/US Airways,
Inc. Trust No. N___U_
Owner Trustee: First Security Bank, National Association
U.S. MAIL
79 South Main Street, 3rd Floor
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telecopy No.: (801) 246-5053
OVERNIGHT COURIER
79 South Main Street, 3rd Floor
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Telecopy No.: (801) 246-5053
WIRE TRANSFER
First Security Bank, National Association
ABA No. ___________
Acct. No. ___________
Re: US Airways, Inc. Trust No. N___U_
SCHEDULE II
COMMITMENTS
PERCENTAGE OF
PURCHASERS INTEREST RATE
LESSOR'S COST AND MATURITY PURCHASE PRICE
------------- ------------ --------------
US Airways, Inc.
Pass Through Trust:
2000-1G ___% Series G Secured $__________
_______% Notes due__________
2000-1C ___% Series C Secured $__________
______% Notes due __________
OWNER PARTICIPANT EQUITY INVESTMENT
-----% $----------
100% Total Commitments $__________
SCHEDULE III
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
---------------------------------------------------------------
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of February __, 2000, and as supplemented
by Trust Supplement No. 2000-1C, dated as of February __, 2000.
EXHIBIT A
TO PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N___U_)
SCHEDULE OF COUNTRIES FOR REREGISTRATION
----------------------------------------
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of registration such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Form Definitions
N___U_
ANNEX A
-------
[FORM OF DEFINITIONS - BASIC LEASE FORM]
DEFINITIONS
(US Airways, Inc. Trust No. N___U_)
The following terms shall have the following meanings for
all purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a Pratt & Whitney
model PW 4168A or 4173 (or improved) type engine having not less than 500
cycles left before such engine's next scheduled shop visit or (ii) an
engine of the same or another manufacturer suitable for use on the Airframe
and having a value and utility equal to or greater than a Pratt & Whitney
model PW 4168A or 4173 type engine, assuming such engine is in the
condition required by the Lease.
"Acceptance Certificate" has the meaning specified for such
term in Section 4(a)(v) of the Participation Agreement.
"Actual Knowledge" means, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the
Corporate Trust Office of the Indenture Trustee, as the case may be, and
(ii) as it applies to the Owner Participant, actual knowledge of a vice
president or other higher officer of the Owner Participant having
responsibility for the transactions contemplated by the Operative
Documents.
"Additional Insured" means Lessor, in its individual
capacity and as owner of the Aircraft, the Indenture Trustee, the Owner
Participant, the Pass Through Trustee, the Liquidity Provider, the Policy
Provider, Lessee in its capacity as sublessor under any Sublease, and each
of their respective Affiliates, successors and permitted assigns, and the
respective directors, officers, employees and agents of the foregoing.
"Additional Parts" has the meaning specified for such term
in Section 8(c) of the Lease.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean 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.
"Aircraft" means the Airframe to be delivered and leased
under the Lease (or any airframe from time to time substituted for such
Airframe pursuant to Section 10(a) of the Lease) together with the two
Engines initially leased under the Lease (or any engine substituted for
either of such Engines pursuant to the terms of the Lease), in each case as
specified in the applicable Lease Supplement, whether or not any of such
initial or substituted Engines may from time to time be installed on such
initial or substituted Airframe or may be installed on any other airframe
or on any other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial Lease
Supplement, which aircraft shall be leased by Lessor to Lessee under the
Lease and under such Lease Supplement, and any aircraft (except Engines or
engines from time to time installed thereon) which may from time to time be
substituted for such aircraft (except Engines or engines from time to time
installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the
same shall be incorporated or installed in or attached to such aircraft
(except Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however,
that at such time as an aircraft (except Engines or engines from time
to time installed thereon) shall be deemed part of the property leased
under the Lease in substitution for the Airframe pursuant to the applicable
provisions of the Lease, the replaced Airframe shall cease to be an
Airframe under the Lease; provided further that the Airframe shall not
include Passenger Convenience Equipment.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
The Chase Manhattan Bank in New York, New York from time to time as its
base rate.
"Basic Rent" means, for the Basic Term, the rent payable for
the Aircraft pursuant to Section 3(b) of the Lease as adjusted as provided
in Section 3(c) of the Lease but subject always to the provisions of
Section 3(c)(v) of the Lease and, for any Renewal Term, Basic Rent
determined pursuant to Section 19 of the Lease.
"Basic Term" means the term for which the Aircraft is leased
pursuant to Section 3(a) of the Lease, commencing on the Delivery Date and
ending on the Basic Term Expiration Date.
"Basic Term Expiration Date" means , or such earlier date as
the Lease may be terminated in accordance with the provisions thereof.
"Bill of Sale" means a full warranty bill of sale covering
the Aircraft, executed by Lessee in favor of the Owner Trustee, dated the
Delivery Date, specifically referring to the Airframe and each Engine,
which Bill of Sale shall contain, among other things, a statement that such
Bill of Sale thereby conveys to the Owner Trustee good title to the
Airframe and each Engine described in such Bill of Sale, free and clear of
all liens, encumbrances and rights of others except Permitted Liens
described in Section 6(a)(xv) of the Participation Agreement.
"Burdensome Termination Event" means an event which shall be
deemed to have occurred if (A) one or more events have occurred which give
rise to an obligation on the part of Lessee to pay or indemnify any costs
or expenses under Sections 6(b) or 6(c) of the Participation Agreement or
under the Tax Indemnity Agreement if the aggregate amount of such indemnity
or other payments would exceed (as to future payments on a present value
basis discounted at the Debt Rate) 2.50% of Lessor's Cost or (B) Lessee
plans non-severable improvements to the Aircraft which (i) are necessary or
desirable in Lessee's sole discretion, (ii) are expected to cost in excess
of $2.5 million and (iii) the Owner Participant will not permit to be
financed under similar terms then available in the market for similar
transaction.
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in
New York, New York, Hartford, Connecticut, Pittsburgh, Pennsylvania or the
city and state where the office of the Owner Trustee is located.
"Cash Equivalents" means (i) direct obligations of the
United States of America and agencies guaranteed by the United States
government having a final maturity of ninety (90) days or less from date of
purchase thereof; (ii) certificates of deposit issued by, bankers'
acceptances of, or time deposits with, any bank, trust company or national
banking association incorporated under the laws of the United States of
America or one of the states thereof having combined capital and surplus
and retained earnings as of its last report of condition of at least
$500,000,000 and having a rating of Aa or better by Moody's Investors
Service, Inc. ("Moody's") or AA or better by Standard & Poor's Corporation
("S&P") and having a final maturity of ninety (90) days or less from date
of purchase thereof; and (iii) commercial paper of any holding company of a
bank, trust company or national banking association described in (ii) and
commercial paper of any corporation or finance company incorporated or
doing business under the laws of the United States of America or any state
thereof having a rating assigned to such commercial paper of A1 by S&P or
P1 by Moody's and having a final maturity of ninety (90) days or less from
the date of purchase thereof; provided, however, that the aggregate amount
at any one time so invested in certificates of deposit issued by any one
bank shall not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United
States holding a carrier operating certificate issued by the Secretary of
Transportation (or by the Administrator of the FAA acting under authority
delegated by the Secretary of Transportation) pursuant to Chapter 447 of
Title 49, United States Code, for aircraft capable of carrying ten or more
individuals or 6,000 pounds or more of cargo or that otherwise is certified
or registered to the extent required to fall within the purview of 11
U.S.C. Section 1110 or any analogous successor provision of the Bankruptcy
Code.
"Citizen of the United States" has the meaning specified for
such term in Section 40102(a)(15) of Title 49 of the United States Code or
any similar legislation of the United States of America enacted in
substitution or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve
Air Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class C Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Class G Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the
Participation Agreement of a Pass Through Trustee or of the Owner
Participant, as the case may be, to finance the Owner Trustee's payment of
Lessor's Cost for the Aircraft.
"Consent and Agreement" means, collectively, each Consent
and Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of
the Lease, executed by the Seller and the Manufacturer, respectively, as
the same may be amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof.
"Continuous Stay Period" has the meaning specified for such
term in Section 4.04(a) of the Trust Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103, Attention: Corporate Trust Administration, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Lessee, the Owner Trustee, the Loan Participants and each Note
Holder.
"Debt" means any liability for borrowed money, or any
liability for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments or for the deferred purchase
price of property, goods or services.
"Debt Rate" means, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in
Schedule I to the Trust Indenture.
"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 or
Lease Event of Default (excluding Lease Events of Default related to
Excluded Payments).
"Delivery Date" means the date of the initial Lease
Supplement for the Aircraft, which date shall be the date the Aircraft is
leased by Lessor to Lessee and accepted by Lessee under the Lease.
"Delivery Notice" means the notice of delivery delivered
pursuant to Section 2(c) of the Participation Agreement.
"Depositary" means ABN AMRO Bank, N.V., acting through its
Chicago branch, as Class G Depositary and Class C Depositary under the
Deposit Agreements, or any successor thereto.
"Deposit Agreements" means, collectively, (i) that certain
Deposit Agreement (Class G), dated as of the Pass Through Trust Closing
Date, between First Security Bank, National Association, as escrow agent
under the Escrow Agreement referred to therein, and the Depositary and (ii)
that certain Deposit Agreement (Class C), dated as of the Pass Through
Trust Closing Date, between First Security Bank, National Association, as
escrow agent under the Escrow Agreement referred to therein, and the
Depositary.
"Depreciation Period" means the period commencing on the
Delivery Date and ending at the end of the calendar year during which the
seventh (7th) anniversary of the Delivery Date occurs, or such earlier date
as the Lease may be terminated in accordance with the provisions of the
Lease.
"Dollars" and "$" mean the lawful currency of the United
States of America.
"EBO Amount" means the applicable amount for the relevant
EBO Date set forth on Exhibit D to the Lease (as such Exhibit D may be
adjusted from time to time as provided in Section 3(c) of the Lease or as
expressly provided in any Operative Document).
"EBO Date" means the applicable date set forth on Exhibit D
to the Lease.
"Enforcement Date" has the meaning specified for such term
in Section 4.03 of the Trust Indenture.
"Engine" means (i) each of the two Pratt & Whitney type
engines listed by manufacturer's serial number in the initial Lease
Supplement, whether or not from time to time thereafter installed on the
Airframe or installed on any other airframe or on any other aircraft; and
(ii) any Acceptable Alternate Engine that may from time to time be
substituted, pursuant to the terms of the Lease, for either of such two
engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed therefrom so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such Engine; provided,
however, that at such time as an engine shall be deemed part of the
property leased under the Lease in substitution for an Engine pursuant to
the applicable provisions of the Lease, the replaced Engine shall cease to
be an Engine under the Lease. The term "Engines" means, as of any date of
determination, all Engines then leased under the Lease.
"Equipment Note Register" has the meaning specified for such
term in Section 2.07 of the Indenture.
"Equipment Note Registrar" has the meaning specified for
such term in Section 2.07 of the Indenture.
"Equipment Notes" means and include any Equipment Notes
issued under the Trust Indenture, and issued in exchange therefor or
replacement thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Escrow Agreements" means, collectively, (i) that certain
Escrow and Paying Agent Agreement (Class G), dated as of the Pass Through
Trust Closing Date, among First Security Bank, National Association, as
escrow agent, the Underwriters, the Pass Through Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, as paying
agent thereunder and (ii) that certain Escrow and Paying Agent Agreement
(Class C), dated as of the Pass Through Trust Closing Date, among First
Security Bank, National Association, as escrow agent, the Underwriters, the
Pass Through Trustee, and State Street Bank and Trust Company of
Connecticut, National Association, as paying agent thereunder.
"Event of Default" (i) when such term is used in or with
respect to the Lease has the meaning specified for such term in Section 14
of the Lease and (ii) when such term is used in or with respect to the
Trust Indenture has the meaning specified for such term in Section 4.02 of
the Trust Indenture.
"Event of Loss" means, with respect to the Aircraft,
Airframe or any Engine, any of the following events with respect to such
property: (i) the loss of such property or of the use thereof due to the
destruction of or damage to such property which renders repair uneconomic
or which renders such property permanently unfit for normal use by Lessee
(or any Sublessee) for any reason whatsoever; (ii) any damage to such
property which results in an insurance settlement with respect to such
property on the basis of a total loss, or a constructive or compromised
total loss; (iii) the theft or disappearance of such property for a period
in excess of one hundred eighty (180) days or, if earlier, the expiration
of the Term; (iv) the requisition for use of such property by any
governmental authority (other than a requisition for use by the United
States Government or any government of registry of the Aircraft or any
agency or instrumentality thereof) that shall have resulted in the loss of
possession of such property by Lessee (or any Sublessee) for a period in
excess of one hundred eighty (180) consecutive days or, if earlier, the
expiration of the Term; (v) the requisition for use by the United States
Government or any government of registry of the Aircraft or any
instrumentality or agency thereof, which shall have occurred during the
Basic Term (or any Renewal Term) and shall have continued for a period of
thirty (30) days beyond the Term, provided, however, that no Event of Loss
pursuant to this clause (v) shall exist if Lessor shall have furnished to
Lessee the written notice specified in Section 10(d) of the Lease; (vi)
condemnation, confiscation, requisition or taking of title of the Aircraft
or the Airframe for more than thirty (30) days, or if earlier, the
expiration of the Term; (vii) as a result of any law, rule, regulation,
order or other action by the Federal Aviation Administration or other
governmental body of the government of registry of the Aircraft having
jurisdiction, the use of such property in the normal course of the business
of air transportation shall have been prohibited for a period of one
hundred eighty (180) consecutive days, unless Lessee (or Sublessee) shall
have undertaken and shall be diligently carrying forward all steps which
are necessary or desirable to permit the normal use of such property by
Lessee (or such Sublessee), but in any event an "Event of Loss" shall occur
if such "grounding" extends for a period of more than three hundred sixty
(360) days (or, if earlier, the expiration of the Term); provided that no
Event of Loss shall be deemed to occur if such "grounding" is applicable to
Lessee's entire fleet of A330 aircraft and Lessee, prior to the expiration
of one year from the prohibition of such use, shall have conformed at least
one such aircraft in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of
the same in such jurisdiction and shall be diligently carrying forward, on
a non-discriminatory basis, all steps which are necessary or desirable to
permit the normal use of the Aircraft by Lessee (or such Sublessee), but in
any event an "Event of Loss" shall be deemed to have occurred if such use
shall have been prohibited for a period of two consecutive years or such
use shall be prohibited at the expiration of the Term; and (viii) with
respect to an Engine only, any divestiture of title to or interest in an
Engine or any event with respect to an Engine that is deemed to be an Event
of Loss with respect to such Engine pursuant to Section 7(b) of the Lease.
An Event of Loss with respect to the Aircraft shall be deemed to have
occurred if an Event of Loss occurs with respect to the Airframe.
"Excluded Payments" means (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner
Trustee in its individual capacity, their respective Affiliates, successors
and permitted assigns and their directors, officers, employees, servants
and agents (collectively, the "Owner Indemnitees") pursuant to Sections
6(b), 6(c), 15 or 16 of the Participation Agreement, (ii) proceeds of
public liability insurance in respect of the Aircraft payable as a result
of insurance claims made, or losses suffered, by the Owner Trustee or the
Indenture Trustee in their respective individual capacities or by any of
the Owner Indemnitees, (iii) proceeds of insurance maintained with respect
to the Aircraft by the Owner Participant (whether directly or through the
Owner Trustee) or any other Owner Indemnitee and permitted under Section 11
of the Lease in Exhibit H thereto, (iv) all payments required to be made
under the Tax Indemnity Agreement by Lessee and all payments of
Supplemental Rent by Lessee in respect of any amounts payable under the Tax
Indemnity Agreement, (v) fees payable to the Owner Trustee or the Indenture
Trustee, (vi) provided that the Equipment Notes shall have been duly
assumed by Lessee pursuant to Section 2.13 of the Trust Indenture, the
amounts payable to the Owner Trustee pursuant to Section 19(b) of the Lease
plus all reasonable expenses incurred by the Owner Trustee and the Owner
Participant in connection with such assumption, as applicable, (vii)
interest accrued on any of the above and (viii) any right to enforce the
payment of any amount described in clauses (i) through (vii) above
(provided the rights referred to in this clause (viii) shall not be deemed
to include the exercise of any remedies provided for in the Lease other
than the right to sue for specific performance of any covenant or to make
such payment or to sue for damages in respect of the breach of any such
covenant) and the right to declare an Event of Default in respect of any of
the foregoing amounts.
"Expenses" means 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 reasonable costs of investigation).
"Fair Market Renewal Term" has the meaning specified for
such term in Section 19(a)(2) of the Lease.
"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 Federal
Aviation Administration), executed by Lessee in favor of the Owner Trustee
and dated the Delivery Date.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all times
be 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, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Fixed Renewal Term" has the meaning specified for such term
in Section 19(a)(1) of the Lease.
"Foreign Air Carrier" means any air carrier which is not a
U.S. Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"French Pledge Agreement" means the French Pledge Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Trustee and the Indenture Trustee, as the same may be amended,
supplemented or modified from time to time.
"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 Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Owner Trustee, in its individual
capacity and as trustee under the Trust Agreement, (ii) the Indenture
Trustee, (iii) the Owner Participant, (iv) the Trust Estate, (v) the Loan
Participants and each other Note Holder, (vi) the Subordination Agent,
(vii) the Liquidity Provider, (viii) the Policy Provider, (ix) the Pass
Through Trustees, (x) each Affiliate of the Persons described in clauses
(i) through (iv), inclusive, (xi) each Affiliate of the Persons described
in clauses (vi), (vii), (viii) and (ix), (xii) the respective directors,
officers, employees, agents and servants of each of the Persons described
in clauses (i) through (ix), inclusive, (xiii) the successors and permitted
assigns of the Persons described in clauses (i) through (iv), inclusive,
and (xiv) the successors and permitted assigns of the Persons described in
clauses (v), (vi), (vii), (viii) and (ix).
"Indemnity Agreement" means that certain Indemnity
Agreement, dated as of the Pass Through Trust Closing Date, between the
Depositary and Lessee.
"Indenture Agreements" means the Participation Agreement,
the Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Bills of Sale and any other contract, agreement
or instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Event of Default" has the meaning given the term
"Event of Default" in the Trust Indenture.
"Indenture Excess Amount" has the meaning specified for such
term in Section 2.03(b) of the Trust Indenture.
"Indenture Indemnitees" means (i) State Street and the
Indenture Trustee, (ii) each separate or additional trustee appointed
pursuant to the Trust Indenture, (iii) the Subordination Agent, (iv) the
Liquidity Provider, (v) the Policy Provider, (vi) each Pass Through Trustee
and (vii) each of the respective directors, officers, employees, agents and
servants of each of the Persons described in clauses (i) through (vi),
inclusive.
"Indenture Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, not in its individual capacity, but solely as Indenture
Trustee, and any entity which may from time to time be acting as indenture
trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation
Agreement, the Trust Indenture and the French Pledge Agreement and any
other agreements between the Indenture Trustee and any other party to the
Participation Agreement relating to the Transactions, delivered on the
Delivery Date.
"Indenture Trustee Event" means either (i) the Equipment
Notes shall have become due and payable pursuant to Section 4.04(b) of the
Trust Indenture, (ii) the Indenture Trustee has taken action or notified
Owner Trustee that it intends to take action to foreclose the Lien of the
Trust Indenture or otherwise commence the exercise of any significant
remedy under the Trust Indenture or the Lease or (iii) in the event of a
reorganization proceeding involving Lessee under Chapter 11 of the
Bankruptcy Code, (A) the trustee in such proceeding or Lessee not assuming
or agreeing to perform its obligations under the Lease, as contemplated
under Section 1110, during the 60-day period under Section 1110(a)(1)(A) of
the Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) or (B) at any time after agreeing to
perform or assuming such obligations, such trustee or Lessee ceasing to
perform such obligations with the result that the Continuous Stay Period
comes to an end.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft or the administration of the Trust Estate pursuant
to the Trust Indenture, (B) acts of the Indenture Trustee not permitted by,
or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer
of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV
or V of the Trust Indenture, or a transfer of the Aircraft pursuant to
Section 15 of the Lease while an Event of Default is continuing and prior
to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
"Insurance Brokers" has the meaning specified for such term
in Exhibit H to the Lease.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the Pass Through Trust Closing Date, among the Pass
Through Trustees, the Liquidity Provider, the Policy Provider and the
Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
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.
"Lease" means that certain Lease Agreement (US Airways, Inc.
Trust No. N___U_), dated as of _________ __, ____, entered into by the
Owner Trustee and Lessee concurrently with the execution and delivery of
the Trust Indenture, as said Lease Agreement has been, or may from time to
time be, supplemented or amended, or the terms thereof waived or modified,
to the extent permitted by, and in accordance with, the terms of the Trust
Indenture. The term "Lease" shall also include each Lease Supplement from
time to time entered into pursuant to the terms of the Lease.
"Lease Default" means any event which with the giving of
notice or the lapse of time or both would become a Lease Event of Default.
"Lease Event of Default" means an "Event of Default" as
defined in Section 14 of the Lease.
"Lease Period" means each of the consecutive periods
throughout the Basic Term and any Renewal Term ending on a Lease Period
Date, the first such period commencing on and including the Delivery Date.
"Lease Period Date" means ___________, ____ and each
succeeding February 20 and August 20, to and including the last such date
in the Term.
"Lease Supplement" means a Lease Supplement, substantially
in the form of Exhibit A to the Lease, to be entered into between Lessor
and Lessee on the Delivery Date for the purpose of leasing the Aircraft
under and pursuant to the terms of the Lease, and any subsequent Lease
Supplement entered into in accordance with the terms of the Lease.
"Lessee" means US Airways, Inc., a Delaware corporation.
"Lessee Documents" means the Participation Agreement, the
Lease, the Lease Supplement covering the Aircraft, the Purchase Agreement
(insofar as it relates to the Aircraft), the FAA Bill of Sale, the Bill of
Sale, the Purchase Agreement Assignment, the Tax Indemnity Agreement and
each other agreement between the Lessee and any other party to the Lease
delivered on the Delivery Date.
"Lessor" means First Security Bank, National Association,
not in its individual capacity, but solely as Owner Trustee, or any of its
successors and permitted assigns acting as lessor under the Lease.
"Lessor Liens" means any Lien or disposition of title or
interest arising as a result of (i) claims against Lessor, First Security
Bank, National Association, in its individual capacity, or the Owner
Participant not related to the transactions contemplated by the Operative
Documents, (ii) any act or omission of the Owner Participant, Lessor, or
First Security Bank, National Association, in its individual capacity,
which is not related to the transactions contemplated by the Operative
Documents or is in violation of any of the terms of the Operative
Documents, (iii) claims against the Owner Participant, Lessor, or First
Security Bank, National Association, in its individual capacity, with
respect to Taxes or Expenses against which Lessee is not required to
indemnify the Owner Participant, Lessor or First Security Bank, National
Association, in its individual capacity, pursuant to Section 6 of the
Participation Agreement or (iv) claims against Lessor or the Owner
Participant arising out of any transfer by Lessor or the Owner Participant
of all or any portion of the respective interests of Lessor or the Owner
Participant in the Aircraft, the Trust Estate or the Operative Documents
other than the transfer of possession of the Aircraft by Lessor pursuant to
the Lease, the transfer pursuant to the Trust Indenture or a transfer of
the Aircraft pursuant to Section 9, 10, 19 or 20 of the Lease or pursuant
to the exercise of the remedies set forth in Section 15 of the Lease.
"Lessor's Cost" for the Aircraft means the amount
denominated as such in Exhibit B to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the two Revolving Credit
Agreements, each dated as of the Pass Through Trust Closing Date, between
the Subordination Agent, as borrower, and the Liquidity Provider, and any
replacement thereof, in each case as the same may be amended, modified or
supplemented.
"Liquidity Provider" means Bayerische Landesbank
Girozentrale, as Class G Liquidity Provider and Class C Liquidity Provider
under the Liquidity Facilities, or any successor thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from
acts or claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Loss Payment Date" has the meaning specified for such term
in Section 10(a) of the Lease.
"Majority in Interest of Note Holders" as of a particular
date of determination means the holders of at least a majority in aggregate
unpaid principal amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by the Owner Trustee or the Owner
Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by the Owner Trustee or the
Owner Participant) or Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Equipment
Note, the amount (as determined by an independent investment banker
selected by Lessee and reasonably acceptable to the Indenture Trustee and
the Owner Participant) by which (a) the present value of the remaining
scheduled payments of principal and interest from the redemption date to
maturity of such Equipment Note computed by discounting each such payment
on a semiannual basis from its respective Payment Date (assuming a 360- day
year of twelve 30-day months) using a discount rate equal to the Treasury
Yield exceeds (b) the outstanding principal amount of such Equipment Note
plus accrued interest. For purposes of determining the Make-Whole Amount,
"Treasury Yield" means, at the time of determination, the interest rate
(expressed as a semiannual equivalent and 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 and trading in the public securities market 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 and (B) the other maturing as close as possible
to, but later than, the Average Life Date, 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 is reported on
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 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 redemption date. "Average Life Date" means, for
each Equipment Note to be redeemed, the date which follows the redemption
date by a period equal to the Remaining Weighted Average Life at the
redemption date of such Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term
in Section 3.03 of the Trust Indenture.
"Net Economic Return" has the meaning specified for such
term in paragraph 2 of Exhibit E to the Lease.
"Net Present Value of Rents" means the net present value, as
of the date of calculation, of Basic Rent set forth in Exhibit B to the
Lease, discounted at an annual interest rate of ten percent (10%) on a
semi-annual basis.
"New Debt" has the meaning specified for such term in
Section 16(a) of the Participation Agreement.
"Non-U.S. Person" means any Person other than a U.S. Person.
"Note Holder" means any holder from time to time of one or
more Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of the Pass Through Trust Closing Date among Lessee, the Pass
Through Trustee for the Class G and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company of Connecticut, National
Association, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Operative Documents" means, collectively, the Participation
Agreement, the Lease, the Trust Indenture, the Trust Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by the
Participants and Lessee, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the
Equipment Notes, the Bill of Sale, the FAA Bill of Sale, the French Pledge
Agreement, the Purchase Agreement (insofar as it relates to the Aircraft),
the Purchase Agreement Assignment and the Consent and Agreement (each, an
"Operative Document").
"Operative Indentures" means each of the indentures under
which notes have been issued and purchased by the Pass Through Trustees.
"Owner Indemnitee" has the meaning specified for such term
in the definition of Excluded Payments.
"Owner Participant" means ___________________, a
[_____________] corporation, so long as such party shall have any interest
in the Trust Estate, and transferees thereof as permitted by Section 7(k)
of the Participation Agreement and Section 8.01 of the Trust Agreement.
"Owner Participant Documents" means the Participation
Agreement, the Trust Agreement, and the Tax Indemnity Agreement and each
other agreement between the respective parties thereto relating to the
subject matter thereof, delivered on the Delivery Date.
"Owner Trustee" means First Security Bank, National
Association, not in its individual capacity but solely as owner trustee,
and any entity appointed as successor Owner Trustee pursuant to Section
9.01 of the Trust Agreement, and references to a predecessor Owner Trustee
in its individual capacity by name in the Operative Documents shall include
such successor Owner Trustee in its individual capacity from and after such
succession.
"Owner Trustee Documents" means the Participation Agreement,
the Trust Agreement, the Trust Supplement covering the Aircraft, the Lease,
the Lease Supplement covering the Aircraft, the Purchase Agreement
Assignment, the French Pledge Agreement, the Trust Indenture and the
Equipment Notes and each other agreement between the respective parties
thereto relating to the subject matter thereof, delivered on the Delivery
Date.
"Owner Trustee's pro rata share" has the meaning specified
for such term in the Trust Indenture.
"Participants" means the Loan Participants and the Owner
Participant, collectively (each individually, a "Participant").
"Participation Agreement" means that certain Participation
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the dated of the
Lease, among the Owner Trustee, the Subordination Agent, the Indenture
Trustee, Lessee, the Owner Participant and the Pass Through Trustee, as the
same may from time to time be supplemented or further amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance
with, the terms thereof.
"Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature (other than (a) complete Engines or engines, (b) any items leased by
Lessee from a third party (other than Lessor) and (c) cargo containers)
which may from time to time be incorporated or installed in or attached to
the Airframe or any Engine or so long as title thereto shall remain vested
in Lessor in accordance with Section 8 of the Lease after removal
therefrom; provided that "Parts" shall not include Passenger Convenience
Equipment.
"Pass Through Certificates" means the pass through
certificates to be issued by the Pass Through Trustee in connection with
the Transactions.
"Pass Through Documents" means the Participation Agreement,
the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Escrow Agreements, the Liquidity Facilities, the Policy
Provider Agreement, the Policy and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination
Agent, the Liquidity Provider, the Policy Provider and the Pass Through
Trustee, (ii) each Affiliate of a Person described in the preceding clause
(i), (iii) the respective directors, officers, employees, agents and
servants of each of the Persons described in the preceding clauses (i) and
(ii) and (iv) the successors and permitted assigns of the Persons described
in the preceding clauses (i), (ii) and (iii).
"Pass Through Trust" means, collectively, the two separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreement, to facilitate
certain of the transactions contemplated by the Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the two separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means March __, 2000.
"Pass Through Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, in its capacity as trustee under each Pass Through Trust
Agreement, and each other Person that may from time to time be acting as
successor trustee under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components
or systems installed on or affixed to the Airframe that are used to provide
individual telecommunications to passengers aboard the Aircraft.
"Past Due Rate" has the meaning specified for such term in
Exhibit B to the Lease.
"Payment Date" means each February 20 and August 20,
commencing on ________ 20, ____ (or, if any such day is not a Business Day,
the immediately succeeding Business Day) until the Equipment Notes have
been paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 6 of the Lease.
"Permitted Sublessee" means any entity domiciled in a
country listed in Exhibit F to the Lease as in effect from time to time and
as may be modified in accordance with Section 7(d) of the Participation
Agreement.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the financial guarantee insurance policy,
dated as of the Pass Through Trust Closing Date, issued by the Policy
Provider in favor of the Subordination Agent for the benefit of the Class G
Pass Through Trust.
"Policy Provider" means MBIA Insurance Corporation, or any
successor thereto.
"Policy Provider Agreement" means the Insurance and
Indemnity Agreement, dated as of the Pass Through Trust Closing Date,
between the Policy Provider and the Subordination Agent.
"Principal 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.
"Purchase Agreement" means the Purchase Agreement dated as
of November 24, 1998 between US Airways Group, Inc. and the Seller
(including all exhibits thereto, together with all letter agreements
entered into that by their terms constitute part of any such Purchase
Agreement), as the same may be amended or otherwise supplemented from time
to time, as the same has been assigned to Lessee, relating to the purchase
by Lessee of the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between Lessee and Lessor, as the same may be amended, supplemented
or modified from time to time, with a form of Consent and Agreement to be
executed by the Seller attached thereto.
"Purchase Option Date" has the meaning specified for such
term in Section 19(b) of the Lease.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section
2.08 of the Trust Indenture.
"Qualified Owner Participant" means a Person (x) that is not
an Affiliate of Lessee and (y) that has a tangible net worth, calculated in
accordance with generally accepted accounting principles, greater than
$50,000,000 or such other amount as is acceptable to Lessee, or (z) whose
obligations under the Operative Documents are unconditionally guaranteed by
a Person meeting the requirements of clauses (x) and (y).
"Refinancing Certificate" has the meaning specified for such
term in Section 16(a) of the Participation Agreement.
"Refinancing Date" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Refinancing Information" has the meaning specified for such
term in Section 16(a) of the Participation Agreement.
"Remaining Weighted Average Life" of an Equipment Note, at
the redemption date of such Equipment Note, means the number of days equal
to the quotient obtained by dividing (a) the sum of the products obtained
by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such Equipment
Note, by (ii) the number of days from and including the redemption date to
but excluding the scheduled payment date of such principal installment; by
(b) the then unpaid principal amount of such Equipment Note.
"Renewal Term" means any Fixed Renewal Term or Fair Market
Renewal Term.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Replacement Airframe" means any airframe substituted for
the Airframe pursuant to Section 10 of the Lease.
"Replacement Engine" means any engine substituted for an
Engine pursuant to Sections 9(c) and 10 of the Lease.
"Responsible Officer" means with respect to the Owner
Trustee, a responsible officer in the Trust Office of the Owner Trustee
(including, without limitation, any authorized officer in the Trust Office
of the Owner Trustee), and with respect to the Indenture Trustee, a
responsible officer in the Corporate Trust Office of the Indenture Trustee.
"Scheduled Delivery Date" has the meaning specified for such
term in Section 2(f) of the Participation Agreement.
"Section 1110 Period" has the meaning specified for such
term in Section 4.04(a) of the Trust Indenture.
"Secured Obligations" has the meaning specified for such
term in the Granting Clause of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" means AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Trust Indenture.
"Series C" or "Series C Equipment Notes" means Equipment
Notes issued and designated as "Series C" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series C."
"Series G" or "Series G Equipment Notes" means Equipment
Notes issued and designated as "Series G" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series G."
"Significant Expenditure" means an expenditure or planned
expenditure of the type described in clause (B) of the definition of
Burdensome Termination Event.
"State Street" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its capacity as Indenture Trustee under the Trust Indenture, but in its
individual capacity.
"Sublease" means any sublease permitted by the terms of
Section 7(b)(x) of the Lease.
"Sublessee" means any Person for so long, but only so long,
as such Person is in possession of the Airframe and/or any Engine pursuant
to the terms of a Sublease which is then in effect pursuant to Section
7(b)(x) of the Lease.
"Subordination Agent" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, as subordination agent under the Intercreditor Agreement, or
any successor thereto.
"Subsequent Owner Participant" means any entity to which the
Owner Participant or any transferee from the Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest originally
held by the Owner Participant in the Trust Agreement, the Trust Estate and
the Participation Agreement, to the extent permitted by Section 8.01 of the
Trust Agreement and Section 7(k) of the Participation Agreement.
"Supplemental Rent" means, without duplication, (a) all
amounts, liabilities, indemnities and obligations (other than Basic Rent)
that Lessee assumes or becomes obligated to or agrees to pay under any
Lessee Document to or on behalf of Lessor or any other Person, including,
without limitation, payments of Termination Value, any amounts in respect
of a purchase price payable pursuant to Section 19(c) or 20 of the Lease
and payments of indemnities under Section 6 of the Participation Agreement,
but excluding any amount as to which Lessee is obligated to pay a pro rata
share pursuant to clause (d) or (e) of this definition, (b) (i) to the
extent not payable (whether or not in fact paid) under Section 7(a) of the
Note Purchase Agreement (as originally in effect or amended with the
consent of the Owner Participant), an amount or amounts equal to the fees
payable to (x) 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 G Equipment Notes
and Series C Equipment Notes and the denominator of which shall be the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
and "Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures and (y) the
Policy Provider under the Policy Fee Letter (as defined in the Policy
Provider Agreement) multiplied by a fraction the numerator of which shall
be the sum of the then outstanding aggregate principal amount of the Series
G Equipment Notes and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued under
the Operative Indentures; (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) if any payment default shall have occurred and
be continuing with respect to interest on any Series G Equipment Note or
Series C Equipment Note, (x) the excess, if any, of (1) an amount equal to
interest on any Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance payable under Section 3.07 of each Liquidity Facility
(or, in the case of the Series G Equipment Notes, if the Policy Provider
has made a payment equivalent to such an Advance, as would have been
payable under Section 3.07 of the applicable Liquidity Facility in respect
of the Class G Pass Through Certificates had such Advance been made) over
(2) the sum of Investment Earnings from any Final Advance plus any amount
of interest at the Past Due Rate actually payable (whether or not in fact
paid) by Lessee in respect of the overdue scheduled interest on the
Equipment Notes in respect of which such Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance was made by the applicable
Liquidity Provider (or, in the case of the Series G Equipment Notes, an
equivalent payment was made by the Policy Provider) multiplied by (y) a
fraction the numerator of which shall be the then aggregate overdue amounts
of interest on the Series G Equipment Notes and Series C 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 G
Equipment Notes" and "Series C Equipment Notes" (in each case as defined in
the relevant Operative Indenture) issued under the Operative Indentures
(other than interest becoming due and payable solely as a result of
acceleration of any such "Equipment Notes," (in each case as defined in the
relevant Operative Indenture) issued under the Operative Indentures); and
(v) Lessee's pro rata share of 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
(i), (ii), (iii) or (iv) above, (c) Lessee's pro rata share of all
compensation and reimbursement of expenses, disbursements and advances
payable by Lessee under the Pass Through Trust Agreements, (d) Lessee's pro
rata share of (I) 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 (II) all amounts for which the Policy
Provider is entitled to reimbursement under Section 3.7(i) of the
Intercreditor Agreement, and (e) Lessee's pro rata share of any amount
payable under Section 6(c) of the Participation Agreement to any Pass
Through Indemnitee to the extent such amount relates to, results from or
arises out of or in connection with (i) the Pass Through Trust Agreement or
the enforcement of any of the terms of any Pass Through Document, (ii) the
offer, sale, or delivery of the Pass Through Certificates or any interest
therein or represented thereby or (iii) 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 Lessee under any Pass Through Document
or the falsity of any representation or warranty of Lessee in any Pass
Through Document. As used herein, "Lessee'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" (in
each case as defined in the relevant Operative Indenture) issued under the
Operative Indentures. For purposes of this definition, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility. For the avoidance of doubt, it is
understood and agreed that Supplemental Rent includes, without limitation,
any amounts payable under the third paragraph of Section 2.02 of the Trust
Indenture.
"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between the Owner Participant and Lessee, as originally executed or
as modified, amended or supplemented pursuant to the applicable provisions
thereof.
"Taxes" means any and all fees (including, without
limitation, license, recording, documentation and registration fees), taxes
(including, without limitation, income, gross receipts, sales, rental, use,
turnover, value added, property (tangible and intangible), excise and stamp
taxes), license, levies, imposts, duties, recording charges and assessments
of any kind whatsoever that are in the nature of taxes or other
governmental charges including interest, penalties and additions to tax
(each, individually a "Tax").
"Term" means the Basic Term and, if actually entered into,
any Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a)
of the Lease.
"Termination Value" with respect to the Aircraft as of any
date during the Term means, but subject always to the provisions of Section
3(c)(v) of the Lease, the amount determined by multiplying Lessor's Cost
for the Aircraft by the percentage specified in Exhibit C to the Lease
opposite the Termination Date with respect to which the amount is
determined (as such Exhibit C may be adjusted from time to time as provided
in Section 3(c) of the Lease and as expressly provided in any other
Operative Document).
"Transaction Expenses" means: all of the reasonable
out-of-pocket costs, fees and expenses incurred by Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Indenture
Trustee, the Liquidity Provider and the Policy Provider in connection with
the transactions contemplated by the Participation Agreement, the other
Operative Documents, the Pass Through Documents and the Underwriting
Agreement (except, in each case, as otherwise provided therein) including,
without limitation:
(a) the reasonable and actual fees, expenses and
disbursements of (A) Bingham Dana LLP, special counsel for the Pass Through
Trustee, the Subordination Agent and the Indenture Trustee, (B) Ray,
Quinney & Nebeker, special counsel for the Owner Trustee, (C) Milbank,
Tweed, Hadley & McCloy LLP, special counsel for the Underwriters and (D)
Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma;
(b) the initial fees and reasonable and actual
disbursements of the Owner Trustee under the Trust Agreement;
(c) the initial fee and reasonable and actual
disbursements of the Indenture Trustee under the Trust Indenture;
(d) the initial fees and expenses of the Liquidity
Provider, the Policy Provider, the Pass Through Trustee and the Subordination
Agent;
(e) underwriting fees and commissions;
(f) the fees and expenses with respect to the appraisal
of the Aircraft;
(g) the reasonable fees, expenses and disbursements of
_________________, special counsel to the Owner Participant, such fees not to
exceed the amount previously agreed to by the Owner Participant and Lessee;
(h) the fees, expenses and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP and its affiliates, special counsel for Lessee;
(i) the costs of filing and recording documents with
the FAA and filing Uniform Commercial Code statements in the United States;
(j) the reasonable fees, expenses and disbursements of
special counsel to each of the Liquidity Provider and the Policy Provider;
(k) the expenses of the Depositary payable under
Section 10(a) of each Indemnity Agreement; and
(l) the reasonable fees, expenses and disbursements
of special counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transferee" has the meaning specified for such term in
Section 7(k) of the Participation Agreement.
"Transportation Code" means that portion of the United
States Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Trust Agreement" means that certain Trust Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Participant and First Security Bank, National Association, in its
individual capacity, as originally executed or as modified, amended or
supplemented pursuant to the applicable provisions thereof, including,
without limitation, supplementation thereof by one or more Trust
Supplements entered into pursuant to the applicable provisions thereof.
"Trust Agreement and Indenture Supplement" or "Trust
Supplement" means a supplement to the Trust Agreement and the Trust
Indenture, substantially in the form of Exhibit A to the Trust Indenture,
which shall particularly describe the Aircraft, and any Replacement
Airframe and Replacement Engine included in the property of the Owner
Trustee covered by the Trust Agreement.
"Trust Estate" means all estate, right, title and interest
of the Owner Trustee in and to the Aircraft, the Lease, any Lease
Supplement, the Purchase Agreement, the Purchase Agreement Assignment, the
Bill of Sale and the FAA Bill of Sale, including, without limitation, all
amounts of Basic Rent and Supplemental Rent including without limitation
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee, for its own account or in its individual
capacity, the Owner Participant, the Loan Participants or the Indenture
Trustee) and requisition, indemnity or other payments of any kind for or
with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee, in its
individual capacity, or to the Loan Participants or any other holder of a
Equipment Note, or to any of their respective directors, officers,
employees, servants and agents, pursuant to Section 6 of the Participation
Agreement). Notwithstanding the foregoing, "Trust Estate" shall not include
any Excluded Payments.
"Trust Indenture" means that certain Trust Indenture and
Security Agreement (US Airways, Inc. Trust No. N___U_), dated as of the
date of the Lease, between Lessor and the Indenture Trustee, as it may from
time to time be supplemented or amended as therein provided, including
supplementing by the Trust Agreement and Indenture Supplement pursuant to
the Trust Indenture.
"Trust Indenture Estate" means all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in
the Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriters" means Salomon Smith Barney Inc., Chase
Securities Inc., Credit Lyonnais Securities (USA) Inc. and Credit Suisse
First Boston Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to
which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the Transportation Code, 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. Person" means any Person that qualifies as a "United
States person" under Section 7701(a)(30) of the Code.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Lessee (or any
Sublessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Lessee (or any Sublessee)) and (ii) shall be
maintained by Lessee (or any Sublessee) in accordance with its normal
maintenance practices.
Form Definitions
N___U_
ANNEX A
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[FORM OF DEFINITIONS - DEFERRED EQUITY/
PREPAID - DEFERRED RENT STRUCTURE]
DEFINITIONS
-----------
(US Airways, Inc. Trust No. N___U_)
The following terms shall have the following meanings for
all purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a Pratt & Whitney
model PW 4168A or 4173 (or improved) type engine having not less than 500
cycles left before such engine's next scheduled shop visit or (ii) an
engine of the same or another manufacturer suitable for use on the Airframe
and having a value and utility equal to or greater than a Pratt & Whitney
model PW 4168A or 4173 type engine, assuming such engine is in the
condition required by the Lease.
"Acceptance Certificate" has the meaning specified for such
term in Section 4(a)(v) of the Participation Agreement.
"Actual Knowledge" means, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the
Corporate Trust Office of the Indenture Trustee, as the case may be, and
(ii) as it applies to the Owner Participant, actual knowledge of a vice
president or other higher officer of the Owner Participant having
responsibility for the transactions contemplated by the Operative
Documents.
"Additional Insured" means Lessor, in its individual
capacity and as owner of the Aircraft, the Indenture Trustee, the Owner
Participant, the Pass Through Trustee, the Liquidity Provider, the Policy
Provider, Lessee in its capacity as sublessor under any Sublease, and each
of their respective Affiliates, successors and permitted assigns, and the
respective directors, officers, employees and agents of the foregoing.
"Additional Parts" has the meaning specified for such term
in Section 8(c) of the Lease.
"Advance" has the meaning specified for such term in Section
3(g) of the Lease.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean 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.
"Aircraft" means the Airframe to be delivered and leased
under the Lease (or any airframe from time to time substituted for such
Airframe pursuant to Section 10(a) of the Lease) together with the two
Engines initially leased under the Lease (or any engine substituted for
either of such Engines pursuant to the terms of the Lease), in each case as
specified in the applicable Lease Supplement, whether or not any of such
initial or substituted Engines may from time to time be installed on such
initial or substituted Airframe or may be installed on any other airframe
or on any other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial Lease
Supplement, which aircraft shall be leased by Lessor to Lessee under the
Lease and under such Lease Supplement, and any aircraft (except Engines or
engines from time to time installed thereon) which may from time to time be
substituted for such aircraft (except Engines or engines from time to time
installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the
same shall be incorporated or installed in or attached to such aircraft
(except Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however,
that at such time as an aircraft (except Engines or engines from time to
time installed thereon) shall be deemed part of the property leased under
the Lease in substitution for the Airframe pursuant to the applicable
provisions of the Lease, the replaced Airframe shall cease to be an
Airframe under the Lease; provided further that the Airframe shall not
include Passenger Convenience Equipment.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
The Chase Manhattan Bank in New York, New York from time to time as its
base rate.
"Basic Rent" means, for the Basic Term, the rent payable for
the Aircraft pursuant to Section 3(b) of the Lease as adjusted as provided
in Section 3(c) of the Lease but subject always to the provisions of
Section 3(c)(v) of the Lease and, for any Renewal Term, Basic Rent
determined pursuant to Section 19 of the Lease.
"Basic Term" means the term for which the Aircraft is leased
pursuant to Section 3(a) of the Lease, commencing on the Delivery Date and
ending on the Basic Term Expiration Date.
"Basic Term Expiration Date" means , or such earlier date as
the Lease may be terminated in accordance with the provisions thereof.
"Bill of Sale" means a full warranty bill of sale covering
the Aircraft, executed by Lessee in favor of the Owner Trustee, dated the
Delivery Date, specifically referring to the Airframe and each Engine,
which Bill of Sale shall contain, among other things, a statement that such
Bill of Sale thereby conveys to the Owner Trustee good title to the
Airframe and each Engine described in such Bill of Sale, free and clear of
all liens, encumbrances and rights of others except Permitted Liens
described in Section 6(a)(xv) of the Participation Agreement.
"Burdensome Termination Event" means an event which shall be
deemed to have occurred if (A) one or more events have occurred which give
rise to an obligation on the part of Lessee to pay or indemnify any costs
or expenses under Sections 6(b) or 6(c) of the Participation Agreement or
under the Tax Indemnity Agreement if the aggregate amount of such indemnity
or other payments would exceed (as to future payments on a present value
basis discounted at the Debt Rate) 2.50% of Lessor's Cost or (B) Lessee
plans non-severable improvements to the Aircraft which (i) are necessary or
desirable in Lessee's sole discretion, (ii) are expected to cost in excess
of $2.5 million and (iii) the Owner Participant will not permit to be
financed under similar terms then available in the market for similar
transaction.
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in
New York, New York, Hartford, Connecticut, Pittsburgh, Pennsylvania or the
city and state where the office of the Owner Trustee is located.
"Cash Equivalents" means (i) direct obligations of the
United States of America and agencies guaranteed by the United States
government having a final maturity of ninety (90) days or less from date of
purchase thereof; (ii) certificates of deposit issued by, bankers'
acceptances of, or time deposits with, any bank, trust company or national
banking association incorporated under the laws of the United States of
America or one of the states thereof having combined capital and surplus
and retained earnings as of its last report of condition of at least
$500,000,000 and having a rating of Aa or better by Moody's Investors
Service, Inc. ("Moody's") or AA or better by Standard & Poor's Corporation
("S&P") and having a final maturity of ninety (90) days or less from date
of purchase thereof; and (iii) commercial paper of any holding company of a
bank, trust company or national banking association described in (ii) and
commercial paper of any corporation or finance company incorporated or
doing business under the laws of the United States of America or any state
thereof having a rating assigned to such commercial paper of A1 by S&P or
P1 by Moody's and having a final maturity of ninety (90) days or less from
the date of purchase thereof; provided, however, that the aggregate amount
at any one time so invested in certificates of deposit issued by any one
bank shall not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United
States holding a carrier operating certificate issued by the Secretary of
Transportation (or by the Administrator of the FAA acting under authority
delegated by the Secretary of Transportation) pursuant to Chapter 447 of
Title 49, United States Code, for aircraft capable of carrying ten or more
individuals or 6,000 pounds or more of cargo or that otherwise is certified
or registered to the extent required to fall within the purview of 11
U.S.C. Section 1110 or any analogous successor provision of the Bankruptcy
Code.
"Citizen of the United States" has the meaning specified for
such term in Section 40102(a)(15) of Title 49 of the United States Code or
any similar legislation of the United States of America enacted in
substitution or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve
Air Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class C Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Class G Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the
Participation Agreement of a Pass Through Trustee or of the Owner
Participant, as the case may be, to finance the Owner Trustee's payment of
Lessor's Cost for the Aircraft.
"Consent and Agreement" means, collectively, each Consent
and Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of
the Lease, executed by the Seller and the Manufacturer, respectively, as
the same may be amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof.
"Continuous Stay Period" has the meaning specified for such
term in Section 4.04(a) of the Trust Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103, Attention: Corporate Trust Administration, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Lessee, the Owner Trustee, the Loan Participants and each Note
Holder.
"Debt" means any liability for borrowed money, or any
liability for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments or for the deferred purchase
price of property, goods or services.
"Debt Rate" means, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in
Schedule I to the Trust Indenture.
"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 or
Lease Event of Default (excluding Lease Events of Default related to
Excluded Payments).
["Deferred Equity Amounts" has the meaning set forth in
Schedule IV of the Participation Agreement.]1
["Deferred Equity Dates" has the meaning set forth in Schedule
IV of the Participation Agreement.]2
"Delivery Date" means the date of the initial Lease
Supplement for the Aircraft, which date shall be the date the Aircraft is
leased by Lessor to Lessee and accepted by Lessee under the Lease.
"Delivery Notice" means the notice of delivery delivered
pursuant to Section 2(c) of the Participation Agreement.
"Depositary" means ABN AMRO Bank, N.V., acting through its
Chicago branch, as Class G Depositary and Class C Depositary under the
Deposit Agreements, or any successor thereto.
"Deposit Agreements" means, collectively, (i) that certain
Deposit Agreement (Class G), dated as of the Pass Through Trust Closing
Date, between First Security Bank, National Association, as escrow agent
under the Escrow Agreement referred to therein, and the Depositary and (ii)
that certain Deposit Agreement (Class C), dated as of the Pass Through
Trust Closing Date, between First Security Bank, National Association, as
escrow agent under the Escrow Agreement referred to therein, and the
Depositary.
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1 For deferred equity transactions only.
2 For deferred equity deals only.
"Depreciation Period" means the period commencing on the
Delivery Date and ending at the end of the calendar year during which the
seventh (7th) anniversary of the Delivery Date occurs, or such earlier date
as the Lease may be terminated in accordance with the provisions of the
Lease.
"Determination Date" has the meaning set forth in Section
10(a)(i) of the Lease.
"Dollars" and "$" mean the lawful currency of the United
States of America.
"EBO Amount" means the applicable amount for the relevant
EBO Date set forth on Exhibit D to the Lease (as such Exhibit D may be
adjusted from time to time as provided in Section 3(c) of the Lease or as
expressly provided in any Operative Document).
"EBO Date" means the applicable date set forth on Exhibit D
to the Lease.
"Enforcement Date" has the meaning specified for such term
in Section 4.03 of the Trust Indenture.
"Engine" means (i) each of the two Pratt & Whitney type
engines listed by manufacturer's serial number in the initial Lease
Supplement, whether or not from time to time thereafter installed on the
Airframe or installed on any other airframe or on any other aircraft; and
(ii) any Acceptable Alternate Engine that may from time to time be
substituted, pursuant to the terms of the Lease, for either of such two
engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed therefrom so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such Engine; provided,
however, that at such time as an engine shall be deemed part of the
property leased under the Lease in substitution for an Engine pursuant to
the applicable provisions of the Lease, the replaced Engine shall cease to
be an Engine under the Lease. The term "Engines" means, as of any date of
determination, all Engines then leased under the Lease.
"Equipment Note Register" has the meaning specified for such
term in Section 2.07 of the Indenture.
"Equipment Note Registrar" has the meaning specified for
such term in Section 2.07 of the Indenture.
"Equipment Notes" means and include any Equipment Notes
issued under the Trust Indenture, and issued in exchange therefor or
replacement thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Escrow Agreements" means, collectively, (i) that certain
Escrow and Paying Agent Agreement (Class G), dated as of the Pass Through
Trust Closing Date, among First Security Bank, National Association, as
escrow agent, the Underwriters, the Pass Through Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, as paying
agent thereunder and (ii) that certain Escrow and Paying Agent Agreement
(Class C), dated as of the Pass Through Trust Closing Date, among First
Security Bank, National Association, as escrow agent, the Underwriters, the
Pass Through Trustee, and State Street Bank and Trust Company of
Connecticut, National Association, as paying agent thereunder.
"Event of Default" (i) when such term is used in or with
respect to the Lease has the meaning specified for such term in Section 14
of the Lease and (ii) when such term is used in or with respect to the
Trust Indenture has the meaning specified for such term in Section 4.02 of
the Trust Indenture.
"Event of Loss" means, with respect to the Aircraft,
Airframe or any Engine, any of the following events with respect to such
property: (i) the loss of such property or of the use thereof due to the
destruction of or damage to such property which renders repair uneconomic
or which renders such property permanently unfit for normal use by Lessee
(or any Sublessee) for any reason whatsoever; (ii) any damage to such
property which results in an insurance settlement with respect to such
property on the basis of a total loss, or a constructive or compromised
total loss; (iii) the theft or disappearance of such property for a period
in excess of one hundred eighty (180) days or, if earlier, the expiration
of the Term; (iv) the requisition for use of such property by any
governmental authority (other than a requisition for use by the United
States Government or any government of registry of the Aircraft or any
agency or instrumentality thereof) that shall have resulted in the loss of
possession of such property by Lessee (or any Sublessee) for a period in
excess of one hundred eighty (180) consecutive days or, if earlier, the
expiration of the Term; (v) the requisition for use by the United States
Government or any government of registry of the Aircraft or any
instrumentality or agency thereof, which shall have occurred during the
Basic Term (or any Renewal Term) and shall have continued for a period of
thirty (30) days beyond the Term, provided, however, that no Event of Loss
pursuant to this clause (v) shall exist if Lessor shall have furnished to
Lessee the written notice specified in Section 10(d) of the Lease; (vi)
condemnation, confiscation, requisition or taking of title of the Aircraft
or the Airframe for more than thirty (30) days, or if earlier, the
expiration of the Term; (vii) as a result of any law, rule, regulation,
order or other action by the Federal Aviation Administration or other
governmental body of the government of registry of the Aircraft having
jurisdiction, the use of such property in the normal course of the business
of air transportation shall have been prohibited for a period of one
hundred eighty (180) consecutive days, unless Lessee (or Sublessee) shall
have undertaken and shall be diligently carrying forward all steps which
are necessary or desirable to permit the normal use of such property by
Lessee (or such Sublessee), but in any event an "Event of Loss" shall occur
if such "grounding" extends for a period of more than three hundred sixty
(360) days (or, if earlier, the expiration of the Term); provided that no
Event of Loss shall be deemed to occur if such "grounding" is applicable to
Lessee's entire fleet of A330 aircraft and Lessee, prior to the expiration
of one year from the prohibition of such use, shall have conformed at least
one such aircraft in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of
the same in such jurisdiction and shall be diligently carrying forward, on
a non-discriminatory basis, all steps which are necessary or desirable to
permit the normal use of the Aircraft by Lessee (or such Sublessee), but in
any event an "Event of Loss" shall be deemed to have occurred if such use
shall have been prohibited for a period of two consecutive years or such
use shall be prohibited at the expiration of the Term; and (viii) with
respect to an Engine only, any divestiture of title to or interest in an
Engine or any event with respect to an Engine that is deemed to be an Event
of Loss with respect to such Engine pursuant to Section 7(b) of the Lease.
An Event of Loss with respect to the Aircraft shall be deemed to have
occurred if an Event of Loss occurs with respect to the Airframe.
"Excluded Payments" means (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner
Trustee in its individual capacity, their respective Affiliates, successors
and permitted assigns and their directors, officers, employees, servants
and agents (collectively, the "Owner Indemnitees") pursuant to Sections
6(b), 6(c), 15 or 16 of the Participation Agreement, (ii) proceeds of
public liability insurance in respect of the Aircraft payable as a result
of insurance claims made, or losses suffered, by the Owner Trustee or the
Indenture Trustee in their respective individual capacities or by any of
the Owner Indemnitees, (iii) proceeds of insurance maintained with respect
to the Aircraft by the Owner Participant (whether directly or through the
Owner Trustee) or any other Owner Indemnitee and permitted under Section 11
of the Lease in Exhibit H thereto, (iv) all payments required to be made
under the Tax Indemnity Agreement by Lessee and all payments of
Supplemental Rent by Lessee in respect of any amounts payable under the Tax
Indemnity Agreement, (v) fees payable to the Owner Trustee or the Indenture
Trustee, (vi) provided that the Equipment Notes shall have been duly
assumed by Lessee pursuant to Section 2.13 of the Trust Indenture, the
amounts payable to the Owner Trustee pursuant to Section 19(b) of the Lease
plus all reasonable expenses incurred by the Owner Trustee and the Owner
Participant in connection with such assumption, as applicable, (vii)
interest accrued on any of the above and (viii) any right to enforce the
payment of any amount described in clauses (i) through (vii) above
(provided the rights referred to in this clause (viii) shall not be deemed
to include the exercise of any remedies provided for in the Lease other
than the right to sue for specific performance of any covenant or to make
such payment or to sue for damages in respect of the breach of any such
covenant) and the right to declare an Event of Default in respect of any of
the foregoing amounts.
"Expenses" means 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 reasonable costs of investigation).
"Fair Market Renewal Term" has the meaning specified for
such term in Section 19(a)(2) of the Lease.
"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 Federal
Aviation Administration), executed by Lessee in favor of the Owner Trustee
and dated the Delivery Date.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all times
be 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, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Fixed Renewal Term" has the meaning specified for such term
in Section 19(a)(1) of the Lease.
"Foreign Air Carrier" means any air carrier which is not a
U.S. Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"French Pledge Agreement" means the French Pledge Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Trustee and the Indenture Trustee, as the same may be amended,
supplemented or modified from time to time.
"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 Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Owner Trustee, in its individual
capacity and as trustee under the Trust Agreement, (ii) the Indenture
Trustee, (iii) the Owner Participant, (iv) the Trust Estate, (v) the Loan
Participants and each other Note Holder, (vi) the Subordination Agent,
(vii) the Liquidity Provider, (viii) the Policy Provider, (ix) the Pass
Through Trustees, (x) each Affiliate of the Persons described in clauses
(i) through (iv), inclusive, (xi) each Affiliate of the Persons described
in clauses (vi), (vii), (viii) and (ix), (xii) the respective directors,
officers, employees, agents and servants of each of the Persons described
in clauses (i) through (ix), inclusive, (xiii) the successors
and permitted assigns of the Persons described in clauses (i) through (iv),
inclusive, and (xiv) the successors and permitted assigns of the Persons
described in clauses (v), (vi), (vii), (viii) and (ix).
"Indemnity Agreement" means that certain Indemnity
Agreement, dated as of the Pass Through Trust Closing Date, between the
Depositary and Lessee.
"Indenture Agreements" means the Participation Agreement,
the Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Bills of Sale and any other contract, agreement
or instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Event of Default" has the meaning given the term
"Event of Default" in the Trust Indenture.
"Indenture Excess Amount" has the meaning specified for such
term in Section 2.03(b) of the Trust Indenture.
"Indenture Indemnitees" means (i) State Street and the
Indenture Trustee, (ii) each separate or additional trustee appointed
pursuant to the Trust Indenture, (iii) the Subordination Agent, (iv) the
Liquidity Provider, (v) the Policy Provider, (vi) each Pass Through Trustee
and (vii) each of the respective directors, officers, employees, agents and
servants of each of the Persons described in clauses (i) through (vi),
inclusive.
"Indenture Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, not in its individual capacity, but solely as Indenture
Trustee, and any entity which may from time to time be acting as indenture
trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation
Agreement, the Trust Indenture and the French Pledge Agreement and any
other agreements between the Indenture Trustee and any other party to the
Participation Agreement relating to the Transactions, delivered on the
Delivery Date.
"Indenture Trustee Event" means either (i) the Equipment
Notes shall have become due and payable pursuant to Section 4.04(b) of the
Trust Indenture, (ii) the Indenture Trustee has taken action or notified
Owner Trustee that it intends to take action to foreclose the Lien of the
Trust Indenture or otherwise commence the exercise of any significant
remedy under the Trust Indenture or the Lease or (iii) in the event of
a reorganization proceeding involving Lessee under Chapter 11 of the
Bankruptcy Code, (A) the trustee in such proceeding or Lessee not assuming
or agreeing to perform its obligations under the Lease, as contemplated
under Section 1110, during the 60-day period under Section 1110(a)(1)(A) of
the Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) or (B) at any time after agreeing to
perform or assuming such obligations, such trustee or Lessee ceasing to
perform such obligations with the result that the Continuous Stay Period
comes to an end.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft or the administration of the Trust Estate pursuant
to the Trust Indenture, (B) acts of the Indenture Trustee not permitted by,
or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer
of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV
or V of the Trust Indenture, or a transfer of the Aircraft pursuant to
Section 15 of the Lease while an Event of Default is continuing and prior
to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
["Initial Rent Payment Date" means ________, ____]3
-------------------------
"Insurance Brokers" has the meaning specified for such term
in Exhibit H to the Lease.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the Pass Through Trust Closing Date, among the Pass
Through Trustees, the Liquidity Provider, the Policy Provider and the
Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
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.
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3 For deferred equity deals only.
"Lease" means that certain Lease Agreement (US Airways, Inc.
Trust No. N___U_), dated as of _________ __, ____, entered into by the
Owner Trustee and Lessee concurrently with the execution and delivery of
the Trust Indenture, as said Lease Agreement has been, or may from time to
time be, supplemented or amended, or the terms thereof waived or modified,
to the extent permitted by, and in accordance with, the terms of the Trust
Indenture. The term "Lease" shall also include each Lease Supplement from
time to time entered into pursuant to the terms of the Lease.
"Lease Default" means any event which with the giving of
notice or the lapse of time or both would become a Lease Event of Default.
"Lease Event of Default" means an "Event of Default" as
defined in Section 14 of the Lease.
"Lease Period" means (i) with respect to the Basic Term the
"Lease Periods" identified on Exhibit B-3 to the Lease and (ii) with
respect to any Renewal Term, each of the consecutive periods throughout
such Renewal Term ending on a Rent Payment Date, the first such period
commencing on and including the first day of such Renewal.
"Lease Supplement" means a Lease Supplement, substantially
in the form of Exhibit A to the Lease, to be entered into between Lessor
and Lessee on the Delivery Date for the purpose of leasing the Aircraft
under and pursuant to the terms of the Lease, and any subsequent Lease
Supplement entered into in accordance with the terms of the Lease.
"Lessee" means US Airways, Inc., a Delaware corporation.
"Lessee Documents" means the Participation Agreement, the
Lease, the Lease Supplement covering the Aircraft, the Purchase Agreement
(insofar as it relates to the Aircraft), the FAA Bill of Sale, the Bill of
Sale, the Purchase Agreement Assignment, the Tax Indemnity Agreement and
each other agreement between the Lessee and any other party to the Lease
delivered on the Delivery Date.
"Lessor" means First Security Bank, National Association,
not in its individual capacity, but solely as Owner Trustee, or any of its
successors and permitted assigns acting as lessor under the Lease.
"Lessor Liens" means any Lien or disposition of title or
interest arising as a result of (i) claims against Lessor, First Security
Bank, National Association, in its individual capacity, or the Owner
Participant not related to the transactions contemplated by the Operative
Documents, (ii) any act or omission of the Owner Participant, Lessor, or
First Security Bank, National Association, in its individual capacity,
which is not related to the transactions contemplated by the Operative
Documents or is in violation of any of the terms of the Operative
Documents, (iii) claims against the Owner Participant, Lessor, or First
Security Bank, National Association, in its individual capacity, with
respect to Taxes or Expenses against which Lessee is not required to
indemnify the Owner Participant, Lessor or First Security Bank, National
Association, in its individual capacity, pursuant to Section 6 of the
Participation Agreement or (iv) claims against Lessor or the Owner
Participant arising out of any transfer by Lessor or the Owner Participant
of all or any portion of the respective interests of Lessor or the Owner
Participant in the Aircraft, the Trust Estate or the Operative Documents
other than the transfer of possession of the Aircraft by Lessor pursuant to
the Lease, the transfer pursuant to the Trust Indenture or a transfer of
the Aircraft pursuant to Section 9, 10 , 19 or 20 of the Lease or pursuant
to the exercise of the remedies set forth in Section 15 of the Lease.
"Lessor's Cost" for the Aircraft means the amount
denominated as such in Exhibit B-4 to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the two Revolving Credit
Agreements, each dated as of the Pass Through Trust Closing Date, between
the Subordination Agent, as borrower, and the Liquidity Provider, and any
replacement thereof, in each case as the same may be amended, modified or
supplemented.
"Liquidity Provider" means Bayerische Landesbank
Girozentrale, as Class G Liquidity Provider and Class C Liquidity Provider
under the Liquidity Facilities, or any successor thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from
acts or claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Loss Payment Date" has the meaning specified for such term
in Section 10(a) of the Lease.
"Majority in Interest of Note Holders" as of a particular
date of determination means the holders of at least a majority in aggregate
unpaid principal amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by the Owner Trustee or the Owner
Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by the Owner Trustee or the
Owner Participant) or Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Equipment
Note, the amount (as determined by an independent investment banker
selected by Lessee and reasonably acceptable to the Indenture Trustee and
the Owner Participant) by which (a) the present value of the remaining
scheduled payments of principal and interest from the redemption date to
maturity of such Equipment Note computed by discounting each such payment
on a semiannual basis from its respective Payment Date (assuming a 360- day
year of twelve 30-day months) using a discount rate equal to the Treasury
Yield exceeds (b) the outstanding principal amount of such Equipment Note
plus accrued interest. For purposes of determining the Make-Whole Amount,
"Treasury Yield" means, at the time of determination, the interest rate
(expressed as a semiannual equivalent and 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 and trading in the public securities market 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 and (B) the other maturing as close as possible
to, but later than, the Average Life Date, 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 is reported on
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 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 redemption date. "Average Life Date" means, for
each Equipment Note to be redeemed, the date which follows the redemption
date by a period equal to the Remaining Weighted Average Life at the
redemption date of such Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term
in Section 3.03 of the Trust Indenture.
"Net Economic Return" has the meaning specified for such
term in paragraph 2 of Exhibit E to the Lease.
"Net Present Value of Rents" means the net present value, as
of the date of calculation, of Basic Rent set forth in Exhibit B-2 to the
Lease, discounted at an annual interest rate of ten percent (10%) on a
semi-annual basis.
"New Debt" has the meaning specified for such term in
Section 16(a) of the Participation Agreement.
"Non-U.S. Person" means any Person other than a U.S. Person.
"Note Holder" means any holder from time to time of one or
more Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of the Pass Through Trust Closing Date among Lessee, the Pass
Through Trustee for the Class G and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company of Connecticut, National
Association, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Operative Documents" means, collectively, the Participation
Agreement, the Lease, the Trust Indenture, the Trust Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by the
Participants and Lessee, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the
Equipment Notes, the Bill of Sale, the FAA Bill of Sale, the French Pledge
Agreement, the Purchase Agreement (insofar as it relates to the Aircraft),
the Purchase Agreement Assignment and the Consent and Agreement (each, an
"Operative Document").
"Operative Indentures" means each of the indentures under
which notes have been issued and purchased by the Pass Through Trustees.
"Owner Indemnitee" has the meaning specified for such term
in the definition of Excluded Payments.
"Owner Participant" means ___________________, a
[_____________] corporation, so long as such party shall have any interest
in the Trust Estate, and transferees thereof as permitted by Section 7(k)
of the Participation Agreement and Section 8.01 of the Trust Agreement.
"Owner Participant Documents" means the Participation
Agreement, the Trust Agreement, and the Tax Indemnity Agreement and each
other agreement between the respective parties thereto relating to the
subject matter thereof, delivered on the Delivery Date.
"Owner Trustee" means First Security Bank, National
Association, not in its individual capacity but solely as owner trustee,
and any entity appointed as successor Owner Trustee pursuant to Section
9.01 of the Trust Agreement, and references to a predecessor Owner Trustee
in its individual capacity by name in the Operative Documents shall include
such successor Owner Trustee in its individual capacity from and after such
succession.
"Owner Trustee Documents" means the Participation Agreement,
the Trust Agreement, the Trust Supplement covering the Aircraft, the Lease,
the Lease Supplement covering the Aircraft, the Purchase Agreement
Assignment, the French Pledge Agreement, the Trust Indenture and the
Equipment Notes and each other agreement between the respective parties
thereto relating to the subject matter thereof, delivered on the Delivery
Date.
"Owner Trustee's pro rata share" has the meaning specified
for such term in the Trust Indenture.
"Participants" means the Loan Participants and the Owner
Participant, collectively (each individually, a "Participant").
"Participation Agreement" means that certain Participation
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the dated of the
Lease, among the Owner Trustee, the Subordination Agent, the Indenture
Trustee, Lessee, the Owner Participant and the Pass Through Trustee, as the
same may from time to time be supplemented or further amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance
with, the terms thereof.
"Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature (other than (a) complete Engines or engines, (b) any items leased by
Lessee from a third party (other than Lessor) and (c) cargo containers)
which may from time to time be incorporated or installed in or attached to
the Airframe or any Engine or so long as title thereto shall remain vested
in Lessor in accordance with Section 8 of the Lease after removal
therefrom; provided that "Parts" shall not include Passenger Convenience
Equipment.
"Pass Through Certificates" means the pass through
certificates to be issued by the Pass Through Trustee in connection with
the Transactions.
"Pass Through Documents" means the Participation Agreement,
the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Escrow Agreements, the Liquidity Facilities, the Policy,
the Policy Provider Agreement, and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination
Agent, the Liquidity Provider, the Policy Provider and the Pass Through
Trustee, (ii) each Affiliate of a Person described in the preceding clause
(i), (iii) the respective directors, officers, employees, agents and
servants of each of the Persons described in the preceding clauses (i) and
(ii) and (iv) the successors and permitted assigns of the Persons described
in the preceding clauses (i), (ii) and (iii).
"Pass Through Trust" means, collectively, the two separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreement, to facilitate
certain of the transactions contemplated by the Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the two separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means March __, 2000.
"Pass Through Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, in its capacity as trustee under each Pass Through Trust
Agreement, and each other Person that may from time to time be acting as
successor trustee under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components
or systems installed on or affixed to the Airframe that are used to provide
individual telecommunications to passengers aboard the Aircraft.
"Past Due Rate" has the meaning specified for such term in
Exhibit B to the Lease.
"Payment Date" means each February 20 and August 20,
commencing on ________ 20, ____ (or, if any such day is not a Business Day,
the immediately succeeding Business Day) until the Equipment Notes have
been paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 6 of the Lease.
"Permitted Sublessee" means any entity domiciled in a
country listed in Exhibit F to the Lease as in effect from time to time and
as may be modified in accordance with Section 7(d) of the Participation
Agreement.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the financial guarantee insurance policy,
dated as of the Pass Through Trust Closing Date, issued by the Policy
Provider in favor of the Subordination Agent for the benefit of the Class G
Pass Through Trust.
"Policy Provider" means MBIA Insurance Corporation, or any
successor thereto.
"Policy Provider Agreement" means the Insurance and
Indemnity Agreement, dated as of the Pass Through Trust Closing Date,
between the Policy Provider and the Subordination Agent.
"Principal 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.
"Purchase Agreement" means the Purchase Agreement dated as
of November 24, 1998 between US Airways Group, Inc. and the Seller
(including all exhibits thereto, together with all letter agreements
entered into that by their terms constitute part of any such Purchase
Agreement), as the same may be amended or otherwise supplemented from time
to time, as the same has been assigned to Lessee, relating to the purchase
by Lessee of the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between Lessee and Lessor, as the same may be amended, supplemented
or modified from time to time, with a form of Consent and Agreement to be
executed by the Seller attached thereto.
"Purchase Option Date" has the meaning specified for such
term in Section 19(b) of the Lease.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section
2.08 of the Trust Indenture.
"Qualified Owner Participant" means a Person (x) that is not
an Affiliate of Lessee and (y) that has a tangible net worth, calculated in
accordance with generally accepted accounting principles, greater than
$50,000,000 or such other amount as is acceptable to Lessee, or (z) whose
obligations under the Operative Documents are unconditionally guaranteed by
a Person meeting the requirements of clauses (x) and (y).
"Refinancing Certificate" has the meaning specified for such
term in Section 16(a) of the Participation Agreement.
"Refinancing Date" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Refinancing Information" has the meaning specified for such
term in Section 16(a) of the Participation Agreement.
"Remaining Weighted Average Life" of an Equipment Note, at
the redemption date of such Equipment Note, means the number of days equal
to the quotient obtained by dividing (a) the sum of the products obtained
by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such Equipment
Note, by (ii) the number of days from and including the redemption date to
but excluding the scheduled payment date of such principal installment; by
(b) the then unpaid principal amount of such Equipment Note.
"Renewal Term" means any Fixed Renewal Term or Fair Market
Renewal Term.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Rent Payment Date" means ____________ 20, ____, each
succeeding February 20 and August 20 in the Term, the Basic Term Expiration
Date, and the last day of any Renewal Term.
"Replacement Airframe" means any airframe substituted for
the Airframe pursuant to Section 10 of the Lease.
"Replacement Engine" means any engine substituted for an
Engine pursuant to Sections 9(c) and 10 of the Lease.
"Responsible Officer" means with respect to the Owner
Trustee, a responsible officer in the Trust Office of the Owner Trustee
(including, without limitation, any authorized officer in the Trust Office
of the Owner Trustee), and with respect to the Indenture Trustee, a
responsible officer in the Corporate Trust Office of the Indenture Trustee.
"Scheduled Delivery Date" has the meaning specified for such
term in Section 2(f) of the Participation Agreement.
"Section 1110 Period" has the meaning specified for such
term in Section 4.04(a) of the Trust Indenture.
"Secured Obligations" has the meaning specified for such
term in the Granting Clause of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" means AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Trust Indenture.
"Series C" or "Series C Equipment Notes" means Equipment
Notes issued and designated as "Series C" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series C."
"Series G" or "Series G Equipment Notes" means Equipment
Notes issued and designated as "Series G" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series G."
"Significant Expenditure" means an expenditure or planned
expenditure of the type described in clause (B) of the definition of
Burdensome Termination Event.
"State Street" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its capacity as Indenture Trustee under the Trust Indenture, but in its
individual capacity.
"Sublease" means any sublease permitted by the terms of
Section 7(b)(x) of the Lease.
"Sublessee" means any Person for so long, but only so long,
as such Person is in possession of the Airframe and/or any Engine pursuant
to the terms of a Sublease which is then in effect pursuant to Section
7(b)(x) of the Lease.
"Subordination Agent" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, as subordination agent under the Intercreditor Agreement, or
any successor thereto.
"Subsequent Owner Participant" means any entity to which the
Owner Participant or any transferee from the Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest originally
held by the Owner Participant in the Trust Agreement, the Trust Estate and
the Participation Agreement, to the extent permitted by Section 8.01 of the
Trust Agreement and Section 7(k) of the Participation Agreement.
"Supplemental Rent" means, without duplication, (a) all
amounts, liabilities, indemnities and obligations (other than Basic Rent)
that Lessee assumes or becomes obligated to or agrees to pay under any
Lessee Document to or on behalf of Lessor or any other Person, including,
without limitation, payments of Termination Value, any amounts in respect
of a purchase price payable pursuant to Section 19(c) or 20 of the Lease
and payments of indemnities under Section 6 of the Participation Agreement,
but excluding any amount as to which Lessee is obligated to pay a pro rata
share pursuant to clause (d) or (e) of this definition, (b) (i) to the
extent not payable (whether or not in fact paid) under Section 7(a) of the
Note Purchase Agreement (as originally in effect or amended with the
consent of the Owner Participant), an amount or amounts equal to the fees
payable to (x) 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 G Equipment Notes
and Series C Equipment Notes and the denominator of which shall be the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
and "Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures and (y) the
Policy Provider under the Policy Fee Letter (as defined in the Policy
Provider Agreement) multiplied by a fraction the numerator of which shall
be the sum of the then outstanding aggregate principal amount of the Series
G Equipment Notes and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued under
the Operative Indentures; (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) if any payment default shall have occurred and
be continuing with respect to interest on any Series G Equipment Note or
Series C Equipment Note, (x) the excess, if any, of (1) an amount equal to
interest on any Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance payable under Section 3.07 of each Liquidity Facility
(or, in the case of the Series G Equipment Notes, if the Policy Provider
has made a payment equivalent to such an Advance, as would have been
payable under Section 3.07 of the applicable Liquidity Facility in respect
of the Class G Pass Through Certificates had such Advance been made) over
(2) the sum of Investment Earnings from any Final Advance plus any amount
of interest at the Past Due Rate actually payable (whether or not in fact
paid) by Lessee in respect of the overdue scheduled interest on the
Equipment Notes in respect of which such Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance was made by the applicable
Liquidity Provider (or, in the case of the Series G Equipment Notes, an
equivalent payment was made by the Policy Provider) multiplied by (y) a
fraction the numerator of which shall be the then aggregate overdue amounts
of interest on the Series G Equipment Notes and Series C 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 G
Equipment Notes" and "Series C Equipment Notes" (in each case as defined in
the relevant Operative Indenture) issued under the Operative Indentures
(other than interest becoming due and payable solely as a result of
acceleration of any such "Equipment Notes," (in each case as defined in the
relevant Operative Indenture) issued under the Operative Indentures); and
(v) Lessee's pro rata share of 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
(i), (ii), (iii) or (iv) above, (c) Lessee's pro rata share of all
compensation and reimbursement of expenses, disbursements and advances
payable by Lessee under the Pass Through Trust Agreements, (d) Lessee's pro
rata share of (I) 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 (II) all amounts for which the Policy
Provider is entitled to reimbursement under Section 3.7(i) of the
Intercreditor Agreement and (e) Lessee's pro rata share of any amount
payable under Section 6(c) of the Participation Agreement to any Pass
Through Indemnitee to the extent such amount relates to, results from or
arises out of or in connection with (i) the Pass Through Trust Agreement or
the enforcement of any of the terms of any Pass Through Document, (ii) the
offer, sale, or delivery of the Pass Through Certificates or any interest
therein or represented thereby or (iii) 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 Lessee under any Pass Through Document
or the falsity of any representation or warranty of Lessee in any Pass
Through Document. As used herein, "Lessee'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" (in
each case as defined in the relevant Operative Indenture) issued under the
Operative Indentures. For purposes of this definition, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility. For the avoidance of doubt, it is
understood and agreed that Supplemental Rent includes, without limitation,
any amounts payable under the third paragraph of Section 2.02 of the Trust
Indenture.
"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement (US Airways, Inc. Trust No. N___U_), dated as of the date of the
Lease, between the Owner Participant and Lessee, as originally executed or
as modified, amended or supplemented pursuant to the applicable provisions
thereof.
"Taxes" means any and all fees (including, without
limitation, license, recording, documentation and registration fees), taxes
(including, without limitation, income, gross receipts, sales, rental, use,
turnover, value added, property (tangible and intangible), excise and stamp
taxes), license, levies, imposts, duties, recording charges and assessments
of any kind whatsoever that are in the nature of taxes or other
governmental charges including interest, penalties and additions to tax
(each, individually a "Tax").
"Term" means the Basic Term and, if actually entered into,
any Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a)
of the Lease.
"Termination Value" with respect to the Aircraft (a) as of
any date during the Basic Term means, but subject always to the provisions
of Section 3(c)(v) of the Lease, the amount determined by multiplying
Lessor's Cost for the Aircraft by the percentage specified in Exhibit C to
the Lease under the caption "Total Termination Payment" opposite the
Termination Value Date with respect to which the amount is determined (as
such Exhibit C may be adjusted from time to time as provided in Section
3(c) of the Lease and as expressly provided in any other Operative
Document) [(such Termination Value shall equal the sum of, and represent,
(i) a payment (or reduction) of Basic Rent in an amount equal to the "Basic
Rent Amount" set forth on Exhibit C to the Lease (which includes all
amounts of Basic Rent allocated to any period prior to the termination and
not yet paid and reduced by all amounts paid prior to the termination and
allocated to periods after the termination and (ii) a payment of the
"Termination Amount" set forth on Exhibit C to the Lease)] and (b) as of
any date during the Renewal Term, shall have the meaning set forth in
Section 19(a)(5) of the Lease.
"Termination Value Date" means each date set forth on
Exhibit C to the Lease under the caption "Termination Date."
"Transaction Expenses" means: all of the reasonable
out-of-pocket costs, fees and expenses incurred by Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Indenture
Trustee, the Liquidity Provider and the Policy Provider in connection with
the transactions contemplated by the Participation Agreement, the other
Operative Documents, the Pass Through Documents and the Underwriting
Agreement (except, in each case, as otherwise provided therein) including,
without limitation:
(a) the reasonable and actual fees, expenses and
disbursements of (A) Bingham Dana LLP, special counsel for the Pass Through
Trustee, the Subordination Agent and the Indenture Trustee, (B) Ray,
Quinney & Nebeker, special counsel for the Owner Trustee, (C) Milbank,
Tweed, Hadley & McCloy LLP, special counsel for the Underwriters and (D)
Crowe & Dunlevy, P.C., special counsel in Oklahoma City, Oklahoma;
(b) the initial fees and reasonable and actual
disbursements of the Owner Trustee under the Trust Agreement;
(c) the initial fee and reasonable and actual
disbursements of the Indenture Trustee under the Trust Indenture;
(d) the initial fees and expenses of the Liquidity
Provider, the Policy Provider, the Pass Through Trustee and the
Subordination Agent;
(e) underwriting fees and commissions;
(f) the fees and expenses with respect to the appraisal
of the Aircraft;
(g) the reasonable fees, expenses and disbursements of
_________________, special counsel to the Owner Participant, such fees not
to exceed the amount previously agreed to by the Owner Participant and
Lessee;
(h) the fees, expenses and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP and its affiliates, special counsel for
Lessee;
(i) the costs of filing and recording documents with
the FAA and filing Uniform Commercial Code statements in the United States;
(j) the reasonable fees, expenses and disbursements
of special counsel to each of the Liquidity Provider and the Policy
Provider;
(k) the expenses of the Depositary payable under
Section 10(a) of each Indemnity Agreement; and
(l) the reasonable fees, expenses and disbursements
of special counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transferee" has the meaning specified for such term in
Section 7(k) of the Participation Agreement.
"Transportation Code" means that portion of the United
States Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Trust Agreement" means that certain Trust Agreement (US
Airways, Inc. Trust No. N___U_), dated as of the date of the Lease, between
the Owner Participant and First Security Bank, National Association, in its
individual capacity, as originally executed or as modified, amended or
supplemented pursuant to the applicable provisions thereof, including,
without limitation, supplementation thereof by one or more Trust
Supplements entered into pursuant to the applicable provisions thereof.
"Trust Agreement and Indenture Supplement" or "Trust
Supplement" means a supplement to the Trust Agreement and the Trust
Indenture, substantially in the form of Exhibit A to the Trust Indenture,
which shall particularly describe the Aircraft, and any Replacement
Airframe and Replacement Engine included in the property of the Owner
Trustee covered by the Trust Agreement.
"Trust Estate" means all estate, right, title and interest
of the Owner Trustee in and to the Aircraft, the Lease, any Lease
Supplement, the Purchase Agreement, the Purchase Agreement Assignment, the
Bill of Sale and the FAA Bill of Sale, including, without limitation, all
amounts of Basic Rent and Supplemental Rent including without limitation
insurance proceeds (other than insurance proceeds payable to or for the
benefit of the Owner Trustee, for its own account or in its individual
capacity, the Owner Participant, the Loan Participants or the Indenture
Trustee) and requisition, indemnity or other payments of any kind for or
with respect to the Aircraft (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee, in its
individual capacity, or to the Loan Participants or any other holder of a
Equipment Note, or to any of their respective directors, officers,
employees, servants and agents, pursuant to Section 6 of the Participation
Agreement). Notwithstanding the foregoing, "Trust Estate" shall not include
any Excluded Payments.
"Trust Indenture" means that certain Trust Indenture and
Security Agreement (US Airways, Inc. Trust No. N___U_), dated as of the
date of the Lease, between Lessor and the Indenture Trustee, as it may from
time to time be supplemented or amended as therein provided, including
supplementing by the Trust Agreement and Indenture Supplement pursuant to
the Trust Indenture.
"Trust Indenture Estate" means all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in
the Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriters" means Salomon Smith Barney Inc., Chase
Securities Inc., Credit Lyonnais Securities (USA) Inc. and Credit Suisse
First Boston Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to
which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the Transportation Code, 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. Person" means any Person that qualifies as a "United
States person" under Section 7701(a)(30) of the Code.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Lessee (or any
Sublessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Lessee (or any Sublessee)) and (ii) shall be
maintained by Lessee (or any Sublessee) in accordance with its normal
maintenance practices.
Exhibit B-1
[FORM OF SASM&F (ILLINOIS)
OPINION FOR LEASED AIRCRAFT]
----------, ----
To Each Person Listed on
Schedule I Hereto
Re: US Airways, Inc. Trust No. N
----------------------------
Ladies and Gentlemen:
We have acted as special counsel to US Airways, Inc., a
Delaware corporation ("US Airways"), in connection with the execution and
delivery of (i) the Participation Agreement (US Airways, Inc. Trust No.
N______), dated as of __________, ____ (the "Participation Agreement"),
among US Airways, as Lessee, ____________, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association, a
national banking association, not in its individual capacity except as
otherwise provided therein, but solely as Pass Through Trustee, Indenture
Trustee and Subordination Agent, and First Security Bank, National
Association, a national banking association, not in its individual capacity
except as otherwise stated, but solely as Owner Trustee, relating to the
Aircraft described in the Lease Supplement (as defined below); (ii) the
Lease Agreement (US Airways, Inc. Trust No. N______), dated as of ___ __,
____, between the Owner Trustee, as Lessor, and US Airways, as Lessee (the
"Lease"); (iii) the Lease Supplement (US Airways, Inc. Trust No. N_______),
dated ______ ___, ____, between the Owner Trustee and US Airways (the
"Lease Supplement"); (iv) the Purchase Agreement Assignment, dated as of
______ ___, ____, between the Owner Trustee and US Airways (the "Purchase
Agreement Assignment"); (v) the warranty bill of sale, dated the date
hereof, executed by US Airways (the "Warranty Bill of Sale"); (vi) the FAA
Bill of Sale on Form 8050-1 dated the date hereof (the "FAA Bill of Sale");
(vii) the acceptance certificate dated the date hereof executed by US
Airways (the "Acceptance Certificate"); (viii) the Pass Through Trust
Agreement, dated as of _____________, 1999, between the Pass Through
Trustee and US Airways (the "Pass Through Trust Agreement"); and (ix) each
of the Pass Through Trust Supplements dated as of ________, ____
(collectively, the "Pass Through Trust Supplements"). This opinion is being
delivered at the request of US Airways and pursuant to Section 4(a)(xi) of
the Participation Agreement.
In our examination, we have assumed the genuineness of all
signatures, including indorsements, the legal capacity of natural persons,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all copies submitted to us as
telefacsimile, certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion, we have
relied solely upon statements, representations and warranties of US
Airways, the Owner Participant, the Owner Trustee, the Indenture Trustee,
the Subordination Agent, the Pass Through Trustee and their respective
officers and representatives, and others in the Operative Documents and of
public officials, including the facts and conclusions set forth in the
Company's Certificate described below, and we have made no independent
investigation or inquiry with respect to such factual matters.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(b) the Participation Agreement;
(d) the Lease;
(f) the Lease Supplement;
(h) the Purchase Agreement Assignment;
(j) the Trust Indenture and Security Agreement (US Airways,
Inc. Trust No. N______), dated as of ____ ___, ____ (the "Trust Indenture")
between First Security Bank, National Association, not in its individual
capacity, except as expressly stated therein, but solely as Owner Trustee,
and State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee;
(l) the Trust Agreement and Indenture Supplement (US Airways,
Inc. Trust No. N_____) dated ______, ____ (the "Trust Supplement") of First
Security Bank, National Association, as Owner Trustee, in respect of the
Trust Indenture;
(n) the Warranty Bill of Sale;
(p) the Tax Indemnity Agreement;
(r) the FAA Bill of Sale;
(t) the Acceptance Certificate;
(v) the Equipment Notes;
(x) the Pass Through Trust Agreement;
(z) each of the Pass Through Trust Supplements;
(ab) unfiled, but signed copies of financing statements
naming "First Security Bank, National Association, as Owner Trustee," as
debtor and "State Street Bank and Trust Company of Connecticut, as
Indenture Trustee" as secured party, which we understand will be filed
within ten (10) days of the transfer of the security interest in the
Offices of the Secretary of State of the State of New York (such filing
Office, the "New York Filing Office" and such financing Statements, the
"New York Financing Statement");
(ad) a certificate of US Airways, dated the date hereof, a
copy of which is attached as Exhibit A; and
(af) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.1
We express no opinion as to the laws of any jurisdiction
other than (i) the Applicable Laws of the State of New York and (ii) the
Applicable Laws of the United States of America. In this respect, we call
to your attention that certain of the Operative Documents are governed by
laws of jurisdictions other than those described above and we express no
opinion as to the effect of any such laws on the opinions expressed herein.
In addition, we express no opinion with respect to the Transportation Code
or the rules and regulations of the Federal Aviation Administration or the
effect thereof on the opinions herein stated.
- --------
1 For transactions involving subleases to Shuttle, include a reference
to Shuttle Sublease.
Capitalized terms not otherwise defined herein have the
meanings assigned thereto in Annex A to the Participation Agreement. The
documents referred to in (a) through (d), (g) through (h), (j), (l) and (m)
above shall hereinafter be referred to collectively as the "Transaction
Documents". The documents referred to in (e) and (f) above shall
hereinafter be referred to collectively as the "Indenture Documents."
"Applicable Laws" shall mean those laws, rules, regulations which, in our
experience, are normally applicable to transactions of the type
contemplated by the Transaction Documents, the Indenture Documents and the
Equipment Notes, without our having made any special investigation as to
the applicability of any special law, rule or regulation, and which are not
the subject of a specific opinion herein referring to a particular law or
laws. "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with,
any governmental authority pursuant to Applicable Laws. Unless otherwise
indicated, the "New York UCC" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York.
Based upon the foregoing, and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
3. Each of the Transaction Documents constitutes the valid
and binding obligation of US Airways enforceable against US Airways in
accordance with its terms under the laws of the State of New York. Each of
the Indenture Documents constitutes the valid and binding obligation of
each of the parties thereto, enforceable against each such party in
accordance with its terms under the laws of the State of New York.
5. Neither the execution and delivery by US Airways of the
Transaction Documents nor the compliance by US Airways with the terms and
provisions thereof will contravene any Applicable Law of the State of New
York or any Applicable Law of the United States of America.
7. Except for (a) the due and timely filing and, where
appropriate, recording of (i) the FAA Bill of Sale, (ii) the Trust
Agreement, (iii) the Lease (with the Lease Supplement covering the
Aircraft, the Indenture and the Trust Supplement covering the Aircraft
attached as exhibits) and (iv) the Trust Indenture (with the Trust
Supplement covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, (b) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act, (c) compliance with the
securities law of each applicable state and (d) filing of appropriate UCC
Financing Statements and continuation statements, no Governmental Approval,
which has not been obtained or taken and is not in full force and effect,
is required in connection with the execution, delivery or enforceability by
US Airways of any of the Transaction Documents.
9. No registration of US Airways or any of the Pass Through
Trusts under the Investment Company Act of 1940, as amended, is required.
11. The Equipment Notes, when issued to and acquired by the
Pass Through Trustee, will be valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with their
terms and the terms of the Trust Indenture, as supplemented by the Trust
Supplement, and will be entitled to the benefits of the Trust Indenture, as
supplemented by the Trust Supplement.
13. The provisions of the Trust Indenture, as supplemented
by the Trust Supplement, are effective to create, in favor of the Indenture
Trustee to secure the Secured Obligations, a valid security interest in the
Owner Trustee's rights in that portion of the collateral described therein
which is subject to Article 9 of the New York UCC (the "UCC Collateral").
15. If the Lease and any Lease Supplement constitute
"chattel paper" within the meaning of Section 9-105 of the New York UCC (as
to which we express no opinion) then the security interest of the Indenture
Trustee therein will be perfected under the New York UCC upon the Indenture
Trustee taking possession of each original counterpart thereof in the State
of New York.
17. The New York Financing Statement is in appropriate form
for filing in the New York Filing Office. To the extent that the New York
UCC governs the perfection of a security interest in the Owner Trustee's
rights in the UCC Collateral, as to which we express no opinion, the
security interest in favor of the Indenture Trustee in the UCC Collateral
described in the New York Financing Statement will be perfected upon filing
of the New York Financing Statement in the New York Filing Office.
Our opinions in paragraphs 6, 7 and 8 with respect to the
security interest of the Indenture Trustee are subject to the following
qualifications:
(b) We have assumed the Owner Trustee owns, or with respect
to after-acquired property will own, the UCC Collateral, and we express no
opinion as to the nature or extent of the Owner Trustee's rights in or
title to any of the UCC Collateral, and we note that with respect to
after-acquired property, the security interest will not attach until US
Airways acquires ownership thereof.
(d) Our opinions with respect to the validity and perfection
of the security interest of the Indenture Trustee is limited to Article 9
of the New York UCC, and such opinions do not address (i) laws of
jurisdictions other than New York, and of New York except for Article 9 of
the UCC, (ii) collateral of a type not subject to Article 9 of the
Applicable UCC, and (iii) what law governs perfection or priority of the
security interests granted in the collateral covered by this opinion.
(f) We call your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-103 with
respect to changes in the location of the collateral and the location of a
debtor; and Sections 9-307, 9-308 and 9-309 with respect to subsequent
purchasers of the collateral. In addition, actions taken by a secured party
(e.g., releasing or assigning the security interest, delivering possession
of the collateral to a debtor or another person and voluntarily
subordinating a security interest) may affect any security interest subject
to the UCC.
(h) We express no opinion with respect to the priority of
the security interest of the Indenture Trustee.
(j) We call to your attention that with respect to any goods
which is an accession to, or commingled or processed with other goods, the
security interest of the Indenture Trustee may be limited by Section 9-314
or 9-315 of the New York UCC.
(l) In the case of any instrument, chattel paper, account or
general intangible which is itself secured by other property, we express no
opinion with respect to the Indenture Trustee's rights in and to such
underlying property.
(n) In the case of chattel paper, accounts or general
intangibles, we call to your attention that the security interest of the
Indenture Trustee for the benefit of the Pass Through Trustee may be
subject to the rights of account debtors, claims and defenses of account
debtors and the terms of agreements with account debtors.
(p) In the case of goods, we express no opinion regarding
the security interest of the Indenture Trustee for the benefit of the Pass
Through Trustee in any goods which are (i) an accession to, or commingled
or processed with other goods to the extent that the security interest of
the Indenture Trustee for the benefit of the Pass Through Trustee is
limited by Section 9-314 or 9-315 of the UCC or (ii) subject to a
certificate of title or a document of title.
(r) We express no opinion regarding the security interest of
the Indenture Trustee for the benefit of the Pass Through Trustee in any
items which are subject to a statute, regulation or treaty of the United
States of America which provides for a national or international
registration or a national or international certificate of title for the
perfection of a security interest therein or which specifies a place of
filing different from the place specified in the UCC for filing to perfect
such security interest.
(t) We express no opinion regarding the security interest of
the Indenture Trustee for the benefit of the Pass Through Trustee in any of
the UCC Collateral consisting of claims against any government or
governmental agency (including without limitation the United States of
America or any state thereof or any agency or department of the United
States of America or any state thereof).
(v) We have assumed that if the Trust maintains any place of
business in the State of New York, then the Trust shall be deemed to do
business in more than one county in the State of New York.
19. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Estate under
the circumstances contemplated by the Participation Agreement to register
such beneficial interest under the Securities Act of 1933, as amended, or
to qualify the Trust Agreement or the Trust Indenture under the Trust
Indenture Act of 1939, as amended.
21. The Indenture Trustee acting in behalf of the holders of
the Equipment Notes will be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to the Aircraft if US Airways is a debtor in a
case under Chapter 11 of the Bankruptcy Code.
23. [US Airways, as lessor under the sublease to Shuttle, Inc.,
will be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the Aircraft if Shuttle, Inc. is a debtor in a case under
Chapter 11 of the Bankruptcy Code.]2
With respect to our opinion[s] in paragraph[s] 10 [and 11], we
note that a 1998 decision, Western Pacific Airlines, Inc. v. GATX (In re
Western Pacific Airlines, Inc.), 219 B.R. 305, on rehearing, 221 B.R. 1 (D.
Colo. 1998), appeal dismissed as moot, vacatur denied, Boullioun Aircraft
Holding Co., Inc. v. Smith Management (In re Western Pacific Airlines,
Inc.), 1999 WL 459469 (10th Cir. July 7, 1999), ruled that Section 1110
does not apply in a case after the trustee timely makes the agreement
specified in Section 1110(a)(1)(A) and timely cures defaults outstanding as
of the date of the Chapter 11 petition or that occur during the first sixty
days of the case, with the result, among others, that the ability of a
lessor to exercise remedies based on a default that occurs after the first
sixty days of the Chapter 11 case would be subject to the automatic stay.
We believe that this decision construes Section 1110 in a manner that is
inconsistent with both the language of Section 1110 and the legislative
history explaining the purpose and operation of Section 1110. Accordingly,
we believe that the decision is an incorrect interpretation of Section
1110.
In addition, with respect to our opinion[s] in paragraph[s]
10 [and 11], we have, with your consent, relied on the US Airways Opinion
(as defined below) to the effect that [each of] US Airways [and Shuttle,
Inc.] is a "citizen of the United States," as defined in Section 40102 of
Title 49 of the United States Code, and [each of US Airways and Shuttle,
Inc.] is the holder of an "air carrier operating certificate" issued by the
Secretary of Transportation (or by the Administrator of the FAA acting
under authority delegated by the Secretary of Transportation) pursuant to
Section 44705 (in Chapter 447) of the Transportation Code for aircraft
capable of carrying ten or more individuals or 6,000 pounds or more of
cargo. We have also assumed that where the Indenture Trustee is acting as
secured party, the security interest of the Indenture Trustee in the
Aircraft is perfected.
- --------
2 All bracketed language is for Aircraft subleased to US Airways
Shuttle.
Our opinions are subject to the following assumptions and
qualifications:
(b) enforcement of the Transaction Documents and the
Indenture Documents may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law);
(d) certain of the remedial provisions with respect to the
leased property including waivers with respect to the exercise of remedies
against the leased property contained in the Lease, may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect the
validity of the Lease, taken as a whole, and the Lease, taken as a whole,
together with applicable law, contains adequate provisions for the
practical realization of the benefits thereof;
(f) certain of the remedial provisions with respect to the
security including waivers with respect to the exercise of remedies against
the Trust Indenture Estate contained in the Trust Indenture, as
supplemented by the Trust Supplement, may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of
each of the Trust Indenture, as supplemented by the Trust Supplement, taken
as a whole, and the Trust Indenture, as supplemented by the Trust
Supplement, taken as a whole, together with applicable law, contains
adequate provisions for the practical realization of the security thereof;
(h) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party
(without in any way limiting other qualifications and assumptions made
herein, other than US Airways) to the Transaction Documents or the
Indenture Documents with any state, federal or other laws or regulations
applicable to it or (ii) the legal or regulatory status or the nature of
the business of any such party;
(j) we express no opinion as to the enforceability of any
rights to contribution or indemnification provided for in the Transaction
Documents or the Indenture Documents to the extent any such rights are
violative of the public policy (including, without limitation, the public
policy underlying any federal or state securities law, rule or regulation);
(l) we express no opinion as to any provision of any
Transaction Document or any Indenture Document that provides a penalty or
to the extent that it provides for an absolute and unconditional obligation
to perform such Transaction Document even though such Transaction Document
or Indenture Document is invalid or terminated or such performance would be
illegal; and
(n) with respect to our opinion that the New York choice of
law provision in the Transaction Documents and the Indenture Documents
which are expressly governed by New York law is enforceable, we rely upon,
among other things, the Act of July 19, 1984, Ch. 421, 1984 McKinney's
Sess. Laws of N.Y. 1406, (codified at N.Y. Gen. Oblig. Law ss.ss. 5-1401,
5-1402 (McKinney 1989) and N.Y. CPLR 327(b) (McKinney 1990) (the "Act"),
and our opinion is subject to the qualifications that such enforceability
(i) may be limited by public policy considerations of any jurisdiction,
other than the courts of the State of New York, in which enforcement of
such provisions, or of a judgement upon an agreement containing such
provisions, is sought, and (ii) as specified in the Act, does not apply to
the extent provided to the contrary in subsection two of Section 1-105 of
the Uniform Commercial Code for the State of New York.
In rendering the foregoing opinions, we have assumed, with
your consent, that:
(b) each of the Transaction Documents constitutes the legal,
valid and binding obligation of each party thereto (other than US Airways)
enforceable against each such party (other than US Airways) in accordance
with its terms;
(d) each of (i) the Owner Participant, (ii) State Street
Bank and Trust Company of Connecticut, National Association, (iii) First
Security Bank, National Association, and (iv) US Airways is duly organized
and validly existing in good standing under the laws of the jurisdiction of
its organization;
(f) each of (i) the Owner Participant, (ii) State Street
Bank and Trust Company of Connecticut, National Association, individually
and as Indenture Trustee, Subordination Agent and Pass Through Trustee,
(iii) First Security Bank, National Association, individually and as Owner
Trustee, and (iv) US Airways has full power, authority and legal right to
enter into and perform its respective obligations under, and consummate the
transactions contemplated by, each of the Transaction Documents and the
Indenture Documents to which it is a party;
(h) each of (i) the Owner Participant, (ii) State Street
Bank and Trust Company of Connecticut, National Association, individually
and as Indenture Trustee, Subordination Agent and Pass Through Trustee,
(iii) First Security Bank, National Association, individually and as Owner
Trustee, and (iv) US Airways has duly authorized, executed and delivered
each of the Transaction Documents and the Indenture Documents to which it
is a party;
(j) the execution, delivery and performance of the
Transaction Documents and the Indenture Documents by each of the parties
thereto and the consummation of the transactions contemplated thereby does
not and will not conflict with, contravene, violate or constitute a default
under (i) the respective certificate of incorporation, by-laws or other
organizational documents of any such party, (ii) any indenture, mortgage,
lease, agreement or other instrument to which any such party is a party or
by which it or any of its property may be bound or subject, (iii) any law,
rule or regulation of any jurisdiction (provided that we make no such
assumption with respect to Applicable Laws of the State of New York and
Applicable Laws of the United States of America insofar as such Applicable
Laws apply to US Airways, as to which we express our opinion in paragraph 2
herein) or (iv) any judicial or administrative order or decree of any
governmental authority;
(l) except for (i) the due and timely filing and, where
appropriate, recording of (A) the FAA Bill of Sale, (B) the Trust
Agreement, (C) the Lease (with the Lease Supplement covering the Aircraft,
the Indenture and the Trust Supplement covering the Aircraft attached as
exhibits) and (D) the Trust Indenture (with the Trust Supplement covering
the Aircraft attached as an exhibit), pursuant to the Transportation Code,
(ii) the registration of the issuance and sale of the Pass Through
Certificates under the Securities Act, (iii) compliance with the securities
law of each applicable state and (iv) the filing of appropriate UCC
financing statements, no consent, license, permit or approval of, or giving
of notice to, or registration with, or taking of any action in respect of,
any governmental authority of any jurisdiction is required in connection
with (X) the execution, delivery and performance by any party to any
Transaction Document of the respective Transaction Documents to which it is
a party, (Y) the consummation of the transactions contemplated thereby or
(Z) the legality, validity or enforceability of the Transaction Documents
or the Indenture Documents with respect to any party to any Transaction
Document or any Indenture Document (provided that we make no such
assumption with respect to those required by Applicable Laws as such
Applicable Laws apply to US Airways); and
(n) the Trust Agreement duly creates, for the benefit of the
Owner Participant, the trust interest in the trust estate which the Trust
Agreement by its terms purports to create and the trust purported to be
created by the Trust Agreement has been duly formed and is validly
existing.
With respect to US Airways, we understand that you are
separately receiving an opinion with respect to certain matters set forth
above from Howard L. Wu, Esq., Associate General Counsel to US Airways (the
"US Airways Opinion"). With respect to Transportation Code matters, we
understand that you are separately receiving an opinion with respect to
certain matters set forth above from Crowe & Dunlevy, P.C., special
Transportation Code counsel (the "TC Opinion"). With respect to the Owner
Trustee, we understand that you are separately receiving an opinion with
respect to certain matters set forth above from Ray, Quinney & Nebeker,
special counsel to the Owner Trustee (the "Owner Trustee Opinion"). With
respect to the Indenture Trustee, the Pass Through Trustee and the
Subordination Agent, we understand that you are separately receiving an
opinion with respect to certain matters set forth above from Bingham Dana
LLP, special counsel to the Indenture Trustee, the Pass Through Trustee and
the Subordination Agent (the "State Street Opinion"). With respect to the
Owner Participant, we understand that you are receiving separate opinions
with respect to certain matters set forth above from __________, special
counsel to the Owner Participant (together with the US Airways Opinion, the
TC Opinion, the Owner Trustee Opinion and the State Street Opinion, the
"Other Counsel's Opinions"). We are advised that such Other Counsel's
Opinions contain qualifications. Our opinions herein stated are based upon
the assumptions specified above, and we express no opinion as to the effect
on the opinions herein stated of the qualifications stated in the Other
Counsel's Opinions.
This opinion is being furnished only to you and is solely
for your benefit and is not to be used, circulated, quoted, relied upon or
otherwise referred to by any other Person or for any other purpose without
our prior written consent.
Very truly yours,
SCHEDULE I
____________________, as Owner Participant
State Street Bank and Trust Company of Connecticut, National Association,
individually and as Indenture Trustee, Pass Through
Trustee and Subordination Agent
First Security Bank, National Association,
individually and as Owner Trustee
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Officer's Certificate to SASM&F (Illinois) Opinion
N_________
EXHIBIT A
Certificate
The undersigned, Howard L. Wu, is the Associate General
Counsel of US Airways, Inc., a Delaware corporation (the "Lessee"), and
understands that pursuant to certain of the Transaction Documents (as
defined in the Opinion referred to below), Skadden, Arps, Slate, Meagher &
Flom (Illinois) ("SASM&F") is rendering an opinion dated the date hereof
(the "Opinion") to each of the Persons listed on Schedule I thereto.
Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Opinion. The undersigned further understands that
SASM&F is relying on this officer's certificate and the statements made
herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Lessee, the
undersigned certifies that:
2. Due inquiry has been made of all persons deemed necessary
or appropriate to verify or confirm the statements contained herein.
4. SASM&F may rely upon the representations and warranties
that the Lessee has made in each of the Transaction Documents to which it
is a party. The undersigned has made a careful review of the
representations and warranties of the Lessee contained in each of the
Transaction Documents and hereby confirms, to the best of his knowledge and
belief, that such representations and warranties are true, correct and
complete on and as of the date of this certificate.
6. Less than 25 percent of the assets of Lessee and its
subsidiaries on a consolidated basis and on an unconsolidated basis consist
of margin stock (as such term is defined in Regulation U of the Board of
Governors of the Federal Reserve System).
8. Lessee is engaged primarily, directly and through its
wholly-owned subsidiaries and its Majority-Owned Subsidiaries (as
hereinafter defined), in the airline transportation business and (i) is not
and does not hold itself out as being, engaged primarily nor does it
propose to engage primarily, in the business of investing, reinvesting or
trading in Securities (as hereinafter defined), (ii) has not and is not
engaged in, and does not propose to engage in, the business of issuing
Face-Amount Certificates of the Installment Type (as hereinafter defined)
and has no such certificate outstanding and (iii) is not engaged and does
not propose to engage in the business of investing, reinvesting, owning,
holding or trading in Securities, whether or not as its primary activity,
and does not own or propose to acquire Investment Securities (as
hereinafter defined) having a Value exceeding 40% of the Value of the total
assets of the Lessee (exclusive of Government Securities (as hereinafter
defined)) on an unconsolidated basis.
10. Neither the Lessee nor any of its subsidiaries or
affiliates owns or operates facilities that are used for the generation,
transmission, or distribution of electric energy for sale ("electric
utility facilities").
12. Neither the Lessee nor any of its subsidiaries or
affiliates owns or operates facilities that are used for the distribution
at retail of natural or manufactured gas for heat, light, or power ("gas
utility facilities").
14. Neither the Lessee nor any of its subsidiaries or
affiliates, directly or indirectly, or through one or more intermediary
companies, owns, controls or holds with power to vote (a) five percent (5%)
or more of the outstanding securities, such as notes, drafts, stock,
treasury stock, bonds, debentures, certificates of interest or
participation in any profit sharing agreements or in oil, gas, other
mineral royalties or leases, collateral-trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts,
voting-trust certificates, certificate of deposit for a security,
receiver's or trustee's certificates, or any other instrument commonly
known as a "security" (including certificates of interest or participation
in, temporary or interim certificates for, receipt for, guaranty of,
assumption of liability on, or warrants or right to subscribe to or
purchase any of the foregoing) presently entitling it to vote in the
direction or management of, or any such instrument issued under or pursuant
to any trust, agreement, or arrangement whereby a trustee or trustees or
agent or agents for the owner or holder of such instrument is presently
entitled to vote in the direction or management of, any corporation,
partnership, association, joint-stock company, joint venture or trust that
owns or operates any electric utility facilities or gas utility facilities,
or (b) any other interest, directly or indirectly, or through one or more
intermediary entities, in any corporation, partnership, association,
joint-stock company, joint venture or trust that owns or operates any
electric utility facilities or gas utility facilities.
16. Neither the Lessee nor any of its subsidiaries or
affiliates has received notice that the Securities and Exchange Commission
has determined, or may determine, that the Lessee or any of its
subsidiaries or affiliates exercises a controlling influence over the
management or direction of the policies of a gas utility company or an
electric utility company as to make it subject to the obligations, duties
and liabilities
Officer's Certificate to SASM&F (Illinois) Opinion
N_________
imposed on holding companies by the Public Utility Holding Company Act of
1935, as amended.
18. As used in paragraph 4 of this certificate, the following
terms shall have the following meanings:
"Control" means the power to exercise a controlling
influence over the management or policies of a company, unless such power
is solely the result of an official position with such company;
"Face-Amount Certificate of the Installment Type" means any
certificate, investment contract, or other Security that represents an
obligation on the part of its issuer to pay a stated or determinable sum or
sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments
of a stated or determinable amount;
"Government Securities" means all Securities issued or
guaranteed as to principal or interest by the United States, or by a person
controlled or supervised by and acting as an instrumentality of the
government of the United States pursuant to authority granted by the
Congress of the United States; or any certificate of deposit for any of the
foregoing;
"Investment Securities" includes all Securities except (A)
Government Securities, (B) Securities issued by employees' securities
companies, and (C) Securities issued by Majority-Owned Subsidiaries of the
Lessee which are not engaged and do not propose to be engaged in activities
within the scope of clause (i), (ii) or (iii) of paragraph 4 of this
Certificate;
"Majority-Owned Subsidiary" of a person means a company 50%
or more of the outstanding Voting Securities of which are owned by such
person, or by a company which, within the meaning of this paragraph, is a
Majority-Owned Subsidiary of such person. Notwithstanding the foregoing, a
company shall not be considered a Majority-Owned Subsidiary of a person if
Control of such company rests with someone other than such person;
"Security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferrable
share, investment contract, voting-trust certificate, certificate of
deposit for
Officer's Certificate to SASM&F (Illinois) Opinion
N________
a security, fractional undivided interest in oil, gas, or other mineral
rights, any put, call, straddle, option, or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a "security," or any certificate of interest
or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the
foregoing;
"Value" means (i) with respect to Securities owned at the
end of the last preceding fiscal quarter for which market quotations are
readily available, the market value at the end of such quarter; (ii) with
respect to other Securities and assets owned at the end of the last
preceding fiscal quarter, fair value at the end of such quarter, as
determined in good faith by or under the direction of the board of
directors; and (iii) with respect to securities and other assets acquired
after the end of the last preceding fiscal quarter, the cost thereof;
"Voting Security" means any security presently entitling the
owner or holder hereof to vote for the election of directors of a company.
Officer's Certificate to SASM&F (Illinois) Opinion
N_________
IN WITNESS WHEREOF, the undersigned has executed this
certificate this ___ day of ______, ____.
--------------------------------
Name: Howard L. Wu
Title: Associate General Counsel
Exhibit B-2
[LETTERHEAD OF US AIRWAYS, INC.]
[LEASED AIRCRAFT OPINION]
------------, ----
To Each Person Listed
on Schedule I Hereto
Re: US Airways, Inc. Trust No. N____U_
-----------------------------------
Ladies and Gentlemen:
I am the _________________________ of US Airways, Inc., a Delaware
corporation ("US Airways"), and am familiar with the transactions
contemplated by the Participation Agreement (US Airways, Inc. Trust No.
N___U_), dated as of ________, ____ (the "Participation Agreement"), among
US Airways, as Lessee, __________________, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association, a
national banking association, not in its individual capacity except as
otherwise provided therein but solely as Pass Through Trustee, Indenture
Trustee and Subordination Agent, and First Security Bank, National
Association, a national banking association, not in its individual capacity
except as otherwise provided therein, but solely as Owner Trustee, relating
to the Aircraft (as defined below). Capitalized terms not otherwise defined
herein have the meanings assigned thereto in Annex A to the Participation
Agreement.
This opinion is being delivered pursuant to Section 4(a)(xi) of the
Participation Agreement.
In my examination, I have assumed the genuineness of all signatures
(other than the signatures made on behalf of US Airways), including
endorsements, the legal capacity of natural persons, the authenticity of
all documents submitted to me as originals, the conformity to original
documents of all copies submitted to me as telefacsimile, certified or
photostatic copies, and the authenticity of the originals of such copies.
As to any facts material to this opinion, I have relied solely upon
statements, representations and warranties of US Airways, the Owner
Participant, the Owner Trustee, the Indenture Trustee, the Subordination
Agent, the Pass Through Trustee and their respective officers and
representatives, and others in the Operative Documents and of public
officials, and I have made no independent investigation or inquiry with
respect to such factual matters.
In rendering the opinions set forth herein, I have examined and
relied on executed originals or copies of the following:
(a) the Participation Agreement;
(b) the Lease;
(c) the Lease Supplement;
(d) the Tax Indemnity Agreement;
(e) the Purchase Agreement Assignment;
(f) the Trust Indenture;
(g) the Trust Supplement;
(h) the Warranty Bill of Sale;
(i) the FAA Bill of Sale;
(j) the Acceptance Certificate;
(k) the Equipment Notes;
(l) the Pass Through Trust Agreement;
(m) each of the Pass Through Trust Agreement Supplements;
(n) certified copies of the Certificate of Incorporation and By-laws
of US Airways;
(o) certified copies of certain resolutions of the Board of Directors
of US Airways adopted on May 18, 1999;
(p) a certificate of good standing from the Secretary of State of
the State of Delaware as to the good standing of US Airways in such
jurisdiction [and a certificate of good standing from the Secretary of
State of the State of Delaware as to the good standing of Shuttle, Inc. in
such jurisdiction]; and
(q) such other documents as I have deemed necessary or appropriate
as a basis for the opinions set forth below.
Based on the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, it is my
opinion that:
1. US Airways is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, is a "citizen
of the United States" within the meaning of Section 40102(a)(15) of the
Transportation Code, and has or had, on the date of execution thereof, the
corporate power and authority to carry on its business as currently
conducted and to enter into and perform its obligations under each of the
Operative Documents to which it is a party. US Airways is duly qualified to
do business and is in good standing in the Commonwealth of Virginia and
each other state of the United States in which its operations or the nature
of its business requires US Airways to so qualify, except where the failure
to so qualify would not have a material adverse effect on US Airways or its
business.
2. US Airways possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents which are material
to the operation of the routes flown by it and the conduct of its business
and operations as currently conducted, and each such certificate,
franchise, license, permit, right and concession and consent is in full
force and effect, except where any failure would not have a material
adverse effect on US Airways or its business.
3. Each of the Operative Documents to which US Airways is a party
has or had, on the date of execution thereof, been duly authorized,
executed and delivered by US Airways.
4. Neither the execution and delivery by US Airways of any of the
Operative Documents to which US Airways is a party, nor the consummation of
any of the transactions by US Airways contemplated thereby, nor the
performance of the obligations thereunder by US Airways, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the Certificate of Incorporation or By-laws of US
Airways or (b) conflict with or contravene the provisions of, or constitute
a default under, or result in the creation of any Lien (other than any
Permitted Lien) upon the property of US Airways under any law, governmental
rule or regulation, or the Certificate of Incorporation or By-laws of US
Airways or any order, writ, injunction or decree of any court or
governmental authority against US Airways or by which any of its properties
may be bound or any material indenture, mortgage, contract or other
agreement known to me to which US Airways is a party or by which it may be
bound, or require the approval or consent of any trustee or the holders of
any indebtedness or material obligations of US Airways.
5. Neither the execution and delivery by US Airways of any of the
Operative Documents to which it is a party, nor the consummation of any
transactions by US Airways contemplated thereby, nor the performance of the
obligations thereunder by US Airways, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Operative Documents, all of which were or
are required to be performed on or prior to the Delivery Date and which
were or shall have been accomplished on or prior to the Delivery Date) the
registration with, or the taking of any other action in respect of, the
FAA, the Securities and Exchange Commission or any other authority or
agency of the federal government or of the State of Delaware other than (i)
the registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (ii) compliance with the securities laws of each
applicable state, (iii) the registration in the Owner Trustee's name of the
Aircraft pursuant to the Transportation Code, and (iv) the filings and,
where appropriate, recording, pursuant to the Transportation Code, of each
of the FAA Bill of Sale, the Trust Agreement, the Lease (with the Lease
Supplement covering the Aircraft attached as an exhibit) and the Trust
Indenture (with the Trust Supplement covering the Aircraft attached as an
exhibit), or (b) contravene any judgment or order applicable to or binding
on US Airways or any law or governmental rule or regulation of the United
States or of the State of Delaware.
6. There is no pending or, to my knowledge, threatened action or
proceeding before any court or administrative agency which individually (or
in the aggregate in the case of any group of related lawsuits) (i) is
expected to have a material adverse effect on (A) the financial condition
of US Airways except for the matters described under "Legal Proceedings" in
US Airways' Annual Report on Form 10-K for the fiscal year ended December
31, ____ [and US Airways' Quarterly Report on Form 10-Q for the quarter
ended March 31, ____, June 30, ____, and September 30, ____, respectively],
as to all of which I can express no opinion at this time concerning US
Airways' liability (if any) or the effect of any adverse determination upon
the business, condition (financial or otherwise) or operations of US
Airways, or (B) the ability of US Airways to perform its obligations under
the Operative Documents, or (ii) involves the Aircraft.
7. US Airways is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Section 41102(a) of the Transportation Code. US Airways is the holder of an
"air carrier operating certificate" under Section 44705 of the
Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and such certificate is in
full force and effect.
8. US Airways is not, and is not directly or indirectly controlled
by or acting on behalf of any Person which is, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
[9. Shuttle, Inc. is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
is a "citizen of the United States" within the meaning of Section
40102(a)(15) of the Transportation Code.]1
[10. Shuttle, Inc. is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Section 41102(a) of the Transportation Code. Shuttle, Inc. is the holder of
an "air carrier operating certificate" under Section 44705 of the
Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and such certificate is in
full force and effect.]2
- --------
1 For transactions with Aircraft leased or subleased to Shuttle, Inc. only.
I do not express any opinion as to matters governed by any law
other than the federal laws of the United States of America and the
corporation law of the State of Delaware.
This opinion is delivered to you solely for your use in connection
with the transaction described herein, and may not be used for any other
purpose, and may not be relied upon by any other person, without my prior
written consent.
Very truly yours,
- --------
2 For transactions with Aircraft leased or subleased to Shuttle, Inc. only.
SCHEDULE I
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Exhibit C
FORM (FRENCH LAW) OPINION OF CLIFFORD CHANCE
IN CONNECTION WITH CERTAIN (LEASED AIRCRAFT) TRANSACTIONS FOR A330 AIRCRAFT
[ ]
To: US Airways Inc.
US Airways Group, Inc.
First Security Bank, National Association
[ ]
RE: ONE AIRBUS A330-[ ] AIRCRAFT
MANUFACTURER'S SERIAL NO.[ ]
US REGISTRATION NO. [ ]
Dear Sirs,
1. We have been requested by US Airways Inc. (the "COMPANY"), to act as
special French counsel with respect to, and to render this opinion
in connection with certain of the transactions contemplated in a
certain Participation Agreement dated as of [ ] (the
"PARTICIPATION AGREEMENT") among [ ].
2. We have examined copies(1) (which we assume conform to the originals)
of:
- -------------
(1) AS OF THE DATE HEREOF WE HAVE NOT HAD SIGHT OF PRO-FORMA DOCUMENTS;
THIS DRAFT OPINION IS BASED ON THE ASSUMPTION THAT THE DOCUMENTS WILL
FOLLOW THE FORM OF THE 1999 EETC FINANCINGS.
(i) the purchase agreement assignment (Scheduled April, 2000
through December, 2000 Deliveries) dated as of [ ] between
US Airways Group, Inc. (as assignor) and the Company (as
assignee) (the "FIRST PURCHASE AGREEMENT ASSIGNMENT");
(ii) the consent and agreement of AVSA S.A.R.L. ("AVSA") and Airbus
Industrie G.I.E. ("AIRBUS") to the First Purchase Agreement
Assignment as acknowledged and accepted by US Airways Group,
Inc. and the Company dated as of [ ] (the "FIRST
CONSENT");
(iii) the purchase agreement assignment (US Airways, Inc. Trust No.
N[ ]U[ ]), dated as of [ ], between the Company (as
assignor) and State Street Bank and Trust Company of
Connecticut, National Association (the "INDENTURE TRUSTEE") as
assignee) (the "SECOND PURCHASE AGREEMENT ASSIGNMENT");
(iv) the consent and agreement of Airbus (to the Second Purchase
Agreement Assignment) dated as of [ ] (the "AIRBUS CONSENT
AND AGREEMENT");
(v) the consent and agreement of AVSA (to the Second Purchase
Agreement Assignment) dated as of [ ] (the "AVSA CONSENT
AND AGREEMENT");
(vi) the indenture and security agreement dated as of [ ]
between the Company (as owner) and the Indenture Trustee (the
"INDENTURE"); and
(vii) a document executed both in the English language as the "FRENCH
PLEDGE" and in the French language as the "ACTE DE NANTISSEMENT
DE CREANCES" (the latter being a correct translation of the
former) each dated [ ] and made between the Company (as
pledgor) and the Indenture Trustee (as pledgee) collectively
referred to herein as the "ACTE DE NANTISSEMENT",
the First Purchase Agreement and the Second Purchase Agreement
Assignment are together referred to herein as the "ASSIGNMENTS", the
First Consent and the Second Consents are together referred to herein
as the "CONSENTS" and the documents referred to in (i) to (vii) above
are hereinafter referred to collectively as the "DOCUMENTS".
3. In considering the above, we have assumed:
(i) that the Documents have been duly executed by the parties
thereto (other than Airbus and AVSA);
(ii) the genuineness of all signatures;
(iii) the completeness and conformity to the originals of all
documents supplied to us as copies or as facsimiles;
(iv) that the Documents expressed to be governed by New York law
constitute the legal, valid and binding obligations of the
parties thereto under New York law.
4. Having considered the Documents we are of the opinion, subject to the
qualifications and reservations set out in paragraph 5 below, that:
(i) Airbus is a groupement d'interet economique duly organised and
existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale Matra S.A.,
(ii) DaimlerChrysler Aerospace Airbus GmbH, (iii) British
Aerospace (Operations) Ltd. and (iv) Construcciones
Aeronauticas S.A. and each of such corporations is, without the
need to proceed against any collateral security for the
indebtedness of Airbus or to take any other legal action or
process (except for service on Airbus by huissier of notice to
perform and subsequent failure by Airbus to do so), jointly and
severally liable with the other members for the debts of Airbus
arising out of obligations contracted by Airbus while such
corporation is a member of Airbus;
(ii) AVSA is a societe a responsabilite limitee duly established and
existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted;
(iii) each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
the Documents to which it is a party; such obligations are
legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus and
AVSA, as the case may be;
(iv) assuming that under New York law the Indenture Trustee would be
entitled to take proceedings in its own name and on its own
account to recover from the Company the full amount of all
amounts secured by the Acte de Nantissement and subject to the
registration and huissier requirements of paragraph 5(d) hereof
and the observation set forth in paragraph 5(f) hereof, the
Acte de Nantissement:
(a) duly creates for the benefit of the Indenture Trustee the
security interests which it purports to create and the
Indenture Trustee is entitled to the benefits and security
afforded thereby; and
(b) would be effective as against Airbus, AVSA and third
parties to perfect the pledge (nantissement) of the
obligations of Airbus and AVSA that are the subject of the
Acte de Nantissement;
(v) the choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court would
uphold such choice of law in any suit on the Documents brought
in a French court.
5. This opinion must be read subject to the following qualifications and
observations as to French law:
(a) the remedy of specific performance may not be available in a
French court;
(b) in respect of payment obligations, a French court has power
under Article 1244-1 of the French Civil Code to grant time to
a debtor (not in excess of two years), taking into account the
position of the debtor and the needs of the creditor;
(c) in order to ensure the validity as against third parties of the
assignment made in the Assignments, it is necessary that notice
of such assignments be served on Airbus and AVSA by huissier in
accordance with the provisions of Article 1690 of the French
Civil Code. [We have been instructed by the Company to assist
in carrying out such formalities which we intend to do upon
receipt of duly executed originals of such assignment and we
anticipate that there will be no difficulty in accomplishing
these formalities](2);
(d) in order to ensure the validity as against third parties of the
pledge (nantissement) created by the Acte de Nantissement in
accordance with the provisions of Article 2075 of the French
Civil Code, it is necessary for the Acte de Nantissement to be
registered with the French tax administration in a form duly
translated in French by a sworn translator, involving payment
of a stamp duty of a nominal amount. In addition, the pledge
(nantissement) created by the Acte de Nantissement will need to
be served on each of the obligors by huissier, in accordance
with the provisions of Article 2075 of the French Civil Code.
[We have been instructed by the Company to carry out such
formalities on its behalf which we intend to do upon receipt of
duly executed originals of the Pledge Agreement and we
anticipate that there will be no difficulty in accomplishing
these formalities](2);
- ------------
(2) NOTE: US AIRWAYS TO CONFIRM INSTRUCTIONS
(e) in the event o any proceedings being brought in a French court
in respect of a monetary obligation expressed to be payable in
a currency other than French Francs or euros, a French court
would probably give judgment expressed as an order to pay, not
such currency, but its French Franc or euro equivalent at the
time of payment or enforcement of judgment. With respect to a
bankruptcy, insolvency, liquidation, moratorium,
reorganisation, reconstruction or similar proceedings, French
law may require that all claims or debts be converted into
French Francs or euros at an exchange rate determined by the
court at a date related thereto, such as the date of
commencement of a winding-up;
(f) pledges over non-monetary claims are unusual under French law.
In principal, pledges over claims of this type should be
effective against Airbus, AVSA and third parties but in the
absence of case law, there is a lack of certainty about the
pledge being effective;
(g) a determinatio or certificate as to any matter provided for in
the Documents might be held by a French court not to be final,
conclusive or binding, if such determination or certificate
could be shown to have an unreasonable, incorrect or arbitrary
basis or not to have been given or made in good faith;
(h) claims may become barred by effluxion of time or may be or
become subject to defence of set-off or counterclaim;
(i) a French court may stay proceedings if concurrent proceedings
are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
documents conferring a right of set-off or similar right would
be effective against a liquidator or a creditor;
(k) the enforcemen against Airbus of any of the Documents to which
it is a party may be limited by applicable bankruptcy,
insolvency, arrangement, moratorium or similar laws relating to
or affecting the enforcement of creditors' rights generally, as
such laws are applied to Airbus. The enforcement against AVSA
of any of the Documents to which it is a party may be limited
to such laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited to such laws, as such
laws are applied to such member;
(l) our opinion as to the enforceability of the Documents relates
only to their enforceability in France in circumstances where
the competent French court has and accepts jurisdiction. The
term "enforceability" refers to the legal character of the
obligations assumed by the parties under the Documents, i.e.
that they are of a character which French law enforces or
recognises. It does not mean that the Documents will be
enforced in all circumstances or in foreign jurisdictions or by
or against third parties or that any particular remedy will be
available; and
(m) article 899 of the French Tax Code provides that agreements
evidencing an undertaking to pay a sum of money are subject to
stamp tax (droit de timbre) of a nominal amount if made in the
French Republic, if made in a foreign country, such agreements
are subject to a stamp tax of a nominal amount before certain
use thereof can be made in the French Republic (Article 897 of
the French Tax Code). However non-payment of such stamp tax
does not affect the legality, validity or enforceability of the
Documents.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the laws of the French
Republic as of the date hereof. This opinion is for your use and that of no
one else, and is limited to (i) the matters specifically mentioned herein,
and (ii) the purpose set out above.
Yours faithfully,
CLIFFORD CHANCE
Exhibit D
[LETTERHEAD OF FSB]
_________________, 2000
TO EACH OF THE PARTIES SET FORTH
IN SCHEDULE A HERETO:
Re: US AIRWAYS, INC. LEVERAGED LEASE N____
Dear Sir or Madam:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity
("First Security") and in its capacity as trustee (the "Owner Trustee")
under Trust Agreement ___ dated as of __________, 2000, (the "Trust
Agreement") between it and ____________, as owner participant (the "Owner
Participant"), in connection with the transactions contemplated by the
Participation Agreement (as defined below). We are delivering this opinion
at the request of First Security. Except as otherwise defined herein, the
terms used herein shall have the meanings set forth in Annex A to
Participation Agreement ___, dated as of ____________, 2000 among US
Airways, Inc., as Lessee, the Owner Participant, First Security, not in its
individual capacity except as provided therein, and as Owner Trustee, and
State Street Bank and Trust Company of Connecticut, National Association,
not in its individual capacity except as expressly provided therein, but
solely as Indenture Trustee, Subordination Agent and as Pass Through
Trustee under each of the Pass Through Trust Agreements (the "Participation
Agreement").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or advisable for the purpose of
rendering this opinion.
Based upon the foregoing, we are of the opinion that:
(1) First Security is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States, is a "citizen of the United States" within the meaning
of Section 40102(a)(15) of the Act and has the full power and
authority to enter into and perform its obligations under the Trust
Agreement and each other Operative Agreement to which it, in its
individual capacity or as Owner Trustee, as the case may be, is a
party and, as Owner Trustee, to issue, execute, and deliver and
perform the Equipment Notes.
(2) The Owner Trustee is the duly appointed trustee under the
Trust Agreement and the Trust Agreement creates a legal and valid
trust under the laws of the State of Utah; the trust created by the
Trust Agreement has been duly created and exists for the benefit of
the Owner Participant, and the Trust Agreement creates for the benefit
of the Owner Participant the rights and interests in the Trust Estate
which the Trust Agreement by its terms purports to create; and
assuming the Trust Agreement was properly authorized, executed and
delivered by the Owner Participant and that the terms of the Trust
Agreement are not in violation of any laws, documents, judgments,
regulations or other provisions applicable to the Owner Participant,
the Trust Agreement constitutes, under the laws of the State of Utah,
a legal, valid and binding obligation of the Owner Participant
enforceable against the Owner Participant in accordance with its
terms.
(3) The Trust Agreement, the Participation Agreement, and each
other Operative Agreement to which First Security or the Owner
Trustee, as the case may be, is a party, and the Equipment Notes, have
been duly authorized, executed and delivered by First Security, or the
Owner Trustee, as the case may be, and assuming due authorization,
execution and delivery by the other parties thereto is a legal, valid
and binding obligation of First Security, or the Owner Trustee, as the
case may be, enforceable in accordance with their respective terms.
(4) The execution and delivery by First Security of the Trust
Agreement and the Participation Agreement and the execution and
delivery by the Owner Trustee of the Operative Agreements to which it
is a party is not, and the performance by First Security, or the Owner
Trustee, as the case may be, of its respective obligations under each
such agreements will not be, inconsistent with the articles of
association or by-laws of First Security, do not and will not
contravene any federal law or law of the State of Utah, or any rule or
regulation of the State of Utah or the federal government, or any
judgment or order of which we have knowledge and which is applicable
to it and do not and will not contravene any provision of, or result
in the creation of any lien upon any property of First Security, or
constitute a default under, any indenture, mortgage, contract or other
instrument of which we have knowledge and to which First Security or
the Owner Trustee is a party or by which either is bound or require
the consent or approval of, the giving of notice to, or the
registration with, or the taking of any action in respect of, or under
federal law or the laws of the State of Utah or any subdivision or
agency thereof.
(5) There are no fees, taxes or other charges, except taxes
imposed on fees payable to First Security, required to be paid under
the laws, ordinances or regulations of the State of Utah or any
political subdivision thereof, including, without limitation, Salt
Lake City, in connection with the execution, delivery or performance
by the Lessee, Owner Trustee, Mortgagee or any Participant of the
Operative Agreements solely because First Security, or the Owner
Trustee as the case may be, performs certain of its obligations under
the Operative Agreements in the State of Utah.
(6) There are no pending or, to our knowledge, threatened
actions or proceedings against or affecting First Security or the
Owner Trustee, as the case may be, before any court, governmental
authority or administrative agency which, if adversely determined,
could materially adversely affect the right, power or ability, either
in its individual capacity or as Owner Trustee, or both, as the case
may be, to enter into or perform its obligations under the Operative
Agreements.
(7) The Trust Indenture (or financing statements or other
notices with respect thereto) has been filed for record or recorded
with the Division of Corporations and Commercial Code in the State of
Utah and such offices are all the places in the State of Utah wherein
such filing or recordation is necessary and no other actions or
filings are necessary in the State of Utah to perfect the lien and
security interest of the Mortgagee in the Trust Estate as against
creditors of or purchasers from the Owner Trustee or the Lessee, or
both.
(8) The Owner Trustee has received such right, title and
interest in and to the Aircraft as was conveyed to the Owner Trustee
on the date hereof, subject to (i) the rights of the Lessee under the
Lease and the Lease Supplement; (ii) the beneficial interest of the
Owner Participant in the Aircraft; and (iii) the Lien created pursuant
to the Trust Indenture and the Trust Indenture Supplement; and to our
knowledge there exist no Liens affecting the right, title or interest
of the Owner Trustee in and to the Trust Estate resulting from claims
against First Security, not related to the ownership of the Trust
Estate or the administration of the Trust Estate or any other
transaction contemplated by the Operative Agreements.
(9) Assuming that (i) the Aircraft is not physically located in
the State of Utah at the commencement or termination of the Term, (ii)
in connection with any sale or lease of the Aircraft, such Aircraft
will not be physically delivered in the State of Utah, and (iii) the
Aircraft will be sold or leased for use in interstate commerce, and
(iv) the trust created by the Trust Agreement is treated as a grantor
trust for federal income tax purposes in accordance with Sections 671
through 678 of the Internal Revenue Code of 1986, as amended, there
are no sales or transfer fees, taxes or other charges (except taxes
imposed on fees payable to the Owner Trustee) payable to the State of
Utah or any political subdivision thereof in connection with the
execution, delivery or performance by the Owner Trustee, the
Mortgagee, the Lessee or any Participant of the Operative Agreements
or in connection with the making by the Owner Participant of its
investment in the Aircraft or its acquisition of the beneficial
interest in the Trust Estate or in connection with the issuance and
acquisition of the Equipment Notes. Neither the Owner Trustee, the
Trust Estate nor the trust created by the Trust Agreement will be
subject to any fee, tax or other governmental charge (except taxes on
fees payable to the Owner Trustee) under the laws of the State of Utah
or any political subdivision thereof on, based on or measured by,
directly or indirectly, the gross receipts, net income or value of the
Trust Estate by reason of the creation or continued existence of the
trust under the terms of the Trust Agreement pursuant to the laws of
the State of Utah or the Owner Trustee's performance of its duties
under the Trust Agreement within such State.
(10) Neither a Utah court nor a federal court applying Utah law
or federal law, if properly presented with the issue and after having
properly considered such issue, would permit the Owner Participant to
terminate the Trust Agreement, except in accordance with its terms.
(11) Although there is no Utah case directly on point, under the
laws of the State of Utah, so long as the Trust Agreement has not been
terminated in accordance with its terms, creditors of any person that
is an Owner Participant, holders of a lien against the assets of any
such person that is an Owner Participant, such as trustees, receivers
or liquidators (whether or not an insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire valid claims and
liens, as to the Trust Estate, only against the rights of such Owner
Participant under the Trust Agreement or in the Trust Estate, and do
not have, and may not through the enforcement of such Creditors'
rights acquire, any greater rights than such Owner Participant with
respect to the Trust Agreement or the Trust Estate.
The foregoing opinions are subject to the following assumptions, exception
and qualifications:
A. The foregoing opinions are limited to the laws of the State of
Utah and the federal laws of the United States of America governing
the banking and trust powers of First Security and Title II of the
United States Code entitled "Bankruptcy". In addition, we express no
opinion with respect to (i) federal securities laws, including the
Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, and the Trust Indenture Act of 1939, as amended;
(ii) the Federal Aviation Act of 1958, as amended (except with respect
to the opinion set forth in paragraph 1 above concerning the
citizenship of First Security); or (iii) state securities or blue sky
laws. Insofar as the foregoing opinions relate to the legality,
validity, binding effect and enforceability of the documents involved
in these transactions, which by their terms are governed by the laws
of a state other than Utah, we have assumed that such documents
constitute legal, valid, binding and enforceable agreements under the
laws of such state, as to which we express no opinion.
B. The foregoing opinions regarding enforceability of any document
or instrument are subject (i) except as otherwise set forth in the
opinions in paragraphs 10 and 11, to applicable bankruptcy,
insolvency, moratorium, reorganization, receivership and similar laws
affecting the rights and remedies of creditors generally, and (ii)
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law. We
call to your attention that bankruptcy courts are courts in equity
with wide discretion in applying the provisions of the Bankruptcy
Code.
C. As to the documents involved in these transactions, we have
assumed that each is a legal, valid and binding obligation of each
party thereto, other than First Security or the Owner Trustee, and is
enforceable against each such party in accordance with their
respective terms.
D. The opinion in paragraph 1 above concerning the citizenship of
First Security is based upon the facts contained in an affidavit of
First Security, made by its authorized officer, which facts we have
not independently verified.
E. We have assumed that all signatures, other than those of the
Owner Trustee or First Security, on documents and instruments involved
in these transactions are genuine, that all documents and instruments
submitted to us as originals are authentic, and that all documents and
instruments submitted to us conform with the originals, which facts we
have not independently verified.
F. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the
particular nature of the equipment involved in these transactions.
G. We have made no investigation of, and express no opinion
concerning, the nature of the title to any part of the equipment
involved in these transactions or the priority of any mortgage or
security interest.
H. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of
Section 406 of the Employee Retirement Income Security Act of 1974.
I. In addition to any other limitation by operation of law upon the
scope, meaning or purpose of this opinion, this opinion speaks only as
of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) of changes of law or fact that may
occur after the date hereof, even though the change may effect the
legal analysis, a legal conclusion or any information contained
herein.
J. The opinions expressed in this letter are solely for the use of
the parties which it is addressed in matters directly related to the
Participation Agreement and the transactions contemplated thereunder
and these opinions may not be relied on by any other persons or for
any other purpose without our prior written approval. The opinions
expressed in this letter are limited to the matters set forth in this
letter and no other opinions should be inferred beyond the matters
expressly stated.
Very truly yours,
RAY, QUINNEY & NEBEKER
SCHEDULE A
First Security Bank, National Association
US Airways, Inc.
State Street Bank and Trust Company of Connecticut,
National Association
[Owner Participant]
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
MBIA Insurance Corporation
Exhibit E
[OWNER PARTICIPANT SPECIAL COUNSEL OPINION]
--------------, ----
To the Persons Listed on
Schedule A Attached Hereto
Re: N___U__
Ladies and Gentlemen:
We have acted as special counsel to __________________, a
____________________ (the "Owner Participant") in connection with the
transactions contemplated by the Participation Agreement N___U_ dated as of
______________, ____ (the "Participation Agreement"), among US Airways, a
Delaware corporation, as Lessee; the Owner Participant; First Security
Bank, National Association, a national banking association, not in its
individual capacity except as expressly provided therein, but solely as
Owner Trustee; State Street Bank and Trust Company of Connecticut, National
Association , a national banking association, not in its individual
capacity except as expressly stated therein, but solely as Pass Through
Trustee. Capitalized terms used in this opinion and not defined herein
shall have the, respective meanings assigned thereto in Annex A to the
Participation Agreement. Our opinion is being delivered, at the request of
the Owner Participant, pursuant to Section 4(a)(xiv) of the Participation
Agreement.
In connection with the opinions contained herein, we have
examined executed counterparts of each of the Operative Documents. The
Operative Documents to which the Owner Participant is a party are herein
referred to as the "Owner Participant Documents".
For purposes of the opinions expressed below, we have
examined the originals or conformed copies of such corporate records and
documents, certificates and statements of public officials and such other
documents and records, and such other matters of law, as we have deemed
appropriate as a basis for the opinions hereinafter expressed. We have made
no independent inquiry or investigation of any factual matters or
circumstances relevant to the opinions contained herein, but instead we
have relied upon representations in the Operative Documents and upon
certificates and statements of the parties thereto and of public officials.
For the purposes of the opinions expressed below, we have
assumed (i) the authenticity of all documents submitted as originals; (ii)
the conformity to the originals of all documents submitted as certified or
photostatic copies and the authenticity of the originals; (iii) the legal
capacity of all natural persons who are parties to the Operative Documents;
(iv) the due authorization, execution and delivery of the Owner Participant
Documents by all parties; and (v) the legality, validity and binding effect
of the Owner Participant Documents as to, and the enforceability of the
same against, all parties (other than the Owner Participant).
Based upon the foregoing and such other information as we
have deemed necessary for purposes hereof, and subject to the assumptions,
qualifications and reliances set forth herein, we are of the opinion that:
1. Each of the Owner Participant Documents to which the
Owner Participant is a party constitutes a legal, valid and binding
obligation of the Owner Participant, enforceable against the Owner
Participant in accordance with their respective terms.
2. Neither the execution, delivery or performance by the
Owner Participant of the Owner Participant Documents to which the
Owner Participant is a party, the consummation by the Owner
Participant of any of the transactions contemplated thereby, nor
compliance by the Owner Participant with the provisions thereof (a)
violates any New York or federal laws, rules or regulations or (b)
requires the consent, permit, authorization or approval of, the
giving of notice to, the registration or filing with, or the taking
of any other action in respect of any governmental authority or
agency of the United States or the State of New York (except for
compliance with the requirements of the Federal Aviation Act, as to
which we express no opinion).
Our opinion as to the enforceability of any Owner
Participant Document is qualified by and subject to:
(i) limitations imposed by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, and laws relating to
fraudulent transfers or conveyances, preferences and equitable
subordination;
(ii) general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(iii) the unenforceability under certain circumstances of
provisions purporting to release or exculpate any party from
liability for its acts or omissions, or purporting to impose a duty
upon any party to indemnify any other party when any claimed
damages result from the gross negligence or willful misconduct of
the party seeking such indemnity; and
(iv) the unenforceability under certain circumstances of
waivers, and provisions imposing liquidated damages, late payment
charges or forfeitures, if such amounts are determined to be
penalties in light of the actual damages incurred.
Anything in this opinion to the contrary notwithstanding, we
express no opinion concerning (i) the enforceability of any indemnification
agreements or of any waivers of the benefits of any constitutional,
statutory or common law rights contained in any of the Operative Documents
to the extent such enforceability may be barred or limited by public policy
considerations; (ii) federal and state applicable laws relating to
environmental matters or the offering of securities; (iii) the Employee
Retirement Income Security Act of 1974, as amended; (iv) federal or state
laws, rules or regulations governing banking or trust powers; (v) the
ownership of, or legal or equitable title to any property; or (vi) the
priority of any security interest contemplated by the Operative Documents.
We are members of the bar of the State of New York and,
accordingly, we do not purport to express any opinion on any laws other
than the laws of the State of New York and the federal laws of the United
States of America, in each case as such laws are in effect on the date
hereof With respect to the Owner Participant Documents which by their terms
are to be governed by and construed in accordance with laws other than the
laws of the state of New York, we have assumed for purposes hereof that
such laws are identical in all respects to the laws of the state of New
York.
This opinion is furnished by us at your request for your
sole benefit and no one but an addressee (and any permitted transferee) is
entitled to rely on this opinion without our express written consent. This
opinion shall not be published or reproduced in any manner or distributed
or circulated to any person or entity without our express written consent.
Our opinion is limited to the matters stated herein, and no opinion is
implied or may be inferred beyond the matters expressly stated herein.
Very truly yours,
- ------------------------
SCHEDULE A
__________________, as Owner Participant
First Security Bank, National Association in its individual capacity and as
Owner Trustee
State Street Bank and Trust Company of Connecticut, National Association,
as Pass Through Trustee
US Airways, Inc., as Lessee
Exhibit F
FORM OF FAA COUNSEL OPINION
___________, 2000
To the Addressees on the
Schedule Attached Hereto
RE: AIRBUS INDUSTRIE MODEL A330___ AIRCRAFT WITH
MANUFACTURER'S SERIAL NUMBER _____ AND UNITED STATES
NATIONALITY AND REGISTRATION MARKS N____ (THE
"AIRCRAFT")
Ladies and Gentlemen:
This letter confirms that we filed the following described
instruments with the Federal Aviation Administration (the "FAA") today at
the respective times noted below:
(a) AC Form 8050-2 Aircraft Bill of Sale dated _________ __, 2000
(the "FAA Bill of Sale") by US Airways, Inc. (the "Lessee") to
_______________, as Owner Trustee (the "Owner Trustee") under
Trust Agreement (US Airways, Inc. 2000-1 Series N_____) dated
as of ___________ __, 2000 (the "Trust Agreement") between
_______________________ as Owner Participant and the Owner
Trustee, covering the Aircraft was filed at __:__ _.M., C._.T.;
(b) AC Form 8050-1 Aircraft Registration Application by the Owner
Trustee covering the Aircraft, to which were attached the
Affidavits required by Section 47.7(c)(2)(ii) of Part 47 of the
Federal Aviation Regulations, was filed at __:__ _.M., C._.T.;
(c) the Trust Agreement was filed at __:__ _.M., C._.T.;
(d) Trust Indenture and Security Agreement (US Airways, Inc.2000-1
Series N_____) dated as of _______ __, 2000 (the "Indenture")
between the Owner Trustee and ________________ as Indenture
Trustee (the "Indenture Trustee"), to which was attached Trust
Agreement and Indenture Supplement No. 1 (US Airways,
Inc.2000-1 Series N_____) dated ___________ __, 2000 (the
"Indenture Supplement") covering the Aircraft and the
_______________ model ___________ aircraft engines with
manufacturer's serial numbers ____________ and ______________
(the "Engines"), was filed at __:__ _.M., C._.T.; and
(e) Lease Agreement dated as of ___________ __, 2000 (the "Lease")
between the Owner Trustee as lessor and the Lessee, to which
were attached Lease Supplement No. 1 (US Airways, Inc.2000-1
Series N_____) dated ___________ __, 2000 (the "Lease
Supplement") covering the Aircraft and the Engines, the
Indenture and the Indenture Supplement, was filed at __:__
_.M., C._.T.
Based upon our examination of the above described instruments and of
such records of the FAA as we deemed necessary to render this opinion and
as were made available to us by the FAA, it is our opinion that:
(a) the FAA Bill of Sale, the Indenture with the Indenture
Supplement attached and the Lease with the Lease Supplement,
the Indenture and the Indenture Supplement attached are in due
form for recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance with the
provisions of Section 44107 of Title 49 of the United
States Code;
(b) legal title to the Aircraft is vested in the Owner Trustee and
all instruments necessary to cause the FAA in due course to
issue to the Owner Trustee an AC Form 8050-3 Certificate of
Aircraft Registration covering the Aircraft have been duly
filed with the FAA pursuant to and in accordance with the
provisions of Sections 44102 and 44103 of Title 49 of the
United States Code;
(c) the Aircraft and the Engines are free and clear of Liens (as
such term is defined in Annex A to the Indenture and the Lease)
other than such as are created by the Indenture, as
supplemented by the Indenture Supplement, and by the Lease, as
supplemented by the Lease Supplement;
(d) the Indenture, as supplemented by the Indenture Supplement,
creates a duly and validly perfected first priority security
interest in favor of the Indenture Trustee in the Aircraft and
the Engines and in all of the right, title and interest of the
Owner Trustee in and to the Lease, as supplemented by the Lease
Supplement (insofar as such security interest affects an
interest covered by the recording system established by the FAA
pursuant to Section 44107 of Title 49 of the United States
Code);
(e) the rights of the Owner Trustee and the Lessee under the Lease,
as supplemented by the Lease Supplement, with respect to the
Aircraft and the Engines are perfected;
(f) the Indenture, as supplemented by the Indenture Supplement, is
not required to be refiled with the FAA or filed or recorded in
any other place within the United States in order to perfect or
maintain the perfection of the security interest created
thereby in the Aircraft and the Engines under the applicable
laws of any jurisdiction within the United States;
(g) no other registration of the Aircraft and no filings or
recordings (other than the filings and recordings with the FAA
which have been effected) are necessary to perfect in any
jurisdiction within the United States the Owner Trustee's title
to the Aircraft or the security interest created by the
Indenture, as supplemented by the Indenture Supplement, in the
Aircraft and the Engines under the applicable laws of any
jurisdiction within the United States; and
(h) no authorization, approval, consent, license or order of, or
registration with, or giving of notice to, the FAA Aircraft
Registry is required for the valid authorization, delivery or
performance of the Lease, the Lease Supplement, the Trust
Agreement, the Indenture and the Indenture Supplement except
for such authorizations, approvals, consents, licenses, orders,
registrations and notices as have been effected.
No opinion is herein expressed as to: (i) laws other than the
federal laws of the United States; (ii) the validity or enforceability
under local law of the Indenture, as supplemented by the Indenture
Supplement; (iii) the recognition of the perfection of the security
interest created by the Indenture, as supplemented by the Indenture
Supplement, as against third parties in any legal proceedings outside the
United States; and (iv) the record status of the Aircraft prior to the
commencement of its United States registration. Since our examination
was limited to records maintained by the FAA Aircraft Registry, our
opinion does not cover liens which are perfected without the filing of
notice thereof with the FAA, such as federal tax liens, liens arising
under Section 1368(a) of Title 29 of the United States Code and
possessory artisans' liens, and was subject to the accuracy of FAA
personnel in the filing, indexing and recording of instruments filed with
the FAA and in the search for encumbrance cross-reference index cards for
the Engines. This opinion is rendered in reliance upon the opinion of
the Aeronautical Center Counsel dated ________ __, 2000 (a copy of which
is attached hereto) and upon the past practice of the FAA which is
consistent with said opinion.
Very truly yours,
ROBIN D. JENSON
For the Firm
RDJ:adw
SCHEDULE
________________________ as Owner Trustee
________________________ as Indenture Trustee, Pass Through Trustee and
Subordination Agent
[STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, N.A.]
US Airways, Inc.
Standard & Poor's Ratings Services
[MBIA INSURANCE CORPORATION]
Exhibit G
FORM OF OPINION FOR INDENTURE TRUSTEE COUNSEL
-------------, ------
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
----------
RE: US Airways, Inc./Leveraged Lease Financing of One
Airbus [A320] [A330-300] Aircraft [N _____ US] -
Indenture Trustee
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Indenture Trustee (the "INDENTURE TRUSTEE") under
the Trust Indenture and Security Agreement [N ____ US] dated as of
[_______________, 2000] (the "INDENTURE") between First Security Bank,
National Association, not in its individual capacity, but solely as Owner
Trustee (the "OWNER TRUSTEE"), and State Street, as Indenture Trustee, in
connection with the execution and delivery of the Participation Agreement
[N ____ US] dated as of [_____________, 2000] (the "PARTICIPATION
AGREEMENT") by and among the Indenture Trustee, US Airways, Inc., as Lessee
(the "LESSEE"), [__________________], as Owner Participant, State Street,
as Pass Through Trustee (the "PASS THROUGH TRUSTEE"), State Street, as
Subordination Agent (the "SUBORDINATION AGENT") and the Owner Trustee and
the transactions contemplated thereby. Capitalized terms not otherwise
defined herein shall have the meanings specified in the Lease and Annex A
of the Participation Agreement. This opinion is being delivered at the
request of State Street and pursuant to Section 4(a)(xvi) of the
Participation Agreement.
Our representation of State Street and the Indenture Trustee has been
as special counsel for the limited purposes stated above. As to all matters
of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement and the Indenture (the
"OPERATIVE DOCUMENTS"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other records, documents,
certificates, or other instruments as we have deemed necessary or advisable
for the purposes of this opinion. For purposes of our opinion rendered in
paragraph 1 below, with respect to the authority of State Street to operate
as a national banking association and exercise trust powers, our opinion
relies upon and is limited by such Certificate of the Comptroller of the
Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Indenture Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Indenture Trustee).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that (i)
each party to the Operative Documents, other than State Street,
in its individual capacity or as Indenture Trustee, as
applicable, at all times relevant thereto, is validly existing
and in good standing under the laws of the jurisdiction in which
it is organized, and is qualified to do business and in good
standing under the laws of each jurisdiction where such
qualification is required generally or necessary in order for
such party to enforce its rights under such Operative Documents,
and (ii) each party to the Operative Documents, at all times
relevant thereto, had and has the full power, authority and legal
right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents,
and the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other
than State Street and the Indenture Trustee with respect to the
laws of the United States of America and the internal substantive
laws of the State of the Connecticut, but only in each case to
the limited extent the same may be applicable to State Street or
the Indenture Trustee, and relevant to our opinions expressed
below) to execute, and to perform its obligations under, the
Operative Documents, and (iii) each party to the Operative
Documents (other than State Street or the Indenture Trustee, as
applicable) has duly executed and delivered each of such
agreements and instruments to which it is a party and that (other
than with respect to State Street and the Indenture Trustee, as
applicable) the execution and delivery of such agreements and
instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i) that
each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State
Street or the Indenture Trustee, as applicable, and (ii) that
each of the Operative Documents is a valid, binding and
enforceable obligation of State Street or the Indenture Trustee,
as applicable, to the extent that laws other than those of the
State of Connecticut are relevant thereto (other than the laws of
the United States of America, but only to the limited extent the
same may be applicable to State Street or the Indenture Trustee,
as applicable, and relevant to our opinions expressed below).
3. The enforcement of any obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well
as by bankruptcy, insolvency, reorganization, moratorium,
marshaling or other laws and rules of law affecting the
enforcement generally of creditors' rights and remedies
(including such as may deny giving effect to waivers of debtors'
or guarantors' rights); and we express no opinion as to the
status under any fraudulent conveyance laws or fraudulent
transfer laws of any of the obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be subject
to an implied duty of good faith and fair dealing and to general
principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity) and, as to any
of your rights to collateral security, will be subject to a duty
to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any particular
provision of any of the Operative Documents relating to (i)
waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods
of) service of process, or rights to trial by jury, or other
rights or benefits bestowed by operation of law, (iii) waivers of
any applicable defenses, setoffs, recoupments, or counterclaims,
(iv) the grant of powers of attorney to any person or entity, (v)
exculpation or exoneration clauses, indemnity clauses, and
clauses relating to releases or waivers of unmatured claims or
rights, (vi) the imposition or collection of interest on overdue
interest or providing for a penalty rate of interest or late
charges on overdue or defaulted obligations, or the payment of
any premium, liquidated damages, or other amount which may be
held by any court to be a "penalty" or a "forfeiture," or (vii)
so-called "usury savings clauses" purporting to specify methods
of (or otherwise assure) compliance with usury laws or other
similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws (or
other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and qualifications
set forth herein, we are of the opinion that:
1. State Street is a national banking association, validly formed and
authorized to operate as a national banking association under the laws of
the United States of America and, in its individual capacity or as
Indenture Trustee, as the case may be, has the requisite corporate and
trust power and authority to execute, deliver and perform its obligations
under the Operative Documents and in its capacity as Indenture Trustee, to
authenticate the Equipment Notes issued on the date hereof.
2. State Street, in its individual capacity or as Indenture Trustee, as the
case may be, has duly authorized the Operative Documents by all necessary
corporate or trust action and has duly executed and delivered the Operative
Documents, and the Operative Documents constitute valid and binding
obligations of State Street, in its individual capacity or as Indenture
Trustee, as the case may be, enforceable against State Street, in its
individual capacity or as Indenture Trustee, as the case may be, in
accordance with their respective terms.
3. The Equipment Notes issued as of the date hereof have been duly
authenticated and delivered by State Street as Indenture Trustee pursuant
to the terms of the Indenture.
4. The authorization, execution, delivery and performance by State Street,
in its individual capacity or as Indenture Trustee, as the case may be, of
the Operative Documents and the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not
result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
5. No authorization, approval, consent, license or order of, giving of
notice to, registration with, or taking of any other action in respect of,
any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Indenture
Trustee, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Indenture Trustee, as the case may be, contemplated thereby (except as
shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable under the
laws of the State of Connecticut or any political subdivision of such State
in connection with the execution and delivery by State Street, in its
individual capacity or as Indenture Trustee, as the case may be, of the
Operative Documents (except for taxes on any fees payable to State Street
in its individual capacity) which are imposed solely because State Street
has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut.
7. To our knowledge, but without having investigated any governmental
records or court dockets, and without having made any other independent
investigation, there are no proceedings pending or overtly threatened in
writing against or affecting State Street in any court or before any
governmental authority, agency, arbitration board or tribunal which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to affect materially and adversely the trust related to the
Indenture or affect the right, power and authority of State Street, in its
individual capacity or as Indenture Trustee, as the case may be, to enter
into or perform its obligations under the Operative Documents.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of
Connecticut, National Association
First Security Bank, National Association
[____________________], as Owner Participant
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
MBIA Insurance Corporation
Exhibit H
FORM OF OPINION FOR PASS THROUGH TRUSTEE COUNSEL
__________________, ____
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: US Airways, Inc./Leveraged Lease Financing of One
Airbus [A320] [A330-300] Aircraft [N _________ US]
-- Pass Through Trust
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Pass Through Trustee (the "PASS THROUGH TRUSTEE")
under the Pass Through Trust Agreement dated as of July 30, 1999, among US
Airways Group, Inc., US Airways, Inc. and State Street, as supplemented by
Trust Supplement No. 2000-1G and Trust Supplement No. 2000-1C, each dated
as of [__________, 2000] and each among US Airways, Inc. and State Street
(collectively, the "PASS THROUGH TRUSTS" and, individually, a "PASS THROUGH
TRUST") in connection with the execution and delivery of the Participation
Agreement [N US] dated as of [ , 2000] (the "PARTICIPATION
AGREEMENT") by and among State Street, as Indenture Trustee, US Airways,
Inc., as Lessee (the "LESSEE"), [ ], as Owner
Participant, State Street, as Pass Through Trustee, State Street, as
Subordination Agent (the "SUBORDINATION AGENT") and First Security Bank,
National Association, as Owner Trustee and the transactions contemplated
thereby. Capitalized terms not otherwise defined herein shall have the
meanings specified in the Lease and Annex A of the Participation Agreement.
This opinion is being delivered at the request of State Street and
pursuant to Section 4(a)(xxiii) of the Participation Agreement.
Our representation of State Street and the Pass Through Trustee has
been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement, the Liquidity Facility
for each of the Class G and Class C Trusts, the Policy Provider Agreement,
the Policy, the Intercreditor Agreement, the Note Purchase Agreement, the
Escrow and Paying Agent Agreement for each of the Class G and Class C
Trusts each dated as of ______________ __, 2000 and each among First
Security Bank, National Association, as Escrow Agent, the underwriters
named therein, State Street, as Pass Through Trustee and State Street, as
Paying Agent, and each of the Pass Through Trusts (the "OPERATIVE
DOCUMENTS"), the Certificate of the Comptroller of the Currency relating to
State Street and originals, or copies certified or otherwise identified to
our satisfaction, of such other records, documents, certificates, or other
instruments as we have deemed necessary or advisable for the purposes of
this opinion. For purposes of our opinion rendered in paragraph 1 below,
with respect to the authority of State Street to operate as a national
banking association and exercise trust powers, our opinion relies upon and
is limited by such Certificate of the Comptroller of the Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Pass Through Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Pass Through
Trustee).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street,
in its individual capacity or as Pass Through Trustee, as applicable,
at all times relevant thereto, is validly existing and in good
standing under the laws of the jurisdiction in which it is organized,
and is qualified to do business and in good standing under the laws
of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents,
at all times relevant thereto, had and has the full power, authority
and legal right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Pass Through Trustee with respect to the laws of
the United States of America and the internal substantive laws of the
State of Connecticut, but only in each case to the limited extent the
same may be applicable to State Street or the Pass Through Trustee,
and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii)
each party to the Operative Documents (other than State Street or the
Pass Through Trustee, as applicable) has duly executed and delivered
each of such agreements and instruments to which it is a party and
that (other than with respect to State Street and the Pass Through
Trustee, as applicable) the execution and delivery of such agreements
and instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street
or the Pass Through Trustee, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Pass Through Trustee, as applicable, to the
extent that laws other than those of the State of Connecticut are
relevant thereto (other than the laws of the United States of
America, but only to the limited extent the same may be applicable to
State Street or the Pass Through Trustee, as applicable, and relevant
to our opinions expressed below).
3. The enforcement of any obligations of State Street or the
Pass Through Trustee, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
by bankruptcy, insolvency, reorganization, moratorium, marshaling or
other laws and rules of law affecting the enforcement generally of
creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights); and we express
no opinion as to the status under any fraudulent conveyance laws or
fraudulent transfer laws of any of the obligations of State Street or
the Pass Through Trustee, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and, as to any of your rights to collateral security, will be subject
to a duty to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any
applicable defenses, setoffs, recoupments, or counterclaims, (iv) the
grant of powers of attorney to any person or entity, (v) exculpation
or exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the
imposition or collection of interest on overdue interest or providing
for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings
clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
In rendering the opinion set forth below in paragraph 6 as to certain
Connecticut tax matters, we have assumed that, for federal income tax
purposes, the trust created by the Trust Agreement will not be taxable as a
corporation, but, rather, will be classified as a grantor trust under
subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986, as amended or as a partnership.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. State Street is a national banking association, validly formed
and authorized to operate as a national banking association under the laws
of the United States of America and, in its individual capacity or as Pass
Through Trustee, as the case may be, has or had, as the case may be, the
requisite corporate and trust power and authority to execute, deliver and
perform its obligations under the Operative Documents and in its capacity
as Pass Through Trustee, to issue and execute the Pass Through Certificates
delivered on the Pass Through Trust Closing Date.
2. State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, has duly authorized by all necessary corporate
or trust action the Operative Documents and has duly executed and delivered
the Operative Documents, and the Operative Documents constitute valid and
binding obligations of State Street, in its individual capacity or as Pass
Through Trustee, as the case may be, enforceable against State Street, in
its individual capacity or as Pass Through Trustee, as the case may be, in
accordance with their respective terms.
3. The Pass Through Certificates issued and dated on the Pass
Through Trust Closing Date have been duly issued, authenticated and
delivered by State Street as Pass Through Trustee pursuant to the terms of
the Operative Documents and are enforceable against the Pass Through
Trustee and are entitled to the benefits of the applicable Pass Through
Trusts.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, as the case
may be, of the Operative Documents and the consummation of the transactions
therein contemplated and compliance with the terms thereof do not and will
not result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Pass Through Trustee, as the case may be, contemplated thereby (except
as shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the State of Connecticut or any political subdivision of
such State in connection with the execution and delivery by State Street,
in its individual capacity or as Pass Through Trustee, as the case may be,
of the Operative Documents (except for taxes on any fees payable to State
Street in its individual capacity) or in connection with the issuance,
execution and delivery of the Pass Through Certificates by State Street, as
Pass Through Trustee, pursuant to the Pass Through Trusts which are imposed
solely because State Street has its principal place of business in
Connecticut or performs its administrative duties under the Operative
Documents in Connecticut. Neither State Street, in its individual capacity
or as the Pass Through Trustee, as the case may be, the Indenture Trustee,
the Owner Participant, the Owner Trustee, nor the trust created by the
Trust Agreement will, as a result of the transactions contemplated thereby,
be subject to any Taxes under the laws of the State of Connecticut or any
political subdivision thereof (except for Taxes on any fees payable to
State Street in its individual capacity) which are imposed because State
Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut, and
there are no Taxes under the laws of the State of Connecticut or any
political subdivision thereof (except for Taxes on any fees payable to
State Street in its individual capacity) upon or with respect to the
Aircraft or any Engine or any part of any interest therein, or the
purchase, ownership, delivery, lease, sublease, possession, presence, use,
operation, condition, storage, maintenance, modification, alteration,
repair, sale, return, transfer or other disposition of the Aircraft or any
Engine which are imposed because State Street has its principal place of
business in Connecticut or performs its administrative duties under the
Operative Documents in Connecticut.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or
before any governmental authority, agency, arbitration board or tribunal
which, if adversely determined, individually or in the aggregate, could
reasonably be expected to affect materially and adversely the trust related
to the Indenture or affect the right, power and authority of State Street,
in its individual capacity or as Pass Through Trustee, as the case may be,
to enter into or perform its obligations under the Operative Documents.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of
Connecticut, National Association
First Security Bank, National Association
______________________, as Owner Participant
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
MBIA Insurance Corporation
_________________________
Exhibit I
FORM OF OPINION FOR SUBORDINATION AGENT COUNSEL
_____________, ________
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: US Airways, Inc./Leveraged Lease Financing of One
Airbus [A320] [A330-300] Aircraft [N _____ US] u
Subordination Agent
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Subordination Agent (the "SUBORDINATION AGENT")
under the Intercreditor Agreement dated as of [________________] (the
"INTERCREDITOR AGREEMENT") among State Street Bank , in its capacity as
Pass Through Trustee under the US Airways Pass Through Trust 1999-1A, US
Airways Pass Through Trust 1999-1B and US Airways Pass Through Trust 1999-
C, [_______________], as Class A Liquidity Provider, Class B Liquidity
Provider and Class C Liquidity Provider, and State Street, as Subordination
Agent in connection with the execution and delivery of the Participation
Agreement [N ____ US] dated as of [________________] (the "PARTICIPATION
AGREEMENT") by and among State Street, as Indenture Trustee, US Airways,
Inc., as Lessee (the "LESSEE"), [__________________], as Owner Participant,
State Street, as Pass Through Trustee (the "PASS THROUGH TRUSTEE"), State
Street, as Subordination Agent and First Security Bank, National
Association, as Owner Trustee and the transactions contemplated thereby.
Capitalized terms not otherwise defined herein shall have the meanings
specified in the Lease and Annex A of the Participation Agreement. This
opinion is being delivered pursuant to Section 4(a)(____) of the
Participation Agreement.
Our representation of State Street and the Subordination Agent has
been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement and the Intercreditor Agreement (the "OPERATIVE DOCUMENTS"), the
Certificate of the Comptroller of the Currency relating to State Street and
originals, or copies certified or otherwise identified to our satisfaction,
of such other records, documents, certificates, or other instruments as we
have deemed necessary or advisable for the purposes of this opinion. For
purposes of our opinion rendered in paragraph 1 below, with respect to the
authority of State Street to operate as a national banking association and
exercise trust powers, our opinion relies upon and is limited by such
Certificate of the Comptroller of the Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Subordination Agent), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Subordination
Agent).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street,
in its individual capacity or as Subordination Agent, as applicable,
at all times relevant thereto, is validly existing and in good
standing under the laws of the jurisdiction in which it is organized,
and is qualified to do business and in good standing under the laws
of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents,
at all times relevant thereto, had and has the full power, authority
and legal right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Subordination Agent with respect to the laws of
the United States of America and the internal substantive laws of the
State of Connecticut, but only in each case to the limited extent the
same may be applicable to State Street or the Subordination Agent,
and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii)
each party to the Operative Documents (other than State Street or the
Subordination Agent, as applicable) has duly executed and delivered
each of such agreements and instruments to which it is a party and
that (other than with respect to State Street and the Subordination
Agent, as applicable) the execution and delivery of such agreements
and instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street
or the Subordination Agent, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Subordination Agent, as applicable, to the extent
that laws other than those of the State of Connecticut are relevant
thereto (other than the laws of the United States of America, but
only to the limited extent the same may be applicable to State Street
or the Subordination Agent, as applicable, and relevant to our
opinions expressed below).
3. The enforcement of any obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
by bankruptcy, insolvency, reorganization, moratorium, marshaling or
other laws and rules of law affecting the enforcement generally of
creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights); and we express
no opinion as to the status under any fraudulent conveyance laws or
fraudulent transfer laws of any of the obligations of State Street or
the Subordination Agent, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and, as to any of your rights to collateral security, will be subject
to a duty to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any
applicable defenses, setoffs, recoupments, or counterclaims, (iv) the
grant of powers of attorney to any person or entity, (v) exculpation
or exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the
imposition or collection of interest on overdue interest or providing
for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings
clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
1. State Street is a national banking association, validly formed
and authorized to operate as a national banking association under the laws
of the United States of America and, in its individual capacity or as
Subordination Agent, as the case may be, has the requisite corporate and
trust power and authority to execute, deliver and perform its obligations
under the Operative Documents.
2. State Street, in its individual capacity or as Subordination
Agent, as the case may be, has duly authorized the Operative Documents by
all necessary corporate or trust action and has duly executed and delivered
the Operative Documents, and the Operative Documents constitute valid and
binding obligations of State Street, in its individual capacity or as
Subordination Agent, as the case may be, enforceable against State Street,
in its individual capacity or as Subordination Agent, as the case may be,
in accordance with their respective terms.
3. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case
may be, of the Operative Documents and the consummation of the transactions
therein contemplated and compliance with the terms thereof do not and will
not result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
4. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Subordination
Agent, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Subordination Agent, as the case may be, contemplated thereby (except as
shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
5. There are no taxes, fees or other governmental charges payable
under the laws of the State of Connecticut or any political subdivision of
such State in connection with the execution and delivery by State Street,
in its individual capacity or as Subordination Agent, as the case may be,
of the Operative Documents (except for taxes on any fees payable to State
Street in its individual capacity) which are imposed solely because State
Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut.
6. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or
before any governmental authority, agency, arbitration board or tribunal
which, if adversely determined, individually or in the aggregate, could
reasonably be expected to affect materially and adversely the trust related
to the Indenture or affect the right, power and authority of State Street,
in its individual capacity or as Subordination Agent, as the case may be,
to enter into or perform its obligations under the Operative Documents.
7. Assuming that the Subordination Agent holds each of the Equipment
Notes delivered to and registered in its name pursuant to and as required
by the Intercreditor Agreement, it holds such Equipment Notes in trust as
trustee for the related Pass Through Trustee in the exercise of the
fiduciary powers conferred upon State Street by Connecticut law.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of Connecticut, National Association
First Security Bank, National Association
[____________________], as Owner Participant
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Service
Moody's Investors Service, Inc.
MBIA Insurance Corporation
Exhibit A-2-1
to
Note Purchase
Agreement
[LEASE FORM - BASIC]
LEASE AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of
-------- --,----
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its individual capacity except as expressly
provided herein, but solely as Owner Trustee,
Lessor
and
US AIRWAYS, INC.,
Lessee
One Airbus Model A330 Aircraft
- ---------------------------------------------------------------------------
As set forth in Section 21 hereof, Lessor has assigned to the Indenture
Trustee (as defined herein) certain of its right, title and interest in and
to this Lease. To the extent, if any, that this Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect
in any applicable jurisdiction) no security interest in this Lease may be
created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT
BOTH SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C
EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS
AGREEMENT SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT
NOTES AND TO MAKE OTHER RELATED CHANGES.
- ---------------------------------------------------------------------------
Form Lease
N____U_
TABLE OF CONTENTS TO LEASE AGREEMENT
<TABLE>
<S> <C> <C>
SECTION 1. DEFINITIONS........................................................1
SECTION 2. ACCEPTANCE AND LEASE...............................................1
SECTION 3. TERM AND RENT......................................................1
(a) Basic Term..................................................1
(b) Basic Rent..................................................1
(c) Adjustments to Basic Rent...................................2
(d) Supplemental Rent...........................................3
(e) Payments in General.........................................4
(f) Business Day Convention.....................................5
SECTION 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.........................................................5
(a) Disclaimer..................................................5
(b) Representations, Warranties and Covenants of
First Security Bank.........................................6
(c) Lessor's Covenants..........................................6
(d) Manufacturer's Warranties...................................7
SECTION 5. RETURN OF THE AIRCRAFT.............................................7
(a) Condition Upon Return.......................................7
(b) Parking and Related Matters.................................7
(c) Return of Other Engines.....................................8
(d) Obligations Continue Until Return...........................8
SECTION 6. LIENS..............................................................8
SECTION 7. REGISTRATION, MAINTENANCE, OPERATION AND REGISTRATION; POSSESSION
AND SUBLEASES; INSIGNIA............................................9
(a) Registration, Maintenance, Operation and Registration.......9
(1) Registration and Maintenance..........................9
(2) Operation............................................10
(3) Reregistration.......................................11
(b) Possession and Subleases...................................11
(c) Insignia...................................................16
SECTION 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS
AND ADDITIONS.....................................................17
(a) Replacement of Parts.......................................17
(b) Pooling of Parts...........................................18
(c) Alterations, Modifications and Additions...................19
(d) Certain Matters Regarding Passenger Convenience
Equipment..................................................20
SECTION 9. VOLUNTARY TERMINATION.............................................20
(a) Termination Event..........................................20
(b) Optional Sale of the Aircraft..............................21
(c) Termination as to Engines..................................23
(d) Special Purchase Options...................................24
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC...............................25
(a) Event of Loss with Respect to the Aircraft.................25
(b) Event of Loss with Respect to an Engine....................27
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc..................28
(d) Requisition for Use of the Aircraft by the United States
Government or the Government of Registry of the Aircraft...29
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft...30
(f) Application of Payments During Existence of
Event of Default...........................................30
SECTION 11. INSURANCE.........................................................31
(a) Lessee's Obligation to Insure..............................31
(b) Additional Insurance by Lessor and Lessee..................31
(c) Indemnification by Government in Lieu of Insurance.........31
(d) Application of Payments During Existence of an Event of
Default....................................................31
SECTION 12. INSPECTION........................................................32
SECTION 13. ASSIGNMENT........................................................33
SECTION 14. EVENTS OF DEFAULT.................................................34
SECTION 15. REMEDIES..........................................................36
SECTION 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS; DELIVERY OF
FINANCIAL STATEMENTS..............................................40
SECTION 17. NOTICES...........................................................41
SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC.....................................42
SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION......................43
(a) Renewal Options............................................43
(1) Fixed Renewal Term...................................43
(2) Fair Market Renewal Term.............................43
(3) Waiver...............................................43
(4) Conditions Precedent, Payment of Basic Rent..........44
(5) Termination Value....................................44
(b) Purchase Options...........................................44
(c) Valuation..................................................45
SECTION 20. BURDENSOME PURCHASE OPTION........................................47
SECTION 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF EQUIPMENT
NOTES.............................................................48
SECTION 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE..............................48
SECTION 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR LIMITED.........49
(a) Investment of Security Funds...............................49
(b) Liability of Lessor Limited................................49
SECTION 24. JURISDICTION......................................................49
SECTION 25. MISCELLANEOUS.....................................................50
SECTION 26. SUCCESSOR TRUSTEE.................................................50
SECTION 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES; SECTION 1110 OF
BANKRUPTCY CODE...................................................51
(a) Lease for Federal Income Tax Law Purposes..................51
(b) Section 1110 of Bankruptcy Code............................51
</TABLE>
EXHIBITS
EXHIBIT A - FORM OF LEASE SUPPLEMENT
EXHIBIT B - PAST DUE RATE DEFINED; BASIC RENT AND LESSOR'S COST
EXHIBIT C - TERMINATION VALUE SCHEDULE
EXHIBIT D - EBO AMOUNT
EXHIBIT E - RENT RECALCULATION AND INDEMNIFICATION VERIFICATION
EXHIBIT F - SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
EXHIBIT G - RETURN CONDITIONS
EXHIBIT H - INSURANCE
Form Lease
N____U_
LEASE AGREEMENT
(US Airways, Inc. Trust No. N___U_)
This LEASE AGREEMENT (US Airways, Inc. Trust No. N___U_),
dated as of __________ __,____, between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, except as expressly provided
herein, but solely as Owner Trustee under the Trust Agreement (as defined
in Annex A hereto) (in such capacity, "Lessor"), and US AIRWAYS, INC., a
corporation organized and existing pursuant to the laws of the State of
Delaware ("Lessee");
W I T N E S S E T H:
-------------------
SECTION 1. DEFINITIONS. Capitalized terms used but not
defined herein shall have the respective meanings set forth or incorporated
by reference, and shall be construed and interpreted in the manner
described, in Annex A.
SECTION 2. ACCEPTANCE AND LEASE. Lessor hereby agrees
(subject to satisfaction of the conditions set forth in Section 4(a) of the
Participation Agreement) to accept the transfer of title from and
simultaneously to lease to Lessee hereunder, and Lessee hereby agrees
(subject to satisfaction of the conditions set forth in Section 4(b) of the
Participation Agreement) to lease from Lessor hereunder, the Aircraft as
evidenced by the execution by Lessor and Lessee of a Lease Supplement
leasing the Aircraft hereunder. Lessee hereby agrees that such acceptance
of the Aircraft by Lessor shall, without further act, irrevocably
constitute acceptance by Lessee of such Aircraft for all purposes of this
Lease.
SECTION 3. TERM AND RENT.
-------------
(a) Basic Term. The Basic Term shall commence on the
Delivery Date and end on the Basic Term Expiration Date.
(b) Basic Rent. Lessee shall pay Basic Rent with respect to
each Lease Period during the Basic Term on each Lease Period Date during
the Basic Term, in consecutive installments in the amounts as provided in
the next sentence, each such installment to cover the Lease Period
specified in Exhibit B. Each such installment of Basic Rent shall be equal
to Lessor's Cost multiplied by the percentage for the Delivery Date or
applicable Lease Period Date, as the case may be, specified in Exhibit B
hereto.
(c) Adjustments to Basic Rent.
(i) In the event of a refinancing as contemplated by
Section 16 of the Participation Agreement, then the Basic Rent
percentages set forth in Exhibit B, the Termination Value
percentages set forth in Exhibit C and the EBO Amount set forth on
Exhibit D shall be recalculated (upwards or downwards) by the Owner
Participant as contemplated by such Section to (1) maintain the
Owner Participant's Net Economic Return and (2) to the extent
possible consistent with clause (1) hereof, minimize the Net
Present Value of Rents to Lessee;
(ii) In the event that Lessee elects to satisfy any
indemnity obligation under the Tax Indemnity Agreement, then the
Basic Rent percentages set forth in Exhibit B, the Termination
Value percentages set forth in Exhibit C and the EBO Amount set
forth on Exhibit D shall be recalculated (upwards or downwards) by
the Owner Participant, using the same methods and assumptions
(except to the extent such assumptions shall be varied to take into
account the Loss (as defined in the Tax Indemnity Agreement) that
is the subject of such indemnification and any prior or
contemporaneous Loss) used to calculate the Basic Rent percentages,
the Termination Value percentages and the EBO Amount on the
Delivery Date, in order to (1) maintain the Owner Participant's Net
Economic Return and (2) to the extent possible consistent with
clause (1) hereof, minimize the Net Present Value of Rents to
Lessee.
(iii) Whenever Basic Rent is recalculated pursuant to
this Section 3(c), the Owner Participant shall redetermine the
Termination Value percentages set forth in Exhibit C and the EBO
Amount set forth in Exhibit D in a manner consistent with such
recalculation.
(iv) Any recalculation of Basic Rent and Termination
Value percentages pursuant to this Section 3(c) shall be determined
by the Owner Participant and shall be subject to the verification
procedures set forth in Exhibit E hereto. Such recalculated Basic
Rent and Termination Value percentages shall be set forth in a
Lease Supplement or an amendment to this Lease.
(v) Anything contained in the Participation Agreement
or this Lease to the contrary notwithstanding (I) each
installment of Basic Rent payable hereunder, whether or not
adjusted in accordance with this Section 3(c), shall be, under
any circumstances and in any event, in an amount at least
sufficient to pay in full, on the date on which such installment
of Basic Rent is due, any payments then scheduled to be made on
account of the principal of and interest on the Equipment Notes
and (II) the amount of Termination Value payable on any
Termination Date, Loss Payment Date or, in the case of payments
under Sections 15 and 20, Lease Period Date, whether or not
adjusted in accordance with this Section 3(c), together with all
other amounts payable hereunder by Lessee on such date and the
amount of the premium, if any, payable by Lessor on the Equipment
Notes, shall be, under any circumstances and in any event, in an
amount at least sufficient for Lessor to pay in full, on such
Termination Date, Loss Payment Date or Lease Period Date, the
outstanding principal of, premium, if any, and interest on the
Equipment Notes. It is agreed that no installment of Basic Rent,
payment of Termination Value or EBO Amount shall be increased or
adjusted by reason of (i) any attachment or diversion of Rent on
account of (A) Lessor Liens or (B) any Loan Participant Lien or
other Lien on or against the Trust Estate, any part thereof or
the Operative Documents arising as a result of claims against the
Indenture Trustee not related to the transactions contemplated by
the Operative Documents, (ii) any modification of the payment
terms of the Equipment Notes made without the prior written
consent of Lessee or (iii) the acceleration of any Equipment Note
or Equipment Notes due to the occurrence of an Indenture Event of
Default which does not constitute a Lease Event of Default.
(vi) All adjustments to Basic Rent under this Section
3(c) shall be subject to verification pursuant to Exhibit E.
(d) Supplemental Rent. Lessee shall pay (or cause to be
paid) promptly to Lessor, or to whomsoever shall be entitled thereto, any
and all Supplemental Rent constituting Termination Value and Make-Whole
Amount as the same shall become due and owing and all other amounts of
Supplemental Rent within five Business Days (5) days after demand or within
such other relevant period as may be provided in any Operative Document,
and in the event of any failure on the part of Lessee to pay any
Supplemental Rent when due, Lessor shall have all rights, powers and
remedies provided for herein or in any other Operative Document or by law
or equity or otherwise in the case of nonpayment of Basic Rent. Lessee
shall pay as Supplemental Rent the Make-Whole Amount, if any, due pursuant
to Section 2.10(b) or Section 2.11 of the Trust Indenture in connection
with a prepayment of the Equipment Notes upon redemption of such Equipment
Notes in accordance with Section 2.10(b) or Section 2.11 of the Trust
Indenture. Lessee also will pay to Lessor, or to whomsoever shall be
entitled thereto, on demand, as Supplemental Rent, to the extent permitted
by applicable law, interest at the Past Due Rate on any part of any
installment of Basic Rent not paid when due for any period for which the
same shall be overdue and on any payment of Supplemental Rent not paid when
due for the period until the same shall be paid.
(e) Payments in General. All payments of Rent shall be made
directly by Lessee (whether or not any Sublease shall be in effect) by wire
transfer of immediately available funds prior to 11:00 a.m., New York time,
on the date of payment, to Lessor at its account at First Security Bank,
National Association, 79 South Main Street, 3rd Floor, Salt Lake City, Utah
84111, ABA No. 124-0000-12, Account No.___________, Attention: Corporate
Trust Department, Credit US Airways/US Airways, Inc. Trust No. N___U_ (or
such other account of Lessor in the continental United States as Lessor
shall direct in a notice to Lessee at least ten (10) Business Days prior to
the date such payment of Rent is due); provided that so long as the Trust
Indenture shall not have been fully discharged, Lessor hereby irrevocably
directs and Lessee agrees, that, unless the Indenture Trustee shall
otherwise direct, all Rent payable to Lessor and assigned to the Indenture
Trustee pursuant to the Trust Indenture shall be paid prior to 11:00 a.m.,
New York time on the due date thereof in funds of the type specified in
this Section 3(e) directly to the Indenture Trustee at its account at State
Street Bank and Trust Company of Connecticut, National Association, 225
Asylum Street, Hartford, Connecticut 06103, ABA No. _________, Account No.
__________, Reference: US Airways, Inc. 2000-1EETC/US Airways, Inc. Trust
No. N___U_ (or such other account of the Indenture Trustee in the
continental United States as the Indenture Trustee shall direct in a notice
to Lessee at least ten (10) Business Days prior to the date such payment of
Rent is due). Lessor hereby directs and Lessee agrees that all payments of
Supplemental Rent owing to the Indenture Trustee or to a Loan Participant
or any other Person (other than the Excluded Payments payable to the Owner
Participant) pursuant to the Participation Agreement shall be made in
Dollars in immediately available funds prior to 11:00 a.m., New York time,
on the due date thereof at the office of the Indenture Trustee or at such
other office of such other financial institution located in the continental
United States as the party entitled thereto may so direct at least ten (10)
Business Days prior to the due date thereof. All payments of Supplemental
Rent payable to the Owner Participant, to the extent that such amounts
constitute Excluded Payments, shall be made in Dollars in immediately
available funds prior to 11:00 a.m., New York time, on the due date
thereof, to the account of the Owner Participant specified in Schedule I to
the Participation Agreement (or to such other account as may be specified
in writing by the Owner Participant from time to time).
(f) Business Day Convention. Notwithstanding anything to
the contrary contained herein, if any date on which a payment of Rent
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 with the same force and effect as if made on such scheduled
date and (provided such payment is made on such next succeeding Business
Day) no interest shall accrue on the amount of such payment from and after
such scheduled date.
SECTION 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES
AND AGREEMENTS.
(a) Disclaimer. LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT
AND EACH PART THEREOF "AS-IS," "WHERE-IS." EXCEPT AS EXPRESSLY PROVIDED
HEREIN, NEITHER LESSOR, THE INDENTURE TRUSTEE NOR ANY PARTICIPANT MAKES,
HAS MADE OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY EXPRESSLY
DISCLAIMS AND WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, WORKMANSHIP, CONDITION, DESIGN, OPERATION, MERCHANTABILITY
OR FITNESS FOR USE OR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART
THEREOF, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT
LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.
(b) Representations, Warranties and Covenants of First
Security Bank. First Security Bank, National Association, in its individual
capacity, (i) represents and warrants that on the Delivery Date, Lessor
shall have received whatever title to the Aircraft was conveyed to it by
Lessee, (ii) represents and warrants that on the Delivery Date the Aircraft
shall be free of Lessor Liens attributable to it, (iii) covenants that
neither it nor any Person claiming by, through or under it will, through
its own actions or inactions, interfere in Lessee's or any Sublessee's
continued possession, use, operation and quiet enjoyment of the Aircraft
during the Term unless an Event of Default has occurred and is continuing
and this Lease has been duly declared in default, and this Lease shall not
be terminated except as expressly provided herein, (iv) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine or any portion of the Trust Estate and (v) represents and
warrants that it is a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement, and agrees
that if at any time it shall cease to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, the Owner Participant or Lessee), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement.
(c) Lessor's Covenants. Lessor (i) covenants that neither it
nor any Person claiming by, through or under it will, through its own
actions or inactions, interfere in Lessee's or any Sublessee's continued
possession, use, operation and quiet enjoyment of the Aircraft during the
Term unless an Event of Default has occurred and is continuing and this
Lease has been duly declared in default, and this Lease shall not be
terminated except as expressly provided herein and (ii) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine.
(d) Manufacturer's Warranties. None of the provisions of
this Lease shall be deemed to amend, modify or otherwise affect the
representations, warranties or other obligations (express or implied) of
the Seller, the Manufacturer, any subcontractor or supplier of the
Manufacturer with respect to the Airframe, the Engines or any Parts, or to
release the Seller, the Manufacturer, or any such subcontractor or
supplier, from any such representation, warranty or obligation. Unless an
Event of Default shall have occurred and be continuing under Section 14 and
this Lease shall have been declared in default, Lessor agrees to make
available to Lessee such rights as Lessor may have under any warranty with
respect to the Aircraft made by the Seller, the Manufacturer or any
affiliate thereof or any of its subcontractors or suppliers and any other
claims against the Seller, the Manufacturer or any affiliate thereof, or
any such subcontractor or supplier with respect to the Aircraft, all
pursuant to and in accordance with the terms of the Purchase Agreement
Assignment.
SECTION 5. RETURN OF THE AIRCRAFT.
(a) Condition Upon Return. Lessee shall comply with each of
the provisions of Exhibit G, which provisions are hereby incorporated by
this reference as if set forth in full herein.
(b) Parking and Related Matters. Unless Lessee has elected
to purchase the Aircraft in accordance with the terms hereof, if Lessor
gives written notice to Lessee not less than sixty (60) days nor more than
one hundred eighty (180) days prior to the end of the Term requesting
storage of the Aircraft upon its return hereunder, Lessee will provide
Lessor, or cause Lessor to be provided, with outdoor parking facilities for
the Aircraft for a period up to thirty (30) days, commencing on the date of
such return, at such storage facility in the forty eight (48) contiguous
states of the United States as Lessee may select; provided that such
location shall be a location generally used for the parking of commercial
aircraft by aircraft owners or operators. Notwithstanding subsection (a) of
Exhibit G, such location shall be deemed to be the return location of the
Aircraft for purposes of such Exhibit G. Such parking shall be at Lessor's
risk and expense and Lessor shall pay all applicable storage, maintenance
and insurance fees and expenses. Lessee's obligation to arrange parking
shall be subject to Lessee and Lessor entering into an agreement prior to
the commencement of the storage period with the storage facility providing,
among other things, that Lessor shall bear all maintenance charges and
other costs incurred relating to such storage.
(c) Return of Other Engines. In the event that any Engine
owned by Lessor shall not be installed on the Airframe at the time of
return hereunder, Lessee shall be required to return the Airframe hereunder
with an Acceptable Alternate Engine meeting the requirements of, and in
accordance with, Section 10 and Exhibit G hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of the return of the Airframe.
(d) Obligations Continue Until Return. If Lessee shall, for
any reason, fail to return the Aircraft at the time specified herein, all
obligations of Lessee under this Lease shall continue in effect with
respect to the Aircraft until the Aircraft is returned to Lessor and Lessee
shall pay to Lessor an amount equal to the average daily Basic Rent payable
by Lessee during the Term for each day after the end of the Term to but
excluding the day of such return; provided, however, that Lessee shall not
be responsible for Lessor's failure to accept return of the Aircraft in
accordance with this Section 5 in a timely manner or for any Rent with
respect to periods after Lessee has tendered the Aircraft for return in
accordance with this Lease. Any Rent owed to Lessor pursuant to this
Section 5(d) shall be payable upon acceptance of the Aircraft by Lessor or
on the last day of each calendar month following the last day of the Term
if the Aircraft has not been accepted earlier.
SECTION 6. LIENS. Lessee will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein or in this Lease, except
(i) the respective rights of Lessor as owner of the Aircraft and Lessee as
herein provided, the Lien of the Trust Indenture, the rights of any
Sublessee under a sublease permitted hereunder and any other rights of any
Person existing pursuant to the Operative Documents, (ii) the rights of
others under agreements or arrangements to the extent permitted by the
terms of Sections 7(b) and 8(b) hereof, (iii) Lessor Liens, Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Lessee (or any Sublessee) either not yet due or being contested in good
faith by appropriate proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Lessee's (or, if a Sublease is then in effect, Sublessee's) business
(including those arising under maintenance agreements entered into in the
ordinary course of business) securing obligations that are not overdue for
a period of more than sixty (60) days or are being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (vi) Liens arising out of any judgment or
award against Lessee (or any Sublessee), unless the judgment secured shall
not, within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Lessee
(or any Sublessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of Lessor and (viii) Liens
approved in writing by Lessor. Lessee will promptly, at its own expense,
take (or cause to be taken) such actions as may be necessary duly to
discharge any such Lien not excepted above if the same shall arise at any
time.
SECTION 7. REGISTRATION, MAINTENANCE, OPERATION AND
REGISTRATION; POSSESSION AND SUBLEASES; INSIGNIA.
(a) Registration, Maintenance, Operation and Registration.
(1) Registration and Maintenance. Lessee, at its own
cost and expense, shall (or shall cause any Sublessee to): (A)
forthwith upon the delivery thereof hereunder, cause the Aircraft
to be duly registered in the name of Lessor, and, subject to clause
3 of this Section 7(a) and Section 7(d) of the Participation
Agreement, to remain duly registered in the name of Lessor under
the Transportation Code, provided that Lessor shall execute and
deliver all such documents as Lessee (or any Sublessee) may
reasonably request for the purpose of effecting and continuing
such registration, and shall not register the Aircraft or permit
the Aircraft to be registered under any laws other than the
Transportation Code at any time except as provided in Section
7(d) of the Participation Agreement and, unless the Lien of the
Trust Indenture shall have been discharged, shall cause the Trust
Indenture to be duly recorded and maintained of record as a first
mortgage on the Aircraft; (B) maintain, service, repair and/or
overhaul (or cause to be maintained, serviced, repaired and/or
overhauled) the Aircraft so as to keep the Aircraft in as good an
operating condition as when delivered by the Seller to Lessee,
ordinary wear and tear excepted, and as may be necessary to
enable the applicable airworthiness certification for the
Aircraft to be maintained in good standing at all times (other
than during temporary periods of storage or during maintenance or
modification permitted hereunder) under the Transportation Code,
except when all of Lessee's Airbus Model A330 aircraft powered by
engines of the same type as those with which the Airframe shall
be equipped at the time of such grounding and registered in the
United States have been grounded by the FAA (although such
certification need actually be maintained only during such
periods as the Aircraft is registered in the United States), or
the applicable laws of any other jurisdiction in which the
Aircraft may then be registered from time to time in accordance
with Section 7(d) of the Participation Agreement, utilizing,
except during any period that a Sublease is in effect, the same
manner and standard of maintenance, service, repair or overhaul
used by Lessee with respect to similar aircraft operated by
Lessee in similar circumstances and utilizing, during any period
that a Sublease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by the Sublessee
with respect to similar aircraft operated by the Sublessee in
similar circumstances; (C) maintain or cause to be maintained in
English all records, logs and other materials required to be
maintained in respect of the Aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered; and (D) promptly
furnish or cause to be furnished to Lessor and the Owner
Participant such information as may be required to enable Lessor
to file any reports required to be filed by Lessor or the Owner
Participant with any governmental authority because of Lessor's
ownership of the Aircraft.
(2) Operation. Lessee will not maintain, use,
service, repair, overhaul or operate the Aircraft (or permit any
Sublessee to maintain, use, service, repair, overhaul or operate
the Aircraft) in violation of any law or any rule, regulation,
order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction over the Aircraft, or in
violation of any airworthiness certificate, license or registration
relating to the Aircraft issued by any such authority, except to
the extent Lessee (or, if a Sublease is then in effect, any
Sublessee) is contesting in good faith the validity or application
of any such law, rule, regulation or order in any reasonable manner
which does not involve any material risk of sale, forfeiture or
loss of the Aircraft. Lessee will not operate the Aircraft, or
permit any Sublessee to operate the Aircraft, in any area excluded
from coverage by any insurance required by the terms of Section 11;
provided, however, that the failure of Lessee to comply with the
provisions of this sentence shall not give rise to an Event of
Default hereunder if indemnification complying with Section 11(c)
has been provided or where such failure is attributable to
extraordinary circumstances involving an isolated occurrence or
series of incidents not in the ordinary course of the regular
operations of Lessee (or any Sublessee) such as a hijacking,
medical emergency, equipment malfunction, weather condition,
navigational error or other causes beyond the reasonable control of
Lessee (or any Sublessee).
(3) Reregistration. At any time after the
Depreciation Period, Lessor, upon Lessee's compliance with all of
the terms of Section 7(d) of the Participation Agreement, shall, at
the request and sole expense of Lessee, cooperate with Lessee to
take all actions required to change the registration of the
Aircraft to another country.
(b) Possession and Subleases. Lessee will not, without the
prior written consent of Lessor, sublease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Lessee (or any
Sublessee) shall comply with the provisions of Section 7(a) and Section 11
hereof, Lessee may (or may permit any Sublessee to), without the prior
written consent of Lessor:
(i) subject the Airframe and the Engines or
engines then installed thereon to interchange agreements or any
Engine to pooling or similar arrangements, in each case customary
in the airline industry and entered into by Lessee (or, if a
Sublease is then in effect, by Sublessee) in the ordinary course of
its business; provided that (A) no such agreement or arrangement
contemplates or requires the transfer of title to the Airframe, (B)
if Lessor's title to any Engine shall be divested under any such
agreement or arrangement, such divestiture shall be deemed to be an
Event of Loss with respect to such Engine and Lessee shall (or
shall cause Sublessee to) comply with Section 10(b) hereof in
respect thereof and (C) any interchange agreement to which the
Airframe may be subject shall be with a U.S. Air Carrier or a
Foreign Air Carrier.
(ii) deliver possession of the Airframe or any
Engine to the manufacturer thereof (or for delivery thereto) or to
any organization (or for delivery thereto) for testing, service,
repair, maintenance or overhaul work on the Airframe or Engine or
any part of any thereof or for alterations or modifications in or
additions to such Airframe or Engine to the extent required or
permitted by the terms of Section 8(c) hereof;
(iii)install an Engine on an airframe owned by
Lessee (or any Sublessee) free and clear of all Liens, except: (A)
Permitted Liens and those which apply only to the engines (other
than Engines), appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment (other than Parts)
installed on such airframe (but not to the airframe as an
entirety), (B) the rights of third parties under interchange
agreements or pooling or similar arrangements which would be
permitted under clause (i) above, provided that Lessor's title to
such Engine and, if any Equipment Notes shall be outstanding, the
first priority Lien of the Trust Indenture shall not be divested or
impaired as a result thereof and (C) mortgage liens or other
security interests, provided that (as regards this clause (C)) the
documents creating such mortgage liens or other security interests
(or, if applicable, another written agreement governing such
mortgage liens or other security interests) effectively provide
that such Engine shall not become subject to the lien of such
mortgage or security interest, notwithstanding the installation
thereof on such airframe;
(iv) install an Engine on an airframe leased to
Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee)
subject to a conditional sale or other security agreement, provided
that (x) such airframe is free and clear of all Liens, except: (A)
the rights of the parties to the lease or conditional sale or other
security agreement covering such airframe, or their assignees and
(B) Liens of the type permitted by clause (iii) of this paragraph
(b) and (y) such lease, conditional sale or other security
agreement effectively provides that such Engine shall not become
subject to the lien of such lease, conditional sale or other
security agreement, notwithstanding the installation thereof on
such airframe;
(v) install an Engine on an airframe owned by
Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or
purchased by Lessee (or any Sublessee) subject to a conditional
sale or other security agreement under circumstances where neither
clause (iii) nor clause (iv) of this paragraph (b) is applicable,
provided that such installation shall be deemed an Event of Loss
with respect to such Engine and Lessee shall (or shall cause any
Sublessee to) comply with Section 10(b) hereof in respect thereof,
Lessor not intending hereby to waive any right or interest it may
have to or in such Engine under applicable law until compliance by
Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b)
hereof, subject any appliances, Parts or other equipment owned by
Lessor and removed from the Airframe or any Engine to any pooling
arrangement referred to in Section 8(b) hereof;
(vii)subject (or permit any Sublessee to
subject) the Airframe or any Engine to the Civil Reserve Air Fleet
Program and transfer (or permit any Sublessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to the
Civil Reserve Air Fleet Program, so long as Lessee (or any
Sublessee) shall (A) promptly notify Lessor upon subjecting the
Airframe or any Engine to the Civil Reserve Air Fleet Program in
any contract year and provide Lessor with the name and address of
the Contracting Office Representative for the Air Mobility Command
of the United States Air Force to whom notice must be given
pursuant to Section 15 hereof and (B) promptly notify Lessor upon
transferring possession of the Airframe or any Engine to the United
States of America or any agency or instrumentality thereof pursuant to
such program;
(viiifor a period not to extend beyond the end
of the Term, enter into a Wet Lease for the Airframe and Engines or
engines then installed thereon with any third party; provided that
if Lessee (or any Sublessee) shall enter into any Wet Lease for a
period of more than one year (including renewal options) Lessee
shall provide Lessor written notice of such Wet Lease (such notice
to be given prior to entering into such Wet Lease, if practicable,
but in any event promptly after entering into such Wet Lease);
(ix) for a period not to extend beyond the end
of the Term, transfer possession of the Airframe or any Engine to
the United States Government or any instrumentality or agency
thereof pursuant to a contract, a copy of which shall be provided
to Lessor; or
(x) Lessee may, at any time in its sole
discretion, enter into any sublease with (A) any Person domiciled
in the United States, (B) after the Depreciation Period, any
Permitted Sublessee or (C) after the Depreciation Period, any other
Person approved in writing by Lessor, which approval shall not be
unreasonably withheld; provided, however, that no sublease entered
into pursuant to this clause (x) shall extend beyond the expiration
of the Basic Term or any Renewal Term then in effect unless Lessee
shall have irrevocably committed to purchase the Aircraft or renew
the Lease in accordance with the terms hereof at the end of the
Basic Term or Renewal Term, as the case may be, to a date beyond
the latest permissible expiration date of such sublease; provided,
further, with respect to a sublease under subclauses (B) or (C) of
this clause (x), Lessee shall deliver to Lessor an opinion of
counsel to the effect that (I) the obligations of Lessee and the
rights and remedies of the Lessor under the Lease remain valid,
binding and (subject to customary bankruptcy and equitable remedies
exceptions and to other exceptions customary in such Opinions)
enforceable; (II) the terms of the sublease constitute valid and
binding obligations of the Sublessee and (subject to customary
bankruptcy and equitable remedies exceptions and to other
exceptions customary in such Opinions) enforceable against
Sublessee (it being understood that such opinion may
be an opinion as to the form of the Sublease only and may assume
due authorization, execution, delivery, requisite approvals and
absence of conflicts with laws, contracts or organizational
documents) under the laws of the jurisdiction governing the
sublease, (III) that there is no tort liability of the owner of an
aircraft not in possession thereof under the laws of the
jurisdiction of the proposed sublessee other than tort liability
which might have been imposed on such owner under the laws of the
United States or any state thereof (it being understood that in the
event such opinion cannot be given such opinion requirement shall
be waived if insurance reasonably satisfactory to Lessor, in its
individual capacity, is provided at Lessee's expense) and (IV)
unless Lessee shall have agreed to provide insurance covering the
risk of requisition of use of the Aircraft by the government of the
jurisdiction of the proposed sublessee reasonably satisfactory to
the Owner Participant, that the laws of such jurisdiction require
fair compensation by the government of such jurisdiction payable in
currency freely convertible into Dollars for the loss of use of the
Aircraft in the event of the requisition by such government of such
use; and provided finally that, with respect to any sublease to any
Affiliate of Lessee, (I) such sublessee shall be a Certificated Air
Carrier and (II) Lessee shall deliver to Lessor an opinion of
counsel to the effect that Lessee would be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to the Aircraft
if such Affiliate were to be a debtor in a case under Chapter 11 of
the Bankruptcy Code, such opinion to be subject to customary
assumptions and qualifications. Lessee shall provide Lessor with a
copy of any sublease which has a term of more than one (1) year.
The rights of any Sublessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Sublease permitted by this paragraph
(b) shall be expressly subject and subordinate to, all the terms of this
Lease and Lessor's (and so long as the Trust Indenture is in effect, the
Indenture Trustee's (as Lessor's assignee) rights to repossess and to void
such Sublease upon such repossession, and Lessee shall remain primarily
liable hereunder for the performance of all of the terms of this Lease, and
the terms of any such Sublease shall not permit any Sublessee to take any
action not permitted to be taken by Lessee in this Lease with respect to
the Aircraft. No pooling agreement, sublease or other relinquishment of
possession of the Airframe or any Engine or Wet Lease shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder or
constitute a waiver of Lessor's rights or remedies hereunder. Lessor
agrees, for the benefit of Lessee (and any Sublessee) and for the benefit
of any mortgagee or other holder of a security interest in any engine
(other than an Engine) owned by Lessee (or any Sublessee), any lessor of
any engine (other than an Engine) leased to Lessee (or any Sublessee) and
any conditional vendor of any engine (other than an Engine) purchased by
Lessee (or any Sublessee) subject to a conditional sale agreement or any
other security agreement, that no interest shall be created hereunder in
any engine so owned, leased or purchased and that none of Lessor, its
successors or assigns will acquire or claim, as against Lessee (or any
Sublessee) or any such mortgagee, lessor or conditional vendor or other
holder of a security interest or any successor or assignee of any thereof,
any right, title or interest in such engine as the result of such engine
being installed on the Airframe.
Any Wet Lease or similar arrangement under which Lessee
maintains operational control of the Aircraft shall not constitute a
delivery, transfer or relinquishment of possession of the Aircraft for
purposes of this section. Lessor acknowledges that any consolidation or
merger of Lessee or conveyance, transfer or lease of all or substantially
all of Lessee's assets otherwise permitted by the Operative Documents shall
not be prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon
as practicable thereafter, Lessee agrees to affix and maintain (or cause to
be affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Leased From
First Security Bank, National Association, as Owner Trustee, Lessor
and, for so long as the Airframe and each Engine shall be subject to the
Lien of the Trust Indenture, bearing the following additional inscription:
Mortgaged To
State Street Bank and Trust Company of Connecticut, National Association,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Lessor or successor Indenture Trustee, in each
case as permitted under the Operative Documents). Except as above provided,
Lessee will not allow the name of any Person to be placed on the Airframe
or on any Engine as a designation that might be interpreted as a claim of
ownership; provided that nothing herein contained shall prohibit Lessee (or
any Sublessee) from placing its customary colors and insignia on the
Airframe or any Engine.
SECTION 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
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MODIFICATIONS AND ADDITIONS.
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(a) Replacement of Parts. Lessee, at its own cost and
expense, will promptly replace or cause to be replaced all Parts which may
from time to time be incorporated or installed in or attached to the
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, except as
otherwise provided in paragraph (c) of this Section 8 or if the Airframe or
an Engine to which a Part relates has suffered an Event of Loss. In
addition, Lessee (or any Sublessee) may, at its own cost and expense,
remove 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 that Lessee (or any Sublessee), except as otherwise
provided in paragraph (c) of this Section 8, will, at its own cost and
expense, 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 paragraph (b) of this
Section 8 and except in the case of replacement property temporarily
installed on an emergency basis) and shall be in as good operating
condition as, and shall have a value and utility at least equal to, the
Parts replaced assuming such replaced Parts were in the condition and
repair required to be maintained by the terms hereof. Except as otherwise
provided in paragraph (c) of this Section 8, all Parts at any time removed
from the Airframe or any Engine shall remain the property of Lessor, no
matter where located, until such time as such Parts shall be replaced by
Parts which have been incorporated or installed in or attached to the
Airframe or such Engine and which meet the requirements for replacement
Parts specified above. Immediately upon any replacement part becoming
incorporated or installed in or attached to the Airframe or any Engine as
above provided, without further act (subject only to Permitted Liens and
any pooling arrangement to the extent permitted by paragraph (b) of this
Section 8 and except in the case of replacement property temporarily
installed on an emergency basis), (i) title to such replacement Part shall
thereupon vest in Lessor, (ii) such replacement Part shall become subject
to this Lease and be deemed part of the Airframe or such Engine for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in or attached to the Airframe or such Engine and (iii) title to
the replaced Part shall thereupon vest in Lessee (or, if a Sublease is then
in effect, any Sublessee), free and clear of all rights of Lessor, and
shall no longer be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as provided in paragraph (a) of this Section 8 may be subjected
by Lessee (or any Sublessee) to a normal pooling arrangement customary in
the airline industry of which Lessee (or, if a Sublease is then in effect,
any Sublessee) is a party entered into in the ordinary course of Lessee's
(or any Sublessee's) business; provided that the Part replacing such
removed Part shall be incorporated or installed in or attached to such
Airframe or Engine in accordance with such paragraph (a) 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 in accordance with such paragraph (a) may be owned
by any third party subject to such a normal pooling arrangement, provided
that Lessee (or any Sublessee), at its expense, as promptly thereafter as
practicable, either (i) causes title to such replacement Part to vest in
Lessor in accordance with such paragraph (a) by Lessee (or any Sublessee)
acquiring title thereto for the benefit of, and transferring such title to,
Lessor free and clear of all Liens except Permitted Liens (other than
pooling arrangements) or (ii) replaces such replacement Part by
incorporating or installing in or attaching to the Airframe or Engine a
further replacement Part owned by Lessee (or any Sublessee) free and clear
of all Liens except Permitted Liens (other than pooling arrangements) and
by causing title to such further replacement Part to vest in Lessor in
accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Lessee, at its
own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or
any applicable regulatory agency or body of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 7(d) of the
Participation Agreement; provided, however, that Lessee (or, if a Sublease
is then in effect, any Sublessee) may, in good faith, contest the validity
or application of any such law, rule, regulation or order in any reasonable
manner which does not adversely affect Lessor or, so long as any Equipment
Notes are outstanding, the Indenture Trustee. In addition, Lessee (or any
Sublessee), at its own expense, may from time to time add further parts or
accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Lessee (or any Sublessee) may deem desirable
in the proper conduct of its business, including, without limitation,
removal of Parts which Lessee (or any Sublessee) has determined in its
reasonable judgment to be obsolete or no longer suitable or appropriate for
use on the Airframe or such Engine (such parts, "Obsolete Parts"); provided
that no such alteration, modification or addition shall materially diminish
the value, utility or remaining useful life of the Airframe or such Engine
below the value, utility or remaining useful life thereof immediately prior
to such alteration, modification or addition, assuming the Airframe or such
Engine was then in the condition required to be maintained by the terms of
this Lease, except that the value (but not the utility or remaining useful
life) of the Airframe or any Engine may be reduced by the value of Obsolete
Parts which shall have been removed so long as the aggregate value of all
Obsolete Parts which shall have been removed and not replaced shall not
exceed $750,000 in aggregate value at the time of removal. Title to all
Parts incorporated or installed in or attached or added to the Airframe or
an Engine as the result of such alteration, modification or addition
(except those parts which (x) Lessee has leased from others and (y) may be
removed by Lessee pursuant to the next sentence (the "Additional Parts"))
shall, without further act, vest in Lessor. Notwithstanding the foregoing
sentence, Lessee (or any Sublessee) may remove or suffer to be removed any
Additional Part, provided that such Additional Part (i) is in addition to,
and not in replacement of or substitution for, any Part originally
incorporated or installed in or attached to the Airframe or any Engine at
the time of delivery thereof hereunder or any Part in replacement of, or
substitution for, any such Part, (ii) is not required to be incorporated or
installed in or attached or added to the Airframe or any Engine pursuant to
the terms of Section 7 hereof or the first sentence of this paragraph (c)
and (iii) can be removed from the Airframe or such Engine without
diminishing or impairing the value, utility or remaining useful life which
the Airframe or such Engine would have had at the time of removal had such
alteration, modification or addition not occurred. Upon the removal by
Lessee (or Sublessee) of any Part as provided above, title thereto shall,
without further act, vest in Lessee (or any Sublessee, as the case may be)
and such Part shall no longer be deemed part of the Airframe or Engine from
which it was removed. Any Part not removed by Lessee (or any Sublessee) as
above provided prior to the return of the Airframe or Engine to Lessor
hereunder shall remain the property of Lessor.
(d) Certain Matters Regarding Passenger Convenience
Equipment. Lessee may install on the Airframe, subject to the requirements
of Section 8(c) above, Passenger Convenience Equipment that is (i) owned by
another Person and leased to Lessee, (ii) sold to Lessee by another Person
subject to a conditional sale contract or other retained security interest,
(iii) leased to Lessee pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Lessee by another Person, and in any such
case the Lessor and the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on
the Airframe. Lessee agrees that if any such Person repossesses such
Passenger Convenience Equipment, Lessee will (or will cause such Person to)
restore the Aircraft to the condition it would have been in had the
installation of such Passenger Convenience Equipment not occurred.
SECTION 9. VOLUNTARY TERMINATION.
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(a) Termination Event.
-----------------
(i) Lessee shall have the right to elect to terminate this
Lease (x) on any Lease Period Date occurring on or after the close
of the calendar year in which the seventh (7th) anniversary of the
Delivery Date occurs if Lessee shall have made the good faith
determination, which shall be evidenced by a certificate of a
responsible officer of Lessee, that the Aircraft is obsolete or
surplus to its needs or (y) on the tenth, thirteenth and sixteenth
anniversaries of the Delivery Date.
(ii) Lessee shall give to Lessor at least one hundred twenty
(120) days revocable advance written notice of Lessee's intention
to so terminate this Lease (any such notice, a "Termination
Notice") specifying (A) the Lease Period Date on which Lessee
intends to terminate this Lease in accordance with this Section 9
(such specified date, a "Termination Date"), (B) either (I) that
Lessee has determined that the Aircraft is obsolete or surplus to
its needs or (II) that it is exercising its termination option
pursuant to Section 9(a)(i)(y) and (C) in the case of a Termination
under Section 9(a)(i)(y) whether Lessee elects to purchase the
Aircraft pursuant to Section 9(d). Any Termination Notice shall
become irrevocable fifteen (15) days prior to the Termination Date.
(b) Optional Sale of the Aircraft; Lessor Retention Option;
Revocation of Termination Notice. In the event that Lessee shall have
exercised its right to terminate this Lease under Section 9(a)(i)(y) but
shall not have elected to purchase the Aircraft pursuant to Section 9(d),
or Lessee shall have elected to terminate this Lease pursuant to Section
9(a)(i)(x), then during the period from the giving of the Termination
Notice until the proposed Termination Date (unless Lessee shall have
revoked the Termination Notice specifying such proposed Termination Date or
Lessor shall have irrevocably elected to retain the Aircraft pursuant to
this Section 9(b)), Lessee, as agent for Lessor and at no expense to
Lessor, shall use commercially reasonable efforts to obtain bids for the
purchase of the Aircraft and, in the event it receives any bid, Lessee
shall, within five (5) Business Days after receipt thereof and at least ten
(10) Business Days prior to the proposed Termination Date, certify to
Lessor in writing the amount and terms of such bid, and the name and
address of the party or parties (who shall not be Lessee or any Affiliate
of Lessee or any Person with whom Lessee or any such Affiliate has an
arrangement or understanding regarding the future use of the Aircraft by
Lessee or any such Affiliate but who may be the Owner Participant, any
Affiliate thereof or any Person contacted by the Owner Participant)
submitting such bid. Subject to the next succeeding sentence, on or before
the Termination Date, subject to the release of all mortgage and security
interests with respect to the Aircraft under the Trust Indenture: (1)
Lessee shall deliver the Aircraft, or cause the Aircraft to be delivered,
to the bidder(s), if any, which shall have submitted the highest bid
therefor at least ten (10) Business Days prior to such Termination Date, in
the same manner and in the same condition and otherwise in accordance with
all the terms of this Lease as if delivery were made to Lessor pursuant to
Section 5, and shall duly transfer to Lessor title to any engines not owned
by Lessor all in accordance with the terms of Section 5, (2) Lessor shall
comply with the terms of the Trust Indenture and shall, without recourse or
warranty (except as to the absence of Lessor Liens), subject to prior or
concurrent payment by Lessee of all amounts due under clause (3) of this
sentence, sell all of Lessor's right, title and interest in and to the
Aircraft for cash in Dollars to such bidder(s), the total sales price
realized at such sale to be retained by Lessor and (3) Lessee shall
simultaneously pay or cause to be paid to Lessor in funds of the type
specified in Section 3(e) hereof, an amount equal to the sum of (A) the
excess, if any, of (i) the Termination Value for the Aircraft, computed as
of the Termination Date, over (ii) the sales price of the Aircraft sold by
Lessor after deducting the reasonable expenses incurred by Lessor in
connection with such sale, (B) all unpaid Basic Rent with respect to the
Aircraft due prior to such Termination Date and, if such Basic Rent is
payable in arrears on such Termination Date as indicated on Exhibit B, on
such Termination Date, and all unpaid Supplemental Rent due on or prior to
the Termination Date with respect to the Aircraft and (C) the Make-Whole
Amount, if any, due on the Equipment Notes, and upon such payment Lessor
simultaneously will transfer to Lessee, without recourse or warranty
(except as to the absence of Lessor Liens), all of Lessor's right, title
and interest in and to any Engines constituting part of the Aircraft which
were not sold with the Aircraft. Notwithstanding the preceding sentence,
Lessor may, if Lessee has not revoked the Termination Notice, elect to
retain title to the Aircraft. If Lessor so elects, Lessor shall give to
Lessee irrevocable written notice of such election within thirty (30) days
of its receipt of a Termination Notice accompanied by an irrevocable
undertaking by the Owner Participant to make available to the Lessor for
payment to the Indenture Trustee on the Termination Date the amount
required to pay in full the unpaid principal amount of the Equipment Notes
outstanding on the Termination Date plus interest accrued thereon through
the Termination Date together with the Make-Whole Amount, if any, due on
the Equipment Notes, if the same is not otherwise paid. Upon receipt of
notice of such an election by Lessor and the accompanying undertaking by
the Owner Participant, Lessee shall cease its efforts to obtain bids as
provided above and shall reject all bids theretofore or thereafter
received. On the Termination Date, Lessor shall (subject to the payment by
Lessee of all Rent due on or prior to such date as set forth below) pay in
full the unpaid principal amount of the Equipment Notes outstanding on the
Termination Date plus interest accrued thereon through the Termination Date
together with all Make-Whole Amount, if any, due on the Equipment Notes
and, so long as the Equipment Notes are paid as aforesaid, Lessee shall
deliver the Airframe and Engines or engines to Lessor in accordance with
Section 5 and shall pay all Basic Rent due prior to the Termination Date
and, if such Basic Rent is payable in arrears on such Termination Date as
indicated on Exhibit B, on such Termination Date, and all Supplemental Rent
(other than Make-Whole Amount or Termination Value) due on or prior to the
Termination Date. If no sale shall have occurred on the Termination Date
and Lessor has not made the payment contemplated by the preceding sentence
and thereby caused this Lease to terminate, or if Lessee revokes its
Termination Notice, this Lease shall continue in full force and effect as
to the Aircraft, Lessee shall pay the reasonable costs and expenses
incurred by the Owner Participant and Lessor (unless such failure to
terminate the Lease is a consequence of the failure of Lessor or the Owner
Participant without due cause to make, or cause to be made, the payment
referred to in the immediately preceding sentence, in which case Lessor and
the Owner Participant shall be responsible for damages), if any, in
connection with preparation for such sale and Lessee may give one or more
additional Termination Notices in accordance with Section 9(a), subject to
the last sentence of this Section 9(b). In the event of any such sale or
such retention of the Aircraft by Lessor and upon compliance by Lessee with
the provisions of this paragraph, the obligation of Lessee to pay Basic
Rent or any other amounts hereunder shall cease to accrue and this Lease
shall terminate. Lessor may, but shall be under no duty to, solicit bids,
inquire into the efforts of Lessee to obtain bids or otherwise take any
action in connection with any such sale other than to transfer (in
accordance with the foregoing provisions) to the purchaser named in the
highest bid certified by Lessee to Lessor all of Lessor's right, title and
interest in the Aircraft, against receipt of the payments provided herein.
Lessee may revoke a Termination Notice given pursuant to Section 9(a) no
more than two (2) times during the Term.
(c) Termination as to Engines; Replacement. Lessee shall
have the right at its option at any time during the Term, on at least
thirty (30) days prior written notice, to terminate this Lease with respect
to any Engine. In such event, and prior to the date of such termination,
Lessee shall replace such Engine hereunder by complying with the terms of
Section 10(b) to the same extent as if an Event of Loss had occurred with
respect to such Engine, and Lessor shall transfer such right, title and
interest as it may have to the replaced Engine as provided in Section 5(b).
No termination of this Lease with respect to any Engine as contemplated by
this Section 9(c) shall result in any reduction of Basic Rent.
(d) Special Purchase Options. If Lessee exercises its right
to terminate this Lease under Section 9(a)(1)(y), gives its notice pursuant
to Section 9(a)(ii) to purchase the Aircraft pursuant to this Section 9(d)
and such notice becomes irrevocable, then on the Termination Date specified
in Section 9(a), Lessee shall purchase the Aircraft at the greater of (i)
the Termination Value on the Termination Date, or (ii) its fair market
sales value on the Termination Date (determined in accordance with Section
19(c) hereof), provided that Lessee shall have also paid the amounts
specified in (A) and (B) of the following sentence. In such event, Lessor
shall, without recourse or warranty (except as to the absence of Lessor
Liens), sell the Aircraft to Lessee in exchange for the payment in
immediately available funds in an amount equal to the greater of (x) the
Termination Value for the Aircraft, computed as of the Termination Value
Date, or (y) the fair market sales value of the Aircraft on the Termination
Date, provided that on such date the Lessee shall have also paid to the
Lessor the sum of (A) all unpaid Basic Rent with respect to the Aircraft
due on or prior to such Termination Date (other than Basic Rent payable in
advance and due on the Termination Date) and all unpaid Supplemental Rent
with respect to the Aircraft due on or prior to such Termination Date plus
(B) all reasonable expenses incurred by Lessor and the Owner Participant in
connection with such sale. Upon payment in full of the amounts required to
be paid and the performance of all acts required to be performed by Lessee
pursuant to the preceding sentence, (i) the obligation of Lessee to pay
Basic Rent hereunder with respect to the Aircraft for any period commencing
on or after the Termination Date shall terminate with respect to the
Aircraft, (ii) this Lease shall terminate on the Termination Date, (iii)
Lessor will transfer to or at the direction of Lessee, without recourse or
warranty (except as to the absence of Lessor Liens), all of Lessor's right,
title and interest in the Airframe and Engines and furnish to or at the
direction of the Lessee a bill of sales in form and substance reasonably
satisfactory to Lessee, evidencing such transfer. Notwithstanding the
foregoing, Lessee may, in accordance with Section 7(u) of the Participation
Agreement, assume the principal amount of the Equipment Notes then
outstanding on any Termination Date specified in Section 9(a), in which
event the Lessee will receive a credit against the purchase price otherwise
payable pursuant to this Section 9(d) in an amount equal to the principal
amount of Equipment Notes so assumed.
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Lessee shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give Lessor written notice of such Event of Loss, and, within
sixty (60) days after such Event of Loss, Lessee shall give Lessor written
notice of its election to perform one of the following options (it being
agreed that if Lessee shall not have given such notice of election within
such period, Lessee shall be deemed to have elected the option set forth in
clause (i) below). Lessee may elect either to:
(i) make the payments specified in this clause
(i), in which event not later than the earlier of (x) the Business
Day next succeeding the 120th day following the occurrence of such
Event of Loss or (y) an earlier Business Day irrevocably specified
fifteen (15) days in advance by notice from Lessee to Lessor and
the Indenture Trustee (the "Loss Payment Date"), Lessee shall pay
or cause to be paid to Lessor in funds of the type specified in
Section 3(e) hereof, an amount equal to the Termination Value of
the Aircraft corresponding to the Termination Value Date occurring
on or immediately following the Loss Payment Date (the
"Determination Date"); provided that in any instance in which the
applicable Loss Payment Date shall occur after the final day of the
Term, the Determination Date shall be the last Termination Value
Date in the Term, and the Termination Value shall be reduced by any
amount of Basic Rent due on the Determination Date that has
actually been paid;
(ii) substitute an aircraft or an airframe or
an airframe and one or more engines, as the case may be; provided
that, if Lessee does not perform its obligation to effect such
substitution in accordance with this Section 10(a), during the
period of time provided herein, then Lessee shall pay or cause to
be paid to Lessor on the Business Day next succeeding the 120th
day following the occurrence of such Event of Loss the amount
specified in clause (i) above.
At such time as Lessor shall have received the amounts
specified in clause (i) above, together with all other amounts that then
may be due hereunder (including, without limitation, all Basic Rent due
before the date of such payment and all Supplemental Rent), under the
Participation Agreement and under the Tax Indemnity Agreement, (1) the
obligation of Lessee to pay the installments of Basic Rent shall cease to
accrue, (2) this Lease shall terminate, (3) Lessor will comply with the
terms of the Trust Indenture and transfer to or at the direction of Lessee,
without recourse or warranty (except as to the absence of Lessor Liens),
all of Lessor's right, title and interest in and to the Airframe and any
Engines subject to such Event of Loss, as well as any Engines not subject
to such Event of Loss, and furnish to or at the direction of Lessee a bill
of sale in form and substance reasonably satisfactory to Lessee (or any
Sublessee), evidencing such transfer and (4) Lessee will be subrogated to
all claims of Lessor, if any, against third parties, for damage to or loss
of the Airframe and any Engines which were subject to such Event of Loss to
the extent of the then insured value of the Aircraft.
In the event Lessee shall elect to substitute an aircraft
(or an airframe or an airframe and one or more engines, as the case may be)
Lessee shall, at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss,
(A) convey or cause to be conveyed to Lessor and to be leased by Lessee
hereunder, an aircraft (or an airframe or an airframe and one or more
engines which, together with the Engines constituting a part of the
Aircraft but not installed thereon at the time of such Event of Loss
constitute the Aircraft) free and clear of all Liens (other than Permitted
Liens) and having a value, utility and remaining useful life at least equal
to the Aircraft subject to such Event of Loss assuming that the Aircraft
had been maintained in accordance with this Lease and (B) prior to or at
the time of any such substitution, Lessee (or any Sublessee), at its own
expense, will (1) furnish Lessor with a full warranty bill of sale and a
Federal Aviation Administration bill of sale, in form and substance
reasonably satisfactory to Lessor, evidencing such transfer of title, (2)
cause a Lease Supplement and a Trust Supplement to be duly executed by
Lessee and filed for recording pursuant to the Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in which
the Airframe may then be registered as permitted by Section 7(d) of the
Participation Agreement, (3) cause a financing statement or statements with
respect to such substituted property to be filed in such place or places as
are deemed necessary or desirable by Lessor to perfect its and the
Indenture Trustee's interest therein and herein, (4) furnish Lessor with
such evidence of compliance with the insurance provisions of Section 11
with respect to such substituted property as Lessor may reasonably request,
(5) furnish Lessor with copies of the documentation required to be provided
by Lessee pursuant to Section 5.06 of the Trust Indenture, and Lessor
simultaneously will comply with the terms of the Trust Indenture and
transfer to or at the direction of Lessee, without recourse or warranty
(except as to the absence of Lessor Liens), all of Lessor's right, title
and interest, if any, in and to the Aircraft or the Airframe and one or
more Engines, as the case may be, with respect to which such Event of Loss
occurred and furnish to or at the direction of Lessee a bill of sale in
form and substance reasonably satisfactory to Lessee (or any Sublessee),
evidencing such transfer, (6) furnish Lessor with an opinion of counsel
(which shall be Skadden, Arps, Slate, Meagher & Flom LLP or Skadden, Arps,
Slate, Meagher & Flom (Illinois) and, if not, other counsel chosen by
Lessee and reasonably acceptable to Lessor) reasonably satisfactory to
Lessor to the effect that Lessor and the Indenture Trustee will be entitled
to the benefits of Section 1110 of the U.S. Bankruptcy Code with respect to
the substitute aircraft, provided that such opinion need not be delivered
to the extent that immediately prior to such substitution the benefits of
Section 1110 of the U.S. Bankruptcy Code were not, solely by reason of a
change in law or governmental interpretation thereof after the date hereof,
available to Lessor and, so long as any Equipment Notes are outstanding,
the Indenture Trustee (it being agreed that such opinion may contain
customary qualifications and assumptions) and (7) Lessee will be subrogated
to all claims of Lessor, if any, against third parties for damage to or
loss of the Airframe and any Engine which were subject to such Event of
Loss to the extent of the then insured value of the Aircraft. For all
purposes hereof, the property so substituted shall after such transfer be
deemed part of the property leased hereunder and shall be deemed an
"Aircraft", "Airframe" and "Engine", as the case may be, as defined herein.
No Event of Loss with respect to the Airframe or the Airframe and the
Engines or engines then installed thereon for which substitution has been
elected pursuant to Section 10(a)(ii) hereof shall result in any reduction
in Basic Rent.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect
to the Airframe, Lessee shall forthwith (and in any event, within fifteen
days after such occurrence) give Lessor written notice thereof and shall,
within one hundred twenty (120) days after the occurrence of such Event of
Loss, convey or cause to be conveyed to Lessor, as replacement for the
Engine with respect to which such Event of Loss occurred, title to an
Acceptable Alternate Engine. Prior to or at the time of any such
conveyance, Lessee, at its own expense, will (i) furnish Lessor with a
warranty (as to title) bill of sale, in form and substance reasonably
satisfactory to Lessor, with respect to such Acceptable Alternate Engine,
(ii) cause a Lease Supplement and Trust Supplement to be duly executed by
Lessee and to be filed for recording pursuant to the Transportation Code,
or the applicable laws, rules and regulations of any other jurisdiction in
which the Airframe may then be registered as permitted by Section 7(d) of
the Participation Agreement, (iii) furnish Lessor with such evidence of
compliance with the insurance provisions of Section 11 hereof with respect
to such replacement engine as Lessor may reasonably request and furnish
Lessor with copies of the documentation required to be provided by Lessee
pursuant to Section 5.06 of the Trust Indenture, and Lessor will comply
with the terms of the Trust Indenture and transfer to or at the direction
of Lessee without recourse or warranty (except as to absence of Lessor
Liens) all of Lessor's right, title and interest, if any, in and to (A) the
Engine with respect to which such Event of Loss occurred and furnish to or
at the direction of Lessee a bill of sale in form and substance reasonably
satisfactory to Lessee, evidencing such transfer and (B) all claims, if
any, against third parties, for damage to or loss of the Engine subject to
such Event of Loss, and such Engine shall thereupon cease to be the Engine
leased hereunder. For all purposes hereof, each such replacement engine
shall, after such conveyance, be deemed part of the property leased
hereunder, and shall be deemed an "Engine". No Event of Loss with respect
to an Engine under the circumstances contemplated by the terms of this
paragraph (b) shall result in any reduction in Basic Rent.
(c) Application of Payments from Governmental Authorities
for Requisition of Title, etc. Any payments (other than insurance proceeds
the application of which is provided for in Section 11) received at any
time by Lessor or by Lessee from any governmental authority or other Person
with respect to an Event of Loss will be applied as follows:
(i) if payments are received with respect to
the Airframe (or the Airframe and any Engine or engines then
installed thereon), (A) unless the same are replaced pursuant to
the last paragraph of Section 10(a), after reimbursement of Lessor
(as provided in Section 7.01 of the Trust Agreement) for reasonable
costs and expenses, so much of such payments remaining as shall not
exceed the Termination Value required to be paid by Lessee pursuant
to Section 10(a), shall be applied in reduction of Lessee's
obligation to pay Termination Value, if not already paid by Lessee,
or, if already paid by Lessee, shall be applied to reimburse Lessee
for its payment of Termination Value, and following the foregoing
application, the balance, if any, of such payments will be paid
over to, or retained by Lessee, provided that Lessor shall be
entitled to so much of the excess, if any, of such payment over the
greater of (x) the Termination Value and (y) the fair market value
of the Aircraft as Lessor shall demonstrate to Lessee's
reasonable satisfaction is attributable to compensation for loss
of Lessor's interest in the Aircraft as distinguished from the
loss of use of the Aircraft; or (B) if such property is replaced
pursuant to the last paragraph of Section 10(a), such payments
shall be paid over to, or retained by, Lessee; and
(ii) if such payments are received with respect
to an Engine under circumstances contemplated by Section 10(b)
hereof, so much of such payments remaining after reimbursement of
Lessor (as provided for in Section 7.01 of the Trust Agreement) for
reasonable costs and expenses shall be paid over to, or retained
by, Lessee.
(d) Requisition for Use of the Aircraft by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of the Airframe and the Engines or engines
installed on the Airframe during the Term by the United States Government
or any other government of registry of the Aircraft or any instrumentality
or agency of any thereof, Lessee shall promptly notify Lessor of such
requisition, and all of Lessee's obligations under this Lease with respect
to the Aircraft shall continue to the same extent as if such requisition
had not occurred (except to the extent that any failure or delay in
repairing or maintaining the Aircraft shall have been caused by such
requisition), provided that if such Airframe and Engines or engines
installed thereon are not returned by such government prior to the end of
the Term, Lessee shall be obligated to return the Airframe and such Engines
or engines to Lessor pursuant to, and in all other respects in compliance
with the provisions of, Section 5 promptly on the date of such return by
such government. If, in the event of any such requisition, Lessee shall
fail to return the Aircraft on or before the thirtieth (30th) day beyond
the end of the Term, such failure shall constitute an Event of Loss which
shall be deemed to have occurred on the last day of the Term and in such
event Lessee shall make the payment contemplated by Section 10(a)(i) in
respect of such Event of Loss; provided, however, that Lessor may notify
Lessee in writing on or before the twentieth (20th) day prior to the last
day of the Term that, in the event Lessee shall fail by reason of such
requisition to return the Airframe and such Engines or engines on or before
the thirtieth day beyond the end of the Term, such failure shall not be
deemed an Event of Loss. Upon the giving of such notice and such failure to
return by the thirtieth (30th) day beyond the end of the Term, Lessee shall
be relieved of all of its obligations pursuant to the provisions of Section
5 (but not under any other Section), except that if any engine not owned by
Lessor shall then be installed on the Airframe, Lessee will, at no cost to
Lessor, furnish, or cause to be furnished, to Lessor a full warranty (as to
title) bill of sale with respect to each such engine, in form and substance
reasonably satisfactory to Lessor (together with an opinion of counsel
(which may be Lessee's General Counsel, Deputy General Counsel, Associate
General Counsel or Assistant General Counsel) to the effect that such full
warranty bill of sale has been duly authorized and delivered and is
enforceable in accordance with its terms and that such engines are free and
clear of Liens other than Lessor Liens, Loan Participant Liens and
Indenture Trustee Liens), against receipt from Lessor of a bill of sale
evidencing the transfer, without recourse or warranty (except as to the
absence of Lessor Liens), by Lessor to Lessee or its designee of all of
Lessor's right, title and interest in and to any Engine constituting part
of the Aircraft but not then installed on the Airframe. All payments
received by Lessor or Lessee from such government for the use of such
Airframe and Engines or engines during the Term shall be paid over to, or
retained by, Lessee (or, if directed by Lessee, any Sublessee); and all
payments received by Lessor or Lessee from such government for the use of
such Airframe and Engines or engines after the end of the Term shall be
paid over to, or retained by, Lessor unless Lessee shall have exercised its
purchase option hereunder, in which case such payments shall be made to
Lessee.
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof (other than in the circumstances
contemplated by paragraph (d)), Lessee shall replace such Engine hereunder
by complying (or causing any Sublessee to comply) with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 10(b) hereof, any payments
received by Lessor or Lessee from such government with respect to such
requisition shall be paid over to, or retained by, Lessee.
(f) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 10 which is payable to or
retainable by Lessee (or any Sublessee) shall not be paid to or retained by
Lessee (or such Sublessee) if at the time of such payment or retention an
Event of Default has occurred and is continuing, but shall be held by or
paid over to Lessor as security for the obligations of Lessee (or such
Sublessee) under this Lease and, if an Event of Default has occurred and is
continuing hereunder, applied against Lessee's obligations hereunder as and
when due. At such time as there shall not be continuing any such Event of
Default, such amount shall be paid to Lessee (or such Sublessee) to the
extent not previously applied in accordance with the preceding sentence.
SECTION 11. INSURANCE.
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(a) Lessee's Obligation to Insure. Lessee shall comply with,
or cause to be complied with, each of the provisions of Exhibit H, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) Additional Insurance by Lessor and Lessee. Lessee (and
any Sublessee) may at its own expense carry insurance with respect to its
interest in the Aircraft in amounts in excess of that required to be
maintained by this Section 11; the Owner Participant may carry for its own
account at its sole cost and expense insurance with respect to its interest
in the Aircraft, provided that such insurance does not prevent Lessee (or
any Sublessee) from carrying the insurance required or permitted by this
Section 11 or adversely affect such insurance or the cost thereof.
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 11 requiring insurance,
Lessor agrees to accept, in lieu of insurance against any risk with respect
to the Aircraft, indemnification from, or insurance provided by, the United
States Government or any agency or instrumentality thereof, or, upon the
written consent of Lessor, other government of registry of the Aircraft or
agency or instrumentality thereof, against such risk in an amount which,
when added to the amount of insurance against such risk maintained by
Lessee (or any Sublessee) shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 11 (taking
into account self-insurance permitted by Exhibit H hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit H hereto which
is payable to or retainable by Lessee (or any Sublessee) shall not be paid
to or retained by Lessee (or any Sublessee) if at the time of such payment
or retention an Event of Default has occurred and is continuing, but shall
be held by or paid over to Lessor as security for the obligations of Lessee
under this Lease and, if Lessor declares this Lease to be in default
pursuant to Section 15 hereof, applied against Lessee's obligations
hereunder as and when due. At such time as there shall not be continuing
any such Event of Default, such amount shall be paid to Lessee to the
extent not previously applied in accordance with the preceding sentence.
SECTION 12. INSPECTION. At all reasonable times and upon at
least 15 days prior written notice to Lessee, the Owner Participant or the
Indenture Trustee, or their respective authorized representatives, may
inspect the Aircraft and inspect and make copies of the books and records
of Lessee and any Sublessee required to be maintained by the Federal
Aviation Administration or the regulatory agency or body of another
jurisdiction in which the Aircraft is then registered relating to the
maintenance of the Aircraft (at Lessor's, the Owner Participant's or the
Indenture Trustee's risk and expense, as the case may be) and shall keep
any information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Lessor, the Note Holders
and to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Note Holders' or the Indenture Trustee's interest (and
such prospective and permitted transferee's counsel, independent insurance
advisors or other agents) who agree to hold such information confidential,
(B) to Lessor's, the Owner Participant's, the Note Holders' or the
Indenture Trustee's counsel, independent insurance advisors or other agents
who agree to hold such information confidential, or (C) as may be required
by any statute, court or administrative order or decree or governmental
ruling or regulation, provided, however, that any and all disclosures
permitted by clause (C) above shall be made only to the extent necessary to
meet the specific requirements or needs of the Persons for whom such
disclosures are hereby permitted. Any such inspection of the Aircraft shall
be subject to Lessee's safety and security rules applicable to the location
of the Aircraft, shall be a visual, walk-around inspection of the interior
and exterior of the Aircraft and shall not include opening any panels, bays
or the like without the express consent of Lessee (except in connection
with a heavy maintenance visit when a panel, bay or the like is scheduled
or required to be opened), which consent Lessee may in its sole discretion
withhold; provided that no exercise of such inspection right shall
interfere with the normal operation or maintenance of the Aircraft by, or
the business of, Lessee (or any Sublessee). Upon receipt by Lessee of a
written request from the Owner Participant specifying that the Owner
Participant desires to have an authorized representative observe the next
scheduled heavy maintenance visit to be performed on the Aircraft during
the Term, Lessee shall cooperate with the Owner Participant to enable the
Owner Participant's representative to observe such scheduled maintenance to
be performed on the Aircraft during the Term; provided that the Owner
Participant's authorized representative shall merely observe such scheduled
heavy maintenance visit, shall not interfere with or extend in any manner
the normal conduct or duration of the scheduled heavy maintenance visit,
and shall not be entitled to direct any of the work performed in connection
with such scheduled heavy maintenance visit. Neither the Owner Participant
nor the Indenture Trustee shall have any duty to make any such inspection
nor shall either of them incur any liability or obligation by reason of not
making such inspection. Except during the final six (6) months of the Term
or during the continuance of an Event of Default, all inspections by the
Owner Participant and its authorized representatives or the Indenture
Trustee and its authorized representatives provided for under this Section
12 shall, in regard to each of the Owner Participant and the Indenture
Trustee, be limited to one (1) inspection of any kind contemplated by this
Section 12 during any calendar year. During the last three months of the
Term (unless Lessee shall have elected to purchase the Aircraft or renew
this Lease in accordance with the terms of this Lease), with reasonable
notice, Lessee will cooperate and cause any Sublessee to cooperate, at
Lessor's sole cost, in all reasonable respects with the efforts of Lessor
to sell or lease the Aircraft, including, without limitation, permitting
prospective purchasers or lessees to inspect the Aircraft, any maintenance
records relating to the Aircraft then required to be retained by the FAA or
by the comparable government of registry of the Aircraft, all in accordance
with the provisions set forth above; provided that any such cooperation
shall not interfere with the normal operation or maintenance of the
Aircraft by, or the business of, Lessee or any Sublessee.
SECTION 13. ASSIGNMENT. Except as otherwise provided herein,
Lessee will not, without prior written consent of Lessor, assign in whole
or in part any of its rights or obligations hereunder. Lessor agrees that
it will not assign or convey its right, title and interest in and to this
Lease or the Aircraft except as provided herein, in the Trust Indenture,
the Trust Agreement, in the Participation Agreement or in any other
Operative Document. Subject to the foregoing, the terms and provisions of
this Lease shall be binding upon and inure to the benefit of Lessor and
Lessee and their respective successors and permitted assigns.
SECTION 14. EVENTS OF DEFAULT. Each of the following events
shall constitute an Event of Default (whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and each such Event of Default shall continue so long
as, but only as long as, it shall not have been remedied:
(a) Lessee shall not have made a payment of (i) Basic Rent
within five (5) Business Days after the same shall have become due or (ii)
Termination Value within ten (10) Business Days after receipt by Lessee of
written notice that the same is past due; or
(b) Lessee shall have failed to make a payment of
Supplemental Rent (other than Termination Value) after the same shall have
become due and such failure shall continue for thirty (30) days after
Lessee's receipt of written demand therefor by the party entitled thereto
(provided that any failure to pay any amount owed by Lessee under the Tax
Indemnity Agreement or any failure of Lessee to pay to Lessor or the Owner
Participant when due any Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Participant to Lessee and the
Indenture Trustee that such failure shall constitute an Event of Default);
or
(c) Lessee shall have failed to perform or observe (or
caused to be performed and observed) in any material respect any covenant
or agreement (except the covenants set forth in the Tax Indemnity
Agreement) to be performed or observed by it under any Operative Document,
and such failure shall continue unremedied for a period of thirty (30) days
after receipt by Lessee of written notice thereof from Lessor or the
Indenture Trustee; provided, however, that if Lessee shall have undertaken
to cure any such failure and, notwithstanding the diligence of Lessee in
attempting to cure such failure, such failure is not cured within said
thirty (30) day period but is curable with future due diligence, there
shall exist no Event of Default under this Section 14 so long as Lessee is
proceeding with due diligence to cure such failure and such failure is
remedied not later than three hundred sixty (360) days after receipt by
Lessee of such written notice; or
(d) any representation or warranty made by Lessee herein or
in the Participation Agreement or any document or certificate furnished by
Lessee in connection herewith or therewith or pursuant hereto or thereto
(except the representations and warranties set forth in the Tax Indemnity
Agreement and such documents or certificates as are furnished to the Owner
Participant solely in connection with matters dealt with in the Tax
Indemnity Agreement and for no other purpose and except for representations
or warranties contained in the Pass Through Trust Agreement, the
Underwriting Agreement or any document or instrument furnished pursuant to
either thereof) shall prove to have been incorrect in any material respect
at the time made, shall remain material at the time in question and such
incorrectness shall not have been cured (to the extent of the adverse
impact of such incorrectness on the interests of the Owner Participant,
Lessor or the Note Holders) within thirty (30) days after the receipt by
Lessee of a written notice from Lessor or the Indenture Trustee advising
Lessee of the existence of such incorrectness; or
(e) the commencement of an involuntary case or other
proceeding in respect of Lessee in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law in the United
States or seeking the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Lessee or for all
or substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety (90) consecutive
days or an order, judgment or decree shall be entered in any proceeding by
any court of competent jurisdiction appointing, without the consent of
Lessee, a receiver, trustee or liquidator of Lessee, or of any substantial
part of its property, or sequestering any substantial part of the property
of Lessee and any such order, judgment or decree or appointment or
sequestration shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date of entry
thereof; or
(f) the commencement by Lessee of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other similar
law in the United States, or the consent by Lessee to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Lessee or for all or
substantially all of its property, or the making by Lessee of any
assignment for the benefit of creditors, or Lessee shall take any corporate
action to authorize any of the foregoing; or
(g) Lessee shall fail to carry and maintain on or with
respect to the Aircraft (or cause to be carried and maintained) insurance
required to be maintained in accordance with the provisions of Section 11
hereof;
provided, however, that, notwithstanding anything to the contrary contained
in Section 14(c) or (d) hereof, any failure of Lessee to perform or observe
any covenant, condition, agreement or any error in a representation or
warranty shall not constitute an Event of Default if such failure or error
is caused solely by reason of an event that constitutes an Event of Loss so
long as Lessee is continuing to comply with all of the terms of Section 10
hereof.
SECTION 15. REMEDIES. Upon the occurrence of any Event of
Default and at any time thereafter so long as the same shall be continuing,
Lessor may, at its option, declare by written notice to Lessee this Lease
to be in default; and at any time thereafter, so long as any such
outstanding Events of Default shall not have been remedied, Lessor may do
one or more of the following with respect to all or any part of the
Airframe and any or all of the Engines as Lessor in its sole discretion
shall elect, to the extent permitted by, and subject to compliance with any
mandatory requirements of, applicable law then in effect; provided,
however, that during any period the Aircraft is subject to the Civil
Reserve Air Fleet Program in accordance with the provisions of Section 7(b)
hereof and in possession of the United States government or an agency or
instrumentality of the United States, Lessor shall not, on account of any
Event of Default, be entitled to do any of the following in such manner as
to limit Lessee's control under this Lease (or any Sublessee's control
under any Sublease) of any Airframe or any Engines installed thereon,
unless at least sixty (60) days (or such lesser period as may then be
applicable under the Air Mobility Command program of the United States
Government) written notice of default hereunder shall have been given by
Lessor by registered or certified mail to Lessee (and any Sublessee) with a
copy addressed to the Contracting Office Representative for the Air
Mobility Command of the United States Air Force under any contract with
Lessee (or any Sublessee) relating to the Aircraft:
(a) upon the written demand of Lessor and at Lessee's
expense, cause Lessee to return promptly, and Lessee shall return promptly,
the Airframe or any Engine as Lessor may so demand to Lessor or its order
in the manner and condition required by, and otherwise in accordance with
all the provisions of, Section 5 as if such Airframe or Engine were being
returned at the end of the Term, or Lessor, at its option, may enter upon
the premises where all or any part of the Airframe or any Engine is located
and take immediate possession of and remove the same by summary proceedings
or otherwise (and/or, at Lessor's option, store the same at Lessee's
premises until disposal thereof by Lessor), all without liability accruing
to Lessor for or by reason of such entry or taking of possession or
removing whether for the restoration of damage to property caused by such
action or otherwise;
(b) sell the Airframe and/or any Engine at public or private
sale, as Lessor may determine, or otherwise dispose of, hold, use, operate,
lease to others or keep idle the Aircraft as Lessor, in its sole
discretion, may determine, all free and clear of any rights of Lessee,
except as hereinafter set forth in this Section 15;
(c) whether or not Lessor shall have exercised, or shall
thereafter at any time exercise, any of its rights under paragraph (a) or
paragraph (b) above with respect to the Airframe and/or any Engine, Lessor,
by written notice to Lessee specifying a payment date which shall be the
Lease Period Date not earlier than ten (10) days from the date of such
notice, may demand that Lessee pay to Lessor, and Lessee shall pay Lessor,
on the payment date so specified, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the installments of Basic Rent for
the Aircraft due for Lease Periods commencing on or after the Lease Period
Date specified as the payment date in such notice), any unpaid Basic Rent
due on Lease Period Dates prior to the payment date so specified
(including, without limitation, any adjustments to Basic Rent payable
pursuant to Section 3(c)) plus whichever of the following amounts Lessor,
in its sole discretion, shall specify in such notice (together with
interest, if any, on such amount at the Past Due Rate from such specified
payment date until the date of actual payment of such amount): (i) an
amount equal to the excess, if any, of the Termination Value for
the Aircraft, computed as of the Lease Period Date specified as the payment
date in such notice, over the aggregate fair market rental value (computed
as hereafter in this Section 15 provided) of such Aircraft for the
remainder of the Term, after discounting such aggregate fair market rental
value to present value as of the Lease Period Date specified as the payment
date in such notice at an annual rate equal to the Past Due Rate; or (ii)
an amount equal to the excess, if any, of the Termination Value for such
Aircraft, computed as of the Lease Period Date specified as the payment
date in such notice over the fair market sales value of such Aircraft
(computed as hereafter in this Section provided) as of the Lease Period
Date specified as the payment date in such notice;
(d) in the event Lessor, pursuant to paragraph (b) above,
shall have sold the Airframe and/or any Engine, Lessor, in lieu of
exercising its rights under paragraph (c) above with respect to such
Aircraft, may, if it shall so elect, demand that Lessee pay Lessor, and
Lessee shall pay to Lessor, on the date of such sale, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the installments of
Basic Rent for the Aircraft due on or after such date), any unpaid Basic
Rent with respect to the Aircraft due prior to such date (including,
without limitation, any adjustments to Basic Rent payable pursuant to
Section 3(c)) plus the amount of any deficiency between the net proceeds of
such sale (after deduction of all reasonable costs of sale) and the
Termination Value of such Aircraft, computed as of the Termination Date on
or immediately following the date of such sale together with interest, if
any, on the amount of such deficiency, at the Past Due Rate, from the date
of such sale to the date of actual payment of such amount; and/or
(e) Lessor may rescind this Lease as to the Aircraft, and/or
may exercise any other right or remedy which may be available to it under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for breach hereof.
For the purposes of paragraph (c) above, the "fair market
rental value" or the "fair market sales value" of the Aircraft shall be the
rental value or sales value, as the case may be, which would be obtained in
an arm's-length transaction between an informed and willing lessee or
purchaser, as the case may be, under no compulsion to lease or purchase, as
the case may be, and an informed and willing lessor or seller in possession
under no compulsion to lease, sell, as the case may be, in each case based
upon the actual condition and location of the Aircraft, which value shall
be determined by mutual agreement or, in the absence of mutual written
agreement, pursuant to an appraisal prepared and delivered by a nationally
recognized firm of independent aircraft appraisers nominated by Lessor, and
Lessor shall immediately notify Lessee of such nomination. Unless Lessee
shall have objected in writing within ten (10) Business Days after its
receipt of Lessor's notice, Lessor's nomination shall be conclusive and
binding. If Lessee shall object, however, Lessor and Lessee shall endeavor,
within ten (10) Business Days after such objection is made, to select a
mutually acceptable appraiser; provided that, if Lessee shall not so
endeavor to make such selection, Lessor's nomination referred to in the
preceding sentence hereof shall be conclusive and binding. If Lessor and
Lessee fail to reach agreement (except for the reason referred to in the
proviso in the preceding sentence), or if any appraiser selected fails to
act for any reason, then the question shall be determined by an appraisal
(applying the definitions of "fair market rental value" and "fair market
sales value" as set forth above based upon the actual condition of the
Aircraft) mutually agreed to by two (2) recognized independent aircraft
appraisers, one of which appraisers shall be chosen by Lessor and one by
Lessee within five (5) Business Days after Lessor or Lessee shall have
received written notice from the other party of a demand that such an
appraisal be made, which notice shall specify the appraiser chosen by the
party giving the notice or, if such appraisers cannot agree on the amount
of such appraisal within twenty (20) Business Days after the end of such
five (5) Business Day period, each shall render its own appraisal and shall
by mutual consent choose another appraiser within five (5) Business Days
after the end of such twenty (20) day period. If, within such five (5) day
period, such two appraisers fail to appoint a third appraiser, then either
Lessor or Lessee, on behalf of both, may request such appointment by the
then President of the Association of the Bar of the City of New York (or
any successor organization thereto) or, in his absence, failure, refusal or
inability to act, then either Lessor or Lessee may apply to the American
Arbitration Association (or any successor organization thereto) in New
York, New York for the appointment of such third appraiser. The decision of
the third appraiser so appointed shall be given within twenty (20) Business
Days after the appointment of such third appraiser. As soon as the third
appraiser has delivered his appraisal, that appraisal shall be compared
with the appraisals given by the other two (2) appraisers. If the
determination of one appraiser is more disparate from the average of all
three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and
binding upon the parties hereto. If no determination is more disparate from
the average of all three determinations than each of the other
determinations, then such average shall be final and binding upon the
parties thereto. The cost of such appraisal or appointment shall be borne
by Lessee.
In addition, Lessee shall be liable, except as otherwise
provided above and without duplication of amounts payable hereunder, for
any and all unpaid Rent due hereunder before, after or during the exercise
of any of the foregoing remedies and for all reasonable legal fees and
other costs and expenses (including fees of the appraisers hereinabove
referred to) incurred by Lessor, the Indenture Trustee, the Loan
Participants and the Owner Participant in connection with the return of the
Airframe or any Engine in accordance with the terms of Section 5 or in
placing such Airframe or Engine in the condition and airworthiness required
by such Section.
At any sale of the Aircraft or any part thereof pursuant to
this Section 15, Lessor (or the Indenture Trustee, any Loan Participant or
the Owner Participant) or Lessee may bid for and purchase such property.
Lessor agrees to give Lessee at least fifteen (15) days prior written
notice of the date fixed for any public sale of the Airframe or any Engine
or of the date on or after which will occur the execution of any contract
providing for any private sale and any such public sale shall be conducted
in general so as to afford Lessee (and any Sublessee) a reasonable
opportunity to bid. Except as otherwise expressly provided above, no remedy
referred to in this Section 15 is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such remedies shall
not preclude the simultaneous or later exercise by Lessor of any or all of
such other remedies. No waiver by Lessor of any Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent
Event of Default.
SECTION 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS;
DELIVERY OF FINANCIAL STATEMENTS. Forthwith upon the execution and delivery
of each Lease Supplement and Trust Supplement from time to time required by
the terms hereof and upon the execution and delivery of any amendment to
this Lease, to the Trust Indenture or to the Trust Agreement, Lessee will
cause such Lease Supplement, Trust Supplement (and, in the case of the
initial Lease Supplement and Trust Supplement, this Lease, the Trust
Agreement and the Trust Indenture as well) or amendment to be duly filed
and recorded, and maintained of record, in accordance with the applicable
laws of the government of registry of the Aircraft. In addition, Lessee
will promptly and duly execute and deliver to Lessor such further documents
and take such further action as Lessor or the Indenture Trustee may from
time to time reasonably request in order more effectively to carry out the
intent and purpose of this Lease and to establish and protect the rights
and remedies created or intended to be created in favor of Lessor and the
Indenture Trustee hereunder, including, without limitation, if requested by
Lessor or the Indenture Trustee, at the expense of Lessee, the execution
and delivery of supplements or amendments hereto or to the Trust Indenture,
each in recordable form, subjecting to this Lease and the Trust Indenture,
any airframe or engine substituted for the Airframe or any Engine pursuant
to the terms thereof and the recording or filing of counterparts
thereof, in accordance with the laws of such jurisdictions as Lessor or the
Indenture Trustee may from time to time deem advisable. Lessee agrees to
furnish to Lessor and the Indenture Trustee promptly after execution and
delivery of any supplement and amendment hereto and promptly after the
execution and delivery of any supplement and amendment to the Trust
Indenture (except for any such supplement or amendment which does not
require or receive the approval of Lessee pursuant to the Operative
Documents and is not required pursuant to the terms of the Operative
Documents), an opinion of counsel (which may be Lessee's General Counsel,
Deputy General Counsel, Associate General Counsel or Assistant General
Counsel) reasonably satisfactory to Lessor and the Indenture Trustee as to
the due recording or filing of such supplement or amendment. Lessee will
deliver to Lessor, the Owner Participant and the Indenture Trustee (a)
within sixty (60) days after the end of each of the first three quarterly
periods of each fiscal year of Lessee, the publicly filed Form 10-Q report
of Lessee; and (b) within one hundred twenty (120) days after the close of
such fiscal year, the publicly filed annual report and Form 10-K report of
Lessee.
SECTION 17. NOTICES. All notices required under the terms
and provisions hereof shall be by telecopier or other telecommunication
means (with such telecopy or other telecommunication means to be confirmed
in writing), or if such notice is impracticable, by registered, first-class
airmail, with postage prepaid, or by personal delivery of written notice
and any such notice shall become effective when received, addressed:
(a) if to Lessee, for U.S. mail at 2345 Crystal Drive,
Arlington, Virginia 22227, and for overnight courier at 2345 Crystal Drive,
Arlington, Virginia 22227, Attention: Treasurer (Telecopy No. (703)
872-5936), or to such other address or telecopy number as Lessee shall from
time to time designate in writing to Lessor,
(b) if to Lessor, at 79 South Main Street, 3rd Floor,
Salt Lake City, Utah 84111, Attention: Corporate Trust Department (Telecopy
No. (801) 246-5053), or to such other address or telecopy number as Lessor
shall from time to time designate in writing to Lessee, and
(c) if to a Loan Participant, the Indenture Trustee or the
Owner Participant, addressed to such Loan Participant, the Indenture
Trustee or the Owner Participant at such address or telecopy number as such
Loan Participant, the Indenture Trustee or the Owner Participant shall have
furnished by notice to Lessor and to Lessee, and, until an address is so
furnished, addressed to such Loan Participant, the Indenture
Trustee or the Owner Participant at its address or telecopy number set
forth in Schedule I to the Participation Agreement.
SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC. All Rent shall be
paid by Lessee to Lessor in funds of the type specified in Section 3(e).
Except as expressly provided herein, Lessee's obligation to pay all Rent
payable hereunder shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right which Lessee may
have against Lessor, in its individual capacity or as Owner Trustee under
the Trust Agreement, the Indenture Trustee (in its individual capacity or
as Indenture Trustee), any Loan Participant, the Owner Participant, or
anyone else for any reason whatsoever (whether in connection with the
transactions contemplated hereby or any other transactions), including,
without limitation, any breach by Lessor or the Owner Participant of their
respective warranties, agreements or covenants contained in any of the
Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or any
damage to or loss or destruction of, the Aircraft, or any interruption or
cessation in or prohibition of the use or possession thereof by Lessee (or
any Sublessee) for any reason whatsoever, including, without limitation,
any such interruption, cessation or prohibition resulting from the act of
any government authority, (iii) any insolvency, bankruptcy, reorganization
or similar case or proceedings by or against Lessee (or any Sublessee) or
any other Person, or (iv) any other circumstance, happening, or event
whatsoever, whether or not unforeseen or similar to any of the foregoing;
provided, however, that notwithstanding the foregoing, Lessee shall be
entitled to offset from any payment due to the Owner Participant the cost
incurred by Lessee to discharge Lessor Liens relating to the Owner
Participant. If for any reason whatsoever this Lease shall be terminated in
whole or in part by operation of law or otherwise except as specifically
provided herein, Lessee nonetheless agrees without limitation of the other
rights or remedies of Lessor hereunder to pay to Lessor an amount equal to
each Rent payment at the time such payment would have become due and
payable in accordance with the terms hereof had this Lease not been
terminated in whole or in part. Lessee hereby waives, to the extent
permitted by applicable law, any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease except in
accordance with the express terms hereof.
SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION.
--------------------------------------------
(a) Renewal Options.
---------------
(1) Fixed Renewal Term. Not more than 365 days and
not less than one hundred twenty (120) days, before the end of the
Basic Term or any Fixed Renewal Term (as hereinafter defined),
Lessee may deliver to Lessor a written notice irrevocably electing
to renew this Lease for a term having a duration and at a Basic
Rent as determined below (any such renewal term, a "Fixed Renewal
Term"). The duration of any Fixed Renewal Term shall be a period
specified by Lessee before the end of the Basic Term which is (i)
not less than one year (provided any such period shall be in six
(6) month increments), (ii) not more than the longest period of
time which would cause the Term, after giving effect to such Fixed
Renewal Term, to be equal to 75% of the total useful life of the
aircraft as determined by the Delivery Date appraisal. Each semi-
annual installment of Basic Rent during the Fixed Renewal Term
shall be equal to the lesser of (A) the fair market rental value of
the Aircraft or (B) (I) one-half of the average annual Basic Rent
during the Basic Term divided by (II) two (2).
(2) Fair Market Renewal Term. Lessee shall have the
right to renew this Lease for additional periods of one (1) year or
more (provided any such period shall be on six (6) month
increments) commencing at the end of the Basic Term or the Fixed
Renewal Term for a Basic Rent equal to the fair market rental value
of the Aircraft for such period (any such renewal term, a "Fair
Market Renewal Term"). Each such option to renew shall be exercised
by Lessee providing irrevocable notice at least one hundred twenty
(120) days prior to the commencement of such Fair Market Renewal
Term.
(3) Waiver. If no written notice is delivered by
Lessee to Lessor pursuant to Section 19(a)(1) or (a)(2) on or
before the day specified therefor, Lessee shall be deemed to have
waived any right to renew this Lease.
(4) Conditions Precedent, Payment of Basic Rent. At
-------------------------------------------
the end of the Basic Term or any Renewal Term, if Lessee has elected
to renew this Lease as aforesaid, (i) this Lease shall continue in
full force and effect during the Renewal Term and (ii) Basic Rent
for such Renewal Term shall be payable in semi-annual
installments in arrears, each such installment being due and
payable on each Lease Period Date occurring during the Renewal
Term, commencing with the Lease Period Date immediately following
the commencement of the Renewal Term, provided that Basic Rent
for such Renewal Term shall be payable at such other frequency of
payment consistent with the length of the Renewal Term as Lessor
may reasonably designate in the event that such period is not
divisible into whole semi-annual periods.
(5) Termination Value. The amounts which are payable
during any Renewal Term in respect of Termination Value with
respect to the Aircraft shall be determined on the basis of the
fair market sales value of the Aircraft as of the commencement of
such Renewal Term, amortized on a straight-line basis over such
Renewal Term to the projected fair market sales value of the
Aircraft as of the expiration of such Renewal Term, as such fair
market sales value in each case is determined prior to the
commencement of such Renewal Term. In determining fair market sales
value for purposes of calculating Termination Value for any Renewal
Term effect shall be given to the encumbrance on the Aircraft of
any Fixed Renewal Term available or in force.
(b) Purchase Options. Lessee shall have the option, (i) upon
at least thirty (30) days irrevocable prior written notice to Lessor prior
to the EBO Date with respect to the purchase option set forth in clause (i)
and (ii) upon at least one hundred twenty (120) days irrevocable prior
written notice to Lessor prior to the relevant purchase date (each a
"Purchase Option Date") with respect to the purchase options set forth in
clauses (ii) and (iii), to terminate this Lease and to purchase the
Aircraft:
(1) on the EBO Date, for a purchase price equal to
the EBO Amount set forth on Exhibit D, it being understood that if
such amount is to be paid in installments, Lessee will, upon
payment of the first installment of the EBO Amount, on the EBO
date, receive title to the Aircraft free and clear of all liens
(other than the Lien of the Indenture if Lessee has elected to
assume the Equipment Notes in accordance with Section 7(u) of the
Participation Agreement);
(2) on the last Business Day of the Basic Term for a
purchase price equal to the fair market sales value of the Aircraft
on such date, provided, however, that in no event shall such
purchase price exceed 50% of Lessor's Cost;
(3) on the last Business Day of any Renewal Term for
a purchase price equal to the fair market sales value of the
Aircraft on such date.
Notwithstanding the foregoing but subject to the last
sentence of this paragraph, the purchase price on any Purchase Option Date
shall be sufficient, together with all other amounts payable simultaneously
by Lessee, to pay in full the payments then required to be made on account
of the principal amount of and accrued and unpaid interest on the Equipment
Notes then outstanding. Upon payment to Lessor in immediately available
funds in Dollars of the full amount of the purchase price and payment of
any other amounts then due hereunder (including all Rent and all reasonable
costs or expenses of the Owner Participant in connection with such
purchase), Lessor will transfer to Lessee, without recourse or warranty
(except as to the absences of Lessor Liens), all of Lessor's right, title
and interest in and to the Aircraft. Notwithstanding the foregoing, Lessee
may, in accordance with Section 7(u) of the Participation Agreement, assume
the principal amount of the Equipment Notes then outstanding on any
applicable Purchase Option Date in which event Lessee shall receive a
credit against the purchase price otherwise payable pursuant to the
preceding two sentences in an amount equal to the principal amount so
assumed.
(c) Valuation. At any time not earlier than three hundred
sixty-five (365) days prior to the date on which Lessee may purchase the
Aircraft pursuant to Section 19(b)(2) or (b)(3) hereof or renew this Lease
pursuant to Section 19(a)(1) or (a)(2) hereof, Lessee may deliver to Lessor
a revocable notice of its intent to exercise its renewal option or purchase
option. For all purposes of this Section 19 and Section 20, including the
appraisal referred to in this Section 19(c), in determining "fair market
rental value" or "fair market sales value", the Aircraft shall be valued
(i) as if in the condition and otherwise in compliance with the terms of
Section 5 upon a return of the Aircraft to Lessor and as if it had been
maintained at all times as required in accordance with Section 7(a)(i)
during periods when no Sublease was in effect, (ii) on the basis of the
value which would obtain in an arm's-length transaction between an informed
and willing buyer-user or lessee (other than a lessee or an Affiliate of a
lessee currently in possession or a used equipment scrap dealer) under no
compulsion to buy or lease and an informed and willing seller or lessor
unaffiliated with such buyer-user or lessee and under no compulsion to sell
or lease and disregarding the purchase and renewal options of the lessee
provided in this Lease and (iii) in the case of such valuation for
determining "fair market rental value", assuming such lessee would have
substantially the same obligations during the Fair Market Renewal Term as
provided hereunder including without limitation the obligations of Lessee
to carry and maintain the insurance required by Section 11 hereof and to
make certain payments with reference to Termination Value during the
applicable Fair Market Renewal Term. Upon receipt of such notice Lessor and
Lessee shall confer in good faith with a view to reaching agreement on the
"fair market rental value" or "fair market sales value" of the Aircraft. If
the parties have not so agreed within two hundred seventy (270) days prior
to the end of the Basic Term or the Renewal Term in question, then the
question shall be determined by an appraisal mutually agreed to by two
recognized independent aircraft appraisers, one of which appraisers shall
be chosen by Lessor and one by Lessee within five (5) Business Days after
Lessor or Lessee shall have received written notice from the other party of
a demand that such an appraisal be made, which notice shall specify the
appraiser chosen by the party giving the notice or, if such appraisers
cannot agree on the amount of such appraisal within twenty (20) Business
Days after the end of such five (5) Business Day period, each shall render
its own appraisal and shall by mutual consent choose another appraiser
within five (5) Business Days after the end of such twenty (20) Business
Day period. If, within such five (5) Business Day period, such two
appraisers fail to appoint a third appraiser, then either Lessor or Lessee,
on behalf of both, may request such appointment by the then President of
the Association of the Bar of the City of New York (or any successor
organization thereto) or, in his absence, failure, refusal or inability to
act, then either Lessor or Lessee may apply to the American Arbitration
Association (or any successor organization thereto) in New York, New York
for the appointment of such third appraiser. The decision of the third
appraiser so appointed shall be given within ten (10) Business Days after
the appointment of such third appraiser. As soon as the third appraiser has
delivered his appraisal, that appraisal shall be compared with the
appraisals given by the other two appraisers. If the determination of one
appraiser is more disparate from the average of all three determinations
than each of the other two determinations, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be
averaged and such average shall be final and binding upon the parties
hereto. If no determination is more disparate from the average of all three
determinations than each of the other determinations, then such average
shall be final and binding upon the parties thereto. Lessee and Lessor
shall share equally all expenses relating to such appraisal procedure
provided if Lessee elects not to renew this Lease or purchase the Aircraft
following such appraisal, Lessee shall pay all expenses of such appraisal.
SECTION 20. BURDENSOME PURCHASE OPTION. If a Burdensome
Termination Event shall have occurred, then on any Lease Period Date
occurring after the expiration of the Depreciation Period, Lessee shall
have the option, upon at least one hundred twenty (120) days revocable
prior notice to Lessor and, if any Equipment Notes are then outstanding,
the Indenture Trustee, to purchase the Aircraft on such date for a purchase
price equal to the higher of the Termination Value as of such date or the
fair market sales value of the aircraft (determined as set forth in clause
(c) above and excluding the value of any Significant Expenditure) (such
price, the "Burdensome Buyout Price"). In addition, if on such date there
shall be any Equipment Notes outstanding, Lessee shall have the option to
assume, pursuant to Section 7(u) of the Participation Agreement and Section
2.13 of the Trust Indenture, all of the obligations of Lessor under the
Trust Indenture. If such assumption is made, Lessee shall pay Lessor a
purchase price equal to (I) the Burdensome Buyout Price minus (II) an
amount equal to principal of, and accrued but unpaid interest on, any
Equipment Notes that are outstanding on such date. Upon such payment in
full and payment of any other amounts then due hereunder (including costs
or expenses of the Owner Participant in connection with such purchase, any
installments of Basic Rent due prior to such date and, if Basic Rent is
payable in arrears on such date as indicated on Exhibit B, on such date
(but not any installment of Basic Rent due on such date if Basic Rent is
payable in advance on such date), and all unpaid Supplemental Rent due on
or prior to such date), Lessor will transfer to Lessee, without recourse or
warranty (except as to the absence of Lessor Liens), all of Lessor's right,
title and interest in and to the Aircraft and under the Trust Indenture
and, unless there shall be any Equipment Notes outstanding after such
payment, exercise such rights as it has to cause the Aircraft to be
released from the Lien of the Trust Indenture.
SECTION 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF
EQUIPMENT NOTES. In order to secure the indebtedness evidenced by the
Equipment Notes, Lessor has agreed in the Trust Indenture, among other
things, to assign to the Indenture Trustee this Lease, the Lease
Supplements and any amendments to this Lease and to mortgage its interest
in the Aircraft in favor of the Indenture Trustee, subject to the
reservations and conditions therein set forth. To the extent, if any, that
this Lease, the Lease Supplements and any amendments to this Lease
constitute chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in
this Lease, the Lease Supplements and any amendments to this Lease may be
created through the transfer or possession of any counterpart other than
the original counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Indenture Trustee on the
signature page thereof. Lessee hereby accepts and consents to the
assignment of all Lessor's right, title and interest in and to this Lease
pursuant to the terms of the Trust Indenture. Subject to Section 3(e)
hereof, Lessee agrees to pay directly to the Indenture Trustee (or, after
receipt by Lessee of notice from the Indenture Trustee of the discharge of
the Trust Indenture, to Lessor), all amounts of Rent due or to become due
hereunder and assigned to the Indenture Trustee and Lessee agrees that the
Indenture Trustee's right to such payments hereunder shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, the circumstances set forth in clauses (i) through (iv)
of Section 18 hereof. Notwithstanding the foregoing assignment of this
Lease, the obligations of Lessor to Lessee to perform the terms and
conditions of this Lease shall remain in full force and effect.
SECTION 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee
fails to make any payment of Rent required to be made by it hereunder or
fails to perform or comply with any of its agreements contained herein,
then (but in each case, except in the case of failure to pay Rent or in the
case of failure to maintain insurance as required hereunder, no earlier
than the fifteenth day after the occurrence of such failure, whether or not
it shall yet constitute an Event of Default hereunder) Lessor may itself
make such payment or perform or comply with such agreement but shall not be
obligated hereunder to do so, and the amount of such payment and the amount
of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the
case may be, together with interest thereon at the Past Due Rate, shall be
deemed Supplemental Rent, payable by Lessee upon demand.
SECTION 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR
LIMITED.
(a) Investment of Security Funds. Any moneys held by Lessor
as security hereunder for future payments to Lessee at a time when there is
not continuing an Event of Default shall, until paid to Lessee, be invested
by Lessor or, if the Trust Indenture shall not have been discharged, by the
Indenture Trustee, as the case may be, as Lessee may from time to time
direct in writing (and in absence of a written direction by Lessee, there
shall be no obligation to invest such moneys) in Cash Equivalents. There
shall be promptly remitted to Lessee or its order (but no more frequently
than monthly) any gain (including interest received) realized as a result
of any such investment (net of any fees, commissions and other expenses, if
any, incurred in connection with such investment) unless an Event of
Default shall have occurred and be continuing. Lessee shall be responsible
for any net loss realized as a result of any such investment and shall
reimburse Lessor (or the Indenture Trustee, as the case may be) therefor on
demand.
(b) Liability of Lessor Limited. It is expressly agreed and
understood that all representations, warranties and undertakings of Lessor
hereunder shall be binding upon Lessor only in its capacity as trustee
under the Trust Agreement, and the institution acting as Lessor shall not
be liable in its individual capacity for any breach thereof except for its
gross negligence or willful misconduct or for breach of its covenants,
representations and warranties contained herein, to the extent covenanted
or made in its individual capacity.
SECTION 24. JURISDICTION. Lessor and Lessee each hereby
irrevocably submits itself to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York and to the
non-exclusive jurisdiction of the Supreme Court of the State of New York,
New York County, for the purposes of any suit, action or other proceeding
arising out of this Lease, the subject matter hereof or any of the
transactions contemplated hereby brought by Lessor, Lessee, the Indenture
Trustee, the Loan Participants or the Owner Participant or their successors
or assigns.
SECTION 25. MISCELLANEOUS. Any provision of this Lease which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. No term or provision of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by Lessor, Lessee and any assignee of Lessor's rights hereunder.
This Lease shall constitute an agreement of lease, and nothing contained
herein shall be construed as conveying to Lessee any right, title or
interest in the Aircraft except as a lessee only. Neither Lessee nor any
affiliate of Lessee will file any tax returns in a manner inconsistent with
the foregoing fact or with Lessor's ownership of the Aircraft. The section
and paragraph headings in this Lease and the table of contents are for
convenience of reference only and shall not modify, define, expand or limit
any of the terms or provisions hereof and all references herein to numbered
sections, unless otherwise indicated, are to sections of this Lease. THIS
LEASE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND 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 Lease may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument.
SECTION 26. SUCCESSOR TRUSTEE. Lessee agrees that in the
case of the appointment of any successor Owner Trustee pursuant to the
terms of the Trust Agreement, such successor Owner Trustee shall, upon
written notice by such successor Owner Trustee, succeed to all the rights,
powers and title of Lessor hereunder and shall be deemed to be Lessor and
the owner of the Aircraft for all purposes hereof without the necessity of
any consent or approval by Lessee (subject to Section 9 of the
Participation Agreement) and without in any way altering the terms of this
Lease or Lessee's obligations hereunder. One such appointment and
designation of a successor Owner Trustee shall not exhaust the right to
appoint and designate further successor Owner Trustees pursuant to the
Trust Agreement, but such right may be exercised repeatedly as long as this
Lease shall be in effect.
SECTION 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
-----------------------------------------------
SECTION 1110 OF BANKRUPTCY CODE
- -------------------------------
(a) Lease for Federal Income Tax Law Purposes. It is the
intent of the parties to this Agreement that this Lease is a true lease for
U.S. Federal income tax purposes.
(b) Section 1110 of Bankruptcy Code. It is the intention of
each of Lessee and Lessor that Lessor (and the Indenture Trustee as secured
party and as assignee of Lessor under the Trust Indenture) shall be
entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to the right to take possession of the Aircraft, Airframe, Engines
and Parts as provided in this Lease.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this
Lease to be duly executed as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly provided
herein, but solely as Owner Trustee,
Lessor
By:___________________________________
Title:________________________________
US AIRWAYS, INC.,
Lessee
By:___________________________________
Title:________________________________
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on the ___ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, Indenture Trustee
By:_____________________________________
Title:__________________________________
As set forth in Section 21 of the Lease (as defined below), Lessor has
assigned to the Indenture Trustee (as defined herein) certain of its right,
title and interest in and to the Lease and this Lease Supplement. To the
extent, if any, that this Lease Supplement constitutes chattel paper (as
such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction) no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
EXHIBIT A
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
LEASE SUPPLEMENT NO.
(US Airways, Inc. Trust No. N___U_)
LEASE SUPPLEMENT NO. __, dated _________, _____, between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
not in its individual capacity, but solely as Owner Trustee under the Trust
Agreement (US Airways, Inc. Trust No. N___U_), dated as of __________ __,
____ with the Owner Participant named therein (such Owner Trustee, in its
capacity as such Owner Trustee, being herein called "Lessor"), and US
AIRWAYS, INC., a Delaware corporation ("Lessee").
Lessor and Lessee have heretofore entered into that certain
Lease Agreement (US Airways, Inc. Trust No. N___U_), dated as of __________
__, ____, relating to one Airbus Model A330 aircraft (herein called the
"Lease," and the defined terms therein being hereinafter used with the same
meanings). The Lease provides for the execution and delivery from time to
time of Lease Supplements for the purpose of leasing the Airframe and
Engines under the Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof.
[The Lease relates to the Airframe and Engines described
below, and a counterpart of the Lease is attached hereto, and made a part
hereof, and this Lease Supplement, together with such attachment, is being
filed for recordation on the date hereof with the Federal Aviation
Administration as one document.]1
[The Lease relates to the Airframe and Engines described
below, and a counterpart of the Lease, attached and made a part of Lease
Supplement No. 1 dated _______________, ____ to the Lease, has been
recorded by the Federal Aviation Administration on ________________, ____,
as one document and assigned Conveyance No. __.]2
NOW, THEREFORE, in consideration of the premises and other
good and sufficient consideration, Lessor and Lessee hereby agree as
follows:
(a) Lessor hereby delivers and leases to Lessee under the
Lease and Lessee hereby accepts and leases from Lessor under the Lease the
following described Airbus Model A330 aircraft (the "Aircraft"), which
Aircraft as of the date hereof consists of the following components:
(i) Airframe: Airbus Model A330-
___3 airframe bearing FAA Registration No. ______; manufacturer's
serial no. _____; and
(ii) Engines: two (2) engines
identified as [ ]4 type aircraft engines bearing, respectively,
manufacturer's serial nos.______ and _____ (each of which engines
has 750 or more rated takeoff horsepower or the equivalent of
such horsepower).
(b) The Delivery Date of the Aircraft is the date of this
Lease Supplement set forth in the opening paragraph hereof. Except as
otherwise provided in the Lease, the Term for the Aircraft shall commence
on the Delivery Date and end on ____________, 20__.
- --------
1 For use on Lease Supplement No. 1.
2 For use on Lease Supplement No. 2 and thereafter.
3 Insert full model number of Aircraft (e.g., "A330-300").
4 Insert engine manufacturer and model number.
(c) Lessee hereby confirms its agreement to pay Lessor Basic
Rent for the Aircraft throughout the Term therefor in accordance with
Section 3 of the Lease.
(d) Lessee hereby confirms to Lessor that Lessee has
accepted the Aircraft for all purposes hereof and of the Lease as being
airworthy, in good working order and repair and without defect or inherent
vice in title, condition, design, operation or fitness for use; provided,
however, that nothing contained herein or in the Lease shall in any way
diminish or otherwise affect any right Lessee or Lessor may have with
respect to the Aircraft against Airbus Industrie G.I.E., or any
subcontractor or supplier of Airbus Industrie G.I.E., under the Purchase
Agreement or otherwise.
(e) All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.
(f) This Lease Supplement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument. To the extent, if any, that
this Lease Supplement constitutes chattel paper (as such term is defined in
the Uniform Commercial Code as in effect in any jurisdiction), no security
interest in this Lease Supplement may be created through the transfer or
possession of any counterpart other than the original counterpart, which
shall be identified as the counterpart containing the receipt therefor
executed by the Indenture Trustee on the signature page hereof.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement to be duly executed on the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly provided
herein, but solely as Owner Trustee,
Lessor
By:______________________________________
Name:
Title:
US AIRWAYS, INC.,
Lessee
By:______________________________________
Name:
Title:
Form Lease
N____U_
(1) Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this ____ day of __________, ___ .
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,
Indenture Trustee
By:_____________________________________
Name:
Title:
(1) This language contained in the original counterpart only.
Form Lease
N____U_
EXHIBIT B
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
PAST DUE RATE DEFINED; BASIC RENT AND LESSOR'S COST
The portion of this Exhibit appearing below will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
"Past Due Rate" means (i) with respect to any portion of any
payment of Rent that may be required by the Trust Indenture to be paid by
the Indenture Trustee to the Loan Participants, or the holders of any
outstanding Equipment Notes, a rate per annum equal to 1% over the interest
rate then in effect for such Equipment Notes, and (ii) with respect to the
remaining portion of any payment of Rent (and the entire amount of any
payment of Rent after the satisfaction and discharge of the Trust
Indenture), a rate per annum equal to 1% over the Base Rate.
Basic Rent:
- ----------
Basic Rent
Lease Period (Percentage of
Date Lessor's Cost)
----------------- ----------------
*
**
Lessor's Cost: $_______________
- ---------------
* Denotes payment in arrears from preceding Lease Period Date (or
Delivery Date in the case of the first Lease Period) to specified
Lease Period Date.
** Denotes payment in advance from specified Lease Period Date to
succeeding Lease Period Date.
Form Lease
N____U_
EXHIBIT C
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
TERMINATION VALUE SCHEDULE
The portion of this Exhibit appearing below this text will
be intentionally deleted from the FAA filing counterpart as the parties
hereto deem it to contain confidential information.
Termination Termination
Value Date Value Percentage
----------- -----------------
Form Lease
N____U_
EXHIBIT D
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
EBO AMOUNT
The portion of this Exhibit appearing below this text will
be intentionally deleted from the FAA filing counterpart as the parties
hereto deem it to contain confidential information.
EBO Date EBO Amount
-------- ----------
Form Lease
N____U_
EXHIBIT E
to
Lease Agreement
(US Airways, Inc. N___U_)
RENT RECALCULATION AND
INDEMNIFICATION VERIFICATION
The portion of this Exhibit appearing below this will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
Any recalculation of Basic Rent, Termination Value
percentages and EBO Amount pursuant to the Lease shall be determined by the
Owner Participant, and shall maintain the Owner Participant's Net Economic
Return except as assumptions have been modified pursuant to Section 3 of
the Lease or pursuant to the Tax Indemnity Agreement or the Participation
Agreement, as the case may be; provided, however, that Lessee may request
(A) Lessee's independent public accountants to verify such calculations but
without any requirement that the Owner Participant disclose to such Persons
the methodology and assumptions and (B) if Lessee believes that such
calculations by the Owner Participant are in error then a nationally
recognized firm of accountants selected by the Owner Participant and
reasonably acceptable to Lessee shall be permitted to verify such
calculations and the Owner Participant will make available to such firm
(subject to the execution by such firm of a confidentiality agreement
reasonably acceptable to the Owner Participant) the methodology and
assumptions and any changes made therein pursuant to Section 3 of the
Lease. In the event of a verification under clause (B) of the first
sentence of this paragraph the determination by such firm of accountants
shall be final. Lessee will pay the reasonable costs and expenses of the
verification under clause (B) of the first sentence of this paragraph
unless an error adverse to Lessee is established by such firm, and if as a
result of such verification process the Basic Rent is adjusted and such
adjustment causes the Net Present Value of Rents to decline by 10 (ten) or
more basis points or causes a material reduction in Termination Value, EBO
Amount or any indemnity payment (in which event the Owner Participant shall
pay the reasonable costs and expenses of such verification process). Such
recalculated Basic Rent, Termination Value percentages and EBO amounts
shall be set forth in a Lease Supplement or an amendment to the Lease.
"Net Economic Return" means the Owner Participant's
after-tax yield and aggregate after-tax cash flow utilizing the multiple
investment sinking fund method of analysis, computed on the basis of the
same methodology and assumptions as were utilized by the Owner Participant
in determining Basic Rent, Termination Value percentages and EBO Amount as
of the Delivery Date.
Form Lease
N____U_
EXHIBIT F
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States of America
Malaysia Venezuela
*So long as on the date of the Sublease such country and the United
States have diplomatic relations at least as good as those in effect on the
Delivery Date.
Form Lease
N____U_
EXHIBIT G
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
RETURN CONDITIONS
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Condition Upon Return. Unless purchased by Lessee
pursuant to Section 19 or 20 hereof, upon the termination of this Lease at
the end of the Basic Term or any Renewal Term or pursuant to Sections 9(b)
or 15, unless Lessor has requested that Lessee return the Aircraft to a
storage location pursuant to Section 5(b) (in which case the storage
location provided in said Section 5(b) shall be deemed to be the return
location), Lessee will return the Airframe to Lessor at one of Lessee's
principal maintenance bases located in one of the forty-eight contiguous
states of the United States chosen by Lessee, and Lessee will give Lessor
at least ten (10) days prior written notice of the place of such return. At
the time of such return, (i) Lessee will, at its own cost and expense,
unless otherwise requested by Lessor to retain the existing registration of
the Aircraft at least ninety (90) days prior to the date of return
hereunder, cause the Aircraft, if it is not then so registered, to be
registered under the laws of the United States with the Federal Aviation
Administration in the name of the Lessor or its designee, provided that
Lessee shall be relieved of its obligations under this sentence if such
registration is prohibited by reason of the failure of Lessor, Owner
Participant or Lessor's designee to be eligible on such date to own an
aircraft registered with the Federal Aviation Administration and (ii) the
Airframe will be fully equipped with the Engines (or Acceptable Alternate
Engines) installed thereon. Also, at the time of such return, Lessor shall
have good title to such Airframe and Engines or Acceptable Alternate
Engines, and such Airframe and Engine or Acceptable Alternate Engines (A)
shall be certified (or, if not then registered under the Transportation
Code by reason of the proviso of clause (i) in the preceding sentence or
because Lessor has so requested that the Aircraft not be so registered,
shall hold a valid certificate of airworthiness issued by the country of
registry and be eligible for certification by the Federal Aviation
Administration) as an airworthy aircraft by the Federal Aviation
Administration, (B) shall be free and clear of all Liens (other than Lessor
Liens, Indenture Trustee's Liens and Loan Participant Liens) and rights of
third parties under pooling, interchange, overhaul, repair or other similar
agreements or arrangements, (C) shall be in a regular passenger
configuration, and in as good a condition as when delivered by Seller to
Lessee, ordinary wear and tear excepted, and otherwise in the condition
required to be maintained under Lessee's FAA-approved maintenance plan
(notwithstanding any Sublease theretofore in effect), (D) in the event that
Lessee (or any Sublessee then in possession of the Aircraft) shall not then
be using a continuous maintenance program with respect to the Airframe
immediately prior to such return but instead shall have been using a block
overhaul program with respect to the Airframe, then (i) such block overhaul
program shall have been approved by the government of registry of the
Aircraft and (ii) the Airframe shall have remaining until the next
scheduled block overhaul at least 25% of the allowable hours between block
overhauls permitted under the block overhaul program then used by Lessee or
such Sublessee, (E) on average, the Engines or Acceptable Alternate Engines
shall not have been operated since the last engine shop visit more than 75%
of the time represented by Lessee's average on-wing hang time as then
applicable to mature engines employed on A330-___ aircraft in Lessee's
fleet (based on a three (3) year average), (F) shall have all Lessee's and
any Sublessee's exterior marking removed or painted over with areas thereof
refinished to match adjacent areas and (G) shall be in a state of
cleanliness suitable under Lessee's normal service standards for operation
in Lessee's revenue passenger service and in all such cases the Aircraft
shall not have been discriminated against whether by reason of its leased
status or otherwise in maintenance, use, operation or in any other manner
whatsoever.
If clause (D) of the first paragraph of this subsection (a)
shall be applicable but the Airframe does not meet the conditions specified
in said clause (D), Lessee shall pay or cause to be paid to Lessor,
concurrently with the return thereof, a Dollar amount computed by
multiplying (i) 110% of the direct cost to Lessee (based upon the direct
cost to Lessee for similar aircraft in the fleet of Lessee) during the
preceding 12 months of performing an airframe block overhaul of the type
referred to in such clause (D) by (ii) a fraction of which (x) the
numerator shall be the excess of 25% of the hours of operation allowable
between such block overhauls over the actual number of hours of operation
remaining on the Airframe to the next such block overhaul and (y) the
denominator shall be the number of hours of operation allowable between
such block overhauls in accordance with such block overhaul program.
If the Engines (or Acceptable Alternate Engines) do not meet
the conditions specified in clause (E) of the first paragraph of this
subsection (a), Lessee shall pay or cause to be paid to Lessor,
concurrently with the return thereof, a Dollar amount computed by
multiplying (i) two (2) times (ii) 110% of the direct cost to Lessee
(based upon the direct cost to Lessee for similar aircraft in the fleet of
Lessee) during the preceding 12 months of performing for an engine of the
same model as the Engines (or Acceptable Alternate Engines) the scheduled
engine heavy maintenance under the maintenance program then used by Lessee
for engines of the same model as the Engines (or Acceptable Alternate
Engines) (such applicable amount, the "HEM Value") times (iii)25%, and
subtracting from such product of clauses (i), (ii) and (iii), the value (as
calculated in accordance with the following sentence) of the aggregate of
the amount of time remaining to the next scheduled engine shop visit
(determined by using Lessee's average on-wing hang time as then applicable
to a mature engine of the type used on an A330-___ type aircraft (based on
a three (3) year average)) for the Engines or Acceptable Alternate Engines.
The value of the time to the next scheduled shop visit for any Engine or
Acceptable Alternate Engine shall be calculated by multiplying (i) a
fraction of which (x) the numerator shall be the amount of time remaining
until the next scheduled shop visit for such Engine or Acceptable Alternate
Engine and (y) the denominator shall be the average on-wing hang time for
such Engine or Acceptable Alternate Engine determined in accordance with
the preceding sentence by (ii) HEM Value.
(b) Return of the Engines. In the event that an Acceptable
Alternate Engine shall be delivered with the returned Airframe as set forth
in subsection (a) of this Exhibit G, Lessee, concurrently with such
delivery, will, at no cost to Lessor, furnish, or cause to be furnished, to
Lessor a full warranty (as to title) bill of sale with respect to each such
Acceptable Alternate Engine, in form and substance satisfactory to Lessor
(together with an opinion of counsel (which may be Lessee's General
Counsel, Deputy General Counsel, Associate General Counsel or Assistant
General Counsel) to the effect that such full warranty bill of sale has
been duly authorized and delivered and is enforceable in accordance with
its terms and that each such Acceptable Alternate Engine is free and clear
of all Liens other than Lessor Liens, Loan Participant Liens and Indenture
Trustee Liens), against receipt from Lessor of a bill of sale or evidencing
the transfer, without recourse or warranty (except as to the absence of
Lessor Liens), by Lessor to Lessee or its designee of all of Lessor's
right, title and interest in and to any Engine not installed on the
Airframe at the time of the return of the Airframe.
(c) Fuel and Manuals. Upon the return of the Airframe upon
any termination of this Lease in accordance with subsection (a) of this
Exhibit G, (i) Lessor shall pay to Lessee, the amount of Lessee's cost for
any fuel or oil contained in the fuel or oil tanks of such Airframe and
(ii) Lessee shall deliver or cause to be delivered to Lessor all logs,
manuals and data and inspection, modification and overhaul records required
to be maintained under the provisions of the Lease.
Form Lease
N____U_
EXHIBIT H
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
INSURANCE5
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1)
Except as provided in clause (2) of this subsection (a), and subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee will carry or cause to be carried with respect to the Aircraft at
its or any Sublessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased, and operated by Lessee (or, if a Sublease is then in effect, by
Sublessee) of the same type as the Aircraft and (y) $300 million per
occurrence, (B) of the type and covering the same risks as from time to
time applicable to aircraft owned or leased and operated by Lessee of the
same type as the Aircraft, and (C) which is maintained in effect with
insurers of nationally or internationally recognized reputation and
responsibility; provided, however, that Lessee need not maintain such cargo
liability insurance, or may maintain such cargo liability insurance in an
amount less than $300 million per occurrence, so long as the amount of
cargo liability insurance, if any, maintained with respect to the Aircraft
is not less than the cargo liability insurance, if any, maintained for
other Airbus Model A330 aircraft owned or leased and operated by Lessee.
(2) During any period that the Airframe or an Engine, as the
case may be, is on the ground and not in operation, Lessee may carry or
cause to be carried as to such non-operating property, in lieu of the
insurance required by clause (1) above, and subject to the self-insurance
to the extent permitted by subsection (d) hereof, insurance by
insurers of nationally or internationally recognized reputation and
responsibility otherwise conforming with the provisions of said clause (1)
except that (A) the amounts of coverage shall not be required to exceed the
amounts of comprehensive airline liability from time to time applicable to
property owned or leased by Lessee of the same type as such non-operating
property and which is on the ground and not in operation; and (B) the scope
of the risks covered and the type of insurance shall be the same as from
time to time shall be applicable to aircraft owned or leased by Lessee of
the same type as such non-operating property and which is on the ground and
not in operation.
- --------
5 US Airways to confirm.
(b) Insurance Against Loss or Damage to the Aircraft. (1)
Except as provided in clause (2) of this subsection (b), and subject to the
provisions of subsection (d) of this Exhibit H permitting the
self-insurance, Lessee shall maintain or cause to be maintained in effect,
at its or any Sublessee's expense, with insurers of nationally or
internationally recognized responsibility, all-risk aircraft hull insurance
covering the Aircraft and fire and extended coverage and all-risk aircraft
hull insurance covering Engines and Parts while temporarily removed from
the Aircraft and not replaced by similar components; provided that such
insurance shall at all times while the Aircraft is subject to this Lease be
for an amount (taking into account the self-insurance to the extent
permitted by subsection (d) of this Exhibit H) not less than the
Termination Value for the Aircraft; provided further, that, subject to
compliance with subsection (d) of this Exhibit H, such all-risk property
damage insurance covering Engines and Parts temporarily removed from an
Airframe or an airframe or (in the case of Parts) an Engine need be
obtained only to the extent available at reasonable cost (as reasonably
determined by Lessee). In the case of a Loss with respect to an engine
(other than an Engine) installed on the airframe in circumstances which do
not constitute an Event of Loss with respect to the Airframe, Lessor shall
promptly remit any payment made to it of any insurance proceeds in respect
of such Loss to Lessee or any other third party that is entitled to receive
such proceeds.
Unless an Event of Default has occurred and is continuing,
all losses will be adjusted by Lessee with the insurers. As between Lessor
and Lessee, it is agreed that all insurance payments received as the result
of the occurrence of an Event of Loss will be applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed
thereon), (i) unless such property is replaced pursuant to
the last paragraph of Section 10(a), so much of such
payments remaining, after reimbursement of Lessor (as
provided in Section 7.01 of the Trust Agreement) and the
Owner Participant for reasonable costs and expenses, as
shall not exceed the Termination Value and the other amounts
payable pursuant to Section 10(a) hereof shall be applied in
reduction of Lessee's obligation to pay such Termination
Value and other amounts payable pursuant to Section 10(a)
hereof, if not already paid by Lessee, or, if already paid
by Lessee, shall be applied to reimburse Lessee for its
payment of such Termination Value and such other amounts
payable, and the balance, if any, of such payments remaining
thereafter will be paid over to, or retained by, Lessee (or
if directed by Lessee, any Sublessee); or (ii) if such
property is replaced pursuant to the last paragraph of
Section 10(a), such payments shall be paid over to, or
retained by, Lessee (or if directed by Lessee, any
Sublessee), provided that Lessee shall have fully performed
or, concurrently therewith, will fully perform the terms of
the last paragraph of Section 10(a) with respect to the
Event of Loss for which such payments are made; and
(y) if such payments are received with respect to an
Engine under the circumstances contemplated by Section 10(b)
hereof, so much of such payments remaining after
reimbursement of Lessor (as provided in Section 7.01 of the
Trust Agreement) and the Owner Participant for reasonable
costs and expenses, shall be paid over to, or retained by,
Lessee (or if directed by Lessee, any Sublessee), provided
that Lessee shall have fully performed or concurrently
therewith will fully perform the terms of Section 10(b) with
respect to the Event of Loss for which such payments are
made.
As between Lessor and Lessee, the insurance payments for any
property damage loss to the Airframe or any engine not constituting an
Event of Loss with respect thereto will be applied in payment for repairs
or for replacement property in accordance with the terms of Sections 7 and
8, if not already paid for by Lessee (or any Sublessee), and any balance
(or if already paid for by Lessee (or any Sublessee), all such insurance
proceeds) remaining after compliance with such Sections with respect to
such loss shall be paid to Lessee (or any Sublessee if directed by Lessee).
(2) During any period that the Aircraft is on the ground and
not in operation, Lessee may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit H, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from
time to time applicable to aircraft owned or leased by Lessee (or, if a
Sublease is then in effect, by Sublessee) of the same type as the Aircraft
similarly on the ground and not in operation, provided that, subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee shall maintain insurance against risk of loss or damage to the
Aircraft in an amount at least equal to the Termination Value of the
Aircraft during such period that the Aircraft is on the ground and not in
operation.
(3) If Lessee (or any Sublessee) 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 Lessee (or any
Sublessee) with respect to other aircraft owned and operated by Lessee (or
any Sublessee) on such routes or in such areas, 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
Termination Value.
(c) Reports, etc. Lessee will furnish, or cause to be
furnished, to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or before the Delivery Date and on each annual
anniversary date of Lessee's applicable insurance, a report, signed by
Lessee's regular insurance broker or any other independent firm of
insurance brokers reasonably acceptable to Lessor which brokers may be in
the regular employ of Lessee (the "Insurance Brokers"), describing in
reasonable detail the hull and liability insurance (and property insurance
for detached engines and parts) then carried and maintained with respect to
the Aircraft and stating the opinion of such firm that the insurance
complies with the terms hereof; provided, that all information contained in
the foregoing report shall not be made available by Lessor, the Indenture
Trustee or the Owner Participant or the Pass Through Trustee to anyone
except (i) to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Indenture Trustee's or the Pass Through Trustee's
interest or their respective counsel, independent certified public
accountants and independent insurance brokers or other agents, who agree to
hold such information confidential, (ii) to Lessor's, the Owner
Participant's, the Indenture Trustee's or a Pass Through Trustee's counsel
or independent certified public accountants, independent insurance brokers
or agents who agree to hold such information confidential or (iii) as may
be required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Lessee will cause such Insurance Broker
to agree to advise Lessor, the Indenture Trustee, the Owner Participant and
the Pass Through Trustee in writing of any act or omission on the part of
Lessee of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Aircraft and to
advise in writing at least thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage and ten (10) days notice with respect
to the Electronic Date Recognition Exclusion Limited Coverage Endorsement),
prior to the cancellation or material adverse change of any insurance
maintained pursuant to Section 11, provided that if the notice period
specified above is not reasonably obtainable, the Insurance Broker shall
provide for as long a period of prior notice as shall then be reasonably
obtainable. In addition, Lessee will also cause such Insurance Brokers to
deliver to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Lessee to such parties on the Delivery Date except for such
changes in the report or the coverage consistent with the terms hereof. In
the event that Lessee or any Sublessee shall fail to maintain or cause to
be maintained insurance as herein provided, Lessor or the Indenture Trustee
may at its sole option, but shall be under no duty to, provide such
insurance and, in such event, Lessee shall, upon demand, reimburse Lessor
or the Indenture Trustee, as Supplemental Rent, for the cost thereof to
Lessor or the Indenture Trustee, as the case may be; provided, however,
that no exercise by Lessor or the Indenture Trustee, as the case may be, of
said option shall affect the provisions of this Lease, including the
provisions of Section 14(g).
(d) Self-Insurance. Lessee may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection (b)
of this Exhibit H, insuring for an amount that is less than the Termination
Value of the Aircraft) the risks required to be insured against pursuant to
Section 11 under a program applicable to all aircraft (whether owned or
leased) in Lessee's fleet, but in no case shall the aggregate amount of
self-insurance in regard to subsection (a) and (b) of this Exhibit H exceed
for any policy year, with respect to all of the aircraft (whether owned or
leased) in Lessee's fleet (including, without limitation, the Aircraft),
the lesser of (i) 50% of the highest replacement value of any single
aircraft in Lessee's fleet or (ii) 1-1/2% of the average aggregate
insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which Lessee carries
insurance, unless an insurance broker of national standing shall certify
that the standard among all other major United States airlines is a higher
level of self-insurance, in which case Lessee may insure the Aircraft to
such higher level. In addition to the foregoing right to self-insure,
Lessee (and any Sublessee) may self-insure to the extent of any applicable
mandatory minimum per aircraft (or, if applicable, per annum or other
period) hull or liability insurance deductible customary in the airline
industry imposed by the aircraft hull or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit H and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit H, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage and ten (10) days in the case of the
Electronic Date Recognition Limited Coverage Endorsement) after issuance to
the Additional Insureds, respectively, of written notice by such insurers
of such cancellation, lapse or change; provided, however, that if any
notice period specified above is not reasonably obtainable, such policies
shall provide for as long a period of prior notice as shall then be
reasonably obtainable, (D) shall provide that in respect of the respective
interests of the Additional Insureds in such policies the insurance shall
not be invalidated by any action or inaction of Lessee (or, if any Sublease
is then in effect, any Sublessee) or any other Person and shall insure the
Additional Insureds regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by Lessee (or, if any
Sublease is then in effect, any Sublessee), (E) shall be primary without
right of contribution from any other insurance which is carried by any
Additional Insured, (F) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner
as if there were a separate policy covering each insured, (G) shall waive
any right of the insurers to any set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability
of any Additional Insured to the extent of any moneys due to any Additional
Insured, and (H) shall provide that (i) in the event of a loss involving
proceeds in excess of $5,000,000, the proceeds in respect of such loss up
to an amount equal to the Termination Value for the Aircraft shall be
payable to Lessor (or, so long as the Trust Indenture shall not have been
discharged, the Indenture Trustee) (except in the case of a loss with
respect to an Engine installed on an airframe other than the Airframe, in
which case Lessee (or any Sublessee) shall arrange for any payment of
insurance proceeds in respect of such loss to be held for the account of
Lessor (or, so long as the Trust Indenture shall not have been discharged,
the Indenture Trustee) whether such payment is made to Lessee (or any
Sublessee) or any third party), it being understood and agreed that in the
case of any payment to Lessor (or the Indenture Trustee) otherwise than in
respect of an Event of Loss, Lessor (or the Indenture Trustee) 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
(and all earnings thereon) to Lessee or its order and (ii) the entire
amount of any loss involving proceeds of $5,000,000 or less or the amount
of any proceeds of any loss in excess of the Termination Value for the
Aircraft shall be paid to Lessee or its order unless an Event of Default
shall have occurred and be continuing and the insurers have been notified
thereof by Lessor or the Indenture Trustee.
Exhibit A-2-2
To Note Purchase
Agreement
[LEASE FORM
DEFERRED EQUITY/PREPAID-DEFERRED
RENT STRUCTURE]
LEASE AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of
________ __, ____
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Not in its individual capacity except as expressly
provided herein, but solely as Owner Trustee,
Lessor
and
US AIRWAYS, INC.,
Lessee
One Airbus Model A330 Aircraft
---------------------------------------------------------------------------
As set forth in Section 21 hereof, Lessor has assigned to the Indenture
Trustee (as defined herein) certain of its right, title and interest in and
to this Lease. To the extent, if any, that this Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect
in any applicable jurisdiction) no security interest in this Lease may be
created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
TABLE OF CONTENTS TO LEASE AGREEMENT
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. ACCEPTANCE AND LEASE . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. TERM AND RENT . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Basic Term . . . . . . . . . . . . . . . . . . . . . . 1
(b) Basic Rent . . . . . . . . . . . . . . . . . . . . . . 1
(c) Adjustments to Basic Rent . . . . . . . . . . . . . . . 2
(d) Supplemental Rent . . . . . . . . . . . . . . . . . . . 3
(e) Payments in General . . . . . . . . . . . . . . . . . . 4
(f) Business Day Convention . . . . . . . . . . . . . . . . 5
SECTION 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES AND
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Disclaimer . . . . . . . . . . . . . . . . . . . . . . 5
(b) Representations, Warranties and Covenants of
First Security Bank . . . . . . . . . . . . . . . . . . 6
(c) Lessor's Covenants . . . . . . . . . . . . . . . . . . 6
(d) Manufacturer's Warranties . . . . . . . . . . . . . . . 7
SECTION 5. RETURN OF THE AIRCRAFT. . . . . . . . . . . . . . . . . . . 7
(a) Condition Upon Return . . . . . . . . . . . . . . . . . 7
(b) Parking and Related Matters . . . . . . . . . . . . . . 7
(c) Return of Other Engines . . . . . . . . . . . . . . . . 8
(d) Obligations Continue Until Return . . . . . . . . . . . 8
SECTION 6. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7. REGISTRATION, MAINTENANCE, OPERATION AND REGISTRATION;
POSSESSION AND SUBLEASES; INSIGNIA . . . . . . . . . . . . . 9
(a) Registration, Maintenance, Operation and
Registration . . . . . . . . . . . . . . . . . . . . . 9
(1) Registration and Maintenance . . . . . . . . . . . 9
(2) Operation . . . . . . . . . . . . . . . . . . . .10
(3) Reregistration . . . . . . . . . . . . . . . . . .11
(b) Possession and Subleases . . . . . . . . . . . . . . .11
(c) Insignia. . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS . . . . . . . . . . . . . . . .17
(a) Replacement of Parts . . . . . . . . . . . . . . . . .17
(b) Pooling of Parts . . . . . . . . . . . . . . . . . . .18
(c) Alterations, Modifications and Additions . . . . . . .19
(d) Certain Matters Regarding Passenger Convenience
Equipment . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 9. VOLUNTARY TERMINATION . . . . . . . . . . . . . . . . . . .20
(a) Termination Event . . . . . . . . . . . . . . . . . . .20
(b) Optional Sale of the Aircraft . . . . . . . . . . . . .21
(c) Termination as to Engines . . . . . . . . . . . . . . .23
(d) Special Purchase Options . . . . . . . . . . . . . . .24
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC. . . . . . . . . . . . .25
(a) Event of Loss with Respect to the Aircraft . . . . . .25
(b) Event of Loss with Respect to an Engine . . . . . . . .27
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc. . . . . . .28
(d) Requisition for Use of the Aircraft by the
United States Government or the Government of
Registry of the Aircraft . . . . . . . . . . . . . . .29
(e) Requisition for Use of an Engine by the United
States Government or the Government of Registry
of the Aircraft . . . . . . . . . . . . . . . . . . . .30
(f) Application of Payments During Existence of
Event of Default . . . . . . . . . . . . . . . . . . .30
SECTION 11. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . .31
(a) Lessee's Obligation to Insure . . . . . . . . . . . . .31
(b) Additional Insurance by Lessor and Lessee . . . . . . .31
(c) Indemnification by Government in Lieu of Insurance. . .31
(d) Application of Payments During Existence of an
Event of Default . . . . . . . . . . . . . . . . . . .31
SECTION 12. INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 13. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 14. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . .34
SECTION 15. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . .36
SECTION 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS;
DELIVERY OF FINANCIAL STATEMENTS . . . . . . . . . . . . . .40
SECTION 17. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC. . . . . . . . . . . . . . . .42
SECTION 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION . . . . . . . .43
(a) Renewal Options . . . . . . . . . . . . . . . . . . . .43
(1) Fixed Renewal Term . . . . . . . . . . . . . . . .43
(2) Fair Market Renewal Term . . . . . . . . . . . . .43
(3) Waiver . . . . . . . . . . . . . . . . . . . . . .43
(4) Conditions Precedent, Payment of Basic Rent. . . .44
(5) Termination Value . . . . . . . . . . . . . . . .44
(b) Purchase Options . . . . . . . . . . . . . . . . . . .44
(c) Valuation . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 20. BURDENSOME PURCHASE OPTION . . . . . . . . . . . . . . . . .47
SECTION 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF
EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . .48
SECTION 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE . . . . . . . . . . . .48
SECTION 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR
LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . .49
(a) Investment of Security Funds . . . . . . . . . . . . . .49
(b) Liability of Lessor Limited . . . . . . . . . . . . . .49
SECTION 24. JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 25. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 26. SUCCESSOR TRUSTEE . . . . . . . . . . . . . . . . . . . . . .50
SECTION 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE . . . . . . . . . . . . . . .51
(a) Lease for Federal Income Tax Law Purposes . . . . . . .51
(b) Section 1110 of Bankruptcy Code . . . . . . . . . . . .51
EXHIBITS
EXHIBIT A - FORM OF LEASE SUPPLEMENT
EXHIBIT B - 1 PAST DUE RATE DEFINED
EXHIBIT B - 2 BASIC RENT PAYMENTS
EXHIBIT B - 3 BASIC RENT ALLOCATIONS
EXHIBIT B - 4 LESSOR'S COST
EXHIBIT C - TERMINATION VALUE SCHEDULE
EXHIBIT D - EBO AMOUNT
EXHIBIT E - RENT RECALCULATION AND INDEMNIFICATION VERIFICATION
EXHIBIT F - SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
EXHIBIT G - RETURN CONDITIONS
EXHIBIT H - INSURANCE
LEASE AGREEMENT
(US Airways, Inc. Trust No. N___U_)
This LEASE AGREEMENT (US Airways, Inc. Trust No. N___U_), dated as
of __________ __, ____, between FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as expressly provided herein, but
solely as Owner Trustee under the Trust Agreement (as defined in Annex A
hereto) (in such capacity, "Lessor"), and US AIRWAYS, INC., a corporation
organized and existing pursuant to the laws of the State of Delaware
("Lessee");
W I T N E S S E T H:
Section 1. DEFINITIONS. Capitalized terms used but not defined
herein shall have the respective meanings set forth or incorporated by
reference, and shall be construed and interpreted in the manner described,
in Annex A.
Section 2. ACCEPTANCE AND LEASE. Lessor hereby agrees (subject
to satisfaction of the conditions set forth in Section 4(a) of the
Participation Agreement) to accept the transfer of title from and
simultaneously to lease to Lessee hereunder, and Lessee hereby agrees
(subject to satisfaction of the conditions set forth in Section 4(b) of the
Participation Agreement) to lease from Lessor hereunder, the Aircraft as
evidenced by the execution by Lessor and Lessee of a Lease Supplement
leasing the Aircraft hereunder. Lessee hereby agrees that such acceptance
of the Aircraft by Lessor shall, without further act, irrevocably
constitute acceptance by Lessee of such Aircraft for all purposes of this
Lease.
Section 3. TERM AND RENT.
(a) Basic Term. The Basic Term shall commence on the Delivery
Date and end on the Basic Term Expiration Date.
(b) Basic Rent. On each Rent Payment Date, Basic Rent shall be
due and payable and Lessee shall pay Basic Rent in Dollars in an amount
equal to Lessor's Cost multiplied by the percentage for such Rent Payment
Date specified on Exhibit B-2. Each payment of Basic Rent shall be final
and, absent manifest error, Lessee shall not seek, or claim any right, to
recover all or any part of such payment from Lessor or any other Person for
any reason whatsoever. Basic Rent shall be allocated to each Lease Period
in the amounts set forth for such Lease Period on Exhibit B-3 under the
caption "Basic Rent Allocation." [Each installment of Basic Rent shall be
allocated to the Lease Period(s) specified under the caption "Timing of
Payments of Allocated Rent" on Exhibit B-3.]
(c) Adjustments to Basic Rent.
(i) In the event of a refinancing as contemplated by Section
16 of the Participation Agreement, then the Basic Rent percentages
set forth in Exhibit B, the Termination Value percentages set forth
in Exhibit C and the EBO Amount set forth on Exhibit D shall be
recalculated (upwards or downwards) by the Owner Participant as
contemplated by such Section to (1) maintain the Owner Participant's
Net Economic Return and (2) to the extent possible consistent with
clause (1) hereof, minimize the Net Present Value of Rents to Lessee;
(ii) In the event that Lessee elects to satisfy any indemnity
obligation under the Tax Indemnity Agreement, then the Basic Rent
percentages set forth in Exhibit B, the Termination Value percentages
set forth in Exhibit C and the EBO Amount set forth on Exhibit D
shall be recalculated (upwards or downwards) by the Owner
Participant, using the same methods and assumptions (except to the
extent such assumptions shall be varied to take into account the Loss
(as defined in the Tax Indemnity Agreement) that is the subject of
such indemnification and any prior or contemporaneous Loss) used to
calculate the Basic Rent percentages, the Termination Value
percentages and the EBO Amount on the Delivery Date, in order to (1)
maintain the Owner Participant's Net Economic Return and (2) to the
extent possible consistent with clause (1) hereof, minimize the Net
Present Value of Rents to Lessee.
(iii) Whenever Basic Rent is recalculated pursuant to this
Section 3(c), the Owner Participant shall redetermine the Termination
Value percentages set forth in Exhibit C and the EBO Amount set forth
in Exhibit D in a manner consistent with such recalculation.
(iv) Any recalculation of Basic Rent and Termination Value
percentages pursuant to this Section 3(c) shall be determined by the
Owner Participant and shall be subject to the verification procedures
set forth in Exhibit E hereto. Such recalculated Basic Rent and
Termination Value percentages shall be set forth in a Lease
Supplement or an amendment to this Lease.
(v) Anything contained in the Participation Agreement or this
Lease to the contrary notwithstanding, (I) each installment of Basic
Rent payable, whether or not adjusted in accordance with this Section
3(c), together with any Advance or payment made by Lessee pursuant to
Section 3(g) and payment of Deferred Equity Amount made by the Owner
Participant under Section 7(cc) of the Participation Agreement(1)
shall be, under any circumstances and in any event, in an amount at
least sufficient for Lessor to pay in full, on the date on which such
installment of Basic Rent[, Advance or Deferred Equity Amount](2) is
due, any payments then scheduled to be made on account of the
principal of, if any, and interest on the Equipment Notes and (II)
the amount of Termination Value payable on any Termination Date, Loss
Payment Date or, in the case of payments under Sections 15 and 20,
Rent Payment Date, whether or not adjusted in accordance with this
Section 3(c), together with all other amounts payable hereunder by
Lessee on such date and the amount of the premium, if any, payable by
Lessor on the Equipment Notes, shall be, under any circumstances and
in any event, in an amount at least sufficient for Lessor to pay in
full, on such Termination Date, Loss Payment Date or Rent Payment
Date, the outstanding principal of, premium, if any, and interest on
the Equipment Notes. It is agreed that no installment of Basic Rent,
payment of Termination Value or EBO Amount shall be increased or
adjusted by reason of (i) any attachment or diversion of Rent on
account of (A) Lessor Liens or (B) any Loan Participant Lien or other
Lien on or against the Trust Estate, any part thereof or the
Operative Documents arising as a result of claims against the
Indenture Trustee not related to the transactions contemplated by the
Operative Documents, (ii) any modification of the payment terms of
the Equipment Notes made without the prior written consent of Lessee
or (iii) the acceleration of any Equipment Note or Equipment Notes
due to the occurrence of an Indenture Event of Default which does not
constitute a Lease Event of Default.
---------------
(1) For deferred equity transactions only.
(2) For deferred equity transactions only.
(vi) All adjustments to Basic Rent under this Section 3(c)
shall be subject to verification pursuant to Exhibit E.
(d) Supplemental Rent. Lessee shall pay (or cause to be paid)
promptly to Lessor, or to whomsoever shall be entitled thereto, any and all
Supplemental Rent constituting Termination Value and Make-Whole Amount as
the same shall become due and owing and all other amounts of Supplemental
Rent within five Business Days (5) days after demand or within such other
relevant period as may be provided in any Operative Document, and in the
event of any failure on the part of Lessee to pay any Supplemental Rent
when due, Lessor shall have all rights, powers and remedies provided for
herein or in any other Operative Document or by law or equity or otherwise
in the case of nonpayment of Basic Rent. Lessee shall pay as Supplemental
Rent the Make-Whole Amount, if any, due pursuant to Section 2.10(b) or
Section 2.11 of the Trust Indenture in connection with a prepayment of the
Equipment Notes upon redemption of such Equipment Notes in accordance with
Section 2.10(b) or Section 2.11 of the Trust Indenture. Lessee also will
pay to Lessor, or to whomsoever shall be entitled thereto, on demand, as
Supplemental Rent, to the extent permitted by applicable law, interest at
the Past Due Rate on any part of any installment of Basic Rent not paid
when due for any period for which the same shall be overdue and on any
payment of Supplemental Rent not paid when due for the period until the
same shall be paid.
(e) Payments in General. All payments of Rent shall be made
directly by Lessee (whether or not any Sublease shall be in effect) by wire
transfer of immediately available funds prior to 11:00 a.m., New York time,
on the date of payment, to Lessor at its account at First Security Bank,
National Association, 79 South Main Street, 3rd Floor, Salt Lake City, Utah
84111, ABA No. 124-0000-12, Account No.___________, Attention: Corporate
Trust Department, Credit US Airways/US Airways, Inc. Trust No. N___U_ (or
such other account of Lessor in the continental United States as Lessor
shall direct in a notice to Lessee at least ten (10) Business Days prior to
the date such payment of Rent is due); provided that so long as the Trust
Indenture shall not have been fully discharged, Lessor hereby irrevocably
directs and Lessee agrees, that, unless the Indenture Trustee shall
otherwise direct, all Rent payable to Lessor and assigned to the Indenture
Trustee pursuant to the Trust Indenture shall be paid prior to 11:00 a.m.,
New York time on the due date thereof in funds of the type specified in
this Section 3(e) directly to the Indenture Trustee at its account at State
Street Bank and Trust Company of Connecticut, National Association, 225
Asylum Street, Hartford, Connecticut 06103, ABA No. _________, Account No.
__________, Reference: US Airways, Inc. 2000-1EETC/US Airways, Inc. Trust
No. N___U_ (or such other account of the Indenture Trustee in the
continental United States as the Indenture Trustee shall direct in a notice
to Lessee at least ten (10) Business Days prior to the date such payment of
Rent is due). Lessor hereby directs and Lessee agrees that all payments of
Supplemental Rent owing to the Indenture Trustee or to a Loan Participant
or any other Person (other than the Excluded Payments payable to the Owner
Participant) pursuant to the Participation Agreement shall be made in
Dollars in immediately available funds prior to 11:00 a.m., New York time,
on the due date thereof at the office of the Indenture Trustee or at such
other office of such other financial institution located in the continental
United States as the party entitled thereto may so direct at least ten (10)
Business Days prior to the due date thereof. All payments of Supplemental
Rent payable to the Owner Participant, to the extent that such amounts
constitute Excluded Payments, shall be made in Dollars in immediately
available funds prior to 11:00 a.m., New York time, on the due date
thereof, to the account of the Owner Participant specified in Schedule I to
the Participation Agreement (or to such other account as may be specified
in writing by the Owner Participant from time to time).
(f) Business Day Convention. Notwithstanding anything to the
contrary contained herein, if any date on which a payment of Rent 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 with the same force and effect as if made on such scheduled date and
(provided such payment is made on such next succeeding Business Day) no
interest shall accrue on the amount of such payment from and after such
scheduled date.
(g) [Certain Advances, Deductions of Advances. On the Initial
Rent Payment Date, prior to noon New York time, Lessee shall advance to the
Indenture Trustee on behalf of the Owner Trustee an amount that, together
with the Basic Rent otherwise due on such date, will be equal to the
scheduled payments of principal and interest then due on the Equipment
Notes (the amount of such advance to be made by Lessee shall herein be
called the "Advance"); provided that, Lessee shall be relieved of such
obligation if, on the Initial Rent Payment Date, the Indenture Trustee
shall have received the amount payable by the Owner Participant pursuant to
Section 7(cc) of the Participation Agreement. In the event Lessee makes an
Advance pursuant to this Section 3(g) and is not reimbursed therefor by the
Owner Participant as provided in Section 7(cc) of the Participation
Agreement, subject to the limitation of Section 3(c)(v), Lessee shall be
entitled to offset and deduct (without duplication) against each succeeding
payment (other than as limited by the proviso to this sentence) due from
Lessee to Persons other than any Note Holder, the Indenture Trustee and
Lessor in its individual capacity (including, without limitation, Basic
Rent, payments due under Sections 5, 9, 10, 15, 19 and 20 hereof, payments
due (only to the extent due to the Owner Participant) under the Tax
Indemnity Agreement and payments due (only to the extent due to the Owner
Participant and its Related Indemnitee Group and the Owner Trustee, but
with respect to the Owner Trustee only to the extent such payments are not
attributable to the principal or interest on the Equipment Notes) under
Section 6 of the Participation Agreement) the amounts (including interest
on such amounts at the Base Rate plus 2% per annum) due and owing by the
Owner Participant to Lessee from time to time under Section 7(cc) of the
Participation Agreement until Lessee has been fully reimbursed for such
amounts (including interest on such amounts at the Base Rate plus 2%);
provided that, in the case of any payment due from Lessee which is
distributable under the terms of the Trust Indenture, Lessee's right of
offset and deduction shall be limited to the amounts distributable to
Lessor thereunder (and shall not include any amounts distributable to the
Indenture Trustee in its individual capacity or to any Note Holder), as
acknowledged by the Indenture Trustee upon 10 days' prior written notice
from Lessee to the Indenture Trustee, accompanied by a certificate of a
responsible officer of Lessee certifying that the conditions precedent to
Lessee's right to effect such an offset have been met. No such offset or
aggregate combined effect of separate offsets shall reduce the amount of
any installment of Basic Rent to an amount that is insufficient to pay in
full the payments then required to be made on account of the principal or
interest on the Equipment Notes. Lessee also will pay to the Indenture
Trustee on demand, to the extent permitted by applicable law, interest at
the Past Due Rate on any part of any Advance required to be made by Lessee
pursuant to this Section 3(g) which is not paid when required to be made
for any period for which the same shall be overdue.](3)
----------------
(3) For deferred equity deals only.
Section 4. DISCLAIMER; LESSOR'S REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.
(a) Disclaimer. LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT AND
EACH PART THEREOF "AS-IS," "WHERE-IS." EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER LESSOR, THE INDENTURE TRUSTEE NOR ANY PARTICIPANT MAKES, HAS MADE
OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY EXPRESSLY DISCLAIMS AND
WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED, ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, WORKMANSHIP,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE
OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE AIRCRAFT OR ANY PART THEREOF.
(b) Representations, Warranties and Covenants of First Security
Bank. First Security Bank, National Association, in its individual
capacity, (i) represents and warrants that on the Delivery Date, Lessor
shall have received whatever title to the Aircraft was conveyed to it by
Lessee, (ii) represents and warrants that on the Delivery Date the Aircraft
shall be free of Lessor Liens attributable to it, (iii) covenants that
neither it nor any Person claiming by, through or under it will, through
its own actions or inactions, interfere in Lessee's or any Sublessee's
continued possession, use, operation and quiet enjoyment of the Aircraft
during the Term unless an Event of Default has occurred and is continuing
and this Lease has been duly declared in default, and this Lease shall not
be terminated except as expressly provided herein, (iv) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine or any portion of the Trust Estate and (v) represents and
warrants that it is a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement, and agrees
that if at any time it shall cease to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, the Owner Participant or Lessee), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement.
(c) Lessor's Covenants. Lessor (i) covenants that neither it nor
any Person claiming by, through or under it will, through its own actions
or inactions, interfere in Lessee's or any Sublessee's continued
possession, use, operation and quiet enjoyment of the Aircraft during the
Term unless an Event of Default has occurred and is continuing and this
Lease has been duly declared in default, and this Lease shall not be
terminated except as expressly provided herein and (ii) covenants that it
will not directly or indirectly create, incur, assume or suffer to exist
any Lessor Lien attributable to it on or with respect to the Airframe or
any Engine.
(d) Manufacturer's Warranties. None of the provisions of this
Lease shall be deemed to amend, modify or otherwise affect the
representations, warranties or other obligations (express or implied) of
the Seller, the Manufacturer, any subcontractor or supplier of the
Manufacturer with respect to the Airframe, the Engines or any Parts, or to
release the Seller, the Manufacturer, or any such subcontractor or
supplier, from any such representation, warranty or obligation. Unless an
Event of Default shall have occurred and be continuing under Section 14 and
this Lease shall have been declared in default, Lessor agrees to make
available to Lessee such rights as Lessor may have under any warranty with
respect to the Aircraft made by the Seller, the Manufacturer or any
affiliate thereof or any of its subcontractors or suppliers and any other
claims against the Seller, the Manufacturer or any affiliate thereof, or
any such subcontractor or supplier with respect to the Aircraft, all
pursuant to and in accordance with the terms of the Purchase Agreement
Assignment.
Section 5. RETURN OF THE AIRCRAFT.
(a) Condition Upon Return. Lessee shall comply with each of the
provisions of Exhibit G, which provisions are hereby incorporated by this
reference as if set forth in full herein.
(b) Parking and Related Matters. Unless Lessee has elected to
purchase the Aircraft in accordance with the terms hereof, if Lessor gives
written notice to Lessee not less than sixty (60) days nor more than one
hundred eighty (180) days prior to the end of the Term requesting storage
of the Aircraft upon its return hereunder, Lessee will provide Lessor, or
cause Lessor to be provided, with outdoor parking facilities for the
Aircraft for a period up to thirty (30) days, commencing on the date of
such return, at such storage facility in the forty eight (48) contiguous
states of the United States as Lessee may select; provided that such
location shall be a location generally used for the parking of commercial
aircraft by aircraft owners or operators. Notwithstanding subsection (a)
of Exhibit G, such location shall be deemed to be the return location of
the Aircraft for purposes of such Exhibit G. Such parking shall be at
Lessor's risk and expense and Lessor shall pay all applicable storage,
maintenance and insurance fees and expenses. Lessee's obligation to
arrange parking shall be subject to Lessee and Lessor entering into an
agreement prior to the commencement of the storage period with the storage
facility providing, among other things, that Lessor shall bear all
maintenance charges and other costs incurred relating to such storage.
(c) Return of Other Engines. In the event that any Engine owned
by Lessor shall not be installed on the Airframe at the time of return
hereunder, Lessee shall be required to return the Airframe hereunder with
an Acceptable Alternate Engine meeting the requirements of, and in
accordance with, Section 10 and Exhibit G hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of the return of the Airframe.
(d) Obligations Continue Until Return. If Lessee shall, for any
reason, fail to return the Aircraft at the time specified herein, all
obligations of Lessee under this Lease shall continue in effect with
respect to the Aircraft until the Aircraft is returned to Lessor and Lessee
shall pay to Lessor an amount equal to the average daily Basic Rent payable
by Lessee during the Term for each day after the end of the Term to but
excluding the day of such return; provided, however, that Lessee shall not
be responsible for Lessor's failure to accept return of the Aircraft in
accordance with this Section 5 in a timely manner or for any Rent with
respect to periods after Lessee has tendered the Aircraft for return in
accordance with this Lease. Any Rent owed to Lessor pursuant to this
Section 5(d) shall be payable upon acceptance of the Aircraft by Lessor or
on the last day of each calendar month following the last day of the Term
if the Aircraft has not been accepted earlier.
Section 6. LIENS. Lessee will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein or in this Lease, except
(i) the respective rights of Lessor as owner of the Aircraft and Lessee as
herein provided, the Lien of the Trust Indenture, the rights of any
Sublessee under a sublease permitted hereunder and any other rights of any
Person existing pursuant to the Operative Documents, (ii) the rights of
others under agreements or arrangements to the extent permitted by the
terms of Sections 7(b) and 8(b) hereof, (iii) Lessor Liens, Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Lessee (or any Sublessee) either not yet due or being contested in good
faith by appropriate proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Lessee's (or, if a Sublease is then in effect, Sublessee's) business
(including those arising under maintenance agreements entered into in the
ordinary course of business) securing obligations that are not overdue for
a period of more than sixty (60) days or are being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein, (vi) Liens arising out of any judgment or
award against Lessee (or any Sublessee), unless the judgment secured shall
not, within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Lessee
(or any Sublessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of Lessor and (viii) Liens
approved in writing by Lessor. Lessee will promptly, at its own expense,
take (or cause to be taken) such actions as may be necessary duly to
discharge any such Lien not excepted above if the same shall arise at any
time.
Section 7. REGISTRATION, MAINTENANCE, OPERATION AND REGISTRATION;
POSSESSION AND SUBLEASES; INSIGNIA.
(a) Registration, Maintenance, Operation and Registration.
(1) Registration and Maintenance. Lessee, at its own cost and
expense, shall (or shall cause any Sublessee to): (A) forthwith upon
the delivery thereof hereunder, cause the Aircraft to be duly
registered in the name of Lessor, and, subject to clause 3 of this
Section 7(a) and Section 7(d) of the Participation Agreement, to
remain duly registered in the name of Lessor under the Transportation
Code, provided that Lessor shall execute and deliver all such
documents as Lessee (or any Sublessee) may reasonably request for the
purpose of effecting and continuing such registration, and shall not
register the Aircraft or permit the Aircraft to be registered under
any laws other than the Transportation Code at any time except as
provided in Section 7(d) of the Participation Agreement and, unless
the Lien of the Trust Indenture shall have been discharged, shall
cause the Trust Indenture to be duly recorded and maintained of
record as a first mortgage on the Aircraft; (B) maintain, service,
repair and/or overhaul (or cause to be maintained, serviced, repaired
and/or overhauled) the Aircraft so as to keep the Aircraft in as good
an operating condition as when delivered by the Seller to Lessee,
ordinary wear and tear excepted, and as may be necessary to enable
the applicable airworthiness certification for the Aircraft to be
maintained in good standing at all times (other than during temporary
periods of storage or during maintenance or modification permitted
hereunder) under the Transportation Code, except when all of Lessee's
Airbus Model A330 aircraft powered by engines of the same type as
those with which the Airframe shall be equipped at the time of such
grounding and registered in the United States have been grounded by
the FAA (although such certification need actually be maintained only
during such periods as the Aircraft is registered in the United
States), or the applicable laws of any other jurisdiction in which
the Aircraft may then be registered from time to time in accordance
with Section 7(d) of the Participation Agreement, utilizing, except
during any period that a Sublease is in effect, the same manner and
standard of maintenance, service, repair or overhaul used by Lessee
with respect to similar aircraft operated by Lessee in similar
circumstances and utilizing, during any period that a Sublease is in
effect, the same manner and standard of maintenance, service, repair
or overhaul used by the Sublessee with respect to similar aircraft
operated by the Sublessee in similar circumstances; (C) maintain or
cause to be maintained in English all records, logs and other
materials required to be maintained in respect of the Aircraft by the
FAA or the applicable regulatory agency or body of any other
jurisdiction in which the Aircraft may then be registered; and (D)
promptly furnish or cause to be furnished to Lessor and the Owner
Participant such information as may be required to enable Lessor to
file any reports required to be filed by Lessor or the Owner
Participant with any governmental authority because of Lessor's
ownership of the Aircraft.
(2) Operation. Lessee will not maintain, use, service, repair,
overhaul or operate the Aircraft (or permit any Sublessee to
maintain, use, service, repair, overhaul or operate the Aircraft) in
violation of any law or any rule, regulation, order or certificate of
any government or governmental authority (domestic or foreign) having
jurisdiction over the Aircraft, or in violation of any airworthiness
certificate, license or registration relating to the Aircraft issued
by any such authority, except to the extent Lessee (or, if a Sublease
is then in effect, any Sublessee) is contesting in good faith the
validity or application of any such law, rule, regulation or order in
any reasonable manner which does not involve any material risk of
sale, forfeiture or loss of the Aircraft. Lessee will not operate the
Aircraft, or permit any Sublessee to operate the Aircraft, in any
area excluded from coverage by any insurance required by the terms of
Section 11; provided, however, that the failure of Lessee to comply
with the provisions of this sentence shall not give rise to an Event
of Default hereunder if indemnification complying with Section 11(c)
has been provided or where such failure is attributable to
extraordinary circumstances involving an isolated occurrence or
series of incidents not in the ordinary course of the regular
operations of Lessee (or any Sublessee) such as a hijacking, medical
emergency, equipment malfunction, weather condition, navigational
error or other causes beyond the reasonable control of Lessee (or any
Sublessee).
(3) Reregistration. At any time after the Depreciation Period,
Lessor, upon Lessee's compliance with all of the terms of Section
7(d) of the Participation Agreement, shall, at the request and sole
expense of Lessee, cooperate with Lessee to take all actions required
to change the registration of the Aircraft to another country.
(b) Possession and Subleases. Lessee will not, without the prior
written consent of Lessor, sublease or otherwise in any manner deliver,
transfer or relinquish possession of the Airframe or any Engine or install
or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Lessee (or any
Sublessee) shall comply with the provisions of Section 7(a) and Section 11
hereof, Lessee may (or may permit any Sublessee to), without the prior
written consent of Lessor:
(i) subject the Airframe and the Engines or engines then
installed thereon to interchange agreements or any Engine to pooling
or similar arrangements, in each case customary in the airline
industry and entered into by Lessee (or, if a Sublease is then in
effect, by Sublessee) in the ordinary course of its business;
provided that (A) no such agreement or arrangement contemplates or
requires the transfer of title to the Airframe, (B) if Lessor's title
to any Engine shall be divested under any such agreement or
arrangement, such divestiture shall be deemed to be an Event of Loss
with respect to such Engine and Lessee shall (or shall cause
Sublessee to) comply with Section 10(b) hereof in respect thereof and
(C) any interchange agreement to which the Airframe may be subject
shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or any Engine to the
manufacturer thereof (or for delivery thereto) or to any organization
(or for delivery thereto) for testing, service, repair, maintenance
or overhaul work on the Airframe or Engine or any part of any thereof
or for alterations or modifications in or additions to such Airframe
or Engine to the extent required or permitted by the terms of Section
8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any
Sublessee) free and clear of all Liens, except: (A) Permitted Liens
and those which apply only to the engines (other than Engines),
appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment (other than Parts) installed on such
airframe (but not to the airframe as an entirety), (B) the rights of
third parties under interchange agreements or pooling or similar
arrangements which would be permitted under clause (i) above,
provided that Lessor's title to such Engine and, if any Equipment
Notes shall be outstanding, the first priority Lien of the Trust
Indenture shall not be divested or impaired as a result thereof and
(C) mortgage liens or other security interests, provided that (as
regards this clause (C)) the documents creating such mortgage liens
or other security interests (or, if applicable, another written
agreement governing such mortgage liens or other security interests)
effectively provide that such Engine shall not become subject to the
lien of such mortgage or security interest, notwithstanding the
installation thereof on such airframe;
(iv) install an Engine on an airframe leased to Lessee (or any
Sublessee) or purchased by Lessee (or any Sublessee) subject to a
conditional sale or other security agreement, provided that (x) such
airframe is free and clear of all Liens, except: (A) the rights of
the parties to the lease or conditional sale or other security
agreement covering such airframe, or their assignees and (B) Liens of
the type permitted by clause (iii) of this paragraph (b) and (y) such
lease, conditional sale or other security agreement effectively
provides that such Engine shall not become subject to the lien of
such lease, conditional sale or other security agreement,
notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any
Sublessee), leased to Lessee (or any Sublessee) or purchased by
Lessee (or any Sublessee) subject to a conditional sale or other
security agreement under circumstances where neither clause (iii) nor
clause (iv) of this paragraph (b) is applicable, provided that such
installation shall be deemed an Event of Loss with respect to such
Engine and Lessee shall (or shall cause any Sublessee to) comply with
Section 10(b) hereof in respect thereof, Lessor not intending hereby
to waive any right or interest it may have to or in such Engine under
applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject
any appliances, Parts or other equipment owned by Lessor and removed
from the Airframe or any Engine to any pooling arrangement referred
to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the
Airframe or any Engine to the Civil Reserve Air Fleet Program and
transfer (or permit any Sublessee to transfer) possession of the
Airframe or any Engine to the United States Government or any
instrumentality or agency thereof pursuant to the Civil Reserve Air
Fleet Program, so long as Lessee (or any Sublessee) shall (A)
promptly notify Lessor upon subjecting the Airframe or any Engine to
the Civil Reserve Air Fleet Program in any contract year and provide
Lessor with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United States Air
Force to whom notice must be given pursuant to Section 15 hereof and
(B) promptly notify Lessor upon transferring possession of the
Airframe or any Engine to the United States of America or any agency
or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term,
enter into a Wet Lease for the Airframe and Engines or engines then
installed thereon with any third party; provided that if Lessee (or
any Sublessee) shall enter into any Wet Lease for a period of more
than one year (including renewal options) Lessee shall provide Lessor
written notice of such Wet Lease (such notice to be given prior to
entering into such Wet Lease, if practicable, but in any event
promptly after entering into such Wet Lease);
(ix) for a period not to extend beyond the end of the Term,
transfer possession of the Airframe or any Engine to the United
States Government or any instrumentality or agency thereof pursuant
to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time in its sole discretion, enter into
any sublease with (A) any Person domiciled in the United States, (B)
after the Depreciation Period, any Permitted Sublessee or (C) after
the Depreciation Period, any other Person approved in writing by
Lessor, which approval shall not be unreasonably withheld; provided,
however, that no sublease entered into pursuant to this clause (x)
shall extend beyond the expiration of the Basic Term or any Renewal
Term then in effect unless Lessee shall have irrevocably committed to
purchase the Aircraft or renew the Lease in accordance with the terms
hereof at the end of the Basic Term or Renewal Term, as the case may
be, to a date beyond the latest permissible expiration date of such
sublease; provided, further, with respect to a sublease under
subclauses (B) or (C) of this clause (x), Lessee shall deliver to
Lessor an opinion of counsel to the effect that (I) the obligations
of Lessee and the rights and remedies of the Lessor under the Lease
remain valid, binding and (subject to customary bankruptcy and
equitable remedies exceptions and to other exceptions customary in
such Opinions) enforceable; (II) the terms of the sublease constitute
valid and binding obligations of the Sublessee and (subject to
customary bankruptcy and equitable remedies exceptions and to other
exceptions customary in such Opinions) enforceable against Sublessee
(it being understood that such opinion may be an opinion as to the
form of the Sublease only and may assume due authorization,
execution, delivery, requisite approvals and absence of conflicts
with laws, contracts or organizational documents) under the laws of
the jurisdiction governing the sublease, (III) that there is no tort
liability of the owner of an aircraft not in possession thereof under
the laws of the jurisdiction of the proposed sublessee other than
tort liability which might have been imposed on such owner under the
laws of the United States or any state thereof (it being understood
that in the event such opinion cannot be given such opinion
requirement shall be waived if insurance reasonably satisfactory to
Lessor, in its individual capacity, is provided at Lessee's expense)
and (IV) unless Lessee shall have agreed to provide insurance
covering the risk of requisition of use of the Aircraft by the
government of the jurisdiction of the proposed sublessee reasonably
satisfactory to the Owner Participant, that the laws of such
jurisdiction require fair compensation by the government of such
jurisdiction payable in currency freely convertible into Dollars for
the loss of use of the Aircraft in the event of the requisition by
such government of such use; and provided finally that, with respect
to any sublease to any Affiliate of Lessee, (I) such sublessee shall
be a Certificated Air Carrier and (II) Lessee shall deliver to Lessor
an opinion of counsel to the effect that Lessee would be entitled to
the benefits of Section 1110 of the Bankruptcy Code with respect to
the Aircraft if such Affiliate were to be a debtor in a case under
Chapter 11 of the Bankruptcy Code, such opinion to be subject to
customary assumptions and qualifications. Lessee shall provide Lessor
with a copy of any sublease which has a term of more than one (1)
year.
The rights of any Sublessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Sublease permitted by this paragraph
(b) shall be expressly subject and subordinate to, all the terms of this
Lease and Lessor's (and so long as the Trust Indenture is in effect, the
Indenture Trustee's (as Lessor's assignee) rights to repossess and to void
such Sublease upon such repossession, and Lessee shall remain primarily
liable hereunder for the performance of all of the terms of this Lease, and
the terms of any such Sublease shall not permit any Sublessee to take any
action not permitted to be taken by Lessee in this Lease with respect to
the Aircraft. No pooling agreement, sublease or other relinquishment of
possession of the Airframe or any Engine or Wet Lease shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder or
constitute a waiver of Lessor's rights or remedies hereunder. Lessor
agrees, for the benefit of Lessee (and any Sublessee) and for the benefit
of any mortgagee or other holder of a security interest in any engine
(other than an Engine) owned by Lessee (or any Sublessee), any lessor of
any engine (other than an Engine) leased to Lessee (or any Sublessee) and
any conditional vendor of any engine (other than an Engine) purchased by
Lessee (or any Sublessee) subject to a conditional sale agreement or any
other security agreement, that no interest shall be created hereunder in
any engine so owned, leased or purchased and that none of Lessor, its
successors or assigns will acquire or claim, as against Lessee (or any
Sublessee) or any such mortgagee, lessor or conditional vendor or other
holder of a security interest or any successor or assignee of any thereof,
any right, title or interest in such engine as the result of such engine
being installed on the Airframe.
Any Wet Lease or similar arrangement under which Lessee maintains
operational control of the Aircraft shall not constitute a delivery,
transfer or relinquishment of possession of the Aircraft for purposes of
this section. Lessor acknowledges that any consolidation or merger of
Lessee or conveyance, transfer or lease of all or substantially all of
Lessee's assets otherwise permitted by the Operative Documents shall not be
prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Lessee agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Leased From
First Security Bank, National Association, as Owner Trustee, Lessor
and, for so long as the Airframe and each Engine shall be subject to the
Lien of the Trust Indenture, bearing the following additional inscription:
Mortgaged To
State Street Bank and Trust Company of Connecticut, National Association,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Lessor or successor Indenture Trustee, in each
case as permitted under the Operative Documents). Except as above
provided, Lessee will not allow the name of any Person to be placed on the
Airframe or on any Engine as a designation that might be interpreted as a
claim of ownership; provided that nothing herein contained shall prohibit
Lessee (or any Sublessee) from placing its customary colors and insignia on
the Airframe or any Engine.
Section 8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS.
(a) Replacement of Parts. Lessee, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time
to time be incorporated or installed in or attached to the 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, except as otherwise
provided in paragraph (c) of this Section 8 or if the Airframe or an Engine
to which a Part relates has suffered an Event of Loss. In addition, Lessee
(or any Sublessee) may, at its own cost and expense, remove 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 that
Lessee (or any Sublessee), except as otherwise provided in paragraph (c) of
this Section 8, will, at its own cost and expense, 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 paragraph (b) of this Section 8 and except in the case
of replacement property temporarily installed on an emergency basis) and
shall be in as good operating condition as, and shall have a value and
utility at least equal to, the Parts replaced assuming such replaced Parts
were in the condition and repair required to be maintained by the terms
hereof. Except as otherwise provided in paragraph (c) of this Section 8,
all Parts at any time removed from the Airframe or any Engine shall remain
the property of Lessor, no matter where located, until such time as such
Parts shall be replaced by Parts which have been incorporated or installed
in or attached to the Airframe or such Engine and which meet the
requirements for replacement Parts specified above. Immediately upon any
replacement part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided, without further act (subject only
to Permitted Liens and any pooling arrangement to the extent permitted by
paragraph (b) of this Section 8 and except in the case of replacement
property temporarily installed on an emergency basis), (i) title to such
replacement Part shall thereupon vest in Lessor, (ii) such replacement Part
shall become subject to this Lease and be deemed part of the Airframe or
such Engine for all purposes hereof to the same extent as the Parts
originally incorporated or installed in or attached to the Airframe or such
Engine and (iii) title to the replaced Part shall thereupon vest in Lessee
(or, if a Sublease is then in effect, any Sublessee), free and clear of all
rights of Lessor, and shall no longer be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or any
Engine as provided in paragraph (a) of this Section 8 may be subjected by
Lessee (or any Sublessee) to a normal pooling arrangement customary in the
airline industry of which Lessee (or, if a Sublease is then in effect, any
Sublessee) is a party entered into in the ordinary course of Lessee's (or
any Sublessee's) business; provided that the Part replacing such removed
Part shall be incorporated or installed in or attached to such Airframe or
Engine in accordance with such paragraph (a) 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
in accordance with such paragraph (a) may be owned by any third party
subject to such a normal pooling arrangement, provided that Lessee (or any
Sublessee), at its expense, as promptly thereafter as practicable, either
(i) causes title to such replacement Part to vest in Lessor in accordance
with such paragraph (a) by Lessee (or any Sublessee) acquiring title
thereto for the benefit of, and transferring such title to, Lessor free and
clear of all Liens except Permitted Liens (other than pooling arrangements)
or (ii) replaces such replacement Part by incorporating or installing in or
attaching to the Airframe or Engine a further replacement Part owned by
Lessee (or any Sublessee) free and clear of all Liens except Permitted
Liens (other than pooling arrangements) and by causing title to such
further replacement Part to vest in Lessor in accordance with such
paragraph (a).
(c) Alterations, Modifications and Additions. Lessee, at its own
expense, will make (or cause to be made) such alterations and modifications
in and additions to the Airframe and Engines as may be required from time
to time to meet the applicable standards of the FAA or any applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered as permitted by Section 7(d) of the Participation
Agreement; provided, however, that Lessee (or, if a Sublease is then in
effect, any Sublessee) may, in good faith, contest the validity or
application of any such law, rule, regulation or order in any reasonable
manner which does not adversely affect Lessor or, so long as any Equipment
Notes are outstanding, the Indenture Trustee. In addition, Lessee (or any
Sublessee), at its own expense, may from time to time add further parts or
accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Lessee (or any Sublessee) may deem desirable
in the proper conduct of its business, including, without limitation,
removal of Parts which Lessee (or any Sublessee) has determined in its
reasonable judgment to be obsolete or no longer suitable or appropriate for
use on the Airframe or such Engine (such parts, "Obsolete Parts"); provided
that no such alteration, modification or addition shall materially diminish
the value, utility or remaining useful life of the Airframe or such Engine
below the value, utility or remaining useful life thereof immediately prior
to such alteration, modification or addition, assuming the Airframe or such
Engine was then in the condition required to be maintained by the terms of
this Lease, except that the value (but not the utility or remaining useful
life) of the Airframe or any Engine may be reduced by the value of Obsolete
Parts which shall have been removed so long as the aggregate value of all
Obsolete Parts which shall have been removed and not replaced shall not
exceed $750,000 in aggregate value at the time of removal. Title to all
Parts incorporated or installed in or attached or added to the Airframe or
an Engine as the result of such alteration, modification or addition
(except those parts which (x) Lessee has leased from others and (y) may be
removed by Lessee pursuant to the next sentence (the "Additional Parts"))
shall, without further act, vest in Lessor. Notwithstanding the foregoing
sentence, Lessee (or any Sublessee) may remove or suffer to be removed any
Additional Part, provided that such Additional Part (i) is in addition to,
and not in replacement of or substitution for, any Part originally
incorporated or installed in or attached to the Airframe or any Engine at
the time of delivery thereof hereunder or any Part in replacement of, or
substitution for, any such Part, (ii) is not required to be incorporated or
installed in or attached or added to the Airframe or any Engine pursuant to
the terms of Section 7 hereof or the first sentence of this paragraph (c)
and (iii) can be removed from the Airframe or such Engine without
diminishing or impairing the value, utility or remaining useful life which
the Airframe or such Engine would have had at the time of removal had such
alteration, modification or addition not occurred. Upon the removal by
Lessee (or Sublessee) of any Part as provided above, title thereto shall,
without further act, vest in Lessee (or any Sublessee, as the case may be)
and such Part shall no longer be deemed part of the Airframe or Engine from
which it was removed. Any Part not removed by Lessee (or any Sublessee) as
above provided prior to the return of the Airframe or Engine to Lessor
hereunder shall remain the property of Lessor.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Lessee may install on the Airframe, subject to the requirements of Section
8(c) above, Passenger Convenience Equipment that is (i) owned by another
Person and leased to Lessee, (ii) sold to Lessee by another Person subject
to a conditional sale contract or other retained security interest,
(iii) leased to Lessee pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Lessee by another Person, and in any such
case the Lessor and the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on
the Airframe. Lessee agrees that if any such Person repossesses such
Passenger Convenience Equipment, Lessee will (or will cause such Person to)
restore the Aircraft to the condition it would have been in had the
installation of such Passenger Convenience Equipment not occurred.
Section 9. VOLUNTARY TERMINATION.
(a) Termination Event.
(i) Lessee shall have the right to elect to terminate this
Lease (x) on any Rent Payment Date occurring on or after the close of
the calendar year in which the seventh (7th) anniversary of the
Delivery Date occurs if Lessee shall have made the good faith
determination, which shall be evidenced by a certificate of a
responsible officer of Lessee, that the Aircraft is obsolete or
surplus to its needs or (y) on the tenth, thirteenth and sixteenth
anniversaries of the Delivery Date.
(ii) Lessee shall give to Lessor at least one hundred twenty
(120) days revocable advance written notice of Lessee's intention to
so terminate this Lease (any such notice, a "Termination Notice")
specifying (A) the Rent Payment Date on which Lessee intends to
terminate this Lease in accordance with this Section 9 (such
specified date, a "Termination Date"), (B) either (I) that Lessee has
determined that the Aircraft is obsolete or surplus to its needs or
(II) that it is exercising its termination option pursuant to Section
9(a)(i)(y) and (C) in the case of a Termination under Section
9(a)(i)(y) whether Lessee elects to purchase the Aircraft pursuant to
Section 9(d). Any Termination Notice shall become irrevocable fifteen
(15) days prior to the Termination Date.
(b) Optional Sale of the Aircraft; Lessor Retention Option;
Revocation of Termination Notice. In the event that Lessee shall have
exercised its right to terminate this Lease under Section 9(a)(i)(y) but
shall not have elected to purchase the Aircraft pursuant to Section 9(d),
or Lessee shall have elected to terminate this Lease pursuant to Section
9(a)(i)(x), then during the period from the giving of the Termination
Notice until the proposed Termination Date (unless Lessee shall have
revoked the Termination Notice specifying such proposed Termination Date or
Lessor shall have irrevocably elected to retain the Aircraft pursuant to
this Section 9(b)), Lessee, as agent for Lessor and at no expense to
Lessor, shall use commercially reasonable efforts to obtain bids for the
purchase of the Aircraft and, in the event it receives any bid, Lessee
shall, within five (5) Business Days after receipt thereof and at least ten
(10) Business Days prior to the proposed Termination Date, certify to
Lessor in writing the amount and terms of such bid, and the name and
address of the party or parties (who shall not be Lessee or any Affiliate
of Lessee or any Person with whom Lessee or any such Affiliate has an
arrangement or understanding regarding the future use of the Aircraft by
Lessee or any such Affiliate but who may be the Owner Participant, any
Affiliate thereof or any Person contacted by the Owner Participant)
submitting such bid. Subject to the next succeeding sentence, on or before
the Termination Date, subject to the release of all mortgage and security
interests with respect to the Aircraft under the Trust Indenture: (1)
Lessee shall deliver the Aircraft, or cause the Aircraft to be delivered,
to the bidder(s), if any, which shall have submitted the highest bid
therefor at least ten (10) Business Days prior to such Termination Date, in
the same manner and in the same condition and otherwise in accordance with
all the terms of this Lease as if delivery were made to Lessor pursuant to
Section 5, and shall duly transfer to Lessor title to any engines not owned
by Lessor all in accordance with the terms of Section 5, (2) Lessor shall
comply with the terms of the Trust Indenture and shall, without recourse or
warranty (except as to the absence of Lessor Liens), subject to prior or
concurrent payment by Lessee of all amounts due under clause (3) of this
sentence, sell all of Lessor's right, title and interest in and to the
Aircraft for cash in Dollars to such bidder(s), the total sales price
realized at such sale to be retained by Lessor and (3) Lessee shall
simultaneously pay or cause to be paid to Lessor in funds of the type
specified in Section 3(e) hereof, an amount equal to the sum of (A) the
excess, if any, of (i) the Termination Value for the Aircraft, computed as
of the Termination Date, over (ii) the sales price of the Aircraft sold by
Lessor after deducting the reasonable expenses incurred by Lessor in
connection with such sale, (B) all unpaid Basic Rent with respect to the
Aircraft due prior to (but not on) such Termination Date and all
Supplemental Rent due by Lessee under this Lease (including, without
limitation, Supplemental Rent in respect of the Make-Whole Amount, if any,
payable in connection with a prepayment of the Equipment Notes, and upon
such payment Lessor simultaneously will transfer to Lessee, without
recourse or warranty (except as to the absence of Lessor Liens), all of
Lessor's right, title and interest in and to any Engines constituting part
of the Aircraft which were not sold with the Aircraft. Notwithstanding the
preceding sentence, Lessor may, if Lessee has not revoked the Termination
Notice, elect to retain title to the Aircraft. If Lessor so elects, Lessor
shall give to Lessee irrevocable written notice of such election within
thirty (30) days of its receipt of a Termination Notice accompanied by an
irrevocable undertaking by the Owner Participant to make available to the
Lessor for payment to the Indenture Trustee on the Termination Date the
amount required to pay in full the unpaid principal amount of the Equipment
Notes outstanding on the Termination Date plus interest accrued thereon
through the Termination Date together with the Make-Whole Amount, if any,
due on the Equipment Notes, if the same is not otherwise paid. Upon
receipt of notice of such an election by Lessor and the accompanying
undertaking by the Owner Participant, Lessee shall cease its efforts to
obtain bids as provided above and shall reject all bids theretofore or
thereafter received. On the Termination Date, Lessor shall (subject to the
payment by Lessee of all Rent due on or prior to such date, other than any
Basic Rent due on such date) pay in full the unpaid principal amount of the
Equipment Notes outstanding on the Termination Date plus interest accrued
thereon through the Termination Date together with all Make-Whole Amount,
if any, due on the Equipment Notes and, so long as the Equipment Notes are
paid as aforesaid, Lessee shall deliver the Airframe and Engines or engines
to Lessor in accordance with Section 5 and shall pay all Basic Rent due
prior to the Termination Date and all Supplemental Rent (other than Make-
Whole Amount or Termination Value) due on or prior to the Termination Date.
If no sale shall have occurred on the Termination Date and Lessor has not
made the payment contemplated by the preceding sentence and thereby caused
this Lease to terminate, or if Lessee revokes its Termination Notice, this
Lease shall continue in full force and effect as to the Aircraft, Lessee
shall pay the reasonable costs and expenses incurred by the Owner
Participant and Lessor (unless such failure to terminate the Lease is a
consequence of the failure of Lessor or the Owner Participant without due
cause to make, or cause to be made, the payment referred to in the
immediately preceding sentence, in which case Lessor and the Owner
Participant shall be responsible for damages), if any, in connection with
preparation for such sale and Lessee may give one or more additional
Termination Notices in accordance with Section 9(a), subject to the last
sentence of this Section 9(b). In the event of any such sale or such
retention of the Aircraft by Lessor and upon compliance by Lessee with the
provisions of this paragraph, the obligation of Lessee to pay Basic Rent or
any other amounts hereunder shall cease to accrue and this Lease shall
terminate. Lessor may, but shall be under no duty to, solicit bids,
inquire into the efforts of Lessee to obtain bids or otherwise take any
action in connection with any such sale other than to transfer (in
accordance with the foregoing provisions) to the purchaser named in the
highest bid certified by Lessee to Lessor all of Lessor's right, title and
interest in the Aircraft, against receipt of the payments provided herein.
Lessee may revoke a Termination Notice given pursuant to Section 9(a) no
more than two (2) times during the Term.
(c) Termination as to Engines; Replacement. Lessee shall have the
right at its option at any time during the Term, on at least thirty (30)
days prior written notice, to terminate this Lease with respect to any
Engine. In such event, and prior to the date of such termination, Lessee
shall replace such Engine hereunder by complying with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect
to such Engine, and Lessor shall transfer such right, title and interest as
it may have to the replaced Engine as provided in Section 5(b). No
termination of this Lease with respect to any Engine as contemplated by
this Section 9(c) shall result in any reduction of Basic Rent.
(d) Special Purchase Options. If Lessee exercises its right to
terminate this Lease under Section 9(a)(1)(y), gives its notice pursuant to
Section 9(a)(ii) to purchase the Aircraft pursuant to this Section 9(d) and
such notice becomes irrevocable, then on the Termination Date specified in
Section 9(a), Lessee shall purchase the Aircraft at the greater of (i) the
Termination Value on the Termination Date, or (ii) its fair market sales
value on the Termination Date (determined in accordance with Section 19(c)
hereof), provided that Lessee shall have also paid the amounts specified in
(A) and (B) of the following sentence. In such event, Lessor shall,
without recourse or warranty (except as to the absence of Lessor Liens),
sell the Aircraft to Lessee in exchange for the payment in immediately
available funds in an amount equal to the greater of (x) the Termination
Value for the Aircraft, computed as of the Termination Value Date, or (y)
the fair market sales value of the Aircraft on the Termination Date,
provided that on such date the Lessee shall have also paid to the Lessor
the sum of (A) all unpaid Basic Rent with respect to the Aircraft due prior
to (but not on) such Termination Date and all unpaid Supplemental Rent with
respect to the Aircraft due on or prior to such Termination Date plus (B)
all reasonable expenses incurred by Lessor and the Owner Participant in
connection with such sale. Upon payment in full of the amounts required to
be paid and the performance of all acts required to be performed by Lessee
pursuant to the preceding sentence, (i) the obligation of Lessee to pay
Basic Rent hereunder with respect to the Aircraft due on or after the
Termination Date shall terminate with respect to the Aircraft, (ii) this
Lease shall terminate on the Termination Date, (iii) Lessor will transfer
to or at the direction of Lessee, without recourse or warranty (except as
to the absence of Lessor Liens), all of Lessor's right, title and interest
in the Airframe and Engines and furnish to or at the direction of the
Lessee a bill of sales in form and substance reasonably satisfactory to
Lessee, evidencing such transfer. Notwithstanding the foregoing, Lessee
may, in accordance with Section 7(u) of the Participation Agreement, assume
the principal amount of the Equipment Notes then outstanding on any
Termination Date specified in Section 9(a), in which event the Lessee will
receive a credit against the purchase price otherwise payable pursuant to
this Section 9(d) in an amount equal to the principal amount of Equipment
Notes so assumed.
Section 10. LOSS, DESTRUCTION, REQUISITION, ETC.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Lessee shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give Lessor written notice of such Event of Loss, and, within
sixty (60) days after such Event of Loss, Lessee shall give Lessor written
notice of its election to perform one of the following options (it being
agreed that if Lessee shall not have given such notice of election within
such period, Lessee shall be deemed to have elected the option set forth in
clause (i) below). Lessee may elect either to:
(i) make the payments specified in this clause (i), in which
event not later than the earlier of (x) the Business Day next
succeeding the 120th day following the occurrence of such Event of
Loss or (y) an earlier Business Day irrevocably specified fifteen
(15) days in advance by notice from Lessee to Lessor and the
Indenture Trustee (the "Loss Payment Date"), Lessee shall pay or
cause to be paid to Lessor in funds of the type specified in Section
3(e) hereof, an amount equal to the Termination Value of the Aircraft
corresponding to the Termination Value Date occurring on or
immediately following the Loss Payment Date (the "Determination
Date"); provided that in any instance in which the applicable Loss
Payment Date shall occur after the final day of the Term, the
Determination Date shall be the last Termination Value Date in the
Term, and the Termination Value shall be reduced by any amount of
Basic Rent due on the Determination Date that has actually been paid;
(ii) substitute an aircraft or an airframe or an airframe and
one or more engines, as the case may be; provided that, if Lessee
does not perform its obligation to effect such substitution in
accordance with this Section 10(a), during the period of time
provided herein, then Lessee shall pay or cause to be paid to Lessor
on the Business Day next succeeding the 120th day following the
occurrence of such Event of Loss the amount specified in clause (i)
above.
At such time as Lessor shall have received the amounts specified in
clause (i) above, together with all other amounts that then may be due
hereunder (excluding Basic Rent due on the Determination Date but
including, without limitation, all Basic Rent due before the date of such
payment and all Supplemental Rent), under the Participation Agreement and
under the Tax Indemnity Agreement, (1) the obligation of Lessee to pay the
installments of Basic Rent shall cease to accrue, (2) this Lease shall
terminate, (3) Lessor will comply with the terms of the Trust Indenture and
transfer to or at the direction of Lessee, without recourse or warranty
(except as to the absence of Lessor Liens), all of Lessor's right, title
and interest in and to the Airframe and any Engines subject to such Event
of Loss, as well as any Engines not subject to such Event of Loss, and
furnish to or at the direction of Lessee a bill of sale in form and
substance reasonably satisfactory to Lessee (or any Sublessee), evidencing
such transfer and (4) Lessee will be subrogated to all claims of Lessor, if
any, against third parties, for damage to or loss of the Airframe and any
Engines which were subject to such Event of Loss to the extent of the then
insured value of the Aircraft.
In the event Lessee shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Lessee
shall, at its sole expense, not later than the Business Day next succeeding
the 120th day following the occurrence of such Event of Loss, (A) convey or
cause to be conveyed to Lessor and to be leased by Lessee hereunder, an
aircraft (or an airframe or an airframe and one or more engines which,
together with the Engines constituting a part of the Aircraft but not
installed thereon at the time of such Event of Loss constitute the
Aircraft) free and clear of all Liens (other than Permitted Liens) and
having a value, utility and remaining useful life at least equal to the
Aircraft subject to such Event of Loss assuming that the Aircraft had been
maintained in accordance with this Lease and (B) prior to or at the time of
any such substitution, Lessee (or any Sublessee), at its own expense, will
(1) furnish Lessor with a full warranty bill of sale and a Federal Aviation
Administration bill of sale, in form and substance reasonably satisfactory
to Lessor, evidencing such transfer of title, (2) cause a Lease Supplement
and a Trust Supplement to be duly executed by Lessee and filed for
recording pursuant to the Transportation Code, or the applicable laws,
rules and regulations of any other jurisdiction in which the Airframe may
then be registered as permitted by Section 7(d) of the Participation
Agreement, (3) cause a financing statement or statements with respect to
such substituted property to be filed in such place or places as are deemed
necessary or desirable by Lessor to perfect its and the Indenture Trustee's
interest therein and herein, (4) furnish Lessor with such evidence of
compliance with the insurance provisions of Section 11 with respect to such
substituted property as Lessor may reasonably request, (5) furnish Lessor
with copies of the documentation required to be provided by Lessee pursuant
to Section 5.06 of the Trust Indenture, and Lessor simultaneously will
comply with the terms of the Trust Indenture and transfer to or at the
direction of Lessee, without recourse or warranty (except as to the absence
of Lessor Liens), all of Lessor's right, title and interest, if any, in and
to the Aircraft or the Airframe and one or more Engines, as the case may
be, with respect to which such Event of Loss occurred and furnish to or at
the direction of Lessee a bill of sale in form and substance reasonably
satisfactory to Lessee (or any Sublessee), evidencing such transfer, (6)
furnish Lessor with an opinion of counsel (which shall be Skadden, Arps,
Slate, Meagher & Flom LLP or Skadden, Arps, Slate, Meagher & Flom
(Illinois) and, if not, other counsel chosen by Lessee and reasonably
acceptable to Lessor) reasonably satisfactory to Lessor to the effect that
Lessor and the Indenture Trustee will be entitled to the benefits of
Section 1110 of the U.S. Bankruptcy Code with respect to the substitute
aircraft, provided that such opinion need not be delivered to the extent
that immediately prior to such substitution the benefits of Section 1110 of
the U.S. Bankruptcy Code were not, solely by reason of a change in law or
governmental interpretation thereof after the date hereof, available to
Lessor and, so long as any Equipment Notes are outstanding, the Indenture
Trustee (it being agreed that such opinion may contain customary
qualifications and assumptions) and (7) Lessee will be subrogated to all
claims of Lessor, if any, against third parties for damage to or loss of
the Airframe and any Engine which were subject to such Event of Loss to the
extent of the then insured value of the Aircraft. For all purposes hereof,
the property so substituted shall after such transfer be deemed part of the
property leased hereunder and shall be deemed an "Aircraft", "Airframe" and
"Engine", as the case may be, as defined herein. No Event of Loss with
respect to the Airframe or the Airframe and the Engines or engines then
installed thereon for which substitution has been elected pursuant to
Section 10(a)(ii) hereof shall result in any reduction in Basic Rent.
(b) Event of Loss with Respect to an Engine. Upon the occurrence
of an Event of Loss with respect to an Engine under circumstances in which
there has not occurred an Event of Loss with respect to the Airframe,
Lessee shall forthwith (and in any event, within fifteen days after such
occurrence) give Lessor written notice thereof and shall, within one
hundred twenty (120) days after the occurrence of such Event of Loss,
convey or cause to be conveyed to Lessor, as replacement for the Engine
with respect to which such Event of Loss occurred, title to an Acceptable
Alternate Engine. Prior to or at the time of any such conveyance, Lessee,
at its own expense, will (i) furnish Lessor with a warranty (as to title)
bill of sale, in form and substance reasonably satisfactory to Lessor, with
respect to such Acceptable Alternate Engine, (ii) cause a Lease Supplement
and Trust Supplement to be duly executed by Lessee and to be filed for
recording pursuant to the Transportation Code, or the applicable laws,
rules and regulations of any other jurisdiction in which the Airframe may
then be registered as permitted by Section 7(d) of the Participation
Agreement, (iii) furnish Lessor with such evidence of compliance with the
insurance provisions of Section 11 hereof with respect to such replacement
engine as Lessor may reasonably request and furnish Lessor with copies of
the documentation required to be provided by Lessee pursuant to Section
5.06 of the Trust Indenture, and Lessor will comply with the terms of the
Trust Indenture and transfer to or at the direction of Lessee without
recourse or warranty (except as to absence of Lessor Liens) all of Lessor's
right, title and interest, if any, in and to (A) the Engine with respect to
which such Event of Loss occurred and furnish to or at the direction of
Lessee a bill of sale in form and substance reasonably satisfactory to
Lessee, evidencing such transfer and (B) all claims, if any, against third
parties, for damage to or loss of the Engine subject to such Event of Loss,
and such Engine shall thereupon cease to be the Engine leased hereunder.
For all purposes hereof, each such replacement engine shall, after such
conveyance, be deemed part of the property leased hereunder, and shall be
deemed an "Engine". No Event of Loss with respect to an Engine under the
circumstances contemplated by the terms of this paragraph (b) shall result
in any reduction in Basic Rent.
(c) Application of Payments from Governmental Authorities for
Requisition of Title, etc. Any payments (other than insurance proceeds the
application of which is provided for in Section 11) received at any time by
Lessor or by Lessee from any governmental authority or other Person with
respect to an Event of Loss will be applied as follows:
(i) if payments are received with respect to the Airframe (or
the Airframe and any Engine or engines then installed thereon), (A)
unless the same are replaced pursuant to the last paragraph of
Section 10(a), after reimbursement of Lessor (as provided in Section
7.01 of the Trust Agreement) for reasonable costs and expenses, so
much of such payments remaining as shall not exceed the Termination
Value required to be paid by Lessee pursuant to Section 10(a), shall
be applied in reduction of Lessee's obligation to pay Termination
Value, if not already paid by Lessee, or, if already paid by Lessee,
shall be applied to reimburse Lessee for its payment of Termination
Value, and following the foregoing application, the balance, if any,
of such payments will be paid over to, or retained by Lessee,
provided that Lessor shall be entitled to so much of the excess, if
any, of such payment over the greater of (x) the Termination Value
and (y) the fair market value of the Aircraft as Lessor shall
demonstrate to Lessee's reasonable satisfaction is attributable to
compensation for loss of Lessor's interest in the Aircraft as
distinguished from the loss of use of the Aircraft; or (B) if such
property is replaced pursuant to the last paragraph of Section 10(a),
such payments shall be paid over to, or retained by, Lessee; and
(ii) if such payments are received with respect to an Engine
under circumstances contemplated by Section 10(b) hereof, so much of
such payments remaining after reimbursement of Lessor (as provided
for in Section 7.01 of the Trust Agreement) for reasonable costs and
expenses shall be paid over to, or retained by, Lessee.
(d) Requisition for Use of the Aircraft by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of the Airframe and the Engines or engines
installed on the Airframe during the Term by the United States Government
or any other government of registry of the Aircraft or any instrumentality
or agency of any thereof, Lessee shall promptly notify Lessor of such
requisition, and all of Lessee's obligations under this Lease with respect
to the Aircraft shall continue to the same extent as if such requisition
had not occurred (except to the extent that any failure or delay in
repairing or maintaining the Aircraft shall have been caused by such
requisition), provided that if such Airframe and Engines or engines
installed thereon are not returned by such government prior to the end of
the Term, Lessee shall be obligated to return the Airframe and such Engines
or engines to Lessor pursuant to, and in all other respects in compliance
with the provisions of, Section 5 promptly on the date of such return by
such government. If, in the event of any such requisition, Lessee shall
fail to return the Aircraft on or before the thirtieth (30th) day beyond
the end of the Term, such failure shall constitute an Event of Loss which
shall be deemed to have occurred on the last day of the Term and in such
event Lessee shall make the payment contemplated by Section 10(a)(i) in
respect of such Event of Loss; provided, however, that Lessor may notify
Lessee in writing on or before the twentieth (20th) day prior to the last
day of the Term that, in the event Lessee shall fail by reason of such
requisition to return the Airframe and such Engines or engines on or before
the thirtieth day beyond the end of the Term, such failure shall not be
deemed an Event of Loss. Upon the giving of such notice and such failure
to return by the thirtieth (30th) day beyond the end of the Term, Lessee
shall be relieved of all of its obligations pursuant to the provisions of
Section 5 (but not under any other Section), except that if any engine not
owned by Lessor shall then be installed on the Airframe, Lessee will, at no
cost to Lessor, furnish, or cause to be furnished, to Lessor a full
warranty (as to title) bill of sale with respect to each such engine, in
form and substance reasonably satisfactory to Lessor (together with an
opinion of counsel (which may be Lessee's General Counsel, Deputy General
Counsel, Associate General Counsel or Assistant General Counsel) to the
effect that such full warranty bill of sale has been duly authorized and
delivered and is enforceable in accordance with its terms and that such
engines are free and clear of Liens other than Lessor Liens, Loan
Participant Liens and Indenture Trustee Liens), against receipt from Lessor
of a bill of sale evidencing the transfer, without recourse or warranty
(except as to the absence of Lessor Liens), by Lessor to Lessee or its
designee of all of Lessor's right, title and interest in and to any Engine
constituting part of the Aircraft but not then installed on the Airframe.
All payments received by Lessor or Lessee from such government for the use
of such Airframe and Engines or engines during the Term shall be paid over
to, or retained by, Lessee (or, if directed by Lessee, any Sublessee); and
all payments received by Lessor or Lessee from such government for the use
of such Airframe and Engines or engines after the end of the Term shall be
paid over to, or retained by, Lessor unless Lessee shall have exercised its
purchase option hereunder, in which case such payments shall be made to
Lessee.
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof (other than in the circumstances
contemplated by paragraph (d)), Lessee shall replace such Engine hereunder
by complying (or causing any Sublessee to comply) with the terms of Section
10(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 10(b) hereof, any payments
received by Lessor or Lessee from such government with respect to such
requisition shall be paid over to, or retained by, Lessee.
(f) Application of Payments During Existence of Event of Default.
Any amount referred to in this Section 10 which is payable to or retainable
by Lessee (or any Sublessee) shall not be paid to or retained by Lessee (or
such Sublessee) if at the time of such payment or retention an Event of
Default has occurred and is continuing, but shall be held by or paid over
to Lessor as security for the obligations of Lessee (or such Sublessee)
under this Lease and, if an Event of Default has occurred and is continuing
hereunder, applied against Lessee's obligations hereunder as and when due.
At such time as there shall not be continuing any such Event of Default,
such amount shall be paid to Lessee (or such Sublessee) to the extent not
previously applied in accordance with the preceding sentence.
Section 11. INSURANCE.
(a) Lessee's Obligation to Insure. Lessee shall comply with, or
cause to be complied with, each of the provisions of Exhibit H, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) Additional Insurance by Lessor and Lessee. Lessee (and any
Sublessee) may at its own expense carry insurance with respect to its
interest in the Aircraft in amounts in excess of that required to be
maintained by this Section 11; the Owner Participant may carry for its own
account at its sole cost and expense insurance with respect to its interest
in the Aircraft, provided that such insurance does not prevent Lessee (or
any Sublessee) from carrying the insurance required or permitted by this
Section 11 or adversely affect such insurance or the cost thereof.
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 11 requiring insurance,
Lessor agrees to accept, in lieu of insurance against any risk with respect
to the Aircraft, indemnification from, or insurance provided by, the United
States Government or any agency or instrumentality thereof, or, upon the
written consent of Lessor, other government of registry of the Aircraft or
agency or instrumentality thereof, against such risk in an amount which,
when added to the amount of insurance against such risk maintained by
Lessee (or any Sublessee) shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 11 (taking
into account self-insurance permitted by Exhibit H hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit H hereto which
is payable to or retainable by Lessee (or any Sublessee) shall not be paid
to or retained by Lessee (or any Sublessee) if at the time of such payment
or retention an Event of Default has occurred and is continuing, but shall
be held by or paid over to Lessor as security for the obligations of Lessee
under this Lease and, if Lessor declares this Lease to be in default
pursuant to Section 15 hereof, applied against Lessee's obligations
hereunder as and when due. At such time as there shall not be continuing
any such Event of Default, such amount shall be paid to Lessee to the
extent not previously applied in accordance with the preceding sentence.
Section 12. INSPECTION. At all reasonable times and upon at
least 15 days prior written notice to Lessee, the Owner Participant or the
Indenture Trustee, or their respective authorized representatives, may
inspect the Aircraft and inspect and make copies of the books and records
of Lessee and any Sublessee required to be maintained by the Federal
Aviation Administration or the regulatory agency or body of another
jurisdiction in which the Aircraft is then registered relating to the
maintenance of the Aircraft (at Lessor's, the Owner Participant's or the
Indenture Trustee's risk and expense, as the case may be) and shall keep
any information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Lessor, the Note Holders
and to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Note Holders' or the Indenture Trustee's interest (and
such prospective and permitted transferee's counsel, independent insurance
advisors or other agents) who agree to hold such information confidential,
(B) to Lessor's, the Owner Participant's, the Note Holders' or the
Indenture Trustee's counsel, independent insurance advisors or other agents
who agree to hold such information confidential, or (C) as may be required
by any statute, court or administrative order or decree or governmental
ruling or regulation, provided, however, that any and all disclosures
permitted by clause (C) above shall be made only to the extent necessary to
meet the specific requirements or needs of the Persons for whom such
disclosures are hereby permitted. Any such inspection of the Aircraft
shall be subject to Lessee's safety and security rules applicable to the
location of the Aircraft, shall be a visual, walk-around inspection of the
interior and exterior of the Aircraft and shall not include opening any
panels, bays or the like without the express consent of Lessee (except in
connection with a heavy maintenance visit when a panel, bay or the like is
scheduled or required to be opened), which consent Lessee may in its sole
discretion withhold; provided that no exercise of such inspection right
shall interfere with the normal operation or maintenance of the Aircraft
by, or the business of, Lessee (or any Sublessee). Upon receipt by Lessee
of a written request from the Owner Participant specifying that the Owner
Participant desires to have an authorized representative observe the next
scheduled heavy maintenance visit to be performed on the Aircraft during
the Term, Lessee shall cooperate with the Owner Participant to enable the
Owner Participant's representative to observe such scheduled maintenance to
be performed on the Aircraft during the Term; provided that the Owner
Participant's authorized representative shall merely observe such scheduled
heavy maintenance visit, shall not interfere with or extend in any manner
the normal conduct or duration of the scheduled heavy maintenance visit,
and shall not be entitled to direct any of the work performed in connection
with such scheduled heavy maintenance visit. Neither the Owner Participant
nor the Indenture Trustee shall have any duty to make any such inspection
nor shall either of them incur any liability or obligation by reason of not
making such inspection. Except during the final six (6) months of the Term
or during the continuance of an Event of Default, all inspections by the
Owner Participant and its authorized representatives or the Indenture
Trustee and its authorized representatives provided for under this Section
12 shall, in regard to each of the Owner Participant and the Indenture
Trustee, be limited to one (1) inspection of any kind contemplated by this
Section 12 during any calendar year. During the last three months of the
Term (unless Lessee shall have elected to purchase the Aircraft or renew
this Lease in accordance with the terms of this Lease), with reasonable
notice, Lessee will cooperate and cause any Sublessee to cooperate, at
Lessor's sole cost, in all reasonable respects with the efforts of Lessor
to sell or lease the Aircraft, including, without limitation, permitting
prospective purchasers or lessees to inspect the Aircraft, any maintenance
records relating to the Aircraft then required to be retained by the FAA or
by the comparable government of registry of the Aircraft, all in accordance
with the provisions set forth above; provided that any such cooperation
shall not interfere with the normal operation or maintenance of the
Aircraft by, or the business of, Lessee or any Sublessee.
Section 13. ASSIGNMENT. Except as otherwise provided herein,
Lessee will not, without prior written consent of Lessor, assign in whole
or in part any of its rights or obligations hereunder. Lessor agrees that
it will not assign or convey its right, title and interest in and to this
Lease or the Aircraft except as provided herein, in the Trust Indenture,
the Trust Agreement, in the Participation Agreement or in any other
Operative Document. Subject to the foregoing, the terms and provisions of
this Lease shall be binding upon and inure to the benefit of Lessor and
Lessee and their respective successors and permitted assigns.
Section 14. EVENTS OF DEFAULT. Each of the following events
shall constitute an Event of Default (whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and each such Event of Default shall continue so long
as, but only as long as, it shall not have been remedied:
(a) Lessee shall not have made (i) a payment of Basic Rent within
five (5) Business Days after the same shall have become due, (ii) a payment
of Termination Value within ten (10) Business Days after receipt by Lessee
of written notice that the same is past due or (iii) an Advance when
required to be made pursuant to Section 3(g) within five (5) Business Days
after the same shall have been required to have been made; or
(b) Lessee shall have failed to make a payment of Supplemental
Rent (other than Termination Value) after the same shall have become due
and such failure shall continue for thirty (30) days after Lessee's receipt
of written demand therefor by the party entitled thereto (provided that any
failure to pay any amount owed by Lessee under the Tax Indemnity Agreement
or any failure of Lessee to pay to Lessor or the Owner Participant when due
any Excluded Payments shall not constitute an Event of Default unless
notice is given by the Owner Participant to Lessee and the Indenture
Trustee that such failure shall constitute an Event of Default); or
(c) Lessee shall have failed to perform or observe (or caused to
be performed and observed) in any material respect any covenant or
agreement (except the covenants set forth in the Tax Indemnity Agreement)
to be performed or observed by it under any Operative Document, and such
failure shall continue unremedied for a period of thirty (30) days after
receipt by Lessee of written notice thereof from Lessor or the Indenture
Trustee; provided, however, that if Lessee shall have undertaken to cure
any such failure and, notwithstanding the diligence of Lessee in attempting
to cure such failure, such failure is not cured within said thirty (30) day
period but is curable with future due diligence, there shall exist no Event
of Default under this Section 14 so long as Lessee is proceeding with due
diligence to cure such failure and such failure is remedied not later than
three hundred sixty (360) days after receipt by Lessee of such written
notice; or
(d) any representation or warranty made by Lessee herein or in the
Participation Agreement or any document or certificate furnished by Lessee
in connection herewith or therewith or pursuant hereto or thereto (except
the representations and warranties set forth in the Tax Indemnity Agreement
and such documents or certificates as are furnished to the Owner
Participant solely in connection with matters dealt with in the Tax
Indemnity Agreement and for no other purpose and except for representations
or warranties contained in the Pass Through Trust Agreement, the
Underwriting Agreement or any document or instrument furnished pursuant to
either thereof) shall prove to have been incorrect in any material respect
at the time made, shall remain material at the time in question and such
incorrectness shall not have been cured (to the extent of the adverse
impact of such incorrectness on the interests of the Owner Participant,
Lessor or the Note Holders) within thirty (30) days after the receipt by
Lessee of a written notice from Lessor or the Indenture Trustee advising
Lessee of the existence of such incorrectness; or
(e) the commencement of an involuntary case or other proceeding in
respect of Lessee in an involuntary case under the federal bankruptcy laws,
as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Lessee or for all or substantially
all of its property, or seeking the winding-up or liquidation of its
affairs and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive days or an
order, judgment or decree shall be entered in any proceeding by any court
of competent jurisdiction appointing, without the consent of Lessee, a
receiver, trustee or liquidator of Lessee, or of any substantial part of
its property, or sequestering any substantial part of the property of
Lessee and any such order, judgment or decree or appointment or
sequestration shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date of entry
thereof; or
(f) the commencement by Lessee of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other similar
law in the United States, or the consent by Lessee to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Lessee or for all or
substantially all of its property, or the making by Lessee of any
assignment for the benefit of creditors, or Lessee shall take any corporate
action to authorize any of the foregoing; or
(g) Lessee shall fail to carry and maintain on or with respect to
the Aircraft (or cause to be carried and maintained) insurance required to
be maintained in accordance with the provisions of Section 11 hereof;
provided, however, that, notwithstanding anything to the contrary contained
in Section 14(c) or (d) hereof, any failure of Lessee to perform or observe
any covenant, condition, agreement or any error in a representation or
warranty shall not constitute an Event of Default if such failure or error
is caused solely by reason of an event that constitutes an Event of Loss so
long as Lessee is continuing to comply with all of the terms of Section 10
hereof.
Section 15. REMEDIES. Upon the occurrence of any Event of
Default and at any time thereafter so long as the same shall be continuing,
Lessor may, at its option, declare by written notice to Lessee this Lease
to be in default; and at any time thereafter, so long as any such
outstanding Events of Default shall not have been remedied, Lessor may do
one or more of the following with respect to all or any part of the
Airframe and any or all of the Engines as Lessor in its sole discretion
shall elect, to the extent permitted by, and subject to compliance with any
mandatory requirements of, applicable law then in effect; provided,
however, that during any period the Aircraft is subject to the Civil
Reserve Air Fleet Program in accordance with the provisions of Section 7(b)
hereof and in possession of the United States government or an agency or
instrumentality of the United States, Lessor shall not, on account of any
Event of Default, be entitled to do any of the following in such manner as
to limit Lessee's control under this Lease (or any Sublessee's control
under any Sublease) of any Airframe or any Engines installed thereon,
unless at least sixty (60) days (or such lesser period as may then be
applicable under the Air Mobility Command program of the United States
Government) written notice of default hereunder shall have been given by
Lessor by registered or certified mail to Lessee (and any Sublessee) with a
copy addressed to the Contracting Office Representative for the Air
Mobility Command of the United States Air Force under any contract with
Lessee (or any Sublessee) relating to the Aircraft:
(a) upon the written demand of Lessor and at Lessee's expense,
cause Lessee to return promptly, and Lessee shall return promptly, the
Airframe or any Engine as Lessor may so demand to Lessor or its order in
the manner and condition required by, and otherwise in accordance with all
the provisions of, Section 5 as if such Airframe or Engine were being
returned at the end of the Term, or Lessor, at its option, may enter upon
the premises where all or any part of the Airframe or any Engine is located
and take immediate possession of and remove the same by summary proceedings
or otherwise (and/or, at Lessor's option, store the same at Lessee's
premises until disposal thereof by Lessor), all without liability accruing
to Lessor for or by reason of such entry or taking of possession or
removing whether for the restoration of damage to property caused by such
action or otherwise;
(b) sell the Airframe and/or any Engine at public or private sale,
as Lessor may determine, or otherwise dispose of, hold, use, operate, lease
to others or keep idle the Aircraft as Lessor, in its sole discretion, may
determine, all free and clear of any rights of Lessee, except as
hereinafter set forth in this Section 15;
(c) whether or not Lessor shall have exercised, or shall
thereafter at any time exercise, any of its rights under paragraph (a) or
paragraph (b) above with respect to the Airframe and/or any Engine, Lessor,
by written notice to Lessee specifying a payment date which shall be the
Rent Payment Date not earlier than ten (10) days from the date of such
notice, may demand that Lessee pay to Lessor, and Lessee shall pay Lessor,
on the payment date so specified, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the installments of Basic Rent for
the Aircraft due on Rent Payment Dates occurring on or after the Rent
Payment Date specified as the payment date in such notice), any unpaid
Basic Rent due on Rent Payment Dates prior to (but not on) the payment date
so specified (including, without limitation, any adjustments to Basic Rent
payable pursuant to Section 3(c)) plus whichever of the following amounts
Lessor, in its sole discretion, shall specify in such notice (together with
interest, if any, on such amount at the Past Due Rate from such specified
payment date until the date of actual payment of such amount): (i) an
amount equal to the excess, if any, of the Termination Value for the
Aircraft, computed as of the Rent Payment Date specified as the payment
date in such notice, over the aggregate fair market rental value (computed
as hereafter in this Section 15 provided) of such Aircraft for the
remainder of the Term, after discounting such aggregate fair market rental
value to present value as of the Rent Payment Date specified as the payment
date in such notice at an annual rate equal to the Past Due Rate; or (ii)
an amount equal to the excess, if any, of the Termination Value for such
Aircraft, computed as of the Rent Payment Date specified as the payment
date in such notice over the fair market sales value of such Aircraft
(computed as hereafter in this Section provided) as of the Rent Payment
Date specified as the payment date in such notice;
(d) in the event Lessor, pursuant to paragraph (b) above, shall
have sold the Airframe and/or any Engine, Lessor, in lieu of exercising its
rights under paragraph (c) above with respect to such Aircraft, may, if it
shall so elect, demand that Lessee pay Lessor, and Lessee shall pay to
Lessor, on the date of such sale, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the installments of Basic Rent for
the Aircraft due on or after such date), any unpaid Basic Rent with respect
to the Aircraft due prior to (but not on) such date (including, without
limitation, any adjustments to Basic Rent payable pursuant to Section 3(c))
plus the amount of any deficiency between the net proceeds of such sale
(after deduction of all reasonable costs of sale) and the Termination Value
of such Aircraft, computed as of the Termination Value Date (as set forth
on Exhibit C) on or immediately following the date of such sale together
with interest, if any, on the amount of such deficiency, at the Past Due
Rate, from the date of such sale to the date of actual payment of such
amount; and/or
(e) Lessor may rescind this Lease as to the Aircraft, and/or may
exercise any other right or remedy which may be available to it under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages for breach hereof.
For the purposes of paragraph (c) above, the "fair market rental
value" or the "fair market sales value" of the Aircraft shall be the rental
value or sales value, as the case may be, which would be obtained in an
arm's-length transaction between an informed and willing lessee or
purchaser, as the case may be, under no compulsion to lease or purchase, as
the case may be, and an informed and willing lessor or seller in possession
under no compulsion to lease, sell, as the case may be, in each case based
upon the actual condition and location of the Aircraft, which value shall
be determined by mutual agreement or, in the absence of mutual written
agreement, pursuant to an appraisal prepared and delivered by a nationally
recognized firm of independent aircraft appraisers nominated by Lessor, and
Lessor shall immediately notify Lessee of such nomination. Unless Lessee
shall have objected in writing within ten (10) Business Days after its
receipt of Lessor's notice, Lessor's nomination shall be conclusive and
binding. If Lessee shall object, however, Lessor and Lessee shall
endeavor, within ten (10) Business Days after such objection is made, to
select a mutually acceptable appraiser; provided that, if Lessee shall not
so endeavor to make such selection, Lessor's nomination referred to in the
preceding sentence hereof shall be conclusive and binding. If Lessor and
Lessee fail to reach agreement (except for the reason referred to in the
proviso in the preceding sentence), or if any appraiser selected fails to
act for any reason, then the question shall be determined by an appraisal
(applying the definitions of "fair market rental value" and "fair market
sales value" as set forth above based upon the actual condition of the
Aircraft) mutually agreed to by two (2) recognized independent aircraft
appraisers, one of which appraisers shall be chosen by Lessor and one by
Lessee within five (5) Business Days after Lessor or Lessee shall have
received written notice from the other party of a demand that such an
appraisal be made, which notice shall specify the appraiser chosen by the
party giving the notice or, if such appraisers cannot agree on the amount
of such appraisal within twenty (20) Business Days after the end of such
five (5) Business Day period, each shall render its own appraisal and shall
by mutual consent choose another appraiser within five (5) Business Days
after the end of such twenty (20) day period. If, within such five (5) day
period, such two appraisers fail to appoint a third appraiser, then either
Lessor or Lessee, on behalf of both, may request such appointment by the
then President of the Association of the Bar of the City of New York (or
any successor organization thereto) or, in his absence, failure, refusal or
inability to act, then either Lessor or Lessee may apply to the American
Arbitration Association (or any successor organization thereto) in New
York, New York for the appointment of such third appraiser. The decision
of the third appraiser so appointed shall be given within twenty (20)
Business Days after the appointment of such third appraiser. As soon as
the third appraiser has delivered his appraisal, that appraisal shall be
compared with the appraisals given by the other two (2) appraisers. If the
determination of one appraiser is more disparate from the average of all
three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and
binding upon the parties hereto. If no determination is more disparate
from the average of all three determinations than each of the other
determinations, then such average shall be final and binding upon the
parties thereto. The cost of such appraisal or appointment shall be borne
by Lessee.
In addition, Lessee shall be liable, except as otherwise provided
above and without duplication of amounts payable hereunder, for any and all
unpaid Rent due hereunder before, after or during the exercise of any of
the foregoing remedies (other than Basic Rent due on or after the payment
referenced in paragraph (d) or paragraph (c) above) and for all reasonable
legal fees and other costs and expenses (including fees of the appraisers
hereinabove referred to) incurred by Lessor, the Indenture Trustee, the
Loan Participants and the Owner Participant in connection with the return
of the Airframe or any Engine in accordance with the terms of Section 5 or
in placing such Airframe or Engine in the condition and airworthiness
required by such Section.
At any sale of the Aircraft or any part thereof pursuant to this
Section 15, Lessor (or the Indenture Trustee, any Loan Participant or the
Owner Participant) or Lessee may bid for and purchase such property.
Lessor agrees to give Lessee at least fifteen (15) days prior written
notice of the date fixed for any public sale of the Airframe or any Engine
or of the date on or after which will occur the execution of any contract
providing for any private sale and any such public sale shall be conducted
in general so as to afford Lessee (and any Sublessee) a reasonable
opportunity to bid. Except as otherwise expressly provided above, no
remedy referred to in this Section 15 is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy referred to above
or otherwise available to Lessor at law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such remedies shall
not preclude the simultaneous or later exercise by Lessor of any or all of
such other remedies. No waiver by Lessor of any Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent
Event of Default.
Section 16. LESSEE'S COOPERATION CONCERNING CERTAIN MATTERS;
DELIVERY OF FINANCIAL STATEMENTS. Forthwith upon the execution and
delivery of each Lease Supplement and Trust Supplement from time to time
required by the terms hereof and upon the execution and delivery of any
amendment to this Lease, to the Trust Indenture or to the Trust Agreement,
Lessee will cause such Lease Supplement, Trust Supplement (and, in the case
of the initial Lease Supplement and Trust Supplement, this Lease, the Trust
Agreement and the Trust Indenture as well) or amendment to be duly filed
and recorded, and maintained of record, in accordance with the applicable
laws of the government of registry of the Aircraft. In addition, Lessee
will promptly and duly execute and deliver to Lessor such further documents
and take such further action as Lessor or the Indenture Trustee may from
time to time reasonably request in order more effectively to carry out the
intent and purpose of this Lease and to establish and protect the rights
and remedies created or intended to be created in favor of Lessor and the
Indenture Trustee hereunder, including, without limitation, if requested by
Lessor or the Indenture Trustee, at the expense of Lessee, the execution
and delivery of supplements or amendments hereto or to the Trust Indenture,
each in recordable form, subjecting to this Lease and the Trust Indenture,
any airframe or engine substituted for the Airframe or any Engine pursuant
to the terms thereof and the recording or filing of counterparts thereof,
in accordance with the laws of such jurisdictions as Lessor or the
Indenture Trustee may from time to time deem advisable. Lessee agrees to
furnish to Lessor and the Indenture Trustee promptly after execution and
delivery of any supplement and amendment hereto and promptly after the
execution and delivery of any supplement and amendment to the Trust
Indenture (except for any such supplement or amendment which does not
require or receive the approval of Lessee pursuant to the Operative
Documents and is not required pursuant to the terms of the Operative
Documents), an opinion of counsel (which may be Lessee's General Counsel,
Deputy General Counsel, Associate General Counsel or Assistant General
Counsel) reasonably satisfactory to Lessor and the Indenture Trustee as to
the due recording or filing of such supplement or amendment. Lessee will
deliver to Lessor, the Owner Participant and the Indenture Trustee (a)
within sixty (60) days after the end of each of the first three quarterly
periods of each fiscal year of Lessee, the publicly filed Form 10-Q report
of Lessee; and (b) within one hundred twenty (120) days after the close of
such fiscal year, the publicly filed annual report and Form 10-K report of
Lessee.
Section 17. NOTICES. All notices required under the terms and
provisions hereof shall be by telecopier or other telecommunication means
(with such telecopy or other telecommunication means to be confirmed in
writing), or if such notice is impracticable, by registered, first-class
airmail, with postage prepaid, or by personal delivery of written notice
and any such notice shall become effective when received, addressed:
(a) if to Lessee, for U.S. mail at 2345 Crystal Drive, Arlington,
Virginia 22227, and for overnight courier at 2345 Crystal Drive, Arlington,
Virginia 22227, Attention: Treasurer (Telecopy No. (703) 872-5936), or to
such other address or telecopy number as Lessee shall from time to time
designate in writing to Lessor,
(b) if to Lessor, at 79 South Main Street, 3rd Floor, Salt Lake
City, Utah 84111, Attention: Corporate Trust Department (Telecopy No.
(801) 246-5053), or to such other address or telecopy number as Lessor
shall from time to time designate in writing to Lessee, and
(c) if to a Loan Participant, the Indenture Trustee or the Owner
Participant, addressed to such Loan Participant, the Indenture Trustee or
the Owner Participant at such address or telecopy number as such Loan
Participant, the Indenture Trustee or the Owner Participant shall have
furnished by notice to Lessor and to Lessee, and, until an address is so
furnished, addressed to such Loan Participant, the Indenture Trustee or the
Owner Participant at its address or telecopy number set forth in Schedule I
to the Participation Agreement.
Section 18. NO SET-OFF, COUNTERCLAIM, ETC. All Rent shall be
paid by Lessee to Lessor in funds of the type specified in Section 3(e).
Except as expressly provided herein, Lessee's obligation to pay all Rent
payable hereunder shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-
off, counterclaim, recoupment, defense or other right which Lessee may have
against Lessor, in its individual capacity or as Owner Trustee under the
Trust Agreement, the Indenture Trustee (in its individual capacity or as
Indenture Trustee), any Loan Participant, the Owner Participant, or anyone
else for any reason whatsoever (whether in connection with the transactions
contemplated hereby or any other transactions), including, without
limitation, any breach by Lessor or the Owner Participant of their
respective warranties, agreements or covenants contained in any of the
Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or any
damage to or loss or destruction of, the Aircraft, or any interruption or
cessation in or prohibition of the use or possession thereof by Lessee (or
any Sublessee) for any reason whatsoever, including, without limitation,
any such interruption, cessation or prohibition resulting from the act of
any government authority, (iii) any insolvency, bankruptcy, reorganization
or similar case or proceedings by or against Lessee (or any Sublessee) or
any other Person, or (iv) any other circumstance, happening, or event
whatsoever, whether or not unforeseen or similar to any of the foregoing;
provided, however, that notwithstanding the foregoing, Lessee shall be
entitled to offset from any payment due to the Owner Participant the cost
incurred by Lessee to discharge Lessor Liens relating to the Owner
Participant. If for any reason whatsoever this Lease shall be terminated
in whole or in part by operation of law or otherwise except as specifically
provided herein, Lessee nonetheless agrees without limitation of the other
rights or remedies of Lessor hereunder to pay to Lessor an amount equal to
each Rent payment at the time such payment would have become due and
payable in accordance with the terms hereof had this Lease not been
terminated in whole or in part. Lessee hereby waives, to the extent
permitted by applicable law, any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease except in
accordance with the express terms hereof.
Section 19. RENEWAL OPTIONS; PURCHASE OPTIONS; VALUATION.
(a) Renewal Options.
(1) Fixed Renewal Term. Not more than 365 days and not less
than one hundred twenty (120) days, before the end of the Basic Term
or any Fixed Renewal Term (as hereinafter defined), Lessee may
deliver to Lessor a written notice irrevocably electing to renew this
Lease for a term having a duration and at a Basic Rent as determined
below (any such renewal term, a "Fixed Renewal Term"). The duration
of any Fixed Renewal Term shall be a period specified by Lessee
before the end of the Basic Term which is (i) not less than one year
(provided any such period shall be in six (6) month increments), (ii)
not more than the longest period of time which would cause the Term,
after giving effect to such Fixed Renewal Term, to be equal to 75% of
the total useful life of the aircraft as determined by the Delivery
Date appraisal. Each semi-annual installment of Basic Rent during the
Fixed Renewal Term shall be equal to the lesser of (A) the fair
market rental value of the Aircraft or (B) (I) one-half of the
average annual Basic Rent during the Basic Term divided by (II) two
(2).
(2) Fair Market Renewal Term. Lessee shall have the right to
renew this Lease for additional periods of one (1) year or more
(provided any such period shall be on six (6) month increments)
commencing at the end of the Basic Term or the Fixed Renewal Term for
a Basic Rent equal to the fair market rental value of the Aircraft
for such period (any such renewal term, a "Fair Market Renewal
Term"). Each such option to renew shall be exercised by Lessee
providing irrevocable notice at least one hundred twenty (120) days
prior to the commencement of such Fair Market Renewal Term.
(3) Waiver. If no written notice is delivered by Lessee to
Lessor pursuant to Section 19(a)(1) or (a)(2) on or before the day
specified therefor, Lessee shall be deemed to have waived any right
to renew this Lease.
(4) Conditions Precedent, Payment of Basic Rent. At the end of
the Basic Term or any Renewal Term, if Lessee has elected to renew
this Lease as aforesaid, (i) this Lease shall continue in full force
and effect during the Renewal Term and (ii) Basic Rent for such
Renewal Term shall be payable in semi-annual installments in arrears,
each such installment being due and payable on each Rent Payment Date
occurring during the Renewal Term, commencing with the Rent Payment
Date immediately following the commencement of the Renewal Term,
provided that Basic Rent for such Renewal Term shall be payable at
such other frequency of payment consistent with the length of the
Renewal Term as Lessor may reasonably designate in the event that
such period is not divisible into whole semi-annual periods.
(5) Termination Value. The amounts which are payable during
any Renewal Term in respect of Termination Value with respect to the
Aircraft shall be determined on the basis of the fair market sales
value of the Aircraft as of the commencement of such Renewal Term,
amortized on a straight-line basis over such Renewal Term to the
projected fair market sales value of the Aircraft as of the
expiration of such Renewal Term, as such fair market sales value in
each case is determined prior to the commencement of such Renewal
Term. In determining fair market sales value for purposes of
calculating Termination Value for any Renewal Term effect shall be
given to the encumbrance on the Aircraft of any Fixed Renewal Term
available or in force.
(b) Purchase Options. Lessee shall have the option, (i) upon at
least thirty (30) days irrevocable prior written notice to Lessor prior to
the EBO Date with respect to the purchase option set forth in clause (i)
and (ii) upon at least one hundred twenty (120) days irrevocable prior
written notice to Lessor prior to the relevant purchase date (each a
"Purchase Option Date") with respect to the purchase options set forth in
clauses (ii) and (iii), to terminate this Lease and to purchase the
Aircraft:
(1) on the EBO Date, for a purchase price equal to the EBO
Amount set forth on Exhibit D, it being understood that if such
amount is to be paid in installments, Lessee will, upon payment of
the first installment of the EBO Amount, on the EBO date, receive
title to the Aircraft free and clear of all liens (other than the
Lien of the Indenture if Lessee has elected to assume the Equipment
Notes in accordance with Section 7(u) of the Participation
Agreement);
(2) on the last Business Day of the Basic Term for a purchase
price equal to the fair market sales value of the Aircraft on such
date, provided, however, that in no event shall such purchase price
exceed 50% of Lessor's Cost;
(3) on the last Business Day of any Renewal Term for a
purchase price equal to the fair market sales value of the Aircraft
on such date.
Notwithstanding the foregoing, but subject to the last sentence of
this paragraph, the purchase price on any Purchase Option Date shall be
sufficient, together with all other amounts payable simultaneously by
Lessee, to pay in full the payments then required to be made on account of
the principal amount of and accrued and unpaid interest on the Equipment
Notes then outstanding. Upon payment to Lessor in immediately available
funds in Dollars of the full amount of the purchase price and payment of
any other amounts then due hereunder (including all Rent and all reasonable
costs or expenses of the Owner Participant in connection with such
purchase), Lessor will transfer to Lessee, without recourse or warranty
(except as to the absences of Lessor Liens), all of Lessor's right, title
and interest in and to the Aircraft. Notwithstanding the foregoing, Lessee
may, in accordance with Section 7(u) of the Participation Agreement, assume
the principal amount of the Equipment Notes then outstanding on any
applicable Purchase Option Date in which event Lessee shall receive a
credit against the purchase price otherwise payable pursuant to the
preceding two sentences in an amount equal to the principal amount so
assumed.
(c) Valuation. At any time not earlier than three hundred sixty-
five (365) days prior to the date on which Lessee may purchase the Aircraft
pursuant to Section 19(b)(2) or (b)(3) hereof or renew this Lease pursuant
to Section 19(a)(1) or (a)(2) hereof, Lessee may deliver to Lessor a
revocable notice of its intent to exercise its renewal option or purchase
option. For all purposes of this Section 19 and Section 20, including the
appraisal referred to in this Section 19(c), in determining "fair market
rental value" or "fair market sales value", the Aircraft shall be valued
(i) as if in the condition and otherwise in compliance with the terms of
Section 5 upon a return of the Aircraft to Lessor and as if it had been
maintained at all times as required in accordance with Section 7(a)(i)
during periods when no Sublease was in effect, (ii) on the basis of the
value which would obtain in an arm's-length transaction between an informed
and willing buyer-user or lessee (other than a lessee or an Affiliate of a
lessee currently in possession or a used equipment scrap dealer) under no
compulsion to buy or lease and an informed and willing seller or lessor
unaffiliated with such buyer-user or lessee and under no compulsion to sell
or lease and disregarding the purchase and renewal options of the lessee
provided in this Lease and (iii) in the case of such valuation for
determining "fair market rental value", assuming such lessee would have
substantially the same obligations during the Fair Market Renewal Term as
provided hereunder including without limitation the obligations of Lessee
to carry and maintain the insurance required by Section 11 hereof and to
make certain payments with reference to Termination Value during the
applicable Fair Market Renewal Term. Upon receipt of such notice Lessor
and Lessee shall confer in good faith with a view to reaching agreement on
the "fair market rental value" or "fair market sales value" of the
Aircraft. If the parties have not so agreed within two hundred seventy
(270) days prior to the end of the Basic Term or the Renewal Term in
question, then the question shall be determined by an appraisal mutually
agreed to by two recognized independent aircraft appraisers, one of which
appraisers shall be chosen by Lessor and one by Lessee within five (5)
Business Days after Lessor or Lessee shall have received written notice
from the other party of a demand that such an appraisal be made, which
notice shall specify the appraiser chosen by the party giving the notice
or, if such appraisers cannot agree on the amount of such appraisal within
twenty (20) Business Days after the end of such five (5) Business Day
period, each shall render its own appraisal and shall by mutual consent
choose another appraiser within five (5) Business Days after the end of
such twenty (20) Business Day period. If, within such five (5) Business
Day period, such two appraisers fail to appoint a third appraiser, then
either Lessor or Lessee, on behalf of both, may request such appointment by
the then President of the Association of the Bar of the City of New York
(or any successor organization thereto) or, in his absence, failure,
refusal or inability to act, then either Lessor or Lessee may apply to the
American Arbitration Association (or any successor organization thereto) in
New York, New York for the appointment of such third appraiser. The
decision of the third appraiser so appointed shall be given within ten (10)
Business Days after the appointment of such third appraiser. As soon as
the third appraiser has delivered his appraisal, that appraisal shall be
compared with the appraisals given by the other two appraisers. If the
determination of one appraiser is more disparate from the average of all
three determinations than each of the other two determinations, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and
binding upon the parties hereto. If no determination is more disparate
from the average of all three determinations than each of the other
determinations, then such average shall be final and binding upon the
parties thereto. Lessee and Lessor shall share equally all expenses
relating to such appraisal procedure provided if Lessee elects not to renew
this Lease or purchase the Aircraft following such appraisal, Lessee shall
pay all expenses of such appraisal.
Section 20. BURDENSOME PURCHASE OPTION. If a Burdensome
Termination Event shall have occurred, then on any Rent Payment Date
occurring after the expiration of the Depreciation Period, Lessee shall
have the option, upon at least one hundred twenty (120) days revocable
prior notice to Lessor and, if any Equipment Notes are then outstanding,
the Indenture Trustee, to purchase the Aircraft on such date for a purchase
price equal to the higher of the Termination Value as of such date or the
fair market sales value of the aircraft (determined as set forth in clause
(c) above and excluding the value of any Significant Expenditure) (such
price, the "Burdensome Buyout Price"). In addition, if on such date there
shall be any Equipment Notes outstanding, Lessee shall have the option to
assume, pursuant to Section 7(u) of the Participation Agreement and Section
2.13 of the Trust Indenture, all of the obligations of Lessor under the
Trust Indenture. If such assumption is made, Lessee shall pay Lessor a
purchase price equal to (I) the Burdensome Buyout Price minus (II) an
amount equal to principal of, and accrued but unpaid interest on, any
Equipment Notes that are outstanding on such date. Upon such payment in
full and payment of any other amounts then due hereunder (excluding any
Basic Rent due on such date but including costs or expenses of the Owner
Participant in connection with such purchase, any installments of Basic
Rent due prior to such date and all unpaid Supplemental Rent due on or
prior to such date), Lessor will transfer to Lessee, without recourse or
warranty (except as to the absence of Lessor Liens), all of Lessor's right,
title and interest in and to the Aircraft and under the Trust Indenture
and, unless there shall be any Equipment Notes outstanding after such
payment, exercise such rights as it has to cause the Aircraft to be
released from the Lien of the Trust Indenture.
Section 21. SECURITY FOR LESSOR'S OBLIGATION TO HOLDERS OF
EQUIPMENT NOTES. In order to secure the indebtedness evidenced by the
Equipment Notes, Lessor has agreed in the Trust Indenture, among other
things, to assign to the Indenture Trustee this Lease, the Lease
Supplements and any amendments to this Lease and to mortgage its interest
in the Aircraft in favor of the Indenture Trustee, subject to the
reservations and conditions therein set forth. To the extent, if any, that
this Lease, the Lease Supplements and any amendments to this Lease
constitute chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in
this Lease, the Lease Supplements and any amendments to this Lease may be
created through the transfer or possession of any counterpart other than
the original counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Indenture Trustee on the
signature page thereof. Lessee hereby accepts and consents to the
assignment of all Lessor's right, title and interest in and to this Lease
pursuant to the terms of the Trust Indenture. Subject to Section 3(e)
hereof, Lessee agrees to pay directly to the Indenture Trustee (or, after
receipt by Lessee of notice from the Indenture Trustee of the discharge of
the Trust Indenture, to Lessor), all amounts of Rent due or to become due
hereunder and assigned to the Indenture Trustee and Lessee agrees that the
Indenture Trustee's right to such payments hereunder shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, the circumstances set forth in clauses (i) through (iv)
of Section 18 hereof. Notwithstanding the foregoing assignment of this
Lease, the obligations of Lessor to Lessee to perform the terms and
conditions of this Lease shall remain in full force and effect.
Section 22. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee
fails to make any payment of Rent required to be made by it hereunder or
fails to perform or comply with any of its agreements contained herein,
then (but in each case, except in the case of failure to pay Rent or in the
case of failure to maintain insurance as required hereunder, no earlier
than the fifteenth day after the occurrence of such failure, whether or not
it shall yet constitute an Event of Default hereunder) Lessor may itself
make such payment or perform or comply with such agreement but shall not be
obligated hereunder to do so, and the amount of such payment and the amount
of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the
case may be, together with interest thereon at the Past Due Rate, shall be
deemed Supplemental Rent, payable by Lessee upon demand.
Section 23. INVESTMENT OF SECURITY FUNDS; LIABILITY OF LESSOR
LIMITED.
(a) Investment of Security Funds. Any moneys held by Lessor as
security hereunder for future payments to Lessee at a time when there is
not continuing an Event of Default shall, until paid to Lessee, be invested
by Lessor or, if the Trust Indenture shall not have been discharged, by the
Indenture Trustee, as the case may be, as Lessee may from time to time
direct in writing (and in absence of a written direction by Lessee, there
shall be no obligation to invest such moneys) in Cash Equivalents. There
shall be promptly remitted to Lessee or its order (but no more frequently
than monthly) any gain (including interest received) realized as a result
of any such investment (net of any fees, commissions and other expenses, if
any, incurred in connection with such investment) unless an Event of
Default shall have occurred and be continuing. Lessee shall be responsible
for any net loss realized as a result of any such investment and shall
reimburse Lessor (or the Indenture Trustee, as the case may be) therefor on
demand.
(b) Liability of Lessor Limited. It is expressly agreed and
understood that all representations, warranties and undertakings of Lessor
hereunder shall be binding upon Lessor only in its capacity as trustee
under the Trust Agreement, and the institution acting as Lessor shall not
be liable in its individual capacity for any breach thereof except for its
gross negligence or willful misconduct or for breach of its covenants,
representations and warranties contained herein, to the extent covenanted
or made in its individual capacity.
Section 24. JURISDICTION. Lessor and Lessee each hereby
irrevocably submits itself to the non-exclusive jurisdiction of the United
States District Court for the Southern District of New York and to the non-
exclusive jurisdiction of the Supreme Court of the State of New York, New
York County, for the purposes of any suit, action or other proceeding
arising out of this Lease, the subject matter hereof or any of the
transactions contemplated hereby brought by Lessor, Lessee, the Indenture
Trustee, the Loan Participants or the Owner Participant or their successors
or assigns.
Section 25. MISCELLANEOUS. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. No term or provision of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by Lessor, Lessee and any assignee of Lessor's rights hereunder.
This Lease shall constitute an agreement of lease, and nothing contained
herein shall be construed as conveying to Lessee any right, title or
interest in the Aircraft except as a lessee only. Neither Lessee nor any
affiliate of Lessee will file any tax returns in a manner inconsistent with
the foregoing fact or with Lessor's ownership of the Aircraft. The section
and paragraph headings in this Lease and the table of contents are for
convenience of reference only and shall not modify, define, expand or limit
any of the terms or provisions hereof and all references herein to numbered
sections, unless otherwise indicated, are to sections of this Lease. THIS
LEASE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND 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 Lease may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument.
Section 26. SUCCESSOR TRUSTEE. Lessee agrees that in the case
of the appointment of any successor Owner Trustee pursuant to the terms of
the Trust Agreement, such successor Owner Trustee shall, upon written
notice by such successor Owner Trustee, succeed to all the rights, powers
and title of Lessor hereunder and shall be deemed to be Lessor and the
owner of the Aircraft for all purposes hereof without the necessity of any
consent or approval by Lessee (subject to Section 9 of the Participation
Agreement) and without in any way altering the terms of this Lease or
Lessee's obligations hereunder. One such appointment and designation of a
successor Owner Trustee shall not exhaust the right to appoint and
designate further successor Owner Trustees pursuant to the Trust Agreement,
but such right may be exercised repeatedly as long as this Lease shall be
in effect.
Section 27. LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE
(a) Lease for Federal Income Tax Law Purposes. It is the intent
of the parties to this Agreement that this Lease is a true lease for U.S.
Federal income tax purposes.
(b) Section 1110 of Bankruptcy Code. It is the intention of each
of Lessee and Lessor that Lessor (and the Indenture Trustee as secured
party and as assignee of Lessor under the Trust Indenture) shall be
entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to the right to take possession of the Aircraft, Airframe, Engines
and Parts as provided in this Lease.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
to be duly executed as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly provided
herein, but solely as Owner Trustee,
Lessor
By: _________________________________
Title: ______________________________
US AIRWAYS, INC.,
Lessee
By: __________________________________
Title: _______________________________
Receipt of this original counterpart of the foregoing Lease is
hereby acknowledged on the ___ day of _________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, Indenture Trustee
By: __________________________________
Title: _______________________________
As set forth in Section 21 of the Lease (as defined below), Lessor has
assigned to the Indenture Trustee (as defined herein) certain of its right,
title and interest in and to the Lease and this Lease Supplement. To the
extent, if any, that this Lease Supplement constitutes chattel paper (as
such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction) no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than
the original executed counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Indenture
Trustee on the signature page thereof.
EXHIBIT A
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
LEASE SUPPLEMENT NO.
(US Airways, Inc. Trust No. N___U_)
LEASE SUPPLEMENT NO. __, dated _________, _____, between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in
its individual capacity, but solely as Owner Trustee under the Trust
Agreement (US Airways, Inc. Trust No. N___U_), dated as of __________ __,
____ with the Owner Participant named therein (such Owner Trustee, in its
capacity as such Owner Trustee, being herein called "Lessor"), and US
AIRWAYS, INC., a Delaware corporation ("Lessee").
Lessor and Lessee have heretofore entered into that certain Lease
Agreement (US Airways, Inc. Trust No. N___U_), dated as of __________ __,
____, relating to one Airbus Model A330 aircraft (herein called the
"Lease," and the defined terms therein being hereinafter used with the same
meanings). The Lease provides for the execution and delivery from time to
time of Lease Supplements for the purpose of leasing the Airframe and
Engines under the Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof.
[The Lease relates to the Airframe and Engines described below,
and a counterpart of the Lease is attached hereto, and made a part hereof,
and this Lease Supplement, together with such attachment, is being filed
for recordation on the date hereof with the Federal Aviation Administration
as one document.](4)
[The Lease relates to the Airframe and Engines described below,
and a counterpart of the Lease, attached and made a part of Lease
Supplement No. 1 dated _______________, ____ to the Lease, has been
recorded by the Federal Aviation Administration on ________________, ____,
as one document and assigned Conveyance No. __.](5)
-----------------
(4) For use on Lease Supplement No. 1.
(5) For use on Lease Supplement No. 2 and thereafter.
NOW, THEREFORE, in consideration of the premises and other good
and sufficient consideration, Lessor and Lessee hereby agree as follows:
(a) Lessor hereby delivers and leases to Lessee under the Lease
and Lessee hereby accepts and leases from Lessor under the Lease the
following described Airbus Model A330 aircraft (the "Aircraft"), which
Aircraft as of the date hereof consists of the following components:
(i) Airframe: Airbus Model A330-___(6) airframe bearing
FAA Registration No. ______; manufacturer's serial no. _____; and
(ii) Engines: two (2) engines identified as [ ](7)
type aircraft engines bearing, respectively, manufacturer's serial
nos.______ and _____ (each of which engines has 750 or more rated
takeoff horsepower or the equivalent of such horsepower).
-------------
(6) Insert full model number of Aircraft (e.g., "A330-300").
(7) Insert engine manufacturer and model number.
(b) The Delivery Date of the Aircraft is the date of this Lease
Supplement set forth in the opening paragraph hereof. Except as otherwise
provided in the Lease, the Term for the Aircraft shall commence on the
Delivery Date and end on ____________, 20__.
(c) Lessee hereby confirms its agreement to pay Lessor Basic
Rent for the Aircraft throughout the Term therefor in accordance with
Section 3 of the Lease.
(d) Lessee hereby confirms to Lessor that Lessee has accepted
the Aircraft for all purposes hereof and of the Lease as being airworthy,
in good working order and repair and without defect or inherent vice in
title, condition, design, operation or fitness for use; provided, however,
that nothing contained herein or in the Lease shall in any way diminish or
otherwise affect any right Lessee or Lessor may have with respect to the
Aircraft against Airbus Industrie G.I.E., or any subcontractor or supplier
of Airbus Industrie G.I.E., under the Purchase Agreement or otherwise.
(e) All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.
(f) This Lease Supplement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute
but one and the same instrument. To the extent, if any, that this Lease
Supplement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any jurisdiction), no security
interest in this Lease Supplement may be created through the transfer or
possession of any counterpart other than the original counterpart, which
shall be identified as the counterpart containing the receipt therefor
executed by the Indenture Trustee on the signature page hereof.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement to be duly executed on the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly provided
herein, but solely as Owner Trustee,
Lessor
By: _________________________________
Name:
Title:
US AIRWAYS, INC.,
Lessee
By: _________________________________
Name:
Title:
(1) Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged on this ___day of__________, ____.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,
Indenture Trustee
By: _________________________________
Name:
Title:
-----------------
(1) This language contained in the original counterpart only.
EXHIBIT B-1
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
PAST DUE RATE DEFINED
The portion of this Exhibit appearing below will be intentionally
deleted from the FAA filing counterpart as the parties hereto deem it to
contain confidential information.
"Past Due Rate" means (i) with respect to any portion of any
payment of Rent that may be required by the Trust Indenture to be paid by
the Indenture Trustee to the Loan Participants, or the holders of any
outstanding Equipment Notes, a rate per annum equal to 1% over the interest
rate then in effect for such Equipment Notes, and (ii) with respect to the
remaining portion of any payment of Rent (and the entire amount of any
payment of Rent after the satisfaction and discharge of the Trust
Indenture), a rate per annum equal to 1% over the Base Rate.
EXHIBIT B-2
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
BASIC RENT PAYMENTS
The portion of this Exhibit appearing below will be intentionally
deleted from the FAA filing counterpart as the parties hereto deem it to
contain confidential information.
Basic Rent Payment*
Rent Payment Date (Percentage of Lessor's Cost)
----------------- -----------------------------
* These Basic Rent Payments will be allocated to the Lease Periods as
set forth on Exhibit B-3.
EXHIBIT B-3
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
BASIC RENT ALLOCATIONS
The portion of this Exhibit appearing below will be intentionally
deleted from the FAA filing counterpart as the parties hereto deem it to
contain confidential information.
Timing of Payments to Allocated Rent
------------------------------------
Basic Rent Allocation
---------------------
Lease Periods (Percentage of Amount (Percentage Rent Payment
(Calendar year) Lessor's Cost) of Lessor's Cost) Date
--------------- -------------- ------------------ ------------
EXHIBIT B-4
to
Lease Agreement
(US Airways, Inc. Trust No. N____U___
LESSOR'S COST
The portion of this Exhibit appearing below will be intentionally deleted
from the FAA filing counterpart as the parties hereto deem it to contain
confidential information.
Lessor's Cost: $__________
EXHIBIT C
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
TERMINATION VALUE SCHEDULE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
Basic Rent Amount Total
Termination Amount as of Termination Termination Payment*
Termination (Percentage of Date (Percentage (Percentage of
Date Lessor's Cost) of Lessor's Cost) Lessor's Cost)
----------- ------------------ ----------------- --------------------
* The "Total Termination Payment" in this column is the amount payable
on termination which is the sum of, and represents, (i) a payment (or
reduction) of Basic Rent in an amount equal to the "Basic Rent Amount"
(which includes all amounts of Basic Rent allocated to any period
prior to the termination and not yet paid and reduced by all amounts
paid prior to the termination and allocated to periods after the
termination) and (ii) a payment of the "Termination Amount."
EXHIBIT D
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
EBO AMOUNT
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
EBO Date EBO Amount
-------- ----------
EXHIBIT E
to
Lease Agreement
(US Airways, Inc. N___U_)
RENT RECALCULATION AND
INDEMNIFICATION VERIFICATION
The portion of this Exhibit appearing below this will be intentionally
deleted from the FAA filing counterpart as the parties hereto deem it to
contain confidential information.
Any recalculation of Basic Rent, Termination Value percentages and EBO
Amount pursuant to the Lease shall be determined by the Owner Participant,
and shall maintain the Owner Participant's Net Economic Return except as
assumptions have been modified pursuant to Section 3 of the Lease or
pursuant to the Tax Indemnity Agreement or the Participation Agreement, as
the case may be; provided, however, that Lessee may request (A) Lessee's
independent public accountants to verify such calculations but without any
requirement that the Owner Participant disclose to such Persons the
methodology and assumptions and (B) if Lessee believes that such
calculations by the Owner Participant are in error then a nationally
recognized firm of accountants selected by the Owner Participant and
reasonably acceptable to Lessee shall be permitted to verify such
calculations and the Owner Participant will make available to such firm
(subject to the execution by such firm of a confidentiality agreement
reasonably acceptable to the Owner Participant) the methodology and
assumptions and any changes made therein pursuant to Section 3 of the
Lease. In the event of a verification under clause (B) of the first
sentence of this paragraph the determination by such firm of accountants
shall be final. Lessee will pay the reasonable costs and expenses of the
verification under clause (B) of the first sentence of this paragraph
unless an error adverse to Lessee is established by such firm, and if as a
result of such verification process the Basic Rent is adjusted and such
adjustment causes the Net Present Value of Rents to decline by 10 (ten) or
more basis points or causes a material reduction in Termination Value, EBO
Amount or any indemnity payment (in which event the Owner Participant shall
pay the reasonable costs and expenses of such verification process). Such
recalculated Basic Rent, Termination Value percentages and EBO amounts
shall be set forth in a Lease Supplement or an amendment to the Lease.
"Net Economic Return" means the Owner Participant's after-tax yield
and aggregate after-tax cash flow utilizing the multiple investment sinking
fund method of analysis, computed on the basis of the same methodology and
assumptions as were utilized by the Owner Participant in determining Basic
Rent, Termination Value percentages and EBO Amount as of the Delivery Date.
EXHIBIT F
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States of America
Malaysia Venezuela
*So long as on the date of the Sublease such country and the United
States have diplomatic relations at least as good as those in effect on the
Delivery Date.
EXHIBIT G
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
RETURN CONDITIONS
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Condition Upon Return. Unless purchased by Lessee pursuant
to Section 19 or 20 hereof, upon the termination of this Lease at the end
of the Basic Term or any Renewal Term or pursuant to Sections 9(b) or 15,
unless Lessor has requested that Lessee return the Aircraft to a storage
location pursuant to Section 5(b) (in which case the storage location
provided in said Section 5(b) shall be deemed to be the return location),
Lessee will return the Airframe to Lessor at one of Lessee's principal
maintenance bases located in one of the forty-eight contiguous states of
the United States chosen by Lessee, and Lessee will give Lessor at least
ten (10) days prior written notice of the place of such return. At the
time of such return, (i) Lessee will, at its own cost and expense, unless
otherwise requested by Lessor to retain the existing registration of the
Aircraft at least ninety (90) days prior to the date of return hereunder,
cause the Aircraft, if it is not then so registered, to be registered under
the laws of the United States with the Federal Aviation Administration in
the name of the Lessor or its designee, provided that Lessee shall be
relieved of its obligations under this sentence if such registration is
prohibited by reason of the failure of Lessor, Owner Participant or
Lessor's designee to be eligible on such date to own an aircraft registered
with the Federal Aviation Administration and (ii) the Airframe will be
fully equipped with the Engines (or Acceptable Alternate Engines) installed
thereon. Also, at the time of such return, Lessor shall have good title to
such Airframe and Engines or Acceptable Alternate Engines, and such
Airframe and Engine or Acceptable Alternate Engines (A) shall be certified
(or, if not then registered under the Transportation Code by reason of the
proviso of clause (i) in the preceding sentence or because Lessor has so
requested that the Aircraft not be so registered, shall hold a valid
certificate of airworthiness issued by the country of registry and be
eligible for certification by the Federal Aviation Administration) as an
airworthy aircraft by the Federal Aviation Administration, (B) shall be
free and clear of all Liens (other than Lessor Liens, Indenture Trustee's
Liens and Loan Participant Liens) and rights of third parties under
pooling, interchange, overhaul, repair or other similar agreements or
arrangements, (C) shall be in a regular passenger configuration, and in as
good a condition as when delivered by Seller to Lessee, ordinary wear and
tear excepted, and otherwise in the condition required to be maintained
under Lessee's FAA-approved maintenance plan (notwithstanding any Sublease
theretofore in effect), (D) in the event that Lessee (or any Sublessee then
in possession of the Aircraft) shall not then be using a continuous
maintenance program with respect to the Airframe immediately prior to such
return but instead shall have been using a block overhaul program with
respect to the Airframe, then (i) such block overhaul program shall have
been approved by the government of registry of the Aircraft and (ii) the
Airframe shall have remaining until the next scheduled block overhaul at
least 25% of the allowable hours between block overhauls permitted under
the block overhaul program then used by Lessee or such Sublessee, (E) on
average, the Engines or Acceptable Alternate Engines shall not have been
operated since the last engine shop visit more than 75% of the time
represented by Lessee's average on-wing hang time as then applicable to
mature engines employed on A330-___ aircraft in Lessee's fleet (based on a
three (3) year average), (F) shall have all Lessee's and any Sublessee's
exterior marking removed or painted over with areas thereof refinished to
match adjacent areas and (G) shall be in a state of cleanliness suitable
under Lessee's normal service standards for operation in Lessee's revenue
passenger service and in all such cases the Aircraft shall not have been
discriminated against whether by reason of its leased status or otherwise
in maintenance, use, operation or in any other manner whatsoever.
If clause (D) of the first paragraph of this subsection (a) shall
be applicable but the Airframe does not meet the conditions specified in
said clause (D), Lessee shall pay or cause to be paid to Lessor,
concurrently with the return thereof, a Dollar amount computed by
multiplying (i) 110% of the direct cost to Lessee (based upon the direct
cost to Lessee for similar aircraft in the fleet of Lessee) during the
preceding 12 months of performing an airframe block overhaul of the type
referred to in such clause (D) by (ii) a fraction of which (x) the
numerator shall be the excess of 25% of the hours of operation allowable
between such block overhauls over the actual number of hours of operation
remaining on the Airframe to the next such block overhaul and (y) the
denominator shall be the number of hours of operation allowable between
such block overhauls in accordance with such block overhaul program.
If the Engines (or Acceptable Alternate Engines) do not meet the
conditions specified in clause (E) of the first paragraph of this
subsection (a), Lessee shall pay or cause to be paid to Lessor,
concurrently with the return thereof, a Dollar amount computed by
multiplying (i) two (2) times (ii) 110% of the direct cost to Lessee (based
upon the direct cost to Lessee for similar aircraft in the fleet of Lessee)
during the preceding 12 months of performing for an engine of the same
model as the Engines (or Acceptable Alternate Engines) the scheduled engine
heavy maintenance under the maintenance program then used by Lessee for
engines of the same model as the Engines (or Acceptable Alternate Engines)
(such applicable amount, the "HEM Value") times (iii)25%, and subtracting
from such product of clauses (i), (ii) and (iii), the value (as calculated
in accordance with the following sentence) of the aggregate of the amount
of time remaining to the next scheduled engine shop visit (determined by
using Lessee's average on-wing hang time as then applicable to a mature
engine of the type used on an A330-___ type aircraft (based on a three (3)
year average)) for the Engines or Acceptable Alternate Engines. The value
of the time to the next scheduled shop visit for any Engine or Acceptable
Alternate Engine shall be calculated by multiplying (i) a fraction of which
(x) the numerator shall be the amount of time remaining until the next
scheduled shop visit for such Engine or Acceptable Alternate Engine and (y)
the denominator shall be the average on-wing hang time for such Engine or
Acceptable Alternate Engine determined in accordance with the preceding
sentence by (ii) HEM Value.
(b) Return of the Engines. In the event that an Acceptable
Alternate Engine shall be delivered with the returned Airframe as set forth
in subsection (a) of this Exhibit G, Lessee, concurrently with such
delivery, will, at no cost to Lessor, furnish, or cause to be furnished, to
Lessor a full warranty (as to title) bill of sale with respect to each such
Acceptable Alternate Engine, in form and substance satisfactory to Lessor
(together with an opinion of counsel (which may be Lessee's General
Counsel, Deputy General Counsel, Associate General Counsel or Assistant
General Counsel) to the effect that such full warranty bill of sale has
been duly authorized and delivered and is enforceable in accordance with
its terms and that each such Acceptable Alternate Engine is free and clear
of all Liens other than Lessor Liens, Loan Participant Liens and Indenture
Trustee Liens), against receipt from Lessor of a bill of sale or evidencing
the transfer, without recourse or warranty (except as to the absence of
Lessor Liens), by Lessor to Lessee or its designee of all of Lessor's
right, title and interest in and to any Engine not installed on the
Airframe at the time of the return of the Airframe.
(c) Fuel and Manuals. Upon the return of the Airframe upon any
termination of this Lease in accordance with subsection (a) of this Exhibit
G, (i) Lessor shall pay to Lessee, the amount of Lessee's cost for any fuel
or oil contained in the fuel or oil tanks of such Airframe and (ii) Lessee
shall deliver or cause to be delivered to Lessor all logs, manuals and data
and inspection, modification and overhaul records required to be maintained
under the provisions of the Lease.
EXHIBIT H
to
Lease Agreement
(US Airways, Inc. Trust No. N___U_)
INSURANCE(8)
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
----------------
(8) US Airways to confirm.
(a) Public Liability and Property Damage Insurance. (1) Except
as provided in clause (2) of this subsection (a), and subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee will carry or cause to be carried with respect to the Aircraft at
its or any Sublessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased, and operated by Lessee (or, if a Sublease is then in effect, by
Sublessee) of the same type as the Aircraft and (y) $300 million per
occurrence, (B) of the type and covering the same risks as from time to
time applicable to aircraft owned or leased and operated by Lessee of the
same type as the Aircraft and (C) which is maintained in effect with
insurers of nationally or internationally recognized reputation and
responsibility; provided, however, that Lessee need not maintain such cargo
liability insurance, or may maintain such cargo liability insurance in an
amount less than $300 million per occurrence, so long as the amount of
cargo liability insurance, if any, maintained with respect to the Aircraft
is not less than the cargo liability insurance, if any, maintained for
other Airbus Model A330 aircraft owned or leased and operated by Lessee.
(2) During any period that the Airframe or an Engine, as the case
may be, is on the ground and not in operation, Lessee may carry or cause to
be carried as to such non-operating property, in lieu of the insurance
required by clause (1) above, and subject to the self-insurance to the
extent permitted by subsection (d) hereof, insurance by insurers of
nationally or internationally recognized reputation and responsibility
otherwise conforming with the provisions of said clause (1) except that (A)
the amounts of coverage shall not be required to exceed the amounts of
comprehensive airline liability from time to time applicable to property
owned or leased by Lessee of the same type as such non-operating property
and which is on the ground and not in operation; and (B) the scope of the
risks covered and the type of insurance shall be the same as from time to
time shall be applicable to aircraft owned or leased by Lessee of the same
type as such non-operating property and which is on the ground and not in
operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject to
the provisions of subsection (d) of this Exhibit H permitting the self-
insurance, Lessee shall maintain or cause to be maintained in effect, at
its or any Sublessee's expense, with insurers of nationally or
internationally recognized responsibility, all-risk aircraft hull insurance
covering the Aircraft and fire and extended coverage and all-risk aircraft
hull insurance covering Engines and Parts while temporarily removed from
the Aircraft and not replaced by similar components; provided that such
insurance shall at all times while the Aircraft is subject to this Lease be
for an amount (taking into account the self-insurance to the extent
permitted by subsection (d) of this Exhibit H) not less than the
Termination Value for the Aircraft; provided further, that, subject to
compliance with subsection (d) of this Exhibit H, such all-risk property
damage insurance covering Engines and Parts temporarily removed from an
Airframe or an airframe or (in the case of Parts) an Engine need be
obtained only to the extent available at reasonable cost (as reasonably
determined by Lessee). In the case of a Loss with respect to an engine
(other than an Engine) installed on the airframe in circumstances which do
not constitute an Event of Loss with respect to the Airframe, Lessor shall
promptly remit any payment made to it of any insurance proceeds in respect
of such Loss to Lessee or any other third party that is entitled to receive
such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Lessee with the insurers. As between Lessor and
Lessee, it is agreed that all insurance payments received as the result of
the occurrence of an Event of Loss will be applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon), (i)
unless such property is replaced pursuant to the last paragraph
of Section 10(a), so much of such payments remaining, after
reimbursement of Lessor (as provided in Section 7.01 of the Trust
Agreement) and the Owner Participant for reasonable costs and
expenses, as shall not exceed the Termination Value and the other
amounts payable pursuant to Section 10(a) hereof shall be applied
in reduction of Lessee's obligation to pay such Termination Value
and other amounts payable pursuant to Section 10(a) hereof, if
not already paid by Lessee, or, if already paid by Lessee, shall
be applied to reimburse Lessee for its payment of such
Termination Value and such other amounts payable, and the
balance, if any, of such payments remaining thereafter will be
paid over to, or retained by, Lessee (or if directed by Lessee,
any Sublessee); or (ii) if such property is replaced pursuant to
the last paragraph of Section 10(a), such payments shall be paid
over to, or retained by, Lessee (or if directed by Lessee, any
Sublessee), provided that Lessee shall have fully performed or,
concurrently therewith, will fully perform the terms of the last
paragraph of Section 10(a) with respect to the Event of Loss for
which such payments are made; and
(y) if such payments are received with respect to an Engine
under the circumstances contemplated by Section 10(b) hereof, so
much of such payments remaining after reimbursement of Lessor (as
provided in Section 7.01 of the Trust Agreement) and the Owner
Participant for reasonable costs and expenses, shall be paid over
to, or retained by, Lessee (or if directed by Lessee, any
Sublessee), provided that Lessee shall have fully performed or
concurrently therewith will fully perform the terms of Section
10(b) with respect to the Event of Loss for which such payments
are made.
As between Lessor and Lessee, the insurance payments for any
property damage loss to the Airframe or any engine not constituting an
Event of Loss with respect thereto will be applied in payment for repairs
or for replacement property in accordance with the terms of Sections 7 and
8, if not already paid for by Lessee (or any Sublessee), and any balance
(or if already paid for by Lessee (or any Sublessee), all such insurance
proceeds) remaining after compliance with such Sections with respect to
such loss shall be paid to Lessee (or any Sublessee if directed by Lessee).
(2) During any period that the Aircraft is on the ground and not
in operation, Lessee may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit H, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from time
to time applicable to aircraft owned or leased by Lessee (or, if a Sublease
is then in effect, by Sublessee) of the same type as the Aircraft similarly
on the ground and not in operation, provided that, subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit H,
Lessee shall maintain insurance against risk of loss or damage to the
Aircraft in an amount at least equal to the Termination Value of the
Aircraft during such period that the Aircraft is on the ground and not in
operation.
(3) If Lessee (or any Sublessee) 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 Lessee (or any
Sublessee) with respect to other aircraft owned and operated by Lessee (or
any Sublessee) on such routes or in such areas, 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
Termination Value.
(c) Reports, etc. Lessee will furnish, or cause to be
furnished, to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or before the Delivery Date and on each annual
anniversary date of Lessee's applicable insurance, a report, signed by
Lessee's regular insurance broker or any other independent firm of
insurance brokers reasonably acceptable to Lessor which brokers may be in
the regular employ of Lessee (the "Insurance Brokers"), describing in
reasonable detail the hull and liability insurance (and property insurance
for detached engines and parts) then carried and maintained with respect to
the Aircraft and stating the opinion of such firm that the insurance
complies with the terms hereof; provided, that all information contained in
the foregoing report shall not be made available by Lessor, the Indenture
Trustee or the Owner Participant or the Pass Through Trustee to anyone
except (i) to prospective and permitted transferees of Lessor's, the Owner
Participant's, the Indenture Trustee's or the Pass Through Trustee's
interest or their respective counsel, independent certified public
accountants and independent insurance brokers or other agents, who agree to
hold such information confidential, (ii) to Lessor's, the Owner
Participant's, the Indenture Trustee's or a Pass Through Trustee's counsel
or independent certified public accountants, independent insurance brokers
or agents who agree to hold such information confidential or (iii) as may
be required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Lessee will cause such Insurance Broker
to agree to advise Lessor, the Indenture Trustee, the Owner Participant and
the Pass Through Trustee in writing of any act or omission on the part of
Lessee of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Aircraft and to
advise in writing at least thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage and ten (10) days notice with respect
to the Electronic Date Recognition Exclusion Limited Coverage Endorsement),
prior to the cancellation or material adverse change of any insurance
maintained pursuant to Section 11, provided that if the notice period
specified above is not reasonably obtainable, the Insurance Broker shall
provide for as long a period of prior notice as shall then be reasonably
obtainable. In addition, Lessee will also cause such Insurance Brokers to
deliver to Lessor, the Indenture Trustee, the Owner Participant and the
Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Lessee to such parties on the Delivery Date except for such
changes in the report or the coverage consistent with the terms hereof. In
the event that Lessee or any Sublessee shall fail to maintain or cause to
be maintained insurance as herein provided, Lessor or the Indenture Trustee
may at its sole option, but shall be under no duty to, provide such
insurance and, in such event, Lessee shall, upon demand, reimburse Lessor
or the Indenture Trustee, as Supplemental Rent, for the cost thereof to
Lessor or the Indenture Trustee, as the case may be; provided, however,
that no exercise by Lessor or the Indenture Trustee, as the case may be, of
said option shall affect the provisions of this Lease, including the
provisions of Section 14(g).
(d) Self-Insurance. Lessee may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection (b)
of this Exhibit H, insuring for an amount that is less than the Termination
Value of the Aircraft) the risks required to be insured against pursuant to
Section 11 under a program applicable to all aircraft (whether owned or
leased) in Lessee's fleet, but in no case shall the aggregate amount of
self-insurance in regard to subsection (a) and (b) of this Exhibit H exceed
for any policy year, with respect to all of the aircraft (whether owned or
leased) in Lessee's fleet (including, without limitation, the Aircraft),
the lesser of (i) 50% of the highest replacement value of any single
aircraft in Lessee's fleet or (ii) 1-1/2% of the average aggregate
insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which Lessee carries
insurance, unless an insurance broker of national standing shall certify
that the standard among all other major United States airlines is a higher
level of self-insurance, in which case Lessee may insure the Aircraft to
such higher level. In addition to the foregoing right to self-insure,
Lessee (and any Sublessee) may self-insure to the extent of any applicable
mandatory minimum per aircraft (or, if applicable, per annum or other
period) hull or liability insurance deductible customary in the airline
industry imposed by the aircraft hull or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit H and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit H, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage and ten (10) days in the case of the
Electronic Date Recognition Limited Coverage Endorsement) after issuance to
the Additional Insureds, respectively, of written notice by such insurers
of such cancellation, lapse or change; provided, however, that if any
notice period specified above is not reasonably obtainable, such policies
shall provide for as long a period of prior notice as shall then be
reasonably obtainable, (D) shall provide that in respect of the respective
interests of the Additional Insureds in such policies the insurance shall
not be invalidated by any action or inaction of Lessee (or, if any Sublease
is then in effect, any Sublessee) or any other Person and shall insure the
Additional Insureds regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by Lessee (or, if any
Sublease is then in effect, any Sublessee), (E) shall be primary without
right of contribution from any other insurance which is carried by any
Additional Insured, (F) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner
as if there were a separate policy covering each insured, (G) shall waive
any right of the insurers to any set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability
of any Additional Insured to the extent of any moneys due to any Additional
Insured and (H) shall provide that (i) in the event of a loss involving
proceeds in excess of $5,000,000, the proceeds in respect of such loss up
to an amount equal to the Termination Value for the Aircraft shall be
payable to Lessor (or, so long as the Trust Indenture shall not have been
discharged, the Indenture Trustee) (except in the case of a loss with
respect to an Engine installed on an airframe other than the Airframe, in
which case Lessee (or any Sublessee) shall arrange for any payment of
insurance proceeds in respect of such loss to be held for the account of
Lessor (or, so long as the Trust Indenture shall not have been discharged,
the Indenture Trustee) whether such payment is made to Lessee (or any
Sublessee) or any third party), it being understood and agreed that in the
case of any payment to Lessor (or the Indenture Trustee) otherwise than in
respect of an Event of Loss, Lessor (or the Indenture Trustee) 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
(and all earnings thereon) to Lessee or its order and (ii) the entire
amount of any loss involving proceeds of $5,000,000 or less or the amount
of any proceeds of any loss in excess of the Termination Value for the
Aircraft shall be paid to Lessee or its order unless an Event of Default
shall have occurred and be continuing and the insurers have been notified
thereof by Lessor or the Indenture Trustee.
Indenture
N___U_
Exhibit A-3 to Note Purchase Agreement
FORM OF LEASED AIRCRAFT INDENTURE
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of __________ __, ____
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A330 AIRCRAFT
BEARING U.S. REGISTRATION MARK N___U_
LEASED BY US AIRWAYS, INC.
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH
SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C
EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS
AGREEMENT SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT
NOTES AND TO MAKE OTHER RELATED CHANGES.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . 8
ARTICLE II THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.01. Form of Equipment Notes. . . . . . . . . . . . 8
SECTION 2.02. Issuance and Terms of Equipment Notes. . . 14
SECTION 2.03. Payments from Trust Indenture Estate Only . 17
SECTION 2.04. Method of Payment . . . . . . . . . . . . . 19
SECTION 2.05. Application of Payments . . . . . . . . . . 22
SECTION 2.06. Termination of Interest in Trust Indenture
Estate . . . . . . . . . . . . . . . . . . . 22
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes . . . . . . . . . . . . . . 23
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes . . . . . . . . . . . . . . 24
SECTION 2.09. Payment of Expenses on Transfer;
Cancellation . . . . . . . . . . . . . . . . 25
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . 25
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . 26
SECTION 2.12. Redemptions; Notice of Redemption . . . . . 26
SECTION 2.13. Assumption of Equipment Notes by Lessee . . 27
SECTION 2.14. Option to Purchase Equipment Notes . . . . . 28
SECTION 2.15. Subordination . . . . . . . . . . . . . . . 29
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . . . . . . . . . 30
SECTION 3.01. Basic Rent Distribution . . . . . . . . . . 30
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing . . . . . . . . . . 31
SECTION 3.03. Payments After Event of Default . . . . . . 32
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . 34
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . 35
SECTION 3.06. Payments to Owner Trustee . . . . . . . . . 36
ARTICLE IV COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . . . . . . . . . 36
SECTION 4.01. Covenants of Owner Trustee . . . . . . . . . 36
SECTION 4.02. Event of Default . . . . . . . . . . . . . . 37
SECTION 4.03. Certain Rights . . . . . . . . . . . . . . . 40
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . 42
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . 45
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . 47
SECTION 4.07. Discontinuance of Proceedings . . . . . . . 47
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . 48
SECTION 4.09. Appointment of Receiver . . . . . . . . . . 48
SECTION 4.10. Indenture Trustee Authorized to Execute Bills
of Sale, Etc. . . . . . . . . . . . . . . . 48
SECTION 4.11. Rights of Note Holders to Receive Payment . 49
ARTICLE V DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . . . . . . 49
SECTION 5.01. Notice of Event of Default . . . . . . . . . 49
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . 50
SECTION 5.03. Indemnification. . . . . . . . . . . . . . . 53
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions . . . . . . . . . 54
SECTION 5.05. No Action Except Under Lease, Trust Indenture
or Instructions . . . . . . . . . . . . . . 54
SECTION 5.06. Replacement Airframes and Replacement Engines 55
SECTION 5.07. Indenture Supplements for Replacements . . . 55
SECTION 5.08. Effect of Replacement . . . . . . . . . . . 55
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee . . . . . . . . . . . . . . . . . . 56
ARTICLE VI THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE . . . . . . . 56
SECTION 6.01. Acceptance of Trusts and Duties. . . . . . 56
SECTION 6.02. Absence of Duties. . . . . . . . . . . . . 57
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents. . . . . . . . . . . . 58
SECTION 6.04. No Segregation of Monies; No Interest. . . . 58
SECTION 6.05. Reliance; Agreements; Advice of Counsel. . 59
SECTION 6.06. Capacity in Which Acting. . . . . . . . . . 60
SECTION 6.07. Compensation. . . . . . . . . . . . . . . . 60
SECTION 6.08. Instructions from Note Holders. . . . . . . 60
ARTICLE VII INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE . . 61
SECTION 7.01. Scope of Indemnification. . . . . . . . . . 61
ARTICLE VIII SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . 62
SECTION 8.01. Notice of Successor Owner Trustee. . . . . . 62
SECTION 8.02. Resignation of Indenture Trustee;
Appointment of Successor. . . . . . . . . . 62
SECTION 8.03. Appointment of Additional and Separate
Trustees.. . . . . . . . . . . . . . . . . . 64
ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER
DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.01. Instructions of Majority; Limitations. . . . 66
SECTION 9.02. Trustees Protected. . . . . . . . . . . . . 68
SECTION 9.03. Documents Mailed to Note Holders. . . . . . 69
SECTION 9.04. No Request Necessary for Lease Supplement
or Trust Agreement and Indenture Supplement. 69
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.01. Termination of Trust Indenture. . . . . . . 69
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Note Holders.. . . . . . . . . . . . . . . . 70
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is
Binding. . . . . . . . . . . . . . . . . . . 70
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture. . . . . . . . . . . . . . . . . . 70
SECTION 10.05. Notices. . . . . . . . . . . . . . . . . . 71
SECTION 10.06. Severability. . . . . . . . . . . . . . . . 71
SECTION 10.07. No Oral Modification or Continuing Waivers. 72
SECTION 10.08. Successors and Assigns. . . . . . . . . . . 72
SECTION 10.09. Headings. . . . . . . . . . . . . . . . . . 72
SECTION 10.10. Normal Commercial Relations. . . . . . . . 72
SECTION 10.11. Governing Law; Counterpart Form. . . . . . . 73
SECTION 10.12. Voting By Note Holders. . . . . . . . . . . 73
SECTION 10.13. Bankruptcy. . . . . . . . . . . . . . . . . 73
SECTION 10.14. No Action Contrary to Lessee's Rights Under
the Lease. . . . . . . . . . . . . . . . . . 73
SCHEDULE I SERIES G . . . . . . . . . . . . . . . . . . SCHEDULE I-1
SERIES C . . . . . . . . . . . . . . . . . . SCHEDULE I-2
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS
THROUGH TRUST SUPPLEMENTS . . . . . . . . SCHEDULE II-1
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N___U_)
TRUST INDENTURE AND SECURITY AGREEMENT (US Airways, Inc. Trust
No. N___U_), dated as of _________ __, ____ (as amended, modified or
supplemented from time to time, this "Trust Indenture"), between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
in its individual capacity, except as expressly stated herein, but solely
as Owner Trustee under the Trust Agreement referred to below (together
with its successors under the Trust Agreement, the "Owner Trustee"), and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
a national banking association, as Indenture Trustee hereunder (together
with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the Owner Participant and the Owner Trustee have
entered into the Trust Agreement whereby, among other things, (i) the
Owner Trustee has established a certain trust for the use and benefit of
the Owner Participant subject, however, to the Trust Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority
of payment to, the holders of Equipment Notes issued hereunder, and (ii)
the Owner Trustee has been authorized and directed to execute and deliver
this Trust Indenture;
WHEREAS, the parties desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee to the
Pass Through Trustees (or their designee) of the Equipment Notes
evidencing the participation of the Pass Through Trustees in the payment
of Lessor's Cost for the Aircraft, as provided in the Participation
Agreement and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Indenture Trustee, as part of the Trust
Indenture Estate hereunder, among other things, of all of the Owner
Trustee's right, title and interest in and to the Aircraft and, except as
hereinafter expressly provided, all of the Owner Trustee's right, title
and interest in, to and under the Lease and all payments and other
amounts received hereunder or thereunder in accordance with the terms
hereof or thereof, as security for, among other things, the Owner
Trustee's obligations to the Indenture Trustee, for the ratable benefit
and security of the Note Holders, subject to Section 2.15 and Article III
hereof;
WHEREAS, all things have been done to make the Equipment Notes,
when executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable
obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee 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 SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal
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 and (ii) the performance and observance by the Owner Trustee of
all the agreements, covenants and provisions herein and in the
Participation Agreement and the Equipment Notes contained, for the
benefit of the Note Holders, the Loan Participants and each of the
Indenture Indemnitees and the prompt payment of all amounts from time to
time owing hereunder, under the Participation Agreement and under the
Lease to the Note Holders, the Loan Participants or any Indenture
Indemnitee by the Owner Trustee or Lessee (the "Secured Obligations") and
for the uses and purposes and subject to the terms and provisions hereof,
and in consideration of the premises and of the covenants herein
contained, and of the acceptance of the Equipment Notes by the holders
thereof, and for other good and valuable consideration the receipt and
adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors in trust and assigns,
for the security and benefit of the Note Holders, a first priority
security interest in and mortgage lien on all right, title and interest
of the Owner Trustee in, to and under the following described property,
rights and privileges, other than Excluded Payments (which collectively,
excluding Excluded Payments but including all property hereafter
specifically subjected to the Lien of this Trust Indenture by the Trust
Agreement and Indenture Supplement or any mortgage supplemental hereto,
are included within the Trust Indenture Estate), to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which the Owner
Trustee shall from time to time acquire title as provided herein and in
the Lease), all as more particularly described in the Trust Agreement and
Indenture Supplement executed and delivered with respect to the Aircraft
or any such replacements or substitutions therefor, as provided in this
Indenture;
(2) the Lease and any Lease Supplement and all Rent thereunder
(including, without limitation, all amounts of Basic Rent, EBO Amount,
Supplemental Rent and payments of any kind thereunder (excluding any
Excluded Payments)) and the right to receive Advances thereunder;
(3) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Bill of Sale;
(4) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(5) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under
Section 11 of the Lease, but excluding insurance proceeds described in
clauses (ii) and (iii) of the definition of Excluded Payments;
(6) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or the Lease or required hereby or by the Lease to be
held by the Indenture Trustee hereunder (other than Excluded Payments);
and
(7) all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Trust Indenture
Estate all Excluded Payments, and the right to enforce and collect the
same, and SUBJECT TO all of the terms and conditions of this Trust
Indenture and the rights of the Owner Trustee and the Owner Participant
hereunder.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee the original executed counterpart of
the Lease and the Lease Supplement No. 1 (to each of which a chattel
paper receipt is attached), and executed copies of the Participation
Agreement, the French Pledge Agreement and the Purchase Agreement
Assignment with the Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders, the Loan Participants and
the Indenture Indemnitees except as provided in Section 2.15 and Article
III hereof 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 in all cases and as to all
property specified in paragraphs (1) through (7) 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 Trustee shall remain liable under
each of the Indenture Agreements to which it is a party 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 Loan Participants, Indenture Indemnitees, Indenture Trustee and
the Note Holders shall have no obligation or liability under the
Indenture Agreements, by reason of or arising out of the assignment
hereunder, nor shall the Loan Participants, Indenture Indemnitees,
Indenture Trustee or the Note Holders be required or obligated in any
manner to perform or fulfill any obligations of the Owner Trustee under
or pursuant to any of the Indenture Agreements to which it is a party,
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.
Notwithstanding the above, the Indenture Trustee agrees, for
the benefit of AVSA, S.A.R.L., that in exercising or assigning its rights
under the Purchase Agreement Assignment, the terms and conditions of the
Purchase Agreement Assignment shall apply to, and be binding upon, the
Indenture Trustee.
The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, 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
Trustee 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 but in all cases
excluding Excluded Payments) 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 Trust Indenture Estate, 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 Indenture Trustee may deem to be necessary or advisable in the
premises. Without limiting the generality of the foregoing, but subject
to the rights of the Owner Trustee and the Owner Participant hereunder,
during the continuance of any Event of Default under this Trust
Indenture, the Indenture Trustee shall have the right under such power of
attorney to accept any offer in connection with the exercise of remedies
as set forth herein of any purchaser to purchase the Airframe and Engines
and upon such purchase to execute and deliver in the name of and on
behalf of the Owner Trustee an appropriate bill of sale and other
instruments of transfer relating to the Airframe and Engines, when
purchased by such purchaser, and to perform all other necessary or
appropriate acts with respect to any such purchase, and in its discretion
to file any claim or take any other action or proceedings, either in its
own name or in the name of the Owner Trustee or otherwise, which the
Indenture Trustee may deem necessary or appropriate to protect and
preserve the right, title and interest of the Indenture Trustee in and to
such Rents and other sums and the security intended to be afforded
hereby; provided, however, that no action of the Indenture Trustee
pursuant to this paragraph shall increase the obligations or liabilities
of the Owner Trustee to any Person beyond those obligations and
liabilities specifically set forth in this Trust Indenture and in the
other Operative Documents. Under the Lease, Lessee is directed, so long
as this Trust Indenture shall not have been fully discharged, to make all
payments of Rent (other than Excluded Payments) and all other amounts
which are required to be paid to or deposited with the Owner Trustee
pursuant to the Lease (other than Excluded Payments) directly to, or as
directed by, the Indenture Trustee at such address or addresses as the
Indenture Trustee shall specify, for application as provided in this
Trust Indenture. The Owner Trustee agrees that promptly upon receipt
thereof, it will transfer to the Indenture Trustee any and all monies
from time to time received by it constituting part of the Trust Indenture
Estate, for distribution by the Indenture Trustee pursuant to this Trust
Indenture, except that the Owner Trustee shall accept for distribution
pursuant to the Trust Agreement any amounts distributed to it by the
Indenture Trustee under this Trust Indenture.
The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner
Trustee will promptly and duly execute and deliver or cause to be duly
executed and delivered any and all such further instruments and documents
as the Indenture Trustee may reasonably deem necessary or desirable to
perfect, preserve or protect the mortgage, security interests and
assignments created or intended to be created hereby or to obtain for the
Indenture Trustee the full benefits of the assignment hereunder and of
the rights and powers herein granted. The parties hereto acknowledge
that neither the Owner Trustee nor the Owner Participant shall have any
obligation as to any recording, filing, refiling or re-recording of any
documents or instruments in regard to maintaining the perfection of the
security interests created hereunder, in the Trust Indenture Estate or
any security interest that may be claimed to have been created by the
Lease or the ownership interest of the Owner Trustee in the Aircraft.
The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in
effect, and the Lien hereof shall not have been released pursuant to
Section 10.01 hereof, any of its right, title or interest hereby
assigned, to anyone other than the Indenture Trustee, and that it will
not, except as otherwise provided in this Trust Indenture and except with
respect to Excluded Payments to which it is entitled, (i) accept any
payment from Lessee under any Indenture Agreement, (ii) enter into any
agreement amending or supplementing any Indenture Agreement, (iii)
execute any waiver or modification of, or consent under, the terms of, or
exercise any rights, powers or privileges under, any Indenture Agreement,
(iv) settle or compromise any claim (other than those relating to an
Excluded Payment) arising under any Indenture Agreement or (v) submit or
consent to the submission of any dispute, difference or other matter
arising under or in respect of any Indenture Agreement to arbitration
thereunder.
The Owner Trustee does hereby further agree that it will not
without the written consent of the Indenture Trustee:
(a) collect or agree to the receipt or collection of any
payment of Rent (other than Excluded Payments), including
Basic Rent, EBO Amount, Termination Value or any other
payment to be made pursuant to Section 9, 10, 19 or 20 of
the Lease prior to the date for the payment thereof
provided for by the Lease or assign, transfer or
hypothecate (other than to the Indenture Trustee
hereunder) any payment of Rent (other than Excluded
Payments), including Basic Rent, EBO Amount, Termination
Value or any other payment to be made pursuant to Section
9, 10, 19 or 20 of the Lease, then due or to accrue in the
future under the Lease in respect of the Airframe and
Engines; or
(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner
trustee, sell, mortgage, transfer, assign or hypothecate
(other than to the Indenture Trustee hereunder) its
interest in the Airframe and Engines or any part thereof
or in any amount to be received by it from the use or
disposition of the Airframe and Engines, other than
amounts distributed to it pursuant to Article III hereof.
It is hereby further agreed that any and all property described
or referred to in the granting clauses hereof which is hereafter acquired
by the Owner Trustee shall ipso facto, and without any further
conveyance, assignment or act on the part of the Owner Trustee or the
Indenture Trustee, become and be subject to the Lien herein granted as
fully and completely as though specifically described herein, but nothing
contained in this paragraph shall be deemed to modify or change the
obligations of the Owner Trustee contained in the foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made
by it therein, herein or in any of the other Owner Trustee Documents.
Notwithstanding the Granting Clause or any of the foregoing
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed
and interpreted in the manner described, in Annex A.
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.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER
TRUST AGREEMENT (US AIRWAYS, INC. TRUST NO. N___U_) DATED AS OF
_______ __, ____.
SERIES [___] NON-RECOURSE EQUIPMENT NOTE DUE [___] ISSUED IN
CONNECTION WITH THE AIRBUS A330-___ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (US Airways, Inc.
Trust No. N___U_), dated as of _________ __, ____, between the Owner
Participant named therein and the Owner Trustee (herein as such Trust
Agreement may be supplemented or amended from time to time called the
"Trust Agreement"), hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the
Principal 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 Interest
Rate indicated above. The Principal Amount of this Equipment Note shall
be payable on the dates and in the installments as set forth in Schedule
I hereto. Accrued but unpaid interest shall be due and payable in semi-
annual installments commencing __________ 20, ____, and thereafter on
February 20 and August 20 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
Principal 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 with the same force and effect as if made on
such scheduled date and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from
and after such scheduled date.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement (US Airways, Inc. Trust No. N___U_),
dated as of ___________ __, ____, between the Owner Trustee and State
Street Bank and Trust Company of Connecticut, National Association (the
"Indenture Trustee"), 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.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal 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).
The holder hereof, by its acceptance of this Equipment Note agrees
that as between it and the Owner Trustee, except as expressly provided in
the Trust Indenture, the Participation Agreement or any other Operative
Document, the obligation to make all payments of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due
hereunder and the performance by the Owner Trustee of every obligation or
covenant contained in the Trust Indenture and in the Participation
Agreement or any of the other Operative Documents shall be payable only
from the income and proceeds from the Trust Estate to the extent included
in the Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust Estate to
the extent included in the Trust Indenture Estate to enable the Indenture
Trustee to make such payments in accordance with the terms of Section
2.03 and Article III of the Trust Indenture and each holder hereof, by
its acceptance of this Equipment Note, agrees that it will look solely to
the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to the holder hereof as above provided and
that none of the Owner Participant, the Owner Trustee, in its individual
capacity, or the Indenture Trustee is personally liable or liable in any
manner extending to any assets other than the Trust Indenture Estate to
the holder hereof for any amounts payable or any liability under this
Equipment Note or, except as expressly provided in the Trust Indenture or
in the Participation Agreement, for any liability under the Trust
Indenture or the Participation Agreement; provided, however, that nothing
herein contained shall limit, restrict or impair the right of the
Indenture Trustee, subject always to the terms and provisions of the
Trust Indenture, to accelerate the maturity of this Equipment Note upon
occurrence of an Event of Default under the Trust Indenture in accordance
with Section 4.04(b) of the Trust Indenture, to bring suit and obtain a
judgment against the Owner Trustee on this Equipment Note for purposes of
realizing upon the Trust Indenture Estate and to exercise all rights and
remedies provided under the Trust Indenture or otherwise realize upon the
Trust Indenture Estate.
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 Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, 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 Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Trust Indenture, each payment of
an installment of the Principal Amount, Make-Whole Amount, if any, and
interest received by it hereunder shall be applied, first, to the payment
of accrued interest on this Equipment Note (as well as any interest on
any overdue Principal 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, second, to the payment of the
Principal Amount of this Equipment Note (or portion hereof) then due
(other than by reason of redemption), third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and fourth, the balance, if any, remaining thereafter, to the
payment of the Principal Amount hereof remaining unpaid and due by
reason of redemption. The amounts paid pursuant to clause fourth of the
preceding sentence shall be applied to installments of the Principal
Amount of this Equipment Note remaining unpaid in the inverse order of
their normal 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
Trustee pursuant to the terms of the Trust Indenture. The Trust
Indenture Estate is held by the Indenture Trustee as security, in part,
for the Equipment Notes. The provisions of this Equipment Note are
subject to the Trust Indenture. Reference is hereby made to the Trust
Indenture and the Participation Agreement 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 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 and the Participation Agreement each holder hereof agrees by
its acceptance of this Equipment Note.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a
like aggregate Principal Amount of Equipment Notes of different
authorized denominations, as requested by the holder surrendering the
same.
Prior to the due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Indenture Trustee shall deem
and treat the Person in whose name this Equipment Note is registered on
the Equipment Note Register as the absolute owner and holder hereof for
the purpose of receiving all amounts payable with respect to this
Equipment Note and for all purposes, and neither of the Owner Trustee nor
the Indenture Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10 [, 2.11](1) and 2.12 of the Trust Indenture but not
otherwise. This Equipment Note is also subject to assumption by Lessee
as provided in Section 2.13 of the Trust Indenture, to exchange and to
purchase by the Owner Participant or the Owner Trustee as provided in
Section 2.14 of the Trust Indenture but not otherwise.
[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 G
Equipment Notes, 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 Indenture Trustee on its 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 Indenture Trustee
its attorney-in-fact for such purpose.](2)
-------------------
1 To be inserted for each Series G Equipment Note.
2 To be inserted for Series C Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee 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 INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment
Note to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in two separate series consisting of Series G
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. 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.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on _________ 20, ____, and on each
February 20 and August 20 thereafter until maturity. The Principal
Amount of each Equipment Note shall be payable on the dates and in the
installments equal to amount as set forth in Schedule I which shall be
attached to the 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 Principal Amount and all
accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve
30-day months) on any part of the Principal 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 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 not be made on such scheduled date but shall be made
on the next succeeding Business Day with the same force and effect as if
made on such scheduled date and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount of such
payment from and after such scheduled date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (i) to the extent not
payable (whether or not in fact paid) under Section 7(a) of the Note
Purchase Agreement (as originally in effect or amended with the consent
of the Owner Participant), an amount or amounts equal to the fees payable
to (x) 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 G Equipment
Notes and Series C Equipment Notes and the denominator of which shall be
the then outstanding aggregate principal amount of all "Series G
Equipment Notes" and "Series C Equipment Notes" (in each case as defined
in the relevant Operative Indenture) issued under the Operative
Indentures and (y) the Policy Provider under the Policy Fee Letter (as
defined in the Policy Provider Agreement) multiplied by a fraction the
numerator of which shall be the sum of the then outstanding aggregate
principal amount of the Series G Equipment Notes and the denominator of
which shall be the sum of the then outstanding aggregate principal amount
of all "Series G Equipment Notes" (in each case as defined in the
relevant Operative Indenture) issued under the Operative Indentures; (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) if any payment default shall have occurred and be continuing
with respect to interest on any Series G Equipment Note or Series C
Equipment Note, (x) the excess, if any, of (1) an amount equal to
interest on any Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance payable under Section 3.07 of each Liquidity
Facility (or, in the case of the Series G Equipment Notes, if the Policy
Provider has made a payment equivalent to such an Advance, as would have
been payable under Section 3.07 of the applicable Liquidity Facility in
respect of the Class G Pass Through Certificates had such Advance been
made) over (2) the sum of Investment Earnings from any Final Advance plus
any amount of interest at the Past Due Rate actually payable (whether or
not in fact paid) by the Owner Trustee in respect of the overdue
scheduled interest on the Equipment Notes in respect of which such Unpaid
Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made by the applicable Liquidity Provider (or, in the case of the Series
G Equipment Notes, an equivalent payment was made by the Policy Provider)
multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series G Equipment Notes and
Series C 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 G Equipment Notes" and "Series C Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures (other than interest becoming due and
payable solely as a result of acceleration of any such "Equipment Notes,"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures); (v) 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 (i), (ii), (iii) or (iv) above multiplied by the
fraction specified in the foregoing clause (i); and (vi) all amounts for
which the Policy Provider is entitled to reimbursement under Section
3.7(i) of the Intercreditor Agreement multiplied by the fraction
specified in the foregoing clause (i). For purposes of this paragraph,
the terms "Applied Downgrade Advance", "Applied Non-Extension Advance",
"Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall
have the meanings specified in each Liquidity Facility or the
Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer.
Equipment Notes bearing the signatures of individuals who were at any
time the proper officers of the Owner Trustee shall bind the Owner
Trustee, 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 Trustee may from time to time execute and
deliver Equipment Notes with respect to the Aircraft to the Indenture
Trustee for authentication upon original issue and such Equipment Notes
shall thereupon be authenticated and delivered by the Indenture Trustee
upon the written request of the Owner Trustee signed by a Vice President
or Assistant Vice President or other authorized officer of the Owner
Trustee; provided, however, that each such request shall specify the
aggregate Principal Amount of all Equipment Notes to be authenticated
hereunder on original issue with respect to the Aircraft. 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 Indenture Trustee by the manual
signature of one of its authorized officers and such certificate upon any
Equipment Notes shall be conclusive evidence, and the only evidence, that
such Equipment Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Payments from Trust Indenture Estate Only.
(a) Without impairing any of the other rights, powers,
remedies, privileges, liens or security interests of the Note Holders
under this Trust Indenture, each Note Holder, by its acceptance of an
Equipment Note, agrees that as between it and the Owner Trustee, except
as expressly provided in this Trust Indenture, the Participation
Agreement or any other Operative Document, (i) the obligation to make all
payments of the Principal Amount of, interest on, Make-Whole Amount, if
any, and all other amounts due with respect to the Equipment Notes, and
the performance by the Owner Trustee of every obligation or covenant
contained in this Trust Indenture and in the Participation Agreement or
any of the other Operative Documents, shall be payable only from the
income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee
shall have sufficient income or proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate to enable the Indenture
Trustee to make such payments in accordance with the terms of Article III
hereof, and all of the statements, representations, covenants and
agreements made by the Owner Trustee (when made in such capacity)
contained in this Trust Indenture and any agreement referred to herein
other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised
and enforced against the Trust Estate; therefore, anything contained in
this Trust Indenture or such other agreements to the contrary
notwithstanding (except for any express provisions or representations
that the Owner Trustee is responsible for, or is making, in its
individual capacity, for which there would be personal liability of the
Owner Trustee), no recourse shall be had with respect to this Trust
Indenture or such other agreements against the Owner Trustee in its
individual capacity or against any institution or Person which becomes a
successor trustee or co-trustee or any officer, director, trustee,
servant or direct or indirect parent or controlling Person or Persons of
any of them, and (ii) none of the Owner Trustee, in its individual
capacity, the Owner Participant, the Indenture Trustee and any officer,
director, trustee, servant, employee, agent or direct or indirect parent
or controlling Person or Persons of any of them shall have any personal
liability for any amounts payable, or other obligation owed, hereunder,
under the Participation Agreement or any of the other Operative Documents
or under the Equipment Notes except as expressly provided herein or in
the Participation Agreement; provided, however, that nothing contained in
this Section 2.03(a) shall be construed to limit the exercise and
enforcement in accordance with the terms of this Trust Indenture or such
other agreements of rights and remedies against the Trust Estate.
(b) If (i) all or any part of the Trust Estate becomes the
property of, or the Owner Trustee or Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Code, (ii)
pursuant to such reorganization provisions, including Section 1111(b) of
the Bankruptcy Code, the Owner Trustee (in its individual capacity) or
the Owner Participant is required, by reason of the Owner Trustee (in its
individual capacity) or the Owner Participant being held to have recourse
liability to any Note Holder or the Indenture Trustee, directly or
indirectly (other than the recourse liability of the Owner Trustee (in
its individual capacity)), to make payment on account of any amount
payable as principal, Make-Whole Amount, if any, interest or other
amounts on the Equipment Notes or under this Indenture and (iii) any Note
Holder or the Indenture Trustee actually receives any Indenture Excess
Amount (as hereinafter defined) which reflects any payment by the Owner
Trustee (in its individual capacity) or the Owner Participant on account
of clause (ii) above, then such Note Holder or the Indenture Trustee, as
the case may be, shall promptly refund to the Owner Trustee (in its
individual capacity) or the Owner Participant (whichever shall have made
such payment) such Indenture Excess Amount.
For purposes of this Section 2.03(b), "Indenture Excess Amount"
means the amount by which such payment exceeds the amount that would have
been received by a Note Holder or the Indenture Trustee if the Owner
Trustee (in its individual capacity) or the Owner Participant had not
become subject to the recourse liability referred to in clause (ii)
above. Nothing contained in this Section 2.03(b) shall prevent a Note
Holder or the Indenture Trustee from enforcing any personal recourse
obligation (and retaining the proceeds thereof) of the Owner Trustee (in
its individual capacity) or the Owner Participant under the Participation
Agreement or this Trust Indenture (and any exhibits or annexes hereto or
thereto) or by separate agreement or from retaining any amount paid by
Owner Participant under Section 2.14 or 4.03 hereof.
SECTION 2.04. Method of Payment.
(a) The Principal 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 11:00 a.m., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution
among the Note Holders in the manner provided herein. The Owner Trustee
shall not have any responsibility for the distribution of such payment to
any Note Holder. Notwithstanding the foregoing or any provision in any
Equipment Note to the contrary, the Indenture Trustee 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 Trustee), all amounts paid by the Owner
Trustee 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 Indenture Trustee shall fail to make any
such payment as provided in the immediately preceding sentence after its
receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees
to compensate such holders for loss of use of funds at the Federal Funds
Rate until such payment is made and the Indenture Trustee 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 Indenture Trustee for cancellation promptly after such
payment. Notwithstanding any other provision of this Trust Indenture to
the contrary, the Indenture Trustee 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 Indenture Trustee 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 11:00 a.m., New York City time, at
the place of payment. Prior to the due presentment for registration of
transfer of any Equipment Note, the Owner Trustee and the Indenture
Trustee 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 neither the Owner Trustee nor the Indenture Trustee 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 I 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
Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner Trustee,
shall exclude and withhold at the appropriate rate from each payment of
Principal 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 applicable thereto as
required by Law. The Indenture Trustee 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 such withholding shall constitute payment in
respect of such Equipment Note) 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
Trustee and Lessee) appropriate receipts showing the payment thereof,
together with such additional documentary evidence as any such Note
Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001, W-8 or W-8BEN (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 Indenture Trustee of the withdrawal or inaccuracy of
such form prior to the date of such payment (and the Indenture Trustee
has no reason to know that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if
any, required by Law (after taking into account any applicable exemptions
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 (and such withholding shall constitute payment in
respect of such Equipment Note). If a Note Holder (x) which is a Non-
U.S. Person has furnished to the Indenture Trustee a properly completed
and currently effective U.S. Internal Revenue Service Form 4224 or 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 avoid withholding of United States federal income tax), during the
calendar year in which the payment is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the
withdrawal or inaccuracy of such certificate or form prior to the date of
such payment (and the Indenture Trustee has no reason to know that any
information set forth in such form is inaccurate) or (y) which is a U.S.
Person has furnished to the Indenture Trustee a properly completed and
currently effective U.S. Internal Revenue Service Form W-9 (or such
successor form or forms as may be required by the United States Treasury
Department), 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 Indenture Trustee 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 are 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 Indenture
Trustee 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
applicable law. Neither the Owner Participant nor the Owner Trustee
shall be liable if the Indenture Trustee fails to withhold withholding
taxes in accordance with this Section 2.04 or if any Note Holder provides
false or inaccurate information on any form required to be delivered
under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Principal 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;
Second: to the payment of the Principal Amount of such
Equipment Note (or a portion thereof) then due thereunder (other than by
reason of redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid
and due by reason of redemption (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 Principal Amount of such Equipment Note in
the inverse order of their normal maturity. Notwithstanding the
foregoing, each indemnity payment or payment of transaction costs or
expenses received hereunder or under another Operative Document shall be
applied for the purpose (directly or by reimbursement) for which such
amount was paid.
SECTION 2.06. Termination of Interest in Trust Indenture
Estate.
A Note Holder and Indenture Indemnitees shall not, as such,
have any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the Secured Obligations due to such Note
Holder or Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes.
The Indenture Trustee shall keep a register (the "Equipment
Note Register") in which the Indenture Trustee 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 Indenture Trustee.
The Indenture Trustee 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
Indenture Trustee 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 Trustee shall
execute, and the Indenture Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new
Equipment Notes of a like aggregate Principal 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 Principal Amount, upon surrender of the Equipment Notes to
be exchanged to the Indenture Trustee at the Corporate Trust Office.
Whenever any Equipment Notes are so surrendered for exchange, the Owner
Trustee shall execute, and the Indenture Trustee shall authenticate and
deliver, the Equipment Notes 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 Trustee 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
Indenture Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Note Holder or such holder's attorney duly authorized in
writing, and the Indenture Trustee 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 Indenture Trustee shall
make a notation on each new Equipment Note of the amount of all payments
of Principal 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 Principal Amount marked
on such new Equipment Note, as provided above, shall be deemed to have
been made thereon. The Owner Trustee 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 Trustee 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 Trustee with respect to such
Equipment Note and for all purposes until a notice stating otherwise is
received from the Indenture Trustee and such change is reflected on the
Equipment Note Register. The Indenture Trustee will promptly notify the
Owner Trustee, the Owner Participant and Lessee of each registration of a
transfer of an Equipment Note. Any such transferee of an Equipment Note,
by its acceptance of an Equipment Note, agrees to the provisions of the
Participation Agreement applicable to Note Holders, including Sections 5,
7(a), 7(c), 7(g), 7(h), 7(n), 7(q), 7(u) and 7(z), 9, 12(a), 12(b), 14(b)
and 14(e), and shall be deemed to have represented and warranted (except
as provided above), and covenanted, to the parties to the Participation
Agreement as to the matters represented, warranted and covenanted by the
Purchasers in the Participation Agreement. Subject to compliance by the
Note Holder and its transferee (if any) of the requirements set forth in
this Section 2.07, the Indenture Trustee and the Owner Trustee shall use
all reasonable efforts to issue new Equipment Notes upon transfer or
exchange within ten (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 Trustee shall, upon the written request of the
holder of such Equipment Note, execute and the Indenture Trustee shall
authenticate and deliver in replacement thereof a new Equipment Note,
payable in the same Principal 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 Indenture Trustee and a photocopy thereof shall be furnished to
the Owner Trustee. If the Equipment Note being replaced has been
destroyed, lost or stolen, the holder of such Equipment Note shall
furnish to the Owner Trustee, the Owner Participant and the Indenture
Trustee such security or indemnity as may be required by them to save the
Owner Trustee, the Owner Participant and the Indenture Trustee harmless
and evidence satisfactory to the Owner Trustee, the Owner Participant and
the Indenture Trustee 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)(l)(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 to Lessee, the Owner Participant,
the Owner Trustee and the Indenture Trustee 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 of the
requirements set forth in this Section 2.08, the Indenture Trustee and
the Owner Trustee shall use all reasonable efforts to issue new Equipment
Notes within ten (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
Indenture Trustee, as Equipment Note Registrar, may require payment from
the party requesting such new Equipment Note 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 Indenture Trustee 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.
(a) On the date on which Lessee is required pursuant to
Section 10(a)(i) of the Lease to make payment for an Event of Loss with
respect to the Aircraft, all of the Equipment Notes shall be redeemed in
whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with all accrued interest thereon to the date of
redemption and all other amounts payable hereunder or under the
Participation Agreement to the Note Holders but without the Make-Whole
Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9, Section 19(b) or Section 20 thereof and
Lessee shall not have assumed all of the obligations of the Owner Trustee
hereunder pursuant to Section 2.13 and Section 7(u) of the Participation
Agreement, on the date the Lease is so terminated all the Equipment Notes
shall be redeemed in whole at a redemption price equal to 100% of the
unpaid Principal Amount thereof, together with accrued interest thereon
to the date of redemption and all other amounts payable hereunder or
under the Participation Agreement to the Note Holders plus the Make-Whole
Amount, if any.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than, all of the Equipment Notes may be
redeemed by the Owner Trustee with the prior consent of Lessee upon at
least 20 days revocable prior written notice to the Indenture Trustee, at
a redemption price equal to 100% of the unpaid Principal Amount thereof,
together with accrued interest thereon to the date of redemption and all
other amounts payable hereunder or under the Participation Agreement to
the Note Holders plus the Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by the Owner Trustee 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 Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than 15 nor more than 60 days
prior to the applicable redemption date, to each Note Holder of such
Equipment Notes to be redeemed or purchased, at such Note Holder's
address appearing in the Equipment Note Register; provided, that in the
case of a redemption to be made pursuant to Section 2.10(b) or Section
2.11, such notice shall be revocable and shall be deemed revoked in the
event that the Lease does not in fact terminate on the specified
termination date or if notice of such redemption shall have been given in
connection with a refinancing of Equipment Notes and the Indenture
Trustee receives written notice of such revocation from Lessee or the
Owner Trustee 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 Trustee (or
any Person on behalf of the Owner Trustee) shall, to the extent an amount
equal to the redemption price for the Equipment Notes to be redeemed or
purchased on the redemption date shall not then be held in the Trust
Indenture Estate, deposit or cause to be deposited with the Indenture
Trustee by 11:00 a.m. New York City time on the redemption date in
immediately available funds the redemption price of the Equipment Notes
to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not deemed revoked as contemplated in the proviso to
Section 2.12(b)), the Equipment Notes to be redeemed or purchased shall,
on the redemption date, become due and payable at the Corporate Trust
Office of the Indenture Trustee 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 or purchase in accordance with said notice, such Equipment
Note shall be redeemed at the redemption price. If any Equipment Note
called for redemption or purchase shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid,
continue to bear interest from the applicable redemption date at the
interest rate in effect for such Equipment Note as of such redemption
date.
SECTION 2.13. Assumption of Equipment Notes by Lessee.
If, in accordance with Section 7(u) of the Participation
Agreement Lessee shall assume (on a full recourse basis) all of the
obligations of the Owner Trustee hereunder, under the Equipment Notes and
all other Operative Documents by supplemental indenture satisfactory to
the Indenture Trustee (which shall contain (i) the provisions
substantially similar to Sections 6, 7, 8, 10, 11 and 12 of the Lease and
(ii) other provisions necessary or advisable to effectuate such
assumption), then upon delivery of such supplemental indenture, payment
by Lessee of all expenses (including reasonable fees and expenses of
counsel) for the Owner Trustee and the Owner Participant and delivery of
an opinion of counsel for Lessee that such assumption has been duly and
validly effected, the Owner Trustee shall be released and discharged from
any further obligations hereunder and under the Equipment Notes and all
other Operative Documents and the Owner Participant shall be released and
discharged from any further obligations under the Participation Agreement
and any other Operative Document to which it is a party, except with
respect to any such obligations that accrued prior thereto.
SECTION 2.14. Option to Purchase Equipment Notes.
Either the Owner Trustee or the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set
forth in this Section 2.14, purchase all but not less than all of the
Equipment Notes outstanding hereunder, and each Note Holder agrees that
it will, upon such events and subject to such terms and conditions and
upon receipt of such price, sell, assign, transfer and convey to such
purchaser or its nominee (without recourse or warranty of any kind except
as to its title to the Equipment Notes and except against Liens on such
Equipment Notes arising by, through or under such holder), all of the
right, title and interest of such Note Holder in and to the Trust
Indenture Estate, this Trust Indenture and the Equipment Notes held by
it, and such purchaser or its nominee shall assume all of such holder's
obligations under the Participation Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant at any time following the
occurrence of any of the following events, and, in any such event, the
purchase price thereof shall equal for each Equipment Note the aggregate
unpaid Principal Amount thereof, plus accrued and unpaid interest thereon
to, but not including, the date of purchase and all other amounts (other
than the Make-Whole Amount, except as provided in the next sentence) then
payable hereunder or under the Participation Agreement to the holder
thereof. Such option to purchase the Equipment Notes may be exercised:
(i) upon an Indenture Trustee Event or (ii) in the event there shall have
occurred and be continuing a Lease Event of Default, provided, that if
such option is exercised pursuant to this clause (ii) at a time when
there shall have occurred and be continuing for less than one hundred
eighty (180) days a Lease Event of Default, the purchase price thereof
shall equal the price provided in the preceding sentence plus the Make-
Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant giving written notice of its
election of such option to the Indenture Trustee, which notice (i) shall
specify a date for such purchase not more than thirty (30) days or less
than fifteen (15) days after the date of such notice and (ii) may specify
that its election of such option is contingent upon the trustee or the
debtor-in-possession in a proceeding involving Lessee under Chapter 11 of
the Bankruptcy Code not entering into an agreement during the Section
1110 Period to perform the Lease. The Indenture Trustee shall not
exercise any of the remedies hereunder or, without the consent of the
Owner Trustee or the Owner Participant, under the Lease, during the
period from the time that a notice of exercise by the Owner Participant
of such option to purchase becomes irrevocable until the date on which
such purchase is required to occur pursuant to the terms of the preceding
sentence. Such election to purchase the Equipment Notes shall become
irrevocable (subject to the provision in clause (ii) of the first
sentence of this paragraph) upon the fifteenth day preceding the date
specified in the written notice described in the first sentence of this
paragraph.
If the Owner Trustee or the Owner Participant on or before the
date of such purchase shall so request, the Note Holders will comply with
all the provisions of Section 2.07 to enable new Equipment Notes to be
issued to the Owner Trustee or the Owner Participant or its nominee in
such denominations as the Owner Trustee or the Owner Participant shall
request. All taxes, charges and expenses required pursuant to Section
2.09 in connection with the issuance of such new Equipment Note shall be
borne by the Owner Participant.
SECTION 2.15. Subordination.
(a) The Owner Trustee and, by acceptance of its Equipment
Notes of any Series, each Note Holder of such Series, 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, including any
payment or distribution of cash, property or securities after the
commencement of a proceeding of the type referred to in Section 4.02(g)
hereof, except as expressly provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series G), 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
2.15 or Article III hereof, it will hold any amount so received in trust
for the Senior Holder (as defined in Section 2.15(c) hereof) and will
forthwith turn over such payment to the Indenture Trustee in the form
received to be applied as provided in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder"
shall mean, (i) the Note Holders of Series G until the Secured
Obligations in respect of Series G have been paid in full and (ii) after
the Secured Obligations in respect of Series G Equipment Notes have been
paid in full, the Note Holders of Series C until the Secured Obligations
in respect of Series C Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.
Except as otherwise provided in Sections 3.02 and 3.03 hereof,
each installment of Basic Rent, any payment of interest on overdue
installments of Basic Rent [,any payment received from the Owner
Participant pursuant to Section 7(cc) of the Participation Agreement](3)
and any payment received by the Indenture Trustee pursuant to Section
4.03 hereof shall be promptly distributed in the following order of
priority:
------------------
3 For deferred equity transactions only.
First, (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments
of Principal Amount and interest and other amounts (as well as any
interest on any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue amounts)
then due under all Series G Equipment Notes shall be distributed to the
Note Holders of Series G ratably, without priority of one over the other,
in the proportion that the amount of such payment or payments then due
under each Series G Equipment Note bears to the aggregate amount of the
payments then due under all Series G Equipment Notes; and (ii) after
giving effect to paragraph (i) above, so much of such installment or
payment remaining as shall be required to pay in full the aggregate
amount of the payment or payments of Principal Amount and interest and
other amounts (as well as any interest on any overdue Principal Amount
and, to the extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series C Equipment
Notes shall be distributed to the Note Holders of Series C ratably,
without priority of one over the other, in the proportion that the amount
of such payment or payments then due under each Series C Equipment Note
bears to the aggregate amount of the payments then due under all Series C
Equipment Notes; and
Second, the balance, if any, of such installment remaining
thereafter shall be distributed to the Owner Trustee free and clear of
the Lien of this Indenture; provided, however, that if an Event of
Default shall have occurred and be continuing, then such balance shall
not be distributed as provided in this clause "Second" but shall be held
by the Indenture Trustee as part of the Trust Indenture Estate and
invested in accordance with Section 5.09 hereof until whichever of the
following shall first occur: (i) all Events of Default shall have been
cured or waived, in which event such balance shall be distributed as
provided in this clause "Second" without reference to this proviso, (ii)
Section 3.03 hereof shall be applicable, in which event such balance
shall be distributed in accordance with the provisions of such Section
3.03, or (iii) the 120th day after the receipt of such payment in which
case such payment shall be distributed as provided in this clause
"Second" without reference to this proviso.
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing.
Except as otherwise provided in Section 3.03 hereof, any
payments received by the Indenture Trustee (i) with respect to the
Aircraft as the result of an Event of Loss, (ii) pursuant to a voluntary
termination of the Lease pursuant to Section 9, 19(b) or 20 thereof,
(iii) in connection with a refinancing of the Equipment Notes pursuant to
Section 16 of the Participation Agreement or (iv) in connection with any
optional redemption of the Equipment Notes effected in accordance with
the Operative Documents, shall be applied to redemption of the Equipment
Notes, to payment of the Secured Obligations or to the Indenture Trustee
or any Note Holder under the Participation Agreement by applying such
funds in the following order of priority:
First, (i) to reimburse the Indenture Trustee 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 Lessee, under the Operative Documents and then (ii) to pay
any other amounts then due to the Indenture Trustee and the Note Holders
under this Trust Indenture, the Participation Agreement or the Equipment
Notes (other than amounts specified in clause Second 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 G Equipment Notes; and (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 C
Equipment Notes; and
Third, 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 10 of the Lease and as permitted by Section
5.06 hereof, any insurance, condemnation or similar proceeds which result
from such Event of Loss and are paid over to the Indenture Trustee shall
be held by the Indenture Trustee as permitted by Section 6.04 hereof
(provided that such moneys shall be invested as provided in Section 5.09
hereof) as additional security for the obligations of Lessee under the
Lessee Documents and, unless otherwise applied pursuant to the Lease,
such proceeds (and such investment earnings) shall be released to Lessee
at Lessee's written request upon the release of such damaged Airframe or
Engine and the replacement thereof as provided in the Lease.
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 Indenture Trustee
(including any amounts realized by the Indenture Trustee from the
exercise of any remedies pursuant to Section 15 of the Lease or Article
IV hereof) after both an Event of Default shall have occurred and be
continuing and the Equipment Notes shall have become due and payable
pursuant to Section 4.04(b) hereof, as well as all payments or amounts
then held by the Indenture Trustee as part of the Trust Indenture Estate,
shall be promptly distributed by the Indenture Trustee in the following
order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Trust Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to
Section 4.05(b) hereof) incurred by the Indenture Trustee (to the extent
not previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any
other expenses for which the Indenture Trustee or the Note Holders are
entitled to reimbursement under any Operative Document and all amounts
payable to the other Indenture Indemnitees hereunder and under the
Participation Agreement and the Lease excluding those amounts described
in clauses Second and Third below, and in the case the aggregate amount
to be so distributed is insufficient to pay as aforesaid, 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 5.03 hereof (to the extent not
previously reimbursed) shall be distributed to such then existing or
prior Note Holders ratably, without priority of one over 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 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series G Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in respect of
the Series G Equipment Notes to the date of distribution, shall be
distributed to the Note Holders of Series G, 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 Principal Amount of all Series G
Equipment Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal Amount of all
Series G Equipment Notes held by all such holders plus the accrued but
unpaid interest and other amounts due thereon to the date of
distribution; and (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 Principal Amount of all Series C Equipment
Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Series C Equipment
Notes to the date of distribution, shall be distributed to the Note
Holders of Series C, 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 Principal Amount of all Series C Equipment Notes
held by each holder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series C Equipment Notes
held by all such holders plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner Trustee free and
clear of the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Trust
Indenture and for which such provision is made in the Lease, the
Participation Agreement or any other Operative Document shall be applied
forthwith to the purpose for which such payment was made in accordance
with the terms of the Lease, the Participation Agreement or such other
Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from the Owner Trustee or
Lessee in respect of (i) the Indenture Trustee in its individual capacity
or any other Indenture Indemnitees, (ii) any Note Holder, (iii) the
Subordination Agent, (iv) the Liquidity Provider, (v) the Policy Provider
and (vi) the Pass Through Trustees, in each case whether pursuant to
Section 6 of the Participation Agreement or as Supplemental Rent,
directly to the Person entitled thereto. Any payment received by the
Indenture Trustee under the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained in this
Article III, any amounts received by the Indenture Trustee which
constitute Excluded Payments shall be distributed promptly upon receipt
by the Indenture Trustee directly to the Person or Persons entitled
thereto.
(d) Notwithstanding any provision of this Trust Indenture to
the contrary, any amounts held by the Indenture Trustee that would, but
for the provisions of Section 3.03 hereof, otherwise be distributed to
Lessee shall, notwithstanding the provisions of said Section, be
distributed to Lessee unless and until a Lease Event of Default shall
have occurred and be continuing.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Lease, the
Participation Agreement, elsewhere in this Trust Indenture or in any
other Operative Document shall be distributed by the Indenture Trustee to
the extent received or realized at any time (i) prior to the payment in
full of all Secured Obligations due the Note Holders, in the order of
priority specified in Section 3.01 hereof subject to the proviso thereto,
and (ii) after payment in full of all Secured Obligations due the Note
Holders, in the following order of priority:
First, to the extent payments or amounts described in clause
"First" of Section 3.03 hereof are otherwise obligations of Lessee under
the Operative Documents or for which Lessee is obligated to indemnify
against thereunder, in the manner provided in clause "First" of Section
3.03 hereof, and
Second, in the manner provided in clause "Fourth" of Section
3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and 3.04
hereof, all payments received and amounts realized by the Indenture
Trustee under the Lease or otherwise with respect to the Aircraft
(including, without limitation, all amounts realized upon the sale or
release of the Aircraft after the termination of the Lease with respect
thereto), to the extent received or realized at any time after payment in
full of all Secured Obligations due the Note Holders, shall be
distributed by the Indenture Trustee in the order of priority specified
in clause (ii) of the immediately preceding sentence of this Section
3.05.
SECTION 3.06. Payments to Owner Trustee.
Any amounts distributed hereunder by the Indenture Trustee to
the Owner Trustee shall be paid to the Owner Trustee (within the time
limits contemplated by Section 2.04(a)) by wire transfer of funds of the
type received by the Indenture Trustee at such office and to such account
or accounts of such entity or entities as shall be designated by notice
from the Owner Trustee to the Indenture Trustee from time to time. The
Owner Trustee hereby notifies the Indenture Trustee that unless and until
the Indenture Trustee receives notice to the contrary from the Owner
Trustee, all amounts to be distributed to the Owner Trustee pursuant to
clause "Second" of Section 3.01 hereof shall be distributed by wire
transfer of funds of the type received by the Indenture Trustee to the
Owner Participant's account (within the time limits contemplated by
Section 2.04(a)) specified in Schedule I to the Participation Agreement.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of Owner Trustee.
The Owner Trustee hereby covenants and agrees as follows:
(a) the Owner Trustee will duly and punctually pay the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under the Equipment Notes and hereunder in accordance with
the terms of the Equipment Notes and this Trust Indenture and all
amounts, if any, payable by it to the Note Holders under the
Participation Agreement;
(b) [Reserved]
(c) in the event the Owner Trustee shall have Actual Knowledge
of an Event of Default, a Default or an Event of Loss, the Owner Trustee
will give prompt written notice of such Event of Default, Default or
Event of Loss to the Indenture Trustee, each Note Holder, Lessee and the
Owner Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished
to the Owner Trustee under the Lease, including, without limitation, a
copy of any Termination Notice received pursuant to Section 9(a) of the
Lease, a copy of each notice delivered pursuant to Section 10, 19 or 20
of the Lease and a copy of each report or notice received pursuant to
Section 11(c) of the Lease to the extent that the same shall not be
required to have been furnished to the Indenture Trustee pursuant to the
Lease;
(e) except pursuant to the Operative Documents or with the
consent of the Indenture Trustee (acting pursuant to instructions given
in accordance with Section 9.01 hereof), the Owner Trustee will not
contract for, create, incur, assume or suffer to exist any Debt, and will
not guarantee (directly or indirectly or by an instrument having the
effect of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the Debt
of any other Person; and
(f) the Owner Trustee will not enter into any business or
other activity other than the business of owning the Aircraft, the
leasing thereof to Lessee and the carrying out of the transactions
contemplated hereby and by the Lease, the Participation Agreement, the
Trust Agreement and the other Operative Documents.
SECTION 4.02. 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):
(a) any Lease Event of Default (provided that any such Lease
Event of Default caused solely by a failure of Lessee to pay to the Owner
Trustee or the Owner Participant when due any amount that is included in
the definition of Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Trustee to the Indenture
Trustee that such failure shall constitute an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any
payment of Principal Amount of, interest on, Make-Whole Amount, if any,
or other amount due and payable under any Equipment Note or hereunder
(other than any such failure arising as a result of a Lease Event of
Default or a Lease Default) and such failure shall have continued
unremedied for ten (10) Business Days in the case of any payment of
Principal Amount or interest or Make-Whole Amount, if any, thereon and,
in the case of any other amount, for ten (10) Business Days after the
Owner Trustee or the Owner Participant receives written demand from the
Indenture Trustee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee in
its individual or trust capacity pursuant to Section 7(f) of the
Participation Agreement, or by the Owner Participant pursuant to Section
7(f) of the Participation Agreement shall remain undischarged for a
period of thirty (30) days after the Owner Trustee and the Owner
Participant shall have received written notice from the Indenture Trustee
or any Note Holder of such Lien; or
(d) any representation or warranty made by the Owner
Participant or the Owner Trustee herein, in the Participation Agreement
or in any certificate furnished by the Owner Participant or the Owner
Trustee to the Indenture Trustee or any Note Holder in connection with
the transactions contemplated by the Operative Documents shall prove to
have been false or incorrect when made in any material respect and
continues to be material and adverse to the interests of the Indenture
Trustee or the Note Holders; and if such misrepresentation is capable of
being corrected and if such correction is being sought diligently, such
misrepresentation shall not have been corrected within sixty (60) days
(or, without affecting Section 4.02(f) hereof, in the case of the
representations made in Section 7(a) of the Participation Agreement as to
the citizenship of the Owner Trustee in its individual capacity [or of
the Owner Participant, respectively,](4) as soon as is reasonably
practicable but in any event within sixty (60) days following notice
thereof from the Indenture Trustee or any Note Holder to the Owner
Trustee or the Owner Participant, as the case may be); or
-----------------
4 Delete for foreign OP.
(e) other than as provided in (c) above or (f) below, any
failure by the Owner Trustee or Owner Participant to observe or perform
any other covenant or obligation of the Owner Trustee or Owner
Participant, as the case may be, for the benefit of the Indenture Trustee
or the Note Holders contained in the Participation Agreement, Section
4.01(a) of the Trust Agreement, the Equipment Notes or this Trust
Indenture which is not remedied within a period of sixty (60) days after
notice thereof has been given to the Owner Trustee and the Owner
Participant; or
(f) if at any time when the Aircraft is registered under the
laws of the United States, the Owner Participant shall not be a Citizen
of the United States, and as the result thereof the registration of the
Aircraft under the Transportation Code, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of
Default shall be deemed to have occurred under this paragraph (f) unless
such circumstances continue unremedied for more than sixty (60) days
after the Owner Participant has Actual Knowledge of the state of facts
that resulted in such ineffectiveness and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of the Owner Participant, the Owner
Trustee or the Trust Estate under the federal bankruptcy Laws, as now
constituted or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar Law in the United States or
seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Owner Participant, the
Owner Trustee or the Trust Estate or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and
unstayed for a period of ninety (90) consecutive days; or (ii) the
commencement by the Owner Participant, the Owner Trustee or the Trust
Estate of a voluntary case or proceeding under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the
United States, or the consent by the Owner Participant, the Owner Trustee
or the Trust Estate to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) of the Owner Participant, the Owner Trustee or
the Trust Estate or for all or substantially all of its property, or the
making by the Owner Participant, the Owner Trustee or the Trust Estate of
any assignment for the benefit of creditors or the Owner Participant or
the Owner Trustee shall take any action to authorize any of the
foregoing; provided, however, that an event referred to in this Section
4.02(g) with respect to the Owner Participant shall not constitute an
Event of Default if within thirty (30) days of the commencement of the
case or proceeding a final non-appealable order, judgement or decree
shall be entered in such case or proceeding by a court or a trustee,
custodian, receiver or liquidator, to the effect that no part of the
Trust Estate (except for the Owner Participant's beneficial interest
therein) and no right, title or interest under the Trust Indenture Estate
shall be included in, or be subject to, any declaration or adjudication
of, or proceedings with respect to, the bankruptcy, insolvency or
liquidation of the Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. Certain Rights.
The Indenture Trustee shall give the Note Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of
Default of which the Indenture Trustee has Actual Knowledge and, if any
such Event of Default results from a Lease Event of Default, shall give
the Note Holders, the Owner Trustee and the Owner Participant not less
than ten (10) Business Days prior written notice of the date (the
"Enforcement Date") on or after which the Indenture Trustee may (subject
to the notice provision set forth in Section 4.04(a)) commence and
consummate the exercise of any remedy or remedies described in Section
4.04, 4.05 or 4.06 hereof, or the exercise of any remedy or remedies
pursuant to the provisions of Section 15 of the Lease; provided, however,
that in the event the Indenture Trustee shall have validly terminated the
Lease (or, in the event of a reorganization proceeding involving Lessee
instituted under Chapter 11 of the Bankruptcy Code, such Lease is
rejected), the Indenture Trustee shall not, without the consent of the
Owner Participant, sell or lease, or otherwise afford the use of, the
Aircraft or any portion thereof to Lessee or any Affiliate thereof.
Without limiting the generality of the foregoing, the Indenture Trustee
shall give the Owner Trustee, the Owner Participant and Lessee at least
ten (10) Business Days prior written notice (which may be given
concurrently with notice of the Enforcement Date) of any declaration of
the Lease to be in default pursuant to Sections 14 and 15 of the Lease or
any termination of the Lease. If an Event of Default shall have occurred
and be continuing, the Owner Trustee shall have the following rights
hereunder, any of which may be exercised directly by the Owner
Participant.
If as a result of the occurrence of an Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease,
the Indenture Trustee shall have insufficient funds to make any payment
of Principal Amount and interest on any Equipment Note on the day it
becomes due and payable, the Owner Trustee or the Owner Participant may,
but shall not be obligated to, pay the Indenture Trustee prior to the
Enforcement Date, in the manner provided in Section 2.04 hereof, for
application in accordance with Section 3.01 hereof, an amount equal to
the portion of the Principal Amount and interest (including interest, if
any, on any overdue payments of such portion of Principal Amount and
interest) then due and payable on the Equipment Notes, and, unless the
Owner Trustee has cured Events of Default in respect of payments of Basic
Rent on each of the three (3) immediately preceding Basic Rent payment
dates, or the Owner Trustee has cured six (6) previous Events of Default
in respect of payments of Basic Rent, such payment by the Owner Trustee
shall, solely for purposes of this Trust Indenture, be deemed to cure any
Event of Default which would otherwise have arisen on account of the
nonpayment by Lessee of such installment of Basic Rent (but not any other
Default or Event of Default which shall have occurred and be continuing).
If any Event of Default (other than in respect of the
nonpayment of Basic Rent by Lessee) which can be cured by the payment of
money has occurred, the Owner Trustee or the Owner Participant may, but
shall not be obligated to, cure such Event of Default by making such
payment prior to the Enforcement Date as is necessary to accomplish the
observance or performance of the defaulted covenant, condition or
agreement.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such
Event of Default, obtain any Lien on any of the Mortgaged Property or any
Rent payable under the Lease for or on account of costs or expenses
incurred in connection with the exercise of such right, nor shall any
claim of the Owner Trustee against Lessee or any other party for the
repayment of such costs or expenses impair the prior right and security
interest of the Indenture Trustee in and to the Mortgaged Property. Upon
any payment by the Owner Trustee or the Owner Participant pursuant to the
first or second preceding paragraphs of this Section 4.03, the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated
to the rights of the Indenture Trustee and the Note Holders in respect of
the Basic Rent which was overdue at the time of such payment and interest
payable by Lessee on account of its being overdue and any Supplemental
Rent in respect of the reimbursement of amounts paid by Owner Trustee
pursuant to the immediately preceding paragraph (but in either case shall
have no rights as a secured party hereunder), and thereafter, the Owner
Trustee or the Owner Participant, as the case may be, shall be entitled
to receive such overdue Basic Rent or Supplemental Rent, as the case may
be, and interest thereon upon receipt thereof by the Indenture Trustee
(and shall be entitled to bring an action against Lessee to enforce such
payment); provided, however, that (i) if the Principal Amount and
interest on the Equipment Notes shall have become due and payable
pursuant to Section 4.04(b) hereof (and such acceleration shall not have
been rescinded pursuant to Section 4.04(b)), such subrogation shall,
until the Principal Amount of, interest on, Make-Whole Amount, if any,
and all other amounts due with respect to all Equipment Notes shall have
been paid in full, be subordinate to the rights of the Indenture Trustee,
the Indenture Indemnitees and the Note Holders in respect of such payment
of overdue Basic Rent, Supplemental Rent and such interest and (ii) the
Owner Trustee shall not be entitled to seek to recover any such payment
(or any payment in lieu thereof) except pursuant to the foregoing right
of subrogation by demand or suit for damages.
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, 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 Indenture
Trustee may, subject to the second paragraph of this Section 4.04(a), on
and after the Enforcement Date if such Event of Default results from a
Lease Event of Default, exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this Article IV and shall
have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code in effect in the State of New York and,
in the event such Event of Default is also a Lease Event of Default, any
and all of the remedies pursuant to Section 15 of the Lease 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 Participant, the Owner Trustee and Lessee and all Persons claiming
under any of them wholly or partly therefrom, provided, that (x) in the
case of a sale of the Aircraft, the Indenture Trustee shall give the
Owner Trustee and the Owner Participant, subsequent to the earlier of (I)
the expiration of the Section 1110 Period (as hereinafter defined) and
(II) Lessee's rejection of the Lease in a proceeding instituted under
Chapter 11 of the Bankruptcy Code, twenty (20) days prior written notice
of its intention to sell the Aircraft and (y) in the case of any judicial
proceeding to foreclose the Lien of the Indenture, fifteen (15) days
prior written notice of its intention to initiate such proceeding and,
provided, further, that in the event the Indenture Trustee shall have
validly terminated the Lease (or, in the event of a reorganization
proceeding involving Lessee instituted under Chapter 11 of the Bankruptcy
Code, such Lease is rejected), the Indenture Trustee shall not, without
the consent of the Owner Participant, sell or lease, or otherwise afford
the use of, the Aircraft or any portion thereof to Lessee or any
affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at any public sale and become the purchaser.
Without limiting any of the foregoing, it is understood and agreed that
the Indenture Trustee 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.
Anything in this Trust Indenture to the contrary
notwithstanding, the Indenture Trustee shall not be entitled to exercise
any remedy hereunder as a result of an Event of Default which arises
solely by reason of one or more events or circumstances which constitute
a Lease Event of Default unless the Indenture Trustee as security
assignee of the Owner Trustee shall have (i) accelerated the maturity of
the Equipment Notes and (ii) exercised or concurrently be exercising one
or more of the remedies provided for in Section 15 of the Lease to
terminate the Lease (in the event that it is not commercially reasonable
to take possession of the Aircraft) or take possession and/or sell the
Aircraft; provided, however, that such requirement to exercise one or
more of such remedies under the Lease shall not apply in circumstances
where the Indenture Trustee is, and has been, for a continuous period in
excess of sixty (60) days subsequent to the entry of an order for relief
or such other period as may be specified in Section 1110(a)(1)(A) of the
Bankruptcy Code (such 60-day or other period being the "Section 1110
Period"), involuntarily stayed or prohibited by applicable law or court
order from exercising such remedies under the Lease (a "Continuous Stay
Period"); provided further, however, that the requirement to exercise one
or more of such remedies under the Lease shall nonetheless be applicable
during a Continuous Stay Period subsequent to the expiration of the
Section 1110 Period to the extent that the continuation of such
Continuous Stay Period subsequent to the expiration of the Section 1110
Period (A) results from an agreement by the trustee or the debtor-in-
possession in such proceeding during the Section 1110 Period with the
approval of the relevant court to perform the Lease in accordance with
Section 1110(a)(1)(A) of the Bankruptcy Code and Lessee continues to
perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy Code or
(B) is an extension of the Section 1110 Period with the consent of the
Indenture Trustee pursuant to Section 1110(b) of the Bankruptcy Code or
(C) results from Lessee's assumption during the Section 1110 Period with
the approval of the relevant court of the Lease pursuant to Section 365
of the Bankruptcy Code or (D) is the consequence of the Indenture
Trustee's own failure to give any requisite notice to any Person. In the
event that the applicability of Section 1110 of the Bankruptcy Code to
the Aircraft is being contested by Lessee in judicial proceedings, both
the Indenture Trustee and the Owner Trustee shall have the right to
participate in such proceedings.
It is expressly understood and agreed that, subject only
to the immediately preceding paragraph, the inability, described in such
paragraph, of the Indenture Trustee to exercise any right or remedy under
the Lease shall in no event and under no circumstances prevent the
Indenture Trustee from exercising any or all of its rights, powers and
remedies under this Trust Indenture, including, without limitation, this
Article IV.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), subject to Section 4.03 hereof, at any time,
by delivery of written notice or notices to the Owner Trustee and the
Owner Participant, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid 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; provided that if an Event of Default
referred to in clause (g) of Section 4.02 hereof shall have occurred and
be continuing or a Lease Event of Default under Section 14(e) of the
Lease shall have occurred and be continuing, then and in every such case
the unpaid Principal Amount then outstanding, together with accrued but
unpaid interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived;
provided further that in the event of a reorganization proceeding
involving Lessee instituted under Chapter 11 of the Bankruptcy Code, if
no other Lease Event of Default and no other Event of Default (other than
the failure to pay the Principal Amount of the Equipment Notes which by
such declaration have become payable) exists at any time after the
consummation of such proceeding, such declaration shall be automatically
rescinded without any further action on the part of any Note Holder.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal 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 under the Equipment Notes (except the Principal Amount of
the Equipment Notes 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 Indenture Trustee, rescind and annul the Indenture
Trustee's declaration 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.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of
Default annulled in the event that the Owner Trustee shall have cured, in
accordance with Section 4.03 hereof, the Event of Default that resulted
in such acceleration or declaration.
(c) Any Note Holder shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, 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 (but 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 Trust Indenture Estate, 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 Principal Amount of all Equipment Notes then
outstanding, together with accrued interest thereon, 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 the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof and unless the Owner
Trustee or the Owner Participant shall have elected to purchase the
Equipment Notes, at the request of the Indenture Trustee, the Owner
Trustee shall promptly execute and deliver to the Indenture Trustee such
instruments and other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times
and place or places as the Indenture Trustee may specify, to obtain
possession of all or any part of the Mortgaged Property included in the
Trust Indenture Estate to which the Indenture Trustee shall at the time
be entitled hereunder. If the Owner Trustee shall for any reason fail to
execute and deliver such instruments and documents after such request by
the Indenture Trustee, the Indenture Trustee may (i) obtain a judgment
conferring on the Indenture Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver such instruments and
documents to the Indenture Trustee, to the entry of which judgment the
Owner Trustee hereby specifically consents to the fullest extent
permitted by applicable law, and (ii) pursue all or part of such
Mortgaged Property wherever it may be found and, in the event that a
Lease Event of Default has occurred and is continuing, may enter any of
the premises of Lessee wherever such Mortgaged Property may be or be
supposed to be and search for such Mortgaged Property and take possession
of and remove such Mortgaged Property. 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 Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property,
make all such expenditures for maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modifications or
alterations to and of the Mortgaged Property, as it may deem proper. In
each such case, the Indenture Trustee shall have the right to maintain,
use, operate, store, insure, lease, control, manage, dispose of, modify
or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of the Owner Participant and the Owner
Trustee relating to the Mortgaged Property, as the Indenture Trustee
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 Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture Trustee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Mortgaged Property and every
part thereof, except Excluded Payments, without prejudice, however, to
the right of the Indenture Trustee under any provision of this Trust
Indenture to collect and receive all cash held by, or required to be
deposited with, the Indenture Trustee hereunder other than Excluded
Payments. Such tolls, rents (including Rent), revenues, issues, income,
products and profits shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make
all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property 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 Trustee), and all other
payments which the Indenture Trustee 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 Indenture Trustee, and of
all Persons properly engaged and employed by the Indenture Trustee with
respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee 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 Indenture Trustee, and the exercise or the beginning of the exercise
of any power or remedy shall not be construed to be a waiver of the right
to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Indenture Trustee in the exercise of
any right, remedy or power or in 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 Trustee or Lessee or to be an
acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee 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
determined adversely to the Indenture Trustee, then and in every such
case the Owner Trustee, the Indenture Trustee and Lessee shall, subject
to any determination in such proceedings, be restored to their former
positions and rights hereunder with respect to the Mortgaged Property,
and all rights, remedies and powers of the Owner Trustee, the Indenture
Trustee or Lessee shall continue as if no such proceedings had been
instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, and subject to Section 5.02 the Indenture Trustee 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
Indenture Trustee shall not waive any Default (i) in the payment of the
Principal 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 IX hereof, cannot
be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of
the Mortgaged Property or the taking of possession thereof or otherwise,
and the Owner Trustee 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 Mortgaged Property shall be entitled to
exercise all the rights and powers of the Indenture Trustee with respect
to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills
of Sale, Etc.
The Owner Trustee irrevocably appoints the Indenture Trustee
the true and lawful attorney-in-fact of the Owner Trustee in its name and
stead and on its behalf, for the purpose, if an Event of Default shall
have occurred and be continuing, of effectuating in accordance with
applicable law 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
Trustee 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 Indenture Trustee or any purchaser,
the Owner Trustee shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Indenture
Trustee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as
may be designated in any such request.
SECTION 4.11. 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
Make-Whole Amount, if any, and interest on an Equipment 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 V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure to pay Rent, the
Indenture Trustee shall give prompt written notice thereof to the Owner
Trustee, the Owner Participant, Lessee and each Note Holder. Subject to
the terms of Sections 2.14, 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the
Indenture Trustee 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
Indenture Trustee shall be instructed in writing by a Majority in
Interest of Note Holders. Subject to the provisions of Section 5.03, if
the Indenture Trustee shall not have received instructions as above
provided within twenty (20) days after mailing notice of such Event of
Default to the Note Holders, the Indenture Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of
this Section 5.01, 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. If the Indenture
Trustee shall at any time declare the Lease to be in default pursuant to
Section 15 thereof or shall elect to foreclose or otherwise enforce this
Trust Indenture, the Indenture Trustee shall forthwith notify the Owner
Participant, the Note Holders, the Owner Trustee and Lessee. For all
purposes of this Trust Indenture, in the absence of Actual Knowledge on
the part of the Indenture Trustee, the Owner Trustee or the Owner
Participant, the Indenture Trustee, the Owner Trustee or the Owner
Participant, as the case may be, shall not be deemed to have knowledge of
a Default or an Event of Default (except, in the case of the Indenture
Trustee, the failure of Lessee to pay any installment of Basic Rent
within one (1) Business Day after the same shall become due, if any
portion of such installment was then required to be paid to the Indenture
Trustee, which failure shall constitute knowledge of a Default) unless
notified in writing by Lessee, the Owner Trustee, the Owner Participant
or one or more Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a) and
(b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any
time and from time to time of a Majority in Interest of Note Holders, the
Indenture Trustee shall, subject to the terms of this Section 5.02, 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; (ii) give such
notice or direction or exercise such right, remedy or power under the
Lease, the Participation Agreement, the Purchase Agreement, or any other
part of the Trust Indenture Estate as shall be specified in such
instructions; and (iii) after the occurrence and during the continuance
of an Event of Default, approve as satisfactory to the Indenture Trustee
all matters required by the terms of the Lease to be satisfactory to the
Owner Trustee, it being understood that without the written instructions
of a Majority in Interest of Note Holders, the Indenture Trustee shall
not approve any such matter as satisfactory to the Indenture Trustee;
provided, that anything contained in this Trust Indenture, the Lease or
the other Operative Documents to the contrary notwithstanding:
(1) the Owner Trustee or the Owner Participant may,
without the consent of the Indenture Trustee, demand, collect, sue
for or otherwise obtain all amounts included in Excluded Payments
from Lessee, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or
equitable remedies to require Lessee to maintain the insurance
coverage referred to in Section 11 of the Lease; provided, that the
rights referred to in this clause (1) shall not be deemed to include
the exercise of any remedies provided for in Section 15 of the Lease
other than the right to proceed by appropriate court action, either
at law or in equity, to enforce payment by Lessee of such amounts
included in Excluded Payments or performance by Lessee of such
insurance covenant, or to recover damages for the breach thereof or
for specific performance of any covenant of Lessee;
(2) the Indenture Trustee shall not, without the
consent of the Owner Trustee and the Owner Participant, which
consent shall not be withheld if no right or interest of the Owner
Trustee or the Owner Participant shall be diminished or impaired
thereby, (i) enter into, execute and deliver amendments,
modifications, waivers or consents in respect of any of the
provisions of the Lease or any other Operative Document, or (ii)
approve any accountants, engineers, appraisers or counsel as
satisfactory to render services for or issue opinions to the Owner
Trustee pursuant to the Operative Documents;
(3) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner
Trustee and the Owner Participant shall have the right, together
with the Indenture Trustee, (i) to receive from Lessee all notices,
certificates, reports, filings, opinions of counsel and other
documents and all information which any thereof is permitted or
required to give or furnish to the Owner Trustee or Lessor pursuant
to any Operative Document, (ii) to exercise inspection rights
pursuant to Section 12 of the Lease and (iii) to give notices of
default under Section 14 of the Lease;
(4) whether or not a Default or Event of Default
under the Trust Indenture has occurred and is continuing, the Owner
Trustee shall have the right to the exclusion of the Indenture
Trustee to (i) adjust upwards Rent, EBO Amount and Termination
Values as provided in Section 3(c) of the Lease, (ii) to extend the
Term, (iii) to retain all rights with respect to insurance
maintained for its own account which Section 11(b) of the Lease
specifically confers on Lessor or the Owner Participant, (iv) to
exercise, to the extent necessary to enable it to exercise its
rights under Section 4.03 hereof, the rights of Lessor under Section
22 of the Lease and (v) to select counsel with respect to any
opinion relating to tax matters to be delivered solely to the Owner
Participant;
(5) so long as no Indenture Trustee Event has
occurred and is continuing, the Owner Trustee shall have the right,
to the exclusion of the Indenture Trustee, to adjust EBO Amounts and
Termination Values as provided in Section 3(c) of the Lease or to
adjust downward any installment or amount of Basic Rent, EBO Amount
or Termination Value, as such installments and amounts are set forth
in Exhibits B, C and D, respectively, to the Lease, to the extent of
the portion of such installment or amount that would, under Section
3.01, 3.02 or 3.03 hereof, as the case may be, be distributable to
the Owner Trustee or the Owner Participant;
(6) whether or not a Default or Event of Default
under the Trust Indenture has occurred and is continuing, the Owner
Trustee may, without the consent of the Indenture Trustee, (i)
solicit and make bids with respect to the Aircraft under Section 9
of the Lease in respect of a termination of the Lease by Lessee
pursuant to Section 9 thereof, (ii) determine "fair market sales
value" and "fair market rental value" under Section 19 of the Lease
for all purposes except following an Event of Default pursuant to
Section 15 of the Lease, and (iii) make an election pursuant to and
in accordance with the provisions of Section 9(b) of the Lease; and
(7) so long as no Indenture Trustee Event shall have
occurred and be continuing, except as provided in clauses (2) and
(3) above, all other rights of the "Lessor" under the Lease shall be
exercised by the Owner Trustee to the exclusion of the Indenture
Trustee including, without limitation, the right to (i) exercise all
rights with respect to Lessee's use and operation, modification or
maintenance of the Aircraft and any Engine which the Lease
specifically confers on Lessor, and (ii) consent to and approve any
assignment pursuant to Section 13 of the Lease; provided that the
foregoing shall not (A) limit any rights separately granted to the
Indenture Trustee under the Operative Documents, (B) limit the right
of the Indenture Trustee to receive any funds to be delivered to the
"Lessor" under the Lease (except with respect to Excluded Payments)
and under the Purchase Agreement or confer upon the Owner Trustee
the right to adversely affect the validity or enforceability of the
Lien of this Indenture by depriving the Note Holders or other
Indenture Indemnitees of the benefit thereof or (C) confer on the
Owner Trustee the right to agree to any amendment or supplement to
the Lease except in accordance with Article IX.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, to the exclusion of the Owner
Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions
of Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the remedies
set forth in such Section 15 (other than in connection with Excluded
Payments) at any time that a Lease Event of Default shall have occurred
and be continuing.
The Indenture Trustee will execute and the Owner Trustee will
file or cause to be filed such continuation statements with respect to
financing statements relating to the security interest created hereunder
in the Trust Indenture Estate as specified by Lessee pursuant to Section
7(d) of the Participation Agreement or as may be specified from time to
time in written instructions of a Majority in Interest of Note Holders
(which instructions may, by their terms, be operative only at a future
date and which shall be accompanied by the form of such continuation
statement so to be filed). The Indenture Trustee will furnish to each
Note Holder (and, during the continuation of an Indenture Trustee Event,
to the Owner Trustee and Owner Participant), promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to the Indenture Trustee
under the Lease or hereunder, including, without limitation, a copy of
any Termination Notice and a copy of each report or notice received
pursuant to Sections 9(a) and 11(c) of the Lease, respectively, to the
extent that the same shall not have been furnished to such Note Holder
pursuant hereto or to the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease
Event of Default under and in accordance with Section 4.03 hereof, on
request of a Majority in Interest of Note Holders, the Indenture Trustee
shall declare the Lease to be in default pursuant to Section 15 thereof
and exercise those remedies specified by such Note Holders. The
Indenture Trustee agrees to provide to the Note Holders, the Owner
Trustee, the Owner Participant and Lessee concurrently with such
declaration by the Indenture Trustee, notice of such declaration by the
Indenture Trustee.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action
or refrain from taking any action under Sections 5.01 (other than the
first sentence thereof), 5.02 or Article IV hereof unless the Indenture
Trustee 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 Indenture Trustee shall not be under any
obligation to take any action under this Trust Indenture and nothing
herein or therein shall require the Indenture Trustee 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 Indenture Trustee shall be accepted as
reasonable assurance of adequate indemnity). The Indenture Trustee shall
not be required to take any action under Section 5.01 (other than the
first sentence thereof) or 5.02 or Article IV hereof, nor shall any other
provision of this Trust Indenture or any other Operative Document be
deemed to impose a duty on the Indenture Trustee to take any action, if
the Indenture Trustee shall have been advised by counsel that such action
is contrary to the terms hereof or of the Lease or is otherwise contrary
to Law.
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions.
The Indenture Trustee 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 Trust Indenture
Estate, or to otherwise take or refrain from taking any action under, or
in connection with, this Trust Indenture or any part of the Trust
Indenture Estate, 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 Indenture
Trustee. The Indenture Trustee 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 7.01
hereof), promptly take such action as may be necessary duly to discharge
all liens and encumbrances on any part of the Trust Indenture Estate
which result from claims against it in its individual capacity not
related to the ownership of the Aircraft or the administration of the
Trust Indenture Estate or any other transaction pursuant to this Trust
Indenture or any document included in the Trust Indenture Estate.
SECTION 5.05. No Action Except Under Lease, Trust Indenture
or Instructions.
The Owner Trustee and the Indenture Trustee agree that they
will not use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Trust Indenture
Estate except (i) as required by the terms of the Lease or (ii) in
accordance with the powers granted to, or the authority conferred upon,
the Owner Trustee and the Indenture Trustee pursuant to this Trust
Indenture and in accordance with the express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or
Replacement Engine, if no Lease Event of Default is continuing, the Owner
Trustee shall direct the Indenture Trustee to execute and deliver to the
Owner Trustee an appropriate instrument releasing such Airframe and/or
Engine as appropriate from the Lien of this Trust Indenture and the
Indenture Trustee shall execute and deliver such instrument as aforesaid,
but only upon compliance by Lessee with the applicable provisions of
Section 10 of the Lease and upon receipt by the Indenture Trustee of a
written request from the Owner Trustee, requesting such release and
specifically describing the Airframe and/or Engine(s) so to be released.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 10 of the Lease, the Owner Trustee
and the Indenture Trustee agree for the benefit of the Note Holders and
Lessee, subject to fulfillment of the conditions precedent and compliance
by Lessee with its obligations set forth in Section 10 of the Lease and
the requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver a Lease Supplement
and a Trust Agreement and Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a
Replacement Engine pursuant to Section 10 of the Lease, (a) all
provisions of this Trust Indenture relating to the Airframe or Engine or
Engines being replaced shall be applicable to such Replacement Airframe
or Replacement Engine or Engines with the same force and effect as if
such Replacement Airframe or Replacement Engine or Engines were the same
airframe or engine or engines, as the case may be, as the Airframe or
Engine or Engines being replaced but for the Event of Loss with respect
to the Airframe or Engine or Engines being replaced, and (b) the
provisions of this Trust Indenture shall no longer be applicable to the
Airframe or Engine or Engines being replaced, which shall be released
from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee.
Any amounts held by the Indenture Trustee as assignee of the
Owner Trustee's rights to hold monies for security pursuant to Section 21
of the Lease shall be held in accordance with the terms of such Section
and the Indenture Trustee agrees, for the benefit of Lessee, to perform
the duties of the Owner Trustee under such Section. Any amounts held by
the Indenture Trustee pursuant to the proviso to the first sentence of
Section 3.01, pursuant to Section 3.02, or pursuant to any provision of
any other Operative Document providing for amounts to be held by the
Indenture Trustee which are not distributed pursuant to the other
provisions of Article III hereof shall be invested by the Indenture
Trustee from time to time in Cash Equivalents as directed by Lessee so
long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Trust Indenture,
any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such
investment, shall be held and applied by the Indenture Trustee 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 Indenture
Trustee 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, and any such investment
may be sold (without regard to its maturity) by the Indenture Trustee
without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee 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 Trust Indenture Estate in accordance with the
terms hereof. The Owner Trustee, in its individual capacity, and the
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for their 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) in the case of the Indenture Trustee, as provided in
the fourth sentence of Section 2.04(a) hereof and the last sentence of
Section 5.04 hereof, and (iii) for liabilities that may result, in the
case of the Owner Trustee, from the inaccuracy of any representation or
warranty of the Owner Trustee expressly made in its individual capacity
in the Participation Agreement or in Section 6.03 hereof (or in any
certificate furnished to the Indenture Trustee or any Note Holder in
connection with the transactions contemplated by the Operative Documents)
or, in the case of the Indenture Trustee (in its individual capacity),
from the inaccuracy of any representation or warranty of the Indenture
Trustee (in its individual capacity) in the Participation Agreement or
expressly made hereunder. Neither the Owner Trustee nor the Indenture
Trustee shall be liable for any action or inaction of the other or of the
Owner Participant.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof,
and except as provided in, and without limiting the generality of,
Sections 5.03 and 5.04 hereof and, in the case of the Owner Trustee, the
Owner Trustee and the Indenture Trustee shall have no duty (i) to see to
any registration of the Aircraft or any recording or filing of the Lease
or 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 Lessee 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 Trust Estate or the Trust
Indenture Estate, (iv) to confirm, verify or inquire into the failure to
receive any financial statements from Lessee, or (v) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Lessee's covenants under the Lease with respect to
the Aircraft. The Owner Participant shall not have any duty or
responsibility hereunder, including, without limitation, any of the
duties mentioned in clauses (i) through (v) above; provided, that nothing
contained in this sentence shall limit any obligations of the Owner
Participant under the Participation Agreement or relieve the Owner
Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
NEITHER THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST
CAPACITY NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER
TRUSTEE UNDER THE TRUST AGREEMENT, NOR THE OWNER PARTICIPANT MAKES OR
SHALL BE DEEMED TO HAVE MADE AND EACH 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, except the Owner Trustee in its
individual capacity warrants that (i) the Owner Trustee has received on
the Delivery Date whatever title was conveyed to it by Lessee, and (ii)
the Aircraft is free and clear of Lessor Liens attributable to the Owner
Trustee in its individual capacity. Neither the Owner Trustee, in its
individual capacity or as Owner Trustee under the Trust Agreement, nor
the Indenture Trustee, in its individual or trust capacities, makes or
shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Trust Indenture, the Trust
Agreement, the Participation Agreement, the Equipment Notes, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, or the Consent
and Agreement, or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of the Owner
Trustee made in its individual capacity and the representations and
warranties of the Indenture Trustee, in each case expressly made in this
Trust Indenture or in the Participation Agreement. The Loan
Participants, the Note Holders and the Owner Participant make no
representation or warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed
to the Note Holders, Lessee or the Owner Trustee as provided in Article
III hereof need not be segregated in any manner except to the extent
required by Law or as specifically provided in the Lease and Section 5.09
hereof, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee shall invest all
monies held as directed by Lessee so long as no Lease 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; provided,
however, that any payments received, or applied hereunder, by the
Indenture Trustee shall be accounted for by the Indenture Trustee so that
any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
Neither the Owner Trustee nor the Indenture Trustee shall 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 Owner Trustee and
the Indenture Trustee may accept a copy of a resolution of the Board of
Directors (or, in the case of the Owner Participant which originally
executed the Participation Agreement, evidence of the approval by the
Executive Committee thereof) of any party to the Participation Agreement,
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 Principal Amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof
rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or
matter relating to Lessee the manner of ascertainment of which is not
specifically described herein, the Owner Trustee and the Indenture
Trustee may for all purposes hereof rely on a certificate, signed by a
duly authorized officer of Lessee, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee and the
Indenture Trustee for any action taken or omitted to be taken by them in
good faith in reliance thereon. The Indenture Trustee shall assume, and
shall be fully protected in assuming, that the Owner Trustee is
authorized by the Trust Agreement to enter into this Trust Indenture and
to take all action to be taken by it pursuant to the provisions hereof,
and shall not inquire into the authorization of the Owner Trustee with
respect thereto. In the administration of the trusts hereunder, the
Owner Trustee and the Indenture Trustee each 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
Trust Indenture Estate, consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Owner Trustee
and the Indenture Trustee shall not be liable for anything done, suffered
or omitted in good faith by them in accordance with the advice or opinion
of any such counsel, accountants or other skilled persons.
SECTION 6.06. Capacity in Which Acting.
The Owner Trustee acts hereunder solely as trustee as herein
and in the Trust Agreement provided, and not in its individual capacity,
except as otherwise expressly provided herein, in the Trust Agreement and
in the Participation Agreement.
SECTION 6.07. Compensation.
The Indenture Trustee 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 Trust Indenture Estate for the payment of
such compensation, to the extent that such compensation shall not be paid
by Lessee, 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
Trust Indenture Estate toward such payments. The Indenture Trustee
agrees that it shall have no right against the Loan Participants, the
Note Holders, the Owner Trustee or the Owner Participant for any fee as
compensation for its services as trustee under this Trust Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee 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 Indenture Trustee's duties or obligations hereunder be unclear, and
the Indenture Trustee shall incur no liability in refraining from acting
until it receives such instructions. The Indenture Trustee shall be
fully protected for acting
in accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.
The Owner Trustee, not in its individual capacity, but solely
as Owner Trustee, hereby agrees, except as otherwise provided in Section
2.03 or 2.04(b) hereof, to assume liability for, and does hereby
indemnify, protect, save and keep harmless the Indenture Trustee (in its
individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Indenture
Trustee on or measured by any compensation received by the Indenture
Trustee for its services under this Trust Indenture), claims, actions,
suits, costs, expenses or disbursements (including reasonable legal fees
and expenses) of any kind and nature whatsoever, which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not
also indemnified against by any other Person under any other document) in
any way relating to or arising out of this Trust Indenture or any other
Operative Document to which it is a party or the enforcement of any of
the terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, non-acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or
other disposition of the Aircraft or any Engine (including, without
limitation, latent or other defects, whether or not discoverable, and any
claim for patent, trademark or copyright infringement), or in any way
relating to or arising out of the administration of the Trust Indenture
Estate or the action or inaction of the Indenture Trustee hereunder, to
the extent not reimbursed by Lessee. Notwithstanding any provision to
the contrary herein, the scope of the Owner Trustee's indemnity
obligations under this Section 7.01 shall not exceed the scope of the
indemnity obligations of Lessee under the Participation Agreement and the
Lease; and the Indenture Trustee agrees that, prior to seeking
indemnification from the Trust Indenture Estate, it will demand, and take
such action as it may determine to be reasonable to pursue,
indemnification available to the Indenture Trustee under the Lease or the
Participation Agreement. Notwithstanding the foregoing, the Indenture
Trustee shall not be entitled to any indemnification for any Expenses to
the extent relating to or arising from the willful misconduct or gross
negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) referred to in Section 6.03 hereof, or as
provided in Section 6.01 hereof or in the last sentence of Section 5.04
hereof, or as otherwise excluded by the terms of Sections 6(b) and 6(c)
of the Participation Agreement from Lessee's indemnities under such
Sections. In addition, if necessary, the Indenture Trustee shall be
entitled to indemnification from the Trust Indenture Estate for any
liability, obligation, loss, damage, penalty, claim, action, suit, cost,
expense or disbursement indemnified against pursuant to this Section 7.01
to the extent not reimbursed by Lessee or others, but without releasing
any of them from their respective agreements of reimbursement; and to
secure the same the Indenture Trustee shall have a prior Lien on the
Trust Indenture Estate. The Owner Trustee shall be subrogated to the
Indenture Trustee's rights, if any, to payment from Lessee for amounts
paid by the Owner Trustee under this Section 7.01.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.
In the case of any appointment of a successor to the Owner
Trustee pursuant to the Trust Agreement including upon any merger,
conversion, consolidation or sale of substantially all of the corporate
trust business of the Owner Trustee pursuant to the Trust Agreement, the
successor Owner Trustee shall give prompt written notice thereof to the
Indenture Trustee, Lessee and the Note Holders.
SECTION 8.02. Resignation of Indenture Trustee; Appointment
of Successor.
(a) The Indenture Trustee or any successor thereto may resign
at any time without cause by giving at least thirty (30) days prior
written notice to Lessee, the Owner Trustee, the Owner Participant and
each Note Holder, such resignation to be effective upon the acceptance of
the trusteeship by a successor Indenture Trustee. In addition, a
Majority in Interest of Note Holders may at any time (but only with the
consent of Lessee, which consent shall not be unreasonably withheld,
except that such consent shall not be necessary if a Lease Event of
Default shall have occurred and be continuing) remove the Indenture
Trustee without cause by an instrument in writing delivered to the Owner
Trustee, Lessee, the Owner Participant and the Indenture Trustee, and the
Indenture Trustee shall promptly notify each Note Holder thereof in
writing, such removal to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In the case of the
resignation or removal of the Indenture Trustee, a Majority in Interest
of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Lease
Event of Default shall have occurred and be continuing, shall be subject
to Lessee's reasonable approval. If a successor Indenture Trustee shall
not have been appointed within thirty (30) days after such notice of
resignation or removal, the Indenture Trustee, the Owner Trustee, the
Owner Participant or any Note Holder may apply to any court of competent
jurisdiction to appoint a successor Indenture Trustee to act until such
time, if any, as a successor shall have been appointed as above provided.
The successor Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by any successor
Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Indenture
Trustee and Lessee an instrument accepting such appointment and assuming
the obligations of the Indenture Trustee under the Participation
Agreement arising from and after the time of such appointment, and
thereupon such successor Indenture Trustee, without further act, shall
become vested with all the estates, properties, rights, powers and duties
of the predecessor Indenture Trustee hereunder in the trust hereunder
applicable to it with like effect as if originally named the Indenture
Trustee herein; but nevertheless upon the written request of such
successor Indenture Trustee, such predecessor Indenture Trustee shall
execute and deliver an instrument transferring to such successor
Indenture Trustee, upon the trusts herein expressed applicable to it, all
the estates, properties, rights and powers of such predecessor Indenture
Trustee, and such predecessor Indenture Trustee shall duly assign,
transfer, deliver and pay over to such successor Indenture Trustee all
monies or other property then held by such predecessor Indenture Trustee
hereunder.
(c) Any successor Indenture Trustee, however appointed, shall
be a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents 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 Indenture Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee
may be transferred, shall, subject to the terms of paragraph (c) of this
Section 8.02, be a successor Indenture Trustee and the Indenture Trustee
under this Trust Indenture without further act.
SECTION 8.03. Appointment of Additional and Separate
Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Trust Indenture Estate shall be situated or to
make any claim or bring any suit with respect to or in connection with
the Trust Indenture Estate, this Trust Indenture, any other Indenture
Agreement, the Equipment Notes or any of the transactions contemplated by
the Participation Agreement, (ii) the Indenture Trustee shall be advised
by counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
the Owner Trustee and Lessee), or (iii) the Indenture Trustee shall have
been requested to do so by a Majority in Interest of Note Holders, then
in any such case, the Indenture Trustee and, upon the written request of
the Indenture Trustee, the Owner Trustee, 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 Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Trust Indenture Estate, or
to act as separate trustee or trustees of all or any part of the Trust
Indenture Estate, 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 Indenture Trustee
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 and
separate trustee, subject in each case to the remaining provisions of
this Section 8.03. If the Owner Trustee shall not have taken any action
requested of it under this Section 8.03(a) that is permitted or required
by its terms within 15 days after the receipt of a written request from
the Indenture Trustee so to do, or if an Event of Default shall have
occurred and be continuing, the Indenture Trustee may act under the
foregoing provisions of this Section 8.03(a) without the concurrence of
the Owner Trustee; and the Owner Trustee hereby irrevocably appoints
(which appointment is coupled with an interest) the Indenture Trustee,
its agent and attorney-in-fact to act for it under the foregoing
provisions of this Section 8.03(a) in either of such contingencies. The
Indenture Trustee 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 8.03(a) shall die, become incapable of acting, resign
or be removed, all the assets, property, rights, powers, trusts, duties
and obligations of such additional or separate trustee shall revert to
the Indenture Trustee until a successor additional or separate trustee is
appointed as provided in this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee 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 Trust Indenture Estate or
otherwise payable under any Operative Document to the Indenture Trustee
shall be promptly paid over by it to the Indenture Trustee. All other
rights, powers, duties and obligations conferred or imposed upon any
additional or separate trustee shall be exercised or performed by the
Indenture Trustee 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 Indenture Trustee
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 Trust Indenture Estate 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 Indenture Trustee 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
Indenture Trustee shall be liable for the consequences of its lack of
reasonable care in selecting, and Indenture Trustee's own actions in
acting with, any additional or separate trustee. Each additional or
separate trustee appointed pursuant to this Section 8.03 shall be subject
to, and shall have the benefit of Articles IV through VIII and Article X
hereof insofar as they apply to the Indenture Trustee. The powers of any
additional or separate trustee appointed pursuant to this Section 8.03
shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or desirable 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 Indenture Trustee shall have been requested to do so in
writing by a Majority in Interest of Note Holders, the Indenture Trustee
and, upon the written request of the Indenture Trustee, the Owner
Trustee, 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 Indenture Trustee may act on behalf
of the Owner Trustee under this Section 8.03(c) when and to the extent it
could so act under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.
(a) Except as expressly provided in Section 5.02 hereof, and
except with respect to Excluded Payments, the Owner Trustee agrees it
shall not enter into any amendment of or supplement to the Lease, the
Purchase Agreement (to the extent assigned in the Purchase Agreement
Assignment), the Purchase Agreement Assignment, the Consent and
Agreement, or execute and deliver any written waiver or modification of,
or consent under, the terms of the Lease, the Purchase Agreement (to the
extent assigned in the Purchase Agreement Assignment), the Purchase
Agreement Assignment, the Consent and Agreement, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
the Indenture Trustee and a Majority in Interest of Note Holders.
Anything to the contrary contained herein notwithstanding, without the
necessity of the consent of any of the Note Holders or the Indenture
Trustee, (i) any Excluded Payments payable to the Owner Participant may
be modified, amended, changed or waived in such manner as shall be agreed
to by the Owner Participant and Lessee and (ii) the Owner Trustee and
Lessee may enter into amendments of or additions to the Lease to modify
Section 5 (except to the extent that such amendment would affect the
rights or exercise of remedies under Section 15 of the Lease), Section 9,
Section 19 or Section 20 of the Lease so long as such amendments,
modifications and changes do not and would not affect the time of, or
reduce the amount of, Rent payments (except to the extent expressly
permitted by Section 5.02) until after the payment in full of all Secured
Obligations or otherwise adversely affect the Note Holders.
(b) Without limiting the provisions of Section 9.01(a) hereof
and subject to Section 5.02(a)(2)(i) hereof, the Indenture Trustee agrees
with the Note Holders that it shall not enter into any amendment, waiver
or modification of, supplement or consent to this Trust Indenture, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement, or any other
agreement included in the Trust Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
a Majority in Interest of Note Holders, or does not adversely affect the
Note Holders, but upon the written request of a Majority in Interest of
Note Holders, the Indenture Trustee 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 Trustee and
Lessee or, as may be appropriate, the Manufacturer; provided, however,
that, without the consent of each holder of an affected Equipment Note
then outstanding, each Liquidity Provider and the Policy Provider, no
such amendment of or supplement to this Trust Indenture, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement or the Participation Agreement or waiver or modification of the
terms of, or consent under, any thereof, shall (i) modify any of the
provisions of this Section 9.01, or of Sections 2.02, 2.10, 2.11, 2.15,
4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 14 (except to add an
Event of Default) of the Lease, the definitions of "Event of Default",
"Default", "Lease Event of Default", "Lease 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 Principal Amount, Make-Whole
Amount, if any, or interest with respect to any Equipment Note, or alter
or modify the provisions of Article III hereof with respect to the order
of priorities in which distribution thereunder shall be made as among the
Note Holders, the Owner Trustee and Lessee, (iii) reduce, modify or amend
any indemnities in favor of the Note Holders, (iv) consent to any change
in the Trust Indenture or the Lease which would permit redemption of
Equipment Notes earlier than permitted under Section 2.10 or 2.11 hereof
or the purchase of the Equipment Notes other than as permitted by Section
2.14 hereof, (v) modify any of the provisions of Section 3(c)(v) of the
Lease, or modify, amend or supplement the Lease or consent to any
assignment of the Lease, in either case releasing Lessee from its
obligations in respect of the payment of Basic Rent, EBO Amount or
Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set
forth in Sections 3 and 19 of the Lease or (vi) 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 Trust Indenture Estate, except as provided in
connection with the exercise of remedies under Article IV hereof.
Without the consent of Lessee, no amendment or supplement to this Trust
Indenture or waiver or modification of the terms hereof shall adversely
affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and
the Indenture Trustee 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 Owner Trustee in accordance with the
terms of the Trust Agreement 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 Indenture Trustee or to
make any other provisions with respect to matters or questions arising
hereunder so long as such action shall not adversely affect the interests
of the 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 Indenture Trustee 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 Trustee for the benefit of the Note Holders, or to surrender
any rights or power herein conferred upon the Owner Trustee, the Owner
Participant or Lessee; (vi) to add to the rights of the Note Holders; and
(vii) to include on the Equipment Notes any legend as may be required by
law.
SECTION 9.02. Trustees Protected.
If, in the opinion of the institution acting as Owner Trustee
under the Trust Agreement or the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the
terms of Section 9.01 hereof adversely affects any right, duty, immunity
or indemnity with respect to such institution under this Trust Indenture
or the Lease, such institution may in its discretion decline to execute
such document.
SECTION 9.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner Trustee or the
Indenture Trustee of any document entered into pursuant to Section 9.01
hereof, the Indenture Trustee shall mail, by first class mail, postage
prepaid, a copy thereof to Lessee and to each Note Holder at its address
last set forth in the Equipment Note Register, but the failure of the
Indenture Trustee to mail such copies shall not impair or affect the
validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Agreement and Indenture Supplement.
No written request or consent of the Indenture Trustee, the
Note Holders or the Owner Participant pursuant to Section 9.01 hereof
shall be required to enable the Owner Trustee to enter into any Lease
Supplement specifically required by the terms of the Lease or to execute
and deliver a Trust Agreement and Indenture Supplement specifically
required by the terms hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal
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 Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the
Participation Agreement, the Owner Trustee shall direct the Indenture
Trustee to execute and deliver to or as directed in writing by the Owner
Trustee an appropriate instrument releasing the Aircraft, the Engines,
the Lease, the Purchase Agreement, and the Purchase Agreement Assignment
with the Consent and Agreement attached thereto from the Lien of this
Trust Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid and give written notice thereof to Lessee;
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
Indenture Trustee of all property constituting part of the Trust
Indenture Estate and the final distribution by the Indenture Trustee of
all monies or other property or proceeds constituting part of the Trust
Indenture Estate 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 10.02. No Legal Title to Trust Indenture Estate in
Note Holders.
No holder of an Equipment Note shall have legal title to any
part of the Trust Indenture Estate. No transfer, by operation of law or
otherwise, of any Equipment Note or other right, title and interest of
any Note Holder in and to the Trust Indenture Estate 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 Trust Indenture
Estate.
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Trust Indenture Estate, or
any part thereof (including any part thereof or interest therein), by the
Indenture Trustee 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 Indenture Trustee, the Owner
Trustee, the Owner Participant and such holders in and to such Trust
Indenture Estate or part thereof. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any
sale or other proceeds with respect thereto by the Indenture Trustee.
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture Trustee, Owner Participant, Lessee, 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 Trustee, the
Indenture Trustee, the Owner Participant, Lessee, the Indenture
Indemnitees and the Note Holders, any legal or equitable right, remedy or
claim under or in respect of this Trust Indenture.
SECTION 10.05. 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 Trustee, addressed
to it at its office at 79 South Main Street, Salt Lake City, Utah 84111,
Attention: Corporate Trust Department (Telecopy No. (801) 246-5053), with
a copy to the Owner Participant addressed as provided in clause (iii)
below, (ii) if to the Indenture Trustee, addressed to it at its office at
225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103-1724,
Attention: Corporate Trust Administration (Telecopy No. (860) 244-1889),
with a copy to State Street Corp., 2 Avenue de Lafayette, 6th Floor,
Boston, Massachusetts 02111, Attention: Corporate Trust Department, Ruth
A. Smith (Telecopy No. (617) 662-1461), (iii) if to any Participant,
Lessee or any Note Holder, addressed to such party at such address as
such party shall have furnished by notice to the Owner Trustee and the
Indenture Trustee, or, until an address is so furnished, addressed to the
address of such party (if any) set forth on the Schedule I to the
Participation Agreement or in the Equipment Note Register. Whenever any
notice in writing is required to be given by the Owner Trustee, any
Participant or the Indenture Trustee or any Note Holder or Lessee 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 10.06. 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 10.07. 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 Trustee and the Indenture
Trustee, in compliance with Section 9.01 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.
SECTION 10.08. 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.
This Trust Indenture and the Trust Indenture Estate shall not be affected
by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Trust Indenture to the Trust Agreement shall mean the
Trust Agreement as amended and supplemented from time to time to the
extent permitted hereby, thereby and by the Participation Agreement.
Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Participation
Agreement applicable to a Loan Participant or a Note Holder.
SECTION 10.09. 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 10.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner Trustee, the Indenture Trustee, any
Participant or any bank or other Affiliate of such Participant may
conduct any banking or other financial transactions, and have banking or
other commercial relationships, with Lessee, 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 Lessee for any
purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 10.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL 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 10.12. 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 10.13. Bankruptcy.
It is the intention of the parties that the Owner Trustee, as
lessor under the Lease (and the Indenture Trustee as assignee of the
Owner Trustee hereunder), shall be entitled to the benefits of Section
1110 with respect to the right to take possession of the Aircraft,
Airframe, Engines and Parts as provided in the Lease in the event of a
case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor,
and in any instance where more than one construction is possible of the
terms and conditions hereof or any other pertinent Operative Document,
each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve
such benefits.
SECTION 10.14. No Action Contrary to Lessee's Rights Under the
Lease.
Notwithstanding any of the provisions of this Trust Indenture
or the Trust Agreement to the contrary, the Indenture Trustee will not
take any action contrary to Lessee's rights under the Lease, including
the right to possession and use of, and the quiet enjoyment of, the
Aircraft, except in accordance with provisions of the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided herein,
but solely as Owner Trustee
By: _____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture
Trustee
By: _______________________________________
Name:
Title:
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE
TRUST AGREEMENT AND INDENTURE SUPPLEMENT
(US Airways, Inc. Trust No. N___U_)
This TRUST AGREEMENT AND INDENTURE SUPPLEMENT (US Airways, Inc.
Trust No. N___U_) dated _______ __, _____ (herein called this "Trust
Indenture Supplement") of FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
in its individual capacity, but solely as Owner Trustee (herein called
the "Owner Trustee") under that certain Trust Agreement (US Airways, Inc.
Trust No. N___U_) dated as of ____________ __, ____ (the "Trust
Agreement"), between the Owner Trustee and the Owner Participant named
therein.
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT (US
Airways, Inc. Trust No. N___U_) dated as of _________ __, ____ (as
amended and supplemented to the date hereof, the "Trust Indenture")
between the Owner Trustee and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture Trustee (the "Indenture
Trustee"), 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 Indenture Trustee; 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 Trustee hereby confirms that the Lien of the Trust Indenture on
the Trust Indenture Estate covers all of Owner Trustee's right, title and
interest in and to the following described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
Airbus A330
together with all of the Owner Trustee's right, title and interest in and
to all Parts of whatever nature, whether now owned or hereinafter
acquired and which are from time to time incorporated or installed in or
attached to said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's
Model Number Serial Number
together with all of Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to
any of such engines.
Together with all of Owner Trustee's right, title and interest
in and to 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).
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Loan Participants and of the Note Holders, in
the trust created by the Trust Indenture, all of the right, title and
interest of the Owner Trustee in, to and under the Lease Supplement [of
even date herewith] covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
equal and proportionate benefit and security of the Note Holders, except
as provided in Section 2.15 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.
This Trust Indenture Supplement is being delivered in the State
of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid
Lease Supplement has been delivered to the Owner Trustee and is included
in the property of the Owner Trustee covered by all the terms and
conditions of the Trust Agreement, subject to the pledge and mortgage
thereof under the Trust Indenture.
IN WITNESS WHEREOF, the Owner Trustee 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.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee
By: __________________________________
Name:
Title:
SCHEDULE I
Principal Amount Interest Rate Maturity
Series G ____%
Series C ____%
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of March __, 2000, and as supplemented
by Trust Supplement No. 2000-1C, dated as of March __, 2000.
Exhibit A-4 to Note Purchase Agreement
FORM OF PURCHASE AGREEMENT ASSIGNMENT
(LEASED AIRCRAFT)
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH
SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT
NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE
OTHER RELATED CHANGES.
PURCHASE AGREEMENT ASSIGNMENT
(US Airways, Inc. Trust No. N___U_)
PURCHASE AGREEMENT ASSIGNMENT (US Airways, Inc. Trust No.
N___U_), dated as of _____________ __, ____ (this "Assignment"), between US
AIRWAYS, INC., a Delaware corporation (the "Assignor" or "Lessee"), and
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity
but solely as Owner Trustee ("FSB" or "Lessor") under the Trust Agreement
(US Airways, Inc. Trust No. N___U_), dated as of _____________ __, ____,
(as amended, modified or supplemented from time to time, the "Trust
Agreement"), between ____________________ (the "Owner Participant") and
FSB.
W I T N E S S E T H :
WHEREAS, US Airways Group, Inc. ("Parent") and AVSA (as
hereinafter defined) are parties to the Purchase Agreement (as hereinafter
defined), providing, among other things, for the delivery by AVSA to the
Assignor of certain aircraft, including the Aircraft (as hereinafter
defined) covered by the Participation Agreement (as hereinafter defined);
WHEREAS, pursuant to a Purchase Agreement Assignment, dated as of
__________ __, _____, by and between Parent and Lessee (the "Parent
Assignment"), Parent assigned all of its right, title in and interest in
and to the Purchase Agreement to Assignor to the extent such right, title
and interest relate to certain aircraft, including the Aircraft covered by
the Participation Agreement;
WHEREAS, pursuant to a Consent and Agreement of AVSA and
Guarantor (as hereinafter defined), dated as of ________ __, 2000 (the
"Parent Consent and Agreement"), AVSA and Guarantor consented to the
assignment by Parent to Assignor of Parent's right, title in and interest
in and to the Purchase Agreement as provided for in the Parent Assignment;
WHEREAS, pursuant to the Parent Consent and Agreement, Guarantor
confirmed that its guarantee given in the Consent and Guaranty (as
hereinafter defined) remains in full force and effect and, to the extent
the same relates to the aircraft assigned to Lessee pursuant to the Parent
Assignment, it inures to the benefit of the Assignor;
WHEREAS, pursuant to the Consent and Guaranty, the Guarantor has
agreed, among other things, to unconditionally guarantee the due and
punctual performance by AVSA of all of its liabilities and obligations as
set forth in the Purchase Agreement;
WHEREAS, pursuant to the Lease (as hereinafter defined), the
Lessor will lease the Aircraft to the Assignor;
WHEREAS, on the terms and conditions hereof and of the Consents
and Agreements (as hereinafter defined), (a) the Assignor desires to assign
to the Lessor certain of the Assignor's remaining rights, title and
interests in, to and under the Purchase Agreement and the Consent and
Guaranty (insofar as they relate to the Purchase Agreement and the
Aircraft) and (b) the Lessor desires to accept the assignments and, except
as otherwise provided herein, to assume the obligations of the "Buyer"
under the Purchase Agreement, to the extent assigned to it pursuant hereto;
WHEREAS, pursuant to the Indenture (as hereinafter defined), the
Lessor will assign, inter alia, its rights hereunder to the Indenture
Trustee (as hereinafter defined) to the extent set forth therein;
WHEREAS, such assignments and acceptances are intended to permit
consummation of the transactions contemplated by the Participation
Agreement;
WHEREAS, AVSA and the Guarantor are willing to execute and
deliver their respective Consents and Agreements; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Defined Terms. For all purposes of this Assignment, except as
otherwise expressly provided or unless the context otherwise requires,
the following terms shall have the following meanings:
"Aircraft" shall mean the Airbus A330 aircraft, bearing
manufacturer's serial number ___, delivered under the Purchase Agreement,
including the two Pratt & Whitney Model PW 4168A engines installed on such
aircraft on the date of delivery thereof pursuant to the Purchase Agreement
or such other engines as may be substituted therefore under the Lease.
"AVSA" shall mean AVSA, S.A.R.L., a French societe a
responsabilite limitee, and its successors and assigns.
"AVSA Consent and Agreement" shall mean the Consent and Agreement
of AVSA attached hereto, as amended, modified or supplemented from time to
time.
"Consent and Guaranty" shall mean the Consent and Guaranty of the
Guarantor attached to the Purchase Agreement, together with all amendments,
waivers, and consents heretofore entered into or heretofore granted
thereunder.
"Consents and Agreements" shall mean the AVSA Consent and
Agreement and the Guarantor Consent and Agreement.
"Equipment Notes" shall have the meaning ascribed thereto in the
Participation Agreement.
"Guarantor" shall mean Airbus Industrie, G.I.E., a French
groupement d'interet economique, and its successors and assigns.
"Guarantor Consent and Agreement" shall mean the Consent and
Agreement of the Guarantor attached hereto, as amended, modified or
supplemented from time to time.
"Indenture" shall mean the Trust Indenture and Security Agreement
(US Airways, Inc. Trust No. N___U_), dated as of _____________ __, ____,
between the Lessor and the Indenture Trustee, as amended, modified or
supplemented from time to time.
"Indenture Trustee" shall mean State Street Bank and Trust
Company of Connecticut, a national banking association, not in its
individual capacity but solely as Indenture Trustee under the Indenture and
each other person which may from time to time be acting as successor
trustee under the Indenture.
"Lease" shall mean the Lease Agreement (US Airways, Inc. Trust
No. N___U_), dated as of _____________ __, ____, between the Lessor and the
Assignor, as amended, modified or supplemented from time to time.
"Participation Agreement" shall mean the Participation Agreement
(US Airways, Inc. Trust No. N___U_), dated as of _____________ __, ____,
among the Assignor, the Owner Participant, the Pass Through Trustee (as
defined therein), the Lessor, the Indenture Trustee and the Subordination
Agent (as defined therein), as amended, modified or supplemented from time
to time.
"Purchase Agreement" shall mean the Airbus A330/A340 Purchase
Agreement, dated as of November 24, 1998, between US Airways Group, Inc.
and AVSA, together with all exhibits, appendices and letter agreements
thereto and all amendments, waivers and consents granted thereunder.
All other terms used herein in capitalized form that are defined
in the Lease shall, when used herein, have the meanings specified in the
Lease.
2. Assignment. (a) Generally. The Assignor has sold, assigned,
transferred and set over and does hereby sell, assign, transfer and
set over unto the Lessor (i) all of the Assignor's right, title and
interest in and to (x) Clauses 12, 13 and 17 of the Purchase Agreement
(the "Assigned Rights") and (y) the Consent and Guaranty (insofar as
such Consent and Guaranty relates to the Assigned Rights), as and to
the extent that the same relates to the Aircraft, except to the extent
reserved below, including, without limitation, in such assignment to
the Lessor (A) all claims for damages in respect of such Aircraft
arising as a result of any default by AVSA under Clause 12, 13 or 17
of the Purchase Agreement, including, without limitation, all
warranty, service life policy and indemnity provisions contained in
Clause 12 of the Purchase Agreement in respect of the Aircraft and
all claims thereunder and under the Consent and Guaranty in respect of
the Aircraft and (B) any and all rights of the Assignor to compel
performance of the terms of Clause 12, 13 and 17 of the Purchase
Agreement and the Consent and Guaranty in respect of the Aircraft;
reserving to the Assignor, however, all the Assignor's rights and
interests in and to Clauses 12, 13 and 17 of the Purchase Agreement
and the Consent and Guaranty as and to the extent that Clause 12, 13
or 17 of the Purchase Agreement and the Consent and Guaranty relate to
aircraft other than the Aircraft and to the extent that the Purchase
Agreement and the Consent and Guaranty relate to any other matters not
directly pertaining to the Aircraft.
(b) Assignment of Rights. If and so long as there shall not
exist and be continuing an Event of Default and, if an Event of Default is
continuing, so long as Lessee or any Sublessee remains in possession of the
Aircraft, the Lessor hereby authorizes the Lessee, to the exclusion of the
Lessor, to exercise in the Lessee's name all rights and powers related to
the Assigned Rights and to retain any recovery or benefit resulting from
the enforcement of any of the Assigned Rights in respect of the Aircraft,
except that the Lessee may not enter into any change order or other
amendment, modification or supplement to the Purchase Agreement without the
written consent or countersignature of the Lessor if such change order,
amendment, modification or supplement would result in any rescission,
cancellation or termination of the Assigned Rights in respect of the
Aircraft or in any way limit the rights assigned hereunder.
(c) Acceptance of Assignment. Subject to the terms hereof, the
Lessor accepts the assignment contained in this Clause 2.
(d) Onward Transfer of Rights. Except as provided in Clause 8
hereunder, the Lessor agrees that it may not sell, assign or otherwise
transfer any of the Assigned Rights without the prior written consent of
AVSA.
(e) Requirement of Notice to AVSA. For all purposes of this
Assignment, AVSA shall not be deemed to have knowledge of and need not
recognize any Event of Default, unless and until AVSA shall have received
written notice thereof from the Lessor or the Indenture Trustee addressed
to its Chief Executive Officer, 2, Rond Point Maurice Bellonte, 31700
Blagnac, France (telex 521155F) (fax: 011-33-5-6130-4011) and, in acting
in accordance with the terms of the Purchase Agreement and this Assignment,
AVSA may act with acquittance and conclusively rely upon any such notice.
3. Certain Rights and Obligations of the Parties. (a) Assignor Remains
Liable. It is expressly agreed that, anything herein contained to the
contrary notwithstanding: (a) the Assignor shall at all times remain
liable to AVSA under the Purchase Agreement to perform all the duties
and obligations of the "Buyer" thereunder to the same extent as if
this Assignment had not been executed; (b) the exercise by the Lessor
of any of the rights assigned hereunder shall not release the Assignor
from any of its duties or obligations to AVSA under the Purchase
Agreement except to the extent that such exercise by the Lessor shall
constitute performance of such duties and obligations; and (c) except
as provided in the next succeeding paragraph, none of the Lessor, the
Indenture Trustee nor any Participant shall have any obligation or
liability under the Purchase Agreement by reason of, or arising out
of, this Assignment or be obligated to perform any of the obligations
or duties of the Assignor under the Purchase Agreement or to make any
payment or to make any inquiry as to the sufficiency of any payment
received by any of them or to present or file any claim or to take any
other action to collect or enforce any claim for any payment assigned
hereunder.
(b) Lessor Bound by Purchase Agreement. Without in any way
releasing the Assignor from any of its duties or obligations under the
Purchase Agreement, the Lessor confirms for the benefit of AVSA that,
insofar as the provisions of the Purchase Agreement relate to the Aircraft,
in exercising any rights under the Purchase Agreement, or in making any
claim with respect to the Aircraft or other goods and services delivered or
to be delivered pursuant to the Purchase Agreement, the terms and
conditions of the Purchase Agreement disclosed to the Lessor in writing
shall apply to, and be binding upon, the Lessor to the extent of its
respective interests assigned hereunder to the same extent as the Assignor.
(c) Limit of Effect of this Assignment. Nothing contained
herein shall (i) subject AVSA or the Guarantor to any liability to which it
would not otherwise be subject under the Purchase Agreement or (ii) modify
in any respect the contractual rights of AVSA or the Guarantor thereunder
(except, in each case, as provided in the attached Consents and
Agreements).
(d) Appointment as Attorney-in-Fact. The Assignor does hereby
constitute, effective at any time after an Event of Default shall have
occurred and be continuing, the Lessor and its successors and permitted
assigns to be the Assignor's true and lawful attorney, irrevocably, with
full power (in the name of the Assignor or otherwise) to ask, require,
demand, receive, compound and give acquittance for any and all monies and
claims for monies due and to become due under, or arising out of, the
Purchase Agreement and the Consent and Guaranty in respect of the Aircraft,
to the extent that the same have been assigned as provided in this
Assignment and, for such period as the Lessor, its successors and assigns
may exercise rights with respect thereto under this Assignment, to endorse
any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute (or, if previously
commenced, assume control of) any proceedings and to obtain any recovery in
connection therewith which the Lessor, its successors and assigns, may deem
to be necessary or advisable in the premises.
4. Further Assurances. The Assignor and the Lessor each agree that, at
any time and from time to time, upon the written request of any other
party hereto, it will promptly and duly execute and deliver any and
all such further instruments and documents and take such further
action as the other may reasonably request in order to obtain the full
benefits of this Assignment and of the rights and powers herein
granted.
5. No Amendment of Purchase Agreement. So long as the Lease is in
effect, the Lessor agrees that it shall not enter into any agreement
that would amend, modify, supplement, rescind, cancel or terminate the
Purchase Agreement or the Consent and Guaranty in any respect or in
any way limit the rights of the Assignor or any of the other rights
assigned hereunder (except as set forth above when there has been an
Event of Default), without the prior written consent of the Assignor.
6. Execution of Assignment. This Assignment is executed by the Assignor
and the Lessor concurrently with the execution and delivery of the
Participation Agreement and the Lease.
7. Confidentiality. The Lessor agrees that it will not disclose to any
third party the terms of the Purchase Agreement or this Assignment,
except (a) as required by applicable law or governmental regulation,
(b) as contemplated in the Lease or the Participation Agreement
(including as set forth in Section 7(o) of the Participation
Agreement) or (c) with the consent of the Assignor, the Guarantor and
AVSA.
8. Assignment as Collateral. Each party hereto consents to the
assignment and pledge by the Lessor to the Indenture Trustee, as
security for the Equipment Notes to be issued under the Indenture and
the other obligations secured thereby as specified in the Indenture,
of all of the Lessor's right, title and interest in and to the
Assigned Rights and the Consent and Guaranty under this Assignment
which assignment shall be on terms identical to this Assignment.
9. Counterparts. This Assignment may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
10. GOVERNING LAW. THIS ASSIGNMENT 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.
11. Successors and Assigns. This Assignment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12. Notices. All notices with respect to the matters contained herein
shall be delivered (notices with respect to AVSA shall be sent to the
address for AVSA set forth in Clause 2(e) hereof) in the manner
provided in Section 12(a) of the Participation Agreement.
13. No Oral Amendments. Neither this Assignment 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 whom the enforcement of such termination, amendment,
supplement, waiver or modification is sought.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be duly executed as of the day and year first above written.
US AIRWAYS, INC.
By: _________________________________
Name:
Title:
` FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in
its individual capacity
but solely as Lessor
By: ________________________________
Name:
Title:
AIRBUS INDUSTRIE CONSENT AND AGREEMENT
The undersigned, Airbus Industrie G.I.E., a groupement d'interet
economique established under Ordonnance No. 67-821 dated September 23, 1967
of the Republic of France (the "Guarantor"), hereby acknowledges notice of
and consents to all of the terms of the Purchase Agreement Assignment
between US Airways, Inc., a Delaware corporation, and First Security Bank,
National Association, not in its individual capacity, but solely as Owner
Trustee, with respect to US Airways, Inc. Trust No. N7___UW, dated as of
______________ (hereinafter called the "Assignment", the defined terms
therein being hereinafter used with the same meaning), and to the
assignment of the Assigned Rights to the Indenture Trustee under the
Indenture, dated as of ______________, between ___________ and ____________
(hereinafter called the "Indenture"), and hereby confirms to the Assignor
and the Lessor and their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, and agreements of the Guarantor under the Consent and
Guaranty insofar as they relate to the Assigned Rights with
respect to the Aircraft shall inure to the benefit of the Lessor
and its respective successors and permitted assigns, to the same
extent as if the Lessor and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) the Guarantor will pay to the person or entity entitled to
receive the corresponding payment from AVSA under the terms of
the Assignment all amounts required to be paid by the Guarantor
with respect to the Aircraft;
(iii) the Guarantor consents to the sale of the Aircraft by
Lessee to the Lessor, the assignment of Assignor's rights and
interests under the Purchase Agreement and the Consent and
Guaranty to the Lessor pursuant to the Assignment and to the
assignment of the Lessor's rights and interests in the Assignment
to the Indenture Trustee pursuant to the Indenture and the lease
of the Aircraft by the Lessor to the Assignor under the Lease;
and
(iv) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft, the
Guarantor will not assert any lien or claim against the Aircraft
or any part thereof or against the Lessee, the Lessor, the Owner
Participant or the Indenture Trustee arising on or prior to such
purchase or in respect of any work or services performed on or
prior thereto.
The Guarantor hereby represents and warrants that:
(A) the Guarantor is a groupement d'interet economique duly
organized and existing in good standing under the laws of the Republic of
France and has the requisite power and authority to enter into and perform
its obligations under the Consent and Guaranty and this Consent and
Agreement;
(B) the making and performance, in accordance with their terms,
of the Consent and Guaranty and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Guarantor,
do not require the consent or approval of the members of the Guarantor, do
not require the consent or approval of, or the giving of notice to, or
registration with, or the taking of any other action in respect of, any
French governmental authority or agency except for those that have already
been obtained and do not contravene any law binding on the Guarantor or
contravene the Guarantor's charter documents or any indenture, credit
agreement or other contractual agreement to which the Guarantor is a party
or by which it is bound;
(C) the Consent and Guaranty constituted, as of the date thereof
and at all times thereafter to and including the date of this Consent and
Agreement, and each of this Consent and Agreement and the Consent and
Guaranty constitutes, binding obligations of the Guarantor enforceable
against the Guarantor in accordance with their respective terms, subject
to: (i) the limitations of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally; and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law), which principles do not make the remedies available at law or in
equity with respect to the Purchase Agreement and this Consent and
Agreement inadequate for the practical realization of the benefits intended
to be provided thereby; and
(D) the Consent and Guaranty is in full force and effect.
This Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AIRBUS INDUSTRIE G.I.E.
By: _______________________________
Name:
Title:
AVSA CONSENT AND AGREEMENT
The undersigned, AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France
("AVSA"), hereby acknowledges notice of and consents to all of the terms of
the Purchase Agreement Assignment between US Airways, Inc., a Delaware
corporation, and First Security Bank, National Association, not in its
individual capacity, but solely as Owner Trustee, with respect to US
Airways, Inc. Trust No. N___U_, dated as of ______________ (hereinafter
called the "Assignment," the defined terms therein being hereinafter used
with the same meaning), and to the assignment of the Assigned Rights to the
Indenture Trustee under the Indenture, dated as of _____________, between
__________ and _____________ (hereinafter called the "Indenture"), and
hereby confirms to the Assignor and the Lessor and their respective
successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, indemnities and agreements of AVSA under the Purchase
Agreement insofar as they relate to the Assigned Rights with
respect to the Aircraft shall inure to the benefit of the Lessor
and its respective successors and permitted assigns to the same
extent as if the Lessor and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) AVSA will pay to the Assignor all payments required to be
paid by it under the Purchase Agreement, unless and until AVSA
shall have received written notice from the Indenture Trustee or
the Lessor (or, after the Indenture shall have been discharged in
full, the Lessor) addressed to it at the address and in the
manner set forth in the Assignment that an Event of Default has
occurred and is continuing, whereupon AVSA will make any and all
payments thereafter required to be made by it under the Purchase
Agreement, to the extent that the right to receive such payment
has been assigned under the Assignment ("AVSA Payments"),
directly to the Indenture Trustee (or, after the Indenture shall
have been discharged in full, the Lessor) if AVSA shall have
received notice as aforesaid that an Event of Default has
occurred and is continuing;
(iii) The Lessor shall not be liable for any of the obligations
or duties of the Assignor under the Purchase Agreement, nor shall
the Assignment give rise to any duties or obligations whatsoever
on the part of the Lessor owing to AVSA, except for the
agreements of the Lessor set forth in the Assignment, including,
but not limited to Clause 3(b) of the Assignment;
(iv) AVSA consents to the sale of the Aircraft by Lessee to
Lessor, assignment of the Lessor's rights and interests in the
Assignment to the Indenture Trustee pursuant to the Indenture and
to the lease of the Aircraft by the Lessor to the Lessee under
the Lease; and
(v) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft,
AVSA will not assert any lien or claim against the Aircraft or
any part thereof arising on or prior to such purchase or in
respect of any work or services performed on or prior thereto.
AVSA hereby represents and warrants that:
(A) AVSA is a societe a responsabilite limitee duly organized
and existing in good standing under the laws of the Republic of France
and has the requisite power and authority to enter into and perform its
obligations under the Purchase Agreement and this Consent and Agreement;
(B) the making and performance, in accordance with their terms,
of the Purchase Agreement and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of AVSA, do not
require any approval of AVSA's shareholders, do not require the consent or
approval of, the giving notice to, or registration with, or the taking of
any other action in respect of, any French governmental authority or agency
except for those that have already been obtained and do not contravene any
law binding on AVSA or contravene AVSA's charter documents or any
indenture, credit agreement or other contractual agreement to which AVSA is
a party or by which it is bound;
(C) each of the Purchase Agreement and this Consent and
Agreement constitutes a binding obligation of AVSA enforceable against AVSA
in accordance with its terms, subject to: (i) the limitations of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), which principles do not make the remedies
available at law or in equity with respect to the Purchase Agreement and
this Consent and Agreement inadequate for the practical realization of the
benefits intended to be provided thereby; and
(D) the Purchase Agreement is in full force and effect as to
AVSA.
This Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AVSA, S.A.R.L.
By: ________________________________
Name:
Title:
Exhibit A-5 to Note Purchase Agreement
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
AFFIDAVIT OF CITIZENSHIP
[OWNER PARTICIPANT]
STATE OF _______________ }
} SS.
COUNTY OF ____________ }
I, _______________, being duly sworn, depose and say, that:
1. I am the duly qualified and acting [Assistant] Secretary of [Owner
Participant] (the "Corporation");
2. The Corporation is duly organized under the laws of the State of
__________;
3. The [Chief Executive Officer/President] and two-thirds or more of the
Board of Directors and other managing officers of the Corporation are
individuals who are citizens of the United States of America;
4. At least seventy-five percent (75%) of the voting interest of the
Corporation is owned or controlled by persons or corporations who are
citizens of the United States of America;
5. Accordingly, the Corporation is a "Citizen of the United States" as
defined in Section 40102(a)(15) of Title 49 of the United States Code.
SWORN to this ____ day of __________, ____.
[OWNER PARTICIPANT]
By:____________________________
Name:
Title:
SWORN AND SUBSCRIBED TO
before me this ____ day of
__________, ____
Notary Public
My Commission Expires on _________________
TRUST AGREEMENT
(US Airways, Inc. Trust No. N___U_)
Dated as of _________ __, ____
between
[OWNER PARTICIPANT],
Owner Participant
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Owner Trustee
One Airbus A330 Aircraft
FAA Registration Mark N___U_
TRUST AGREEMENT
(US Airways, Inc. Trust No. N___U_)
This TRUST AGREEMENT (US Airways, Inc. Trust No. N___U_) dated
as of _________ __, ____ between [OWNER PARTICIPANT], a __________
corporation (the "Owner Participant"), and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association (in its individual capacity,
"FSB") and otherwise not in its individual capacity but solely as trustee
hereunder (herein in such capacity with its permitted successors and
assigns called the "Owner Trustee") (as hereafter from time to time
supplemented or amended, this or the "Trust Agreement");
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, FSB and the Owner Participant hereby agree as
follows:
W I T N E S S E T H:
ARTICLE I
DEFINITIONS AND TERMS
SECTION 1.01 CERTAIN DEFINITIONS. Capitalized terms used but
not defined herein shall have the respective meanings set forth or
incorporated by reference, and shall be construed and interpreted in the
manner described, in Annex A.
ARTICLE II
AUTHORITY TO EXECUTE CERTAIN OPERATIVE DOCUMENTS;
DECLARATION OF TRUST
SECTION 2.01 AUTHORITY TO EXECUTE DOCUMENTS. The Owner
Participant hereby authorizes and directs the Owner Trustee to execute and
deliver the Operative Documents and any other agreements, instruments or
documents to which the Owner Trustee is a party in the respective forms
thereof in which delivered from time to time by the Owner Participant to
the Owner Trustee for execution and delivery and, subject to the terms
hereof, to perform its duties and, upon instructions from the Owner
Participant, exercise its rights under said Operative Documents in
accordance with the terms thereof.
SECTION 2.02 DECLARATION OF TRUST. The Owner Trustee hereby
declares that it shall continue to hold the Trust Estate upon the trusts
hereinafter set forth for the use and benefit of the Owner Participant,
subject, however, to the provisions of and the Lien created by the Trust
Indenture and to the provisions of the Lease.
ARTICLE III
ACCEPTANCE AND DELIVERY OF AIRCRAFT
SECTION 3.01 ACCEPTANCE OF AIRCRAFT. The Owner Participant
hereby authorizes and directs the Owner Trustee to, and the Owner Trustee
agrees for the benefit of the Owner Participant that it will, on the
Delivery Date, subject to due compliance with the terms of Section 3.02
hereof:
(a) purchase the Aircraft pursuant to the Participation
Agreement and the Bill of Sale;
(b) accept from Lessee the delivery of the Bill of Sale and the
FAA Bill of Sale;
(c) cause the Aircraft to be leased to Lessee under the Lease,
and in furtherance thereof execute and deliver a Lease Supplement
covering the Aircraft;
(d) execute and deliver the Trust Supplement covering the
Aircraft;
(e) execute and deliver the financing statements referred to in
Section 4(a)(vi) of the Participation Agreement, together with all
other agreements, documents and instruments referred to in Section 4
of the Participation Agreement to which the Owner Trustee is a party;
and
(f) effect the registration of the Aircraft in the name of the
Owner Trustee by filing or causing to be filed with the FAA: (i) the
FAA Bill of Sale; (ii) an application for registration of the Aircraft
in the name of the Owner Trustee (including without limitation an
affidavit from the Owner Trustee in compliance with the provisions of
14 C.F.R. section 47.7(c)(2)(ii)(1979)); and (iii) the Trust
Agreement.
SECTION 3.02 CONDITIONS PRECEDENT. The right and obligation of
the Owner Trustee to take the action required by Section 3.01 hereof with
respect to the Aircraft shall be subject to the following conditions
precedent:
(a) the Owner Participant shall have made the full amount of its
Commitment set forth in Schedule II of the Participation Agreement
available to the Owner Trustee, in immediately available funds, in
accordance with Section 2 of the Participation Agreement; and
(b) the terms and conditions of Section 4 of the Participation
Agreement, insofar as they relate to the Aircraft, shall have been
complied with in a manner satisfactory to the Owner Participant and
the Owner Trustee.
SECTION 3.03 AUTHORIZATION IN RESPECT OF A TERMINATION OF THE
LEASE AND ASSUMPTION OF THE EQUIPMENT NOTES. The Owner Participant hereby
authorizes and directs the Owner Trustee to, and the Owner Trustee agrees
for the benefit of the Owner Participant that it will, take the actions
specified to be taken by the Owner Trustee in Section 7(u) of the
Participation Agreement upon Lessee's purchasing the Aircraft pursuant to
Section 9(d), 19(b) or 20 of the Lease and upon Lessee's assuming the
indebtedness evidenced by the Equipment Notes in accordance with the
provisions of such Section 7(u).
SECTION 3.04 AUTHORIZATION IN RESPECT OF A REPLACEMENT AIRFRAME
OR REPLACEMENT ENGINES. The Owner Participant hereby authorizes and directs
the Owner Trustee to, and the Owner Trustee agrees for the benefit of the
Owner Participant that it will, in the event of a Replacement Airframe and
Replacement Engines, if any, being substituted pursuant to Section 10(a) of
the Lease, or a Replacement Engine being substituted pursuant to Section
10(b) of the Lease, subject to due compliance with the terms of Section
10(a) or 10(b) of the Lease, as the case may be:
(a) to the extent not previously accomplished by a prior
authorization, authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees of Lessee) to
accept delivery of the Replacement Airframe and Replacement Engines,
if any, or the Replacement Engines;
(b) accept from Lessee or other vendor of the Replacement
Airframe and Replacement Engines, if any, or the Replacement Engine a
bill of sale or bills of sale (if tendered), and the invoice, if any,
with respect to the Replacement Airframe and Replacement Engines, if
any, or the Replacement Engine being furnished pursuant to Section
10(a) or (b) of the Lease;
(c) in the case of a Replacement Airframe, make application to
the Federal Aviation Administration for the registration in the name
of the Owner Trustee of the Aircraft of which such Replacement
Airframe is a part;
(d) execute and deliver a Lease Supplement and a Trust
Supplement covering (i) the Aircraft of which such Replacement
Airframe is part or (ii) such Replacement Engine, as the case may be;
(e) transfer its interest in (without recourse except as to
obligations in respect of Lessor Liens) and to the Airframe and
Engines (if any) or the Engine being replaced to Lessee;
(f) request in writing that the Indenture Trustee execute and
deliver to Lessee appropriate instruments to release the Airframe and
Engines or engines (if any) or the Engine or engine being replaced
from the lien created under the Trust Indenture and release the
Purchase Agreement and the Purchase Agreement Assignment (solely with
respect to such replaced Airframe and Engines, if any, or Engine) from
the assignment and pledge under the Trust Indenture; and
(g) upon instructions from the Owner Participant, take such
further action as may be contemplated by clauses (A) and (B) of the
third paragraph of Section 10(a) of the Lease or clauses (ii) and
(iii) of Section 10(b) of the Lease, as the case may be.
SECTION 3.05 TRUST AGREEMENT REMAINING IN FULL FORCE AND
EFFECT. In the event of the substitution of a Replacement Airframe for the
Airframe or the substitution of a Replacement Engine for any Engine or
engine, all provisions of this Trust relating to such replaced Airframe or
Engine or engine shall be applicable to such Replacement Airframe or
Replacement Engine with the same force and effect as if such Replacement
Airframe or Replacement Engine were the same airframe or engine as the
Airframe or Engine being replaced but for the Event of Loss with respect to
such Airframe or Engine.
SECTION 3.06 AUTHORIZATION IN RESPECT OF A RETURN OF AN ENGINE.
The Owner Participant hereby authorizes and directs the Owner Trustee to,
and the Owner Trustee agrees for the benefit of the Owner Participant that
it will, in the event of an engine being transferred to the Owner Trustee
pursuant to Section 5 of the Lease, subject to due compliance with the
terms of such Section 5:
(a) accept from Lessee the bill of sale with respect to such
engine contemplated by such Section 5 (if tendered);
(b) transfer its interest in (without recourse except as to
obligations in respect of Lessor Liens) and to an Engine to Lessee as
contemplated by such Section 5; and
(c) request in writing that the Indenture Trustee execute and
deliver to Lessee appropriate instruments to release the Engine being
transferred to Lessee pursuant to such Section 5 from the lien of the
Trust Indenture and to release the Purchase Agreement and the Purchase
Agreement Assignment (solely with respect to such Engine) from the
assignment and pledge under the Trust Indenture.
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
SECTION 4.01 DISTRIBUTION OF PAYMENTS. (a) Payments to
Indenture Trustee. Until the Trust Indenture shall have been discharged
pursuant to Section 10.01 thereof, all Basic Rent, Supplemental Rent,
insurance proceeds and requisition or other payments of any kind included
in the Trust Estate (other than Excluded Payments) payable to the Owner
Trustee shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall upon receipt be paid over
to the Indenture Trustee without deduction, set-off or adjustment of any
kind) for distribution in accordance with the provisions of Article III of
the Trust Indenture.
(b) Payments to Owner Trustee; Other Parties. After the Trust
Indenture shall have been discharged pursuant to Section 10.01 thereof, any
payment of the type referred to in Section 4.01(a) hereof (other than
Excluded Payments) received by the Owner Trustee, any payments received
from the Indenture Trustee other than as specified in Section 4.01(d)
hereof and any other amount received as part of the Trust Estate and for
the application or distribution of which no provision is made herein, shall
be distributed forthwith upon receipt by the Owner Trustee in the following
order of priority: first, so much of such payment as shall be required to
reimburse the Owner Trustee for any expenses not otherwise reimbursed as to
which the Owner Trustee is entitled to be so reimbursed pursuant to the
provisions hereof shall be retained by the Owner Trustee; second, so much
of the remainder for which provision as to the application thereof is
contained in the Lease or any of the other Operative Documents shall be
applied and distributed in accordance with the terms of the Lease or such
other Operative Document; and third, the balance, if any, shall be paid to
the Owner Participant.
(c) Certain Distributions to Owner Participant. All amounts from
time to time distributable by the Indenture Trustee to the Owner
Participant pursuant to the Trust Indenture shall, if paid to the Owner
Trustee, be distributed by the Owner Trustee to the Owner Participant in
accordance with the provisions of Article III of the Trust Indenture.
(d) Excluded Payments. Any Excluded Payments received by the
Owner Trustee shall be paid by the Owner Trustee to the Person to whom such
Excluded Payments are payable under the provisions of the Participation
Agreement, the Tax Indemnity Agreement or the Lease.
SECTION 4.02 METHOD OF PAYMENTS. The Owner Trustee shall make
distributions or cause distributions to be made to the Owner Participant
pursuant to this Article IV by transferring by wire transfer the amount to
be distributed to such account or accounts of the Owner Participant as the
Owner Participant may designate from time to time in writing to the Owner
Trustee. Notwithstanding the foregoing, the Owner Trustee will, if so
requested by the Owner Participant in writing, pay any or all amounts
payable to the Owner Participant pursuant to this Article IV either (i) by
crediting such amount or amounts to an account or accounts maintained by
the Owner Participant with the Owner Trustee in its individual capacity in
immediately available funds, (ii) by payment at the trust office of the
Owner Trustee (the trust office of the Owner Trustee shall be the principal
corporate trust office of the Owner Trustee at 79 South Main Street, Salt
Lake City, Utah 84111, Attention: Corporate Trust Department, or the
principal corporate trust office of any successor Owner Trustee), in
immediately available funds, or (iii) by mailing an official bank check or
checks in such amount or amounts payable to the Owner Participant at such
address as the Owner Participant shall have designated in writing to the
Owner Trustee.
ARTICLE V
DUTIES OF THE OWNER TRUSTEE
SECTION 5.01 NOTICE OF EVENT OF DEFAULT. If the Owner Trustee
shall have knowledge of a Lease Event of Default or an Indenture Event of
Default (or a Lease Default or an event which with the passage of time or
the giving of notice or both would constitute an Indenture Event of
Default) the Owner Trustee shall give to the Owner Participant prompt
telephonic or telecopy notice thereof followed by prompt confirmation
thereof by certified mail, postage prepaid, provided that (i) in the case
of an event which, with the passage of time would constitute an Indenture
Event of Default referred to in paragraph (c) of Section 4.02 of the Trust
Indenture, such notice shall in no event be furnished later within ten (10)
days after the Owner Trustee shall first have knowledge of such event and
(ii) in the case of a misrepresentation by the Owner Trustee which with the
passage of time would constitute an Indenture Event of Default referred to
in paragraph (d) of Section 4.02 of the Trust Indenture, such notice shall
in no event be furnished later than ten (10) days after the Owner Trustee
shall first have knowledge of such event. Subject to the terms of Section
5.03 hereof, the Owner Trustee shall take such action or shall refrain from
taking such action, not inconsistent with the provisions of the Trust
Indenture, with respect to such Lease Event of Default, Indenture Event of
Default or other event as the Owner Trustee shall be directed in writing by
the Owner Participant. If the Owner Trustee shall not have received
instructions as above provided within twenty (20) days after the mailing of
such notice to the Owner Participant, the Owner Trustee until instructed
otherwise in accordance with the preceding sentence may, but shall be under
no duty to, take or refrain from taking such action with respect to such
Lease Event of Default, Indenture Event of Default or other event, not
inconsistent with the provisions of the Trust Indenture, as it shall deem
advisable in the best interests of the Owner Participant. For all purposes
of this Trust Agreement, the Lease and the other Operative Documents, in
the absence of actual knowledge by an officer of FSB in the Corporate Trust
Department, the Owner Trustee shall not be deemed to have knowledge of a
Lease Event of Default, an Indenture Event of Default or other event
referred to in this Section 5.01 unless notified in writing by the
Indenture Trustee, the Owner Participant or Lessee.
SECTION 5.02 ACTION UPON INSTRUCTIONS. Subject to the terms of
Sections 5.01 and 5.03 hereof, upon the written instructions at any time
and from time to time of the Owner Participant, the Owner Trustee will take
such of the following actions, not inconsistent with the provisions of the
Trust Indenture, as may be specified in such instructions: (i) give such
notice or direction or exercise such right, remedy or power hereunder or
under any of the Operative Documents to which the Owner Trustee is a party
or in respect of all or any part of the Trust Estate as shall be specified
in such instructions (including entering into agreements referred to in
clause (i) of Section 8.01 hereof and in clause (U) of Section 7(k) of the
Participation Agreement); (ii) take such action to preserve or protect the
Trust Estate (including the discharge of Liens) as may be specified in such
instructions; (iii) approve as satisfactory to it all matters required by
the terms of the Lease or the other Operative Documents to be satisfactory
to the Owner Trustee, it being understood that without written instructions
of the Owner Participant, the Owner Trustee shall not approve any such
matter as satisfactory to it (it being understood that the provisions of
Sections 3.03, 3.04 and 3.06 hereof do not constitute instructions by the
Owner Participant for the Owner Trustee to approve of or consent to the
matters to be approved of or consented to by the Owner Trustee in the
sections of the Lease referred to in Sections 3.03, 3.04 or 3.06 hereof);
and (iv) subject to the rights of Lessee under the Operative Documents,
after the expiration or earlier termination of the Lease, deliver the
Aircraft to the Owner Participant in accordance with such instructions,
convey all of the Owner Trustee's right, title and interest in and to the
Aircraft for such amount, on such terms and to such purchaser or purchasers
as shall be designated in such instructions, or net lease the Aircraft on
such terms and to such lessee or lessees as shall be designated in such
instructions.
SECTION 5.03 INDEMNIFICATION. The Owner Trustee shall not be
required to take any action under Section 5.01 (other than the giving of
the notices referred to therein) or 5.02 hereof unless the Owner Trustee
shall have been indemnified by the Owner Participant, in manner and form
satisfactory to the Owner Trustee, against any liability, cost or expense
(including reasonable counsel fees and disbursements) which may be incurred
in connection therewith; and, if the Owner Participant shall have directed
the Owner Trustee to take any such action or refrain from taking any
action, the Owner Participant agrees to furnish such indemnity as shall be
required and, in addition, to the extent not otherwise paid pursuant to the
provisions of the Lease or the Participation Agreement, to pay the
reasonable compensation of the Owner Trustee for the services performed or
to be performed by it pursuant to such direction and any fees and
disbursements of counsel or agents employed by the Owner Trustee in
connection therewith. The Owner Trustee shall not be required to take any
action under Section 5.01 or 5.02 hereof if the Owner Trustee shall
reasonably determine, or shall have been advised by counsel, that such
action is contrary to the terms of any of the Operative Documents to which
the Owner Trustee is a party, or is otherwise contrary to law.
SECTION 5.04 NO DUTIES EXCEPT AS SPECIFIED IN TRUST AGREEMENT
OR INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, control, use, sell, dispose of or otherwise deal with the Aircraft
or any other part of the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with any of the Operative
Documents to which the Owner Trustee is a party, except as expressly
required by the terms of any of the Operative Documents to which the Owner
Trustee is a party, or (to the extent not inconsistent with the provisions
of the Trust Indenture) as expressly provided by the terms hereof or in
written instructions from the Owner Participant received pursuant to the
terms of Section 5.01 or 5.02, and no implied duties or obligations shall
be read into this Trust Agreement against the Owner Trustee. FSB agrees
that it will, in its individual capacity and at its own cost or expense
(but without any right of indemnity in respect of any such cost or expense
under Section 7.01 hereof) promptly take such action as may be necessary to
duly discharge and satisfy in full all Lessor Liens which it is required to
discharge pursuant to Section 7(f) of the Participation Agreement and
otherwise comply with the terms of said Section binding on it.
SECTION 5.05 SATISFACTION OF CONDITIONS PRECEDENT. Anything
herein to the contrary notwithstanding, the Owner Trustee shall comply with
the provisions of Section 3.01 hereof upon the satisfaction, to the
satisfaction of special counsel for the Owner Trustee, of all the
applicable conditions precedent specified in Section 3.02 hereof and in
Section 4 of the Participation Agreement.
SECTION 5.06 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not have any power, right or
authority to, and the Owner Trustee agrees that it will not, manage,
control, use, sell, dispose of or otherwise deal with the Aircraft or any
other part of the Trust Estate except (i) as expressly required by the
terms of any of the Operative Documents to which the Owner Trustee is a
party, (ii) as expressly provided by the terms hereof, or (iii) as
expressly provided in written instructions from the Owner Participant
pursuant to Section 5.01 or 5.02 hereof.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.01 ACCEPTANCE OF TRUSTS AND DUTIES. FSB accepts the
trusts hereby created and agrees to perform the same but only upon the
terms hereof applicable to it. The Owner Trustee also agrees to receive and
disburse all monies received by it constituting part of the Trust Estate
upon the terms hereof. FSB shall not be answerable or accountable under
any circumstances, except (a) for its own willful misconduct or gross
negligence, (b) for performance of the terms of the last sentence of
Section 5.04 hereof, (c) for its or the Owner Trustee's failure to use
ordinary care to disburse funds and (d) for liabilities that may result
from the inaccuracy of any representation or warranty of it (or from the
failure by it to perform any covenant) in Section 6.03 hereof, in Section
6.03 of the Trust Indenture, in Section 4 of the Lease or in Sections 7(a),
7(b), 7(f), 7(g), 7(m), 7(o), 7(p), 7(s) or 7(u) of the Participation
Agreement.
SECTION 6.02 ABSENCE OF CERTAIN DUTIES. Except in accordance
with written instructions furnished pursuant to Section 5.02 hereof and
except as provided in, and without limiting the generality of, Section 5.04
hereof and the last sentence of Section 9.01(b) hereof, neither the Owner
Trustee nor FSB shall have any duty (i) to see to any recording or filing
of any Operative Document or of any supplement to any thereof or to see to
the maintenance of any such recording or filing or any other filing of
reports with the Federal Aviation Administration or other governmental
agencies, except that FSB, in its individual capacity, shall comply with
the reporting requirements set forth in 14 C.F.R. section 47.45 or any
successor provision and the Owner Trustee shall, to the extent that
information for that purpose is supplied by Lessee pursuant to any of the
Operative Documents, complete and timely submit (and furnish the Owner
Participant with a copy of) any and all reports relating to the Aircraft
which may from time to time be required by the Federal Aviation
Administration or any government or governmental authority having
jurisdiction, or (ii) to see to any insurance on the Aircraft or to effect
or maintain any such insurance, whether or not Lessee shall be in default
with respect thereto, other than to forward to the Owner Participant copies
of all reports and other written information which the Owner Trustee
receives from Lessee pursuant to Section 11 of the Lease, (iii) to see to
the payment or discharge of any tax, assessment or other governmental
charge or any lien or encumbrance of any kind owing with respect to,
assessed or levied against any part of the Trust Indenture Estate or the
Trust Estate, except as provided in Section 7 of the Participation
Agreement, or (iv) to inspect Lessee's books and records with respect to
the Aircraft at any time permitted pursuant to the Lease. Notwithstanding
the foregoing, the Owner Trustee will furnish to the Indenture Trustee and
the Owner Participant, promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Owner Trustee under the
Lease or any other Operative Document.
SECTION 6.03 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN
MATTERS. NEITHER THE OWNER TRUSTEE NOR FSB MAKES OR SHALL BE DEEMED TO
HAVE MADE (A) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR
USE OF THE AIRCRAFT OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR
WARRANTY WITH RESPECT TO THE AIRCRAFT WHATSOEVER, except that FSB in its
individual capacity warrants that on the Delivery Date the Owner Trustee
shall have received whatever title was conveyed to it by Lessee and that
the Aircraft shall during the Term be free of Lessor Liens attributable to
it, or (b) any representation or warranty as to the validity, legality or
enforceability of this Trust Agreement or any Operative Document to which
the Owner Trustee is a party, or any other document or instrument, or as to
the correctness of any statement contained in any thereof except to the
extent that any such statement is expressly made herein or therein as a
representation by FSB in its individual capacity or by the Owner Trustee
and except that FSB in its individual capacity hereby represents and
warrants that this Trust Agreement has been, and (assuming due
authorization, execution and delivery by the Owner Participant of this
Trust Agreement) the Operative Documents to which it or the Owner Trustee
is a party have been (or at the time of execution and delivery of any such
instrument by it or the Owner Trustee hereunder or pursuant to the terms of
the Participation Agreement that such an instrument will be) duly executed
and delivered by one of its officers who is or will be, as the case may be,
duly authorized to execute and deliver such instruments on behalf of itself
or the Owner Trustee, as the case may be.
SECTION 6.04 NO SEGREGATION OF MONIES REQUIRED; NO INTEREST.
Except as provided in Section 23 of the Lease, monies received by the Owner
Trustee hereunder need not be segregated in any manner except to the extent
required by law, and may be deposited under such general conditions as may
be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 6.05 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS.
The Owner Trustee shall incur no liability to anyone in acting in reliance
upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and reasonably believed by it to be
signed by the proper party or parties. Unless other evidence in respect
thereof is specifically prescribed herein, any request, direction, order or
demand of the Owner Participant or Lessee mentioned herein or in any of the
Operative Documents to which the Owner Trustee is a party shall be
sufficiently evidenced by written instruments signed by a person purporting
to be the chairman of the board, the president, any executive vice
president, any senior vice president or any vice president or a managing
director and in the name of the Owner Participant or Lessee, as the case
may be. The Owner Trustee may accept a copy of a resolution of the Board of
Directors or Executive Committee of Lessee, certified by the secretary or
any assistant secretary of Lessee as duly adopted and in full force and
effect, as conclusive evidence that such resolution has been duly adopted
by said Board or Committee and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically described herein, the Owner Trustee may for all purposes
hereof rely on a certificate signed by a person purporting to be the
chairman of the board, the president, any executive vice president, any
senior vice president or any vice president or a managing director of
Lessee, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of
trusts hereunder, the Owner Trustee may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may, at the expense of the Trust Estate, consult
with counsel, accountants and other skilled persons to be selected and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or
opinion of any such counsel, accountants or other skilled persons and the
Owner Trustee shall not be liable for the negligence of any such agent,
attorney, counsel, accountant or other skilled person appointed by it with
due care hereunder.
SECTION 6.06 NOT ACTING IN INDIVIDUAL CAPACITY. In acting
hereunder, the Owner Trustee acts solely as trustee and not in its
individual capacity except as otherwise expressly provided herein; and,
subject to the terms of the Participation Agreement and the Trust
Indenture, all persons, other than the Owner Participant, as provided
herein, having any claim against the Owner Trustee by reason of the
transactions contemplated hereby shall look only to the Trust Estate for
payment or satisfaction thereof.
SECTION 6.07 FEES; COMPENSATION. Except as provided in Section
5.03 or 7.01 hereof, the Owner Trustee agrees that it shall have no right
against the Owner Participant or (subject to the provisions of the Trust
Indenture) the Trust Estate for any fee as compensation for its services
hereunder.
SECTION 6.08 TAX RETURNS. The Owner Trustee shall be
responsible for the keeping of all appropriate books and records relating
to the receipt and disbursement of all monies under this Trust Agreement or
any agreement contemplated hereby. The Owner Participant shall be
responsible for causing to be prepared and filed all income tax returns
required to be filed by the Owner Participant. The Owner Trustee shall be
responsible for causing to be prepared, at the request and expense of the
Owner Participant, all income tax returns required to be filed with respect
to the trust created hereby and shall execute and file such returns. The
Owner Participant or the Owner Trustee, as the case may be, upon request,
will furnish the Owner Trustee or the Owner Participant, as the case may
be, with all such information as may be reasonably required from the Owner
Participant or the Owner Trustee, as the case may be, in connection with
the preparation of such income tax returns.
ARTICLE VII
INDEMNIFICATION OF OWNER TRUSTEE
BY OWNER PARTICIPANT
SECTION 7.01 OWNER PARTICIPANT TO INDEMNIFY OWNER TRUSTEE. The
Owner Participant hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and
hereby indemnify, protect, save and keep harmless FSB in its individual
capacity and its successors, assigns, legal representatives, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by FSB in its
individual capacity on or measured by any compensation received by FSB in
its individual capacity for its services hereunder or in connection with
the transactions contemplated by the Operative Documents), claims, actions,
suits, costs, expenses or disbursements (including, without limitation,
reasonable ongoing fees of the Owner Trustee, reasonable legal fees and
expenses, and including without limitation any liability of an owner, any
strict liability and any liability without fault) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against FSB in
its individual capacity (whether or not also indemnified against by Lessee
under the Lease or under the Participation Agreement or also indemnified
against by any other person but only to the extent not otherwise paid or
reimbursed by Lessee or such other person) in any way relating to or
arising out of this Trust Agreement or any of the Operative Documents or
the enforcement of any of the terms of any thereof, or in any way relating
to or arising out of the manufacture, purchase, acceptance, nonacceptance,
rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of the Aircraft (including,
without limitation, latent and other defects, whether or not discoverable,
and any claim for patent, trademark or copyright infringement), or in any
way relating to or arising out of the administration of the Trust Estate or
the action or inaction of the Owner Trustee or FSB in its individual
capacity hereunder, except (a) in the case of willful misconduct or gross
negligence on the part of the Owner Trustee or FSB in its individual
capacity in the performance or nonperformance of its duties hereunder or
(b) those resulting from the inaccuracy of any representation or warranty
of FSB in its individual capacity (or from the failure of FSB in its
individual capacity to perform any covenant) in Section 6.03 hereof, in
Section 6.03 of the Trust Indenture or, with respect to representations or
warranties of FSB in its individual capacity only, in Section 4 of the
Lease, in Sections 7(a), 7(b), 7(f), 7(g), 7(m), 7(o), 7(p), 7(s) or 7(u)
of the Participation Agreement or in any of the other Operative Documents
or (c) as may result from a breach by FSB in its individual capacity of its
covenants in the last sentence of Section 5.04 hereof or (d) in the case of
the failure to use ordinary care on the part of the Owner Trustee or FSB in
its individual capacity in the disbursement of funds. The indemnities
contained in this Section 7.01 extend to FSB only in its individual
capacity and shall not be construed as indemnities of the Trust Indenture
Estate or the Trust Estate (except to the extent, if any, that FSB in its
individual capacity has been reimbursed by the Trust Indenture Estate or
the Trust Estate for amounts covered by the indemnities contained in this
Section 7.01). The indemnities contained in this Section 7.01 shall survive
the termination of this Trust Agreement. In addition, if necessary, FSB in
its individual capacity shall be entitled to indemnification from the Trust
Estate, subject to the Lien of the Trust Indenture, for any liability,
obligation, loss, damage, penalty, tax, claim, action, suit, cost, expense
or disbursement indemnified against pursuant to this Section 7.01 to the
extent not reimbursed by Lessee, the Owner Participant or others, but
without releasing any of them from their respective agreements of
reimbursement; and to secure the same FSB in its individual capacity shall
have a Lien on the Trust Estate, subject to the Lien of the Trust
Indenture, which shall be prior to any interest therein of the Owner
Participant. The payor of any indemnity under this Article VII shall be
subrogated to any right of the person indemnified in respect of the matter
as to which such indemnity was paid.
ARTICLE VIII
TRANSFER OF THE OWNER PARTICIPANT'S INTEREST
SECTION 8.01 TRANSFER OF INTERESTS. All provisions of Section
7(k) of the Participation Agreement shall (with the same force and effect
as if set forth in full, mutatis, in this Section 8.01) be applicable to
any assignment, conveyance or other transfer by any Owner Participant of
its right, title or interest in and to the Participation Agreement, the
Trust Estate or this Trust Agreement. In addition to the provisions of
Section 7(k) of the Participation Agreement: (i) any such transfer shall
be effected by a written agreement, in form and substance reasonably
satisfactory to the Owner Trustee in its individual capacity, among such
transferee, its transferor and the Owner Trustee, which shall provide that
such transferee thereby becomes a party to, and beneficiary of, this Trust
Agreement and an Owner Participant for all purposes hereof and that such
transferee assumes all of the obligations of its transferor under this
Trust Agreement; and (ii) so long as the Lease shall be in effect or any
Equipment Notes remain unpaid, such transferee and its transferor shall
have complied with all of the terms of Section 7(k) of the Participation
Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
SECTION 9.01 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF
SUCCESSOR. (a) Resignation or Removal. The Owner Trustee or any successor
Owner Trustee (i) shall resign if required to do so pursuant to Section
7(a) of the Participation Agreement and (ii) may resign at any time without
cause by giving at least sixty (60) days' prior written notice to the Owner
Participant, the Indenture Trustee (so long as the Lien of the Trust
Indenture has not been fully discharged) and Lessee (so long as the Lease
is in effect), such resignation to be effective upon the acceptance of
appointment by the successor Owner Trustee under Section 9.01(b) hereof. In
addition, the Owner Participant may at any time remove the Owner Trustee
without cause by a notice in writing delivered to the Owner Trustee, the
Indenture Trustee (so long as the Lien of the Trust Indenture has not been
fully discharged) and Lessee (so long as the Lease is in effect), such
removal to be effective upon the acceptance of appointment by the successor
Owner Trustee under Section 9.01(b) hereof. In the case of the resignation
or removal of the Owner Trustee, the Owner Participant may appoint a
successor Owner Trustee by an instrument signed by the Owner Participant.
If a successor Owner Trustee shall not have been appointed within thirty
(30) days after such notice of resignation or removal, the Owner Trustee,
the Owner Participant, Lessee or the Indenture Trustee may apply to any
court of competent jurisdiction to appoint a successor Owner Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. Any successor Owner Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Owner
Trustee appointed as above provided.
(b) Execution and Delivery of Documents, etc. Any successor
Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee and the Owner Participant an instrument accepting
such appointment, and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts
hereunder with like effect as if originally named the Owner Trustee herein;
but nevertheless, upon the written request of such successor Owner Trustee,
such predecessor Owner Trustee shall execute and deliver an instrument
transferring to such successor Owner Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers and trusts of such
predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon
the trusts herein expressed. Upon the appointment of any successor Owner
Trustee hereunder, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will
take such further actions as are requested of it by such successor Owner
Trustee as are reasonably required to cause registration of the Aircraft
included in the Trust Estate to be transferred upon the records of the
Federal Aviation Administration, or other governmental authority having
jurisdiction, into the name of the successor Owner Trustee.
(c) Qualification. Any successor Owner Trustee, however
appointed, shall be a Citizen of the United States without making use of a
voting trust, voting powers agreement or similar arrangement and shall also
be a bank or trust company organized under the laws of the United States or
any state thereof 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 Owner Trustee hereunder upon
reasonable or customary terms.
(d) Merger, etc. Any corporation into which the Owner Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Owner Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Owner Trustee may be
transferred, shall, subject to the terms of Section 9.01(c) hereof, be the
Owner Trustee hereunder without further act.
SECTION 9.02 CO-TRUSTEES AND SEPARATE TRUSTEES. If at any time
it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which all or any part of the Trust Estate is located, or
the Owner Trustee being advised by counsel shall determine that it is so
necessary or prudent in the interest of the Owner Participant or the Owner
Trustee, or the Owner Trustee shall have been directed to do so by the
Owner Participant, the Owner Trustee and the Owner Participant shall
execute and deliver an agreement supplemental hereto and all other
instruments and agreements necessary or proper to constitute another bank
or trust company or one or more persons (any and all of which shall be a
Citizen of the United States without making use of a voting trust, voting
powers agreement or similar arrangement) approved by the Owner Trustee and
the Owner Participant, either to act as co-trustee, jointly with the Owner
Trustee, or to act as separate trustee hereunder (any such co-trustee or
separate trustee being herein sometimes referred to as an "additional
trustee").
Every additional trustee hereunder shall, to the extent permitted
by law, be appointed and act, and the Owner Trustee and its successors
shall act, subject to the following provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon
the Owner Trustee in respect of the custody, control and management of
monies, or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner
Trustee;
(B) all other rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred or imposed upon
and exercised or performed by the Owner Trustee and such additional
trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(including the holding of title to the Trust Estate) the Owner Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such additional trustee;
(C) no power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised hereunder
by such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder;
(E) the Owner Participant, at any time, by an instrument in
writing may remove any such additional trustee; and
(F) no appointment of, or action by, any additional trustee will
relieve the Owner Trustee of any of its obligations under, or
otherwise affect any of the terms of, the Trust Indenture or affect
the interests of the Indenture Trustee or the holders of the Equipment
Notes in the Trust Indenture Estate.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
TO TRUST AGREEMENT AND OTHER DOCUMENTS
SECTION 10.01 SUPPLEMENTS AND AMENDMENTS. (a) Supplements and
Amendments. This Trust Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by the Owner
Trustee and the Owner Participant. Subject to Section 10.02 hereof and the
first sentence of Section 9 of the Participation Agreement, the Owner
Trustee will execute any amendment, supplement or other modification of
this Trust Agreement or of any other Operative Document to which the Owner
Trustee is a party which it is requested to execute by the Owner
Participant, except that the Owner Trustee shall not execute any such
amendment, supplement or other modification which, by the express
provisions of any of the above documents, requires the consent of any other
party unless such consent shall have been obtained.
(b) Delivery of Amendments and Supplements to Certain Parties. A
signed copy of each amendment or supplement referred to in Section 10.01(a)
hereof shall be delivered by the Owner Trustee to Lessee, the Indenture
Trustee and each holder of a Equipment Note.
SECTION 10.02 DISCRETION AS TO EXECUTION OF DOCUMENTS. Prior to
executing any document required to be executed by it pursuant to the terms
of Section 10.01 hereof, the Owner Trustee shall be entitled to receive an
opinion of its counsel to the effect that the execution of such document is
authorized hereunder. If in the opinion of the Owner Trustee any such
document adversely affects any right, duty, immunity or indemnity in favor
of the Owner Trustee hereunder or under any other Operative Document to
which the Owner Trustee is a party, the Owner Trustee may in its discretion
decline to execute such document.
SECTION 10.03 ABSENCE OF REQUIREMENTS AS TO FORM. It shall not
be necessary for any written request furnished pursuant to Section 10.01
hereof to specify the particular form of the proposed documents to be
executed pursuant to such Section, but it shall be sufficient if such
request shall indicate the substance thereof.
SECTION 10.04 DISTRIBUTION OF DOCUMENTS. Promptly after the
execution by the Owner Trustee of any document entered into pursuant to
Section 10.01 hereof, the Owner Trustee shall mail, by certified mail,
postage prepaid, a conformed copy thereof to the Owner Participant, but the
failure of the Owner Trustee to mail such conformed copy shall not impair
or affect the validity of such document.
SECTION 10.05 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST
SUPPLEMENT. No written request pursuant to Section 10.01 hereof shall be
required to enable the Owner Trustee to enter into the Lease Supplement
covering the Aircraft with Lessee pursuant to the terms of the Lease and
Section 3.01 hereof and the Trust Supplement pursuant to the terms of the
Trust Indenture and Section 3.01 hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 TERMINATION OF TRUST AGREEMENT. This Trust
Agreement and the trusts created hereby shall be of no further force or
effect upon the earlier of (a) both the final discharge of the Trust
Indenture pursuant to Section 10.01 thereof and the sale or other final
disposition by the Owner Trustee of all property constituting part of the
Trust Estate and the final distribution by the Owner Trustee of all monies
or other property or proceeds constituting part of the Trust Estate in
accordance with Article IV hereof, provided that at such time Lessee shall
have fully complied with all of the terms of the Lease and the
Participation Agreement or (b) twenty-one years less one day after the
death of the last survivor of all of the descendants of the grandparents of
Joseph P. Kennedy living on the date of the earliest execution of this
Trust Agreement by any party hereto; otherwise this Trust Agreement and the
trusts created hereby shall continue in full force and effect in accordance
with the terms hereof.
SECTION 11.02 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST
ESTATE. The Owner Participant shall not have legal title to any part of the
Trust Estate. No transfer, by operation of law or otherwise, of any right,
title and interest of the Owner Participant in and to the Trust Estate
hereunder shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any successors or transferees of the Owner Participant
to an accounting or to the transfer of legal title to any part of the Trust
Estate.
SECTION 11.03 ASSIGNMENT, SALE, ETC. OF AIRCRAFT. Any
assignment, sale, transfer or other conveyance of its interest in the
Aircraft by the Owner Trustee made pursuant to the terms hereof or of the
Lease or the Participation Agreement shall bind the Owner Participant and
shall be effective to transfer or convey all right, title and interest of
the Owner Trustee and the Owner Participant in and to the Aircraft. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment,
sale, transfer or conveyance or as to the application of any sale or other
proceeds with respect thereto by the Owner Trustee.
SECTION 11.04 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES
ONLY. Except for the terms of Section 7(k) of the Participation Agreement
incorporated in Article VIII hereof and except as otherwise provided in
Articles IX and X hereof, nothing herein, whether expressed or implied,
shall be construed to give any Person other than the Owner Trustee and the
Owner Participant any legal or equitable right, remedy or claim under or in
respect of this Trust Agreement; but this Trust Agreement shall be held to
be for the sole and exclusive benefit of the Owner Trustee and the Owner
Participant.
SECTION 11.05 NOTICES; CONSENT TO JURISDICTION. (a) All notices,
demands, instructions and other communications required or permitted to be
given to or made upon any party hereto shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage
prepaid, or by telecopier, or by prepaid courier service, and shall be
deemed to be given for purposes of this Trust Agreement on the day that
such writing is delivered or sent to the intended recipient thereof in
accordance with the provisions of this Section 11.05(a). Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 11.05(a), notices, demands, instructions and
other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Lessee, the Owner
Trustee, the Loan Participants, the Indenture Trustee or the Owner
Participant, to the respective addresses set forth below the signatures of
such parties on the signature page of the Participation Agreement, or (B)
if to a Subsequent Owner Participant, addressed to such Subsequent Owner
Participant at such address as such Subsequent Owner Participant shall have
furnished by notice to the parties hereto or (C) if to any subsequent
Certificate Holder, addressed to such Certificate Holder at its address set
forth in the Equipment Note register maintained pursuant to Section 2.07 of
the Trust Indenture.
(b) Each of the parties hereto (A) hereby irrevocably submits
itself to the non-exclusive jurisdiction of the United States District
Court for the Southern District of New York and to the non-exclusive
jurisdiction of the Supreme Court of the State of New York, New York
County, for the purposes of any suit, action or other proceeding arising
out of this Trust Agreement, the Participation Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document, the subject matter
of any thereof or any of the transactions contemplated hereby or thereby
brought by any party or parties thereto, or their successors or assigns,
and (B) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, to the
extent permitted by applicable law, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that the Participation Agreement, the Lease, the
Tax Indemnity Agreement or any other Operative Document or the subject
matter of any thereof or any of the transactions contemplated hereby or
thereby may not be enforced in or by such courts.
SECTION 11.06 SEVERABILITY. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 11.07 WAIVERS, ETC. No term or provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing entered into in compliance with the terms of Article X hereof;
and any waiver of the terms hereof shall be effective only in the specific
instance and for the specific purpose given.
SECTION 11.08 COUNTERPARTS. This Trust Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.09 BINDING EFFECT, ETC. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Owner Trustee and its successors and assigns, and the Owner Participant,
its successors and, to the extent permitted by Article VIII hereof, its
assigns. Any request, notice, direction, consent, waiver or other
instrument or action by the Owner Participant shall bind its successors and
assigns. Any Owner Participant which shall cease to have any ownership
interest shall thereupon cease to be a party hereto or an Owner Participant
for any reason and shall have no further obligations hereunder.
SECTION 11.10 HEADINGS; REFERENCES. The headings of the various
Articles and Sections herein are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.11 GOVERNING LAW. THIS TRUST AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
[OWNER PARTICIPANT]
BY ______________________________
Name:
Title:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
BY_______________________________
Name:
Title:
Exhibit A-6 to Note Purchase Agreement
[FORM OF FRENCH PLEDGE AGREEMENT FOR LEASED AIRCRAFT]
FRENCH PLEDGE AGREEMENT
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
THIS PLEDGE is made on this ____ day of _______________, _______________
(this "Pledge")
BETWEEN:
(1) First Security Bank, National Association, a national banking
association having its principal place of business at 79 South
Main Street, 3rd Floor, Salt Lake City, Utah 84111 U.S.A.,
acting not in its individual capacity but solely as Owner
Trustee under the Trust Agreement defined below (hereinafter
referred to as the "Pledgor"); and
(2) State Street Bank and Trust Company of Connecticut, National
Association, a national banking association having its
principal place of business at 225 Asylum Street, Goodwin
Square, Hartford, Connecticut 06103, U.S.A., acting not in its
individual capacity but solely as Indenture Trustee under the
Trust Indenture defined below (hereinafter referred to as the
"Pledgee").
RECITALS
(A) Pursuant to the terms of the Trust Indenture, the Pledgor has,
inter alia, assigned to the Pledgee by way of collateral
security certain of its right, interest, claims and demands in
and to the Secured Documents (as hereinafter defined).
(B) The Pledgor and the Pledgee wish to create a pledge under
French law of the right, interest, claims and demands of the
Pledgor in and to the Secured Documents.
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DEFINITIONS
Capitalized terms used herein without definition have the
respective meanings ascribed to them in the Trust Indenture
(whether set out therein or incorporated by reference).
"Indenture Documents" means the Trust Indenture, the Participation
Agreement, the Equipment Notes and the Lease.
"Trust Indenture" means the Trust Indenture and Security Agreement,
dated as of _________ , 2000 and made between the Pledgor and the
Pledgee.
"Secured Documents" means the Purchase Agreement Assignment and the
Consent and Agreement.
2. PLEDGE
In order to assure the due performance by the Pledgor of the
Secured Obligations and in order to secure the payment of all
amounts due and owing by the Pledgor in connection therewith
(whether of principal, interest or other amounts), the Pledgor
hereby grants and pledges to the Pledgee, all of the Pledgor's
right, title and interest in and to the Secured Documents and to
all payments or proceeds (other than Excluded Payments) to be
received by the Pledgor and all rights of the Pledgor to enforce
such payments under all of the Secured Documents.
It is understood that this Pledge is granted as security for the
payment of:
(i) the principal amount of US$[ ] payable with respect to [ ];
(ii) interest on the outstanding amount at the rate of [ ]%;
(iii) all other amounts payable by the Pledgor to the Pledgee
under the Indenture Documents; and
(iv) any expenses incurred in the enforcement of the payment
obligations and recovery of the sums payable under the
Indenture Documents.
3. NOTIFICATION
The Pledgor shall, in accordance with Article 2075 of the French
Civil Code, register a French translation of this Pledge with the
relevant French tax authorities ("recette des impOts") and shall
give notice thereof by huissier to AVSA, S.A.R.L. and Airbus
Industrie G.I.E..
4. GOVERNING LAW
This Pledge is of a commercial nature and shall be governed by and
construed in accordance with French law.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge to
be duly executed as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner
Trustee
By: _________________________________
Name:
Title:
` STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee
By: ________________________________
Name:
Title:
Exhibit C-1 to Note Purchase Agreement
Owned Aircraft
Participation Agreement
N___U_
===========================================================================
PARTICIPATION AGREEMENT
(N___U_)
Dated as of
_________ __, ____
By and Between
US AIRWAYS, INC.,
Owner
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
_______________________
One Airbus A330 Aircraft
U.S. Registration No. N___U_
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT
BOTH SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF
SERIES C EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR
CLOSING DATE, THIS AGREEMENT SHALL BE MODIFIED TO REMOVE
REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
===========================================================================
INDEX TO PARTICIPATION AGREEMENT
Page
----
SECTION 1. Definitions and Construction. . . . . . . . . . . . . . . . 2
SECTION 2. Participation by Pass Through Trustees in
Financing of the Aircraft . . . . . . . . . . . . . . . . . 2
(a) Participation by Pass Through Trustees on the
Delivery Date; Issuance of Equipment Notes. . . . . . . 2
(b) Owner's Notice of Delivery Date . . . . . . . . . . . . 3
(c) Closing . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Postponement of Scheduled Delivery Date . . . . . . . . 3
SECTION 3. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4. Conditions Precedent. . . . . . . . . . . . . . . . . . . . 4
(a) Conditions Precedent to Purchase of Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Conditions Precedent to the Obligations of Owner . . . 10
SECTION 5. Extent of Interest of Note Holders . . . . . . . . . . . . 12
SECTION 6. Representations and Warranties of Owner; Indemnities . . . 12
(a) Representations and Warranties . . . . . . . . . . . . 12
(b) General Indemnity . . . . . . . . . . . . . . . . . . . 15
SECTION 7. Representations, Warranties and Covenants . . . . . . . . . 19
(a) Securities Act . . . . . . . . . . . . . . . . . . . . 19
(b) Reregistration . . . . . . . . . . . . . . . . . . . . 19
(c) Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . 20
(d) Equipment Notes Acquired for Investment . . . . . . . . 20
(e) Owner Merger Covenant . . . . . . . . . . . . . . . . . 21
(f) Representations, Warranties and Covenants of
the Indenture Trustee . . . . . . . . . . . . . . . . . 22
(g) Confidentiality of Purchase Agreement . . . . . . . . . 23
(h) Loan Participant Liens . . . . . . . . . . . . . . . . 23
(i) Indenture Trustee Liens . . . . . . . . . . . . . . . . 24
(j) Further Assurances . . . . . . . . . . . . . . . . . . 24
(k) Transfer of Equipment Notes . . . . . . . . . . . . . . 24
(l) Representations and Warranties of Pass Through
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 24
(m) Representations and Warranties of Subordination
Agent . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8. Reliance of Liquidity Provider and Policy Provider . . . . 28
SECTION 9. Other Documents . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10. Certain Covenants of Owner . . . . . . . . . . . . . . . . 29
(a) Further Assurances . . . . . . . . . . . . . . . . . . 29
(b) Filings . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12. Notices; Consent to Jurisdiction . . . . . . . . . . . . . 29
(a) Notices . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Consent to Jurisdiction . . . . . . . . . . . . . . . . 30
SECTION 13. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Survival . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Counterparts . . . . . . . . . . . . . . . . . . . . . 31
(c) Amendments and Waivers . . . . . . . . . . . . . . . . 31
(d) Successors and Assigns . . . . . . . . . . . . . . . . 31
(e) Governing Law . . . . . . . . . . . . . . . . . . . . . 31
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Meagher & Flom
(Illinois), special counsel for Owner
Exhibit B-2 - Form of Opinion of Owner's Legal Department
Exhibit C - Form of Opinion of special counsel for the Manufacturer
Exhibit D - Form of Opinion of Crowe & Dunlevy, P.C., special FAA Counsel
Exhibit E - Form of Opinion of Bingham Dana LLP, special counsel for the
Indenture Trustee
Exhibit F - Form of Opinion of Bingham Dana LLP, special counsel for the
Pass Through Trustee
Exhibit G - Form of Opinion of Bingham Dana LLP, special counsel for the
Subordination Agent
PARTICIPATION AGREEMENT
(N___U_)
THIS PARTICIPATION AGREEMENT (N___U_) dated as of _______ ___,
____ (as amended, supplemented or otherwise modified from time to time,
this "Agreement") by and between US AIRWAYS, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Owner"), and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity except as
otherwise provided herein, but solely as pass through trustee under each of
two separate Pass Through Trust Agreements (in such capacity, together with
its successors and permitted assigns, the "Pass Through Trustee"),
subordination agent and trustee under the Intercreditor Agreement (in such
capacity, together with its successors and permitted assigns, the
"Subordination Agent"), and Indenture Trustee under the Indenture (in such
capacity, together with any successor indenture trustee, the "Indenture
Trustee");
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Indenture Trustee and the Owner are entering into the
Indenture pursuant to which the Owner will issue to the Pass Through
Trustee for each Pass Through Trust Equipment Notes in two series, which
Equipment Notes are to be secured by the mortgage and security interests
created by the Owner in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Owner will execute and deliver an Indenture Supplement covering
the Aircraft, supplementing the Indenture;
WHEREAS, the proceeds from the issuance and sale of the Pass
Through Certificates by each Pass Through Trust will be applied in part by
the Pass Through Trustee on the Delivery Date to purchase from Owner, on
behalf of each Pass Through Trust, all of the Equipment Notes bearing the
same interest rate as the Pass Through Certificates issued by such Pass
Through Trust;
WHEREAS, on the Delivery Date for the Aircraft, Owner will
deliver an Indenture Supplement covering the Aircraft;
WHEREAS, pursuant to the terms of the Note Purchase Agreement,
the Pass Through Trustee will purchase from the Owner on the Delivery Date,
on behalf of each Pass Through Trust, all of the Equipment Notes bearing
the same interest rate as the Pass Through Certificates issued by such Pass
Through Trust;
WHEREAS, prior to the execution and delivery of this Agreement,
(i) the Liquidity Provider entered into two separate Liquidity Facilities,
one for the benefit of the holders of Pass Through Certificates of each of
the Class G Pass Through Trust and the Class C Pass Through Trust (each
referenced on Schedule III hereto), with the Subordination Agent, as agent
for the Pass Through Trustee on behalf of each such Pass Through Trust (ii)
the Policy Provider entered into a Policy Provider Agreement with the
Subordination Agent, as agent for the Pass Through Trustee on behalf of the
Class G Trust and has issued the Policy for the benefit of the holders of
Certificates of the Class G Pass Through Trust; and (iii) the Pass Through
Trustee, the Liquidity Provider, the Policy Provider and the Subordination
Agent have entered into the Intercreditor Agreement; and
WHEREAS, the Equipment Notes will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATION BY PASS THROUGH TRUSTEES IN FINANCING OF
THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery Date;
Issuance of Equipment Notes. Subject to the terms and conditions of this
Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
make a secured loan to Owner on the Delivery Date to finance, in part, the
Owner's acquisition of the Aircraft by paying to Owner the aggregate
purchase price of the Equipment Notes being issued to such Pass Through
Trustee as set forth on Schedule II opposite the name of such Pass Through
Trust. The Pass Through Trustees shall make such payments to Owner on a
date to be designated pursuant to Section 2(b) but in no event later than
__________________, by transferring to the account of Owner at State Street
Bank and Trust Company of Connecticut, National Association, 225 Asylum
Street, Goodwin Square, Hartford, Connecticut 06103, ABA No. _________,
Account No. __________, Reference: US Airways, Inc. 2000-1 EETC/N___U_),
not later than 9:30 a.m., New York City time, on the Delivery Date in
immediately available funds in Dollars, the amount set forth opposite the
name of such Pass Through Trust on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to Owner, Owner shall issue, pursuant
to Article II of the Indenture, to the Subordination Agent on behalf of the
Pass Through Trustee for each of the Pass Through Trusts, Equipment Notes
of the maturity and aggregate principal amount, bearing the interest rate
and for the purchase price set forth on Schedule II opposite the name of
such Pass Through Trust.
(b) Owner's Notice of Delivery Date. Owner agrees to give the
Indenture Trustee, the Pass Through Trustee and the Subordination Agent at
least one (1) Business Day written or facsimile notice prior to the
Delivery Date, which notice shall specify the amount of Equipment Notes to
be purchased by the Pass Through Trustees, the Delivery Date for the
Aircraft, the serial number of the Airframe and each Engine, and the United
States registration number for the Aircraft.
(c) Closing. The closing of the transactions referred to in
this Agreement shall take place commencing at 9:30 a.m. local time, on the
Delivery Date, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP
in New York, New York.
(d) Postponement of Scheduled Delivery Date.
(i) If for any reason whatsoever the closing of the
transactions contemplated hereby is not consummated on the Delivery
Date provided for pursuant to Section 2(b) (the "Scheduled Delivery
Date"), the closing shall be deemed adjourned to the next Business
Day or to such other Business Day on or prior to _______________ as
Owner shall specify by written notice to the Pass Through Trustee and
the Indenture Trustee.
(ii) If the closing fails to occur on the Scheduled Delivery
Date, Owner shall cause the Indenture Trustee to promptly return to
the Pass Through Trustees any funds provided by any such Pass Through
Trustee, together with interest or income earned thereon.
(iii) If the closing fails to occur on the Scheduled Delivery
Date and funds are not returned, as provided by clause (ii) above, to
each Pass Through Trustee that made funds available, Owner shall use
reasonable efforts to cause the Indenture Trustee to invest, at the
risk of Owner, the funds received by it from such Pass Through
Trustees in Cash Equivalents. Any such obligations purchased by Owner,
whether directly or through a repurchase agreement, shall be held in
trust by the Indenture Trustee for the benefit of the respective Pass
Through Trustees that provided such funds.
(iv) If the closing fails to occur on the Scheduled Delivery
Date, unless Owner shall cause the Indenture Trustee to return all
funds to the Pass Through Trustee by 2:00 p.m., New York City time, on
the Scheduled Delivery Date, Owner shall reimburse each Pass Through
Trustee that has made funds available pursuant to this Section 2 for
the loss of the use of its funds an amount equal to the excess, if
any, of (x) interest at the Debt Rate on the amount of such funds for
the period from and including the Scheduled Delivery Date to but
excluding the actual Delivery Date or, if earlier, the day on which
such Pass Through Trustee's funds are returned if such return is made
by 2:00 p.m., New York City time (or to but excluding the next
following Business Day if such return is not made by such time) over
(y) any amount paid to such Pass Through Trustee in respect of
interest or income earned by Owner pursuant to clause (iii) above.
(v) On the Delivery Date or on the date funds are required to be
returned to the Pass Through Trustees pursuant to clause (ii) above,
Owner shall reimburse the Pass Through Trustees that provided funds
which are invested by Owner pursuant to this subsection (d) for any
losses incurred on such investments. All income and profits on the
investment of such funds shall be for the respective accounts of such
Pass Through Trustee, and Owner shall not be liable for failure to
invest such funds, except for its own negligence or willful
misconduct.
SECTION 3. [RESERVED.]
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to Purchase of Equipment Notes. It is
agreed that the obligations of the Indenture Trustee, the Subordination
Agent and the Pass Through Trustee on behalf of each Pass Through Trust to
participate in the transaction contemplated hereby on the Delivery Date are
subject to the fulfillment to the satisfaction of each party (or waiver by
such party), prior to or on the Delivery Date of the following conditions
precedent:
(i) At least one (1) Business Day prior to the Delivery Date,
each of the parties hereto shall have received the Delivery Notice
pursuant to Section 2(b).
(ii) On the Delivery Date, no change shall have occurred after
the date of the execution and delivery of this Agreement in applicable
law or regulations or guidelines or interpretations thereof by
appropriate regulatory authorities which would make it a violation of
law or regulations or guidelines for the Pass Through Trustee to make
its Commitment available in accordance with Section 2.
(iii) The following documents shall have been duly
authorized, executed and delivered by the respective party or parties
thereto, shall each be satisfactory in form and substance to the
Indenture Trustee, the Pass Through Trustee and the Subordination
Agent and shall be in full force and effect and executed counterparts
shall have been delivered to the Indenture Trustee, the Pass Through
Trustee and the Subordination Agent, or their respective counsel,
provided that only the Subordination Agent on behalf of each Pass
Through Trustee shall receive an executed original of such Pass
Through Trustee's respective Equipment Note and provided, further,
that an excerpted copy of the Purchase Agreement shall only be
delivered to and retained by the Indenture Trustee, which copy may be
inspected by the Indenture Trustee if and only if there shall occur
and be continuing an Event of Default:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft);
(2) the Indenture;
(3) the Indenture Supplement;
(4) the Equipment Notes;
(5) the FAA Bill of Sale;
(6) the Bill of Sale;
(7) the Purchase Agreement Assignment;
(8) the Consent and Agreement; and
(9) the French Pledge Agreement.
In addition, the Pass Through Trustee shall have received
executed counterparts or conformed copies of the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement;
(3) the Liquidity Facility for each of the Class G and
Class C Pass Through Trusts; and
(4) the Policy Provider Agreement and the Policy for
the Class G Pass Through Trusts.
(iv) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the
Granting Clause of the Indenture that are not covered by the recording
system established by the Transportation Code shall have been executed
and delivered by Owner, and arrangements satisfactory to the Indenture
Trustee shall have been made for the filing of such financing
statement or statements in all places necessary or advisable, and any
additional Uniform Commercial Code financing statements deemed
advisable by the Pass Through Trustee shall have been executed and
delivered by Owner and arrangements satisfactory to the Indenture
Trustee shall have been made for the filing of such financing
statements.
(v) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received the following, in each case in
form and substance satisfactory to it (except it shall not be a
condition to the obligation of any such party that it receive a
certificate or other document required to be delivered by it):
(A) (1) an incumbency certificate of Owner as to the
person or persons authorized to execute and deliver the
Operative Documents to which Owner is a party and any other
documents to be executed on behalf of Owner in connection
with the transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of Owner or Owner's executive committee, certified
by the Secretary or an Assistant Secretary of Owner, duly
authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to
be executed and delivered on behalf of Owner in connection
with the transactions contemplated hereby; and
(3) a copy of the certificate of incorporation of
Owner, certified by the Secretary of State of the State of
Delaware, a copy of the by-laws of Owner certified by the
Secretary or Assistant Secretary of Owner, and a certificate
or other evidence from the Secretary of State of the State
of Delaware, dated as of a date shortly prior to the
Delivery Date, as to the due incorporation and good standing
of Owner in such state.
(B) (1) an incumbency certificate of the Indenture Trustee
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Indenture
Trustee is a party and any other documents to be executed on
behalf of the Indenture Trustee in connection with the
transactions contemplated hereby and the signatures of such
person or persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association of the
Indenture Trustee certified by the Comptroller of the
Currency, a copy of the by-laws of the Indenture Trustee
certified by the Secretary or an Assistant Secretary of the
Indenture Trustee, and a certificate or other evidence from
the Comptroller of the Currency, dated as of a date shortly
prior to the Delivery Date, as to the existence of the
Indenture Trustee under the laws of the United States of
America; and
(4) a certificate signed by an authorized officer of
the Indenture Trustee, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(vi) All appropriate action required to have been taken prior to
the Delivery Date in connection with the transactions contemplated by
this Agreement shall have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision
or instrumentality of the United States, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities
required to be in effect on the Delivery Date in connection with the
transactions contemplated by this Agreement shall have been issued,
and all such orders, permits, waivers, authorizations, exemptions and
approvals shall be in full force and effect on the Delivery Date.
(vii) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received a certificate signed by an
authorized officer of Owner to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a current
certificate of airworthiness;
(2) the Indenture and the Indenture Supplement
covering the Aircraft shall have been duly filed for
recordation (or shall be in the process of being so duly
filed for recordation) with the Federal Aviation
Administration;
(3) the representations and warranties contained
herein of Owner are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date); and
(4) the conditions to the purchase of the Equipment
Notes by the Pass Through Trustees under the Pass Through
Documents have been duly satisfied or waived in accordance
with their respective terms.
(viii) In the case of the Pass Through Trustees, the conditions
specified in Section 3 of the Note Purchase Agreement shall have been
satisfied or waived.
(ix) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received, addressed to each such
party, an opinion dated the Delivery Date substantially in the form
of Exhibit B-1 hereto from Skadden, Arps, Slate, Meagher & Flom
(Illinois), special counsel for Owner, and an opinion dated the
Delivery Date substantially in the form of Exhibit B-2 hereto from
Owner's legal department.
(x) The Pass Through Trustee and the Indenture Trustee shall
have received, addressed to the Pass Through Trustee, the Indenture
Trustee and Owner, an opinion dated the Delivery Date substantially in
the form of Exhibit C hereto from Clifford Chance, with respect to the
Manufacturer Documents.
(xi) [Reserved.]
(xii) [Reserved.]
(xiii) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received, addressed to each such party,
an opinion dated the Delivery Date substantially in the form of
Exhibit D hereto from Crowe & Dunlevy, P.C., special FAA counsel.
(xiv) The Pass Through Trustee and the Subordination Agent
shall have received, addressed to each such party, an opinion dated
the Delivery Date substantially in the form of Exhibit E from Bingham
Dana LLP, special counsel for the Indenture Trustee.
(xv) [Reserved.]
(xvi) The Indenture Trustee, the Pass Through Trustee and the
Subordination Agent shall have received an insurance certificate
together with an independent insurance broker's report, in form and
substance reasonably satisfactory to the Indenture Trustee, as to the
due compliance with the terms of Section 7.04 of the Indenture
relating to insurance with respect to the Aircraft.
(xvii) [Reserved.]
(xviii) No action or proceeding shall have been instituted nor
shall governmental action be threatened before any court or
governmental agency, nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency at
the time of the Delivery Date to set aside, restrain, enjoin or
prevent the completion and consummation of this Agreement or the
transactions contemplated hereby.
(xix) [Reserved.]
(xx) No Event of Default has occurred and is continuing and no
Event of Loss has occurred with respect to the Airframe or any Engine.
(xxi) The Indenture Trustee and the Subordination Agent shall
have received (A) a certificate signed by an authorized officer of the
Pass Through Trustee, dated the Delivery Date, certifying that the
representations and warranties contained herein of the Pass Through
Trustee are correct in all material respects as though made on and as
of the Delivery Date, except to the extent that such representations
and warranties relate solely to an earlier date (in which case such
representations and warranties are correct on and as of such earlier
date), (B) an opinion dated the Delivery Date substantially in the
form of Exhibit F hereto addressed to each such party of Bingham Dana
LLP, special counsel for the Pass Through Trustee and (C) such other
documents and evidence with respect to the Pass Through Trustee as it
may reasonably request in order to establish the due consummation of
the transactions contemplated by this Agreement, the taking of all
necessary corporate action in connection therewith and compliance with
the conditions herein set forth.
(xxii) The Indenture Trustee and the Pass Through Trustee
shall have received, addressed to each such party, an opinion dated
the Delivery Date substantially in the form of Exhibit G hereto from
Bingham Dana LLP, special counsel for the Subordination Agent.
Promptly upon the recording of the Indenture and the Indenture
Supplement covering the Aircraft pursuant to the Transportation Code, Owner
will cause Crowe & Dunlevy, P.C., special FAA counsel in Oklahoma City,
Oklahoma, to deliver to the Pass Through Trustee, the Indenture Trustee and
Owner an opinion as to the due recording of the Indenture and such
Indenture Supplement and the lack of filing of any intervening documents
with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Owner. It is
agreed that the obligations of Owner to enter into the Operative Documents
on the Delivery Date are all subject to the fulfillment to the satisfaction
of Owner prior to the Delivery Date of the following conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on the
Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii) shall have
been satisfied.
(iii) Those documents described in Section 4(a)(iii) shall
have been duly authorized, executed and delivered by the respective
party or parties thereto (other than Owner) in the manner specified in
Section 4(a)(iii), shall each be satisfactory in form and substance to
Owner, shall be in full force and effect on the Delivery Date, and an
executed counterpart of each thereof (other than the Equipment Notes)
shall have been delivered to Owner or its special counsel.
(iv) Owner shall have received (A) each certificate referred to
in Section 4(a)(v) (other than the certificate referred to in clause
(A) thereof), (B) the certificate referred to in Section 4(a)(xxi)(A)
and (C) such other documents and evidence with respect to the Pass
Through Trustee as Owner or its special counsel may reasonably request
in order to establish the due consummation of the transactions
contemplated by this Agreement, the taking of all corporate
proceedings in connection therewith and compliance with the conditions
herein set forth.
(v) Owner shall have received the opinions set forth in Sections
4(a)(x), 4(a)(xiii), 4(a)(xiv), 4(a)(xxi)(B) and 4(a)(xxii) in each
case addressed to Owner and dated the Delivery Date.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or the transactions
contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for Owner to enter into any transaction contemplated by the
Operative Documents.
(viii) Owner shall have been paid by the Pass Through Trustees
for the issuance of the Equipment Notes.
SECTION 5. EXTENT OF INTEREST OF NOTE HOLDERS. No Note Holder
shall have any further interest in, or other right with respect to, the
mortgage and security interests created by the Indenture when and if the
principal of and interest on all Equipment Notes held by such holder and
all other sums payable to such holder hereunder, under the Indenture and
under such Equipment Notes shall have been paid in full.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF OWNER; INDEMNITIES.
(a) Representations and Warranties. Owner represents and
warrants to the Pass Through Trustee, the Indenture Trustee, each Loan
Participant, the Subordination Agent, each Liquidity Provider and the
Policy Provider that:
(i) Owner is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, has
the corporate power and authority to own or hold under lease its
properties, has, or had on the respective dates of execution thereof,
the corporate power and authority to enter into and perform its
obligations under the Owner Documents, the Pass Through Trust
Agreements and the other Operative Documents to which it is a party,
and is duly qualified to do business as a foreign corporation in each
state in which its operations or the nature of its business requires
other than failures to so qualify which would not have a material
adverse effect on the condition (financial or otherwise), business or
properties of Owner and its subsidiaries considered as one enterprise;
(ii) Owner is a Certificated Air Carrier, and its chief executive
office (as such term is used in Article 9 of the Uniform Commercial
Code in effect in the State of Virginia) is located at Arlington,
Virginia;
(iii) the execution and delivery by Owner of Owner Documents,
the Pass Through Trust Agreements and each other Operative Document
to which Owner is a party, and the performance of the obligations of
Owner under Owner Documents, the Pass Through Trust Agreements and
each other Operative Document to which Owner is a party, have been
duly authorized by all necessary corporate action on the part of
Owner, do not require any stockholder approval, or approval or consent
of any trustee or holder of any material indebtedness or material
obligations of Owner, except such as have been duly obtained and are
in full force and effect, and do not contravene any law, governmental
rule, regulation or order binding on Owner or the certificate of
incorporation or by-laws of Owner, or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien
(other than Permitted Liens) upon the property of Owner under, any
indenture, mortgage, contract or other agreement to which Owner is a
party or by which it may be bound or affected which contravention,
default or Lien, individually or in the aggregate, would be reasonably
likely to have a material adverse effect on the condition (financial
or otherwise), business or properties of Owner and its subsidiaries
considered as one enterprise; provided, that insofar as the
representations and warranties set forth in this Section 6(a)(iii)
apply to the prohibited transaction rules of ERISA and Section 4975 of
the Code, such representations and warranties are based upon and
subject to the truth and accuracy of the representations and
warranties made or deemed made by each purchaser of Pass Through
Certificates issued by a Pass Through Trust;
(iv) neither the execution and delivery by Owner of Owner
Documents, the Pass Through Trust Agreements or any other Operative
Document to which Owner is a party, nor the performance of the
obligations of Owner under Owner Documents, the Pass Through Trust
Agreements or the other Operative Documents to which Owner is a party,
requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of,
the Department of Transportation, the FAA, or any other Federal, state
or foreign governmental authority having jurisdiction over Owner,
other than (A) the registration of the Pass Through Certificates under
the Securities Act and under the securities laws of any state in
which the Pass Through Certificates may be offered for sale if the
laws of such state require such action, (B) the qualification of the
Pass Through Trust Agreements under the Trust Indenture Act of 1939,
as amended, pursuant to an order of the Securities and Exchange
Commission, (C) the orders, permits, waivers, exemptions,
authorizations and approvals of the regulatory authorities having
jurisdiction over the operation of the Aircraft by Owner required to
be obtained on or prior to the Delivery Date, which orders, permits,
waivers, exemptions, authorizations and approvals have been, or on the
Delivery Date will be, duly obtained and are, or on the Delivery Date
will be, in full force and effect, (D) the registrations and filings
referred to in Section 6(a)(vi) and (E) authorizations, consents,
approvals, actions, notices and filings required to be obtained,
taken, given or made either only after the date hereof or the failure
of which to obtain, take, give or make would not be reasonably likely
to have a material adverse effect on the condition (financial or
otherwise), business or properties of Owner and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other Owner Documents and the
Pass Through Trust Agreements to which Owner is a party constitute
(or, in the case of documents to be executed on the Delivery Date,
will constitute) the legal, valid and binding obligations of Owner
enforceable against Owner in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, 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;
(vi) except for (A) the filing for recording pursuant to the
Transportation Code of the Indenture and the Indenture Supplement
attached thereto and made a part thereof and (B) the filing of
financing statements (and continuation statements at periodic
intervals) with respect to the security interests created by such
documents under the Uniform Commercial Code of Virginia and such other
states as may be specified in the opinion furnished pursuant to
Section 4(a)(ix) hereof, no further filing or recording of any
document (including any financing statement in respect thereof under
Article 9 of the Uniform Commercial Code of any applicable
jurisdiction) or other action is necessary under the laws of the
United States of America or any State thereof in order to perfect the
security interest in favor of the Indenture Trustee in the Aircraft
(with respect to such portion of the Aircraft as is covered by the
recording system established by the FAA pursuant to 49 U.S.C. Section
44107);
(vii) neither Owner nor any of its Affiliates has directly or
indirectly offered any interest in the Equipment Notes or the Pass
Through Certificates for sale to any Person other than in a manner
permitted by the Securities Act and by the rules and regulations
thereunder;
(viii) Owner is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes a
Default or an Event of Default;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of
time;
(xi) Owner is solvent and has no intention or belief that it is
about to incur debts beyond its ability to pay as they mature;
(xii) none of the proceeds from the issuance of the Equipment
Notes will be used directly or indirectly by Owner to purchase or
carry any "margin security" as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System;
(xiii) except as may have been disclosed in Owner's reports
filed with the Securities and Exchange Commission, there are no
pending or threatened actions or proceedings that individually or in
the aggregate which could be expected to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Owner and its subsidiaries considered as one enterprise;
(xiv) Owner has 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 the Lien of the Trust Indenture and Liens
permitted by clauses (iv) (solely for Taxes not yet due but excluding
any such Taxes being contested) and (v) (solely securing obligations
that are not yet due but excluding any such obligations being
contested) of Section 7.01 of the Trust Indenture;
(xv) the audited consolidated balance sheet of Owner with respect
to fiscal year ended _____(1) included in Owner's annual report on Form
10-K for the year ended _____, [as amended], filed by Owner with the
SEC, and the related consolidated statements of income, stockholders'
equity and cash flows for the period then ended, have been prepared in
conformity with GAAP and present fairly in all material respects the
financial condition of Owner and its consolidated subsidiaries as of
such date and the result of its operations and cash flows for such
period; and
----------------
(1) Insert most recent fiscal year end.
(xvi) 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 be
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business or properties of Owner and its
subsidiaries considered as one enterprise.
(b) General Indemnity. Owner hereby agrees to indemnify each
Indemnitee against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), any and all expenses
imposed on, incurred by or asserted against any Indemnitee, in any way
relating to, based on or arising out of (A) the execution, delivery and
performance of the Operative Documents or the Pass Through Documents and
the transactions contemplated thereby; (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine or Parts; (C) the
Aircraft (or any portion thereof) or any engine installed on the Airframe
or any airframe on which an Engine is installed whether or not arising out
of the manufacture, purchase, registration, reregistration, financing,
refinancing, ownership, delivery, nondelivery, inspection, lease, sublease,
possession, storage, use or non-use, operation, maintenance, overhaul,
modification, alteration, condition, replacement, repair, substitution,
sale, return or other disposition of the Aircraft including, without
limitation, any violation of law relating to the Aircraft (including
environmental laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; or (D) the offer or sale of any interest in the Equipment
Notes or the Pass Through Certificates (or other evidence of the debt
relating to the Aircraft) on the Delivery Date or in connection with a
refinancing in accordance with the terms hereof (including any violation of
securities laws or ERISA); provided, that the foregoing indemnity shall not
extend to an Indemnitee with respect to any Expense to the extent such
Expense is attributable to one or more of the following: (1) any
representation or warranty by such Indemnitee in the Operative Documents or
the Pass Through Documents being incorrect, or (2) the failure by such
Indemnitee to perform or observe any of its agreements, covenants or
conditions in any of the Operative Documents or the Pass Through Documents,
or (3) the willful misconduct or the gross negligence of such Indemnitee,
or (4) (A) in the case of any Indemnitee, the offer, sale or other
disposition (voluntary or involuntary) by such Indemnitee of all or any
part of its interest in the Airframe or any Engine, (B) in the case of a
Note Holder, the offer, sale or other disposition (voluntary or
involuntary) by such Note Holder of all or any part of its interest in any
Equipment Note or (C) in the case of any Indemnitee, the offer, sale or
other disposition by such Indemnitee of all or any part of such
Indemnitee's interest in the Operative Documents, or (5) any Tax, or (6) in
the case of the Indenture Trustee in its individual and trust capacities,
failure on the part of the Indenture Trustee to distribute in accordance
with the Indenture any amounts distributable by it thereunder, or (7) in
the case of any Pass Through Trustee or the Subordination Agent, failure on
the part of such Pass Through Trustee or the Subordination Agent to
distribute in accordance with the Intercreditor Agreement and the Pass
Through Trust Agreement amounts received and distributable thereunder, or
(8) the authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any of the Operative
Documents which amendments, supplements, waivers or consents (a) are not or
were not requested by Owner or (b) are not occasioned by a specific
requirement of the Operative Documents, or (9) any amount which any
Indemnitee expressly agrees to pay under any Operative Document or any
amount which is expressly stated to be an expense that is not reimbursable
by Owner under the Operative Documents, or (10) any amount that is an
ordinary and usual operating or overhead expense of any Indemnitee (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating and overhead expenses"), or (11)
any amounts attributable to any Lien which such Indemnitee is required to
remove pursuant to the terms of the Operative Documents or the Pass Through
Documents, or (12) any loss of tax benefits or increases in tax liability
or (13) any amount that constitutes principal of, or interest or premium on
the Equipment Notes.
Owner's indemnity obligation to an Indemnitee under this Section
6(b) shall equal the amount which, after taking into account any Tax
imposed upon the receipt or accrual of the amounts payable under this
Section 6(b) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(b).
If any Indemnitee shall realize a tax savings by reason of any
Tax paid or indemnified by Owner pursuant to this Section 6(b) (whether
such tax savings shall be by means of a foreign tax credit, depreciation or
cost recovery deduction or otherwise) and such savings are not otherwise
taken into account in computing such payment or indemnity such 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 6(b)
by Owner to such Indemnitee (less any payments previously made by such
Indemnitee to Owner pursuant to this Section 6(b)) (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 Indemnitee
pursuant to this Section 6(b)).
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Owner;
provided that the failure to give such notice shall not affect the
obligations of Owner hereunder except to the extent Owner is prejudiced by
such failure or Owner's indemnification obligations are increased as a
result of such failure. If no Event of Default shall have occurred and be
continuing, Owner shall be entitled, at its sole cost and expense, acting
through counsel reasonably acceptable to the respective Indemnitee, (A) in
any judicial or administrative proceeding that involves solely a claim for
one or more expenses, to assume responsibility for and control thereof, (B)
in any judicial or administrative proceeding involving a claim for one or
more expenses and other claims related or unrelated to the transactions
contemplated by the Operative Documents, to assume responsibility for and
control of such claim for Expenses to the extent that the same may be and
is severed from such other claims (and such Indemnitee shall use its best
efforts to obtain such severance) and (C) in any other case, to be
consulted by such Indemnitee with respect to judicial proceedings subject
to the control of such Indemnitee and to be allowed, at Owner's sole
expense, to participate therein. Notwithstanding any of the foregoing to
the contrary, Owner shall not be entitled to assume responsibility for and
control of any such judicial or administrative proceedings if such
proceedings will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on, the
Aircraft, the Indenture Estate or any part thereof unless in such an event
Owner shall have posted a bond or other security satisfactory to the
relevant Indemnitees in respect to such risk. The Indemnitee may
participate at its own expense and with its own counsel in any judicial
proceeding controlled by Owner pursuant to the preceding provisions.
The affected Indemnitee shall supply Owner with such information
reasonably requested by Owner as is necessary or advisable for Owner to
control or participate in any proceeding to the extent permitted by this
Section 6(b). Such Indemnitee shall not 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 6(b).
Owner shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 6(b).
Upon payment of any Expense pursuant to this Section 6(b), Owner,
without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Owner to permit
Owner to pursue such claims, if any, to the extent reasonably requested by
Owner.
If an Indemnitee is reimbursed, in whole or in part, with respect
to any Expense paid by Owner hereunder, it will promptly pay the amount
refunded, including interest received thereon (but not an amount in excess
of the amount Owner or any of its insurers has paid in respect of such
Expense pursuant to this Section 6(b)) over to Owner.
To the extent permitted by applicable law, interest at the Base
Rate plus one percent (1.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6 until the same shall
be paid. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
Any amount which is payable to Owner by any Person pursuant to
this Section 6(b) shall not be paid to Owner if an Event of Default has
occurred and is continuing or if any payment is due and owing by Owner to
such Person under any Operative Document. Any such amount shall be held by
such Person (Owner hereby granting a security interest in such amount to
such Person) and, if an Event of Default shall have occurred and be
continuing, shall be applied against Owner's obligations hereunder to such
Person as and when due (and, to the extent that Owner has no obligations
hereunder to such Person, such amount shall be paid to Owner). At such
time as there shall not be continuing any such Event of Default or there
shall not be due and owing any such payment, such amount shall be paid to
Owner to the extent not previously applied in accordance with the
immediately preceding sentence.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting in its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any Person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act or the
rules and regulations thereunder.
(b) Reregistration. The Indenture Trustee and each Loan
Participant agree that, so long as no Event of Default shall have occurred
and be continuing, Owner may elect to effect a change in registration of
the Aircraft, at Owner's cost and expense, so long as the country of
registry of the Aircraft is a country listed on Exhibit A. Upon the
request of Owner, Exhibit A shall be amended from time to time to include
any other country which the Indenture Trustee has determined, acting
reasonably, would provide substantially equivalent protection for the
rights of lenders in similar transactions as provided under the laws of the
United States of America and the states thereof. In order for Owner to
effect a change in the country of registry of the Aircraft, Owner shall
deliver to the Indenture Trustee the following:
(I) an Officer's Certificate certifying that (A) the insurance or
self-insurance required by Section 7.04 of the Indenture shall be
in full force and effect at the time of such change in
registration after giving effect to such change in registration,
(B) all indemnities in favor of the Indenture Trustee under any
Operative Document afford the Indenture Trustee substantially the
same protection as provided prior to such change of registry, (C)
the Lien of the Indenture in favor of the Indenture Trustee will
continue as a first priority lien following such change of
registry, (D) such change will not result in the imposition of,
or increase in the amount of, any Tax for which Owner is not
required to indemnify, or is not then willing to enter into a
binding agreement to indemnify, the Note Holders or the Indenture
Trustee, pursuant to this Agreement and (E) that the new country
of registry imposes aircraft maintenance standards not materially
different from those of any Permitted Foreign Air Authority; and
(II) a favorable opinion (subject to customary exceptions) of counsel
(reasonably acceptable to the Indenture Trustee) addressed to the
Indenture Trustee, from counsel of recognized reputation
qualified in the laws of the relevant jurisdiction to the effect
that: (A) it is not necessary, solely as a consequence of such
change in registration and without giving effect to any other
activity of the Indenture Trustee (or any Affiliate thereof) for
the Indenture Trustee to register or qualify to do business in
such jurisdiction; (B) unless Owner shall have agreed to provide
insurance covering the risk of requisition of use of such
Aircraft by the government of such jurisdiction so long as such
Aircraft is registered under the laws of such jurisdiction, the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of such Aircraft in
the event of the requisition by such government of such use; and
(C) after giving effect to such change in registration, the Lien
of the Indenture on Owner's right, title and interest in and to
the Aircraft shall continue as a valid and duly perfected first
priority security 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 Indenture
Trustee 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 Indenture Trustee on or
prior to the effective date of such change in registration).
Owner shall pay all reasonable costs, expenses, fees, recording
and registration taxes, including the reasonable fees and expenses of
counsel to the Indenture Trustee, and other charges in connection with any
such change in registration.
(c) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent and the Pass Through Trustee
covenants and agrees that, so long as no Event of Default shall have
occurred and be continuing and the Indenture has not been duly declared in
default, such Person shall not (and shall not permit any Affiliate or other
Person claiming by, through or under it to) interfere with Owner's
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft.
(d) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Indenture is being acquired by it for investment and not
with a view to resale or distribution (it being understood that such Loan
Participant may pledge or assign as security its interest in each Equipment
Note issued to it), except that the Loan Participants may sell, transfer or
otherwise dispose of any Equipment Note or any portion thereof, or grant
participations therein, in a manner which in itself does not require
registration under the Securities Act.
(e) Owner Merger Covenant. Owner will not consolidate with or
merge into any other corporation or convey, transfer or lease substantially
all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Owner is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Owner as an entirety shall
be (i) organized and validly existing under the laws of the United
States of America or any state thereof or the District of Columbia,
(ii) a Citizen of the United States and (iii) a Certificated Air
Carrier, if and so long as such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Code with respect to
the Lien of the Indenture;
(ii) the corporation formed by such consolidation or into which
Owner is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Owner as an entirety shall
execute and deliver to Indenture Trustee an agreement in form and
substance reasonably satisfactory to the Indenture Trustee a duly
authorized, valid, binding and enforceable agreement containing an
assumption by such successor corporation or Person of the due and
punctual performance and observance of each covenant and condition of
the Operative Documents to which Owner is a party to be performed or
observed by Owner;
(iii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing; and
(iv) Owner shall have delivered to the Indenture Trustee a
certificate signed by the President, any Executive Vice President, any
Senior Vice President or any Vice President and by the Secretary or an
Assistant Secretary of Owner, and an opinion of counsel (which may be
Owner's General Counsel, Deputy General Counsel, Associate General
Counsel or Assistant General Counsel) reasonably satisfactory to the
Indenture Trustee, each stating that such consolidation, merger,
conveyance, transfer or lease and the assumption agreement mentioned
in clause (ii) above comply with this Section 7(e) and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Owner as an
entirety in accordance with this Section 7(e), the successor corporation or
Person formed by such consolidation or into which Owner is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Owner under
this Agreement with the same effect as if such successor corporation or
Person had been named as Owner herein. No such conveyance, transfer or
lease of substantially all of the assets of Owner as an entirety shall have
the effect of releasing Owner or any successor corporation or Person which
shall theretofore have become such in the manner prescribed in this Section
7(e) from its liability in respect of any Operative Document to which it is
a party.
(f) Representations, Warranties and Covenants of the Indenture
Trustee. State Street Bank and Trust Company of Connecticut, National
Association represents, warrants (as of the Delivery Date) and covenants,
in its individual capacity, to Owner, the Pass Through Trustee, the
Subordination Agent, each Liquidity Provider and the Policy Provider as
follows:
(i) the Indenture Trustee is a national banking association duly
incorporated, validly existing and in good standing under the laws of
the United States, is a Citizen of the United States (without making
use of any voting trust, voting powers agreement or similar
arrangement), will notify promptly all parties to this Agreement if in
its reasonable opinion its status as a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement) is likely to change and will resign as Indenture
Trustee as provided in Section 9.02 of the Indenture promptly after it
obtains actual knowledge that it has ceased to be such a Citizen of
the United States (without making use of a voting trust, voting powers
agreement or similar arrangement), and has the full corporate power,
authority and legal right under the laws of the State of Connecticut
and the United States pertaining to its banking, trust and fiduciary
powers to execute and deliver each of this Agreement, the Indenture
and each other Operative Document to which it is a party and to carry
out its obligations under this Agreement, the Indenture and each other
Operative Document to which it is a party and to authenticate the
Equipment Notes;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Equipment
Notes and the performance by the Indenture Trustee of its obligations
under the Indenture Trustee Documents have been duly authorized by the
Indenture Trustee 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;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective 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;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be, to
perform its obligations under the Operative Documents to which it is a
party; and
(v) there are no Indenture Trustee Liens on the Aircraft.
(g) Confidentiality of Purchase Agreement. The Indenture
Trustee agrees for the benefit of the Seller, the Manufacturer and Owner
that it will not disclose or suffer to be disclosed the terms of the
Purchase Agreement to any third party except (A) as may be required by any
applicable statute, court or administrative order or decree or governmental
ruling or regulation or to any regulatory authorities having official
jurisdiction over them, (B) in connection with the financing of the
Aircraft and the other transactions contemplated by the Operative Documents
(including any transfer of Equipment Notes (including by way of
participation or assignment of an interest, provided such participant or
assignee agrees to hold such terms confidential to the same extent as
herein provided) and any exercise of remedies under the Indenture), (C)
with the prior written consent of the Manufacturer, the Seller and Owner or
(D) to the Indenture Trustee's counsel or special counsel, independent
insurance brokers or other agents who agree to hold such information
confidential.
(h) Loan Participant Liens. Each Loan Participant covenants and
agrees that it shall not cause or permit to exist a Loan Participant Lien
attributable to it with respect to the Aircraft. Each Loan Participant
agrees that it will promptly, at its own expense, take such other action as
may be necessary duly to discharge such Loan Participant Lien attributable
to it. Each Loan Participant agrees to make restitution to Owner for any
actual diminution of the assets of Owner resulting from such Loan
Participant Lien attributable to it.
(i) Indenture Trustee Liens. State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity,
covenants and agrees that it shall not cause or permit to exist any
Indenture Trustee's Liens with respect to the Indenture Estate. State
Street Bank and Trust Company of Connecticut, National Association, in its
individual capacity, agrees that it will promptly, at its own expense, take
such action as may be necessary duly to discharge such Indenture Trustee's
Liens. State Street Bank and Trust Company of Connecticut, National
Association, in its individual capacity, agrees to make restitution to
Owner for any actual diminution of the assets of the Indenture Estate
resulting from such Indenture Trustee's Liens.
(j) Further Assurances. Owner, at its expense, will take, or
cause to be taken, such action with respect to the recording, filing, re-
recording and refiling of the Indenture, the Indenture Supplement and any
financing statements or other instruments as are necessary to maintain, so
long as the Indenture is in effect, the perfection of the security
interests created by the Indenture or will furnish to the Indenture Trustee
timely notice of the necessity of such action, together with such
instruments, in execution form, and such other information as may be
required to enable them to take such action. Owner will notify the
Indenture Trustee of any change in the location of its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code)
promptly after making such change or in any event within the period of time
necessary under applicable law to prevent the lapse of perfection (absent
refiling) of financing statements filed under the Operative Documents.
(k) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Owner) to
make the representations contemplated to be made by a Loan Participant in
this Agreement and to be bound by the terms of this Agreement and the
Indenture.
(l) Representations and Warranties of Pass Through Trustee. The
Pass Through Trustee represents and warrants to Owner, the Indenture
Trustee, the Subordination Agent, each Liquidity Provider and the Policy
Provider, in its capacity as such and in its individual capacity, as
follows:
(i) the Pass Through Trustee is a national banking association
duly organized, 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 State of Connecticut and the United
States pertaining to its banking, trust and fiduciary powers to
execute and deliver each of the Pass Through Trust Agreements, the
Intercreditor Agreement and this Agreement and to perform its
obligations under the Pass Through Trust Agreements, the Intercreditor
Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements
and the Intercreditor Agreement have been duly authorized, executed
and delivered by the Pass Through Trustee; this Agreement, each of the
Pass Through Trust Agreements and the Intercreditor Agreement
constitute the legal, valid and binding obligations of the Pass
Through Trustee enforceable against it in accordance with their
respective 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;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Equipment Notes pursuant to this Agreement, or
the issuance of the Pass Through Certificates pursuant to the Pass
Through Trust Agreements, contravenes any law, rule or regulation of
the State of Connecticut or any United States governmental authority
or agency regulating the Pass Through Trustee's banking, trust or
fiduciary powers or any judgment or order applicable to or binding on
the Pass Through Trustee and does not contravene or result in any
breach of, or constitute a default under, the Pass Through Trustee's
articles of association or by-laws or any agreement or instrument to
which the Pass Through Trustee is a party or by which it or any of its
properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Trust Agreements, the Intercreditor
Agreement or this Agreement, nor the consummation by the Pass Through
Trustee of any of the transactions contemplated hereby or thereby,
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 Connecticut governmental authority or agency or any Federal
governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Pass Through Trustee of this Agreement, any of
the Pass Through Trust Agreements or the Intercreditor Agreement
(other than franchise or other taxes based on or measured by any fees
or compensation received by the Pass Through Trustee for services
rendered in connection with the transactions contemplated by any of
the Pass Through Trust Agreements), and there are no Taxes payable by
the Pass Through Trustee imposed by the State of Connecticut or any
political subdivision thereof in connection with the acquisition,
possession or ownership by the 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 the Pass Through
Trustee 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 either as a grantor trust under subpart E, Part I, of
Subchapter J of the Code or as a partnership, such trusts will not be
subject to any Taxes imposed by the State of Connecticut or any
political subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee 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 Pass
Through Trustee to perform its obligations under this Agreement, the
Intercreditor Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Pass Through
Certificates contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Equipment Note for sale to any
Person or solicited any offer to acquire any Equipment Notes from any
Person, nor has the Pass Through Trustee authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note for sale
to any Person, or to solicit any offer to acquire any Equipment Note
from any Person; and the Pass Through Trustee is not in default under
any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with Owner.
(m) Representations and Warranties of Subordination Agent. The
Subordination Agent represents and warrants to Owner, the Indenture Trustee
and the Pass Through Trustee, each Liquidity Provider and the Policy
Provider, in its capacity as such and in its individual capacity, as
follows:
(i) the Subordination Agent is a national banking association
duly organized, 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 State of Connecticut and the United
States pertaining to its banking, trust and fiduciary powers to
execute and deliver this Agreement, the Liquidity Facilities, the
Policy Provider Agreement and the Intercreditor Agreement and to
perform its obligations under this Agreement, the Liquidity
Facilities, the Policy Provider Agreement and the Intercreditor
Agreement;
(ii) this Agreement, each of the Liquidity Facilities, the Policy
Provider Agreement and the Intercreditor Agreement have been duly
authorized, executed and delivered by the Subordination Agent; this
Agreement, each of the Liquidity Facilities, the Policy Provider
Agreement and the Intercreditor Agreement constitute the legal, valid
and binding obligations of the Subordination Agent enforceable against
it in accordance with their respective 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;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the Policy
Provider Agreement, the Intercreditor Agreement or this Agreement
contravenes any law, rule or regulation of the State of Connecticut 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 or result in any breach of, or constitute a
default under, the Subordination Agent's articles of association or
by-laws or 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 any of the Liquidity Facilities, the Policy Provider
Agreement, the Intercreditor Agreement or this Agreement nor the
consummation by the Subordination Agent of any of the transactions
contemplated hereby or thereby 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 Connecticut governmental authority
or agency 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 the State of Connecticut or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Subordination Agent of this Agreement, any of
the Liquidity Facilities, the Policy Provider Agreement or the
Intercreditor 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, the Policy Provider
Agreement or any of the Liquidity Facilities), and there are no Taxes
payable by the Subordination Agent imposed by the State of Connecticut
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 rendered in connection with the transactions
contemplated by the Intercreditor Agreement, the Policy Provider
Agreement or any of the Liquidity Facilities);
(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,
the Intercreditor Agreement, the Policy Provider Agreement or any
Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person, or
to solicit any offer to acquire any Equipment Note from any Person;
and the Subordination Agent is not in default under any Policy
Provider Agreement or Liquidity Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with Owner.
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER AND POLICY PROVIDER.
Each of the parties hereto agrees and acknowledges that the Liquidity
Provider and the Policy Provider shall be third party beneficiaries of each
of the representations, warranties and covenants made herein by such party,
and that each of the Liquidity Provider and Policy Provider may rely on
such representations and warranties to the same extent as if such
representations and warranties were made to each of the Liquidity Provider
and Policy Provider directly. Owner agrees and acknowledges that each of
the Liquidity Provider and Policy Provider shall be third party
beneficiaries of the indemnities contained in Section 6(b), and each of the
Liquidity Provider and Policy Provider may rely on such indemnities to the
same extent as if such indemnities were made to each of the Liquidity
Provider and Policy Provider directly.
SECTION 9. OTHER DOCUMENTS. So long as the Lien of the Indenture
has not been terminated, the Pass Through Trustee, the Subordination Agent
and the Indenture Trustee hereby agree for the benefit of Owner that
without Owner's consent, each such party will not amend any other provision
of any Operative Document or Pass Through Document in a manner adversely
affecting Owner. Each of the Indenture Trustee, the Subordination Agent
and the Pass Through Trustee agree to promptly furnish to Owner copies of
any supplement, amendment, waiver or modification of any of the Operative
Documents or Pass Through Documents to which Owner is not a party. Each
Loan Participant agrees that it will not take any action in respect of the
Indenture Estate except through the Indenture Trustee pursuant to the
Indenture or as otherwise permitted by the Indenture.
SECTION 10. CERTAIN COVENANTS OF OWNER. Owner covenants and agrees
with each of the Loan Participants and the Indenture Trustee, as follows:
(a) Further Assurances. Owner will cause to be done, executed,
acknowledged and delivered all and every such further acts, conveyances and
assurances as the Indenture Trustee shall reasonably require for
accomplishing the purposes of this Agreement and the other Operative
Documents; 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 Documents.
(b) Filings. Owner, at its expense, will cause the Indenture,
all supplements and amendments to the Indenture and this Agreement to be
promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code or required under any other
applicable law. Upon the execution and delivery of the Indenture, the
Indenture and the Indenture Supplement shall be filed for recording with
the Federal Aviation Administration.
SECTION 11. [RESERVED.]
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
prepaid courier service, and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered to the recipient
thereof in accordance with the provisions of this Section 12(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 12(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Owner, the Pass
Through Trustee, the Subordination Agent or the Indenture Trustee to the
respective addresses set forth on Schedule I hereto or (B) if to any
subsequent Note Holder, addressed to such Note Holder at its address set
forth in the Equipment Note register maintained pursuant to Section 2.07 of
the Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any other Operative Document,
the subject matter of any thereof or any of the transactions contemplated
hereby or thereby brought by any party or parties thereto, or their
successors or assigns and (B) hereby waives, and agrees not to assert, by
way of motion, as a defense, or otherwise, in any such suit, action or
proceeding, to the extent permitted by applicable law, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of
the suit, action or proceeding is improper, or that this Agreement or any
other Operative Document or the subject matter of any thereof or any of the
transactions contemplated hereby or thereby may not be enforced in or by
such courts; provided, however that the foregoing shall not apply to the
right any party may have to seek removal of such suit, action or proceeding
to federal court or to seek consolidation of any separate actions, suits or
proceedings brought by one or more of the other parties in the same or
different jurisdictions. The agreement set forth in this Section 12(b) is
given solely for the benefit of the parties hereto and shall not inure to
the benefit of any other Person.
SECTION 13. [RESERVED.]
SECTION 14. MISCELLANEOUS.
(a) Survival. The representations, warranties, indemnities and
agreements of Owner, the Indenture Trustee, the Subordination Agent and the
Pass Through Trustee provided for in this Agreement or any other Operative
Document, and Owner's, the Indenture Trustee's, the Subordination Agent's
and the Pass Through Trustee's obligations under any and all thereof, shall
survive the making available of the respective Commitments by the Pass
Through Trustee, the transfer of any interest by any Loan Participant in
any Equipment Note or the Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(b) Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(c) Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee.
(d) Successors and Assigns. The terms of this Agreement shall
be binding upon, and inure to the benefit of, Owner and, subject to the
terms of this Agreement, 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, each Note Holder and its successors and registered assigns and
the Indenture Trustee and its successors as Indenture Trustee under the
Indenture. The terms of this Agreement shall inure to the benefit of the
Liquidity Provider and Policy Provider, and each of their successors and
permitted assigns.
(e) Governing Law. THIS AGREEMENT 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.
(f) References. Unless otherwise specified, references in this
Agreement to Sections, Exhibits, Schedules and Annexes are references to
Sections, Exhibits, Schedules and Annexes herein or hereto.
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.
US AIRWAYS, INC.,
Owner
By: ___________________________
Name:
Title:
STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
except as otherwise provided
herein, but solely as Indenture
Trustee
By: ___________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise provided
herein, but solely as Pass
Through Trustee
By: ___________________________
Name:
Title:
STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise provided
herein, but solely as
Subordination Agent
By: ___________________________
Name:
Title:
SCHEDULE I
NAMES AND ADDRESSES
Owner: US Airways, Inc.
U.S. MAIL
2345 Crystal Drive
Arlington, Virginia 22227
OVERNIGHT COURIER
_________________________
_________________________
Attn: ___________________
Telecopy No.: (___) ___-____
WIRE TRANSFER
ABA No.__________________
Acct. No.________________
Indenture Trustee, State Street Bank and Trust Company
Subordination Agent of Connecticut, National Association
and Pass Through
Trustee: U.S. MAIL
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attn: Corporate Trust Administration
Telecopy No: (860) 244-1889
with a copy to
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 662-1461
OVERNIGHT COURIER
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attn: Corporate Trust Administration
Telecopy No: (860) 244-1889
with a copy to
State Street Bank and Trust Company
2 Avenue de Lafayette, 6th Floor
Boston, MA 02111
Attn: Corporate Trust Department
Ruth A. Smith
Telecopy No.: (617) 662-1461
WIRE TRANSFER
State Street Bank and Trust Company of
Connecticut, National Association
ABA No._________
Acct. No. ________
Attn: Corporate Trust Administration
Reference: U.S. Airways, Inc. 2000-1 EETC/ N___U_
SCHEDULE II
COMMITMENTS
PERCENTAGE OF
PURCHASERS INTEREST RATE
LESSOR'S COST AND MATURITY PURCHASE PRICE
------------- ------------- --------------
US Airways, Inc.
Pass Through Trust:
2000-1G ___% Series G Secured $__________
_______% Notes due__________
2000-1C ___% Series C Secured $__________
______% Notes due __________
SCHEDULE III
PASS THROUGH TRUST AGREEMENTS
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of February __, 2000 and as supplemented
by Trust Supplement No. 2000-1C, dated as of February __, 2000.
EXHIBIT A
TO PARTICIPATION AGREEMENT
(N___U_)
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States
Malaysia Venezuela
*So long as on the date of registration such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Owned Aircraft Form Definitions
N___U_
ANNEX A
DEFINITIONS
(N___U_)
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a Pratt & Whitney model
PW 4168A or 4173 (or improved) type engine having not less than 500 cycles
left before such engine's next scheduled shop visit or (ii) an engine of
the same or another manufacturer suitable for use on the Airframe and
having a value and utility equal to or greater than a Pratt & Whitney model
PW 4168A or 4173 type engine, assuming such engine is in the condition
required by the Lease.
"Actual Knowledge" means actual knowledge of a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee.
"Additional Insured" means the Indenture Trustee, the Pass
Through Trustee, the Liquidity Provider, the Policy Provider, Owner in its
capacity as lessor under any Lease, and each of their respective
Affiliates, successors and permitted assigns, and the respective directors,
officers, employees and agents of the foregoing.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean 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.
"Aircraft" means the Airframe to be subject to the Lien of the
Indenture (or any airframe from time to time substituted for such Airframe
pursuant to Section 5.06 of the Indenture) together with the two Engines
initially subject to the Lien of the Indenture (or any engine substituted
for either of such Engines pursuant to the terms of the Indenture), in each
case as specified in the applicable Indenture Supplement, whether or not
any of such initial or substituted Engines may from time to time be
installed on such initial or substituted Airframe or may be installed on
any other airframe or on any other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial
Indenture Supplement, and any aircraft (except Engines or engines from
time to time installed thereon) which may from time to time be substituted
for such aircraft (except Engines or engines from time to time installed
thereon) pursuant to Section 5.06 of the Indenture; and (ii) any and all
Parts so long as the same shall be incorporated or installed in or attached
to such aircraft (except Engines or engines from time to time installed
thereon); provided, however, that at such time as an aircraft (except
Engines or engines from time to time installed thereon) shall be deemed
part of the property subject to the Lien of the Indenture in substitution
for the Airframe pursuant to the applicable provisions of the Indenture,
the replaced Airframe shall cease to be an Airframe subject to the Lien of
the Indenture; provided further that the Airframe shall not include
Passenger Convenience Equipment.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by The
Chase Manhattan Bank in New York, New York from time to time as its base
rate.
"Bill of Sale" means a full warranty bill of sale covering the
Aircraft delivered by the Manufacturer or its Affiliate to Owner.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in New
York, New York, Hartford, Connecticut or Pittsburgh, Pennsylvania.
"Cash Equivalents" means (i) direct obligations of the United
States of America and agencies guaranteed by the United States government
having a final maturity of ninety (90) days or less from date of purchase
thereof; (ii) certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national banking
association incorporated under the laws of the United States of America or
one of the states thereof having combined capital and surplus and retained
earnings as of its last report of condition of at least $500,000,000 and
having a rating of Aa or better by Moody's Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial
paper of any corporation or finance company incorporated or doing business
under the laws of the United States of America or any state thereof having
a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's
and having a final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation (or by the Administrator of the FAA acting under authority
delegated by the Secretary of Transportation) pursuant to Chapter 447 of
Title 49, United States Code, for aircraft capable of carrying ten or more
individuals or 6,000 pounds or more of cargo or that otherwise is certified
or registered to the extent required to fall within the purview of 11
U.S.C. Section 1110 or any analogous successor provision of the Bankruptcy
Code.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in substitution
or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class C Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Class G Liquidity Provider" means Bayerische Landesbank
Girozentrale, or any successor thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the Participation
Agreement of a Pass Through Trustee to finance a portion of Owner's cost
for the Aircraft.
"Consent and Agreement" means, collectively, each Consent and
Agreement (N___U_), dated as of the date of the Participation Agreement,
executed by the Seller and the Manufacturer, respectively, as the same may
be amended, modified or supplemented from time to time in accordance with
the applicable provisions thereof.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103, Attention: Corporate Trust Administration, or such other
office at which the Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have specified by notice in
writing to Owner, the Loan Participants and each Note Holder.
"Debt Rate" means, with respect to any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I
to the Indenture.
"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 of the initial Indenture
Supplement for the Aircraft.
"Delivery Notice" means the notice of delivery delivered pursuant
to Section 2(b) of the Participation Agreement.
"Deposit Agreements" means, collectively, (i) that certain
Deposit Agreement (Class G), dated as of the Pass Through Trust Closing
Date, between First Security Bank, National Association, as escrow agent
under the Escrow Agreement referred to therein, and the Depositary and (ii)
that certain Deposit Agreement (Class C), dated as of the Pass Through
Trust Closing Date, between First Security Bank, National Association, as
escrow agent under the Escrow Agreement referred to therein, and the
Depositary.
"Depositary" means ABN AMRO Bank N.V., acting through its Chicago
branch, as Class G and Class C Depositary under the Deposit Agreements, or
any successors thereto.
"Dollars" and "$" mean the lawful currency of the United States
of America.
"Engine" means (i) each of the two Pratt & Whitney type engines
listed by manufacturer's serial number in the initial Indenture Supplement,
whether or not from time to time thereafter installed on the Airframe or
installed on any other airframe or on any other aircraft; and (ii) any
Acceptable Alternate Engine that may from time to time be substituted,
pursuant to the terms of the Indenture, for either of such two engines,
together in each case with any and all Parts incorporated or installed in
or attached thereto or any and all Parts removed there from; provided,
however, that at such time as an engine shall be deemed part of the
property leased under the Indenture in substitution for an Engine pursuant
to the applicable provisions of the Indenture, the replaced Engine shall
cease to be an Engine subject to the Lien of the Indenture. The term
"Engines" means, as of any date of determination, all Engines then subject
to the Lien of the Indenture.
"Equipment Note Register" has the meaning specified for such term
in Section 2.07 of the Indenture.
"Equipment Note Registrar" has the meaning specified for such
term in Section 2.07 of the Indenture.
"Equipment Notes" means and include any Equipment Notes issued
under the Indenture, and issued in exchange therefor or replacement
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Escrow Agreements" means, collectively, (i) that certain Escrow
and Paying Agent Agreement (Class G), dated as of the Pass Through Trust
Closing Date, among First Security Bank, National Association, as escrow
agent, the Underwriters, the Pass Through Trustee, and State Street Bank
and Trust Company of Connecticut, National Association, as paying agent
thereunder and (ii) that certain Escrow and Paying Agent Agreement (Class
C), dated as of the Pass Through Trust Closing Date, among First Security
Bank, National Association, as escrow agent, the Underwriters, the Pass
Through Trustee, and State Street Bank and Trust Company of Connecticut,
National Association, as paying agent thereunder.
"Event of Default" has the meaning specified for such term in
Section 4.02 of the Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe or
any Engine, any of the following events with respect to such property: (i)
the loss of such property or of the use thereof due to the destruction of
or damage to such property which renders repair uneconomic or which renders
such property permanently unfit for normal use by Owner (or any Lessee) for
any reason whatsoever; (ii) any damage to such property which results in an
insurance settlement with respect to such property on the basis of a total
loss, or a constructive or compromised total loss; (iii) the theft or
disappearance of such property for a period in excess of one hundred eighty
(180) days; (iv) the requisition for use of such property by any
governmental authority (other than a requisition for use by the United
States Government or any government of registry of the Aircraft or any
agency or instrumentality thereof) that shall have resulted in the loss of
possession of such property by Owner (or any Lessee) for a period in excess
of one hundred eighty (180) consecutive days; (v) [intentionally omitted];
(vi) condemnation, confiscation, requisition or taking of title of the
Aircraft or the Airframe for more than thirty (30) days; (vii) as a result
of any law, rule, regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government of registry of
the Aircraft having jurisdiction, the use of such property in the normal
course of the business of air transportation shall have been prohibited for
a period of one hundred eighty (180) consecutive days, unless Owner (or
Lessee) shall have undertaken and shall be diligently carrying forward all
steps which are necessary or desirable to permit the normal use of such
property by Owner (or such Lessee), but in any event an "Event of Loss"
shall occur if such "grounding" extends for a period of more than three
hundred sixty (360) days; provided that no Event of Loss shall be deemed to
occur if such "grounding" is applicable to Owner's entire fleet of A330
aircraft and Owner, prior to the expiration of one year from the
prohibition of such use, shall have conformed at least one such aircraft in
its fleet to the requirements of any such law, rule, regulation, order or
other action and commenced regular commercial use of the same in such
jurisdiction and shall be diligently carrying forward, on a non-
discriminatory basis, all steps which are necessary or desirable to permit
the normal use of the Aircraft by Owner (or such Lessee), but in any event
an "Event of Loss" shall be deemed to have occurred if such use shall have
been prohibited for a period of two consecutive years; and (viii) with
respect to an Engine only, any divestiture of title to or interest in an
Engine or any event with respect to an Engine that is deemed to be an Event
of Loss with respect to such Engine pursuant to Section 5.06(b) of the
Indenture. An Event of Loss with respect to the Aircraft shall be deemed
to have occurred if an Event of Loss occurs with respect to the Airframe.
"Expenses" means 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 reasonable costs of investigation).
"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 the Manufacturer or its Affiliates.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all times be
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, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by State Street from three Federal funds brokers of
recognized standing selected by it.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"French Pledge Agreement" means the French Pledge Agreement,
dated as of the date of the Participation Agreement, between the Owner and
the Indenture Trustee, as the same may be amended, supplemented or
modified from time to time.
"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 Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Indenture Trustee, (ii) the Loan
Participants and each other Note Holder, (iii) the Subordination Agent,
(iv) the Liquidity Provider, (v) the Policy Provider; (vi) the Pass Through
Trustees, (vii) each Affiliate of the Persons described in clauses (i)
through (vi), inclusive, (viii) the respective directors, officers,
employees, agents and servants of each of the Persons described in clauses
(i) through (vii), inclusive, and (vix) the successors and permitted
assigns of the Persons described in clauses (i) through (viii), inclusive.
"Indemnity Agreement" means that certain Indemnity Agreement,
dated as of the Pass Through Trust Closing Date, between the Depositary and
Owner.
"Indenture" means that certain Indenture and Security Agreement
(N___U_), dated as of the date of the Participation Agreement, between
Owner and the Indenture Trustee, as it may from time to time be
supplemented or amended as therein provided, including supplementing by the
Indenture Supplement pursuant to the Indenture.
"Indenture Agreements" means the Participation Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the French Pledge
Agreement, the Consent and Agreement and any other contract, agreement or
instrument from time to time assigned or pledged under the Indenture.
"Indenture Estate" means all estate, right, title and interest of
the Indenture Trustee in and to the properties referred to in the Granting
Clause of the Indenture.
"Indenture Indemnitees" means (i) State Street and the Indenture
Trustee, (ii) each separate or additional trustee appointed pursuant to the
Indenture, (iii) the Subordination Agent, (iv) the Liquidity Provider, (v)
the Policy Provider, (vi) each Pass Through Trustee and (vii) each of the
respective directors, officers, employees, agents and servants of each of
the Persons described in clauses (i) through (vi), inclusive.
"Indenture Supplement" means a supplement to the Indenture,
substantially in the form of Exhibit A to the Indenture, which shall
particularly describe the Aircraft, and any Replacement Airframe and
Replacement Engine included in the property subject to the Lien of the
Indenture.
"Indenture Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its individual capacity, but solely as Indenture Trustee, and any entity
which may from time to time be acting as indenture trustee under the
Indenture.
"Indenture Trustee Documents" means the Participation Agreement,
the Indenture, the Purchase Agreement Assignment, the French Pledge
Agreement and any other agreements between the Indenture Trustee and any
other party to the Participation Agreement relating to the Transactions,
delivered on the Delivery Date.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft, (B) acts of the Indenture Trustee not permitted
by, or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Indenture Estate
or the Operative Documents other than a transfer of the Aircraft pursuant
to Article IV or V of the Indenture.
"Insurance Brokers" has the meaning specified for such term in
Exhibit B to the Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the Pass Through Trust Closing Date, among the Pass
Through Trustees, the Liquidity Provider, the Policy Provider and the
Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
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.
"Lease" means any lease permitted by the terms of Section
7.02(b)(x) of the Indenture.
"Lessee" means any Person for so long, but only so long, as such
Person is in possession of the Airframe and/or any Engine pursuant to the
terms of a Lease which is then in effect pursuant to Section 7.02(b) of the
Indenture.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the two Revolving Credit Agreements,
each dated as of the Pass Through Trust Closing Date, between the
Subordination Agent, as borrower, and the Liquidity Provider, and any
replacement thereof, in each case as the same may be amended, modified or
supplemented.
"Liquidity Provider" means Bayerische Landesbank Girozentrale,
as Class G Liquidity Provider and Class C Liquidity Provider under the
Liquidity Facilities, or any successor thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from acts or
claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Majority in Interest of Note Holders" as of a particular date of
determination means the holders of at least a majority in aggregate unpaid
principal amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes held by Owner or any Affiliate thereof).
"Make-Whole Amount" means, with respect to any Equipment Note,
the amount (as determined by an independent investment banker selected by
Owner and reasonably acceptable to the Indenture Trustee) by which (a) the
present value of the remaining scheduled payments of principal and interest
from the redemption date to maturity of such Equipment Note computed by
discounting each such payment on a semiannual basis from its respective
Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (b) the outstanding
principal amount of such Equipment Note plus accrued interest. For
purposes of determining the Make-Whole Amount, "Treasury Yield" means, at
the time of determination, the interest rate (expressed as a semiannual
equivalent and 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 and trading in the public
securities market 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
and (B) the other maturing as close as possible to, but later than, the
Average Life Date, 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 is reported on 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 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
redemption date. "Average Life Date" means, for each Equipment Note to be
redeemed, the date which follows the redemption date by a period equal to
the Remaining Weighted Average Life at the redemption date of such
Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term in
Section 3.03 of the Indenture.
"Non-U.S. Person" means any Person other than a U.S. Person.
"Note Holder" means any holder from time to time of one or more
Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the Pass Through Trust Closing Date among Owner, the Pass Through
Trustee for the Pass Through Trusts, the Subordination Agent, First
Security Bank, National Association, as Escrow Agent, and State Street Bank
and Trust Company of Connecticut, National Association, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 7.03(c) of the Indenture.
"Operative Documents" means, collectively, the Participation
Agreement, the Indenture, the Indenture Supplement covering the Aircraft,
the Equipment Notes, the Purchase Agreement (insofar as it relates to the
Aircraft), the Purchase Agreement Assignment, the French Pledge Agreement
and the Consent and Agreement (each, an "Operative Document").
"Operative Indentures" means each of the indentures under which
notes have been issued and purchased by the Pass Through Trustees.
"Owner" means US Airways, Inc., a Delaware corporation.
"Owner Documents" means the Participation Agreement, the French
Pledge Agreement, the Indenture and the Equipment Notes.
"Participants" means the Loan Participants (each individually, a
"Participant").
"Participation Agreement" means that certain Participation
Agreement (N___U_), dated as of _______________ ______, ____, among the
Subordination Agent, the Indenture Trustee, Owner and the Pass Through
Trustee, as the same may from time to time be supplemented or further
amended, or the terms thereof waived or modified, to the extent permitted
by, and in accordance with, the terms thereof.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
(a) complete Engines or engines, (b) any items leased by Owner from a third
party and (c) cargo containers) which may from time to time be incorporated
or installed in or attached to the Airframe or any Engine for so long as
such items remain subject to the Lien of the Indenture after removal
therefrom; provided that "Parts" shall not include Passenger Convenience
Equipment.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Transactions.
"Pass Through Documents" means the Participation Agreement, the
Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Liquidity Facilities, the Policy Provider Agreement, the
Policy and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination Agent, the
Liquidity Provider, the Policy Provider and the Pass Through Trustee, (ii)
each Affiliate of a Person described in the preceding clause (i), (iii) the
respective directors, officers, employees, agents and servants of each of
the Persons described in the preceding clauses (i) and (ii) and (iv) the
successors and permitted assigns of the Persons described in the preceding
clauses (i), (ii) and (iii).
"Pass Through Trust" means, collectively, the two separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreement, to facilitate
certain of the transactions contemplated by the Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the two separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means February __, 2000.
"Pass Through Trustee" means State Street Bank and Trust Company
of Connecticut, National Association, a national banking association, in
its capacity as trustee under each Pass Through Trust Agreement, and each
other Person that may from time to time be acting as successor trustee
under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components or
systems installed on or affixed to the Airframe that are used to provide
individual telecommunications to passengers aboard the Aircraft.
"Past Due Rate" means a rate per annum equal to 1% over the Debt
Rate.
"Payment Date" means each February 2 and August 2, commencing on
________, ____ (or, if any such day is not a Business Day, the immediately
succeeding Business Day) until the Equipment Notes have been paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Foreign Air Carrier" means any air carrier with its
principal executive office in a country listed in Exhibit C to the
Indenture as in effect from time to time and as may be modified in
accordance with Section 7(b) of the Participation Agreement.
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 7.01 of the Indenture.
"Permitted Lessee" means any (i) 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 the Indenture Trustee and (iv) any U.S. Air Carrier.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the financial guarantee insurance policy, dated as
of the Pass Through Trust Closing Date, issued by the Policy Provider in
favor of the Subordination Agent for the benefit of the Class G Pass
Through Trust.
"Policy Provider" means MBIA Insurance Corporation, or any
successor thereto.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the Pass Through Trust Closing Date, between the
Policy Provider and the Subordination Agent.
"Principal 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.
"Purchase Agreement" means the Purchase Agreement dated as of
November 24, 1998 between US Airways Group, Inc. and the Seller (including
all exhibits thereto, together with all letter agreements entered into that
by their terms constitute part of any such Purchase Agreement), as the same
may be amended or otherwise supplemented from time to time, relating to the
Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (N___U_), dated as of the date of the Participation Agreement,
between Owner and the Indenture Trustee, as the same may be amended,
supplemented or modified from time to time, with a form of Consent and
Agreement to be executed by the Seller attached thereto.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section 2.08 of
the Indenture.
"Remaining Weighted Average Life" of an Equipment Note, at the
redemption date of such Equipment Note, means the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Equipment Note, by
(ii) the number of days from and including the redemption date to but
excluding the scheduled payment date of such principal installment; by (b)
the then unpaid principal amount of such Equipment Note.
"Replacement Airframe" means any airframe substituted for the
Airframe pursuant to Section 5.06 of the Indenture.
"Replacement Engine" means any engine substituted for an Engine
pursuant to Section 5.06 of the Indenture.
"Responsible Officer" means a responsible officer in the
Corporate Trust Office of the Indenture Trustee.
"Scheduled Delivery Date" has the meaning specified for such term
in Section 2(d) of the Participation Agreement.
"Secured Obligations" has the meaning specified for such term in
the Granting Clause of the Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means AVSA, S.A.R.L., a societE a responsabilite limitee
organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Indenture.
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued and designated as "Series C" under the Indenture, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to
the Indenture under the heading "Series C."
"Series G" or "Series G Equipment Notes" means Equipment Notes
issued and designated as "Series G" under the Indenture, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to
the Indenture under the heading "Series G."
"State Street" means State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its capacity as Indenture Trustee under the Indenture, but in its
individual capacity.
"Subordination Agent" means State Street Bank and Trust Company
of Connecticut, National Association, a national banking association, as
subordination agent under the Intercreditor Agreement, or any successor
thereto.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value added, property (tangible and intangible), excise and stamp taxes),
license, levies, imposts, duties, recording charges and assessments of any
kind whatsoever that are in the nature of taxes or other governmental
charges including interest, penalties and additions to tax (each,
individually a "Tax").
"Transaction Expenses" means all of the reasonable out-of-pocket
costs, fees and expenses incurred by Owner, the Pass Through Trustee, the
Subordination Agent, the Indenture Trustee, the Liquidity Provider and the
Policy Provider in connection with the transactions contemplated by the
Participation Agreement, the other Operative Documents, the Pass Through
Documents and the Underwriting Agreement (except, in each case, as
otherwise provided therein) including, without limitation:
(a) the reasonable and actual fees, expenses and disbursements of (A)
Bingham Dana LLP, special counsel for the Pass Through Trustee,
the Subordination Agent and the Indenture Trustee, (B) Milbank,
Tweed, Hadley & McCloy LLP, special counsel for the Underwriters
and (C) Crowe & Dunlevy, P.C., special counsel in Oklahoma City,
Oklahoma;
(b) the initial fee and reasonable and actual disbursements of the
Indenture Trustee under the Indenture;
(c) the initial fees and expenses of the Liquidity Provider, the
Policy Provider, the Pass Through Trustee and the Subordination
Agent;
(d) underwriting fees and commissions;
(e) the fees and expenses with respect to the appraisal of the
Aircraft;
(f) the fees, expenses and disbursements of Skadden, Arps, Slate,
Meagher & Flom LLP and its affiliates, special counsel for Owner;
(g) the costs of filing and recording documents with the FAA and
filing Uniform Commercial Code statements in the United States;
(h) the reasonable fees, expenses and disbursements of special
counsel to each of the Liquidity Provider and Policy Provider;
(i) the expenses of the Depositary payable under Section 10(a) of
each Indemnity Agreement; and
(j) the reasonable fees, expenses and disbursements of, Clifford
Chance, special counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transportation Code" means that portion of the United States
Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Underwriters" means Salomon Smith Barney Inc., Chase Securities
Inc., Credit Lyonnais Securities (USA) Inc. and Credit Suisse First Boston
Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to which
there is in force an air carrier operating certificate issued pursuant to
Part 121 of the regulations under the Transportation Code, 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. Person" means any Person that qualifies as a "United States
person" under Section 7701(a)(30) of the Code.
"Wet Lease" means any arrangement whereby the Owner (or any
Lessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Owner (or any
Lessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Owner (or any Lessee)) and (ii) shall be
maintained by Owner (or any Lessee) in accordance with its normal
maintenance practices.
Exhibit B-1
[FORM OF SASM&F (ILLINOIS)
OPINION FOR OWNED AIRCRAFT]
__________, ____
To Each Person Listed on
Schedule I Hereto
Re: US Airways, Inc. (N___U_)
Ladies and Gentlemen:
We have acted as special counsel to US Airways, Inc., a Delaware
corporation ("US Airways"), in connection with the execution and delivery
of (i) the Participation Agreement (N___U_), dated as of _________ __, ____
(the "Participation Agreement"), by and between US Airways and State Street
Bank and Trust Company of Connecticut, National Association, a national
banking association, not in its individual capacity except as otherwise
provided therein, but solely as Pass Through Trustee, Indenture Trustee and
Subordination Agent relating to the Aircraft described in the Indenture
Supplement (as defined below); (ii) the issuance and sale of the Equipment
Notes (as defined below) pursuant to the Indenture and Security Agreement
(N___U_), dated as of ________ __, ____ by and between US Airways and the
Indenture Trustee ("the Indenture"), as supplemented by the Indenture and
Security Agreement Supplement (N___U_), dated ________ __, ____ of US
Airways (the "Indenture Supplement"); (iii) the Purchase Agreement
Assignment, dated as of _______ __, ____, between the Indenture Trustee and
US Airways (the "Purchase Agreement Assignment"); (iv) the Pass Through
Trust Agreement, dated as of _______, 2000, between the Pass Through
Trustee and US Airways (the "Pass Through Trust Agreement"); and (v) each
of the Pass Through Trust Supplements dated as of ______ __, 2000
(collectively, the "Pass Through Trust Supplements"). This opinion is being
delivered at the request of US Airways and pursuant to Section 4(a)(ix) of
the Participation Agreement.
In our examination, we have assumed the genuineness of all
signatures, including indorsements, the legal capacity of natural persons,
the authenticity of all documents submitted to us as originals, the
conformity to original documents of all copies submitted to us as
telefacsimile, certified or photostatic copies, and the authenticity of the
originals of such copies. As to any facts material to this opinion, we
have relied solely upon statements, representations and warranties of US
Airways, the Indenture Trustee, the Subordination Agent, the Pass Through
Trustee and their respective officers and representatives, and others in
the Operative Documents and of public officials, including the facts and
conclusions set forth in the Company's Certificate described below, and we
have made no independent investigation or inquiry with respect to such
factual matters.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(a) the Participation Agreement;
(b) the Purchase Agreement Assignment;
(c) the Indenture;
(d) the Indenture Supplement;
(e) the Equipment Notes;
(f) the Pass Through Trust Agreement;
(g) each of the Pass Through Trust Supplements;
(h) [that certain Lease Agreement, dated as of __________ __,
____ (the "Shuttle Lease"), between US Airways and Shuttle, Inc., a
Delaware corporation ("Shuttle");](1)
---------------
(1) For Aircraft with Shuttle, Inc. Lease only.
(i) an unfiled, but signed copy of a financing statement naming
"US Airways, Inc." as debtor and "State Street Bank and Trust Company of
Connecticut, as Indenture Trustee" as secured party, which we understand
will be filed within ten (10) days of the transfer of the security interest
in the Offices of the Secretary of State of the State of New York (such
filing Office, the "New York Filing Office" and such financing statement,
the "New York Financing Statement");
(j) unfiled, but signed financing statements naming "US Airways,
Inc." as debtor and "State Street Bank and Trust Company of Connecticut, as
Indenture Trustee" as secured party, which we understand will be filed
within ten (10) days of the transfer of the security interest in the
offices of State Corporation Commission, Virginia and the Arlington County
Clerk (such filing offices, the "Virginia Filing Offices" and such
financing statements, the "Virginia Financing Statements");
(k) a certificate of US Airways, dated the date hereof, a copy of
which is attached as Exhibit A; and
(l) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other
than (i) the Applicable Laws of the State of New York, (ii) the Applicable
Laws of the United States of America and (iii) Article 9 of the Virginia
UCC (as defined below). In this respect, we call to your attention that
certain of the Operative Documents are governed by laws of jurisdictions
other than those described above and we express no opinion as to the effect
of any such laws on the opinions expressed herein. In addition, we express
no opinion with respect to the Transportation Code or the rules and
regulations of the Federal Aviation Administration or the effect thereof on
the opinions herein stated. In addition, we call to your attention that
we are not admitted to practice in the Commonwealth of Virginia and our
opinions in paragraph 8 with respect to the laws of such Commonwealth is
based solely on our review of the Uniform Commercial Code in effect on the
date hereof in the Commonwealth of Virginia (the "Virginia UCC") as
published in the CCH Secured Transactions Guide without regard to case law
decided thereunder.
Capitalized terms not otherwise defined herein have the meanings
assigned thereto in Annex A to the Participation Agreement. The documents
referred to in (a) through (g) above shall hereinafter be referred to
collectively as the "Transaction Documents." "Applicable Laws" shall mean
those laws, rules, regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the Transaction
Documents, without our having made any special investigation as to the
applicability of any special law, rule or regulation, and which are not the
subject of a specific opinion herein referring to a particular law or laws.
"Governmental Approval" means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any
governmental authority pursuant to Applicable Laws. Unless otherwise
indicated, the "New York UCC" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York and "Applicable UCC"
means the New York UCC and the Virginia UCC, as applicable.
Based upon the foregoing, and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
2. Each of the Transaction Documents constitutes the valid and
binding obligation of US Airways enforceable against US Airways in
accordance with its terms under the laws of the State of New York. The
Indenture and the Indenture Supplement constitute valid and binding
obligations of the Indenture Trustee enforceable against the Indenture
Trustee in accordance with their terms under the laws of the State of New
York.
3. Neither the execution and delivery by US Airways of the
Transaction Documents nor the compliance by US Airways with the terms and
provisions thereof will contravene any Applicable Law of the State of New
York or any Applicable Law of the United States of America.
4. Except for (a) the due and timely filing and, where
appropriate, recording of the Indenture (with the Indenture Supplement
covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, (b) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act, (c) compliance with the
securities law of each applicable state and (d) filing of appropriate UCC
Financing Statements and continuation statements, no Governmental Approval,
which has not been obtained or taken and is not in full force and effect,
is required in connection with the execution, delivery or enforceability by
US Airways of any of the Transaction Documents.
5. No registration of US Airways or any of the Pass Through
Trusts under the Investment Company Act of 1940, as amended, is required.
6. The Equipment Notes, when issued to and acquired by the Pass
Through Trustee, will be valid and binding obligations of US Airways
enforceable against US Airways in accordance with their terms and the terms
of the Indenture, as supplemented by the Indenture Supplement, and will be
entitled to the benefits of the Indenture, as supplemented by the Indenture
Supplement.
7. The provisions of the Indenture, as supplemented by the
Indenture Supplement, are effective to create, in favor of the Indenture
Trustee to secure the Secured Obligations, a valid security interest in US
Airways' rights in that portion of the collateral described therein which
is subject to Article 9 of the New York UCC (the "UCC Collateral").
8. The New York Financing Statement is in appropriate form for
filing in the New York Filing Office. To the extent that the New York UCC
governs the perfection of a security interest in US Airways' rights in the
UCC Collateral, as to which we express no opinion, the security interest in
favor of the Indenture Trustee in the UCC Collateral described in the New
York Financing Statement will be perfected upon filing of the New York
Financing Statement in the New York Filing Office.
8. Based solely on our review of the Virginia UCC as published
in the CCH Secured Transaction Guide (without consideration of case law
decided thereunder), we are of the opinion that (i) the Virginia Financing
Statements are in appropriate form for filing in the Virginia Filing
Offices and (ii) to the extent that the Virginia UCC governs the perfection
of a security interest in US Airways' rights in the UCC Collateral, as to
which we express no opinion, the security interest in favor of the
Indenture Trustee in the UCC Collateral described in the Virginia Financing
Statements will be perfected upon filing of the Virginia Financing
Statements in the Virginia Filing Offices.
Our opinions in paragraphs 6, 7 and 8 with respect to the security
interest of the Indenture Trustee are subject to the following
qualifications:
(a) We have assumed the US Airways owns, or with respect to
after-acquired property will own, the UCC Collateral, and we express no
opinion as to the nature or extent of US Airways' rights in or title to any
of the UCC Collateral and we note that with respect to after-acquired
property, the security interest will not attach until US Airways acquires
ownership thereof.
(b) Our opinion with respect to the security interest of the
Indenture Trustee is limited to Article 9 of the Applicable UCC, and such
opinion does not address (i) laws of jurisdictions other than New York or
Virginia, and of New York or Virginia except for Article 9 of the
Applicable UCC, (ii) collateral of a type not subject to Article 9 of the
Applicable UCC, and (iii) what law governs perfection or priority of the
security interests granted in the collateral covered by this opinion.
(c) We call your attention that under the Applicable UCC, events
occurring subsequent to the date hereof may affect any security interest
subject to the Applicable UCC including, but not limited to, factors of the
type identified in Section 9-306 with respect to proceeds; Section 9-103
with respect to changes in the location of the collateral and the location
of a debtor; and Sections 9-307, 9-308 and 9-309 with respect to subsequent
purchasers of the collateral. In addition, actions taken by a secured
party (e.g., releasing or assigning the security interest, delivering
possession of the collateral to a debtor or another person and voluntarily
subordinating a security interest) may affect any security interest subject
to the Applicable UCC.
(d) We express no opinion with respect to the priority of the
security interest of the Indenture Trustee.
(e) We call to your attention that with respect to any goods
which is an accession to, or commingled or processed with other goods, the
security interest of the Indenture Trustee may be limited by Section 9-314
or 9-315 of the New York UCC.
(f) In the case of any instrument, chattel paper, account or
general intangible which is itself secured by other property, we express no
opinion with respect to the Indenture Trustee's rights in and to such
underlying property.
(g) In the case of chattel paper, accounts or general
intangibles, we call to your attention that the security interest of the
Indenture Trustee for the benefit of the Pass Through Trustee may be
subject to the rights of account debtors, claims and defenses of account
debtors and the terms of agreements with account debtors.
(h) In the case of goods, we express no opinion regarding the
security interest of the Indenture Trustee for the benefit of the Pass
Through Trustee in any goods which are subject to a certificate of title or
a document of title.
(i) We express no opinion regarding the security interest of the
Indenture Trustee for the benefit of the Pass Through Trustee in any items
which are subject to a statute, regulation or treaty of the United States
of America which provides for a national or international registration or a
national or international certificate of title for the perfection of a
security interest therein or which specifies a place of filing different
from the place specified in the Applicable UCC for filing to perfect such
security interest.
(j) We express no opinion regarding the security interest of the
Indenture Trustee for the benefit of the Pass Through Trustee in any of the
UCC Collateral consisting of claims against any government or governmental
agency (including without limitation the United States of America or any
state thereof or any agency or department of the United States of America
or any state thereof).
(k) We have assumed that US Airways maintains a place of business
in more than one county in the State of New York.
(l) we express no opinion as to collateral of a type perfected by
means other than the filing of a financing statement under the Applicable
UCC.
(m) We express no opinion with respect to collateral consisting
of goods which are or are to become fixtures, equipment used in farming
operations, or farm products, or accounts or general intangibles arising
from or relating to the sale of farm products by a farmer, consumer goods,
crops growing or to be grown, timber to be cut or minerals or the like
(including oil and gas), or accounts subject to subsection 5 of Section 9-
103 of the Applicable UCC.
(n) We call to your attention that we have not considered the
effect of any tax laws or other similar laws of the Commonwealth of
Virginia which may require the payment of a tax or fee in connection with
the filing of the Virginia Financing Statements and we express no opinion
regarding any tax or fee payable in connection with the filing of the
Virginia Financing Statement (including, without limitation, the existence
or calculation of any such tax or fee).
(o) We have assumed that either the Company maintains a place of
business in more than one county in the Commonwealth of Virginia or that
the Company's only place of business in the Commonwealth of Virginia is and
will be located at 2345 Crystal Drive, Arlington, VA 22227.
9. The Indenture Trustee acting in behalf of the holders of the
Equipment Notes will be entitled to the benefits of Section 1110 of the
Bankruptcy Code with respect to the Aircraft if US Airways is a debtor in a
case under Chapter 11 of the Bankruptcy Code.
10. [US Airways, as lessor under the Shuttle Lease, will be
entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to the Aircraft if Shuttle is a debtor in a case under Chapter 11
of the Bankruptcy Code.](2)
-------------
(2) For Aircraft with Shuttle, Inc. Lease only.
With respect to our opinion[s] in paragraph[s] 9 [and 10], we note
that a 1998 decision, Western Pacific Airlines, Inc. v. GATX (In re Western
Pacific Airlines, Inc.), 219 B.R. 305, on rehearing, 221 B.R. 1 (D. Colo.
1998), appeal dismissed as moot, vacatur denied, Boullioun Aircraft Holding
Co., Inc. v. Smith Management (In re Western Pacific Airlines, Inc.), 1999
WL 459469 (10th Cir. July 7, 1999), ruled that Section 1110 does not apply
in a case after the trustee timely makes the agreement specified in Section
1110(a)(1)(A) and timely cures defaults outstanding as of the date of the
Chapter 11 petition or that occur during the first sixty days of the case,
with the result, among others, that the ability of an Indenture Trustee to
exercise remedies based on a default that occurs after the first sixty days
of the Chapter 11 case would be subject to the automatic stay. We believe
that this decision construes Section 1110 in a manner that is inconsistent
with both the language of Section 1110 and the legislative history
explaining the purpose and operation of Section 1110. Accordingly, we
believe that the decision is an incorrect interpretation of Section 1110.
In addition, with respect to our opinion[s] in paragraph[s] 9 [and
10], we have, with your consent, relied on the US Airways Opinion (as
defined below) to the effect that [each of] US Airways [and Shuttle] is a
"citizen of the United States," as defined in Section 40102 of Title 49 of
the United States Code, and [each of] US Airways [and Shuttle] hold an "air
carrier operating certificate" issued by the Secretary of Transportation
(or by the Administrator of the FAA acting under authority delegated by the
Secretary of Transportation) pursuant to Section 44705 (in Chapter 447) of
the Transportation Code for aircraft capable of carrying ten or more
individuals or 6,000 pounds or more of cargo. We have assumed that where
the Indenture Trustee is acting as secured party, the security interest of
the Indenture Trustee in the Aircraft is perfected.
Our opinions are subject to the following assumptions and
qualifications:
(a) enforcement of the Transaction Documents may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity
or at law);
(b) certain of the remedial provisions with respect to the
security including waivers with respect to the exercise of remedies against
the Indenture Estate contained in the Indenture, as supplemented by the
Indenture Supplement, may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of each of the
Indenture, as supplemented by the Indenture Supplement, taken as a whole,
and the Indenture, as supplemented by the Indenture Supplement, taken as a
whole, together with applicable law, contains adequate provisions for the
practical realization of the security thereof;
(c) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party
(without in any way limiting other qualifications and assumptions made
herein, other than US Airways) to the Transaction Documents with any state,
federal or other laws or regulations applicable to it or (ii) the legal or
regulatory status or the nature of the business of any such party;
(d) we express no opinion as to the enforceability of any rights
to contribution or indemnification provided for in the Transaction
Documents to the extent any such rights are violative of the public policy
(including, without limitation, the public policy underlying any federal or
state securities law, rule or regulation);
(e) we express no opinion as to any provision of any Transaction
Document that provides a penalty or to the extent that it provides for an
absolute and unconditional obligation to perform such Transaction Document
even though such Transaction Document is invalid or terminated or such
performance would be illegal; and
(f) with respect to our opinion that the New York choice of law
provision in the Transaction Documents which are expressly governed by New
York law is enforceable, we rely upon, among other things, the Act of July
19, 1984, Ch. 421, 1984 McKinney's Sess. Laws of N.Y. 1406, (codified at
N.Y. Gen. Oblig. Law sections 5-1401, 5-1402 (McKinney 1989) and N.Y. CPLR
327(b) (McKinney 1990) (the "Act"), and our opinion is subject to the
qualifications that such enforceability (i) may be limited by public policy
considerations of any jurisdiction, other than the courts of the State of
New York, in which enforcement of such provisions, or of a judgement upon
an agreement containing such provisions, is sought, and (ii) as specified
in the Act, does not apply to the extent provided to the contrary in
subsection two of Section 1-105 of the Uniform Commercial Code for the
State of New York.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) each of the Transaction Documents constitutes the legal,
valid and binding obligation of each party thereto (other than US Airways
and, in the case of the Indenture, the Indenture Trustee) enforceable
against each such party (other than US Airways and, in the case of the
Indenture, the Indenture Trustee) in accordance with its terms;
(b) each of (i) State Street Bank and Trust Company of
Connecticut, National Association and (ii) US Airways is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
organization;
(c) each of (i) State Street Bank and Trust Company of
Connecticut, National Association, individually and as Indenture Trustee,
Subordination Agent and Pass Through Trustee, (ii) US Airways has full
power, authority and legal right to enter into and perform its respective
obligations under, and consummate the transactions contemplated by, each of
the Transaction Documents to which it is a party;
(d) each of (i) State Street Bank and Trust Company of
Connecticut, National Association, individually and as Indenture Trustee,
Subordination Agent and Pass Through Trustee, and (ii) US Airways has duly
authorized, executed and delivered each of the Transaction Documents to
which it is a party;
(e) the execution, delivery and performance of the Transaction
Documents by each of the parties thereto and the consummation of the
transactions contemplated thereby does not and will not conflict with,
contravene, violate or constitute a default under (i) the respective
certificate of incorporation, by-laws or other organizational documents of
any such party, (ii) any indenture, mortgage, lease, agreement or other
instrument to which any such party is a party or by which it or any of its
property may be bound or subject, (iii) any law, rule or regulation of any
jurisdiction (provided that we make no such assumption with respect to
Applicable Laws of the State of New York and Applicable Laws of the United
States of America insofar as such Applicable Laws apply to US Airways, as
to which we express our opinion in paragraph 2 herein) or (iv) any judicial
or administrative order or decree of any governmental authority; and
(f) except for (i) the due and timely filing and, where
appropriate, recording of the Indenture and the Indenture Supplement
covering the Aircraft attached as an exhibit pursuant to the Transportation
Code, (ii) the registration of the issuance and sale of the Pass Through
Certificates under the Securities Act, (iii) compliance with the securities
law of each applicable state and (iv) the filing of appropriate UCC
financing statements, no consent, license, permit or approval of, or giving
of notice to, or registration with, or taking of any action in respect of,
any governmental authority of any jurisdiction is required in connection
with (X) the execution, delivery and performance by any party to any
Transaction Document of the respective Transaction Documents to which it is
a party, (Y) the consummation of the transactions contemplated thereby or
(Z) the legality, validity or enforceability of the Transaction Documents
with respect to any party to any Transaction Document (provided that we
make no such assumption with respect to those required by Applicable Laws
as such Applicable Laws apply to US Airways).
With respect to US Airways, we understand that you are separately
receiving an opinion with respect to certain matters set forth above from
Howard L. Wu, Esq., Associate General Counsel to US Airways (the "US
Airways Opinion"). With respect to Transportation Code matters, we
understand that you are separately receiving an opinion with respect to
certain matters set forth above from Crowe & Dunlevy, P.C., special
Transportation Code counsel (the "TC Opinion"). With respect to the
Indenture Trustee, the Pass Through Trustee and the Subordination Agent, we
understand that you are separately receiving an opinion with respect to
certain matters set forth above from Bingham Dana LLP, special counsel to
the Indenture Trustee, the Pass Through Trustee and the Subordination Agent
(together with the US Airways Opinion and the TC Opinion, the "Other
Counsel's Opinions"). We are advised that such Other Counsel's Opinions
contain qualifications. Our opinions herein stated are based upon the
assumptions specified above, and we express no opinion as to the effect on
the opinions herein stated of the qualifications stated in the Other
Counsel's Opinions.
This opinion is being furnished only to you and is solely for your
benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other Person or for any other purpose without our prior
written consent.
Very truly yours,
SCHEDULE I
State Street Bank and Trust Company of Connecticut, National Association,
individually and as Indenture Trustee, Pass Through
Trustee and Subordination Agent
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Officer's Certificate to SASM&F (Illinois) Opinion
EXHIBIT A
Certificate
The undersigned, Howard L. Wu, is the Associate General Counsel of
US Airways, Inc., a Delaware corporation (the "Owner"), and understands
that pursuant to certain of the Transaction Documents (as defined in the
Opinion referred to below), Skadden, Arps, Slate, Meagher & Flom (Illinois)
("SASM&F") is rendering an opinion dated the date hereof (the "Opinion") to
each of the Persons listed on Schedule I thereto. Capitalized terms used
herein but not otherwise defined shall have the meanings set forth in the
Opinion. The undersigned further understands that SASM&F is relying on
this officer's certificate and the statements made herein in rendering such
Opinion.
With regard to the foregoing, on behalf of the Owner, the
undersigned certifies that:
1. Due inquiry has been made of all persons deemed necessary or
appropriate to verify or confirm the statements contained herein.
2. SASM&F may rely upon the representations and warranties that
the Owner has made in each of the Transaction Documents to which it is a
party. The undersigned has made a careful review of the representations
and warranties of the Owner contained in each of the Transaction Documents
and hereby confirms, to the best of his knowledge and belief, that such
representations and warranties are true, correct and complete on and as of
the date of this certificate.
3. Less than 25 percent of the assets of Owner and its
subsidiaries on a consolidated basis and on an unconsolidated basis consist
of margin stock (as such term is defined in Regulation U of the Board of
Governors of the Federal Reserve System).
4. Owner is engaged primarily, directly and through its wholly-
owned subsidiaries and its Majority-Owned Subsidiaries (as hereinafter
defined), in the airline transportation business and (i) is not and does
not hold itself out as being, engaged primarily nor does it propose to
engage primarily, in the business of investing, reinvesting or trading in
Securities (as hereinafter defined), (ii) has not and is not engaged in,
and does not propose to engage in, the business of issuing Face-Amount
Certificates of the Installment Type (as hereinafter defined) and has no
such certificate outstanding and (iii) is not engaged and does not propose
to engage in the business of investing, reinvesting, owning, holding or
trading in Securities, whether or not as its primary activity, and does not
own or propose to acquire Investment Securities (as hereinafter defined)
having a Value exceeding 40% of the Value of the total assets of the Owner
(exclusive of Government Securities (as hereinafter defined)) on an
unconsolidated basis.
5. Neither the Owner nor any of its subsidiaries or affiliates
owns or operates facilities that are used for the generation, transmission,
or distribution of electric energy for sale ("electric utility
facilities").
6. Neither the Owner nor any of its subsidiaries or affiliates
owns or operates facilities that are used for the distribution at retail of
natural or manufactured gas for heat, light, or power ("gas utility
facilities").
7. Neither the Owner nor any of its subsidiaries or affiliates,
directly or indirectly, or through one or more intermediary companies,
owns, controls or holds with power to vote (a) five percent (5%) or more of
the outstanding securities, such as notes, drafts, stock, treasury stock,
bonds, debentures, certificates of interest or participation in any profit
sharing agreements or in oil, gas, other mineral royalties or leases,
collateral-trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts, voting-trust
certificates, certificate of deposit for a security, receiver's or
trustee's certificates, or any other instrument commonly known as a
"security" (including certificates of interest or participation in,
temporary or interim certificates for, receipt for, guaranty of, assumption
of liability on, or warrants or right to subscribe to or purchase any of
the foregoing) presently entitling it to vote in the direction or
management of, or any such instrument issued under or pursuant to any
trust, agreement, or arrangement whereby a trustee or trustees or agent or
agents for the owner or holder of such instrument is presently entitled to
vote in the direction or management of, any corporation, partnership,
association, joint-stock company, joint venture or trust that owns or
operates any electric utility facilities or gas utility facilities, or (b)
any other interest, directly or indirectly, or through one or more
intermediary entities, in any corporation, partnership, association,
joint-stock company, joint venture or trust that owns or operates any
electric utility facilities or gas utility facilities.
8. Neither the Owner nor any of its subsidiaries or affiliates
has received notice that the Securities and Exchange Commission has
determined, or may determine, that the Owner or any of its subsidiaries or
affiliates exercises a controlling influence over the management or
direction of the policies of a gas utility company or an electric utility
company as to make it subject to the obligations, duties and liabilities
imposed on holding companies by the Public Utility Holding Company Act of
1935, as amended.
9. As used in paragraph 4 of this certificate, the following
terms shall have the following meanings:
"Control" means the power to exercise a controlling influence over
the management or policies of a company, unless such power is solely the
result of an official position with such company;
"Face-Amount Certificate of the Installment Type" means any
certificate, investment contract, or other Security that represents an
obligation on the part of its issuer to pay a stated or determinable sum or
sums at a fixed or determinable date or dates more than 24 months after the
date of issuance, in consideration of the payment of periodic installments
of a stated or determinable amount;
"Government Securities" means all Securities issued or guaranteed
as to principal or interest by the United States, or by a person controlled
or supervised by and acting as an instrumentality of the government of the
United States pursuant to authority granted by the Congress of the United
States; or any certificate of deposit for any of the foregoing;
"Investment Securities" includes all Securities except (A)
Government Securities, (B) Securities issued by employees' securities
companies, and (C) Securities issued by Majority-Owned Subsidiaries of the
Owner which are not engaged and do not propose to be engaged in activities
within the scope of clause (i), (ii) or (iii) of paragraph 4 of this
Certificate;
"Majority-Owned Subsidiary" of a person means a company 50% or
more of the outstanding Voting Securities of which are owned by such
person, or by a company which, within the meaning of this paragraph, is a
Majority-Owned Subsidiary of such person. Notwithstanding the foregoing, a
company shall not be considered a Majority-Owned Subsidiary of a person if
Control of such company rests with someone other than such person;
"Security" means any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferrable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest
therein or based on the value thereof), or any put, call, straddle, option,
or privilege entered into on a national securities exchange relating to
foreign currency, or, in general, any interest or instrument commonly known
as a "security," or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the foregoing;
"Value" means (i) with respect to Securities owned at the end of
the last preceding fiscal quarter for which market quotations are readily
available, the market value at the end of such quarter; (ii) with respect
to other Securities and assets owned at the end of the last preceding
fiscal quarter, fair value at the end of such quarter, as determined in
good faith by or under the direction of the board of directors; and (iii)
with respect to securities and other assets acquired after the end of the
last preceding fiscal quarter, the cost thereof;
"Voting Security" means any security presently entitling the owner
or holder hereof to vote for the election of directors of a company.
IN WITNESS WHEREOF, the undersigned has executed this certificate
this ___ day of _________, ____.
_________________________________
Name: Howard L. Wu
Title: Associate General Counsel
Exhibit B-2
[Letterhead of US Airways, Inc.]
[Owned Aircraft Opinion]
___________ ___, ____
To Each Person Listed
on Schedule I Hereto
Re: US Airways, Inc. N__U__
Ladies and Gentlemen:
I am the ____________________ of US Airways, Inc., a Delaware
corporation ("US Airways"), and am familiar with the transactions
contemplated by the Participation Agreement (N___U_), dated as of _________
__, ____ (the "Participation Agreement"), by and between US Airways, as
Owner and State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
except as otherwise provided therein but solely as Pass Through Trustee,
Indenture Trustee and Subordination Agent. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in Annex A to the
Participation Agreement.
This opinion is being delivered pursuant to Section 4(a)(ix) of the
Participation Agreement.
In my examination, I have assumed the genuineness of all signatures
(other than the signatures made on behalf of US Airways), including
endorsements, the legal capacity of natural persons, the authenticity of
all documents submitted to me as originals, the conformity to original
documents of all copies submitted to me as telefacsimile, certified or
photostatic copies, and the authenticity of the originals of such copies.
As to any facts material to this opinion, I have relied solely upon
statements, representations and warranties of US Airways, the Indenture
Trustee, the Subordination Agent, the Pass Through Trustee and their
respective officers and representatives, and others in the Operative
Documents and of public officials, and I have made no independent
investigation or inquiry with respect to such factual matters.
In rendering the opinions set forth herein, I have examined and relied
on executed originals or copies of the following:
(a) the Participation Agreement;
(b) the Purchase Agreement Assignment;
(c) the Indenture;
(d) the Indenture Supplement;
(e) the Warranty Bill of Sale;
(f) the Equipment Notes;
(g) the Pass Through Trust Agreement;
(h) each of the Pass Through Trust Agreement Supplements;
(i) certified copies of the Certificate of Incorporation and By-laws
of US Airways;
(j) certified copies of certain resolutions of the Board of Directors
of US Airways adopted on May 18, 1999;
(k) a certificate of good standing from the Secretary of State of
the State of Delaware as to the good standing of US Airways in such
jurisdiction [and a certificate of good standing from the Secretary of
State of the State of Delaware as the good standing of Shuttle, Inc. in
such jurisdiction](1); and
(l) such other documents as I have deemed necessary or appropriate as
a basis for the opinions set forth below.
-------------------
(1) For Shuttle, Inc. transactions only.
Based on the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, it is my opinion that:
1. US Airways is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under
each of the Operative Documents to which it is a party. US Airways is duly
qualified to do business and is in good standing in the Commonwealth of
Virginia and each other state of the United States in which its operations
or the nature of its business requires US Airways to so qualify, except
where the failure to so qualify would not have a material adverse effect on
US Airways or its business.
2. US Airways possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents which are material
to the operation of the routes flown by it and the conduct of its business
and operations as currently conducted, and each such certificate,
franchise, license, permit, right and concession and consent is in full
force and effect, except where any failure would not have a material
adverse effect on US Airways or its business.
3. Each of the Operative Documents to which US Airways is a party
has or had, on the date of execution thereof, been duly authorized,
executed and delivered by US Airways.
4. Neither the execution and delivery by US Airways of any of the
Operative Documents to which US Airways is a party, nor the consummation of
any of the transactions by US Airways contemplated thereby, nor the
performance of the obligations thereunder by US Airways, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the Certificate of Incorporation or By-laws of US
Airways or (b) conflict with or contravene the provisions of, or constitute
a default under, or result in the creation of any Lien (other than any
Permitted Lien) upon the property of US Airways under any law, governmental
rule or regulation, or the Certificate of Incorporation or By-laws of US
Airways or any order, writ, injunction or decree of any court or
governmental authority against US Airways or by which any of its properties
may be bound or any material indenture, mortgage, contract or other
agreement known to me to which US Airways is a party or by which it may be
bound, or require the approval or consent of any trustee or the holders of
any indebtedness or material obligations of US Airways.
5. Neither the execution and delivery by US Airways of any of the
Operative Documents to which it is a party, nor the consummation of any
transactions by US Airways contemplated thereby, nor the performance of the
obligations thereunder by US Airways, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Operative Documents, all of which were or
are required to be performed on or prior to the Delivery Date and which
were or shall have been accomplished on or prior to the Delivery Date) the
registration with, or the taking of any other action in respect of, the
FAA, the Securities and Exchange Commission or any other authority or
agency of the federal government or of the State of Delaware other than (i)
the registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (ii) compliance with the securities laws of each
applicable state and (iii) the filings and, where appropriate, recording,
pursuant to the Transportation Code, of the Indenture (with the Indenture
Supplement covering the Aircraft attached as an exhibit) or (b) contravene
any judgment or order applicable to or binding on US Airways or any law or
governmental rule or regulation of the United States or of the State of
Delaware.
6. There is no pending or, to my knowledge, threatened action or
proceeding before any court or administrative agency which individually (or
in the aggregate in the case of any group of related lawsuits) (i) is
expected to have a material adverse effect on (A) the financial condition
of US Airways except for the matters described under "Legal Proceedings" in
US Airways' Annual Report on Form 10-K for the fiscal year ended December
31, ____ and US Airways' Quarterly Report on Form 10-Q for the quarter
ended [March 31, ____, June 30, ____ and September 30, ____,] respectively,
as to all of which I can express no opinion at this time concerning US
Airways' liability (if any) or the effect of any adverse determination upon
the business, condition (financial or otherwise) or operations of US
Airways, or (B) the ability of US Airways to perform its obligations under
the Operative Documents, or (ii) involves the Aircraft.
7. US Airways is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Section 41102(a) of the Transportation Code. US Airways is the holder of
an "air carrier operating certificate" under Section 44705 of the
Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and such certificate is in
full force and effect.
8. US Airways is not, and is not directly or indirectly controlled
by or acting on behalf of any Person which is, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
9. [Shuttle, Inc. is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
is a "citizen of the United States" within the meaning of Section
40102(a)(15) of the Transportation Code.](2)
10. [Shuttle, Inc. is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Section 41102(a) of the Transportation Code. Shuttle, Inc. is the holder
of an "air carrier operating certificate" under Section 44705 of the
Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and such certificate is in
full force and effect.](3)
----------------------
(2) For Shuttle, Inc. transactions only.
(3) For Shuttle, Inc. transactions only.
I do not express any opinion as to matters governed by any law other
than the federal laws of the United States of America and the corporation
law of the State of Delaware.
This opinion is delivered to you solely for your use in connection
with the transaction described herein, and may not be used for any other
purpose, and may not be relied upon by any other person, without my prior
written consent.
Very truly yours,
SCHEDULE I
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10041
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Exhibit C
FORM (FRENCH LAW) OPINION OF CLIFFORD CHANCE
IN CONNECTION WITH CERTAIN (OWNED AIRCRAFT) TRANSACTIONS FOR A330 AIRCRAFT
[ ]
To: US Airways Inc.
US Airways Group, Inc.
First Security Bank, National Association
[ ]
RE: ONE AIRBUS A330-[ ] AIRCRAFT
MANUFACTURER'S SERIAL NO.[ ]
US REGISTRATION NO. [ ]
Dear Sirs,
1. We have been requested by US Airways Inc. (the "COMPANY"), to act as
special French counsel with respect to, and to render this opinion
in connection with certain of the transactions contemplated in a
certain Participation Agreement dated as of [ ] (the
"PARTICIPATION AGREEMENT") among [ ].
2. We have examined copies(1) (which we assume conform to the originals)
of:
- -------------
(1) AS OF THE DATE HEREOF WE HAVE NOT HAD SIGHT OF PRO-FORMA DOCUMENTS;
THIS DRAFT OPINION IS BASED ON THE ASSUMPTION THAT THE DOCUMENTS WILL
FOLLOW THE FORM OF THE 1999 EETC FINANCINGS.
(i) the purchase agreement assignment (Scheduled April, 2000
through December, 2000 Deliveries) dated as of [ ] between
US Airways Group, Inc. (as assignor) and the Company (as
assignee) (the "FIRST PURCHASE AGREEMENT ASSIGNMENT");
(ii) the consent and agreement of AVSA S.A.R.L. ("AVSA") and Airbus
Industrie G.I.E. ("AIRBUS") to the First Purchase Agreement
Assignment as acknowledged and accepted by US Airways Group,
Inc. and the Company dated as of [ ] (the "FIRST
CONSENT");
(iii) the purchase agreement assignment (US Airways, Inc. Trust No.
N[ ]U[ ]), dated as of [ ], between the Company (as
assignor) and State Street Bank and Trust Company of
Connecticut, National Association (the "INDENTURE TRUSTEE") as
assignee) (the "SECOND PURCHASE AGREEMENT ASSIGNMENT");
(iv) the consent and agreement of Airbus (to the Second Purchase
Agreement Assignment) dated as of [ ] (the "AIRBUS CONSENT
AND AGREEMENT");
(v) the consent and agreement of AVSA (to the Second Purchase
Agreement Assignment) dated as of [ ] (the "AVSA CONSENT
AND AGREEMENT");
(vi) the indenture and security agreement dated as of [ ]
between the Company (as owner) and the Indenture Trustee (the
"INDENTURE"); and
(vii) a document executed both in the English language as the "FRENCH
PLEDGE" and in the French language as the "ACTE DE NANTISSEMENT
DE CREANCES" (the latter being a correct translation of the
former) each dated [ ] and made between the Company (as
pledgor) and the Indenture Trustee (as pledgee) collectively
referred to herein as the "ACTE DE NANTISSEMENT",
the First Purchase Agreement and the Second Purchase Agreement
Assignment are together referred to herein as the "ASSIGNMENTS", the
First Consent and the Second Consents are together referred to herein
as the "CONSENTS" and the documents referred to in (i) to (vii) above
are hereinafter referred to collectively as the "DOCUMENTS".
3. In considering the above, we have assumed:
(i) that the Documents have been duly executed by the parties
thereto (other than Airbus and AVSA);
(ii) the genuineness of all signatures;
(iii) the completeness and conformity to the originals of all
documents supplied to us as copies or as facsimiles;
(iv) that the Documents expressed to be governed by New York law
constitute the legal, valid and binding obligations of the
parties thereto under New York law.
4. Having considered the Documents we are of the opinion, subject to the
qualifications and reservations set out in paragraph 5 below, that:
(i) Airbus is a groupement d'interet economique duly organised and
existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale Matra S.A.,
(ii) DaimlerChrysler Aerospace Airbus GmbH, (iii) British
Aerospace (Operations) Ltd. and (iv) Construcciones
Aeronauticas S.A. and each of such corporations is, without the
need to proceed against any collateral security for the
indebtedness of Airbus or to take any other legal action or
process (except for service on Airbus by huissier of notice to
perform and subsequent failure by Airbus to do so), jointly and
severally liable with the other members for the debts of Airbus
arising out of obligations contracted by Airbus while such
corporation is a member of Airbus;
(ii) AVSA is a societe a responsabilite limitee duly established and
existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted;
(iii) each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
the Documents to which it is a party; such obligations are
legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus and
AVSA, as the case may be;
(iv) assuming that under New York law the Indenture Trustee would be
entitled to take proceedings in its own name and on its own
account to recover from the Company the full amount of all
amounts secured by the Acte de Nantissement and subject to the
registration and huissier requirements of paragraph 5(d) hereof
and the observation set forth in paragraph 5(f) hereof, the
Acte de Nantissement:
(a) duly creates for the benefit of the Indenture Trustee the
security interests which it purports to create and the
Indenture Trustee is entitled to the benefits and security
afforded thereby; and
(b) would be effective as against Airbus, AVSA and third
parties to perfect the pledge (nantissement) of the
obligations of Airbus and AVSA that are the subject of the
Acte de Nantissement;
(v) the choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court would
uphold such choice of law in any suit on the Documents brought
in a French court.
5. This opinion must be read subject to the following qualifications and
observations as to French law:
(a) the remedy of specific performance may not be available in a
French court;
(b) in respect of payment obligations, a French court has power
under Article 1244-1 of the French Civil Code to grant time to
a debtor (not in excess of two years), taking into account the
position of the debtor and the needs of the creditor;
(c) in order to ensure the validity as against third parties of the
assignment made in the Assignments, it is necessary that notice
of such assignments be served on Airbus and AVSA by huissier in
accordance with the provisions of Article 1690 of the French
Civil Code. [We have been instructed by the Company to assist
in carrying out such formalities which we intend to do upon
receipt of duly executed originals of such assignment and we
anticipate that there will be no difficulty in accomplishing
these formalities](2);
(d) in order to ensure the validity as against third parties of the
pledge (nantissement) created by the Acte de Nantissement in
accordance with the provisions of Article 2075 of the French
Civil Code, it is necessary for the Acte de Nantissement to be
registered with the French tax administration in a form duly
translated in French by a sworn translator, involving payment
of a stamp duty of a nominal amount. In addition, the pledge
(nantissement) created by the Acte de Nantissement will need to
be served on each of the obligors by huissier, in accordance
with the provisions of Article 2075 of the French Civil Code.
[We have been instructed by the Company to carry out such
formalities on its behalf which we intend to do upon receipt of
duly executed originals of the Pledge Agreement and we
anticipate that there will be no difficulty in accomplishing
these formalities](2);
- ------------
(2) NOTE: US AIRWAYS TO CONFIRM INSTRUCTIONS
(e) in the event o any proceedings being brought in a French court
in respect of a monetary obligation expressed to be payable in
a currency other than French Francs or euros, a French court
would probably give judgment expressed as an order to pay, not
such currency, but its French Franc or euro equivalent at the
time of payment or enforcement of judgment. With respect to a
bankruptcy, insolvency, liquidation, moratorium,
reorganisation, reconstruction or similar proceedings, French
law may require that all claims or debts be converted into
French Francs or euros at an exchange rate determined by the
court at a date related thereto, such as the date of
commencement of a winding-up;
(f) pledges over non-monetary claims are unusual under French law.
In principal, pledges over claims of this type should be
effective against Airbus, AVSA and third parties but in the
absence of case law, there is a lack of certainty about the
pledge being effective;
(g) a determinatio or certificate as to any matter provided for in
the Documents might be held by a French court not to be final,
conclusive or binding, if such determination or certificate
could be shown to have an unreasonable, incorrect or arbitrary
basis or not to have been given or made in good faith;
(h) claims may become barred by effluxion of time or may be or
become subject to defence of set-off or counterclaim;
(i) a French court may stay proceedings if concurrent proceedings
are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
documents conferring a right of set-off or similar right would
be effective against a liquidator or a creditor;
(k) the enforcemen against Airbus of any of the Documents to which
it is a party may be limited by applicable bankruptcy,
insolvency, arrangement, moratorium or similar laws relating to
or affecting the enforcement of creditors' rights generally, as
such laws are applied to Airbus. The enforcement against AVSA
of any of the Documents to which it is a party may be limited
to such laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited to such laws, as such
laws are applied to such member;
(l) our opinion as to the enforceability of the Documents relates
only to their enforceability in France in circumstances where
the competent French court has and accepts jurisdiction. The
term "enforceability" refers to the legal character of the
obligations assumed by the parties under the Documents, i.e.
that they are of a character which French law enforces or
recognises. It does not mean that the Documents will be
enforced in all circumstances or in foreign jurisdictions or by
or against third parties or that any particular remedy will be
available; and
(m) article 899 of the French Tax Code provides that agreements
evidencing an undertaking to pay a sum of money are subject to
stamp tax (droit de timbre) of a nominal amount if made in the
French Republic, if made in a foreign country, such agreements
are subject to a stamp tax of a nominal amount before certain
use thereof can be made in the French Republic (Article 897 of
the French Tax Code). However non-payment of such stamp tax
does not affect the legality, validity or enforceability of the
Documents.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the laws of the French
Republic as of the date hereof. This opinion is for your use and that of no
one else, and is limited to (i) the matters specifically mentioned herein,
and (ii) the purpose set out above.
Yours faithfully,
CLIFFORD CHANCE
Exhibit D
FORM OF OPINION OF FAA COUNSEL
_________ __, 2000
To the Addressees on the
Schedule Attached Hereto
RE: AIRBUS INDUSTRIE MODEL A330___ AIRCRAFT WITH
MANUFACTURER'S SERIAL NUMBER _____ AND UNITED STATES
NATIONALITY AND REGISTRATION MARKS N_____ (THE
"AIRCRAFT")
Ladies and Gentlemen:
This letter confirms that we filed with the Federal Aviation
Administration (the "FAA") today at __:__ _.M., C._.T., the Trust
Indenture and Security Agreement (US Airways, Inc.2000-1 Series N_____)
dated as of _________ __, 2000 (the "Indenture") between US Airways, Inc.
(the "Company") and ________________________ as Indenture Trustee (the
"Indenture Trustee"), to which was attached Trust Agreement and Indenture
Supplement No. 1 (US Airways, Inc.2000-1 Series N_____) dated ________
__, 2000 (the "Indenture Supplement") covering the Aircraft and the
______________model _____________ aircraft engines with manufacturer's
serial numbers ____________ and ______________ (the "Engines").
Based upon our examination of the above described instruments and of
such records of the FAA as we deemed necessary to render this opinion and
as were made available to us by the FAA, it is our opinion that:
(a) the Indenture with the Indenture Supplement attached is in due
form for recordation by and has been duly filed for recordation
with the FAA pursuant to and in accordance with the provisions
of Section 44107 of Title 49 of the United States Code;
(b) legal title to the Aircraft is vested in the Company and the
Aircraft is duly registered in the name of the Company pursuant
to and in accordance with the provisions of Sections 44102 and
44103 of Title 49 of the United States Code;
(c) the Aircraft and the Engines are free and clear of Liens (as
such term is defined in Annex A to the Indenture) other than
such as are created by the Indenture, as supplemented by the
Indenture Supplement;
(d) the Indenture, as supplemented by the Indenture Supplement,
creates a duly and validly perfected first priority security
interest in favor of the Indenture Trustee in the Aircraft and
the Engines;
(e) the Indenture, as supplemented by the Indenture Supplement, is
not required to be refiled with the FAA or filed or recorded in
any other place within the United States in order to perfect or
maintain the perfection of the security interest created
thereby in the Aircraft and the Engines under the applicable
laws of any jurisdiction within the United States;
(f) no other registration of the Aircraft and no filings or
recordings (other than the filings and recordings with the FAA
which have been effected) are necessary to perfect in any
jurisdiction within the United States the Company's title to
the Aircraft or the security interest created by the Indenture,
as supplemented by the Indenture Supplement, in the Aircraft
and the Engines under the applicable laws of any jurisdiction
within the United States; and
(h) no authorization, approval, consent, license or order of, or
registration with, or giving of notice to, the FAA Aircraft
Registry is required for the valid authorization, delivery or
performance of the Indenture and the Indenture Supplement
except for such authorizations, approvals, consents, licenses,
orders, registrations and notices as have been effected.
No opinion is herein expressed as to: (i) laws other than the
federal laws of the United States; (ii) the validity or enforceability
under local law of the Indenture, as supplemented by the Indenture
Supplement; (iii) the recognition of the perfection of the security
interest created by the Indenture, as supplemented by the Indenture
Supplement, as against third parties in any legal proceedings outside the
United States; and (iv) the record status of the Aircraft prior to the
commencement of its United States registration. Since our examination
was limited to records maintained by the FAA Aircraft Registry, our
opinion does not cover liens which are perfected without the filing of
notice thereof with the FAA, such as federal tax liens, liens arising
under Section 1368(a) of Title 29 of the United States Code and
possessory artisans' liens, and was subject to the accuracy of FAA
personnel in the filing, indexing and recording of instruments filed with
the FAA and in the search for encumbrance cross-reference index cards for
the Engines. [THIS OPINION IS BEING DELIVERED AT THE REQUEST OF US
AIRWAYS, INC.]
Very truly yours,
ROBIN D. JENSON
For the Firm
RDJ:adw
SCHEDULE
[STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, N.A.]{________________________} as Indenture Trustee,
Pass [ ] Through Trustee and Subordination Agent
US Airways, Inc.
Standard & Poor's Ratings Services
MBIA Insurance Corporation
Exhibit E
FORM OF OPINION FOR INDENTURE TRUSTEE COUNSEL
_____________, ______
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: US Airways, Inc./Secured Financing of One Airbus [A320]
[A330-300] Aircraft [N _____ US] -- Indenture Trustee,
Owned Aircraft
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Indenture Trustee (the "INDENTURE TRUSTEE") under
the Trust Indenture and Security Agreement [N ____ US] dated as of
[________________] (the "INDENTURE") between US Airways, Inc., and State
Street, as Indenture Trustee, in connection with the execution and delivery
of the Participation Agreement [N ____ US] dated as of [________________]
(the "PARTICIPATION AGREEMENT") by and among the Indenture Trustee, US
Airways, Inc., State Street, as Pass Through Trustee (the "PASS THROUGH
TRUSTEE"), State Street, as Subordination Agent (the "SUBORDINATION AGENT")
and the Owner Trustee and the transactions contemplated thereby.
Capitalized terms not otherwise defined herein shall have the meanings
specified in the Lease and Annex A of the Participation Agreement. This
opinion is being delivered at the request of State Street and pursuant to
Section 4( )( ) of the Participation Agreement.
Our representation of State Street and the Indenture Trustee has been
as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement and the Indenture (the
"OPERATIVE DOCUMENTS"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other records, documents,
certificates, or other instruments as we have deemed necessary or advisable
for the purposes of this opinion. For purposes of our opinion rendered in
paragraph 1 below, with respect to the authority of State Street to operate
as a national banking association and exercise trust powers, our opinion
relies upon and is limited by such Certificate of the Comptroller of the
Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Indenture Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Indenture Trustee).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street,
in its individual capacity or as Indenture Trustee, as applicable, at
all times relevant thereto, is validly existing and in good standing
under the laws of the jurisdiction in which it is organized, and is
qualified to do business and in good standing under the laws of each
jurisdiction where such qualification is required generally or
necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents,
at all times relevant thereto, had and has the full power, authority
and legal right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Indenture Trustee with respect to the laws of
the United States of America and the internal substantive laws of the
State of the Connecticut, but only in each case to the limited extent
the same may be applicable to State Street or the Indenture Trustee,
and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii)
each party to the Operative Documents (other than State Street or the
Indenture Trustee, as applicable) has duly executed and delivered
each of such agreements and instruments to which it is a party and
that (other than with respect to State Street and the Indenture
Trustee, as applicable) the execution and delivery of such agreements
and instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street
or the Indenture Trustee, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Indenture Trustee, as applicable, to the extent
that laws other than those of the State of Connecticut are relevant
thereto (other than the laws of the United States of America, but
only to the limited extent the same may be applicable to State Street
or the Indenture Trustee, as applicable, and relevant to our opinions
expressed below).
3. The enforcement of any obligations of State Street or the
Indenture Trustee, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
by bankruptcy, insolvency, reorganization, moratorium, marshaling or
other laws and rules of law affecting the enforcement generally of
creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights); and we express
no opinion as to the status under any fraudulent conveyance laws or
fraudulent transfer laws of any of the obligations of State Street or
the Indenture Trustee, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and, as to any of your rights to collateral security, will be subject
to a duty to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any
applicable defenses, setoffs, recoupments, or counterclaims, (iv) the
grant of powers of attorney to any person or entity, (v) exculpation
or exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the
imposition or collection of interest on overdue interest or providing
for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings
clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. State Street is a national banking association, validly formed
and authorized to operate as a national banking association under the laws
of the United States of America and, in its individual capacity or as
Indenture Trustee, as the case may be, has the requisite corporate and
trust power and authority to execute, deliver and perform its obligations
under the Operative Documents and in its capacity as Indenture Trustee, to
authenticate the Equipment Notes issued on the date hereof.
2. State Street, in its individual capacity or as Indenture Trustee,
as the case may be, has duly authorized the Operative Documents by all
necessary corporate or trust action and has duly executed and delivered the
Operative Documents, and the Operative Documents constitute valid and
binding obligations of State Street, in its individual capacity or as
Indenture Trustee, as the case may be, enforceable against State Street, in
its individual capacity or as Indenture Trustee, as the case may be, in
accordance with their respective terms.
3. The Equipment Notes issued as of the date hereof have been duly
authenticated and delivered by State Street as Indenture Trustee pursuant
to the terms of the Indenture.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Indenture Trustee, as the case may
be, of the Operative Documents and the consummation of the transactions
therein contemplated and compliance with the terms thereof do not and will
not result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Indenture
Trustee, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Indenture Trustee, as the case may be, contemplated thereby (except as
shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the State of Connecticut or any political subdivision of
such State in connection with the execution and delivery by State Street,
in its individual capacity or as Indenture Trustee, as the case may be, of
the Operative Documents (except for taxes on any fees payable to State
Street in its individual capacity) which are imposed solely because State
Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or
before any governmental authority, agency, arbitration board or tribunal
which, if adversely determined, individually or in the aggregate, could
reasonably be expected to affect materially and adversely the trust related
to the Indenture or affect the right, power and authority of State Street,
in its individual capacity or as Indenture Trustee, as the case may be, to
enter into or perform its obligations under the Operative Documents.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of
Connecticut, National Association
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Services
MBIA Insurance Corporation
Exhibit F
FORM OF OPINION FOR PASS THROUGH TRUSTEE COUNSEL
____________________, ____
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: US Airways, Inc./Secured Financing of One Airbus [A320]
[A330-300] Aircraft [N _________ US] -- Pass Through
Trust, Owned Aircraft
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Pass Through Trustee (the "PASS THROUGH TRUSTEE")
under the Pass Through Trust Agreement dated as of July 30, 1999, among US
Airways Group, Inc., US Airways, Inc. and State Street, as supplemented by
Trust Supplement No. [2000-1G], and Trust Supplement No. [2000-1C] each
dated as of [ ] and each among US Airways, Inc. and
State Street (collectively, the "PASS THROUGH TRUSTS" and, individually, a
"PASS THROUGH TRUST") in connection with the execution and delivery of the
Participation Agreement [N ] dated as of [
] (the "PARTICIPATION AGREEMENT") by and among State Street,
as Indenture Trustee, US Airways, Inc., State Street, as Pass Through
Trustee and State Street, as Subordination Agent (the "SUBORDINATION
AGENT") and the transactions contemplated thereby. Capitalized terms not
otherwise defined herein shall have the meanings specified in the Lease and
Annex A of the Participation Agreement. This opinion is being delivered at
the request of State Street and pursuant to Section 4( )( ) of the
Participation Agreement.
Our representation of State Street and the Pass Through Trustee has
been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement, the Liquidity Facility
for each of the Class G and Class C Trusts, the Policy Provider Agreement,
the Policy, the Intercreditor Agreement, the Note Purchase Agreement, the
Escrow and Paying Agent Agreement for each of the Class G and Class C
Trusts each dated as of ______________ __, ____ and each among First
Security Bank, National Association, as Escrow Agent, the underwriters
named therein, State Street, as Pass Through Trustee and State Street, as
Paying Agent, and each of the Pass Through Trusts (the "OPERATIVE
DOCUMENTS"), the Certificate of the Comptroller of the Currency relating to
State Street and originals, or copies certified or otherwise identified to
our satisfaction, of such other records, documents, certificates, or other
instruments as we have deemed necessary or advisable for the purposes of
this opinion. For purposes of our opinion rendered in paragraph 1 below,
with respect to the authority of State Street to operate as a national
banking association and exercise trust powers, our opinion relies upon and
is limited by such Certificate of the Comptroller of the Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Pass Through Trustee), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Pass Through
Trustee).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street,
in its individual capacity or as Pass Through Trustee, as applicable,
at all times relevant thereto, is validly existing and in good
standing under the laws of the jurisdiction in which it is organized,
and is qualified to do business and in good standing under the laws
of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents,
at all times relevant thereto, had and has the full power, authority
and legal right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Pass Through Trustee with respect to the laws of
the United States of America and the internal substantive laws of the
State of Connecticut, but only in each case to the limited extent the
same may be applicable to State Street or the Pass Through Trustee,
and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii)
each party to the Operative Documents (other than State Street or the
Pass Through Trustee, as applicable) has duly executed and delivered
each of such agreements and instruments to which it is a party and
that (other than with respect to State Street and the Pass Through
Trustee, as applicable) the execution and delivery of such agreements
and instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street
or the Pass Through Trustee, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Pass Through Trustee, as applicable, to the
extent that laws other than those of the State of Connecticut are
relevant thereto (other than the laws of the United States of
America, but only to the limited extent the same may be applicable to
State Street or the Pass Through Trustee, as applicable, and relevant
to our opinions expressed below).
3. The enforcement of any obligations of State Street or the
Pass Through Trustee, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
by bankruptcy, insolvency, reorganization, moratorium, marshaling or
other laws and rules of law affecting the enforcement generally of
creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights); and we express
no opinion as to the status under any fraudulent conveyance laws or
fraudulent transfer laws of any of the obligations of State Street or
the Pass Through Trustee, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and, as to any of your rights to collateral security, will be subject
to a duty to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any
applicable defenses, setoffs, recoupments, or counterclaims, (iv) the
grant of powers of attorney to any person or entity, (v) exculpation
or exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the
imposition or collection of interest on overdue interest or providing
for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings
clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
In rendering the opinion set forth below in paragraph 6 as to certain
Connecticut tax matters, we have assumed that, for federal income tax
purposes, the trust created by the Trust Agreement will not be taxable as a
corporation, but, rather, will be classified as a grantor trust under
subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986, as amended or as a partnership.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. State Street is a national banking association, validly formed
and authorized to operate as a national banking association under the laws
of the United States of America and, in its individual capacity or as Pass
Through Trustee, as the case may be, has or had, as the case may be, the
requisite corporate and trust power and authority to execute, deliver and
perform its obligations under the Operative Documents and in its capacity
as Pass Through Trustee, to issue and execute the Pass Through Certificates
delivered on the Pass Through Trust Closing Date.
2. State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, has duly authorized by all necessary corporate
or trust action the Operative Documents and has duly executed and delivered
the Operative Documents, and the Operative Documents constitute valid and
binding obligations of State Street, in its individual capacity or as Pass
Through Trustee, as the case may be, enforceable against State Street, in
its individual capacity or as Pass Through Trustee, as the case may be, in
accordance with their respective terms.
3. The Pass Through Certificates issued and dated on the Pass
Through Trust Closing Date have been duly issued, authenticated and
delivered by State Street as Pass Through Trustee pursuant to the terms of
the Operative Documents and are enforceable against the Pass Through
Trustee and are entitled to the benefits of the applicable Pass Through
Trusts.
4. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Pass Through Trustee, as the case
may be, of the Operative Documents and the consummation of the transactions
therein contemplated and compliance with the terms thereof do not and will
not result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
5. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Pass Through
Trustee, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Pass Through Trustee, as the case may be, contemplated thereby (except
as shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
6. There are no taxes, fees or other governmental charges payable
under the laws of the State of Connecticut or any political subdivision of
such State in connection with the execution and delivery by State Street,
in its individual capacity or as Pass Through Trustee, as the case may be,
of the Operative Documents (except for taxes on any fees payable to State
Street in its individual capacity) or in connection with the issuance,
execution and delivery of the Pass Through Certificates by State Street, as
Pass Through Trustee, pursuant to the Pass Through Trusts which are imposed
solely because State Street has its principal place of business in
Connecticut or performs its administrative duties under the Operative
Documents in Connecticut. Neither State Street, in its individual capacity
or as the Pass Through Trustee, as the case may be, the Indenture Trustee,
the Owner Participant, the Owner Trustee, nor the trust created by the
Trust Agreement will, as a result of the transactions contemplated thereby,
be subject to any Taxes under the laws of the State of Connecticut or any
political subdivision thereof (except for Taxes on any fees payable to
State Street in its individual capacity) which are imposed because State
Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut, and
there are no Taxes under the laws of the State of Connecticut or any
political subdivision thereof (except for Taxes on any fees payable to
State Street in its individual capacity) upon or with respect to the
Aircraft or any Engine or any part of any interest therein, or the
purchase, ownership, delivery, lease, sublease, possession, presence, use,
operation, condition, storage, maintenance, modification, alteration,
repair, sale, return, transfer or other disposition of the Aircraft or any
Engine which are imposed because State Street has its principal place of
business in Connecticut or performs its administrative duties under the
Operative Documents in Connecticut.
7. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or
before any governmental authority, agency, arbitration board or tribunal
which, if adversely determined, individually or in the aggregate, could
reasonably be expected to affect materially and adversely the trust related
to the Indenture or affect the right, power and authority of State Street,
in its individual capacity or as Pass Through Trustee, as the case may be,
to enter into or perform its obligations under the Operative Documents.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of
Connecticut, National Association
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
MBIA Insurance Corporation
Exhibit G
FORM OF OPINION FOR SUBORDINATION AGENT COUNSEL
_____________, ________
TO THE PARTIES SET FORTH
IN SCHEDULE A HERETO
RE: US Airways, Inc./Secured Financing of One Airbus [A320]
[A330-300] Aircraft [N _____ US] for Subordination Agent,
Owned Aircraft
Ladies and Gentlemen:
We have acted as special counsel for State Street Bank and Trust
Company of Connecticut, National Association, in its individual capacity
("STATE STREET") and as Subordination Agent (the "SUBORDINATION AGENT")
under the Intercreditor Agreement dated as of [________________] (the
"INTERCREDITOR AGREEMENT") among State Street, in its capacity as Pass
Through Trustee under the US Airways Pass Through Trust 2000-1G, and US
Airways Pass Through Trust 2000-1C, Bayerische Laudesbank Girozentrale, as
Class G Liquidity Provider and Class C Liquidity Provider, MBIA Insurance
Corporation as Policy Provider and Class C Liquidity Provider and State
Street, as Subordination Agent in connection with the execution and
delivery of the Participation Agreement [N ____ US] dated as of
[________________] (the "PARTICIPATION AGREEMENT") by and among State
Street, as Indenture Trustee, US Airways, Inc., State Street, as Pass
Through Trustee (the "PASS THROUGH TRUSTEE"), and State Street, as
Subordination Agent, and the transactions contemplated thereby.
Capitalized terms not otherwise defined herein shall have the meanings
specified in Annex A of the Participation Agreement. This opinion is being
delivered at the request of State Street and pursuant to Section 4( )(____)
of the Participation Agreement.
Our representation of State Street and the Subordination Agent has
been as special counsel for the limited purposes stated above. As to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention or other state of mind), we have relied,
with your permission, entirely upon (i) the representations and warranties
of the parties set forth in the Operative Documents and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations, warranties and
certificates.
We have examined the Participation Agreement, the Note Purchase
Agreement and the Intercreditor Agreement (the "OPERATIVE DOCUMENTS"), the
Certificate of the Comptroller of the Currency relating to State Street and
originals, or copies certified or otherwise identified to our satisfaction,
of such other records, documents, certificates, or other instruments as we
have deemed necessary or advisable for the purposes of this opinion. For
purposes of our opinion rendered in paragraph 1 below, with respect to the
authority of State Street to operate as a national banking association and
exercise trust powers, our opinion relies upon and is limited by such
Certificate of the Comptroller of the Currency.
We have assumed the genuineness of all signatures (other than those on
behalf of State Street and the Subordination Agent), the conformity to the
originals of all documents reviewed by us as copies, and the authenticity
and completeness of all original documents reviewed by us in original or
copy form and the legal competence of each individual executing any
document (other than on behalf of State Street and the Subordination
Agent).
When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or
which are known to us, or with another similar qualification, the relevant
knowledge or awareness is limited to the actual knowledge or awareness of
the individual lawyer in the firm that signed this opinion, the individual
lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates and the partner of the firm
responsible for State Street corporate trust matters, and without any
special or additional investigation undertaken for the purposes of this
opinion.
Subject to the limitation set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this
opinion. The opinions set forth below are limited solely to the internal
substantive laws of the State of Connecticut as applied by courts located
in Connecticut and the federal laws of the United States. No opinion is
given herein as to the choice of law or internal substantive rules of law
that any court or other tribunal may apply to the transactions contemplated
by the Operative Documents. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by any law, statute, rule or
regulation of the United States relating to the acquisition, ownership,
registration, use, operation, maintenance, repair, replacement or sale of
or the nature of the Aircraft.
To the extent to which this opinion deals with matters governed by or
relating to the laws of the State of New York, or other jurisdiction other
than the State of Connecticut, by which the Operative Documents are stated
to be governed, we have assumed, with your permission that the Operative
Documents are governed by the internal substantive laws of the State of
Connecticut.
Our opinion is further subject to the following exceptions,
qualifications and assumptions:
1. We have assumed without any independent investigation that
(i) each party to the Operative Documents, other than State Street,
in its individual capacity or as Subordination Agent, as applicable,
at all times relevant thereto, is validly existing and in good
standing under the laws of the jurisdiction in which it is organized,
and is qualified to do business and in good standing under the laws
of each jurisdiction where such qualification is required generally
or necessary in order for such party to enforce its rights under such
Operative Documents, and (ii) each party to the Operative Documents,
at all times relevant thereto, had and has the full power, authority
and legal right under its certificate of incorporation, partnership
agreement, bylaws, and other governing organizational documents, and
the applicable corporate, partnership, or other enterprise
legislation and other applicable laws, as the case may be (other than
State Street and the Subordination Agent with respect to the laws of
the United States of America and the internal substantive laws of the
State of Connecticut, but only in each case to the limited extent the
same may be applicable to State Street or the Subordination Agent,
and relevant to our opinions expressed below) to execute, and to
perform its obligations under, the Operative Documents, and (iii)
each party to the Operative Documents (other than State Street or the
Subordination Agent, as applicable) has duly executed and delivered
each of such agreements and instruments to which it is a party and
that (other than with respect to State Street and the Subordination
Agent, as applicable) the execution and delivery of such agreements
and instruments and the transactions contemplated thereby have been
duly authorized by proper corporate or other organizational
proceedings as to such party.
2. We have assumed without any independent investigation (i)
that each of the Operative Documents is a valid, binding and
enforceable obligation of each party thereto other than State Street
or the Subordination Agent, as applicable, and (ii) that each of the
Operative Documents is a valid, binding and enforceable obligation of
State Street or the Subordination Agent, as applicable, to the extent
that laws other than those of the State of Connecticut are relevant
thereto (other than the laws of the United States of America, but
only to the limited extent the same may be applicable to State Street
or the Subordination Agent, as applicable, and relevant to our
opinions expressed below).
3. The enforcement of any obligations of State Street or the
Subordination Agent, as applicable, under any of the Operative
Documents may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
by bankruptcy, insolvency, reorganization, moratorium, marshaling or
other laws and rules of law affecting the enforcement generally of
creditors' rights and remedies (including such as may deny giving
effect to waivers of debtors' or guarantors' rights); and we express
no opinion as to the status under any fraudulent conveyance laws or
fraudulent transfer laws of any of the obligations of State Street or
the Subordination Agent, as applicable, under any of the Operative
Documents.
4. We express no opinion as the availability of any specific or
equitable relief of any kind.
5. The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity)
and, as to any of your rights to collateral security, will be subject
to a duty to act in a commercially reasonable manner.
6. We express no opinion as to the enforceability of any
particular provision of any of the Operative Documents relating to
(i) waivers of rights to object to jurisdiction or venue, or consents
to jurisdiction or venue, (ii) waivers of rights to (or methods of)
service of process, or rights to trial by jury, or other rights or
benefits bestowed by operation of law, (iii) waivers of any
applicable defenses, setoffs, recoupments, or counterclaims, (iv) the
grant of powers of attorney to any person or entity, (v) exculpation
or exoneration clauses, indemnity clauses, and clauses relating to
releases or waivers of unmatured claims or rights, (vi) the
imposition or collection of interest on overdue interest or providing
for a penalty rate of interest or late charges on overdue or
defaulted obligations, or the payment of any premium, liquidated
damages, or other amount which may be held by any court to be a
"penalty" or a "forfeiture," or (vii) so-called "usury savings
clauses" purporting to specify methods of (or otherwise assure)
compliance with usury laws or other similar laws of any jurisdiction.
7. We express no opinion as to the effect of events occurring,
circumstances arising, or changes of law becoming effective or
occurring, after the date hereof on the matters addressed in this
opinion letter, and we assume no responsibility to inform you of
additional or changed facts, or changes in law, of which we may
become aware.
8. No opinion is given herein as to the effect of usury laws
(or other similar laws) of any jurisdiction with respect to the
Operative Documents.
This opinion is rendered solely for the benefit of those institutions
listed on Schedule A hereto and their successors and assigns in connection
with the transactions contemplated by the Operative Documents and may not
be used or relied upon by any other person or for any other purpose.
Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. State Street is a national banking association, validly formed
and authorized to operate as a national banking association under the laws
of the United States of America and, in its individual capacity or as
Subordination Agent, as the case may be, has the requisite corporate and
trust power and authority to execute, deliver and perform its obligations
under the Operative Documents.
2. State Street, in its individual capacity or as Subordination
Agent, as the case may be, has duly authorized the Operative Documents by
all necessary corporate or trust action and has duly executed and delivered
the Operative Documents, and the Operative Documents constitute valid and
binding obligations of State Street, in its individual capacity or as
Subordination Agent, as the case may be, enforceable against State Street,
in its individual capacity or as Subordination Agent, as the case may be,
in accordance with their respective terms.
3. The authorization, execution, delivery and performance by State
Street, in its individual capacity or as Subordination Agent, as the case
may be, of the Operative Documents and the consummation of the transactions
therein contemplated and compliance with the terms thereof do not and will
not result in the violation of the provisions of the charter documents or
by-laws of State Street and, to the best of our knowledge, do not conflict
with, or result in a breach of any terms or provisions of, or constitute a
default under, or result in the creation or the imposition of any lien,
charge or encumbrance upon any property or assets of State Street under any
indenture, mortgage or other agreement or instrument, in each case known to
us, to which State Street is a party or by which it is bound, or violates
any applicable Connecticut or federal law, rule or regulation governing
State Street's banking or trust powers, or, to the best of our knowledge,
of any judgment, order or decree, in each case known to us, applicable to
State Street of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over State Street.
4. No authorization, approval, consent, license or order of, giving
of notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency pursuant to any
federal or Connecticut law governing the banking or trust powers of State
Street is required for the authorization, execution, delivery and
performance by State Street, in its individual capacity or as Subordination
Agent, as the case may be, of the Operative Documents or the consummation
of any of the transactions by State Street, in its individual capacity or
as Subordination Agent, as the case may be, contemplated thereby (except as
shall have been duly obtained, given or taken); and such authorization,
execution, delivery, performance, consummation and issuance do not conflict
with or result in a breach of the provisions of any such law.
5. There are no taxes, fees or other governmental charges payable
under the laws of the State of Connecticut or any political subdivision of
such State in connection with the execution and delivery by State Street,
in its individual capacity or as Subordination Agent, as the case may be,
of the Operative Documents (except for taxes on any fees payable to State
Street in its individual capacity) which are imposed solely because State
Street has its principal place of business in Connecticut or performs its
administrative duties under the Operative Documents in Connecticut.
6. To our knowledge, but without having investigated any
governmental records or court dockets, and without having made any other
independent investigation, there are no proceedings pending or overtly
threatened in writing against or affecting State Street in any court or
before any governmental authority, agency, arbitration board or tribunal
which, if adversely determined, individually or in the aggregate, could
reasonably be expected to affect materially and adversely the trust related
to the Indenture or affect the right, power and authority of State Street,
in its individual capacity or as Subordination Agent, as the case may be,
to enter into or perform its obligations under the Operative Documents.
7. Assuming that the Subordination Agent holds each of the Equipment
Notes delivered to and registered in its name pursuant to and as required
by the Intercreditor Agreement, it holds such Equipment Notes in trust as
trustee for the related Pass Through Trustee in the exercise of the
fiduciary powers conferred upon State Street by Connecticut law.
Very truly yours,
BINGHAM DANA LLP
SCHEDULE A
State Street Bank and Trust Company of Connecticut, National Association
US Airways, Inc.
US Airways Group, Inc.
Standard & Poor's Ratings Services
Moody's Investors Service, Inc.
MBIA Insurance Corporation
Owned Aircraft Indenture
N___U_
Exhibit C-2 to Note Purchase Agreement
FORM OF OWNED AIRCRAFT INDENTURE
INDENTURE AND SECURITY AGREEMENT
(N___U_)
Dated as of __________ __, ____
Between
US AIRWAYS, INC.
Owner
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A330-___ AIRCRAFT
BEARING U.S. REGISTRATION MARK N___U_
OWNED BY US AIRWAYS, INC.
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH
SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C
EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS
AGREEMENT SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT
NOTES AND TO MAKE OTHER RELATED CHANGES.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . 6
SECTION 2.02. Issuance and Terms of Equipment Notes . . . 10
SECTION 2.03. [Reserved] . . . . . . . . . . . . . . . . . 13
SECTION 2.04. Method of Payment . . . . . . . . . . . . . 13
SECTION 2.05. Application of Payments . . . . . . . . . . 16
SECTION 2.06. Termination of Interest in Indenture
Estate . . . . . . . . . . . . . . . . . . . 16
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes . . . . . . . . . . . . . . 16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes . . . . . . . . . . . . . . 18
SECTION 2.09. Payment of Expenses on Transfer;
Cancellation . . . . . . . . . . . . . . . . 19
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . 19
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . 19
SECTION 2.12. Redemptions; Notice of Redemption . . . . . 19
SECTION 2.13. [Reserved] . . . . . . . . . . . . . . . . . 20
SECTION 2.14. [Reserved] . . . . . . . . . . . . . . . . . 21
SECTION 2.15. Subordination . . . . . . . . . . . . . . . 21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE INDENTURE
ESTATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.01. Basic Distributions. . . . . . . . . . . . . 21
SECTION 3.02. Event of Loss; Optional Redemption . . . . . 22
SECTION 3.03. Payments After Event of Default . . . . . . 23
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . 25
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . 26
SECTION 3.06. Payments to Owner . . . . . . . . . . . . . 26
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF DEFAULT; REMEDIES OF INDENTURE
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.01. Certain Covenants of Owner . . . . . . . . . 26
SECTION 4.02. Event of Default . . . . . . . . . . . . . . 27
SECTION 4.03. [Reserved] . . . . . . . . . . . . . . . . . 28
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . 28
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . 30
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . 32
SECTION 4.07. Discontinuance of Proceedings . . . . . . . 32
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . 32
SECTION 4.09. Appointment of Receiver . . . . . . . . . . 33
SECTION 4.10. Indenture Trustee Authorized to Execute
Bills of Sale, Etc. . . . . . . . . . . . . 33
SECTION 4.11. Rights of Note Holders to Receive Payment . 33
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . 34
SECTION 5.01. Notice of Event of Default . . . . . . . . . 34
SECTION 5.02. Action upon
Instructions; Certain
Rights and Limitations . . . . . . . . . . . 34
SECTION 5.03. Indemnification . . . . . . . . . . . . . . 35
SECTION 5.04. No Duties Except as Specified in Indenture
or Instructions . . . . . . . . . . . . . . 35
SECTION 5.05. No Action Except Under Indenture or
Instructions . . . . . . . . . . . . . . . . 36
SECTION 5.06. Replacement Airframes and Replacement
Engines . . . . . . . . . . . . . . . . . . . 36
SECTION 5.07. Indenture Supplements for Replacements . . . 38
SECTION 5.08. Effect of Replacement . . . . . . . . . . . 39
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.01. Acceptance of Trusts and Duties . . . . . . 40
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . 40
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents . . . . . . . . . . . 40
SECTION 6.04. No Segregation of Monies; No Interest . . . 41
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . 41
SECTION 6.06. [Reserved] . . . . . . . . . . . . . . . . . 42
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . 42
SECTION 6.08. Instructions from Note Holders . . . . . . . 42
ARTICLE VII
OPERATING COVENANTS OF OWNER . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.01. Liens . . . . . . . . . . . . . . . . . . . 43
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia . . . . . . 43
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions . . 49
SECTION 7.04. Insurance . . . . . . . . . . . . . . . . . 52
SECTION 7.05. Inspection . . . . . . . . . . . . . . . . . 52
SECTION 7.06. Filings; Delivery of Financial Statements . 53
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER . . . . . . . . . . . . 54
SECTION 8.01. Scope of Indemnification . . . . . . . . . . 54
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . 55
SECTION 9.01. [Reserved.] . . . . . . . . . . . . . . . . 55
SECTION 9.02. Resignation of Indenture Trustee;
Appointment of Successor . . . . . . . . . . 55
SECTION 9.03. Appointment of Additional and Separate
Trustees. . . . . . . . . . . . . . . . . . 56
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.01. Instructions of Majority; Limitations. . . . 59
SECTION 10.02. Trustees Protected. . . . . . . . . . . . . 61
SECTION 10.03. Documents Mailed to Note Holders. . . . . . 61
SECTION 10.04. No Request Necessary for Indenture Supplement.61
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.01. Termination of Indenture. . . . . . . . . . 61
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders. . . . . . . . . . . . . . . . . . . 62
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding . . . . . . . . . . . . . . . . . . 62
SECTION 11.04. Indenture for Benefit of Owner, Indenture . 62
SECTION 11.05. Notices. . . . . . . . . . . . . . . . . . 63
SECTION 11.06. Severability. . . . . . . . . . . . . . . . 63
SECTION 11.07. No Oral Modification or Continuing Waivers. 63
SECTION 11.08. Successors and Assigns. . . . . . . . . . . 64
SECTION 11.09. Headings. . . . . . . . . . . . . . . . . . 64
SECTION 11.10. Normal Commercial Relations. . . . . . . . 64
SECTION 11.11. Governing Law; Counterpart Form. . . . . . 64
SECTION 11.12. Voting By Note Holders. . . . . . . . . . . 65
SECTION 11.13. Bankruptcy. . . . . . . . . . . . . . . . . 65
SECTION 11.14. References. . . . . . . . . . . . . . . . . 65
EXHIBIT B INDENTURE AND SECURITY AGREEMENT . . . . . . . Exhibit B-1
EXHIBIT C INDENTURE AND SECURITY AGREEMENT . . . . . . . Exhibit C-1
SCHEDULE I. . . . . . . . . . . . . . . . . . . . . . . . Schedule I-1
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST
SUPPLEMENTS . . . . . . . . . . . . . . . Schedule II-1
Owned Aircraft Indenture
N___U_
INDENTURE AND SECURITY AGREEMENT
(N___U_)
INDENTURE AND SECURITY AGREEMENT (N___U_), dated as of
_________ __, ____ (as amended, modified or supplemented from time to
time, this "Indenture") between US AIRWAYS, INC., a Delaware corporation
(together with its successors and permitted assigns, "Owner"), and STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (together
with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the parties desire by this Indenture, among other
things, (i) to provide for the issuance by Owner to the Pass Through
Trustees (or their designee) of the Equipment Notes evidencing the
participation of the Pass Through Trustees in the financing of Owner's
Cost for the Aircraft, as provided in the Participation Agreement and
(ii) to provide for the assignment, mortgage and pledge by Owner to the
Indenture Trustee, as part of the Indenture Estate hereunder, among other
things, of all of Owner's right, title and interest in and to the
Aircraft, as security for, among other things, Owner's obligations to the
Indenture Trustee, for the ratable benefit and security of the Note
Holders, subject to Section 2.15 and Article III;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by Owner and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable
obligations of Owner; and
WHEREAS, all things necessary to make this Indenture the
valid, binding and legal obligation of 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 INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal
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 and (ii) the performance and observance by Owner of all the
agreements, covenants and provisions herein and in the Participation
Agreement and the Equipment Notes contained, for the benefit of the Note
Holders, the Loan Participants and each of the Indenture Indemnitees and
the prompt payment of all amounts from time to time owing hereunder and
under the Participation Agreement to the Note Holders, the Loan
Participants or any Indenture Indemnitee by Owner (the "Secured
Obligations") and for the uses and purposes and subject to the terms and
provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes
by the holders thereof, and for other good and valuable consideration the
receipt and adequacy whereof are hereby acknowledged, Owner has granted,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors in trust and assigns,
for the security and benefit of the Note Holders, a first priority
security interest in and mortgage lien on all right, title and interest
of Owner in, to and under the following described property, rights and
privileges, to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which Owner shall
from time to time acquire title as provided herein), all as more
particularly described in the Indenture Supplement executed and delivered
with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture;
(2) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Bill of Sale;
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(4) all insurance and requisition proceeds with respect to
the Aircraft, including but not limited to the insurance required under
Section 7.04;
(5) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or required hereby to be held by the Indenture Trustee
hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, Owner is delivering to
the Indenture Trustee executed copies of the Participation Agreement, the
French Pledge Agreement and the Purchase Agreement Assignment with the
Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.15 and Article III 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 in all cases and as to all property specified in
paragraphs (1) through (6) inclusive above, subject to the terms and
provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, Owner shall remain liable under each of the
Indenture Agreements to which it is a party 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 Indenture Indemnitees, Indenture Trustee and the Note Holders shall
have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Indenture
Indemnitees, Indenture Trustee or the Note Holders be required or
obligated in any manner to perform or fulfill any obligations of Owner
under or pursuant to any of the Indenture Agreements to which it is a
party, 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.
Notwithstanding the above, the Indenture Trustee agrees, for
the benefit of AVSA, S.A.R.L., that in exercising or assigning its rights
under the Purchase Agreement Assignment, the terms and conditions of the
Purchase Agreement Assignment shall apply, and be binding upon, the
Indenture Trustee.
Owner does hereby constitute the Indenture Trustee the true
and lawful attorney of 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 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 Indenture Estate, 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 Indenture
Trustee may deem to be necessary or advisable in the premises. Without
limiting the generality of the foregoing, but subject to the rights of
Owner hereunder, during the continuance of any Event of Default under
this Indenture, the Indenture Trustee shall have the right under such
power of attorney to accept any offer in connection with the exercise of
remedies as set forth herein of any purchaser to purchase the Airframe
and Engines and upon such purchase to execute and deliver in the name of
and on behalf of Owner an appropriate bill of sale and other instruments
of transfer relating to the Airframe and Engines, when purchased by such
purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or
take any other action or proceedings, either in its own name or in the
name of Owner or otherwise, which the Indenture Trustee may deem
necessary or appropriate to protect and preserve the right, title and
interest of the Indenture Trustee in and to such rents and other sums and
the security intended to be afforded hereby; provided, however, that no
action of the Indenture Trustee pursuant to this paragraph shall increase
the obligations or liabilities of Owner to any Person beyond those
obligations and liabilities specifically set forth in this Indenture and
in the other Operative Documents. Owner agrees that promptly upon
receipt thereof, it will transfer to the Indenture Trustee any and all
monies from time to time received by it constituting part of the
Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Indenture.
Owner agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and
all such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect
the mortgage, security interests and assignments created or intended to
be created hereby or to obtain for the Indenture Trustee the full
benefits of the assignment hereunder and of the rights and powers herein
granted.
Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that, except as
permitted by the terms hereof, it will not assign or pledge, so long as
the assignment hereunder shall remain in effect, and the Lien hereof
shall not have been released pursuant to Section 11.01, any of its right,
title or interest hereby assigned, to anyone other than the Indenture
Trustee, and that it will not, except as otherwise provided in this
Indenture, (i) enter into any agreement amending or supplementing any
Indenture Agreement, (ii) execute any waiver or modification of, or
consent under, the terms of, or exercise any rights, powers or privileges
under, any Indenture Agreement, (iii) settle or compromise any claim
arising under any Indenture Agreement or (iv) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.
Owner does hereby further agree that, except as permitted by
the terms hereof, it will not without the written consent of the
Indenture Trustee sell, mortgage, transfer, assign or hypothecate (other
than to the Indenture Trustee hereunder) its interest in the Airframe and
Engines or any part thereof or in any amount to be received by it from
the use or disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III.
It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is
hereafter acquired by Owner shall ipso facto, and without any further
conveyance, assignment or act on the part of Owner or the Indenture
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained
in this paragraph shall be deemed to modify or change the obligations of
Owner contained in the foregoing paragraphs.
Owner does hereby agree that it will not violate any covenant
or agreement made by it, herein or in any of the other Owner Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed
and interpreted in the manner described, in Annex A.
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.
US AIRWAYS, INC. SERIES [___] EQUIPMENT NOTE DUE [___] ISSUED IN
CONNECTION WITH THE AIRBUS A330-__ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
US AIRWAYS, INC., hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the
Principal 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 Interest
Rate indicated above. The Principal Amount of this Equipment Note shall
be payable on the dates and in the installments as set forth in Schedule
I hereto. Accrued but unpaid interest shall be due and payable in semi-
annual installments commencing _______ 20, ____, and thereafter on
February 20 and August 20 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
Principal 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 with the same force and effect as if made on
such scheduled date and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from
and after such scheduled date.
For purposes hereof, the term "Indenture" means the Indenture and
Security Agreement (N___U_), dated as of ___________ __, ____, between
Owner and State Street Bank and Trust Company of Connecticut, National
Association (the "Indenture Trustee"), 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 Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal 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 Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, or as otherwise provided
in the 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 Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Indenture, each payment of an
installment of the Principal Amount, Make-Whole Amount, if any, and
interest received by it hereunder shall be applied, first, to the payment
of accrued interest on this Equipment Note (as well as any interest on
any overdue Principal 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, second, to the payment of the
Principal Amount of this Equipment Note (or portion hereof) then due
(other than by reason of redemption), third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Indenture, and fourth, the balance, if any, remaining thereafter, to the
payment of the Principal Amount hereof remaining unpaid and due by reason
of redemption. The amounts paid pursuant to clause fourth of the
preceding sentence shall be applied to installments of the Principal
Amount of this Equipment Note remaining unpaid in the inverse order of
their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Indenture which have been or are to be issued by Owner pursuant to
the terms of the Indenture. The Indenture Estate is held by the
Indenture Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Indenture.
Reference is hereby made to the Indenture and the Participation Agreement
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 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 Indenture, as well as for a statement of the terms and
conditions of the Trust created by the Indenture, to all of which terms
and conditions in the Indenture and the Participation Agreement each
holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like
aggregate Principal Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, Owner and the Indenture Trustee shall deem and treat the
Person in whose name this Equipment Note is registered on the Equipment
Note Register as the absolute owner and holder hereof for the purpose of
receiving all amounts payable with respect to this Equipment Note and for
all purposes, and neither of Owner nor the Indenture Trustee shall be
affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10 [, 2.11](1) and 2.12 of the Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
-------------
1 To be inserted for each Series G Equipment Note.
Obligations (as defined in the Indenture) in respect of Series G
Equipment Notes, 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 Indenture Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Indenture Trustee its
attorney-in-fact for such purpose.](2)
--------------------
2 To be inserted for each Series C Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized
on the date hereof.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in two separate series consisting of Series G
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. 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.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ 20 , ____, and on each
February 20 and August 20 thereafter until maturity. The Principal
Amount of each Equipment Note shall be payable on the dates and in the
installments equal to the corresponding amount as set forth on Schedule I
attached to the 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 Principal Amount and all
accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve
30-day months) on any part of the Principal 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 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 not be made on such scheduled date but shall be made
on the next succeeding Business Day with the same force and effect as if
made on such scheduled date and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount of such
payment from and after such scheduled date.
Owner agrees to pay to the Indenture Trustee for distribution
in accordance with Section 3.04 (i) to the extent not payable (whether
or not in fact paid) under Section 7(a) of the Note Purchase Agreement,
an amount or amounts equal to the fees payable to (x) 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 G Equipment Notes and Series C Equipment
Notes and the denominator of which shall be the then outstanding
aggregate principal amount of all "Series G Equipment Notes" and "Series
C Equipment Notes" (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures and (y) the Policy
Provider under the Policy Fee Letter (as defined in the Policy Provider
Agreement) multiplied by a fraction the numerator of which shall be the
sum of the then outstanding aggregate principal amount of the Series G
Equipment Notes and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures; (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) if any payment default shall
have occurred and be continuing with respect to interest on any Series G
Equipment Note or Series C Equipment Note, (x) the excess, if any, of (1)
an amount equal to interest on any Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance payable under Section 3.07 of
each Liquidity Facility (or, in the case of the Series G Equipment Notes,
if the Policy Provider has made a payment equivalent to such an Advance,
as would have been payable under Section 3.07 of the applicable Liquidity
Facility in respect of the Class G Pass Through Certificates had such
Advance been made) over (2) the sum of Investment Earnings from any Final
Advance plus any amount of interest at the Past Due Rate actually payable
(whether or not in fact paid) by Owner in respect of the overdue
scheduled interest on the Equipment Notes in respect of which such Unpaid
Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made by the applicable Liquidity Provider (or, in the case of the Series
G Equipment Notes, an equivalent payment was made by the Policy Provider)
multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series G Equipment Notes and
Series C 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 G Equipment Notes" and "Series C Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures (other than interest becoming due and
payable solely as a result of acceleration of any such "Equipment Notes,"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures); (v) 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 (i), (ii), (iii) or (iv) above multiplied by the
fraction specified in the foregoing clause (i); (vi) all compensation and
reimbursement of expenses, disbursements and advances payable by Owner
under the Pass Through Trust Agreements multiplied by the fraction
specified in the foregoing clause (i); (vii) Owner's pro rata share of
(I) 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 (II) all amounts for which the Policy
Provider is entitled to reimbursement under Section 3.7(i) of the
Intercreditor Agreement and (viii) without duplication of any amounts
paid or payable pursuant to clauses (i) through (vii) above, Owner's pro
rata share of any amount payable under Section 6(b) of the Participation
Agreement to any Pass Through Indemnitee to the extent such amount
relates to, results from or arises out of or in connection with (i) the
Pass Through Trust Agreement or the enforcement of any of the terms of
any Pass Through Document, (ii) the offer, sale, or delivery of the Pass
Through Certificates or any interest therein or represented thereby or
(iii) 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 Pass Through Document or the falsity of any
representation or warranty of Owner in any Pass Through Document. 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" (in each case as
defined in the relevant Operative Indenture) issued under the Operative
Indentures. For purposes of this paragraph, the terms "Applied Downgrade
Advance", "Applied Non-Extension Advance", "Cash Collateral Account",
"Downgrade Advance", "Final Advance", "Investment Earnings", "Non-
Extension Advance" and "Unpaid Advance" shall have the meanings specified
in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of Owner by its
President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes
bearing the signatures of individuals who were at any time the proper
officers of Owner shall bind 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. Owner may from
time to time execute and deliver Equipment Notes with respect to the
Aircraft to the Indenture Trustee for authentication upon original issue
and such Equipment Notes shall thereupon be authenticated and delivered
by the Indenture Trustee upon the written request of Owner signed by a
Vice President or Assistant Vice President or other authorized officer of
Owner; provided, however, that each such request shall specify the
aggregate Principal Amount of all Equipment Notes to be authenticated
hereunder on original issue with respect to the Aircraft. No Equipment
Note shall be secured by or entitled to any benefit under this 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 Indenture Trustee by the manual signature of one
of its authorized officers and such certificate upon any Equipment Notes
shall be conclusive evidence, and the only evidence, that such Equipment
Note has been duly authenticated and delivered hereunder.
SECTION 2.03. [Reserved].
SECTION 2.04. Method of Payment.
(a) The Principal 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 11:00 a.m., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution
among the Note Holders in the manner provided herein. Owner shall not
have any responsibility for the distribution of such payment to any Note
Holder. Notwithstanding the foregoing or any provision in any Equipment
Note to the contrary, the Indenture Trustee will use reasonable efforts
to pay or cause to be paid, if so directed in writing by any Note Holder
(with a copy to Owner), all amounts paid by 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 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 Indenture Trustee
shall fail to make any such payment as provided in the immediately
preceding sentence after its receipt of funds at the place and prior to
the time specified above, the Indenture Trustee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss
of use of funds at the Federal Funds Rate until such payment is made and
the Indenture Trustee 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 Indenture Trustee for
cancellation promptly after such payment. Notwithstanding any other
provision of this Indenture to the contrary, the Indenture Trustee 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
Indenture Trustee 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
11:00 a.m., New York City time, at the place of payment. Prior to the
due presentment for registration of transfer of any Equipment Note, Owner
and the Indenture Trustee 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 neither Owner nor the Indenture
Trustee 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 I 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 Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for Owner, shall exclude
and withhold at the appropriate rate from each payment of Principal
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 applicable thereto as
required by Law. The Indenture Trustee 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 such withholding shall constitute payment in
respect of such Equipment Note) 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 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.
If a Note Holder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001, W-8 or W-8BEN (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 Indenture Trustee of the withdrawal or inaccuracy of
such form prior to the date of such payment (and the Indenture Trustee
has no reason to know that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if
any, required by Law (after taking into account any applicable exemptions
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 (and such withholding shall constitute payment in
respect of such Equipment Note). If a Note Holder (x) which is a Non-
U.S. Person has furnished to the Indenture Trustee a properly completed
and currently effective U.S. Internal Revenue Service Form 4224 or 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 avoid withholding of United States federal income tax), during the
calendar year in which the payment is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the
withdrawal or inaccuracy of such certificate or form prior to the date of
such payment (and the Indenture Trustee has no reason to know that any
information set forth in such form is inaccurate) or (y) which is a U.S.
Person has furnished to the Indenture Trustee a properly completed and
currently effective U.S. Internal Revenue Service Form W-9 (or such
successor form or forms as may be required by the United States Treasury
Department), 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 Indenture Trustee 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 are 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 Indenture
Trustee 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
applicable law. Owner shall not be liable if the Indenture Trustee fails
to withhold withholding taxes in accordance with this Section 2.04 or if
any Note Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Principal 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;
Second: to the payment of the Principal Amount of such
Equipment Note (or a portion thereof) then due thereunder (other than by
reason of redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid
and due by reason of redemption (provided that such Equipment Note shall
not be subject to redemption except as provided in Sections 2.10, 2.11
and 2.12).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity. Notwithstanding the
foregoing, each indemnity payment or payment of transaction costs or
expenses received hereunder or under another Operative Document shall be
applied for the purpose (directly or by reimbursement) for which such
amount was paid.
SECTION 2.06. Termination of Interest in Indenture Estate.
A Note Holder and Indenture Indemnitees shall not, as such,
have any further interest in, or other right with respect to, the
Indenture Estate when and if the Secured Obligations due to such Note
Holder or Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes.
The Indenture Trustee shall keep a register (the "Equipment
Note Register") in which the Indenture Trustee 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 Indenture Trustee.
The Indenture Trustee 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
Indenture Trustee 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, Owner shall execute, and
the Indenture Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Equipment Notes of
a like aggregate Principal 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 Principal
Amount, upon surrender of the Equipment Notes to be exchanged to the
Indenture Trustee at the Corporate Trust Office. Whenever any Equipment
Notes are so surrendered for exchange, Owner shall execute, and the
Indenture Trustee shall authenticate and deliver, the Equipment Notes
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 or
otherwise under this Indenture) shall be the valid obligations of Owner
evidencing the same respective obligations, and entitled to the same
security and benefits under this 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 Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee 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 Indenture Trustee shall make a notation on each
new Equipment Note of the amount of all payments of Principal 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 Principal Amount marked on such new Equipment Note,
as provided above, shall be deemed to have been made thereon. 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. 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 Owner with respect to such
Equipment Note and for all purposes until a notice stating otherwise is
received from the Indenture Trustee and such change is reflected on the
Equipment Note Register. The Indenture Trustee will promptly notify
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,
agrees to the provisions of the Participation Agreement applicable to
Note Holders, and shall be deemed to have represented and warranted
(except as provided above), and covenanted, to the parties to the
Participation Agreement as to the matters represented, warranted and
covenanted by the Loan Participants in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of
the requirements set forth in this Section 2.07, the Indenture Trustee
and Owner shall use all reasonable efforts to issue new Equipment Notes
upon transfer or exchange within ten (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, Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Principal 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
Indenture Trustee and a photocopy thereof shall be furnished to Owner.
If the Equipment Note being replaced has been destroyed, lost or stolen,
the holder of such Equipment Note shall furnish to Owner and the
Indenture Trustee such security or indemnity as may be required by them
to save Owner and the Indenture Trustee harmless and evidence
satisfactory to Owner and the Indenture Trustee 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)(l)(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 to Owner and the Indenture Trustee 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 of the
requirements set forth in this Section 2.08, the Indenture Trustee and
Owner shall use all reasonable efforts to issue new Equipment Notes
within ten (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
Indenture Trustee, as Equipment Note Registrar, may require payment from
the party requesting such new Equipment Notes 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 Indenture Trustee 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 Owner is required pursuant to Section 5.06
to make payment for an Event of Loss with respect to the Aircraft, all of
the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with all
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement to the Note
Holders but without the Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than all, of the Equipment Notes may be
redeemed by Owner upon at least twenty (20) days' revocable prior written
notice to the Indenture Trustee at a redemption price equal to 100% of
the unpaid Principal Amount thereof, together with accrued interest
thereon to the date of redemption and all other amounts payable hereunder
or under the Participation Agreement to the Note Holders plus the Make-
Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by Owner of any Equipment Note may be made except to the extent
and in the manner expressly permitted by this Indenture. No purchase of
any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than fifteen (15) nor more than
sixty (60) days prior to the applicable redemption date, to each Note
Holder of such Equipment Notes to be redeemed or purchased, at such Note
Holder's address appearing in the Equipment Note Register. All notices
of redemption shall state: (1) the redemption date, (2) the applicable
basis for determining the redemption price, (3) that on the redemption
date, the redemption price will become due and payable upon each such
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, Owner (or any Person on
behalf of Owner) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed or purchased on the
redemption date shall not then be held in the Indenture Estate, deposit
or cause to be deposited with the Indenture Trustee by 11:00 a.m. New
York City time on the redemption date in immediately available funds the
redemption price of the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not revoked at least three (3) days prior to the
redemption date), the Equipment Notes to be redeemed or purchased shall,
on the redemption date, become due and payable at the Corporate Trust
Office of the Indenture Trustee 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 or purchase in accordance with said notice, such Equipment
Note shall be redeemed at the redemption price. If any Equipment Note
called for redemption or purchase shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid,
continue to bear interest from the applicable redemption date at the
interest rate in effect for such Equipment Note as of such redemption
date.
SECTION 2.13. [Reserved].
SECTION 2.14. [Reserved].
SECTION 2.15. Subordination.
(a) Owner and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, 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, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.02(e), except as
expressly provided in Article III.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series G), 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
2.15 or Article III, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c)) and will forthwith turn
over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III.
(c) As used in this Section 2.15, the term "Senior Holder"
shall mean, (i) the Note Holders of Series G until the Secured
Obligations in respect of Series G Equipment Notes have been paid in full
and (ii) after the Secured Obligations in respect of Series G Equipment
Notes have been paid in full, the Note Holders of Series C until the
Secured Obligations in respect of Series C Equipment Notes have been paid
in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE
SECTION 3.01. Basic Distributions.
Except as otherwise provided in Sections 3.02 and 3.03, each
periodic payment of principal or interest on the Equipment Notes received
by the Indenture Trustee shall be promptly distributed in the following
order of priority: (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments
of Principal Amount and interest and other amounts (as well as any
interest on any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue amounts)
then due under all Series G Equipment Notes shall be distributed to the
Note Holders of Series G ratably, without priority of one over the other,
in the proportion that the amount of such payment or payments then due
under each Series G Equipment Note bears to the aggregate amount of the
payments then due under all Series G Equipment Notes; and (ii) after
giving effect to paragraph (i) above, so much of such installment or
payment remaining as shall be required to pay in full the aggregate
amount of the payment or payments of Principal Amount and interest and
other amounts (as well as any interest on any overdue Principal Amount
and, to the extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series C Equipment
Notes shall be distributed to the Note Holders of Series C ratably,
without priority of one over the other, in the proportion that the amount
of such payment or payments then due under each Series C Equipment Note
bears to the aggregate amount of the payments then due under all Series C
Equipment Notes.
SECTION 3.02. Event of Loss; Optional Redemption.
Except as otherwise provided in Section 3.03, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss or (ii) in connection with any optional
redemption of the Equipment Notes effected in accordance with the
Operative Documents, shall be applied to redemption of the Equipment
Notes, to payment of the Secured Obligations or to the Indenture Trustee
or any Note Holder under the Participation Agreement by applying such
funds in the following order of priority:
First, (i) to reimburse the Indenture Trustee 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 Documents and then (ii) to pay
any other amounts then due to the Indenture Trustee and the Note Holders
under this Indenture, the Participation Agreement or the Equipment Notes
(other than the amounts specified in clause Second below);
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 plus Make-Whole Amount, if any, then due
and payable in respect of the Series G Equipment Notes; and (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 plus Make-Whole Amount,
if any, then due and payable in respect of the Series C Equipment Notes;
and
Third, as provided in clause "Fourth" of Section 3.03 hereof.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Article IV) after both an Event of Default shall
have occurred and be continuing and the Equipment Notes shall have become
due and payable pursuant to Section 4.04(b), as well as all payments or
amounts then held by the Indenture Trustee as part of the Indenture
Estate, shall be promptly distributed by the Indenture Trustee in the
following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to
Section 4.05(b)) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any
other expenses for which the Indenture Trustee or the Note Holders are
entitled to reimbursement under any Operative Document and all amounts
payable to the other Indenture Indemnitees hereunder and under the
Participation Agreement excluding those amounts described in clauses
"Second" and "Third" below, and in the case the aggregate amount to be so
distributed is insufficient to pay as aforesaid, 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 5.03 (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over 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 5.03;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series G Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in respect of
the Series G Equipment Notes to the date of distribution, shall be
distributed to the Note Holders of Series G, 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 Principal Amount of all Series G
Equipment Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal Amount of all
Series G Equipment Notes held by all such holders plus the accrued but
unpaid interest and other amounts due thereon to the date of
distribution; and (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 Principal Amount of all Series C Equipment
Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Series C Equipment
Notes to the date of distribution, shall be distributed to the Note
Holders of Series C, 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 Principal Amount of all Series C Equipment Notes
held by each holder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series C Equipment Notes
held by all such holders plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to Owner or as Owner may direct
free and clear of the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Indenture and
for which such provision is made in the Participation Agreement or any
other Operative Document shall be applied forthwith to the purpose for
which such payment was made in accordance with the terms of the
Participation Agreement or such other Operative Document, as the case may
be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from Owner in respect of (i)
the Indenture Trustee in its individual capacity or any other Indenture
Indemnitees, (ii) any Note Holder, (iii) the Subordination Agent, (iv)
the Liquidity Provider, (v) the Policy Provider and (vi) the Pass Through
Trustees, in each case pursuant to Section 6 of the Participation
Agreement, directly to the Person entitled thereto. Any payment received
by the Indenture Trustee the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee in the manner provided in
Section 3.03. Further, and except as otherwise provided in Sections
3.02, 3.03 and 3.04, all payments received and amounts realized by the
Indenture Trustee with respect to the Aircraft, to the extent received or
realized at any time after payment in full of all Secured Obligations due
the Note Holders, shall be distributed by the Indenture Trustee to Owner.
SECTION 3.06. Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee to
Owner shall be paid to Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner to the
Indenture Trustee from time to time. Owner hereby notifies the Indenture
Trustee that unless and until the Indenture Trustee receives notice to
the contrary from Owner, all amounts to be distributed to Owner pursuant
to this Indenture shall be distributed by wire transfer of funds of the
type received by the Indenture Trustee to Owner's account specified in
Schedule I to the Participation Agreement.
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Certain Covenants of Owner.
Owner hereby covenants and agrees that it will duly and
punctually pay the Principal Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under the Equipment Notes and hereunder
in accordance with the terms of the Equipment Notes and this Indenture
and all amounts, if any, payable by it to the Note Holders under the
Participation Agreement.
SECTION 4.02. 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):
(a) the failure of Owner to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder and such
failure shall have continued unremedied for ten (10) Business Days in the
case of any payment of Principal Amount or interest or Make-Whole Amount,
if any, thereon and, in the case of any other amount, for ten (10)
Business Days after Owner receives written demand from the Indenture
Trustee or any Note Holder; or
(b) any representation or warranty made by Owner herein, in
the Participation Agreement or in any certificate furnished by Owner to
the Indenture Trustee or any Note Holder in connection with the
transactions contemplated by the Operative Documents shall prove to have
been false or incorrect when made in any material respect and continues
to be material and adverse to the interests of the Indenture Trustee or
the Note Holders; and if such misrepresentation is capable of being
corrected and if such correction is being sought diligently, such
misrepresentation shall not have been corrected within sixty (60) days
following notice thereof from the Indenture Trustee or any Note Holder to
Owner; or
(c) other than as provided in (d) below, any failure by Owner
to observe or perform any other covenant or obligation of Owner for the
benefit of the Indenture Trustee or the Note Holders contained in the
Participation Agreement, the Equipment Notes or this Indenture which is
not remedied within a period of sixty (60) days after notice thereof has
been given to Owner; provided, however, that if Owner shall have
undertaken to cure any such failure and, notwithstanding the diligence of
Owner in attempting to cure such failure, such failure is not cured
within said sixty (60) day period but is curable with future due
diligence, there shall exist no Event of Default under this Section
4.02(c) so long as Owner is proceeding with due diligence to cure such
failure and such failure is remedied not later than three hundred sixty
(360) days after receipt by Owner of such written notice; or
(d) if at any time when the Aircraft is registered under the
laws of the United States, Owner shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under
the Transportation Code, and regulations then applicable thereunder,
shall cease to be effective; provided that no Event of Default shall be
deemed to have occurred under this paragraph (d) unless such
circumstances continue unremedied for more than sixty (60) days after
Owner has actual knowledge of the state of facts that resulted in such
ineffectiveness and of such loss of citizenship; or
(e) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of Owner under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the
United States or seeking the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of Owner
or for all or substantially all of its property, or seeking the winding-
up or liquidation of its affairs and the continuation of any such case or
other proceeding undismissed and unstayed for a period of ninety (90)
consecutive days; or (ii) the commencement by Owner of a voluntary case
or proceeding under the federal bankruptcy Laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States, or the consent by
Owner to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Owner or for all or substantially all of its property, or
the making by Owner of any assignment for the benefit of creditors or
Owner shall take any action to authorize any of the foregoing; or
(f) Owner shall fail to carry and maintain or with respect to
the Aircraft (or cause to be carried or maintained) insurance required to
be maintained in accordance with Section 7.04.
SECTION 4.03. [Reserved].
SECTION 4.04. 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 Indenture Trustee may exercise any or all of the
rights and powers and pursue any and all of the remedies pursuant to this
Article IV and shall have and may exercise all of the rights and remedies
of a secured party under the Uniform Commercial Code in effect in the
State of New York 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 Owner and all Persons claiming under
Owner wholly or partly therefrom; provided, however, that during any
period the Aircraft is subject to the Civil Reserve Air Fleet Program and
in possession of the United States Government or an agency or
instrumentality of the United States, the Indenture Trustee shall not, on
account of any Event of Default, be entitled to exercise or pursue any of
the powers, rights or remedies described in this Section 4.04 in such
manner as to limit Owner's control (or any Lessee's control under any
Lease) of any Airframe or any Engines installed thereon, unless at least
sixty (60) days (or such lesser period as may then be applicable under
the Air Mobility Command program of the United States Government) written
notice of default hereunder shall have been given by the Indenture
Trustee by registered or certified mail to Owner (and any Lessee) with a
copy addressed to the Contracting Office Representative of the Air
Mobility Command of the United States Air Force under any contract with
Owner (or any Lessee) relating to the Aircraft; provided further, that
the Indenture Trustee shall give Owner twenty (20) days' prior written
notice of its intention to sell the Aircraft. Without limiting any of
the foregoing, it is understood and agreed that the Indenture Trustee 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 Indenture Trustee 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 Owner, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid 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; provided that if an Event of Default
referred to in clause (e) of Section 4.02 shall have occurred and be
continuing, then and in every such case the unpaid Principal Amount then
outstanding, together with accrued but unpaid interest and all other
amounts due thereunder and hereunder shall immediately and without
further act become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal 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 under the Equipment Notes (except the Principal Amount of
the Equipment Notes 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 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 Indenture Trustee, rescind and annul the Indenture Trustee's
declaration 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) Any Note Holder shall be entitled, at any sale pursuant to
this Section 4.04, 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 Indenture (but only to the
extent that such purchase price would have been paid to such Note Holder
pursuant to Article III 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 Indenture Estate, 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
Indenture, the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued interest thereon, 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 the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, Owner shall promptly
execute and deliver to the Indenture Trustee such instruments and other
documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by
the Indenture Trustee, at such time or times and place or places as the
Indenture Trustee may specify, to obtain possession of all or any part of
the Mortgaged Property included in the Indenture Estate to which the
Indenture Trustee shall at the time be entitled hereunder. If Owner
shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee, the Indenture
Trustee may (i) obtain a judgment conferring on the Indenture Trustee the
right to immediate possession and requiring Owner to execute and deliver
such instruments and documents to the Indenture Trustee, to the entry of
which judgment Owner hereby specifically consents to the fullest extent
permitted by applicable law, and (ii) pursue all or part of such
Mortgaged Property wherever it may be found and may enter any of the
premises of Owner wherever such Mortgaged Property may be or be supposed
to be and search for such Mortgaged Property and take possession of and
remove such Mortgaged Property. 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 Indenture.
(b) Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property,
make all such expenditures for maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modifications or
alterations to and of the Mortgaged Property, as it may deem proper. In
each such case, the Indenture Trustee shall have the right to maintain,
use, operate, store, insure, lease, control, manage, dispose of, modify
or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of Owner relating to the Mortgaged
Property, as the Indenture Trustee 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 Mortgaged
Property or any part thereof as the Indenture Trustee may determine, and
the Indenture Trustee shall be entitled to collect and receive directly
all tolls, rents, revenues, issues, income, products and profits of the
Mortgaged Property and every part thereof. Such tolls, rents, revenues,
issues, income, products and profits shall be applied to pay the expenses
of the maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make
all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property or any part thereof, and all other payments
which the Indenture Trustee may be required or authorized to make under
any provision of this Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all
Persons properly engaged and employed by the Indenture Trustee with
respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this 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 Indenture
Trustee, and the exercise or the beginning of the exercise of any power
or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No
delay or omission by the Indenture Trustee in the exercise of any right,
remedy or power or in 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 Owner or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, and all rights, remedies and
powers of the Indenture Trustee or Owner shall continue as if no such
proceedings had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, the Indenture Trustee 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 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 Indenture Trustee shall not waive any Default (i)
in the payment of the Principal 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, cannot be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of
the Mortgaged Property or the taking of possession thereof or otherwise,
and 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 Mortgaged Property shall be entitled to exercise all the
rights and powers of the Indenture Trustee with respect to the Mortgaged
Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills
of Sale, Etc.
Owner irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of Owner in its name and stead and on its behalf,
for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating in accordance with applicable law any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate, with full power
of substitution, 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 Indenture Trustee
or any purchaser, Owner shall ratify and confirm any such sale,
assignment, transfer or delivery, by executing and delivering to the
Indenture Trustee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Note Holder to receive payment of principal of, and Make-
Whole Amount, if any, and interest on an Equipment 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 V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure by Owner to pay
when due any payment of Principal Amount of, interest on, or Make-Whole
Amount, if any, due and payable under any Equipment Note, the Indenture
Trustee shall give prompt written notice thereof to Owner and each Note
Holder. Subject to the terms of Sections 4.04, 4.08, 5.02 and 5.03, the
Indenture Trustee 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
Indenture Trustee shall be instructed in writing by a Majority in
Interest of Note Holders. Subject to the provisions of Section 5.03, if
the Indenture Trustee shall not have received instructions as above
provided within twenty (20) days after mailing notice of such Event of
Default to the Note Holders, the Indenture Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of
this Section 5.01, 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.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.04, 4.08, 5.01 and 5.03,
upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Indenture Trustee shall,
subject to the terms of this Section 5.02, 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 under the Participation Agreement,
the Purchase Agreement, or any other part of the Indenture Estate as
shall be specified in such instructions.
The Indenture Trustee will execute and Owner will file or cause
to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Indenture Estate as specified by Owner pursuant to Section 7(j) of the
Participation Agreement or as may be specified from time to time in
written instructions of a Majority in Interest of Note Holders (which
instructions may, by their terms, be operative only at a future date and
which shall be accompanied by the form of such continuation statement so
to be filed). The Indenture Trustee 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 Indenture Trustee hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action
or refrain from taking any action under Sections 5.01 (other than the
first sentence thereof) or 5.02 or Article IV unless the Indenture
Trustee 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 Indenture Trustee shall not be under any
obligation to take any action under this Indenture and nothing herein or
therein shall require the Indenture Trustee 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 Indenture Trustee shall be accepted as
reasonable assurance of adequate indemnity). The Indenture Trustee shall
not be required to take any action under Section 5.01 (other than the
first sentence thereof) or 5.02 or Article IV, nor shall any other
provision of this Indenture or any other Operative Document be deemed to
impose a duty on the Indenture Trustee to take any action, if the
Indenture Trustee shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions.
The Indenture Trustee 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 Indenture
Estate, or to otherwise take or refrain from taking any action under, or
in connection with, this Indenture or any part of the Indenture Estate,
except as expressly provided by the terms of this Indenture or as
expressly provided in written instructions from Note Holders as provided
in this Indenture; and no implied duties or obligations shall be read
into this Indenture against the Indenture Trustee. The Indenture Trustee
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), promptly take such action as may be
necessary duly to discharge all liens and encumbrances on any part of the
Indenture Estate which result from claims against it in its individual
capacity not related to its interest in the Aircraft or the
administration of the Indenture Estate or any other transaction pursuant
to this Indenture or any document included in the Indenture Estate.
SECTION 5.05. No Action Except Under Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Indenture Estate except in
accordance with the powers granted to, or the authority conferred upon,
the Indenture Trustee pursuant to this Indenture and in accordance with
the express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the
Airframe and the Engines and/or engines then installed thereon, Owner
shall forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of
Loss, and, within sixty (60) days after such Event of Loss, Owner shall
give the Indenture Trustee written notice of its election to perform one
of the following options (it being agreed that if Owner shall not have
given such notice of election within such period, Owner shall be deemed
to have elected the option set forth in clause (i) below). Owner may
elect either to:
(i) redeem the Equipment Notes in the
manner set forth in Section 2.10 on the earlier of (x) the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss or (y) an earlier Business Day
irrevocably specified fifteen (15) days in advance by notice
from Owner to the Indenture Trustee; or
(ii) substitute an aircraft or an airframe
or an airframe and one or more engines, as the case may be;
provided that, if Owner does not perform its obligation to
effect such substitution in accordance with this Section
5.06(a), during the period of time provided herein, then Owner
shall redeem the Equipment Notes in the manner set forth in
Section 2.10 on the Business Day next succeeding the 120th day
following the occurrence of such Event of Loss.
In the event Owner shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be)
Owner shall, at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss,
(1) furnish the Indenture Trustee with such evidence as the Indenture
Trustee may reasonably request that Owner holds title to such aircraft
(or such airframe or such airframe and one or more engines which,
together with the Engines constituting a part of the Aircraft but not
installed thereon at the time of such Event of Loss, constitute the
Aircraft) free and clear of all Liens (other than Permitted Liens) and
having a value, utility and remaining useful life at least equal to the
Aircraft subject to such Event of Loss assuming that the Aircraft had
been maintained in accordance with the requirements of this Indenture,
and Owner shall cause an Indenture Supplement to be duly executed by
Owner and filed for recording pursuant to the Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in which
the Airframe may then be registered as permitted by Section 7(b) of the
Participation Agreement with respect to such substituted property, (2)
cause a financing statement or statements with respect to such
substituted property to be filed in such place or places, if any, as may
be deemed necessary or desirable by the Indenture Trustee to perfect the
Indenture Trustee's interest therein, (3) furnish the Indenture Trustee
with such evidence of compliance with the insurance provisions hereof
with respect to such substituted property as the Indenture Trustee may
reasonably request and (4) furnish the Indenture Trustee with an opinion
of counsel (which shall be Skadden, Arps, Slate, Meagher & Flom LLP or
Skadden, Arps, Slate, Meagher & Flom (Illinois) and, if not, other
counsel chosen by Owner and reasonably acceptable to the Indenture
Trustee) reasonably satisfactory to the Indenture Trustee to the effect
that the Indenture Trustee will be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to the substitute aircraft,
provided that such opinion need not be delivered to the extent that
immediately prior to such substitution the benefits of Section 1110 of
the Bankruptcy Code were not, solely by reason of a change in law or
governmental interpretation thereof after the date hereof, available to
the Indenture Trustee with respect to the Aircraft. For all purposes
hereof, the property so substituted shall be deemed part of the property
subject to the Lien of this Indenture and shall be deemed an "Aircraft",
"Airframe" and "Engine", as the case may be, as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with
respect to the Airframe, Owner shall forthwith (and in any event, within
fifteen (15) days after such occurrence) give the Indenture Trustee
written notice thereof and shall, within one hundred twenty (120) days
after the occurrence of such Event of Loss, (i) cause an Indenture
Supplement to be duly executed by Owner and to be filed for recording
pursuant to the Transportation Code, or the applicable laws, rules and
regulations of any other jurisdiction in which the Airframe may then be
registered as permitted by Section 7(b) of the Participation Agreement
with respect to an Acceptable Alternate Engine and, (ii) furnish the
Indenture Trustee with such evidence of compliance with the insurance
provisions hereof with respect to such replacement engine as the
Indenture Trustee may reasonably request. For all purposes hereof, each
such replacement engine shall, after such designation, be deemed part of
the property subject to the Lien of this Indenture hereunder, and shall
be deemed an "Engine".
(c) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event
of the requisition for use of an Engine by the United States Government
or any other government of registry of the Aircraft or any agency or
instrumentality of any thereof, Owner shall replace such Engine hereunder
by complying (or causing any Lessee to comply) with the terms of Section
5.06(b) to the same extent as if an Event of Loss had occurred with
respect thereto, and, upon compliance with Section 5.06(b), any payments
received by Owner from such government with respect to such requisition
shall be paid over to, or retained by, Owner.
(d) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 5.06 which is payable to
or retainable by Owner shall not be paid to or retained by Owner if at
the time of such payment or retention an Event of Default has occurred
and is continuing, but shall be held by or paid over to the Indenture
Trustee as security for the obligations of Owner hereunder and, if an
Event of Default has occurred and is continuing hereunder, applied
against Owner's obligations hereunder as and when due. At such time as
there shall not be continuing any such Event of Default, such amount
shall be paid to Owner to the extent not previously applied in accordance
with the preceding sentence.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 5.06, Owner and the Indenture
Trustee agree for the benefit of the Note Holders and Owner, subject to
fulfillment of the conditions precedent and compliance by Owner with the
requirements of Section 5.06 with respect to such Replacement Airframe or
Replacement Engine, to execute and deliver an Indenture Supplement.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of an Engine
or Engines pursuant to Section 5.06, (a) all provisions of this Indenture
relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines
with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine
or Engines being replaced, and (b) the provisions of this Indenture shall
no longer be applicable to the Airframe or Engine or Engines being
replaced, which shall be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee.
Any amounts held by the Indenture Trustee pursuant to any
provision of any other Operative Document providing for amounts to be
held by the Indenture Trustee which are not distributed pursuant to the
other provisions of Article III shall be invested by the Indenture
Trustee from time to time in Cash Equivalents as directed by Owner so
long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Indenture, any
income realized as a result of any such investment, net of the Indenture
Trustee's reasonable fees and expenses in making such investment, shall
be held and applied by the Indenture Trustee 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 Indenture Trustee shall not
be liable for any loss resulting from any investment required to be made
by it under this Indenture other than by reason of its willful misconduct
or gross negligence, and any such investment may be sold (without regard
to its maturity) by the Indenture Trustee without instructions whenever
such sale is necessary to make a distribution required by this Indenture.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms
of this Indenture and agrees to receive and disburse all monies
constituting part of the Indenture Estate in accordance with the terms
hereof. The Indenture Trustee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for 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)
and the last sentence of Section 5.04, and (iii) for liabilities that may
result from the inaccuracy of any representation or warranty of the
Indenture Trustee (in its individual capacity) in the Participation
Agreement or expressly made hereunder.
SECTION 6.02. Absence of Duties.
Except in accordance with written instructions furnished
pursuant to Section 5.01 or 5.02 , and except as provided in, and without
limiting the generality of, Sections 5.03 and 5.04, the Indenture Trustee
shall have no duty (i) to see to any registration of the Aircraft or any
recording or filing of this 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 Indenture Estate, or (iv) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants hereunder with respect to the
Aircraft.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
THE INDENTURE TRUSTEE 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 Indenture Trustee, in
its individual or trust capacity, does not make and shall not be deemed
to have made any representation or warranty as to the validity, legality
or enforceability of this Indenture, the Participation Agreement, the
Equipment Notes, the Purchase Agreement, the Purchase Agreement
Assignment or the Consent and Agreement, or as to the correctness of any
statement contained in any thereof.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed
to the Note Holders or Owner as provided in Article III need not be
segregated in any manner except to the extent required by Law and Section
5.09, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee 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; provided,
however, that any payments received, or applied hereunder, by the
Indenture Trustee shall be accounted for by the Indenture Trustee so that
any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee 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 Indenture Trustee may accept a copy of a
resolution of the Board of Directors of any party to the Participation
Agreement, 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 Principal Amount of Equipment
Notes outstanding as of any date, Owner may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or
matter relating to Owner the manner of ascertainment of which is not
specifically described herein, the Indenture Trustee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of
Owner, as to such fact or matter, and such certificate shall constitute
full protection to the Indenture Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Indenture Trustee may execute
any of the trusts or powers hereof and perform its powers and duties
hereunder directly or through agents or attorneys and may at the expense
of the Indenture Estate, consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Indenture
Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons.
SECTION 6.06. [Reserved].
SECTION 6.07. Compensation.
The Indenture Trustee 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 Indenture Estate 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
Indenture Estate toward such payments. The Indenture Trustee agrees that
it shall have no right against the Loan Participants or the Note Holders
for any fee as compensation for its services as trustee under this
Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a
Majority in Interest of Note Holders should any provision of this
Indenture appear to conflict with any other provision herein or should
the Indenture Trustee's duties or obligations hereunder be unclear, and
the Indenture Trustee shall incur no liability in refraining from acting
until it receives such instructions. The Indenture Trustee shall be
fully protected for acting in accordance with any instructions received
under this Section 6.08.
ARTICLE VII
OPERATING COVENANTS OF OWNER
SECTION 7.01. Liens. Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to
the Aircraft, title thereto or any interest therein, except (i) the Lien
of the Indenture, the rights of any Lessee under a Lease permitted
hereunder and any other rights of any Person existing pursuant to the
Operative Documents, (ii) the rights of others under agreements or
arrangements to the extent permitted by the terms of Sections 7.02 and
7.03, (iii) Loan Participant Liens and Indenture Trustee's Liens, (iv)
Liens for Taxes of Owner (or any Lessee) either not yet due or being
contested in good faith by appropriate proceedings so long as such
proceedings do not involve any material risk of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein, (v)
materialmen's, mechanics', workmen's, repairmen's, employees' or other
like Liens arising in the ordinary course of Owner's (or, if a Lease is
then in effect, Lessee's) business (including those arising under
maintenance agreements entered into in the ordinary course of business)
securing obligations that are not overdue for a period of more than sixty
(60) days or are being contested in good faith by appropriate proceedings
so long as such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein,
(vi) Liens arising out of any judgment or award against Owner (or any
Lessee), unless the judgment secured shall not, within sixty (60) days
after the entry thereof, have been discharged, vacated, reversed or
execution thereof stayed pending appeal or shall not have been
discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Owner
(or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. Owner will
promptly, at its own expense, take (or cause to be taken) such actions as
may be necessary duly to discharge any such Lien not excepted above if
the same shall arise at any time.
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia.
(a) Registration, Maintenance and Operation.
(i) Registration and Maintenance. Owner,
at its own cost and expense, shall (or shall cause any Lessee
to): (A) cause the Aircraft to be duly registered in the name
of Owner (or any Lessee), and, subject to clause (ii) of this
Section 7.02(a) and Section 7(b) of the Participation
Agreement, to remain duly registered in the name of Owner (or
any Lessee) under the Transportation Code, and shall not
register the Aircraft or permit the Aircraft to be registered
under any laws other than the Transportation Code at any time
except as provided in Section 7(b) of the Participation
Agreement and, shall cause the Indenture to be duly recorded
and maintained of record as a first mortgage on the Aircraft;
(B) maintain, service, repair and/or overhaul (or cause to be
maintained, serviced, repaired and/or overhauled) the Aircraft
so as to keep the Aircraft in as good an operating condition as
when delivered by the Seller to Owner, ordinary wear and tear
excepted, and as may be necessary to enable the applicable
airworthiness certification for the Aircraft to be maintained
in good standing at all times (other than during temporary
periods of storage or during maintenance or modification
permitted hereunder) under the Transportation Code, except when
all of Owner's Airbus Model A330 aircraft powered by engines of
the same type as those with which the Airframe shall be
equipped at the time of such grounding and registered in the
United States have been grounded by the FAA (although such
certification need actually be maintained only during such
periods as the Aircraft is registered in the United States), or
the applicable laws of any other jurisdiction in which the
Aircraft may then be registered from time to time in accordance
with Section 7(b) of the Participation Agreement, utilizing,
except during any period that a Lease is in effect, the same
manner and standard of maintenance, service, repair or overhaul
used by Owner with respect to similar aircraft operated by
Owner in similar circumstances and utilizing, during any period
that a Lease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by the Lessee
with respect to similar aircraft operated by the Lessee in
similar circumstances; and (C) maintain or cause to be
maintained in English all records, logs and other materials
required to be maintained in respect of the Aircraft by the FAA
or the applicable regulatory agency or body of any other
jurisdiction in which the Aircraft may then be registered.
(ii) Operation. Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or
permit any Lessee to maintain, use, service, repair, overhaul
or operate the Aircraft) in violation of any law or any rule,
regulation, order or certificate of any government or
governmental authority (domestic or foreign) having
jurisdiction over the Aircraft, or in violation of any
airworthiness certificate, license or registration relating to
the Aircraft issued by any such authority, except to the extent
Owner (or, if a Lease is then in effect, any Lessee) is
contesting in good faith the validity or application of any
such law, rule, regulation or order in any reasonable manner
which does not involve any material risk of sale, forfeiture or
loss of the Aircraft. Owner will not operate the Aircraft, or
permit any Lessee to operate the Aircraft, in any area excluded
from coverage by any insurance required by the terms of Section
7.04; provided, however, that the failure of Owner to comply
with the provisions of this sentence shall not give rise to an
Event of Default hereunder if indemnification complying with
Section 7.04 has been provided or where such failure is
attributable to extraordinary circumstances involving an
isolated occurrence or series of incidents not in the ordinary
course of the regular operations of Owner (or any Lessee) such
as a hijacking, medical emergency, equipment malfunction,
weather condition, navigational error or other causes beyond
the reasonable control of Owner (or any Lessee).
(b) Possession and Leases. Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any
manner deliver, transfer or relinquish possession of the Airframe or any
Engine or install or permit any Engine to be installed on any airframe
other than the Airframe or enter into any Wet Lease, and so long as Owner
(or any Lessee) shall comply with the provisions of Section 7.02(a) and
Section 7.04, Owner may (or may permit any Lessee to), without the prior
written consent of the Indenture Trustee:
(i) subject the Airframe and the Engines
or engines then installed thereon to interchange agreements or
any Engine to pooling or similar arrangements, in each case
customary in the airline industry and entered into by Owner
(or, if a Lease is then in effect, by Lessee) in the ordinary
course of its business; provided that (A) no such agreement or
arrangement contemplates or requires the transfer of title to
the Airframe, (B) if Owner's title to any Engine shall be
divested under any such agreement or arrangement, such
divestiture shall be deemed to be an Event of Loss with respect
to such Engine and Owner shall (or shall cause Lessee to)
comply with Section 5.06(b) in respect thereof, and (C) any
interchange agreement to which the Airframe may be subject
shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery
thereto) or to any organization (or for delivery thereto) for
testing, service, repair, maintenance or overhaul work on the
Airframe or Engine or any part of any thereof or for
alterations or modifications in or additions to such Airframe
or Engine to the extent required or permitted by the terms of
Section 7.03;
(iii) install an Engine on an airframe owned
by Owner (or any Lessee) free and clear of all Liens, except:
(A) Permitted Liens and those which apply only to the engines
(other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties under
interchange agreements or pooling or similar arrangements which
would be permitted under clause (i) above, provided that
Owner's title to such Engine and the first priority Lien of the
Indenture shall not be divested or impaired as a result thereof
and (C) mortgage liens or other security interests, provided
that (as regards this clause (C)) the documents creating such
mortgage liens or other security interests (or, if applicable,
another written agreement governing such mortgage liens or
other security interests) effectively provide that such Engine
shall not become subject to the lien of such mortgage or
security interest, notwithstanding the installation thereof on
such airframe;
(iv) install an Engine on an airframe
leased to Owner (or any Lessee) or purchased by Owner (or any
Lessee) subject to a conditional sale or other security
agreement, provided that (x) such airframe is free and clear of
all Liens, except: (A) the rights of the parties to the lease
or conditional sale or other security agreement covering such
airframe, or their assignees, and (B) Liens of the type
permitted by clause (iii) of this paragraph (b) and (y) such
lease, conditional sale or other security agreement effectively
provides that such Engine shall not become subject to the lien
of such lease, conditional sale or other security agreement,
notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned
by Owner (or any Lessee), leased to Owner (or any Lessee) or
purchased by Owner (or any Lessee) subject to a conditional
sale or other security agreement under circumstances where
neither clause (iii) nor clause (iv) of this paragraph (b) is
applicable, provided that such installation shall be deemed an
Event of Loss with respect to such Engine and Owner shall (or
shall cause any Lessee to) comply with Section 5.06(b) in
respect thereof;
(vi) to the extent permitted by this
Section 7.02(b), subject any appliances, Parts or other
equipment removed from the Airframe or any Engine to any
pooling arrangement referred to in this Section 7.02(b);
(vii) subject (or permit any Lessee to
subject) the Airframe or any Engine to the Civil Reserve Air
Fleet Program and transfer (or permit any Lessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to
the Civil Reserve Air Fleet Program, so long as Owner (or any
Lessee) shall (A) promptly notify the Indenture Trustee upon
subjecting the Airframe or any Engine to the Civil Reserve Air
Fleet Program in any contract year and provide the Indenture
Trustee with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United
States Air Force to whom notice must be given pursuant to
Section 4.04(a), and (B) promptly notify the Indenture Trustee
upon transferring possession of the Airframe or any Engine to
the United States of America or any agency or instrumentality
thereof pursuant to such program;
(viii) enter into a Wet Lease for the
Airframe and Engines or engines then installed thereon with any
third party;
(ix) transfer possession of the Airframe or
any Engine to the United States Government or any
instrumentality or agency thereof pursuant to a contract, a
copy of which shall be provided to the Indenture Trustee; or
(x) at any time, in Owner's sole
discretion, enter into any lease with respect to the Aircraft,
Airframe or any Engine to any Permitted Lessee 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,
however, with respect to a lease to a Permitted Lessee not
domiciled in the United States, Owner shall deliver to the
Indenture Trustee an opinion of counsel to the effect that (I)
the terms of the lease constitute valid and binding obligations
of the Lessee and (subject to customary bankruptcy and
equitable remedies exceptions and to other similar exceptions
customary in such opinions) enforceable against Lessee (it
being understood that such opinion may be an opinion as to the
form of the lease only and may assume due authorization,
execution, delivery, requisite approvals and absence of
conflicts with laws, contracts or organizational documents)
under the laws of the jurisdiction governing the lease and (II)
unless Owner shall have agreed to provide insurance covering
the risk of requisition of use of the Aircraft by the
government of the jurisdiction of the proposed Lessee, that the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of the Aircraft in
the event of the requisition by such government of such use;
and provided, further, that, with respect to any lease to any
Affiliate of Owner, (I) such Lessee shall be a Certificated Air
Carrier and (II) Owner shall deliver to the Indenture Trustee
an opinion of counsel to the effect that Owner would be
entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the Aircraft if such Affiliate were to be a
debtor in a case under Chapter 11 of the Bankruptcy Code, such
opinion to be subject to customary assumptions and
qualifications. Owner shall provide the Indenture Trustee with
a copy of any sublease which has a term of more than one (1)
year.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to the Indenture Trustee's
rights to repossess and to void such Lease upon such repossession, and
Owner shall remain primarily liable hereunder for the performance of all
of the terms of this Indenture and the terms of any such Lease shall not
permit any Lessee to take any action not permitted to be taken by Owner
hereunder with respect to the Aircraft. No pooling agreement, lease,
sublease or other relinquishment of possession of the Airframe or any
Engine or Wet Lease shall in any way discharge or diminish any of Owner's
obligations hereunder or constitute a waiver of the Indenture Trustee's
rights or remedies hereunder. The Indenture Trustee agrees, for the
benefit of Owner (and any Lessee) and for the benefit of any mortgagee or
other holder of a security interest in any engine (other than an Engine)
owned by Owner (or any Lessee), any lessor of any engine (other than an
Engine) leased to Owner (or any Lessee) and any conditional vendor of any
engine (other than an Engine) purchased by Owner (or any Lessee) subject
to a conditional sale agreement or any other security agreement, that no
interest shall be created hereunder in any engine so owned, leased or
purchased and that none of the Indenture Trustee, its successors or
assigns will acquire or claim, as against Owner (or any Lessee) or any
such mortgagee, lessor or conditional vendor or other holder of a
security interest or any successor or assignee of any thereof, any right,
title or interest in such engine as the result of such engine being
installed on the Airframe.
Any Wet Lease or similar arrangement under which Owner
maintains operational control of the Aircraft shall not constitute a
delivery, transfer or relinquishment of possession of the Aircraft for
purposes of this Section.
The Indenture Trustee acknowledges that any consolidation or
merger of Owner or conveyance, transfer or lease of all or substantially
all of Owner's assets otherwise permitted by the Operative Documents
shall not be prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Owner agrees to affix and maintain (or cause to
be affixed and maintained), at its expense, in the cockpit of the
Airframe adjacent to the airworthiness certificate therein and on each
Engine a nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company of Connecticut,
National Association,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Indenture Trustee, as permitted under the
Operative Documents). Except as above provided, Owner will not allow the
name of any Person (other than Owner) to be placed on the Airframe or on
any Engine as a designation that might be interpreted as a claim of
ownership; provided that nothing herein contained shall prohibit Owner
(or any Lessee) from placing its customary colors and insignia on the
Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from
time to time be incorporated or installed in or attached to the 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, except as
otherwise provided in paragraph (c) of this Section 7.03 or if the
Airframe or an Engine to which a Part relates has suffered an Event of
Loss. In addition, Owner (or any Lessee) may, at its own cost and
expense, remove 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 that Owner (or any Lessee), except as
otherwise provided in paragraph (c) of this Section 7.03, will, at its
own cost and expense, 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
paragraph (b) of this Section 7.03 and except in the case of replacement
property temporarily installed on an emergency basis) and shall be in as
good operating condition as, and shall have a value and utility at least
equal to, the Parts replaced assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof.
Except as otherwise provided in paragraph (c) of this Section 7.03, all
Parts at any time removed from the Airframe or any Engine shall remain
the property of Owner, no matter where located. Immediately upon any
replacement part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided, without further act (subject
only to Permitted Liens and any pooling arrangement to the extent
permitted by paragraph (b) of this Section 7.03 and except in the case of
replacement property temporarily installed on an emergency basis), such
replacement Part shall become subject to the Lien of this Indenture and
be deemed part of the Airframe or such Engine for all purposes hereof to
the same extent as the Parts originally incorporated or installed in or
attached to the Airframe or such Engine, and the replaced Part shall be
free and clear of the Lien of this Indenture and shall no longer be
deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as provided in paragraph (a) of this Section 7.03 may be
subjected by Owner (or any Lessee) to a normal pooling arrangement
customary in the airline industry of which Owner (or, if a Lease is then
in effect, any Lessee) is a party entered into in the ordinary course of
Owner's (or any Lessee's) business; provided that the Part replacing such
removed Part shall be incorporated or installed in or attached to such
Airframe or Engine in accordance with such paragraph (a) 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 in accordance with such paragraph (a) may be owned
by any third party subject to such a normal pooling arrangement, provided
that Owner (or any Lessee), at its expense, as promptly thereafter as
practicable, either (i) causes title to such replacement Part to vest in
Owner in accordance with such paragraph (a) free and clear of all Liens
except Permitted Liens (other than pooling arrangements) or (ii) replaces
such replacement Part by incorporating or installing in or attaching to
the Airframe or Engine a further replacement Part owned by Owner (or any
Lessee) free and clear of all Liens except Permitted Liens (other than
pooling arrangements) and by causing title to such further replacement
Part to vest in Owner in accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Owner, at its
own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or
any applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered as permitted by Section 7(b) of
the Participation Agreement; provided, however, that Owner (or, if a
Lease is then in effect, any Lessee) may, in good faith, contest the
validity or application of any such law, rule, regulation or order in any
reasonable manner which does not adversely affect the Indenture Trustee.
In addition, Owner (or any Lessee), at its own expense, may from time to
time add further parts or accessories and make such alterations and
modifications in and additions to the Airframe or any Engine as Owner (or
any Lessee) may deem desirable in the proper conduct of its business,
including, without limitation, removal of Parts which Owner (or any
Lessee) has determined in its reasonable judgment to be obsolete or no
longer suitable or appropriate for use on the Airframe or such Engine
(such parts, "Obsolete Parts"); provided that no such alteration,
modification or addition shall materially diminish the value, utility or
remaining useful life of the Airframe or such Engine below the value,
utility or remaining useful life thereof immediately prior to such
alteration, modification or addition, assuming the Airframe or such
Engine was then in the condition required to be maintained by the terms
of this Indenture, except that the value (but not the utility or
remaining useful life) of the Airframe or any Engine may be reduced by
the value of Obsolete Parts which shall have been removed so long as the
aggregate value of all Obsolete Parts which shall have been removed and
not replaced shall not exceed $750,000 in aggregate value at the time of
removal. Owner (or any Lessee) may remove or suffer to be removed any
Part incorporated or installed in or attached or added to the Airframe or
an Engine as the result of any such alteration, modification or addition,
provided that such additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine at the time of
delivery thereof hereunder or any Part in replacement of, or substitution
for, any such Part, (ii) is not required to be incorporated or installed
in or attached or added to the Airframe or any Engine pursuant to the
terms of Section 7.02 or the first sentence of this paragraph (c) and
(iii) can be removed from the Airframe or such Engine without diminishing
or impairing the value, utility or remaining useful life which the
Airframe or such Engine would have had at the time of removal had such
alteration, modification or addition not occurred.
Upon the removal by Owner (or Lessee) of any Part as provided
above, such Part shall no longer be deemed part of the Airframe or Engine
from which it was removed.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Owner may install on the Airframe, subject to the requirements of Section
7.03(c) above, Passenger Convenience Equipment that is (i) owned by
another Person and leased to Owner, (ii) sold to Owner by another Person
subject to a conditional sale contract or other retained security
interest, (iii) leased to Owner pursuant to a lease which is subject to a
security interest in favor of another Person or (iv) installed on the
Aircraft subject to a license granted to Owner by another Person, and in
any such case the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on
the Airframe. Owner agrees that if any such Person repossesses such
Passenger Convenience Equipment, Owner will (or cause such Person to)
restore the Aircraft to the condition it would have been in had the
installation of such Passenger Convenience Equipment not occurred.
SECTION 7.04. Insurance.
(a) Owner's Obligation to Insure. Owner shall comply with, or
cause to be complied with, each of the provisions of Exhibit B, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) [Reserved.]
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance,
the Indenture Trustee agrees to accept, in lieu of insurance against any
risk with respect to the Aircraft, indemnification from, or insurance
provided by, the United States Government or any agency or
instrumentality thereof, or, upon the written consent of the Indenture
Trustee, other government of registry of the Aircraft or agency or
instrumentality thereof, against such risk in an amount which, when added
to the amount of insurance against such risk maintained by Owner (or any
Lessee) shall be at least equal to the amount of insurance against such
risk otherwise required by this Section 7.04 (taking into account self-
insurance permitted by Exhibit B hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit B which is
payable to or retainable by Owner (or any Lessee) shall not be paid to or
retained by Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but
shall be held by or paid over to the Indenture Trustee as security for
the obligations of Owner hereunder if the Indenture Trustee declares this
Indenture to be in default pursuant to Section 4.02, applied against
Owner's obligations hereunder as and when due. At such time as there
shall not be continuing any such Event of Default, such amount shall be
paid to Owner to the extent not previously applied in accordance with the
preceding sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior
written notice to Owner, the Indenture Trustee, or its authorized
representatives, may inspect the Aircraft and inspect and make copies of
the books and records of Owner and any Lessee required to be maintained
by the FAA or the regulatory agency or body of another jurisdiction in
which the Aircraft is then registered relating to the maintenance of the
Aircraft (at the Indenture Trustee's risk and expense) and shall keep any
information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Note Holders and to
prospective and permitted transferees of the Note Holders' or the
Indenture Trustee's interest (and such prospective and permitted
transferee's counsel, independent insurance advisors or other agents) who
agree to hold such information confidential, (B) to the Note Holders' or
the Indenture Trustee's counsel, independent insurance advisors or other
agents who agree to hold such information confidential, or (C) as may be
required by any statute, court or administrative order or decree or
governmental ruling or regulation, provided, however, that any and all
disclosures permitted by clause (C) above shall be made only to the
extent necessary to meet the specific requirements or needs of the
Persons for whom such disclosures are hereby permitted. Any such
inspection of the Aircraft shall be subject to Owner's safety and
security rules applicable to the location of the Aircraft, shall be a
visual, walk-around inspection of the interior and exterior of the
Aircraft and shall not include opening any panels, bays or the like
without the express consent of Owner (except in connection with a heavy
maintenance visit when a panel, bay or the like is scheduled or required
to be opened), which consent Owner may in its sole discretion withhold;
provided that no exercise of such inspection right shall interfere with
the normal operation or maintenance of the Aircraft by, or the business
of, Owner (or any Lessee). The Indenture Trustee shall not have any duty
to make any such inspection nor shall it incur any liability or
obligation by reason of not making such inspection. Except during the
continuance of an Event of Default, all inspections by the Indenture
Trustee and its authorized representatives provided for under this
Section 7.05 shall be limited to one (1) inspection of any kind
contemplated by this Section 7.05 during any calendar year.
SECTION 7.06. Filings; Delivery of Financial Statements.
Forthwith upon the execution and delivery of each Indenture
Supplement from time to time required by the terms hereof and upon
execution and delivery of any amendment to this Indenture, Owner will
cause such Indenture Supplement (and, in the case of the initial
Indenture Supplement and the Indenture as well) or amendment to be duly
filed and recorded, and maintained of record, in accordance with the
applicable laws of the government of registry of the Aircraft. Owner
agrees to furnish to the Indenture Trustee promptly after execution and
delivery of any supplement and amendment hereto (except for any such
supplement or amendment which does not require or receive the approval of
Owner pursuant to the Operative Documents and is not required pursuant to
the terms of the Operative Documents), an opinion of counsel (which may
be Owner's General Counsel, Deputy General Counsel, Associate General
Counsel or Assistant General Counsel) reasonably satisfactory to the
Indenture Trustee as to the due recording or filing of such supplement or
amendment. Owner will deliver to the Indenture Trustee (a) within sixty
(60) days after the end of each of the first three quarterly periods of
each fiscal year of Owner, the publicly filed Form 10-Q report of Owner;
and (b) within one hundred twenty (120) days after the close of such
fiscal year, the publicly filed annual report and Form 10-K report of
Owner.
SECTION 7.07. Termination as to Engines; Replacement. Owner
shall have the right at its option at any time, on at least thirty (30)
days prior written notice, to terminate the Lien of the Indenture with
respect to any Engine. In such event, and prior to the date of such
termination, Owner shall replace such Engine hereunder by complying with
the terms of Section 5.06 to the same extent as if an Event of Loss had
occurred with respect to such Engine.
SECTION 7.08. No Set-Off, Counterclaim, etc. Except as
expressly provided herein, Owner's obligation to pay all amounts payable
hereunder shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which Owner may have
against the Indenture Trustee (in its individual capacity or as Indenture
Trustee), any Loan Participant, or anyone else for any reason whatsoever
(whether in connection with the transactions contemplated hereby or any
other transactions), including, without limitation, any breach by Owner
of its warranties, agreements or covenants contained in any of the
Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or
any damage to or loss or destruction of, the Aircraft, or any
interruption or cessation in or prohibition of the use or possession
thereof by Owner (or any Lessee) for any reason whatsoever, including,
without limitation, any such interruption, cessation or prohibition
resulting from the act of any government authority, (iii) any insolvency,
bankruptcy, reorganization or similar case or proceedings by or against
Owner (or any Lessee) or any other Person or (iv) any other circumstance,
happening, or event whatsoever, whether or not unforeseen or similar to
any of the foregoing.
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER
SECTION 8.01. Scope of Indemnification.
Owner hereby agrees, except as otherwise provided in Section
2.04(b), to assume liability for, and does hereby indemnify, protect,
save and keep harmless the Indenture Trustee (in its individual and trust
capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture), claims, actions, suits, costs, expenses
or disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever, which may be imposed on, incurred by or
asserted against the Indenture Trustee (whether or not also indemnified
against by any other Person under any other document) in any way relating
to or arising out of this Indenture or any other Operative Document to
which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to
or arising out of the administration of the Indenture Estate or the
action or inaction of the Indenture Trustee hereunder. Notwithstanding
the foregoing, the Indenture Trustee shall not be entitled to any
indemnification for any Expenses to the extent relating to or arising
from the willful misconduct or gross negligence (or negligence in the
case of handling funds) of the Indenture Trustee in the performance of
its duties hereunder or resulting from the inaccuracy of any
representation or warranty of the Indenture Trustee (in its individual
capacity) referred to in Section 6.03, or as provided in Section 6.01 or
in the last sentence of Section 5.04, or as otherwise excluded by the
terms of Section 6(b) of the Participation Agreement from Owner's
indemnities under such Section. In addition, if necessary, the Indenture
Trustee shall be entitled to indemnification from the Indenture Estate
for any liability, obligation, loss, damage, penalty, claim, action,
suit, cost, expense or disbursement indemnified against pursuant to this
Section 8.01 to the extent not reimbursed by Owner or others, but without
releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on
the Indenture Estate. Owner shall be subrogated to the Indenture
Trustee's rights, if any, to payment from Owner for amounts payable by
Owner under this Section 8.01.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. [Reserved.]
SECTION 9.02. Resignation of Indenture Trustee; Appointment
of Successor.
(a) The Indenture Trustee or any successor thereto may resign
at any time without cause by giving at least 30 days' prior written
notice to Owner and each Note Holder, such resignation to be effective
upon the acceptance of the trusteeship by a successor Indenture Trustee.
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 shall have occurred and be continuing) remove the Indenture
Trustee without cause by an instrument in writing delivered to Owner and
the Indenture Trustee, and the Indenture Trustee shall promptly notify
each Note Holder thereof in writing, such removal to be effective upon
the acceptance of the trusteeship by a successor Indenture Trustee. In
the case of the resignation or removal of the Indenture Trustee, a
Majority in Interest of Note Holders may appoint a successor Indenture
Trustee 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 Indenture Trustee
shall not have been appointed within 30 days after such notice of
resignation or removal, the Indenture Trustee, Owner or any Note Holder
may apply to any court of competent jurisdiction to appoint a successor
Indenture Trustee to act until such time, if any, as a successor shall
have been appointed as above provided. The successor Indenture Trustee
so appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as above
provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the predecessor Indenture Trustee and Owner an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee hereunder and under the Participation Agreement arising
from and after the time of such appointment, and thereupon such successor
Indenture Trustee, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor
Indenture Trustee hereunder in the trust hereunder applicable to it with
like effect as if originally named the Indenture Trustee herein; but
nevertheless upon the written request of such successor Indenture
Trustee, such predecessor Indenture Trustee shall execute and deliver an
instrument transferring to such successor Indenture Trustee, upon the
trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee, and such
predecessor Indenture Trustee shall duly assign, transfer, deliver and
pay over to such successor Indenture Trustee all monies or other property
then held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall
be a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents 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 Indenture Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee
may be transferred, shall, subject to the terms of paragraph (c) of this
Section 9.02, be a successor Indenture Trustee and the Indenture Trustee
under this Indenture without further act.
SECTION 9.03. Appointment of Additional and Separate
Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the
Indenture Estate, this Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Indenture Trustee shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
Owner), or (iii) the Indenture Trustee shall have been requested to do so
by a Majority in Interest of Note Holders, then in any such case, the
Indenture Trustee and, upon the written request of the Indenture Trustee,
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 Indenture Trustee, either to act jointly
with the Indenture Trustee as additional trustee or trustees of all or
any part of the Indenture Estate, or to act as separate trustee or
trustees of all or any part of the Indenture Estate, in each case with
such rights, powers, duties and obligations consistent with this
Indenture as may be provided in such supplemental indenture or other
instruments as the Indenture Trustee 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 and separate trustee, subject in each case to
the remaining provisions of this Section 9.03. If Owner shall not have
taken any action requested of it under this Section 9.03(a) that is
permitted or required by its terms within 15 days after the receipt of a
written request from the Indenture Trustee so to do, or if an Event of
Default shall have occurred and be continuing, the Indenture Trustee may
act under the foregoing provisions of this Section 9.03(a) without the
concurrence of Owner; and Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Indenture Trustee, its agent
and attorney-in-fact to act for it under the foregoing provisions of this
Section 9.03(a) in either of such contingencies. The Indenture Trustee
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 9.03(a)
shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Indenture Trustee
until a successor additional or separate trustee is appointed as provided
in this Section 9.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee 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 Indenture Estate or otherwise
payable under any Operative Document to the Indenture Trustee shall be
promptly paid over by it to the Indenture Trustee. All other rights,
powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Indenture
Trustee 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 Indenture Trustee 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 Indenture Estate 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 Indenture Trustee 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
Indenture Trustee shall be liable for the consequences of its lack of
reasonable care in selecting, and Indenture Trustee's own actions in
acting with, any additional or separate trustee. Each additional or
separate trustee appointed pursuant to this Section 9.03 shall be subject
to, and shall have the benefit of Articles IV through IX and Article XI
insofar as they apply to the Indenture Trustee. The powers of any
additional or separate trustee appointed pursuant to this Section 9.03
shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or desirable 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 Indenture Trustee shall have been requested to do so in
writing by a Majority in Interest of Note Holders, the Indenture Trustee
and, upon the written request of the Indenture Trustee, 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 Indenture Trustee may act on behalf of Owner
under this Section 9.03(c) when and to the extent it could so act under
Section 9.03(a).
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) Owner agrees it shall not enter into any amendment of or
supplement to Article 12 of the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement, or execute and deliver any written
waiver or modification of, or consent under, the Purchase Agreement (to
the extent assigned by the Purchase Agreement Assignment), the Purchase
Agreement Assignment, the Consent and Agreement, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
the Indenture Trustee and a Majority in Interest of Note Holders.
(b) Without limiting the provisions of Section 10.01(a) the
Indenture Trustee agrees with the Note Holders that it shall not enter
into any amendment, waiver or modification of, supplement or consent to
this Indenture, the Purchase Agreement (to the extent assigned by the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement, or any other
agreement included in the Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
a Majority in Interest of Note Holders, or does not adversely affect the
Note Holders, but upon the written request of a Majority in Interest of
Note Holders, the Indenture Trustee 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 Owner or, as may be
appropriate, the Manufacturer; provided, however, that, without the
consent of the Liquidity Provider, the Policy Provider and each holder of
an affected Equipment Note then outstanding, no such amendment of or
supplement to this Indenture, the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement or the Participation Agreement or
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
Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06,
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 Principal Amount, Make-Whole Amount, if any, or
interest with respect to any Equipment Note, or alter or modify the
provisions of Article III with respect to the order of priorities in
which distribution thereunder shall be made as among the Note Holders and
Owner, (iii) reduce, modify or amend any indemnities in favor of the Note
Holders, (iv) consent to any change in the Indenture which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10
or 2.11 or the purchase of the Equipment Notes or (v) permit the creation
of any Lien on the Indenture Estate or any part thereof other than
Permitted Liens or deprive any Note Holder of the benefit of the Lien of
this Indenture on the Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV. Without the consent of
Owner, no amendment or supplement to this Indenture or waiver or
modification of the terms hereof shall adversely affect Owner.
(c) At any time after the date hereof, Owner and the Indenture
Trustee 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 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 Indenture Trustee
or to make any other provisions with respect to matters or questions
arising hereunder so long as such action shall not adversely affect the
interests of the 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 Indenture or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subject
to the Lien of this Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of Owner for
the benefit of the Note Holders, or to surrender any rights or power
herein conferred upon Owner; (vi) to add to the rights of the Note
Holders; and (vii) to include on the Equipment Notes any legend as may be
required by law.
SECTION 10.02. Trustees Protected.
If, in the opinion of the institution acting as Indenture
Trustee hereunder, any document required to be executed by it pursuant to
the terms of Section 10.01 adversely affects any right, duty, immunity
or indemnity with respect to such institution under this 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 Owner or the Indenture Trustee
of any document entered into pursuant to Section 10.01, the Indenture
Trustee shall mail, by first class mail, postage prepaid, a copy thereof
to Owner and to each Note Holder at its address last set forth in the
Equipment Note Register, but the failure of the Indenture Trustee to mail
such copies shall not impair or affect the validity of such document.
SECTION 10.04. No Request Necessary for Indenture Supplement.
No written request or consent of the Indenture Trustee or the
Note Holders pursuant to Section 10.01 shall be required to enable Owner
to enter into any Indenture Supplement specifically required by the terms
hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Indenture.
Upon (or at any time after) payment in full of the Principal
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 Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the
Participation Agreement, Owner shall direct the Indenture Trustee to
execute and deliver to or as directed in writing by Owner an appropriate
instrument releasing the Aircraft, the Engines, the Purchase Agreement
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto from the Lien of this Indenture and the Indenture
Trustee shall execute and deliver such instrument as aforesaid and give
written notice thereof to Owner; provided, however, that this Indenture
and the trusts created hereby shall earlier terminate and this Indenture
shall be of no further force or effect upon any sale or other final
disposition by the Indenture Trustee of all property constituting part of
the Indenture Estate and the final distribution by the Indenture Trustee
of all monies or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Except as
aforesaid otherwise provided, this 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 Indenture Estate in Note
Holders.
No holder of an Equipment Note shall have legal title to any
part of the Indenture Estate. No transfer, by operation of law or
otherwise, of any Equipment Note or other right, title and interest of
any Note Holder in and to the Indenture Estate or hereunder shall operate
to terminate this 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 Indenture Estate.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Indenture shall bind
the Note Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, Owner and such holders in
and to such Indenture Estate or part thereof. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the
Indenture Trustee.
SECTION 11.04. Indenture for Benefit of Owner, Indenture
Trustee, Note Holders and the Other Indenture Indemnitees.
Nothing in this Indenture, whether express or implied, shall be
construed to give any Person other than Owner, the Indenture Trustee, the
Indenture Indemnitees and the Note Holders, any legal or equitable right,
remedy or claim under or in respect of this Indenture.
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 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 Owner, addressed to it at its office at
2345 Crystal Drive, Arlington, Virginia 22227, Attention: Vice
President and Treasurer, Telecopy No.: (703) 872-5936, (ii) if to the
Indenture Trustee, addressed to it at its office at 225 Asylum Street,
Goodwin Square, Hartford, Connecticut 06103, Attention: Corporate Trust
Administration, Telecopy No.: (860) 244-1889, (iii) if to any Participant
or any Note Holder, addressed to such party at such address as such party
shall have furnished by notice to Owner and the Indenture Trustee, or,
until an address is so furnished, addressed to the address of such party
(if any) set forth on Schedule I to the Participation Agreement or in the
Equipment Note Register. Whenever any notice in writing is required to
be given by Owner, any Participant, the Indenture Trustee 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 Indenture.
SECTION 11.06. Severability.
Any provision of this 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 Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by Owner and the Indenture Trustee, in
compliance with Section 10.01. 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.
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 Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or 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 Indenture to the contrary
notwithstanding, the Indenture Trustee, any Participant or any bank or
other Affiliate of such Participant 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 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 INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS INDENTURE IS BEING
DELIVERED IN THE STATE OF NEW YORK. This 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 Indenture Trustee
shall be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the right to take possession of the Aircraft, Airframe,
Engines and Parts 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 pertinent Operative Document, each such party agrees that a
construction which would preserve such benefits shall control over any
construction which would not preserve such benefits.
SECTION 11.14. References.
Unless otherwise specified, references in this Indenture to
Sections, Exhibits, Schedules and Annexes are references to Sections,
Exhibits, Schedules and Annexes herein or hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
US AIRWAYS, INC.
By: __________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture
Trustee
By:_____________________________
Name:
Title:
EXHIBIT A
TO
INDENTURE AND SECURITY AGREEMENT
INDENTURE SUPPLEMENT
(No. N___U_)
This Indenture Supplement N___U_) dated _______ __, _____
(herein called this "Indenture Supplement") of US Airways, Inc.
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement N___U_) dated as
of _________ __, ____ (as amended and supplemented to the date hereof,
the "Indenture") between Owner and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture Trustee (the "Indenture
Trustee"), 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 Indenture Trustee; and
WHEREAS, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto
and made a part hereof and this Indenture Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Indenture Supplement witnesseth that Owner
hereby confirms that the Lien of the Indenture on the Indenture Estate
covers all of Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
Airbus A330
together with all of Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and
which are from time to time incorporated or installed in or attached to
said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's
Model Number Serial Number
together with all of Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to
any of such engines.
Together with all of Owner's right, title and interest in and
to 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).
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
equal and proportionate benefit and security of the Note Holders, except
as provided in Section 2.15 and Article III of the 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
Indenture.
This Indenture Supplement shall be construed as supplemental to
the Indenture and shall form a part thereof. The Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved
and confirmed. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Indenture.
This Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, Owner hereby acknowledges that the Aircraft
referred to in this Indenture Supplement has been delivered to Owner and
is included in the property of Owner, subject to the pledge and mortgage
thereof under the Indenture.
IN WITNESS WHEREOF, Owner has caused this Indenture Supplement
to be duly executed by one of its officers, thereunto duly authorized, on
the day and year first above written.
US AIRWAYS, INC.
By: _________________________
Name:
Title:
EXHIBIT B
TO
INDENTURE AND SECURITY AGREEMENT
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties
hereto deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1)
Except as provided in clause (2) of this subsection (a), and subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit
B, Owner will carry or cause to be carried with respect to the Aircraft
at its or any Lessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased, and operated by Owner (or, if a Lease is then in effect, by
Lessee) of the same type as the Aircraft and (y) $300 million per
occurrence, (B) of the type and covering the same risks as from time to
time applicable to aircraft owned or leased and operated by Owner of the
same type as the Aircraft, and (C) which is maintained in effect with
insurers of nationally or internationally recognized reputation and
responsibility; provided, however, that Owner need not maintain such
cargo liability insurance, or may maintain such cargo liability insurance
in an amount less than $300 million per occurrence, so long as the amount
of cargo liability insurance, if any, maintained with respect to the
Aircraft is not less than the cargo liability insurance, if any,
maintained for other Airbus Model A330 aircraft owned or leased and
operated by Owner.
(2) During any period that the Airframe or an Engine, as the
case may be, is on the ground and not in operation, Owner may carry or
cause to be carried as to such non-operating property, in lieu of the
insurance required by clause (1) above, and subject to the self-insurance
to the extent permitted by subsection (d), insurance by insurers of
nationally or internationally recognized reputation and responsibility
otherwise conforming with the provisions of said clause (1) except that
(A) the amounts of coverage shall not be required to exceed the amounts
of comprehensive airline liability from time to time applicable to
property owned or leased by Owner of the same type as such non-operating
property and which is on the ground and not in operation; and (B) the
scope of the risks covered and the type of insurance shall be the same as
from time to time shall be applicable to aircraft owned or leased by
Owner of the same type as such non-operating property and which is on the
ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject
to the provisions of subsection (d) of this Exhibit B permitting the
self-insurance, Owner shall maintain or cause to be maintained in effect,
at its or any Lessee's expense, with insurers of nationally or
internationally recognized responsibility, all-risk aircraft hull
insurance covering the Aircraft and fire and extended coverage and all-
risk aircraft hull insurance covering Engines and Parts while temporarily
removed from the Aircraft and not replaced by similar components;
provided that such insurance shall at all times while the Aircraft is
subject to the Lien of the Indenture be for an amount (taking into
account the self-insurance to the extent permitted by subsection (d) of
this Exhibit B) not less than the amount payable under Section 5.06(a)
upon the occurrence of an Event of Loss; provided further, that, subject
to compliance with subsection (d) of this Exhibit B, such all-risk
property damage insurance covering Engines and Parts temporarily removed
from an Airframe or an airframe or (in the case of Parts) an Engine need
be obtained only to the extent available at reasonable cost (as
reasonably determined by Owner). In the case of a loss with respect to
an engine (other than an Engine) installed on the airframe in
circumstances which do not constitute an Event of Loss with respect to
the Airframe, the Indenture Trustee shall promptly remit any payment made
to it of any insurance proceeds in respect of such loss to Owner or any
other third party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Owner with the insurers. As between the
Indenture Trustee and Owner, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be
applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon),
(i) unless such property is replaced pursuant to the last
paragraph of Section 5.06(a), so much of such payments
remaining, after reimbursement of the Indenture Trustee for
reasonable costs and expenses, as shall not exceed the amounts
payable pursuant to Section 5.06(a), shall be paid over to, or
retained by, the Indenture Trustee for the benefit of the Note
Holders (but not in excess of the amounts then due and payable
under the Equipment Notes); or (ii) if such property is
replaced pursuant to the last paragraph of Section 5.06(a),
such payments shall be paid over to, or retained by, Owner (or
if directed by Owner, any Lessee), provided that Owner shall
have fully performed or, concurrently therewith, will fully
perform the terms of the last paragraph of Section 5.06(a) with
respect to the Event of Loss for which such payments are made;
and
(y) if such payments are received with respect to an
Engine under the circumstances contemplated by Section 5.06(b),
so much of such payments remaining after reimbursement of the
Indenture Trustee for reasonable costs and expenses, shall be
paid over to, or retained by, Owner (or if directed by Owner,
any Lessee), provided that Owner shall have fully performed or
concurrently therewith will fully perform the terms of Section
5.06(b) with respect to the Event of Loss for which such
payments are made.
As between the Indenture Trustee and Owner, the insurance
payments for any property damage loss to the Airframe or any engine not
constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the
terms of Sections 7.02 and 7.03, if not already paid for by Owner (or any
Lessee), and any balance (or if already paid for by Owner (or any
Lessee), all such insurance proceeds) remaining after compliance with
such Sections with respect to such loss shall be paid to Owner (or any
Lessee if directed by Owner).
(2) During any period that the Aircraft is on the ground and
not in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit B, insurance
otherwise conforming with the provisions of said clause (1) except that
the scope of the risks and the type of insurance shall be the same as
from time to time applicable to aircraft owned or leased by Owner (or, if
a Lease is then in effect, by Lessee) of the same type as the Aircraft
similarly on the ground and not in operation, provided that, subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit
B, Owner shall maintain insurance against risk of loss or damage to the
Aircraft in an amount at least equal to the amount payable upon the
occurrence of an Event of Loss pursuant to Section 5.06(a) during such
period that the Aircraft is on the ground and not in operation.
(3) If Owner (or any 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
Lessee) with respect to other aircraft owned and operated by Owner (or
any Lessee) on such routes or in such areas, Owner 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 amount payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a).
(c) Reports, etc. Owner will furnish, or cause to be
furnished, to the Indenture Trustee and the Pass Through Trustee, on or
before the Delivery Date and on each annual anniversary date of Owner's
applicable insurance, a report, signed by Owner's regular insurance
broker or any other independent firm of insurance brokers reasonably
acceptable to the Indenture Trustee which brokers may be in the regular
employ of Owner (the "Insurance Brokers"), describing in reasonable
detail the hull and liability insurance (and property insurance for
detached engines and parts) then carried and maintained with respect to
the Aircraft and stating the opinion of such firm that the insurance
complies with the terms hereof; provided, that all information contained
in the foregoing report shall not be made available by the Indenture
Trustee or the Pass Through Trustee to anyone except (i) to prospective
and permitted transferees of the Indenture Trustee's or the Pass Through
Trustee's interest or their respective counsel, independent certified
public accountants and independent insurance brokers or other agents, who
agree to hold such information confidential, (ii) the Indenture Trustee's
or the Pass Through Trustee's counsel or independent certified public
accountants, independent insurance brokers or agents who agree to hold
such information confidential or (iii) as may be required by any statute,
court or administrative order or decree or governmental ruling or
regulation; provided, however that any disclosure permitted by clause
(iii) above shall be made only to the extent necessary to meet the
specific requirements or needs of the Persons to whom such disclosures
are hereby permitted. Owner will cause such Insurance Brokers to agree
to advise the Indenture and the Pass Through Trustee in writing of any
act or omission on the part of Owner of which it has knowledge and which
might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise in writing at least thirty (30)
days (ten (10) days in the case of war risk, allied perils coverage and
with respect to the Electronic Date Recognition Exclusion Limited
Coverage Endorsement), prior to the cancellation or material adverse
change of any insurance maintained pursuant to Section 7.04, provided
that if the notice period specified above is not reasonably obtainable,
the Insurance Broker shall provide for as long a period of prior notice
as shall then be reasonably obtainable. In addition, Owner will also
cause such Insurance Brokers to deliver to the Indenture Trustee and the
Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Owner to such parties on the Delivery Date except for
such changes in the report or the coverage consistent with the terms
hereof. In the event that Owner or any Lessee shall fail to maintain or
cause to be maintained insurance as herein provided, the Indenture
Trustee may at its sole option, but shall be under no duty to, provide
such insurance and, in such event, Owner shall, upon demand, reimburse
the Indenture Trustee for the cost thereof to the Indenture Trustee.
(d) Self-Insurance. Owner may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection
(b) of this Exhibit B, insuring for an amount that is less than the
amounts payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a)) the risks required to be insured against pursuant to
Section 7.04 under a program applicable to all aircraft (whether owned or
leased) in Owner's fleet, but in no case shall the aggregate amount of
self-insurance in regard to subsection (a) and (b) of this Exhibit B
exceed for any policy year, with respect to all of the aircraft (whether
owned or leased) in Owner's fleet (including, without limitation, the
Aircraft), the lesser of (i) 50% of the highest replacement value of any
single aircraft in Owner's fleet or (ii) 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 United States airlines is a
higher level of self-insurance, in which case Owner may insure the
Aircraft to such higher level. In addition to the foregoing right to
self-insure, Owner (and any Lessee) may self-insure to the extent of any
applicable mandatory minimum per aircraft (or, if applicable, per annum
or other period) hull or liability insurance deductible customary in the
airline industry imposed by the aircraft hull or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit B and any policies
taken out in substitution or replacement for any of such policies (A)
shall be amended to name the Additional Insureds as their respective
interests may appear, (B) may provide for the self-insurance to the
extent permitted in subsection (d) of this Exhibit B, (C) shall provide
that if the insurers cancel such insurance for any reason whatever or if
any material change is made in such insurance which adversely affects the
interest of the Additional Insureds, or such insurance shall lapse for
non-payment of premium, such cancellation, lapse or change shall not be
effective as to the Additional Insureds for thirty (30) days (ten (10)
days in the case of war risk, allied perils coverage and with respect to
the Electronic Date Recognition Limited Coverage Endorsement) after
issuance to the Additional Insureds, respectively, of written notice by
such insurers of such cancellation, lapse or change; provided, however,
that if any notice period specified above is not reasonably obtainable,
such policies shall provide for as long a period of prior notice as shall
then be reasonably obtainable, (D) shall provide that in respect of the
respective interests of the Additional Insureds in such policies the
insurance shall not be invalidated by any action or inaction of Owner
(or, if any Lease is then in effect, any Lessee) or any other Person and
shall insure the Additional Insureds regardless of any breach or
violation of any warranty, declaration or condition contained in such
policies by Owner (or, if any Lease is then in effect, any Lessee), (E)
shall be primary without right of contribution from any other insurance
which is carried by any Additional Insured, (F) shall expressly provide
that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering
each insured, (G) shall waive any right of the insurers to any set-off or
counterclaim or any other deduction, whether by attachment or otherwise,
in respect of any liability of any Additional Insured to the extent of
any moneys due to any Additional Insured, and (H) shall provide that (i)
in the event of a loss involving proceeds in excess of $5,000,000, the
proceeds in respect of such loss up to an amount equal to the amount
payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a) shall be payable to the Indenture Trustee (so long as the
Indenture shall not have been discharged) in the manner set forth in
Sections 2.10 and 2.12 (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 Lessee) shall arrange for any payment of insurance proceeds
in respect of such loss to be held for the account of the Indenture
Trustee (so long as the Indenture shall not have been discharged) whether
such payment is made to Owner (or any Lessee) or any third party), it
being understood and agreed that in the case of any payment to the
Indenture Trustee otherwise than in respect of an Event of Loss, the
Indenture Trustee 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 (and all earnings thereon) to Owner or its
order, and (ii) the entire amount of any loss involving proceeds of
$5,000,000 or less or the amount of any proceeds of any loss in excess of
the amount payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a) 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 Indenture Trustee.
EXHIBIT C
TO
INDENTURE AND SECURITY AGREEMENT
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States
Malaysia Venezuela
*So long as on the date of the Lease such country and the
United States have diplomatic relations at least as good as those in
effect on the Delivery Date.
SCHEDULE I
Principal Amount Interest Rate
Series G _____%
Series C _____%
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of March __, 2000, and as supplemented
by Trust Supplement No. 2000-1C, dated as of March __, 2000.
Exhibit C-3 to Note Purchase Agreement
FORM OF PURCHASE AGREEMENT ASSIGNMENT
(OWNED AIRCRAFT)
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
PURCHASE AGREEMENT ASSIGNMENT
(N___U_)
PURCHASE AGREEMENT ASSIGNMENT (N___U_), dated as of ____________
__, ____ (this "Assignment"), between US AIRWAYS, INC., a Delaware
corporation ("Assignor"), and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, a national banking association, not in
its individual capacity but solely as Indenture Trustee ("Assignee") under
the Indenture and Security Agreement (N___U_), dated as of _____________
__, ____, (as amended, modified or supplemented from time to time, the
"Indenture"), between Assignor and Assignee.
W I T N E S S E T H :
WHEREAS, US Airways Group, Inc. ("Parent") and AVSA (as
hereinafter defined) are parties to the Purchase Agreement (as hereinafter
defined), providing, among other things, for the delivery by AVSA to Parent
of certain aircraft, including the Aircraft (as hereinafter defined)
covered by the Participation Agreement (as hereinafter defined);
WHEREAS, pursuant to a Purchase Agreement Assignment, dated as of
__________ __, 2000, by and between Parent and Assignor (the "Parent
Assignment"), Parent assigned all of its right, title in and interest in
and to the Purchase Agreement to Assignor to the extent such right, title
and interest relate to certain aircraft, including the Aircraft covered by
the Participation Agreement;
WHEREAS, pursuant to a Consent and Agreement of AVSA and
Guarantor (as hereinafter defined), dated as of ________ __, 2000 (the
"Parent Consent and Agreement"), AVSA and Guarantor consented to the
assignment by Parent to Assignor of Parent's right, title in and interest
in and to the Purchase Agreement as provided for in the Parent Assignment;
WHEREAS, pursuant to the Parent Consent and Agreement, Guarantor
confirmed that its guarantee given in the Consent and Guaranty (as
hereinafter defined) remains in full force and effect and, to the extent
the same relates to the aircraft assigned to the Assignor pursuant to the
Parent Assignment, it inures to the benefit of the Assignor;
WHEREAS, pursuant to the Consent and Guaranty, Guarantor has
agreed, among other things, to unconditionally guarantee the due and
punctual performance by AVSA of all of its liabilities and obligations as
set forth in the Purchase Agreement;
WHEREAS, on the terms and conditions hereof and of the Consents
and Agreements (as hereinafter defined), Assignor desires to assign to
Assignee certain of the Assignor's remaining rights, title and interests
in, to and under the Purchase Agreement and the Consent and Guaranty as
security for the Secured Obligations (insofar as such obligations relate
to the Purchase Agreement and the Aircraft) and Assignee is willing to
accept such collateral assignment, as hereinafter set forth;
WHEREAS, such assignments and acceptances are intended to permit
consummation of the transactions contemplated by the Participation
Agreement;
WHEREAS, AVSA and Guarantor are willing to execute and deliver
their respective Consents and Agreements; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Defined Terms. For all purposes of this Assignment, except as
otherwise expressly provided or unless the context otherwise requires,
the following terms shall have the following meanings:
"Aircraft" shall mean the Airbus A330 aircraft, bearing
manufacturer's serial number ___, delivered under the Purchase Agreement,
including the two Pratt & Whitney Model PW4168A engines installed on such
aircraft on the date of delivery thereof pursuant to the Purchase
Agreement.
"AVSA" shall mean AVSA, S.A.R.L., a French societe a
responsabilite limitee, and its successors and assigns.
"AVSA Consent and Agreement" shall mean the Consent and Agreement
of AVSA attached hereto, as amended, modified or supplemented from time to
time.
"Consent and Guaranty" shall mean the Consent and Guaranty of the
Guarantor attached to the Purchase Agreement, together with all amendments,
waivers, and consents heretofore entered into or heretofore granted
thereunder.
"Consents and Agreements" shall mean the AVSA Consent and
Agreement and the Guarantor Consent and Agreement.
"Equipment Notes" shall have the meaning ascribed thereto in the
Participation Agreement.
"Guarantor" shall mean Airbus Industrie G.I.E., a French
groupement d'interet economique, and its successors and assigns.
"Guarantor Consent and Agreement" shall mean the Consent and
Agreement of the Guarantor attached hereto, as amended, modified or
supplemented from time to time.
"Participation Agreement" shall mean the Participation Agreement
(N___U_), dated as of _____________ __, ____, between the Assignor and the
Assignee, as amended, modified or supplemented from time to time.
"Purchase Agreement" shall mean the Airbus A330/A340 Purchase
Agreement, dated as of November 24, 1998, between US Airways Group, Inc.
and AVSA, together with all exhibits, appendices and letter agreements
thereto and all amendments, waivers and consents granted thereunder.
All other terms used herein in capitalized form that are defined
in the Participation Agreement shall, when used herein, have the meanings
specified in the Participation Agreement.
2. Assignment. (a) Generally. To secure performance of the Secured
Obligations, Assignor has assigned, transferred and set over and does
hereby sell, assign, transfer and set over unto the Assignee a first
priority security interest and mortgage in, to and under (i) all of
the Assignor's right, title and interest in and to (x) Clauses 12, 13
and 17 of the Purchase Agreement (the "Assigned Rights") and (y) the
Consent and Guaranty (insofar as such Consent and Guaranty relates to
the Assigned Rights), as and to the extent that the same relates to
the Aircraft, except to the extent reserved below, including, without
limitation, in such assignment to Assignee (A) all claims for damages
in respect of such Aircraft arising as a result of any default by AVSA
under Clause 12, 13 or 17 of the Purchase Agreement, including,
without limitation, all warranty, service life policy and indemnity
provisions contained in Clause 12 of the Purchase Agreement in
respect of the Aircraft and all claims thereunder and under the
Consent and Guaranty in respect of the Aircraft and (B) any and all
rights of Assignor to compel performance of the terms of Clause 12, 13
and 17 of the Purchase Agreement and the Consent and Guaranty in
respect of the Aircraft; reserving to the Assignor, however, all
Assignor's rights and interests in and to Clauses 12, 13 and 17 of the
Purchase Agreement and the Consent and Guaranty as and to the extent
that Clause 12, 13 or 17 of the Purchase Agreement and the Consent and
Guaranty relate to aircraft other than the Aircraft and to the extent
that the Purchase Agreement and the Consent and Guaranty relate to any
other matters not directly pertaining to the Aircraft.
(b) Assignment of Rights. If and so long as there shall not
exist and be continuing an Event of Default and, if an Event of Default is
continuing, so long as Assignor remains in possession of the Aircraft,
Assignee hereby authorizes Assignor, to the exclusion of Assignee, to
exercise in Assignor's name all rights and powers related to the Assigned
Rights and to retain any recovery or benefit resulting from the enforcement
of any of the Assigned Rights in respect of the Aircraft, except that
Assignor may not enter into any change order or other amendment,
modification or supplement to the Purchase Agreement without the written
consent or countersignature of Assignee if such change order, amendment,
modification or supplement would result in any rescission, cancellation or
termination of the Assigned Rights in respect of the Aircraft or in any way
limit the rights assigned hereunder.
(c) Acceptance of Assignment. Subject to the terms hereof,
Assignee accepts the assignment contained in this Clause 2.
(d) Onward Transfer of Rights. Assignee agrees that it may not
sell, assign or otherwise transfer any of the Assigned Rights without the
prior written consent of AVSA.
(e) Requirement of Notice to AVSA. For all purposes of this
Assignment, AVSA shall not be deemed to have knowledge of and need not
recognize any Event of Default, unless and until AVSA shall have received
written notice thereof from Assignee addressed to its Chief Executive
Officer, 2, Rond Point Maurice Bellonte, 31700 Blagnac, France (telex
521155F) (fax: 011-33-5-6130-4011) and, in acting in accordance with the
terms of the Purchase Agreement and this Assignment, AVSA may act with
acquittance and conclusively rely upon any such notice.
3. Certain Rights and Obligations of the Parties. (a) Assignor Remains
Liable. It is expressly agreed that, anything herein contained to the
contrary notwithstanding: (a) Assignor shall at all times remain
liable to AVSA under the Purchase Agreement to perform all the duties
and obligations of the "Buyer" thereunder to the same extent as if
this Assignment had not been executed; (b) the exercise by Assignee of
any of the rights assigned hereunder shall not release Assignor from
any of its duties or obligations to AVSA under the Purchase Agreement
except to the extent that such exercise by Assignee shall constitute
performance of such duties and obligations; and (c) except as provided
in the next succeeding paragraph, neither Assignee nor any Loan
Participant shall have any obligation or liability under the Purchase
Agreement by reason of, or arising out of, this Assignment or be
obligated to perform any of the obligations or duties of Assignor
under the Purchase Agreement or to make any payment or to make any
inquiry as to the sufficiency of any payment received by any of them
or to present or file any claim or to take any other action to collect
or enforce any claim for any payment assigned hereunder.
(b) Assignee Bound by Purchase Agreement. Without in any way
releasing Assignor from any of its duties or obligations under the Purchase
Agreement, Assignee confirms for the benefit of AVSA that, insofar as the
provisions of the Purchase Agreement relate to the Aircraft, in exercising
any rights under the Purchase Agreement, or in making any claim with
respect to the Aircraft or other goods and services delivered or to be
delivered pursuant to the Purchase Agreement, the terms and conditions of
the Purchase Agreement disclosed to Assignee in writing shall apply to, and
be binding upon, Assignee to the extent of its respective interests
assigned hereunder to the same extent as Assignor.
(c) Limit of Effect of this Assignment. Nothing contained
herein shall (i) subject AVSA or the Guarantor to any liability to which it
would not otherwise be subject under the Purchase Agreement or (ii) modify
in any respect the contractual rights of AVSA or the Guarantor thereunder
(except, in each case, as provided in the attached Consents and
Agreements).
(d) Appointment as Attorney-in-Fact. Assignor does hereby
constitute, effective at any time after an Event of Default shall have
occurred and be continuing, Assignee and its successors and permitted
assigns to be Assignor's true and lawful attorney, irrevocably, with full
power (in the name of Assignor or otherwise) to ask, require, demand,
receive, compound and give acquittance for any and all monies and claims
for monies due and to become due under, or arising out of, the Purchase
Agreement and the Consent and Guaranty in respect of the Aircraft, to the
extent that the same have been assigned as provided in this Assignment and,
for such period as Assignee, its successors and assigns may exercise rights
with respect thereto under this Assignment, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or
take any action or institute (or, if previously commenced, assume control
of) any proceedings and to obtain any recovery in connection therewith
which Assignee, its successors and assigns, may deem to be necessary or
advisable in the premises.
4. Further Assurances. Assignor and Assignee each agree that, at any
time and from time to time, upon the written request of any other
party hereto, it will promptly and duly execute and deliver any and
all such further instruments and documents and take such further
action as the other may reasonably request in order to obtain the full
benefits of this Assignment and of the rights and powers herein
granted.
5. No Amendment of Purchase Agreement. So long as any of the Secured
Obligations remain outstanding, Assignee agrees that it shall not
enter into any agreement that would amend, modify, supplement,
rescind, cancel or terminate the Purchase Agreement or the Consent and
Guaranty in any respect or in any way limit the rights of Assignor or
any of the other rights assigned hereunder (except as set forth above
when there has been an Event of Default), without the prior written
consent of Assignor.
6. Execution of Assignment. This Assignment is executed by Assignor and
Assignee concurrently with the execution and delivery of the
Participation Agreement.
7. Confidentiality. Assignee agrees that it will not disclose to any
third party the terms of the Purchase Agreement or this Assignment,
except (a) as required by applicable law or governmental regulation,
(b) as contemplated in the Participation Agreement (including as set
forth in Section 7(o) of the Participation Agreement) or (c) with the
consent of Assignor, Guarantor and AVSA.
8. Counterparts. This Assignment may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
9. GOVERNING LAW. THIS ASSIGNMENT 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.
10. Successors and Assigns. This Assignment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11. Notices. All notices with respect to the matters contained herein
shall be delivered (notices with respect to AVSA shall be sent to the
address for AVSA set forth in Clause 2(e) hereof) in the manner
provided in Section 12(a) of the Participation Agreement.
12. No Oral Amendments. Neither this Assignment 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 whom the enforcement of such termination, amendment,
supplement, waiver or modification is sought.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be duly executed as of the day and year first above written.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
` STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture
Trustee
By: ____________________________
Name:
Title:
AIRBUS INDUSTRIE CONSENT AND AGREEMENT
The undersigned, Airbus Industrie G.I.E., a groupement d'interet
economique established under Ordonnance No. 67-821 dated September 23, 1967
of the Republic of France ("Guarantor"), hereby acknowledges notice of and
consents to all of the terms of the Purchase Agreement Assignment between
US Airways, Inc., a Delaware corporation ("Assignor"), and State Street
Bank and Trust Company of Connecticut, National Association, a national
banking association, not in its individual capacity but solely as Indenture
Trustee ( "Assignee") under the Indenture and Security Agreement (N___U_),
dated as of ______________ (hereinafter called the "Assignment", the
defined terms therein being hereinafter used with the same meaning), and to
the assignment of the Assigned Rights to Assignee under the Indenture,
dated as of ______________, between Assignor and Assignee (hereinafter
called the "Indenture"), and hereby confirms to Assignor and Assignee and
their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, and agreements of Guarantor under the Consent and
Guaranty insofar as they relate to the Assigned Rights with
respect to the Aircraft shall inure to the benefit of Assignee
and its respective successors and permitted assigns, to the same
extent as if Assignee and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) Guarantor will pay to the person or entity entitled to
receive the corresponding payment from AVSA under the terms of
the Assignment all amounts required to be paid by Guarantor with
respect to the Aircraft;
(iii) Guarantor consents to the assignment of Assignor's rights
and interests under the Purchase Agreement and the Consent and
Guaranty to Assignee pursuant to the Assignment; and
(iv) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft,
Guarantor will not assert any lien or claim against the Aircraft
or any part thereof or against Assignor or Assignee arising on or
prior to such purchase or in respect of any work or services
performed on or prior thereto.
Guarantor hereby represents and warrants that:
(A) Guarantor is a groupement d'interet economique duly
organized and existing in good standing under the laws of the Republic of
France and has the requisite power and authority to enter into and perform
its obligations under the Consent and Guaranty and this Consent and
Agreement;
(B) the making and performance, in accordance with their terms,
of the Consent and Guaranty and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of Guarantor, do
not require the consent or approval of the members of Guarantor, do not
require the consent or approval of, or the giving of notice to, or
registration with, or the taking of any other action in respect of, any
French governmental authority or agency except for those that have already
been obtained and do not contravene any law binding on Guarantor or
contravene Guarantor's charter documents or any indenture, credit agreement
or other contractual agreement to which Guarantor is a party or by which it
is bound;
(C) the Consent and Guaranty constituted, as of the date thereof
and at all times thereafter to and including the date of this Consent and
Agreement, and each of this Consent and Agreement and the Consent and
Guaranty constitutes, binding obligations of Guarantor enforceable against
Guarantor in accordance with their respective terms, subject to: (i) the
limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally; and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), which
principles do not make the remedies available at law or in equity with
respect to the Purchase Agreement and this Consent and Agreement inadequate
for the practical realization of the benefits intended to be provided
thereby; and
(D) the Consent and Guaranty is in full force and effect.
This Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AIRBUS INDUSTRIE G.I.E.
By: __________________________
Name:
Title:
AVSA CONSENT AND AGREEMENT
The undersigned, AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France
("AVSA"), hereby acknowledges notice of and consents to all of the terms of
the Purchase Agreement Assignment between US Airways, Inc., a Delaware
corporation ("Assignor"), and State Street Bank and Trust Company of
Connecticut, National Association, a national banking association, not in
its individual capacity but solely as Indenture Trustee (the "Assignee")
under the Indenture and Security Agreement (N___U_), dated as of
______________ (hereinafter called the "Assignment", the defined terms
therein being hereinafter used with the same meaning), and to the
assignment of the Assigned Rights to the Assignee under the Indenture,
dated as of ______________, between the Assignor and the Assignee
(hereinafter called the "Indenture"), and hereby confirms to Assignor and
Assignee and their respective successors and assigns that:
(i) except as provided in the Assignment, all representations,
warranties, indemnities and agreements of AVSA under the Purchase
Agreement insofar as they relate to the Assigned Rights with
respect to the Aircraft shall inure to the benefit of Assignee
and its respective successors and permitted assigns to the same
extent as if Assignee and its successors and permitted assigns
had originally been named the "Buyer" of the Aircraft therein;
(ii) AVSA will pay to Assignor all payments required to be paid
by it under the Purchase Agreement, unless and until AVSA shall
have received written notice from Assignee addressed to it at the
address and in the manner set forth in the Assignment that an
Event of Default has occurred and is continuing, whereupon AVSA
will make any and all payments thereafter required to be made by
it under the Purchase Agreement, to the extent that the right to
receive such payment has been assigned under the Assignment
("AVSA Payments"), directly to Assignee if AVSA shall have
received notice as aforesaid that an Event of Default has
occurred and is continuing;
(iii) Assignee shall not be liable for any of the obligations or
duties of Assignor under the Purchase Agreement, nor shall the
Assignment give rise to any duties or obligations whatsoever on
the part of Assignee owing to AVSA, except for the agreements of
Assignee set forth in the Assignment, including, but not limited
to Clause 3(b) of the Assignment;
(iv) AVSA consents to the assignment of Assignor's rights and
interests under the Purchase Agreement and the Consent and
Guaranty to Assignee pursuant to the Assignment; and
(v) from and after the purchase of the Aircraft pursuant to the
Participation Agreement and payment in full for the Aircraft,
AVSA will not assert any lien or claim against the Aircraft or
any part thereof arising on or prior to such purchase or in
respect of any work or services performed on or prior thereto.
AVSA hereby represents and warrants that:
(A) AVSA is a societe a responsabilite limitee duly organized
and existing in good standing under the laws of the Republic of France
and has the requisite power and authority to enter into and perform its
obligations under the Purchase Agreement and this Consent and Agreement;
(B) the making and performance, in accordance with their terms,
of the Purchase Agreement and this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of AVSA, do not
require any approval of AVSA's shareholders, do not require the consent or
approval of, the giving notice to, or registration with, or the taking of
any other action in respect of, any French governmental authority or agency
except for those that have already been obtained and do not contravene any
law binding on AVSA or contravene AVSA's charter documents or any
indenture, credit agreement or other contractual agreement to which AVSA is
a party or by which it is bound;
(C) each of the Purchase Agreement and this Consent and
Agreement constitutes a binding obligation of AVSA enforceable against AVSA
in accordance with its terms, subject to: (i) the limitations of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally; and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), which principles do not make the remedies
available at law or in equity with respect to the Purchase Agreement and
this Consent and Agreement inadequate for the practical realization of the
benefits intended to be provided thereby; and
(D) the Purchase Agreement is in full force and effect as to
AVSA.
This Consent and Agreement is made subject to and with the
benefit of Clause 3 of the Assignment and Section 4.03 of the Indenture.
* * * * * *
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Dated as of ________________
AVSA, S.A.R.L.
By: _________________________
Name:
Title:
French Pledge Agreement
N___U_
Exhibit C-4 to Note Purchase Agreement
(FORM OF OWNED AIRCRAFT FRENCH PLEDGE AGREEMENT)
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH SERIES
G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C EQUIPMENT NOTES
ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS AGREEMENT SHALL BE
MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT NOTES AND TO MAKE OTHER
RELATED CHANGES.
FRENCH PLEDGE AGREEMENT (N___U_)
THIS PLEDGE is made on this ___ day of _______, ____ (this "Pledge")
BETWEEN:
(1) US Airways, Inc., a Delaware corporation having its principal
place of business at 2345 Crystal Drive, Arlington, Virginia
22227 U.S.A. (together with its successors and permitted
assigns, hereinafter referred to as the "Pledgor"); and
(2) State Street Bank and Trust Company of Connecticut, National
Association, a national banking association having its
principal place of business at 225 Asylum Street, Goodwin
Square, Hartford, Connecticut 06103 U.S.A., acting not in its
individual capacity but solely as Indenture Trustee under the
Indenture (as hereinafter defined) (together with its
successors and assigns, hereinafter referred to as the
"Pledgee").
RECITALS
(A) Pursuant to the terms of the Indenture, the Pledgor has, inter
alia, assigned to the Pledgee by way of collateral security certain of its
right, interest, claims and demands in and to the Purchase Agreement (as
defined in the Indenture).
(B) The Pledgor and the Pledgee wish to create a pledge under
French law of the right, interest, claims and demands of the Pledgor in and
to the Purchase Agreement.
NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DEFINITIONS
Capitalized terms used herein without definition have the
respective meanings ascribed to them in the Indenture (whether set out
therein or incorporated by reference).
"Indenture" means the Indenture and Security Agreement, dated as of
_____________ ____, _____ and made between the Pledgor and the
Pledgee.
2. PLEDGE
(a) In order to assure the due performance by the Pledgor of the
Secured Obligations and in order to secure the payment of all amounts due
and owing by the Pledgor in connection therewith (whether of principal,
interest or other amounts), the Pledgor hereby grants and pledges to the
Pledgee, all of the Pledgor's right, title and interest in and to (i) all
of the Pledgor's right, title and interest in and to (x) the Bill of Sale,
(y) Clauses 12, 13 and 17 of the Purchase Agreement (the "Pledged Rights")
and (z) the Consent and Guaranty (insofar as such Consent and Guaranty
relates to the Pledged Rights), as and to the extent that the same relates
to the Aircraft, except to the extent reserved below, including, without
limitation, in such pledge to Pledgee (A) all claims for damages in respect
of such Aircraft arising as a result of any default by AVSA under Clause
12, 13 or 17 of the Purchase Agreement, including, without limitation, all
warranty, service life policy and indemnity provisions contained in Clause
12 of the Purchase Agreement in respect of the Aircraft and all claims
thereunder and under the Consent and Guaranty in respect of the Aircraft
and (B) any and all rights of Pledgor to compel performance of the terms of
Clause 12, 13 and 17 of the Purchase Agreement and the Consent and Guaranty
in respect of the Aircraft; reserving to the Pledgor, however, all
Pledgor's rights and interests in and to Clauses 12, 13 and 17 of the
Purchase Agreement and the Consent and Guaranty as and to the extent that
Clause 12, 13 or 17 of the Purchase Agreement and the Consent and Guaranty
relate to aircraft other than the Aircraft and to the extent that the
Purchase Agreement and the Consent and Guaranty relate to any other matters
not directly pertaining to the Aircraft.
(b) If and so long as there shall not exist and be continuing an
Event of Default and, if an Event of Default is continuing, so long as
Pledgor remains in possession of the Aircraft, Pledgee hereby authorizes
Pledgor, to the exclusion of Pledgee, to exercise in Pledgor's name all
rights and powers related to the Pledged Rights and to retain any recovery
or benefit resulting from the enforcement of any of the Pledged Rights in
respect of the Aircraft, except that Pledgor may not enter into any change
order or other amendment, modification or supplement to the Purchase
Agreement without the written consent or countersignature of Pledgee if
such change order, amendment, modification or supplement would result in
any rescission, cancellation or termination of the Pledged Rights in
respect of the Aircraft or in any way limit the rights pledged hereunder.
(c) Subject to the terms hereof, Pledgee accepts the pledge
contained in this Clause 2.
(d) It is understood that this Pledge is granted as security for
the payment of:
(i) the principal amount of US$__________ payable with respect to
the Equipment Notes issued pursuant to the Indenture;
(ii) interest on the outstanding amounts at the rate of ____% with
respect to the Equipment Note;
(iii) all other amounts payable by the Pledgor to the Pledgee
under the Operative Documents; and
(iv) any expenses incurred in the enforcement of the payment
obligations and recovery of the sums payable under the
Operative Documents.
3. NOTIFICATION
The Pledgor shall, in accordance with Article 2075 of the French
Civil Code, register a French translation of this Pledge with the relevant
French tax authorities ("recette des impOts") and shall give notice thereof
by huissier to AVSA, S.A.R.L. and Airbus Industrie G.I.E..
4. GOVERNING LAW
The Pledge is of a commercial nature and shall be governed by and
construed in accordance with the laws of France.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Pledge to
be duly executed as of the day and year first above written.
US AIRWAYS, INC.
By: __________________________________
Name:
Title:
` STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: ___________________________________
Name:
Title:
CUSIP No. 90332U AJ 2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
US AIRWAYS SERIES 2000-1G PASS THROUGH TRUST
Pass Through Certificate, Series 2000-1G
Final Expected Regular Distribution Date:
February 20, 2017 evidencing a fractional undivided
interest in a trust, the property of which includes
certain equipment notes each secured by Aircraft
owned by or leased to US Airways, Inc.
Certificate
No. 1 $281,678,000 Fractional Undivided Interest representing
0.000355015% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $281,678,000 (TWO HUNDRED EIGHTY-ONE MILLION, SIX HUNDRED AND
SEVENTY-EIGHT THOUSAND dollars) Fractional Undivided Interest in the US
Airways Pass Through Trust, Series 2000-1G (the "Trust") created by State
Street Bank and Trust Company of Connecticut, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement dated
as of July 30, 1999 (the "Basic Agreement"), between the Trustee, US
Airways, Inc., a corporation incorporated under Delaware law (the
"Company") and US Airways Group, Inc., a corporation incorporated under
Delaware law (the "Parent"), as supplemented by Trust Supplement No. 2000-
1G thereto dated March 3, 2000, between the Trustee and the Company
(collectively, the "Agreement"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings
assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "8.11% US Airways Pass Through
Certificates, Series 2000-1G" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the
Certificateholder of this Certificate assents to and agrees to be bound by
the provisions of the Agreement and any related Intercreditor Agreement.
The property of the Trust includes certain Equipment Notes and all rights
of the Trust to receive any payments under any Intercreditor Agreement, the
Policy and any Liquidity Facility (the "Trust Property"). Each issue of
the Equipment Notes is or will be secured by, among other things, a
security interest in aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, from funds then available to the Trustee,
there will be distributed on each February 20 and August 20 (a "Regular
Distribution Date"), commencing on February 20, 2001, to the Person in
whose name this Certificate is registered at the close of business on the
15th day preceding the Regular Distribution Date, an amount in respect of
the Scheduled Payments on the Equipment Notes due on such Regular
Distribution Date, the receipt of which has been confirmed by the Trustee,
equal to the product of the percentage interest in the Trust evidenced by
this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, in the event that Special Payments on the
Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Special
Distribution Date, an amount in respect of such Special Payments on the
Equipment Notes, the receipt of which has been confirmed by the Trustee,
equal to the product of the percentage interest in the Trust evidenced by
this Certificate and an amount equal to the sum of such Special Payments so
received. If a Regular Distribution Date or Special Distribution Date is
not a Business Day, distribution shall be made on the immediately following
Business Day with the same force and effect as if made on such Regular
Distribution Date or Special Distribution Date and no interest shall accrue
during the intervening period. The Trustee shall mail notice of each
Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or
surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name
of a Clearing Agency (or its nominee), such distribution shall be made by
wire transfer. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will
be made after notice mailed by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or
any affiliate thereof. The Certificates are limited in right of payment,
all as more specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under the
Agreement shall be made only from the Trust Property and only to the extent
that the Trustee shall have sufficient income or proceeds from the Trust
Property to make such payments in accordance with the terms of the
Agreement. Each Certificateholder of this Certificate, by its acceptance
hereof, agrees that it will look solely to the income and proceeds from the
Trust Property to the extent available for distribution to such
Certificateholder as provided in the Agreement. This Certificate does not
purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the
Agreement may be examined during normal business hours at the principal
office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate shall be
conclusive and binding on such Certificateholder and upon all future
Certificateholders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without
the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by
any successor Registrar duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Registrar, duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in
a different denomination. As provided in the Agreement and subject to
certain limitations therein set forth, the Certificates are exchangeable
for new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Trustee, the
Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them
pursuant to the Agreement and the disposition of all property held as part
of the Trust Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have
represented and warranted that either: (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase this Certificate or an interest herein or (ii) the
purchase and holding of this Certificate or interest herein are exempt from
the prohibited transaction restrictions of ERISA and the Code pursuant to
one or more prohibited transaction statutory or administrative exemptions.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
US AIRWAYS PASS THROUGH TRUST
By: STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Ruth A. Smith
-----------------------------
Title: Vice President
Dated: March 3, 2000
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Agreement.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Ruth A. Smith
-----------------------------
Title: Vice President
EXECUTION VERSION
US AIRWAYS, INC.
Pass Through Certificates
Series 2000-1, Class G
UNDERWRITING AGREEMENT
February 25, 2000
Salomon Smith Barney Inc.
Chase Securities Inc.
Credit Lyonnais Securities (USA) Inc.
Credit Suisse First Boston Corporation
c/o Salomon Smith Barney Inc.
390 Greenwich Street
New York, NY 10013
Dear Sirs:
US AIRWAYS, INC., a Delaware corporation (the "Company"),
proposes that State Street Bank and Trust Company of Connecticut, National
Association, as pass through trustee (the "Trustee") under the Class G
Trust, issue and sell to the underwriters named in Schedule II hereto its
pass through certificates in the aggregate principal amounts and with the
interest rates and final distribution dates set forth on Schedule I hereto
(the "Certificates") on the terms and conditions stated herein and in
Schedule III.
The Certificates will be issued pursuant to the Pass
Through Trust Agreement (the "Basic Agreement") between the Company, US
Airways Group, Inc., a Delaware corporation, and the Trustee, as
supplemented with respect to the Certificates by a separate Pass Through
Trust Supplement to be dated as of the Closing Date (as defined below) (the
"Series Supplement"), between the Company and the Trustee (the Basic
Agreement as supplemented by the Series Supplement being referred to herein
individually as the "Pass Through Agreement"). The Series Supplement is
related to the creation and administration of US Airways Pass Through
Trust, Series 2000-1G (the "Trust").
As used herein, unless the context otherwise requires,
the term "Underwriters" shall mean the firms named as Underwriters in
Schedule II, and the term "you" shall mean the Underwriter or Underwriters,
if no underwriting syndicate is purchasing the Certificates or the
representative or representatives of the Underwriters if an underwriting
syndicate is purchasing the Certificates, as indicated in Schedule II.
The cash proceeds of the offering of Certificates will be
paid to First Security Bank, National Association, as escrow agent (the
"Escrow Agent"), under an Escrow and Paying Agent Agreement among the
Escrow Agent, the Underwriters, the Trustee and State Street Bank and Trust
Company of Connecticut, National Association, as paying agent (the "Paying
Agent"), for the benefit of the holders of Certificates issued by the Trust
(the "Escrow Agreement"). The Escrow Agent will deposit such cash proceeds
(each, a "Deposit") with ABN AMRO Bank, N.V., acting through its Chicago
branch, (the "Depositary"), in accordance with a Deposit Agreement relating
to the Trust (the "Deposit Agreement"), and will withdraw Deposits upon
request to allow the Trustee to purchase Equipment Notes (as defined in the
Note Purchase Agreement referred to herein) from time to time pursuant to a
Note Purchase Agreement to be dated as of the Closing Date (the "Note
Purchase Agreement") among the Company, State Street Bank and Trust Company
of Connecticut, National Association, as Trustee of the Trust, as
Subordination Agent (as hereinafter defined) and as Paying Agent, and the
Escrow Agent. The Escrow Agent will issue receipts to be attached to each
related Certificate ("Escrow Receipts") representing each holder's
fractional undivided interest in amounts deposited with such Escrow Agent
and will pay to such holders through the related Paying Agent interest
accrued on the Deposits and received by such Paying Agent pursuant to the
Deposit Agreement at a rate per annum equal to the interest rate applicable
to the Certificates.
Certain amounts of interest payable on the Certificates
will be entitled to the benefits of a liquidity facility. Bayerische
Landesbank Girozentrale (the "Liquidity Provider") will enter into a
revolving credit agreement (the "Liquidity Facility") to be dated as of the
Closing Date for the benefit of the holders of the Certificates. The
Liquidity Provider, MBIA Insurance Corporation, as provider of the Policy
referred to below (in such capacity, the "Policy Provider") and the holders
of the Certificates will be entitled to the benefits of an Intercreditor
Agreement to be dated as of the Closing Date (the "Intercreditor
Agreement") among the Trustee, State Street Bank and Trust Company of
Connecticut, National Association, as subordination agent and trustee
thereunder (the "Subordination Agent"), the Policy Provider and the
Liquidity Provider.
Payments of interest on the Certificates will be
supported by a financial guaranty insurance policy (the "Policy") issued by
the Policy Provider to the extent the Liquidity Facility and any funds
contained in the cash collateral account funded from such Liquidity
Facility are insufficient or unavailable for that purpose. The Policy will
also support the payment of the final distribution on the Certificates and
will take effect in certain other circumstances described in the
Intercreditor Agreement and the Policy. The Policy will be issued pursuant
to an insurance and indemnity agreement dated as of the Closing Date (the
"Policy Provider Agreement") among the Policy Provider, the Company and the
Subordination Agent. Under the Intercreditor Agreement, the Policy Provider
will be entitled to reimbursement for amounts paid pursuant to claims made
under the Policy.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a shelf registration statement on Form S-3
(File No. 333-79825) relating to pass through certificates (such
registration statement, in the form in which it became effective (including
the respective exhibits thereto and the respective documents filed by the
Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act"), that are incorporated by
reference therein, as amended by Post-Effective Amendment No. 1 filed with
the Commission on August 19, 1999 and any further amendments at the date
hereof, being herein referred to as the "Registration Statement") and the
offering thereof from time to time in accordance with Rule 415 of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"). The
Registration Statement has been declared effective by the Commission.
The Company has filed with, or transmitted for filing to,
or shall promptly hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Certificates pursuant to Rule 424 under the
Securities Act. The term "Basic Prospectus" means the prospectus included
in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating
to the Certificates, together with the Basic Prospectus. As used herein,
the terms "Basic Prospectus", "Prospectus" and "preliminary prospectus"
shall include in each case the documents, if any, incorporated by reference
therein. The terms "supplement", "amendment" and "amend" as used herein
shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic Prospectus by
the Company with the Commission pursuant to the Exchange Act.
Capitalized terms not otherwise defined in this Agreement
shall have the meanings specified therefor in the Pass Through Agreement,
the Note Purchase Agreement or the Intercreditor Agreement referred to in
the Pass Through Agreement; provided that, as used in this Agreement, the
term "Operative Documents" shall mean the Deposit Agreement, the Escrow
Agreement, the Intercreditor Agreement, the Liquidity Facility, the Policy,
the Policy Provider Agreement, the Indemnification Agreement dated the date
hereof (the "Indemnification Agreement") among the Company, the Policy
Provider and the Underwriters, the Indentures, the Leases, the Note
Purchase Agreement, the Participation Agreements, the Trust Agreements and
the Pass Through Agreement. As used herein the term "Financing Agreements"
shall mean with respect to each Aircraft the related FAA Bill of Sale,
Trust Indenture and Lease (each as defined in the Participation
Agreements).
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, you and each Underwriter named
in Schedule II that as of the date hereof:
(a) The Registration Statement and the Prospectus comply
as to form and, as amended or supplemented, if applicable, will
comply as to form in all material respects with the Securities Act
and the applicable rules and regulations of the Commission
thereunder.
The Registration Statement, at the time it became
effective, did not contain, and the Registration Statement, as
amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, not
misleading; the Prospectus, as of the date hereof does not
contain, and will not contain for so long as you are required to
deliver a Prospectus in connection with sales or solicitations of
offers to purchase the Certificates, an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection (a)
shall not apply to (i) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and
in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through
Salomon Smith Barney Inc. ("SSB") expressly for use in the
Registration Statement or Prospectus, (ii) that part of the
Registration Statement which constitutes the Statement of
Eligibility of Trustee on Form T-1 or (iii) statements in or
omissions from the Prospectus made with respect to information
relating to the Policy Provider.
The Registration Statement has become effective. No stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(b) The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with
the requirements of the Exchange Act, and, when read together and
with the other information in the Prospectus, did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading; provided,
however, that the representations and warranties in this
subsection (b) shall not apply to documents incorporated by
reference in the Prospectus relating to the Policy Provider.
(c) The accountants who certified the financial
statements pertaining to the Company included or incorporated by
reference in the Registration Statement or Prospectus are
independent public accountants as required by the Securities Act.
(d) Neither the Company nor any Trust is an "investment
company", within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"); and after giving
effect to the offering and sale of the Certificates and the
application of the proceeds thereof as described in the
Prospectus, the Trust will not be, and the escrow arrangements
relating to the Trust contemplated by the Escrow Agreement will
not result in the creation of, an "investment company", as defined
in the Investment Company Act.
(e) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida) or is exempt therefrom.
(f) The execution and delivery by the Company of this
Agreement, the Pass Through Agreement and the other Operative
Documents to which the Company is or will be a party, the
consummation by the Company of the transactions contemplated
herein and therein and in the Prospectus and compliance with the
terms hereof and thereof do not and will not result in any
violation of the charter or by-laws of the Company and do not and
will not conflict with or violate, or result in a breach of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company under (i)
any indenture, mortgage or loan agreement, or any other agreement
or instrument to which the Company is a party or by which it may
be bound or to which any of its properties may be subject (except
for such conflicts, breaches, violations, defaults, liens, charges
or encumbrances that, individually or in the aggregate, would not
have a material adverse effect on the financial condition or on
the earnings or business affairs of the Company and its
subsidiaries considered as a single entity), (ii) any existing
applicable law, rule or regulation or (iii) any judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
of its properties.
(g) No authorization, approval, consent, license, order
of or registration or filing with, or the giving of notice to, any
government, governmental instrumentality or court, domestic or
foreign, or other regulatory body or authority (other than with
respect to the effectiveness of the Registration Statement under
the 1933 Act of the qualification of the Pass Through Agreements
under Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (the "1939 Act") and
other than with respect to the securities or Blue Sky laws of the
various states) is required to be obtained or made by the Company
for the valid authorization, execution, delivery and performance
by the Company of this Agreement or any of the Operative Documents
to which the Company is or will be a party or the consummation of
the transactions contemplated by this Agreement or any such
Operative Documents, except such as may be required under (i) the
securities or Blue Sky laws of the various states or (ii) the
Transportation Code and the Uniform Commercial Code as in effect
in Utah and Virginia, which filings or recordings referred to in
this clause (ii), with respect to any particular set of Financing
Agreements, shall have been made or duly presented for filing or
recordation in all material respects or shall be in the process of
being duly filed or filed for recordation in all material
respects, on or prior to the applicable Delivery Date (as defined
in the Participation Agreements) for the Aircraft related to such
Financing Agreements.
(h) This Agreement has been duly authorized by all
necessary corporate action and duly executed and delivered by the
Company. The Operative Documents to which the Company will be a
party will be duly executed and delivered by the Company on or
prior to the Closing Date or the applicable Delivery Date (as
defined in the Participation Agreements), as the case may be.
(i) The Operative Documents to which the Company is or
will be a party have been duly authorized by all necessary
corporate action, will each be substantially in the form
heretofore supplied to you and will constitute, when duly executed
and delivered by the Company (assuming that such Operative
Documents constitute valid and binding obligations of each other
party thereto), valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or
in equity). The Basic Agreement as executed is substantially in
the form filed as an exhibit to the Registration Statement and has
been duly qualified under the 1939 Act. The Certificates and the
Operative Documents to which the Company is, or is to be, a party
will conform in all material respects to the descriptions thereof
in the Prospectus.
(j) When executed, issued, authenticated and delivered
pursuant to the provisions of the Pass Through Agreement and sold
and paid for as provided in this Agreement, the Certificates will
constitute valid and legally binding obligations of the Trustee
enforceable in accordance with their terms, except to the extent
that enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity);
and the Certificates will be entitled to the benefits provided by
such Pass Through Agreement. When executed, authenticated, issued
and delivered in the manner provided for in the Escrow Agreement,
the Escrow Receipts will be legally and validly issued and will be
entitled to the benefits of the Escrow Agreement.
(k) The Equipment Notes to be issued under each
applicable Indenture, when duly executed and delivered by the
related Owner Trustee or the Company, as the case may be, and duly
authenticated by the Indenture Trustee in accordance with the
terms of such Indenture, will be duly issued under such Indenture
and will constitute the valid and binding obligations of such
Owner Trustee or the Company, as the case may be, enforceable in
accordance with their terms, except that enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); and the Holders
thereof will be entitled to the benefits of such Indenture.
(l) No Appraiser nor the Policy Provider is an affiliate
of the Company or has a substantial interest, direct or indirect,
in the Company. None of the officers and directors of any of the
Appraisers or of the Policy Provider is connected with the Company
or any of its affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, when so filed complied as to form in all material
respects with the Securities Act.
The parties agree that any certificate signed by a duly
authorized officer of the Company and delivered to an Underwriter, or to
counsel for the Underwriters, on the Closing Date and in connection with
this Agreement or the offering of the Certificates, shall be deemed a
representation and warranty by (and only by) the Company to the
Underwriters as to the matters covered thereby.
2. Purchase and Delivery. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and the conditions herein set forth and in Schedule III, the
Company agrees to cause the Trustee to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the
Trustee, at the purchase price specified in Schedule I, the respective
amounts of each Class of Certificates set forth opposite the name of such
Underwriter in Schedule II. Concurrently with the issuance of the
Certificates, the Escrow Agent shall issue and deliver to the Trustee the
Escrow Receipts in accordance with the terms of the Escrow Agreement, which
Escrow Receipts shall be attached to the related Certificates.
(b) The Company is advised by you that the Underwriters
propose to make a public offering of the Certificates as soon after this
Agreement has been entered into as in your judgment is advisable as set
forth in the Prospectus.
(c) As compensation to the Underwriters for their
respective commitments and obligations hereunder in respect of the
Certificates, including their respective undertakings to distribute the
Certificates, the Company will pay to you for the accounts of the
Underwriters the amount set forth in Schedule III hereto, which amount
shall be allocated among the Underwriters in the manner determined by you.
Such payment will be made on the Closing Date simultaneously with the
issuance and sale of the Certificates (with the related Escrow Receipts
attached) to the Underwriters. Payment of such compensation shall be made
by wire transfer of immediately available funds.
(d) Delivery of and payment of the purchase price for the
Certificates to be purchased by the Underwriters (with attached Escrow
Receipts) shall be made at the offices of Skadden, Arps, Slate, Meagher &
Flom, LLP, 4 Times Square, New York, NY 10036 (or at such other place as
shall be agreed upon by you and the Company) at 10:00 A.M., New York City
time, on the fifth business day following the date hereof or such other
date, time and place as may be agreed upon by the Company and you (such
date and time of delivery and payment for the Certificates (with attached
Escrow Receipts) being herein called the "Closing Date"). Delivery of the
Certificates (with attached Escrow Receipts) issued by the Trust shall be
made to your account at The Depository Trust Company ("DTC") for the
respective accounts of the several Underwriters against payment by the
Underwriters of the purchase price thereof by wire transfer of immediately
available funds to the accounts and in the manner specified in the Escrow
Agreement. The Certificates (with attached Escrow Receipts) shall be in the
form of one or more fully registered global certificates, and shall be
deposited with the Trustee as custodian for DTC and registered in the name
of Cede & Co.
(e) The Company agrees to have the Certificates (with
attached Escrow Receipts) available for inspection and checking by you in
New York, New York not later than 1:00 P.M. on the business day prior to
the Closing Date.
3. Conditions to Closing. The several obligations of the
Underwriters to purchase and pay for the Certificates pursuant to this
Agreement are subject to the accuracy of and compliance with the
representations and warranties of the Company contained herein as of the
date hereof and the Closing Date, to the accuracy of the statements of the
officers of the Company made in any certificate furnished pursuant to the
provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder and to the following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have
occurred any downgrading in the rating accorded any of the
securities of the Company by Moody's Investors Service, Inc. or
Standard & Poor's Ratings Service, nor shall any notice have been
given of (i) any intended or potential downgrading or (ii) any
review or possible change in such rating.
(b) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have
occurred any material adverse change, or any development
reasonably likely to result in a material adverse change, in the
financial condition or in the earnings or business affairs of the
Company from that set forth or contemplated in the Prospectus,
that, in your judgment, makes it impracticable to market the
Certificates on the terms and in the manner contemplated in the
Prospectus.
(c) You shall have received on the Closing Date a
certificate, dated the Closing Date and signed by a Vice
President, Treasurer or Assistant Treasurer of the Company, to the
effect (i) that no event set forth in clause (a) above has
occurred, (ii) that the representations and warranties of the
Company contained herein are true and correct as of the Closing
Date (except to the extent that a representation or warranty
expressly relates to an earlier or later date, in which case it
will be true and correct as of such date), (iii) that there shall
not have occurred any material adverse change, or any development
reasonably likely to result in a material adverse change, in the
financial condition or in the earnings or business affairs of the
Company from that set forth or contemplated in the Prospectus, and
(iv) that the Company shall have performed in all material
respects all of its obligations to be performed hereunder on or
prior to the Closing Date. The officer signing and delivering such
certificate may rely on the best of his or her knowledge.
(d) You shall have received on the Closing Date an
opinion, dated the Closing Date, from the General Counsel, Deputy
General Counsel or Associate General Counsel of the Company, in
form satisfactory to you and your counsel, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Delaware and has all
necessary corporate power and authority under such laws
to own its properties, to conduct its business as
described in the Prospectus, to enter into this Agreement
and each of the Operative Documents to which it is a
party and to perform its obligations hereunder and
thereunder (except where the failure to have such power
or authority would not have a material adverse effect on
the Company); and the Company is duly qualified to
transact business as a foreign corporation in good
standing in each jurisdiction in which its ownership of
property or the conduct of its business requires such
qualification (except where the failure to so qualify
would not have a material adverse effect upon the
Company);
(ii) The Company is an "air carrier" and a
"citizen of the United States" within the meaning of the
Transportation Code, and is "holding an air carrier
operating certificate issued by the Secretary of
Transportation" within the meaning of 11 U.S.C. ss. 1110;
the descriptions in the Registration Statement and the
Prospectus with respect to statutes, contracts,
administrative orders and regulations and legal and
governmental proceedings are accurate and fairly
summarize the information required to be shown; and there
are, to the best of such counsel's knowledge, no
statutes, administrative orders or regulations or pending
or threatened legal or governmental proceedings required
to be described in the Registration Statement or the
Prospectus which are not described as required, nor any
contracts or documents of a character required to be
described or referred to in the Registration Statement or
the Prospectus, or to be filed as exhibits to the
Registration Statement, that are not so described,
referred to or filed as required;
(iii) The statements in the Prospectus as to the
routes that the Company presently operates or is
authorized to operate are correct in all material
respects. Except as disclosed in the Prospectus, no
action or proceeding has been instituted or to such
counsel's knowledge, has been threatened by the United
States Department of Transportation, the Federal Aviation
Administration or the aeronautical authorities of any
other country that would impair the Company's ability to
operate such routes;
(iv) This Agreement has been duly authorized,
executed and delivered by the Company;
(v) No authorization, approval, consent,
license, order of, or registration with, or the giving of
notice to, any government, governmental instrumentality,
or court, domestic or foreign, or other regulatory body
or authority (other than with respect to the
effectiveness of the Registration Statement under the
1933 Act or the qualification of the Basic Agreement
under the 1939 Act and other than with respect to the
securities or Blue Sky laws of the various states and
with respect to any registration, filing or recording
that may be required under the Transportation Code and
the Uniform Commercial Code as in effect in various
jurisdictions) is required to be obtained or made by the
Company for the valid authorization, issuance, sale and
delivery of the Certificates and the Equipment Notes
relating thereto or for the valid authorization,
execution, delivery and performance by the Company of
this Agreement and each of the Operative Documents to
which the Company is a party or the consummation of the
transactions contemplated by this Agreement and such
Operative Documents;
(vi) The execution and delivery by the Company
of this Agreement and the Operative Documents to which
the Company is or will be a party, the issuance and sale
of the Certificates and the related Equipment Notes, the
issuance of the Escrow Receipts attached to the
Certificates, the consummation by the Company of the
transactions contemplated herein and therein and in the
Prospectus and compliance with the terms hereof and
thereof do not and will not result in any violation of
the charter or by-laws of the Company and do not and will
not conflict with or violate, or result in a breach of
any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or
assets of the Company under (A) any indenture, mortgage
or loan agreement, or any other agreement or instrument
known to such counsel, to which the Company is a party or
by which either it be bound or to which any of its
properties may be subject (except for such conflicts,
breaches, defaults, violations, liens, charges or
encumbrances that, individually or in the aggregate,
would not have a material adverse effect on the financial
condition or on the earnings or business affairs of the
Company and its subsidiaries considered as a single
entity), (B) any existing applicable law, rule or
regulation (other than the securities or Blue Sky laws of
the various states, as to which such counsel need express
no opinion) or (C) any judgment, order or decree known to
such counsel of any government, governmental
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its properties;
(vii) No default exists in the performance or
observance of any material obligation, agreement,
covenant or condition contained in any contract,
indenture, loan agreement, note, lease or other agreement
or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed as an
exhibit to the Registration Statement;
(viii) Except as disclosed in the Prospectus,
there is no action, suit or proceeding before or by any
government, governmental instrumentality or court,
domestic or foreign, now pending or, to the knowledge of
such counsel, threatened against or affecting the Company
that might reasonably be expected to result in any
material adverse change in the financial condition or in
the earnings or business affairs of the Company, or that
could adversely affect the consummation of the
transactions contemplated by this Agreement or any of the
other Operative Documents to which the Company is a
party; and
(ix) Such counsel has participated in the
preparation of the Registration Statement, the Prospectus
and the documents incorporated by reference in the
Prospectus and such counsel has no reason to believe (A)
that the Registration Statement or any amendment thereto
(except for the financial statements and other financial
or statistical data included or incorporated by reference
therein or omitted therefrom, and except for the
Statement of Eligibility on Form T-1 of the Trustee, as
to which such counsel need express no opinion), at the
time the Registration Statement became effective,
contained and, as of the date such opinion is delivered,
contains any untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or (B) that the Prospectus or any amendment
or supplement thereto (except for (1) the financial
statements and other financial or statistical data
included or incorporated by reference therein or omitted
therefrom and (2) statements in or omissions from the
Prospectus made with respect to information relating to
the Policy Provider, as to both of which such counsel
need express no opinion), at the time the Prospectus was
issued, at the time any amended or supplemented
Prospectus was issued or as of the Closing Date,
contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made,
not misleading.
(e) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Meagher
& Flom LLP, counsel for the Company, in form and substance
reasonably satisfactory to you and substantially to the effect set
forth in Exhibit A hereto.
(f) You shall have received on the Closing Date an
opinion of Bingham Dana, LLP, counsel for State Street Bank and
Trust Company of Connecticut, National Association, individually
and as Trustee, Subordination Agent and Paying Agent, dated the
Closing Date, in form and substance reasonably satisfactory to you
and substantially to the effect set forth in Exhibit B hereto.
(g) You shall have received on the Closing Date an
opinion of Ray, Quinney & Nebeker, counsel for the Escrow Agent,
dated the Closing Date, in form and substance reasonably
satisfactory to you and substantially to the effect set forth in
Exhibit C hereto.
(h) You shall have received on the Closing Date an
opinion of Winthrop, Stimson, Putnam & Roberts, special New York
counsel for the Liquidity Provider, dated the Closing Date, in
form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit D-1 hereto and an
opinion of Schwarz Kurtze Schniewind Kelwing Wicke, special German
counsel for the Liquidity Provider, dated the Closing Date, in
form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit D-2 hereto.
(i) You shall have received on the Closing Date the
opinion of Vedder, Price, Kaufman & Kammholz, special U.S. counsel
for the Depositary for the Trusts, dated the Closing Date, in form
and substance reasonably satisfactory to you and substantially to
the effect set forth in Exhibit E hereto.
(j) You shall have received on the Closing Date the
opinion of Clifford Chance, Dutch counsel for the Depositary for
the Trusts, dated the Closing Date, in form and substance
reasonably satisfactory to you and substantially to the effect set
forth in Exhibit F hereto.
(k) You shall have received the opinion, dated as of the
Closing Date, of the General Counsel for the Policy Provider, in
form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit G.
(l) You shall have received the opinion of Shaw Pittman,
special counsel to the Policy Provider, dated as of the Closing
Date, in form and substance reasonably satisfactory to you and
substantially to the effect set forth in Exhibit H.
(m) You shall have received on the Closing Date an
opinion of Milbank, Tweed, Hadley & McCloy LLP, as counsel for the
Underwriters, dated as of the Closing Date, with respect to the
issuance and sale of the Certificates, the Registration Statement,
the Prospectus and other related matters as the Underwriters may
reasonably require.
(n) On the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the Securities Act and no proceedings therefor shall have
been instituted or threatened by the Commission.
(o) Each of the Appraisers shall have furnished to the
Underwriters a letter from such Appraiser, addressed to the
Company and dated the Closing Date, confirming that such Appraiser
and each of its directors and officers (i) is not an affiliate of
the Company or any of its affiliates, (ii) does not have any
substantial interest, direct or indirect, in the Company or any of
its affiliates and (iii) is not connected with the Company or any
of its affiliates as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
(p) At the Closing Date, each of the Operative Documents
(other than the Indentures, Leases and Participation Agreements)
shall have been duly executed and delivered by each of the parties
thereto; the representations and warranties of the Company
contained in each of such executed Operative Documents shall be
true and correct in all material respects as of the Closing Date
(except to the extent that they relate solely to an earlier or
later date, in which case they shall be true and correct as of
such earlier or later date) and the Underwriters shall have
received a certificate of the President or a Vice President of the
Company, dated as of the Closing Date, to such effect.
(q) On the Closing Date, the Certificates shall be rated
"AAA" by Standard & Poor's Ratings Service and "Aaa" by Moody's
Investors Service, Inc.
(r) The Underwriters shall have received on each of the
date of this Agreement and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from the Company's
independent public accountants, containing statements and
information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain other financial or statistical data and
certain financial information contained in or incorporated by
reference into the Registration Statement and the Prospectus.
4. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) The Company has prepared a preliminary prospectus,
and immediately following the execution of this Agreement, the
Company will prepare a Prospectus Supplement in connection with
the offering of the Certificates. The Company will promptly
transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 under the Securities Act.
(b) The Company will notify you promptly (i) of the
effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement
to the Prospectus or any document to be filed pursuant to the
Exchange Act which will be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement relating in any way to the
offer and sale of the Certificates, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information and (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose.
(c) The Company will give you notice of its intention to
file or prepare any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether by the filing
of documents pursuant to the Exchange Act, the Securities Act or
otherwise, and will furnish you with copies of any such amendment
or supplement or other documents proposed to be filed or prepared
a reasonable time in advance of such proposed filing or
preparation, as the case may be.
(d) The Company will deliver to you as many signed and
conformed copies of the Registration Statement (as originally
filed) and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you, without charge, as many
copies of the Prospectus and any supplements and amendments
thereto as you may reasonably request so long as you are required
to deliver a Prospectus in connection with sales or solicitations
of offers to purchase the Certificates.
(e) If, during the period after the first date of the
public offering of the Certificates as in the written opinion of
counsel for the Underwriters (which counsel shall be reasonably
acceptable to the Company, provided that Milbank, Tweed, Hadley &
McCloy LLP shall be acceptable to the Company) the Prospectus is
required by the Securities Act to be delivered in connection with
sales of the Certificates by an Underwriter or dealer any event
shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein in the light of the circumstances existing at
the time it is delivered to a purchaser, not misleading or if it
shall be necessary, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with
the requirements of the Securities Act or the rules and
regulations of the Commission thereunder, the Company will
promptly prepare and file with the Commission such amendment or
supplement, whether by filing documents pursuant to the Exchange
Act, the Securities Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such
requirements.
(f) The Company will endeavor to qualify the Certificates
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to maintain such
qualification for as long as you shall reasonably request
(provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a
foreign corporation or to subject itself to taxation as doing
business in any jurisdiction in which it is not otherwise required
to be so qualified) and to pay all expenses (including reasonable
fees and disbursements of counsel) in connection with such
qualification and in connection with the determination of the
eligibility of the Certificates for investment under the laws of
such jurisdictions as you may designate, as well as all reasonable
expenses payable in connection with the review (if any) of the
offering of the Certificates by the National Association of
Securities Dealers, Inc. (including any filing fees and reasonable
fees and expenses of counsel for the Underwriters in connection
therewith).
(g) Whether or not any sale of such Certificates is
consummated, the Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of any and
all amendments to the Registration Statement and any and all
amendments to the Prospectus; (ii) the filing of this Agreement;
(iii) the preparation, issuance and delivery of the Certificates;
(iv) the reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee, the Subordination Agent,
the Liquidity Provider, the Depositary, the Escrow Agent, the
related Owner Trustees and the Indenture Trustee and their
respective counsel, and of any registrar, paying agent and
authenticating agent; (v) the qualification of the Certificates
under securities laws in accordance with the provisions of Section
4(f), including filing fees and the reasonable fees and
disbursements of counsel to the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey; (vi) one half of all
reasonable fees and expenses of counsel to the Underwriters; (vii)
the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Underwriters of the
Prospectus and any amendments or supplements thereto in connection
with solicitations or confirmations of sales of the Certificates;
(viii) the preparation and delivery to the Underwriters of copies
of the Pass Through Agreement and the other Operative Documents,
including all expenses incident to the performance of the
Company's obligations under the Pass Through Agreement,
Participation Agreements, Indentures, Leases and each of the other
agreements and instruments referred to in the Indentures and
Participation Agreements; (ix) any fees charged by rating agencies
for the rating of the Certificates; and (x) all other costs and
expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in
this Section.
(h) The Company will not, during the period beginning on
the date of this Agreement and continuing to the Closing Date,
offer or sell, or enter into any agreement to sell, any equipment
notes, pass through certificates, equipment trust certificates or
equipment purchase certificates secured by aircraft owned or
leased by the Company (or rights relating thereto), other than the
Equipment Notes relating thereto, without the prior written
consent of the Underwriters.
(i) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act, will file
promptly all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(j) The Company will make generally available to its
securities holders and you as soon as practicable (but in any
event not later than 45 days) after the close of the period
covered thereby, an earnings statement (which shall satisfy the
provisions of Section 11(a) under the Securities Act) covering
each twelve-month period beginning, in each case, not later than
the first day of the Company's first full fiscal quarter after the
date of this Agreement.
5. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Underwriter, and each person, if
any, who controls such Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to: (i) any Underwriter furnished to the Company in
writing by such Underwriter through SSB expressly for use therein; and (ii)
the Policy Provider; provided, however, that the foregoing indemnity
agreement, with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Certificates, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Certificates to
such person, and if the Prospectus (as so amended or supplemented) would
have cured the defects giving rise to such losses, claims, damages or
liabilities.
(b) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in
writing by such Underwriter through SSB expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the reasonable
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one firm (in addition to any local counsel) for all
such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing
by SSB in the case of parties indemnified pursuant to paragraph (a) above
and by the Company in the case of parties indemnified pursuant to paragraph
(b) above. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding and does not include a statement as to or an admission
of fault, culpability or failure to act by or on behalf of any indemnified
party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 5 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of
the Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters
on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Certificates shall be deemed to be in
the same respective proportions as the net proceeds from the offering of
such Certificates (before deducting expenses) received by the Trusts and
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in (or in the notes to) the table
on the cover of the Prospectus, bear to the aggregate offering price of the
Certificates. The relative fault of the Company on the one hand and of the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 5 are several
in proportion to the respective principal amount of Certificates they have
purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 5, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The indemnity and contribution provisions contained in
this Section 5 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Certificates. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained
in this Section and the representations, warranties and other statements of
the Company contained in this Agreement or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Certificates.
6. Termination. This Agreement shall be subject to
termination in your absolute discretion, by oral notice confirmed in
writing, given by you to the Company, which notice cites one of the
specific events set forth below that has occurred, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., or the Chicago Board of
Options Exchange, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other
such event makes it, in your judgment, impracticable to market the
Certificates on the terms and in the manner contemplated in the Prospectus.
7. Default of Underwriters. If, on the Closing Date, any
one or more of the Underwriters shall fail or refuse to purchase
Certificates that it has or they have agreed to purchase hereunder on such
date, and the aggregate principal amount of Certificates which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Certificates, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Certificates set forth opposite
their respective names in Schedule II bears to the aggregate principal
amount of Certificates set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Certificates which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Certificates that
any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 7 by an amount in excess of one-ninth of
such principal amount of Certificates without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Certificates which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of
Certificates with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Certificates to be purchased
on such date and arrangements satisfactory to you and the Company for the
purchase of such Certificates are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this
Section shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part
of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to
perform its obligations under this Agreement, the Company will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement
with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
8. Notices. All notices and other communications under
this Agreement shall be in writing, unless otherwise stated herein, and
shall be deemed to have been duly given if delivered, mailed or transmitted
by any standard form of telecommunication. Notices to you shall be directed
to you, c/o Salomon Smith Barney Inc., 390 Greenwich Street, 4th Floor, New
York, New York 10013, Attention: John F. Grier; and notices to the Company
shall be directed to it at US Airways, Inc., Crystal Park Four, 2345
Crystal Drive, Arlington, VA 22227, Attention: Treasurer.
9. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
11. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.
Please confirm your agreement to the foregoing by signing
in the space provided below for that purpose and returning to us a copy
hereof, whereupon this Agreement shall constitute a binding agreement
between us.
Very truly yours,
US AIRWAYS, INC.
By: /s/Jeffery A. McDougle
-----------------------------------
Title: Treasurer
Agreed, February 25, 2000
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: SALOMON SMITH BARNEY INC.
Acting on behalf of itself and
as the representative of the other
named Underwriters.
By: /s/ Greg Lee
------------------------------------
Title: Vice President
SCHEDULE I
Pass Through Certificates, Series 2000-1
Pass Through Aggregate Final Expected
Certificate Principal Interest Distribution
Designation Amount Rate Date
------------ --------- -------- --------------
2000-1G $281,678,000 8.11% February 20, 2017
SCHEDULE II
Pass Through Certificates, Series 2000-1
<TABLE>
<CAPTION>
Salomon Smith Credit Lyonnais Credit Suisse First
Barney Inc. Chase Securities Inc. Securities (USA) Inc. Boston Corporation
<S> <C> <C> <C> <C> <C>
2000-1G $70,419,500 $70,419,500 $70,419,500 $70,419,500
</TABLE>
SCHEDULE III
US AIRWAYS, INC.
Underwriting fees,
discounts, commissions
or other compensation: $2,394,263
